“INITIAL REPORT OF SIP”

BY

Saurabh Srivastava

(Reg No- 5116)

Of

Vishwa Vishwani Institute of Systems and Management

Under the guidance of

(Mrs.Sunita Ratnamakar)

Prof- Marketing

A Project Report

Submitted to the

Faculty of Business Management

In partial fulfillment of the requirements

For the award of the

Post Graduate Diploma in Management

July 2010

Boston House, Thumkunta, Hakimpet(Via),

Hyderabad 500078

Phone: 08418- 247222,247522,247622,

Fax: 08418- 247166

www.vishwavishwani.ac.in

ORIGIN OF A COMPANY:-

It can be said with absolute certainty that the RKJ Group has carved out a special niche for itself. Its services touch different aspects of commercial and civilian domains like those of bottling, Food Chain and Education. Headed by Mr. R. K. Jaipuria, the group as on today can laid claim to expertise and leadership in the fields of education, food and beverages.

The business of the company was started in 1991 with a tie-up with Pepsi Foods Limited to manufacture and market Pepsi brand of beverages in geographically pre-defined territories in which brand and technical support was provided by the Principals viz., Pepsi Foods Limited. The manufacturing facilities were restricted at Agra Plant only. Varun Beverages Ltd. is the flagship company of the group.

The group also became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India. It has total 46 Pizza Hut Restaurants & 1 KFC Restaurant under its company.

It diversified into education by opening our first school in Gurgaon under management of Delhi Public School Society. The schools of the group are run under a Registered Trust namely Champa Devi Jaipuria Charitable Trust. Companies are medium sized, professionally managed, unlisted and closely held between Indian Promoters and foreign collaborators.

The group added another feather to its cap when the prestigious PepsiCo “International Bottler of the Year” award was presented to Mr. R. K. Jaipuria for the year 1998 at a glittering award ceremony at PepsiCo’s centennial year celebrations at Hawaii, USA. The award was presented by Mr. Donald M. Kendall, founder of PepsiCo Inc. in the presence of Mr. George Bush, the 41st President of USA, Mr. Roger A. Enrico, Chairman of the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President of Pepsi Cola Company.

Vision:-

Being the best in everything we touch and handle.

Mission:-

Continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making

economic values in all corporate functions.

Their Success:-

Production of innovative, high quality retail branded beverages combined with world-class packaging.

Driven by a management team with a relentless focus on achieving superior customer service, driving earnings improvement and increasing shareholder value.

Their People:-

At RKJ Group they are creating an environment where our employees enjoy a greater degree of empowerment both individually and in their work teams.

Their employees are equipped with the necessary tools, training and management backup for strong performance and accountability, as well as in an environment of open communication and involvement.

Different Product of PepsiCo:-

PepsiDiet PepsiPepsi AhaSliceMirinda7-UpAquafina Mineral Water

TYPES OF PRODUCTS:-

Non-alcoholic soft drink beverage market can be divided into fruit drinks and soft drinks. Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola, lemon and oranges are carbonated drinks while mango drinks come under non-carbonated category. The soft drinks market till early 1990s was in hands of domestic players like campa, thumps up, Limca etc but with opening up of economy and coming of MNC players Pepsi and Coke the market has come totally under their control. While worldwide Coke is the leader in carbonated drinks market in India it is Pepsi which scores over Coke but this difference is fast decreasing (courtesy huge ad-spending by both the players). Pepsi entered Indian market in 1991 coke re-entered (After they were thrown out in 1977, by the then central government) in 1993.

