"Analysing The Opportunities for Horizontal Expansion of Coca-Cola Company"

Analyzing The Opportunities For Horizontal Expansion

THE FMCG INDUSTRY- A BRIEF INSIGHT Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG) are products that have a quick turnover and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for other products. The Indian FMCG industry witnessed significant changes through the 1990s. Many players had been facing severe problems on account of increased competition from small and regional players and from slow growth across its various product categories. As a result, most of the companies were forced to revamp their product, marketing, distribution and customer service strategies to strengthen their position in the market.

By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly. With the liberalization and growth of the Indian economy, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such as television and the Internet. Apart from this, social changes such as increase in the number of nuclear families and the growing number of working couples resulting in increased spending power also contributed to the increase in the Indian RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion consumers' personal consumption. The realization of the customer's growing awareness and the need to meet changing requirements and preferences on account of changing lifestyles required the FMCG producing companies to formulate customer-centric strategies. These changes had a positive impact, leading to the rapid growth in the FMCG industry. Increased availability of retail space, rapid urbanization, and qualified manpower also boosted the growth of the organized retailing sector. HLL led the way in revolutionizing the product, market, distribution and service formats of the FMCG industry by focusing on rural markets, direct distribution, creating new product, distribution and service formats. The FMCG sector also received a boost by government led initiatives in the 2003 budget such as the setting up of excise free zones in various parts of the country that witnessed firms moving away from outsourcing to manufacturing by investing in the zones. Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit on such products can be large. Unlike some industries, such as automobiles, computers, and airlines, FMCG does not suffer from mass layoffs every time the economy starts to dip. A person may put off buying a car but he will not put off having his dinner. Unlike other economy sectors, FMCG share float in a steady manner irrespective of global market dip, because they generally satisfy rather fundamental, as opposed to luxurious needs. The FMCG sector, which is growing at the rate of 9% is the fourth largest sector in the Indian Economy and is worth Rs.93000 crores. The main contributor, making up 32% of the sector, is the South Indian region. It is predicted that in the year 2010, the FMCG sector will be worth Rs.143000 crores. The sector being one of the biggest sectors of the Indian Economy provides up to 4 million jobs. (Source: HCCBPL, Monthly Circular, March 2008)

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Analyzing The Opportunities For Horizontal Expansion

The FMCG sector consists of the following categories:  Personal Care- Oral care, Hair care, Wash (Soaps), Cosmetics and

Toiletries, Deodorants and Perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players being; Hindustan Lever Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble.

 Household Care- Fabric wash (Laundry soaps and synthetic detergents),

Household cleaners (Dish/Utensil/Floor/Toilet cleaners), Air fresheners, Insecticides and Mosquito repellants, Metal polish and Furniture polish; the major players being; Hindustan Lever Limited, Nirma and Ricket Colman.

 Branded and Packaged foods and beverages- Health beverages, Soft

drinks, Staples/Cereals, Bakery products (Biscuits, Breads, Cakes), Snack foods, Chocolates,



Ice-creams, Tea, Coffee, Processed fruits, Processed vegetables, Processed meat, Branded flour, Bottled water, Branded rice, Branded sugar, Juices; the major players being; Hindustan Lever Limited, Nestle, Coca-Cola, Cadbury, Pepsi and Dabur.

 Spirits and Tobacco; the major players being; ITC, Godfrey, Philips and

UB.

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COMPANY PROFILE 2.1 BACKGROUND AND INCEPTION OF COCA-COLA: Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 450 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. The Company’s beverage products comprises of bottled and canned soft drinks as well as concentrates, syrups and not-ready-to drink powder products. In addition to this, it also produces and markets sports drinks, tea and coffee. The Coca-Cola Company began building its global network in the 1920s. Now operating in more than 200 countries and producing nearly 450 brands, the Coca-Cola system has successfully applied a simple formula on a global scale: “Provide a moment of refreshment for a small amount of money- a billion times a day.” The Food and beverages sector is witnessing recently large-scale transformation, huge advertisement spending, awareness campaign about the products and brands. Key factors to success are distribution and advertising.

A large MNC in the food and

beverage industry may be covering as many as 10 lakhs outlets across the country with the help of thousands of distributors. The Coca-Cola Company and its network of bottlers comprise the most sophisticated and pervasive production and distribution system in the world. More than anything, that system is dedicated to people working long and hard to sell the products manufactured by the Company. This unique worldwide system has made The Coca-Cola RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion Company the world’s premier soft-drink enterprise. From Boston to Beijing, from Montreal to Moscow, Coca-Cola, more than any other consumer product, has brought pleasure to thirsty consumers around the globe. For more than 123 years, Coca-Cola has created a special moment of pleasure for hundreds of millions of people every day.

Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a threelegged brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Dr. Pemberton’s partner and book-keeper, Frank M. Robinson, suggested the name and penned “Coca-Cola” in the unique flowing script that is famous worldwide even today. He suggested that “the two Cs would look well in advertising.” The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try “the new and popular soda fountain drink.” Hand-painted oil cloth signs reading “Coca-Cola” appeared on store awnings, with the suggestions “Drink” added to inform passersby that the new beverage was for soda fountain refreshment. By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr. Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has been a distinctive color associated with the soft drink ever since. For his efforts, Dr. Pemberton grossed $50 and spent $73.96 on advertising. Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler, an entrepreneur from Atlanta. By the year 1891, Mr. Candler proceeded to buy additional rights and acquire complete ownership and control of the Coca-Cola business. Within four years, his merchandising flair had helped expand consumption of Coca-Cola to every state and territory after which he liquidated his pharmaceutical business and focused his full attention on the soft drink. With his RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion brother, John S. Candler, John Pemberton’s former partner Frank Robinson and two other associates, Mr. Candler formed a Georgia corporation named the Coca-Cola Company. The trademark “Coca-Cola,” used in the marketplace since 1886, was registered in the United States Patent Office on January 31, 1893. The business continued to grow, and in 1894, the first syrup manufacturing plant outside Atlanta was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los Angeles, California, the following year. In 1895, three years after The Coca-Cola Company’s incorporation, Mr. Candler announced in his annual report to share owners that “Coca-Cola is now drunk in every state and territory in the United States.” As demand for Coca-Cola increased, the Company quickly outgrew its facilities. A new building erected in 1898 was the first headquarters building devoted exclusively to the production of syrup and the management of the business. In the year 1919, the Coca-Cola Company was sold to a group of investors for $25 million. Robert W. Woodruff became the President of the Company in the year 1923 and his more than sixty years of leadership took the business to unsurpassed heights of commercial success, making Coca-Cola one of the most recognized and valued brands around the world. BOTTLERS: One of the main ways by which the Coca-Cola system throughout the world maintains a global brand with a local approach is its Bottling system. Since the CocaCola Company has over 2,400 products spread over 200 countries, its bottling system has to be the best. Before any Coca-Cola product reaches the consumer in any part of the world, it is produced, sold and distributed by a bottler from that region. The Bottlers form the link between the brand and the customers and their services help the product reach the customers. The bottlers are local companies which assist the business to get an indigenous perspective which will help cater to its consumers in a far better way. Each bottler maintains a different method to serve their respective regions in an appropriate way. RNS Institute Of Technology, Bangalore

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COCA-COLA INDIA Coca-Cola India has made significant investments to build and continually improve its business in India, including new production facilities, wastewater treatment plants, and distribution systems and marketing equipment. During the past decade, The Coca-Cola System has invested more than US $1 billion in India, making Coca-Cola one of the country’s top international investors and in 2003, Coca-Cola India pledged to invest a further $100 million in its operations. The Coca-Cola System in India includes 24 Company-owned bottling operations and another 25 franchisee-owned bottling operations that directly employ 5,500 local people and create jobs for another 150,000. The Coca-Cola Company and its independent bottlers have been engaged at the international, national and community levels to support programs that protect the environment, conserve water, promote education, and provide healthcare.

