rm project coca cola

8/11/2019 Rm Project Coca Cola

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CHAPTER I: INTRODUCTION

INTRODUCTION TO 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 400 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 400 brands, the Coca-Cola system has successfully applied a simple

formula on a global s cale: “Provide a moment of refreshment for a small amount

of money- a billion times a day.”

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 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 115 years, Coca-Cola has created a special moment of pleasure for hundredsof millions of people every day.



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The Company aims at increasing shareowner value over time. It accomplishes this

by working with its business partners to deliver satisfaction and value to

consumers through a worldwide system of superior brands and services, thus

increasing brand equity on a global basis. They aim at managing their business

well with people who are strongly committed to the Company values and culture

and providing an appropriately controlled environment, to meet business goals

and objectives. The associates of this Company jointly take responsibility to

ensure compliance with the framework of policies and protect the Company‟s

assets and resources whilst limiting business risks.

INDUSTRY PROFILE

A BRIEF INSIGHT - THE FMCG INDUSTRY IN INDIA

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



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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

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.

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 cr. 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 cr. The



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sector being one of the biggest sectors of the Indian Economy provides up to 4

million jobs.

A BRIEF INSIGHT - BEVERAGE INDUSTRY IN INDIA

In India, beverages form an important part of the lives of people. It is an industry,

in which the players constantly innovate, better products to gainmore con

Fig 2.0 BEVERAGES IN INDIA

The beverage industry is vast and there various ways of segmenting it, so as to

cater the right product to the right person. The different ways of segmenting it are

as follows:

Alcoholic, non-alcoholic and sports beverages.

Natural and Synthetic beverages.

In-home consumption and out of home on premises consumption.

BEVERAGES

ALCOHOLIC NON-ALCOHOLIC

CARBONATED

COLA NON-COLA

NON-CARBONATED

NON-COLA



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Age wise segmentation i.e. beverages for kids, for adults and for senior citizens.

Segmentation based on the amount of consumption i.e. high levels of

consumption and low levels of consumption. If the behavioural patterns of

consumers in India are closely noticed, it could be observed that consumers

perceive beverages in two different ways i.e. beverages are a luxury and that

beverages have to be consumed occasionally. These two perceptions are the

biggest challenges faced by the beverage industry. In order to leverage the

beverage industry, it is important to address this issue so as to encourage regular

consumption as well as and to make the industry more affordable.

Four strong strategic elements to increase consumption of the products of the

beverage industry in India are:

The quality and the consistency of beverages needs to be enhanced so that

consumers are satisfied and they enjoy consuming beverages.

The credibility and trust needs to be built so that there is a very strong and

safe feeling that the consumers have while consuming the beverages.

Consumer education is a must to bring out benefits of beverageconsumption whether in terms of health, taste, relaxation, stimulation,

refreshment, well-being or prestige relevant to the category.

Communication should be relevant and trendy so that consumers are able

to find an appeal to go out, purchase and consume.

The beverage market has still to achieve greater penetration and also a wider

spread of distribution. It is important to look at the entire beverage market, as a

big opportunity, for brand and sales growth in turn to add up to the overall growth

of the food and beverage industry in the economy.



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COMPANY PROFILE

MISSION :

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a

company and serves as the standard against which we weigh our actions and

decisions.

To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

VISION:

Our vision serves as the framework for our Roadmap and guides every aspect of our

business by describing what we need 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.



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Productivity : Be a highly effective, lean and fast-moving organization.

WINNING CULTURE:

Our Winning Culture defines the attitudes and behaviours that will be required of us

to make our 2020 Vision a reality.

LIVE OUR VALUES :

Our values serve as a compass for our actions and describe how we behave in the

world.

Leadership : The courage to shape a better future.

Collaboration : Leverage collective genius.

Integrity : Be real.

Accountability : If it is to be, it's up to me.

Passion : Committed in heart and mind.

Diversity : As inclusive as our brands.

Quality : What we do, we do well.

FOCUS ON THE MARKET:

Focus on needs of our consumers, customers and franchise partners. Get out into the market and listen, observe and learn. Possess a world view. Focus on execution in the marketplace every day.

Be insatiably curious.

WORK SMART:



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Act with urgency. Remain responsive to change.

Have the courage to change course when needed. Remain constructively discontent. Work efficiently.

ACT LIKE OWNERS:

Be accountable for our actions and inactions. Steward system assets and focus on building value.

Reward our people for taking risks and finding better ways to solve problems.

Learn from our outcomes -- what worked and what didn‟t.

TRENDS AND FORCES

The Global Economic Recession Threatens Overall Demand:

In 2008 and 2009, the global economy has fallen into a recession. Not just the

United States but countries from all over the world have felt the impacts of the 2008

Financial Crisis. This may be a problem for Coke, which derives approximately 75%

of its sales from outside North America. Still, the company has positioned itself well

in international markets both organically and through acquisitions, such as that o

Chinese juice maker Huiyuan for $2.4 billion. However the company was

unsuccessful with its purchase of Huiyuan as it broke antitrust laws in China. On

March 5, 2010, Coke's CEO said that emerging markets are bouncing back quickerthan more developed markets.