Carbonated soft drinks major Pepsi India is now putting together a ‘cocktail’ to take a bigger ‘slice’ of the fruit juice market. Close on the heels of the launch of its global lemon drink Twist in an Indian avatar as Pepsi Aha, Pepsi, once again, is all set to roll out another global product—in a localized version. Come June 2002, and Pepsi will roll out the blends of its international fruit drink Twister in the country, albeit, with a difference. In India, Twister blends will be launched as mixed fruit cocktails under Pepsi’s existing juice brand Slice. Pepsi spokesperson, when contacted, confirmed the launch but said the products will be launched on an ‘experimental basis’ for three to four months beginning June 2002. However, confirmed sources said that the product has been test-launched and is ready for a formal launch in June. Globally, the proposed Slice fruit blends exist under Twister brand and are available in over 10 flavors and in various packaging options.

However, in India, while the blends will be decided as per local tastes and as per the

availability of fruit pulp, packaging will be restricted to cartons only. Among the four to five flavors planned, strawberry-peach and kiwi-guava are some of them. However, the new product could be priced a little higher than Slice since Twister—originally—is believed to have more than 15 per cent juice content. Slice, on the other hand, is a 15 per cent juice drink positioned at the mass-end; against the 100 per cent fruit juice Tropicana, which is at the top-end. Pepsi’s decision to launch Twister flavors as Slice variants rather than the original brand itself follows the company’s decision to make slice the mother juice brand in India.

The company had at one time contemplated bringing Twister in its original self to India but the plan was later shelved. “Internally we have been debating whether to go ahead with Twister or keep Slice as a mother brand for juices,” the Pepsi spokesperson said. The move, point out industry observers, is clearly aimed at saving costs of launching an altogether new brand and instead cash in on the potential of a existing juice brand. A Rs 200-crore brand, Slice was originally launched as a mango drink in returnable glass bottles. Last year, in fact, Pepsi launched a new advertising campaign to rejuvenate the brand’s mango positioning. And early this year, it was launched in cartons and more recently—three new flavors—orange, leechi and guava—were added to the brand.

Burdened by high cost of production of returnable glass bottles, Pepsi India has decided to look at the most sought after packaging alternative—flexible packaging—more seriously. The company through one of its prime bottler Mr. Ravi Jaipuria of Varun Beverages Ltd is now setting up a new carton line (tetrapack) at its existing bottling plant at Noida in Uttar Pradesh.

The plant with a capacity of 5,000 to 7,000 cases per day will be used to pack Pepsi’s juice drink Slice and its new variants in 200-ml cartons. The product is currently being packaged at Varun Beverages at Boranada Road Jodhpur.The Noida slim line carton plant—which is expected to take off shortly—will cater to the north market and will help the company cut huge transportation costs.

COMPANY PROFILE:-

Since the entry of Pepsi co. to India in 1987, the soft drink Industry has undergone a radical change. When Pepsi entered parley was the leader with ‘Thumps UP’ being its flagship brand. Other product offerings by parley included Limca & Gold Spot. Another

upcoming player in the market was the erstwhile bottle of Coca-Cola, Pure Drinks. Its offerings included Campa Cola, Camps Lemon and Campa Orange.

With the re-entry of Coca-Cola in the Indian market, Pepsi had to go in for more aggressive marketing to sustain its market share. The chronology the initial phase of the “Coal Wars” in India was

July 1986

An application for soft drinks-cum-snack food joint venture by Pepsi, Voltas and Punjab Agro is submitted to the government after an earlier proposed alliance- 1985, between Pepsi and Duncan’s of the Goenkas fails to take off.

Sept.1988

Final approval for the Pepsi Foods Limited (P.F.L) project granted by the Cabinet Committee on Economic Affairs of the Rajeev Gandhi Government.

March 1990

Pepsi Cola and Seven up Launched in limited market in North India. May 1990

The government clears the Pepsi project again but with a change in brand name to Lehar Pepsi. Simultaneously it rejects the Coca-Cola application. Citra form the Parle stable hits the market.Dec 1991

Pepsi extends its soft drinks reach on national scale. Products launched Delhi and Bombay.Jan 1992

Brito Foods application cleared by the FTPB. Pepsi and Parle start initial negotiations for strategic alliance but talks break off after a while.