2.2 VISION AND MISSION STATEMENT: Company Mission Company Roadmap starts with the mission, which is enduring. It declares company’s purpose as a company and serves as the standard against which company weigh for actions and decisions. •

To refresh the world...

•

To inspire moments of optimism and happiness...

•

To create value and make a difference.

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Company Vision Company vision serves as the framework for company Roadmap and guides every aspect of the business by describing what company needs to accomplish in order to continue achieving sustainable, quality growth.

People: Be a great place to work where people are inspired to be the best they can be. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.

2.3 QUALITY POLICY AND COMPANY VALUE QUALITY POLICY “To ensure customer delight, we commit to quality in our thoughts, deeds and actions by continually improving our processes…Every time.”

COMPANY VALUE Leadership: “The courage to shape a better future” Passion: “Committed in heart and mind” Integrity: “Be real” Accountability: “If it is to be, it’s up to me” Collaboration: “Leverage collective genius” Innovation: “Seek, imagine, create, delight” RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion Quality: “What we do, we do well”

2.4 PRODUCT PROFILE COCA- COLA The biggest-selling soft drink in history, and the best-known product in the world. It is also considered as the World’s most valuable brand. From a humble beginning in the year 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world. The word 'Coca-Cola' itself is even thought to be the second most widely understood word in the world after ‘OK’!

DIET COKE Introduced in the United States in 1982 and in Britain a year later, 'diet Coke' – or ‘Coca Cola Light’ as it’s sometimes known - is now sold in 149 countries across the world, with sales in Britain second only to those of the United States. Whether diet or light, this is the soft drink for those who live life to the full and embrace a healthy lifestyle, and it's deliciously sugar free.

THUMS UP Thums-Up is a leading sparkling soft drink and most trusted brand in India. Originally introduced in 1977, Thums-up was acquired by Coca Cola Company in 1993. It is similar RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion in flavor to other colas but has a unique taste reminiscent of betel nut and is promoted as a masculine and a bold drink.

SPRITE First introduced in 1961, 'Sprite' is now the world’s leading lemon-lime flavored soft drink and the No. 4 soft drink worldwide, sold in 190 different countries! The idea for the name came from Haddon Sundblom’s ‘Coca-Cola’ advertisements featuring ‘the little sprite’ – an elf with silver hair and a big smile. Millions of people around the world enjoy 'Sprite' for its crisp, clean taste.

FANTA 'Fanta' is the soft drink with the vibrant taste of real fruit flavors. 'Fanta' became only the second drink - after 'Coca-Cola' itself - to be marketed by The Coca Cola Company, but was soon available in many different countries. Originally only orange flavored, 'Fanta' is now produced in 70 different varieties worldwide, with flavors often derived from the native fruits of the region where it is being sold. Coca Cola has recently launched the Fanta Apple flavor.

LIMCA Lime n lemoniLimca, the drink that can cast a tangy refreshing spell on anyone, anywhere. Born in 1971, Limca has the original thirst choice, of RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion millions of consumers for over 3 decades. The brand has been displaying the leading flavor soft drinks in the country. The success formula? The sharp fizz and lemoni bite combined with single minded positioning of the brand as the ultimate refresher has continuously strengthened the brand franchise. Limca energizes refreshes and transforms.

MAAZA Maaza was launched in 1976. Here was a drink that offered the same real taste of fruit juices and was available throughout the year. In 1993, Maaza was acquired by Coca- Cola India. Maaza currently dominates the fruit drink category. Mango drinks currently account for 90% of the fruit juice market in India. Maaza currently dominates the fruit drink category and competes with Pepsi's Slice brand of mango drink and Frooti, manufactured by Parle Agro. While Frooti was sold in small cartons, Maaza and Slice were initially sold in returnable bottles. However, all brands are also now available in small cartons and large PET bottles.

MINUTE MAID The history of the Minute Maid brand goes back as 1945 when the Florida Corporation developed orange juice power. The company developed a process that eliminated 80 percent of the water in orange juice. They branded it minute Maid, a name connoting the convenience and the ease of preparation (in a minute). Minute Maid thus moved from a powdered concentrate to the first

ever orange juice from

concentrate.

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KINLEY Water, a thirst quencher that refreshes a life giving force that washes all the toxins away. A ritual purifier that cleanses, purifies, transforms. Kinley water understands the importance and value of life giving force. Kinley water thus promises water that is as it is meant to be. Water you can trust to be safe and pure.

GEORGIA Georgia was launched by the company to address the competition offered by its substitutes. It is available as tea or coffee and is available in seven sizzling flavors. It promises a great tasting, consistent, hygienic and affordable cuppa made available by vending machines.

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2.5 AREA OF OPERATION Coca-Cola is often thought to be produced and distributed around the world by a single company. In reality, our portfolios of more than 3500 beverages are produced by a vibrant business system operating in more than 200 countries around the world. Made up of The Coca-Cola Company and nearly 300 Coca-Cola bottlers, this system allows us to manufacture and distribute our products to customers and consumers around the world. Imagine what it's like to touch 200 countries -- and countless communities -- with almost everything you do. Associates of The Coca-Cola Company have the opportunity to experience this firsthand. Our bottling partners are local companies so they are rooted in their communities, thinking and acting locally. They are employers, purchasers of local goods and services, good neighbors and, of course, producers of the world's most popular beverages. Understand how The Coca-Cola Company works with more than 300 bottlers to produce, deliver, market and sell products around the world. In Indonesia, for instance, boats transport Coca-Cola and our other brands among many hundreds of islands. In the Amazon, where the main road is often the river itself, waterborne distribution is also common. In the higher elevations of the Andes, Coca-Cola is sometimes transported by four-legged power. Across much of Africa, bottlers deliver to thousands of family-run kiosks and home-based stores on which local economies depend. That kind of flexibility doesn't just sell beverages; it also helps us respond immediately in times of need. In the last two years alone, we have delivered hundreds of thousands of beverages to people touched by the South Asian tsunami, the Pakistan earthquake, Hurricane Katrina and other natural disasters while our people have dedicated their personal time and money to helping these communities through their RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion challenging times. We attain global growth by understanding and being a part of local communities. Only the presence and partnership of our bottlers can make that happen. The industry’s complexity has led to the evolution of very different organizational models. Many food and beverage companies are still organized along local/regional lines, with a presence in only a limited number of categories, often with a short shelf life. Some have taken a global, multi-category approach, remaining highly diversified in many different categories but with a small number of truly global brands. Coca Cola is one such brand.