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New Aversion to Soda Threatens Main Business:

74% of the Coca Cola Company's products are classified as carbonated soft drinks,

making it particularly sensitive to changes in demand for CSD. Consumer demand

for CSD has been negatively affected by concerns about health and wellness. This is

true across most of KO's markets. There has been an increase in the number o

regulations regarding CSD in the United States in response to the heightened desire

for healthy food consumption. In 2006, many state public school systems banned the

sale of soft drinks on their campuses. The Centre for Science and Public Interest

proposed that a warning label be placed on all beverages containing more than 13g

of sugar per 12-oz serving. This proposal would affect all non-diet, full calorie

drinks produced by KO. These factors have driven a shift in consumption away from

CSD to healthier alternatives, such as tea, juices, and water.

Within the CSD segment consumers have been moving away from sugared drinks,

opting instead for diet beverages, which do not generally contain any sugar or

calories. Though KO has been somewhat slow to respond to this shift in consumer

preferences, it has recently begun to increase its development of both diet CSD and

non-CSD beverages. KO is faced with the task of balancing the risk of new

innovations with the low growth rates of established brands, a predicament for

manufactures throughout the beverage industry.

Integrated Bottler Strategy Increases Flexibility:

After CEO Neville Isdell was brought out of retirement in 2004 to revive the then

flagging beverage maker, one of the first areas that he targeted for improvement was

KO's frayed relations with its extensive network of bottlers. Since consolidating allcompany-owned bottlers into the Bottling Investments division, Isdell has continued

to increase KO's interest in its bottlers through stake purchases or outright buyouts.

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This strategy represents a weakening of the division between KO's production and

distribution operations. Isdell believes that by combining production and distribution

operations the company will have enhanced its ability to quickly respond to

changing market conditions. In KO's 2007 Q3 Analyst call, Isdell credited the

outright purchase of Coca-Cola Bottlers Philippines (CCBPI) for double-digit

volume growth in that country. Additionally, KO has signed new agreements with

many of its bottlers which allow them to distribute drinks produced by other

companies. For example, Coca-Cola Enterprises (CCE) now distributes Arizona, a

ready-to-drink tea made by Ferolito, Vultaggio & Sons, an American iced-tea

company. Isdell sees these agreements as another way of taking advantage of therapidly growing non-CSD market.

Bottled Water Falling Out of Favour:

In Q3 2009, Dasani bottled water's revenues fell by double digits; this decrease is

emblematic of the bottled water industry as a whole. In August 2009, the Wall Street

Journal reported that sales of bottled water had fallen for the first time in five years.

The combination of the recession and upper class consumers' increased

environmental consciousness has lead many customers to cut back on bottled water

in favour of tap water and reusable containers.

Following this trend, at least one town in Washington state and one in Australia have

outlawed the selling of bottled water within their city limits. In 2008, bottled water

was the third most popular beverage (behind soda and milk), but compared to 2007,

Americans consumption declined for the first time, down to 8.7 billion gallons from

8.8 billion gallons. Although this is a seemingly small decrease, industry experts

don't expect bottled water to bounce back anytime soon.

Commodity Cost Fluctuations Affect Margins:

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Coca-Cola India was the leading soft drink brand in India till 1977 when it was

forced to close down its operation by a socialist government in the drive for sel

sufficiency. After 16 years of absence, coca cola returned to India and witnessed a

different culture and economic platform. During their absence, Parle brothers

introduced a new type of cola called THUMS UP. Along with, they also formulated

a lemon flavoured drink, LIMCA, and mango flavoured, MAAZA. In 1993, coca

cola bought the whole Parle Brother operation, in a hope to beat the main competitor

(Pepsi). They presumed that with the tried and tested products of Parle they will beable to regain their throne in the Indian soft drink market. Pepsi having a 6 year head

start helped revive the demand for global cola but it was not easy for the soft drink

giant (coca cola) to return to India. Pepsi put more focus on the youth of the country

in their advertisements but coca cola tried influencing Indians with the „American‟

way of life, which turned out to be a mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit o

being one of the biggest investor in the country; however, their sales figures werenot so impressive. Hence, they had to re-think their market strategies. Coca-Cola

learned from Hindustan Lever that reducing their will result in more turnover, hence



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leading to profit. They launched an extensive market research in India. They

ascertained that in India 3 As must be applied; Affordability, Availability and

Acceptability. Coca-Cola learnt that they were competing with local drinks such as

“Nimbu Pani”, “Narial Pani”, “Lassi” etc. and reached to a conclusion that

competitive pricing was unavoidable. Since then they introduced a 200 ml glass

bottle for Rs.5. Further, they had different advertising campaigns for different

regions of the country. In the southern part, their strategy was to make Bollywood or

Tamil stars to endorse their products. In various regions they tried portraying coca

cola products with different regional food products. One of the most famous ad

campaigns in India was „Thanda Matlab Coca -Cola‟; they featured the same quotewith different regional entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market

share i.e. 60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment,

33% in Packaged water Segment, compared to its arch rival, Pepsi. Diversifying

their product range and having a competitive pricing policy, they have regained their

throne. With virtually all the goods and services required to produce and market

Coca-Cola being made in India, the business system of the Company directlyemploys approximately 6,000 people, and indirectly creates employment for more

than 125,000 people in related industries through its vast procurement, supply, and

distribution System.The Indian operations comprises of 50 bottling operations, 25

owned by the Company, with another 25 being owned by franchisees. That apart, a

network of 21 contract packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can

navigate the narrow alleyways of Indian cities – constantly keep our brands availablein every nook and corner of the Country‟s remotest areas.