Jan 1993

Pepsi launches Teem and Slice. Captures about 25.30% of the soft drinks market in about two years.

July 1993

Volta’s pulls out of PFL joint venture. Pepsi decides to raise equity to 92% Reports of coke – Parle negotiations gain strength.July 1994

Pepsi brought Dukes& Sons

July 1995

Pepsi launched Cans having capacity of 330 ml in various flavors.

1997

Pepsi brought Mirinda Orange opposite to Fanta.

1998

Pepsi launched Lemon Mirinda to give taught competition to Limca.

1999

Pepsi has launched its Diet Pepsi Can and 1.5 Liters pet battles for health conscious people.

1997

Refusing to dilute its equity state Coca-Coal winds up operations in the country. Parle launches Thumps Up and Drinks launches Campa Cola.2001

Pepsi launched Aquafina.2003

Pepsi launched Mountain Dew

2005Mirinda lemon zinger, 7UP.Ice was launched by Pepsi.

2006

Bubbly Pepsi was launched.

2007

Pepsi Gold was launched.

Company vision:-

To become truly global company, by continuing to build a competitive and profitable worldwide refreshment beverage business.

OBJECTIVES OF VARUN BEVERAGES:-

To observe the implementation and working of sales club programme at different sections in Noida.To monitor whether it is successfully implemented in the market.To monitor the customer awareness about the sales club programme whether they are fully aware about the programme or not.To check out that all the required materials for sales club programmed are given to customer/ retailer or not.To find out the effect on increasing the sales b/z of sales club programmed at partial shop.To monitor the purity of vis-cooler at sales club account.To monitor the purity of sack at sales club account.To monitor whether updates in the programmed book is clan in time or not.To make the books available to the customers.

PRODUCT PORTFOLIO:-

Refreshment beverages

Sports drinks

100% natural fruit juices and juice based drinks

Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options– Diet Pepsi and 7Up Light; hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, and 100% natural fruit juices and juice based drinks – Tropicana, Tropicana Twister and Slice. Our local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola complete our diverse spectrum of brand.

PepsiCo’s snack food company:-

PepsiCo’s snack food company, Frito-Lay, is the leader in the branded potato chip market and was amongst the first companies to eliminate the use of trans fats and MSG in its products. It manufactures Lay’s Potato Chips; Cheetos extruded snacks, Uncle Chipps and traditional namkeen snacks under the Kurkure and Lehar brands. The company’s high fiber breakfast cereal, Quaker Oats, along with Lehar Lites, low fat and roasted snack options enhance the choices available to the growing health and wellness needs of our consumers. Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets.

PRODUCT BOTTLE FILLING

PEPSI 300ml, 200ml

MIRINDA ORANGE 300ml, 200ml

MIRINDA LEMON 300ml, 200ml

SLICE 250ml

7-UP 300ml, 200ml

EVERVESS SODA 300ml

MOUNTAIN DEW 300ml, 200ml

Plant is producing 10 million cases every year.

Plant has employed about 200 employees with separate company uniform on permanent and causal basis. There are 40 managers/ officers/ supervisors and rest of workmen. Plant is dispatching near about 125-150 tracks in peak seasons per day to various location. This Plant spreads over 75 acres.

DISTRIBUTION NETWORK:-

SALES FORCE:- There is a dedicated sales force at every C&F and Distributor point. Every Salesman is assigned a specific route that he has to cover every day. The Salesman has to take care of all the Shops on the designated route and address and inform (to the Sr. CE / CE) about any issue any retailer has on the route. The Salesmen are also assigned the task of providing all the information to the retailers regarding the daily schemes and the details of all the promotion schemes launched from time to time. These include informing the retailer about the promotional scheme, registration for the scheme, terms and conditions of the scheme etc. The Salesman is also assigned the task of registering maximum possible outlets on his assigned route.