FIGURE2- SHOWING GLOBAL PRESENCE OF COCA-COLA

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India falls under Coca-Cola’s Eurasia region of Operation.

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2.6 OWNERSHIP PATTERN: The Coca Cola Company is a public limited company (plc). They offer shares to the general public through the company. It is mainly larger companies such as Coca Cola that are public limited companies. The advantages of a public limited company are: * Shareholders have limited liability * The sale of shares enables larger sums of money to be raised * While the company has this money permanently, the individual owners can recoup their money by selling their shares to others. * Directors may be brought in as experts in certain fields * Produce goods at lower unit cost * Due to their size they can benefit from economies of scale, e.g. bulk buying, cheaper borrowing. The disadvantages of a public limited company are: · There are a number of legal requirements to fulfill in setting up a Company · Regulations mean that a company is more expensive to set up than a sole trader or partnership, although the cost may be as little as £100, and some already registered companies can be bought off the peg· The accounting of a company is less private than for other forms of organization. The company could become too large resulting in poor labor relations · There could be a conflict of interest between shareholders and the Board of Directors · Possibility of takeover or merger because shares can be bought by anyone. Coca Cola also have limited liability as they are a public limited company. A limited company is owned by its shareholders. There is no legal maximum to the number of shareholders. There are two forms of Limited Liability Company in the UK, the Private Limited Company (Ltd) and the Public Limited Company (Plc). The essential difference, RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion between the two, is that the Private Limited Company cannot legally offers its shares to the general 'public', therefore this form of Company is usually associated with family run businesses. Whilst the Public Limited Company can sell its shares to the general public on the Stock Exchange, providing the potential for far greater finances to be raised. The owners of a limited company are referred to as its members, or shareholders. An individual can become an owner of the business by purchasing shares in that business. When the profits of the business are distributed to shareholders, they are distributed in the form of a dividend. The value of the dividend is decided upon not by the owners, but by the Directors of the business. Some shareholders had invested their life savings and not only lost their money, but their homes, limited liability was designed to protect shareholders from this mistake, but the key motive was to ensure that large projects could continue to raise capital.

2.7 COMPETITORS INFORMATION The competitors to the products of the company mainly lie in the non-alcoholic beverage industry consisting of juices and soft drinks. The key competitors in the industry are as follows:

•

PepsiCo: The PepsiCo challenge, to keep up with archrival, the Coca-Cola Company never ends for the World's # 2, carbonated soft-drink maker. The company's soft drinks include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage; PepsiCo sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water. PepsiCo also sells Dole juices and Lipton ready-to-drink tea. PepsiCo and Coca-Cola hold together, a market share of 95% out of which 60.8% is held by Coca-Cola and the rest belongs to Pepsi.

•

Nestlé: Nestle does not give that tough a competition to Coca-Cola as it mainly deals with milk products, Baby foods and Chocolates. But the iced tea that is Nestea which has been introduced into the market by Nestle provides a considerable amount of competition to the products of the Company. Iced tea is one of the closest substitutes to the Colas as it is a thirst quencher and it is healthier when compared to fizz drinks. The flavored milk

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Analyzing The Opportunities For Horizontal Expansion products also have become substitutes to the products of the company due to growing health awareness among people. •

Dabur: Dabur in India, is one of the most trusted brands as it has been operating ever since times and people have laid all their trust in the Company and the products of the Company. Apart from food products, Dabur has introduced into the market Real Juice which is packaged fresh fruit juice. These products give a strong competition to Maaza and the latest product Minute Maid Pulpy Orange.

2.8 AWARDS & RECOGNITION:  Responsible CEO of the Year Award, Muhtar Kent, Corporate Responsibility Magazine (November 2010).  50 Most Admired Companies, FORTUNE (March 2010). 2009 CSR Award, Coca-Cola China, AmCham Shanghai 2009 Corporate Social Responsibility Conference and Awards (November 2009).  Corporate Social Responsibility Awards, Coca-Cola India (May 2009).  Most Socially Responsible Company 2008, Coca-Cola Nigeria Limited, Social Enterprise Reports and Award (SERA) 2008, (August 2008)  Foods and Beverages Most Socially Responsible Company in Nigeria 2008, Coca-Cola Nigeria Limited, Social Enterprise Reports and Award (SERA) 2008, (August 2008)  One of Ten "Most-Admired" Companies in Germany, The Coca-Cola Company, Manager Magazine (February 2008)  Philanthropist of the Year, Coca-Cola Ukraine, World of Child, Ukrainian Fund of Philanthropists and Ukraine 3000 (December 2007)

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Analyzing The Opportunities For Horizontal Expansion  Named Strategic Partners in Poland's Responsible Business Forum, Coca-Cola Poland Services (CCPS) and Coca-Cola HBC Polska (CCHBCP), Responsible Business Forum (FOB) (December 2007)  No. 2, 2007 Corporate Social Responsibility Study, Coca-Cola Mexico, Excélsior (December 2007)  World's Most Accountable Corporations, One World Trust 2007 Global Accountability Report (December 2007).  Asia Society Leadership Award (November 2007)  No. 2, India's Most Respected Fast Moving Consumer Goods Company, and No.

7, Most Respected Multinational Corporation in India, Coca-Cola India, Business World, in conjunction with the Indian Market Research Bureau (November 2007)  No. 13, World's Most Respected Companies survey, Barron's (September 2007)  No. 1, Food and Beverage Industry Category, Best Ethical Quote Progress and

Best Reported Performance Categories (July 2007)  No. 2, Leaders Across All Sectors for Best Reported Performance, Ethical Quote

(July 2007)  FTSE4Good Index of Socially Responsible Companies (July 2007)  No. 4, Most Respected Companies, Coca-Cola India, Business World (April 2007)  No. 8, America's Most Responsible Companies Consumer Index (March 2007)  Best Sustainability Initiative, eKO freshment program, Zenith International

Publishing Beverage Innovation Awards (March 2007)  No. 3, Beverage Industry Category, America's Most Admired Companies Survey,  Fortune Magazine (March 2007) RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion  Corporate Social Responsibility Award, Mexican American Legal Defense and Education Fund (March 2007)  Ethical Brand Awards: No. 1 in the U.S., No. 3 in Spain and No. 8 in France, fivecountry study by market research group GfK NOP (February 2007)  "Global 100," unranked list of the world's 100 most sustainable corporations (January 2007)  Product Innovation Best Ideas on Social Responsibility Issues, Coca-Cola Spain, Actualidad Economica (2007)  Best Companies of the Year, Coca-Cola Spain, Dirigentes (2007)  Best Professional Ethics - 3rd Place, Coca-Cola Spain, Actualidad Economica

(2007).