Pricing Strategies:-

List Price: The Price of each product is fixed and there is no discrepancy. Salesmen are not authorized to make any change, alteration or give discounts unless authorized by the Company.

Discounts: Discounts are provided to Wholesalers and Slums but there is no discount for retailers. The discounts are negotiated directly with the Company and the C&F or the Distributor point is not involved in the price negotiation.

Allowances: Allowances are given to salesmen on achieving their daily targets. This target is given to every Salesman every day before he goes on his designated route. The Depot In charge (Sr. C E / C E) gives the target to every salesman in consultation with the TDM.

Payment period and Credit terms: No credit is provided. The payment procedure is not flexible as the retailers are required to make on the spot payments. At times, they defer the payment and in that case, the Salesman either shows a shortage or pays the rest of the amount by himself. The wholesalers are also required to make in advance but at times they also defer the payment and make the payment at a later date.

Products Price List

Aquafina(1ltr) 14/-

Pepsi(300ml,600ml, 12/-,25/-,55/-

2ltr

Dew(300ml,600ml,2ltr) 12/-,25/-,55/-

Mirinda(300ml,600ml,2ltr) 12/-,25/-,55/-

Slice(250ml,500ml,1ltr) 13/-,26/-,50/-

Cans(pepsi,dew,slice,mirinda

)

30/-

Promotion Strategies:-

Sales Promotion: This is the most frequently used form of promotion which is used to increase the sale of the selected product. These promotions are used from time to time depending upon the sale of the products. If the sale of any particular product declines or shows a declining trend then a suitable Sales Promotion Campaign is launched to increase the sale of that product.

Advertising: Advertising is done by PepsiCo. COBO (Company owned Bottling Operations) and FOBO (Franchisee owned Bottling Operations) have no say in the advertising campaigns and their planning. The advertising account of Pepsi is handled by JWT (J Walter Thomson) in association with the corporate office of PepsiCo India.

Sales Force: There is a dedicated sales force at every C&F and Distributor point. Every Salesman is assigned a specific route that he has to cover every day. The Salesman has to take care of all the Shops on the designated route and address and inform (to the Sr. CE / CE) about any issue any retailer has on the route. The Salesmen are also assigned the task of providing all the information to the retailers regarding the daily schemes and the details of all the promotion schemes launched from time to time. These include informing the retailer about the promotional scheme, registration for the scheme, terms and conditions of the scheme etc. The Salesman is also assigned the task of registering maximum possible outlets on his assigned route.

Market share:-

44.3

14.7

37.6

Market Shares

Coca ColaCadbury,Parle,RC-ColaPepsi

Competition:-

Market structure:-

COMPANY

COBO FOBO

WAREHOUSE

C & F DISTRIBUTOR

WHOLESALER SLUMS RETAILER

RETAILER CUSTOMER

CUSTOMER

SALESMEN SALESMEN

Initially the focus of the Company remains on reaching all the markets and then the Company shifts its focus on increasing the frequency of sales in the respective markets so that the sales and profitability of the Company can be increased.

Company (PepsiCo): PepsiCo India provides the salt to all the bottling plants in the Country that carry out the bottling operations

COBO: These are Company owned bottling operations operating directly under the Company. Out of 32 bottling plants, PepsiCo owns 15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for Pepsi.

Warehouses: These are Company or franchisee owned warehouses spread over various locations that cover the respective territories and come under the purview of their respective Area or Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where they are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution network and receive proper assistance from the Company (either COBO or FOBO). The C & F center is owned by a private player and not by the Company. The vehicles (Delivery Vans) are owned by the Company, and the Salesmen at the C & F points are on the Company Payroll.

Distributors: These are small, compared to C & F centers. Everything at the Distributor point owned and managed by the distributor, even the salespersons are on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get the stock directly from the Company or Franchisee. They get their stock directly from the Company and thus get special rates and extra discounts from the Company.