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2.9 WORK FLOW MODEL

The manufacturing unit of HCCBPL, situated at Bidadi, is the third largest plant and one of the bottling operations owned by the company. The plant has one PET line which has the capacity of yielding 210 bottles per minute, and RGB bottles i.e. 600 bottles per minute. It caters to the whole of South Karnataka through a network of more than 80 distributors. There are three depots in Bangalore; North Depot, East Depot, and Mega Depot.

Manufacturing plant Bidadi

Sales and Distribution

Distributors

Outlets

Outlets

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2.10 FUTURE GROWTH: Not just growth, but sustainable growth -- meeting our short-term commitments while investing to meet our long-term goals. And we have a vision and clear goals to guide our journey to achieve long-term growth -- the kind of long-term growth that allows careers to flourish. We are building on our fundamental strengths in marketing and innovation, driving increased efficiency and effectiveness in interactions with our system and generating new energy through core brands that focus on health and wellness.

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Mc. KINSEY’S 7S FRAMEWORK

STRUCTURE: RNS Institute Of Technology, Bangalore

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Structure of Coca-Cola:Chief Executive Office

Vice President Supply Chain Region Vice President

Chief Finance Officer

AGM/AOD (Unit 1) Director Human Resource

AGM/AOD (Unit2) Vice President BSG AGM/AOD (Unit3) Regional Vice President (North) AGM/AOD (Unit4) Regional Vice President Region Finance (Central)

Region Human Resource

Region Customer Service

Region External Affairs

Region cold Drinks Legal RNS Institute Of Technology,Region Bangalore Region BSG

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Analyzing The Opportunities For Horizontal Expansion

Region Director/Manager RNS Institute Of Technology, Bangalore Region Capability Region Channel Management

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AGM/AOD

Plant Manager

Route to Market

Area Sales manager

Human Resource Manager

Channel Manager

Marketing

Sales Executive

Market Developer

Finance Manager

General Sales Manage r

Area Capability Manager

Sales Trainer

Key Accounts

Distributors and Salesman

STRATEGY:

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Analyzing The Opportunities For Horizontal Expansion What will drive for the success in the future is not just growth, but sustainable growth meeting short term commitments while investing to meet long term goals. And Coca-Cola company have clear goals to achieve long term growth. The strategies are to build their fundamental strenghts in marketing and innovation, driving increased efficency and effectiveness in interactions with the system and generating new energy through core brands that focus on health and wellness. As Coca-Cola is the world’s most recognised family of brands , they deliver more than 3500 beverages to over 200 countries around the world. Not just soft drinks , but juice and juice drinks, sport drinks, water , coffee and milk. And every day they explore new ways to create and share beverages to energize, relax, nourish , hydrate and enjoy.As Coca-Cola is the world’s largest distributor of non alcoholic beverages, they maintain a trusted local presence in every community.Coca-Cola have increased the annual marketing budget substaintlly, launched many new products, and developed a new model to help retail customers to maximize their sales while we continue to plan for the next one , five and ten years in business.

SYSTEM: Coca-Cola system in world wide and in India Globally, the Coca-Cola system includes the company and more than 300 bottling partners. The Coca-Cola company manufactures and sells

concerate and

beverage bases. In India the Coca-Cola system comprises of a wholly owned subsidiary of the Coca- Cola company namely the Coca Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a company owned bottling entity, namely Hindustan Coca-Cola beverages Pvt Ltd Thirteen authorized bottling partners of the Coca-Cola company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of the Coca-Cola company and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Pvt Ltd sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. RNS Institute Of Technology, Bangalore

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STAFF: The people are the face of the brands. They are talented and passionate, and they take immense pride in being a pert of company with a global scale. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system. The coco-cola staff strive to ensure that the work environment is safe and inclusive and that are plentiful opportunities for people in India and across the world.

SKILLS: Working in Coca-Cola company, is going to be working with people who are top of the league at what they do. The slill that is mainly deployed is of training skills. Coca-Cola company has an extensive on the job training program to focus on day to- day needs of the people and in each of the offices across the continent there are number of local training innitatives.

STYLES: There are four main types of management styles that each business would use. Coca Cola have four principles of citizenship that they would have to incorporate into the management style: * Provide quality in the marketplace * Enrich the workplace * Preserve the environment * Strengthen the community A management style is an overall method of leadership used by the manager. The Coca Cola Company use the following management styles, but each one in different departments. There are three main types of management styles used in businesses:

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Analyzing The Opportunities For Horizontal Expansion Autocratic: Where the leader makes all the decisions, there is no negotiation andis very prescriptive and there is little job satisfaction. However, the job gets done quickly and there is less conflict between different ideas. This style is hardly used among the company as they believe that the lack of input could lead to poor results. Autocratic does: Save a lot of time as quick decisions can be made and there is no timewasted on discussion resulting in the business saving time and money. Democratic: This emphasises on group agreements to generate new ideas. There aretwo types of democratic management styles; democratic and consultative democratic. Democratic is where all the managers, junior managers and employees are involved in the ideas and final decision process. Out of all the workers, no-one has a higher level than the others n this management style. Consultative democratic: This is where the managers allow the employees to make the ideas butthe ideas are forwarded to the executive's or the manager consults their team to make the final decision. Coca Cola applies consultative management style to the company more as there can be less conflict for what the final decision is. The advantage of this is that it helps to motivate staff as they are aware that they have a say in the company to some extent. The disadvantages of this that the process is verytime consuming and effort will be needed by a manager to do this. Management encourages employees to set goals in line within theorganization aims. There are reviewed regularly in performanceappraisals. The advantages of this style are that it will increase efficiency of individuals and help to motivate them and train them so they are productive. The disadvantages of this are that it needs to be well organized and will not work in highly structured jobs. RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion Democratic style is the management style that Coca cola adopts. Thissort of management style involves empowerment. In this management style individuals and teams are given responsibilities and decisions to make, usually within a given framework. If anything wrong happens then the individuals and teams are then held responsible for the decisions that are chosen. With this type of management style it allows the manager to feel comfortable with other people in the organization making some of the decisions. Democratic managers will often want feed back from their employees on decisions being made. Democratic leaders listen and act on the opinions of the group. This type of management is good as it makes the employees happy and productivity is high. This is a very good method because employee's thoughts and suggestions are listened to by the business. This makes the employees seem as if they are respected and that their thoughts are valid.

SHARED VALUES: Coca-Cola company is guided by the shared values such a Leadership: ‘The courage to shape a better future. Passion: ‘Committed in heat and mind’ Integrity: ‘Be real.’ Accountability: ‘If it is to be, it is up to me’. Collaboration: ‘Leverage collective genius’. Innovation: ‘Seek, imagine, create and delight.’ Quality: “What we do, we do well.

SWOT ANALYSIS

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Analyzing The Opportunities For Horizontal Expansion SWOT Analysis is the process of analyzing the company and the environment in which it is operating. This analysis helps in formulating effective strategy for the company to deal with competition. SWOT stands for Strengths, weaknesses, opportunities and threats. Strengths and weakness are internal to the organization, whereas opportunities and threats are external to the organization.

Strengths:  High Quality Products: The products of Coca Cola are well known for their product quality.  Highly Reliable Products: Coca Cola products are highly reliable in the Indian beverages market.  Best Seller Products: Coca cola has two of the bestselling products Thums Up,

Sprite all over India.  Brand Loyalist: Coca cola has huge number of brand loyal people. It has been already proved, as the Coca Cola products are the best seller in the beverages segment all over the world.  Coca cola has a huge product mix to cater every segment of the market.  Availability, Affordability, Acceptability: These additional features of our product give us an added advantage over our rivals in the CSD segment. Weaknesses:  Less efficient distribution channel: The present distribution channel lacks penetration because retailer activation involves higher cost. Coca cola needs to become the Hindustan lever of India.  Brand killing strategy of coca cola: Coca cola tends to kill the local brand in order to promote its own international brands. Coca cola has done this in past and still follow this strategy. Coca cola has put behind Limca in order to promote its other international brand Sprite and MMPO.

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Analyzing The Opportunities For Horizontal Expansion  Horizontal and vertical conflict exists in the distribution channel. Distributors are trying to eat up the profit of the distributors of the adjoining area. Opportunities:  Some of the segments are still untouched by coca cola like the juice segment and the milk product segment. Our rival Pepsi has paid attention to this segment and therefore gained a lot from this segment. A vast market of 1200 crores or 500 million cases has been untouched by coca cola.

 Every market has its own local needs. People need changes over the season for example people tend to switch over to drinks like Lassi and Neembupani. Coca Cola should come up with drinks which are more local and seasonal.

 In metropolitan areas people are becoming more health conscious and therefore prefer drinks which are nutritious and health beneficial. This segment needs attention.

Threats:  In the CSD segment there is still a price war between Coke and Pepsi, therefore both the rivals maintain the same price but the way in which the rivals can gain advantage is by influencing the distributor and the retailers by offering them special schemes.

 Since retailers are always profit oriented they tend to shift their preferences which can turn out to be a major loss.

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LEARNING EXPERIENCE Through internship project at Hindustan Coca-Cola Beverages Pvt. Ltd, Bangalore I got an opportunity to learn and get experienced with the principles and practices followed in the company. It also gave me a real time interaction with the market, the marketing concepts followed as well as the real time challenges faced in the market, which directly or indirectly affects the overall operation of the business. It also helped me to know how an organization functions by providing an insight of different departments of an organization and their co-ordination with other departments to achieve the common objective of the organization. While working on project I have learned many crucial things which were very difficult to get through theoretical study. This Project has given me a platform to apply my theoretical background which I have learnt during my academics. During this Project I visited several customers and interacted with corporate people who enriched my knowledge base.

Learning experience from the study •

Through this study I got an understanding of the business carried out by the company.

•

The study helped me to experience the operations and functions of the organization

•

It helped me to understand how the database is prepared and maintained.

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Analyzing The Opportunities For Horizontal Expansion •

The study gave me a real time experiencing on Profiling of the customer bases and segmenting the same into different sectors.

•

The study gave me an overview of procedure of creating a new Customer & retaining them for long term goals.

•

While working on the project I got an exposure to how to develop a strategy plan for increasing present customer base & generating a continuous business from the existing customer

•

The study helped to understand the Porter's Five Forces concept and the method of using the strategic tools.

The project also helped me to know the job profile of employees at different levels in the organization, their job responsibilities and their contribution towards the success of the organization.

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GENERAL INTRODUCTION

What is Horizontal Expansion?

Expansion of business capacity through the absorption of facilities or buildings as well as through the acquisition of new equipment to handle an increased volume in sales in which the business is already engaged .In microeconomics and strategic management, the term Horizontal Expansion describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal Expansion in marketing is much more common than Vertical Expansion is in production. Horizontal Expansion occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, E.g. Pepsi has adopted strategy of Vertical Expansion by which Pepsi wants to improve its sale from Coke monopoly outlets, means Coke’s monopoly outlets are being taken over by Pepsi now in this condition to improve its sale Coke need to open new outlets which is called Horizontal Expansion Strategy. A monopoly created through Horizontal Expansion is called a Horizontal Monopoly. This is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service.

Horizontal Expansion: It is defined as expanding a business beyond what is presently known as its core functions. Best illustrated by example, a typical case of horizontal expansion was when ProBlogger decided to introduce their Job Boards. While ProBlogger’s core functions RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion was providing bloggers with tips on how to make money through their blogs, the team behind the site identified that a job board could compliment what they already provided their “customers” (readers) with, and at the same time create a new cash flow and increase their revenue (by charging for the listings on the job board). This is a type of horizontal expansion where you expand on your already existing brand and go beyond your core activity in order to create new and (hopefully) rewarding cash flows that by calculation will, at some point, make your business more profitable. Another type of Horizontal Expansion is to create a completely new section of your company, and only tie them together under an umbrella. In the world of small, independent online publishers a feasible example would be that if you run a popular blog on a certain videogame, you can start a completely new blog on another videogame, and tie them together only by a company/network blog or website. Of course, the other method of expanding horizontally would be to simply extend the topic of your current blog to include the additional new videogame. When developing an market business you will always be looking for ways to maximize your revenue, and expanding your fields of operation is often a possibility that surfaces when you are evaluating the future of your businesses. While common to most of those who have formally studied business management, the concepts of Vertical Expansion and Horizontal Expansion are not always recognized by small time internet entrepreneurs such as myself. Generally when facing the option of expansion, you will have two initial paths to choose from, and the way we usually separate them is by classifying them as horizontal or vertical.

Reason Of Horizontal Expansion? The ultimate objective of coke is to acquire more customer and serve them properly. While doing Horizontal Expansion take care to the competitor’s strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Coke do not believe on Vertical Expansion because Vertical Expansion

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has limited preview so COKE is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry. India is a big country having diversified taste and appearance and same character is reflected in their demography. Horizontal Expansion helps the company to serve the more people and more customers touch point because in the waste country many customers commute.

Benefits of horizontal expansion  Through this study company can know about its growth compared to its major competitor PepsiCo.  This study will also help to the company to know about their new concepts position in the market  This study will also help to the company to know about its promotional activities involved in advertising.  Through this study company will know about the availability of its products in the market.  This study is helpful to find out the sales trends of the Coke products and its effect on consumers value and satisfaction.  This study is helpful to find out the number of outlets coming under RED concept  This study is also helpful to find out the outlets efficiency which are coming under RED.  This study directly deals with interaction of different kinds of people in the organization which helps me to understand the corporate communication system.  This study also helps me to understand how the marketing strategy like Pull and Push works in the corporate. (For push – at the time of pulpy promotion, for pull at the time of more demand of sprite.).  Provides Incremental Volume & Revenue for Business

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Analyzing The Opportunities For Horizontal Expansion  By horizontal expansion there will be more outlets of our product In the market which will sell our product in more quantity. This will generate incremental revenue for the business.  Helps to Improve Route Productivity.