Slums: They are generally smaller than the Wholesalers are. However, they get special discounts from the C & F centers and Distributor points.

All the different players in the distribution channel namely C & F centers, Distributor points, Wholesalers and Slums have different designated markets and are not supposed to operate in the market designated to any other player.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi as they are the only point of contact with the customers. Retailers get their stock from all the other channel members in the distribution channel.

ORGANISATIONAL STRUCTURE:-

ABOUT THE CUSTOMERS:-

Chairman

President

Unit Manager

TDM

ADC

Customer Executive

Distributers A,B,C

Route Agents

Helper

Customer Executive

Distributers E,F

Route Agents

Helper

As my company guide given me the topic of promotional merchandising I had covered several shops and I understand this concept equally well by covering almost 20 shops in 15 days. These are as follows:

Retail shopsFood MartsShopping MallsBakery ShopsFood Court

SEGMENTATION:-

GEOGRAPHIC:-

REGION (URBAN AND RURAL AREAS) [INDIA]

CLIMATE (HOT AND DRY)

TARGET AREA – Domestic users, Restaurants, Bars, School and College canteens.

DEMOGRAPHIC:-

Age – 14 to 30

Gender – Male and Female

Family size – no bar

Family lifecycle – unmarried, married, Income – 5000+

Psychographic:-

Social class – Middle Class and Upper Class

Pepsi attempts to capture the youth of today by focusing on their personality, lifestyle and attitude of youth through advertisement

Behavioral:-

Occasions – Parties, Birthdays, Sports and regular occasions

Benefits – Quality and taste

Loyalty status – Strong

Readiness stage – Aware, Interested

PRODUCT POSITIONING:-

Pepsi prefers to position itself as the beverage choice of the “New Generation”, “Generation Next”, or just as the “Pepsi Generation”.

These terms adopted in Pepsi’s advertising campaigns are referring to the markets that marketers refer to as Generation X. The Generation X consumer is profiled to be between the ages of 18 to 29. They have high expectations in life and are very mobile and active. They adopt a lifestyle of living for today and not worrying about long-term goals. Though Pepsi’s main emphasis is on this segment but they also have a focus on the 12 to 18 year old market.

The rich deep blue coloring represents eternal youthfulness and openness. Marketing plans like “Yeh Dil Maange More”, “Got Another Pepsi”, “Ye Pyass Hai Badi” have made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category.

BUYING PATTERN OF CONSUMERS:-

COCA COLA MIRINDA THUMS UP PEPSI SLICE MAZZA0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

CHILDRENYOUNGERSOLDERS

This statistics and charts are totally depend on the market survey to find the consumer behavior and their buying pattern. This questionnaire is as follows:-

MARKET RESEARCH QUESTIONARES

PERSONAL DETAILS :-

NAME:- __________________________

1. AGEA) 17-20B) 21-24C) 25-28D) 29 and Above

2. GENDER(A) Male(B) Female

3. EDUCATION(A) High school(B) Under graduate(C) Graduate(D) Post Graduate(E) Others

MARKET SURVEY:-

1. Which brand of soft drinks do you mostly prefer?(A) Coca Cola(B) Pepsi co(C) Parle

2. Whom so you buy soft drinks for? (Tick one)(A) Family(B) Children(C) Institutional purposes/ Social occasions

3. How often do you have a softdrink?(A) 1-3 times a week(B) 4-6 times a week(C) More than 6 times a week(D) Rarely

4. What quantity do you usually prefer to buy?(A) 200-250ml(B) 300ml(C) 500ml bottle(D) 1-2ltr

5. Through which medium did you come to know about your preferred soft drink brand?(A) Hoardings & Banners(B) Newspapers & Magazines(C) T.V./ Radio(D) Word of mouth(E) Others

6. Which is the most preferred channel for purchasing a soft drinks?(A) Retail/ Grocery Store(B) Supermarket/ Hypermarket(C) Cineplex(D) Pan Shops(E) Restaurants(F) Others