 Increase in market power over supplier and downstream market channels

OUTCOME OF THE PROJECT Apart from the other benefits of horizontal expansion, its main benefit is to generate incremental revenue for the company. During the project I studied strategies and analyzed the market. My major job was to use different tools provided by the company for horizontal expansion like refrigerator, ice box etc. and to open outlets for coca cola products. With my other team mates I targeted the market of Bengaluru and added 27 new Outlets to The Company.

6.1 STATEMENT OF THE PROBLEM The ultimate objective of coke is to acquire more customers and serve them properly. They are also concerned to the competitor’s strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Coke do not believe on Vertical Expansion because Vertical Expansion has limited preview so COKE is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry. Horizontal Expansion helps the company to serve the more people and more customers touch point that is why company is in to analyzing the opportunities for horizontal expansion in the market.

6.2 OBJECTIVES OF THE STUDY RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion 1. To understand and explain the concept of Horizontal Expansion to the retailers. 2. To understand how to make the Horizontal expansion process more effective. 3. To Know the Demand in terms of coco-cola products from the Retailers. 4. To enhance the business, and to expand the market coverage 5. To study the distribution system of the company. 6.

To enlist the benefits of horizontal expansion for the company at the retail end.

6.3 SCOPE OF THE STUDY Horizontal merger provides the following advantages to the companies which are merged: 1) Economies of scope The notion of economies of scope resembles that of economies of scale. Economies of scale principally denote effectiveness related to alterations in the supply side, for example, growing or reducing production scale of an individual form of commodity. On the other hand, economies of scope denote effectiveness principally related to alterations in the demand side, for example growing or reducing the range of marketing and supply of various forms of products. Economies of scope are one of the principal causes for marketing plans like product lining, product bundling, as well as family branding. 2) Economies of scale Economies of scale refer to the cost benefits received by a company as the result of a horizontal merger. The merged company is able to have bigger production volume in comparison to the companies operating separately. Therefore, the merged company can derive the benefits of economies of scale. The maximum use of plant facilities can be done by the merged company, which will lead to a decrease in the average expenses. The important benefits of economies of scale are the following: • Synergy • Growth or expansion • Risk diversification • Diminution in tax liability RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion • Greater market capability and lesser competition •

Financial synergy (Improved creditworthiness, enhancement of borrowing power,

decrease in the cost of capital, growth of value per share and price earnings ratio, capital raising, smaller flotation expenses • Motivation for the managers For attaining economies of scale, there are two methods and they are the following: • Increased fixed cost and static marginal cost • No or small fixed cost and decreasing marginal cost One example of economies of scale is that if a company increases its production twofold, then the entire expense of inputs goes up less than twofold.

6.4 RESEARCH METHODOLOGY Research Design: Once the problem is identified, the next step is the research design. Research design is the basic framework of rest of the study. A research design specifies the methods and procedures for conducting particular study. In this project I am following descriptive research design. Source of Data: There are two types of data: 1.

Primary data

2.

Secondary data

Primary Data: The primary data is fresh information collected for a specified study. The primary data can be gathered by observational, experimentation and survey method. Here the entire scheme of plan starts with the definition of various terms used, units to be employed, type of enquiry to be conducted, extent of accuracy aimed etc.,

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Analyzing The Opportunities For Horizontal Expansion The methods commonly used for the collection of primary data are: 1.

Direct personal investigation, where the data is collected by the investigator from the sources concerned.

2.

Indirect oral interviews, where the interview is conducted directly or indirectly concerned with subject matter of the enquiry.

3.

Information received through local agencies, which are appointed by the investigator.

4.

Mailed questionnaire method, here the method consists in preparing a questionnaire (a list of questions relating to the field of enquiry and providing space for the answers to be filled by the respondents.), which is mailed to the respondents with a request for quick response with in the specified time.

In this project mailed questionnaire method is used to collect the primary data. Secondary Data: The secondary data refers to data, which already exists. The secondary data collect from internal records, business magazines, company websites and Newspapers. Research instruments: For the collection of primary data a structured questionnaire was prepared covering various aspects of the study. The questionnaire contains closed-ended and dichotomous questions. Sampling Procedure: It is a procedure required from defining a population to the actual selection of the sample. PROCESS The study is based on Primary data and Secondary data. Secondary Data was collected from the Company’s website and MD’s Sales Presenter as well as Primary Data was collected through structured questionnaire. The questionnaire was designed by keeping all the objectives of the study in mind. RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion The type of research which is used to conduct survey was. Sample Unit: Sampling units are outlets owners/ shopkeepers selling soft drinks. Sample Size: Sample size of 80 Outlet. Sample Technique: Sample Technique is Simple Random Technique. Method of data collection: Method of data collection is survey method.

6.5 LIMITATIONS OF THE STUDY: 1. The training was for shorter period of time that is why it was not possible to carry out a detail study. 2. The sample size was limited. 3. The strategies of the company changes very frequently it is difficult to make exact recommendation.

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DATA INTERPRETATION 1. What type of outlet do you hold? Type of Outlets Type of Outlets

Number

Percentage

Grocery Store

15

19

E&D 1- Bakery

15

19

Convenience Store

50

62

TOTAL Source

80 Primary Data

100

Graph-1: Type of outlets

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Analyzing The Opportunities For Horizontal Expansion ANALYSIS: In this Graph Convenience Stores are 62 in percentage whereas E&D Bakery and Grocery Store are of 19%. INTERPRETATION: By knowing the above graph it is very obvious that the visited area included more number of Convenience Store and hence our more effort was to enroll these stores to expand the business. 2. Do you deal with beverages?

Response Yes No Total Source:

Outlets deal with beverages Number Percentage 45 56 35 44 80 100 Primary Data

Graph-2: Outlets deal with beverages

ANALYSIS: Among 80 Outlets 45 outlets are deal with beverages and 35 Outlets do not deal with beverages. RNS Institute Of Technology, Bangalore

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INTERPRETATION: In the above graph out of 80 visited new outlets 45 outlets are deal with beverages and 35 outlets do not deal with beverages. Here I tried to convince those outlets also which were not interested but only in few cases I got success. If Company comes up with good profitable scheme then may be these outlets can be enroll for the Company. 3. If yes which brand do you keep?