7. Do the following reasons influence your consumption of soft drinks?

FACTORS VERY LESS IMPORTANT

LESS IMPORTANT

NO INFLUENCE IMPORTANT VERY IMPORTANT

FLAVOUR

NO OF FLAVOURS

AVALIABILITY &CONVINIENCEPRICE

CLEANLINESS OF BOTTLES/ NOT DAMAGEDMANUFACTORING DATE/EXPIRY DATEFREQUENCY OF ADVERTISEMENTBRAND AMBASSADORBRAND VALUE/ BRAND NAME

CALORIE CONTENT

PROMOTION SCHEMES/DISCOUNTSVISUAL APPEAL OF PACKAGING

INGRIDIENTS

8. Which is the most important characteristic for choosing the channel?(A) Pricing(B) Ambience(C) Location/Nearness(D) Service(E) Display/Merchandising(F) Reputation(G) Occasion(H) Others

9. Are you satisfied with the price of your soft drinks?(A) Yes(B) No

SWOT ANALYSIS:-

STRENGTH:

1) Good market penetration.2) Motivated channel partner.3) Well defined routes.

WEAKNESS:

1) All flavour were not available in at least 80% shops.2) Complaint handling was not up to mark.

3) Supply in certain area is very irregular and also route agents are not covering full routes.

4) Poor signage and display is making the routes week for the sale of Pepsi.5) Interpersonal relationship with the company officials and the route agent is not

satisfactory. OPPORTUNITY:

It is observed that in some newly establishing areas many new outlets are opening , Pepsi needs to concentrate on these new outlets and can gradually increase its sale in these area.Large number of mix outlets can be changed to Pepsi exclusive and coke exclusive to mix only by luring them good and efficient supply, glow sign and cooling equipments.

THREATS:-

NGO’s – NGO’s like CSE can seriously hamper the sales and prospects of companies operating in this industry. This happened during the pesticide controversy involving both coke and Pepsi.

HEALTH – Growing health awareness among people and some of ill effects of carbonated beverages have pursued many people to switch over to non-carbonated beverages that can seriously hamper the long-term prospects of the entire Industry and not Pepsi.

ENVIRONMENT – Environmental concerns are often raised because of the massive amount of water extracted by the bottling plants resulting in the drop in groundwater level which affects the local population adversely.

RECOMMENDATION:-

This is one of the most important and most difficult part of the study. I arrived at certain recommendations for PepsiCo India(Trans-Yamuna and Agra markets) after the analysis of the data. Some of the important recommendations are as follows

There should be and correct feedback from the retailers on the performance of salesmen. This will help improve their efficiency and accountability. Moreover, this will also help in reducing the confusing that the retailers have at times because the salesman does not explain the schemes properly.

As already mentioned Vizicoolers are a major reason of dissatisfaction among retailers. The periodical maintenance check of Vizicoolers is done at three months. This should be done at an interval of 45 days or 60 days instead of the current practice of 90 days

A complete survey of the every territory should be done for stands, banners logo racks etc. and then a proper budget and plan should be made for their availability at the required places, instead of doing it in bits and pieces as the current practice is this will help with promotion at every retailer level

There should be incentives for salesmen for every display they enroll because they are assigned this task and if they get incentives for the same then it will greatly increase the efficiency of the promotional activities.

Pepsi should also introduce a version of Diet Pepsi Cola as a sports drink range this is a completely new and untapped market which will help in providing the impetus for Diet Pepsi

Pepsi should start more aggressive marketing of its Diet Pepsi range of products as they have very good growth and future prospects while there is not much growth in the carbonated beverages sector.

WHO AND WHO`S

DEPARTMENTAL HEAD OF THE COMPANY- MR Deepak Bhalla

CEO OF THE COMPANY- MR Ravi Kant Jaipuria