Percentage of Outlets Holding Other Brands Brands Number Percentage Pepsi 31 69 Parle 12 27 Dabur 2 4 Total 45 100 Source

Primary Data

Graph-3: Percentage of outlets holding other brands

ANALYSIS: In Market most the outlets keeps Pepsi Products. Among 45 new Outlets 31 Outlets hold Pepsi Products and 12 Outlets and 2 Outlets keeps Parle and Dabur respectively. INTERPRETATION: RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion Most of the Outlets were keeping Pepsi products the reason behind it may be Coca-Cola Company have not approached them still or may be that particular area have less demand of Coke Product.

4. Are you aware of Coca-Cola products? Awareness of Coca-Cola Variable

Number

Percentage

Yes

80

100

No

0

0

TOTAL

80

100

Source

Primary Data Graph-4: Awarness of Coca-Cola

Awareness of Coca-Cola No 0%

Yes 100%

Analysis: The above table shows that 100% of outlets owners are aware of Coca-Cola products and nil% said No. RNS Institute Of Technology, Bangalore

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Interpretation: So here it can be interpreted that all the outlet owners sre sware of Coca-Cola products.

5. If Yes how did you come to know? Variable Banner Hoarding Television Newspaper TOTAL Source

Media which created awareness of coca-cola Number Percentage 8 10 32 40 30 37.5 10 12.5 80 100 Primary Data

Graph-5: Media which created awareness of Coca-Cola

ANALYSIS: The above table shows that 10% of outlet owners came to know about the coca-cola products through banner. 40% of outlet owners came to know about the Coca-Cola product through Hoarding 37.5%of outlet owners came to know about the Coca-Cola product through television. 12.5% of outlet owners came to know about the Coca-Cola product through Newspaper RNS Institute Of Technology, Bangalore

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INTREPRETATION: From the analysis of the above data it can be interpreted that advertisement through hoardings and television are the major tool for creating awareness to the consumers. 6. What is the chilling equipment you use? Chilling Equipment Uses by Retailers

Numbers

Percentage

Pepsi Fridge

17

38

Own Fridge

15

33

Ice Box

2

4

Both Pepsi fridge and own box

11

25

Total

45

Source

Primary Data

100

Graph-6: Chilling equipments used by retailers

ANALYSIS: From the above graph it is analyzed that Outlets keep mostly Pepsi and their own Chilling equipment.

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Analyzing The Opportunities For Horizontal Expansion INTERPRETATION: Pepsi fridge holding outlets are more and next is own fridge holding outlets and only 2 outlets are keeping Ice fridge out of 45 outlets & both Pepsi and own ice box are 11 in number. 7. Does outlet fits in Balance 2 criteria? (Pepsi products) Outlets Fits in Balance 2 Criteria Response

Number

Yes

31

39

No

49

61

Total

80

100

Source

Percentage

Primary Data

Graph-7: Outlets fit in Balance 2 criteria

ANALYSIS: 49 Outlets fits in balance 2 criteria and 31 does not fits.

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Analyzing The Opportunities For Horizontal Expansion INTERPRETATION: In the above Graph among 80 new Outlets 31 Outlets keep Pepsi Products and 49 Outlets they were not having any of the beverages like Coca- Cola and Pepsi. There was a more opportunity to enroll new outlets because most of the outlets do not have any beverages products. 8. How often do you order for the products? Frequency of Placing Order For The Products Days

Number

Percentage

Daily

10

22

Weekly

29

64

Monthly

6

14

TOTAL

45

100

Source

Primary Data

Graph-8: Frequency of placing order for the products

ANALYSIS: 29 Outlets order weekly 10 Outlets Daily and 5 Outlets Monthly. INTERPRETATION: RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion There are 29 outlets which order in weekly basis and only 10 outlets are there which order daily and only 5 outlets are there which order in monthly basis. Commonly outlets order for weekly basis.

9. What do you do if a brand which you prefer is not delivered to you on time? Response of The Retailer If Product is not Delivered on Time Response Go for other brand call to distribute Call to company's Sales Person Stop Selling that Brand Total Source

Number 25 8 22 25 80

Percentage 31 10 28 31 100 Primary Data

Graph-9: Response of the retailer if products is not delivered on time

ANALYSIS: Among 80 new Outlets 55 Outlets said that they will go for other brand whereas 27 said they stop selling the Brand and 23 and 13 outlets said call to Company’s Salesperson and Distributor respectively. INTERPRETATION:

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Analyzing The Opportunities For Horizontal Expansion If brand product is not delivered on time then commonly outlets go for other Brand. But if demand is high for the same product then they try to contact company to get the Product on time. 10. Coca-Cola Company does not take empty bottles of Pepsi, but the latter does. Does it have any effect on sales? Effect On Sales If Coca-Cola Does not Take Empty Bottles of Pepsi Response

Number

Percentage

Yes

2

4

No

18

40

Can't Say

25

56

Total

45

100

Source

Primary Data

Graph-10: Affect on sales if Coca-Cola does not take empty bottles of pepsi

ANALYSIS: There are 25 Outlets have not given any response for this Questionnaire and 18 and 3 Outlets said NO and YES respectively. INTERPRETATION: RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion Coca-Cola does not take empty bottles, most of the retailers were not having any idea of this but some said that there is no any impact on sales. 11. Kindly rate the behavior of salesman of the beverages you deal with? Behavior of Salesman of The Company Response Number Percentage Highly Satisfied 4 8 Satisfied 24 54 Neither Satisfied nor Dissatisfied 13 29 Dissatisfied 4 8 Highly Dissatisfied 0 0 Total 45 100 Source Primary Data Graph-11: Behaviour of salesman of the company

ANALYSIS: From the above Graph 24 Outlets were very satisfied with Pepsi services and 4 are highly satisfied. 13 Outlets were not satisfied or dissatisfied and only 4 outlets among 45 Outlets were dissatisfied. INTERPRETATION:

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Analyzing The Opportunities For Horizontal Expansion Pepsi provided better services to the outlets and hence it is required for the Coca-Cola Company to come up with better scheme and provide a better services to the outlets then competitors. 12. If you wish to do business with Coco-Cola, give reasons for it? Reason Behind Keeping Coca-Cola Products Reasons Numbers Brand Value 35 Better Scheme 2 High Demand 41 Good Supply 0 High Profit Margin 0 Good Service Quality 1 Any Other 1 Total 80 Source Primary Data

Percentage 44 3 51 0 0 1 1 100

Graph-12: Reason behind keeping Coca-Cola products

ANALYSIS: There are 44 new Outlets wants to go for Coca-Cola Products because of their Brand Value and 51 Outlets because of High Demand. Only 3 Outlets for better scheme and 1 outlet for Good Service and any other reason. INTERPRETATION:

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Analyzing The Opportunities For Horizontal Expansion There are 49 outlets they want to do business with Coca-Cola Company and 51 Outlets they do business because Coca-Cola Product have high Demand.

13. How you rate the price of beverages you keep other than Coca-Cola? Rate 1 if it is least price and Rate 5 if it is highly priced. Rating of the price of beverages other than Coca-Cola Rate Numbers Percentage 1 1 2 2 14 31 3 17 38 4 9 20 5 4 9 TOTAL 45 100 Source Primary Data Graph -13: Rating the price of beverages other then Coca-Cola Rating the price of beverages other than Coca-Cola 38

40 31 30

20

20 10

9 2

0 1

2

3

4

5

ANALYSIS: Among the total respondents 2% retailers says that the Coca-Cola products are priced high, 31% says it is priced more then others, 38% have neutral opinion about it, 20% says it is priced lower then others and remaining 9% says that it is priced least. INTERPRETATION:

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Majority of the retailers have an opinion that the products of Coca-Cola is priced cheaper then other beverages. However the percentage of retailers saying that the coca-cola products are rated higher then other products is sufficient enough for the company to consder the revision of the pricing policy.

14. Which type of packaging attracts the retailers to open the outlet? Packaging attracts the retailers Number Percentage 23 50% 18 40% 1 2% 3 8% 45 100 Primary Data

Particulars RGB Pet Bottles Tetra Packs Cans TOTAL Source

Graph-14: Packaging attracts the retailers

Packaging attracts the retailer 50 40 30 20 10 0 RGB

Pet Bottles

Tetra Packs

Cans

ANALYSIS:

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Analyzing The Opportunities For Horizontal Expansion By knowing above graph, R G B is 50%, Pet bottles is 40%, Tetra packs is 2% and Cans is 8% contribution towards attracting the retailers for opening a new outlet INTERPRETATION: Here R G B is highest percentage and TETRA PACKS having lowest percentage in attracting the retailers to open a new outlet 15. Which of the following promotions affect the opening and retaining of outlets? Promotions affecting the opening and retaining of outlet Schemes

32

40%

Case re-fund

28

35%

Price pack

20

25%

TOTAL

80

100

Source

Primary Data

Graph-15: Promotions affecting the opening and retaining of outlet

Promotions affecting the opening and retaining of outlet 40 35 30 25 20 15 10 5 0 Scheme

Case re-fund

Price pack

ANALYSIS:

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Analyzing The Opportunities For Horizontal Expansion By knowing above graph, Schemes 40%, Case re-fund 35% and Price pack is 25% effect on the opening and retaining of outlet. INTERPRETATION: Here SCHEMES is having highest percentage and PRICE PACK is having lowest percentage.

FINDINGS 1. In the survey I recognized that there is 51% of demand for the Coca-Cola products than any other products.

2. It is felt that outlet owners are very much interested in supply part. So the company needs to take care of the supply division.

3. Pepsi provided better services to the outlet and hence it is required for the Coca-Cola Company to come up with better service options for the outlets than its competitors.

4.

I found out that around 43.75% of new outlets were not keeping any kind of beverages. Hence there was more opportunity to enroll new outlets.

5. Most of the outlets i.e. around 69% of outlets were keeping Pepsi products. The

reason behind it would be Coca-Cola Company might not have approached them.

6. My survey found that 44% of outlets trust the Coca-Cola brand name and goodwill.

Hence there is a good business opportunity with these new outlets. RNS Institute Of Technology, Bangalore

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7. My survey found that there is 100% awareness of Coca-Cola products.

RECOMMENDATION AND SUGGESTTION 1. Whenever the retailers have problems with their cooling equipment prompt after sales services can be provided. 2. After sales service is very important factor and should be looked into sincerely. 3. Exchange policy should be improved. So that retailers won’t suffer from any losses and will be happy. 4. Consumer preference is towards Coco-Cola brand because of its taste and quality. So the company should maintain the same. 5. Company should try to maintain the availability of Coca- Cola Products in rural areas. 6. The supply and distribution services should be improved for getting more sales and being remain as market leader.

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CONCLUSION In the present competitive world the success of the company depends on satisfying the customers as well as channel members. This is the area of retail business and to win the race and be on the top companies are out Performing by spending more on trade promotions. The channel members play a key role in increasing the sales of FMCG products. So the company has to pay more attention on distribution, promotion and availability of brand to win sales in the market. The study concludes that the Hindustan Coca Cola Beverages Pvt. Ltd has to strengthen its product line by introducing new flavors and new sizes. It also has to increase the stock holding and availability of Coke brands through motivating channel members by offering attractive schemes and incentives.

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QUESTIONNARE 1. Name of Outlet: ________________________________________ 2. Location:______________________________________________ 3. Life Span of Business:____________ 4. Criteria no.’s (7 criteria’s for a new outlet) of the _____________ retailer. 5. What Type of Outlet do you hold?

a) Grocery Store b) E&D 1- Bakery c) Convenience Store 6. Do you deal with beverages?

a) Yes b) No

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Analyzing The Opportunities For Horizontal Expansion 7. If yes which Brand do you keep ?

a) Pepsi b) Parle c) Dabur 8. Are you aware of Coca-Cola Products ? a) Yes b) No 9. If yes, how did you come to know ? a) Banner b) Hoarding c) Television d) Newspaper 10. What is Chilling Equipment you use? a) Pepsi Fridge b) Own Fridge c) Ice Box d) Both Pepsi and Own Fridge 11. Does outlet fit in Balance 2 Criteria? a)Yes b)No 12. How often do you Order? RNS Institute Of Technology, Bangalore

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Analyzing The Opportunities For Horizontal Expansion a) Monthly b) Weekly c) Daily 13. What do you do if a Brand which you prefer is not delivered to you on time? a) Go for other Brand b) Call to Distributor c) Call to Company’s Sales Person d) Stop Selling that Brand 14. Coca-Cola Company does not take empty bottles of Pepsi, but the latter does. Does it have any effect on sales? a) Yes b) No c) Can’t Say 15. Kindly rate the behavior of salesman of the beverages you deal with? a) Highly Satisfied b) Satisfied c) Neither Satisfied nor Dissatisfied d) Dissatisfied e) Highly Dissatisfied 16. If you wish to do business with Coco-Cola, give reasons for it? a) Brand Value

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Analyzing The Opportunities For Horizontal Expansion b) Better Scheme c) High Demand d) Good Supply e) High Profit Margin f) Good Service Quality g) Any Other 17. How you rate the price of Beverages you keep other than Coca-Cola? a) Rate 1 If it is least price and b) Rate 5 if it is highly priced

18. Which type of packaging attracts the retailer to open the outlet a) R G B b) Pet bottle c) Tetra Pack d) Cans 19. Which of the following promotions affect the opening and retaining of outlets a) Schemes b) Case refund c) Price pack

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Analyzing The Opportunities For Horizontal Expansion Suggestions if any: _______________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________

BIBLIOGRPHY Books: Marketing Management- Philip Kotler (Pg.no. 5,12,452,455 etc.)

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Analyzing The Opportunities For Horizontal Expansion Business Research Methods by Prof. S.N. Murthy and Dr. U.Bhojanna Websites

 www.coca-colaindia.com  www.coca-cola.com  http://en.wikipedia.org/wiki/The_Coca-Cola_Company  http://www.123helpme.com/view.asp?id=148943  www.thecoca-colacompany.com

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