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PRODUCTS OF COCA-COLA INDIA

COCA-COLA:-

In India Coca-Cola was leading soft drink till 1977 when Government policies

necessitated its departure. Coca-Cola made its return to the country in 1993 Over the

past fourteen years has enthralled consumers in India by connecting with passions o

India – Cricket, movies, music & food. Coca- Cola‟s advertising campaigns “Jo

Chaho Ho Jaye” & “Life Ho Toh Aise” were very popular & had entered youths

vocabulary. In 2002.Coca- Cola launched its iconic campaign “Thanda Matlab Coca -Cola” which sky rocketed the brand to make it India‟s favourite soft drink brand.

LIMCA:-

Limca was introduced in 1971 in India. Limca has remained unchallenged as the

No.1 sparkling drink in the cloudy lemon segment. The success formula is the sharp

fizz and lemoni bite combined with the single minded proposition of the brand as the provider of “Freshness” .Limca can cast a tangy refreshing spell on anyone,

anywhere. Derived from “Nimbu” + “Jaise” hence Lime Sa,.

THUMS UP:-

Thums up is a leading sparkling soft drink and most trusted brand in India.

Originally introduced in 1977, Thums up was acquires by The Coca-Cola Company

in 1993. Thums up is known for its strong, fizzy taste and it confident, mature and

uniquely masculine attitude. This brand clearly seeks to separate the men from the

boys.



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SPRITE:-

Sprite a global leader in the lemon lime category is the second largest sparkling

beverage brand in India. Launched in 1999, Sprite with its cut-thru perspective has

managed to be a true teen icon.

FANTA:-

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied

a strong market place and is identifies as “The Fun Catalyst”. Perceived as a fun

youth brand, Fanta stands for its vibrant colour, tempting taste and tingling bubbles

that not just uplifts feelings but also helps free spirit thus encouraging one to indulge

in the moment.

MAAZA:-

Maaza was introduced in late 1970‟s. Maaza has today come to symbolise the very

spirit of mangoes. Universally loved for its taste, colour, thickness and wholesome

properties, Maaza is the mango lover‟s first choice.

KINLEY:-

The importance of water can never be understated, Particularly in a nation such as

India where water governs the lives of the millions, be it as a part of everyday ritual

or as the monsoon which gives life to the sub continent. Kinley water comes with the

assurance of safety from the Coca-Cola Company.



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CHAPTER II : ANALYSIS I

MARKETING MIX OF COCA-COLA INDIA

PRODUCT:-

Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola,

Fanta, Sprite, Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was

another area where Coca-Cola identified major opportunities. In 2002, Packaged

drinking water in India was a Rs 1,000 cr industry and growing by 40% every year.

PDW was a low margin – high volume business, but it was an attractive propositionfor bottlers as it increased plant utilization rates. In this market Coke‟s Kinley was

pitched against Ramesh Chauhan‟s Bisleri and Pepsi‟s Aquafina. The product not

only faced intense competition but also was difficult to differentiate. Coke

positioned Kinley as natural water with the tag line “Bhoond Bhoond Mein

Vishwas” (Trust in each drop of water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result 12

more bottlers were brought into CCI‟s fold. This acquisition added Crush, CanadaDry and Sport Cola to CCI‟s product line. This meant CCI had three orange, clear

lime and cola drinks each in its portfolio.

PRICE:-

Coke learnt with experience that price was a strategic weapon in an emerging market

like India. An increase in value added tax in 1996 had taken the price of the 300ml

bottle beyond the reach of many Indian customers. In 2000, CCI conducted ayearlong experiment in coastal Andhra Pradesh by introducing a 200ml bottle at Rs

7. The volumes went up by 30% demonstrating the importance of consumer

affordability. So the 200ml pack priced at Rs 5 was rolled out countrywide in



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January 2003. The advertising Campaign highlighted the affordability and Indian

image.To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in

selected places in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3

per cup in testing marketing exercise conducted in mid – 2002. In 2002 Kinley with

35% market share had become the leader in the retail PDW segment and was

contributing 20% of CCI‟s revenues.

PLACE:-

Coke pushed down responsibilities from corporate headquarters to the local business

units. The aim was to effectively align CCI's corporate resources, support systemsand culture to leverage the local capabilities. CCI's operations had been divided into

North, Central and Southern regions. Each region had a president at the top, with

divisions comprising marketing, finance, human resources and bottling operations.

The heads of the divisions reported to the CEO. Bottling operations were divided

into four companies directed by the bottling head from headquarters. Under the new

plan, CCI shifted to a six region profit center set up where product customization

and packaging, marketing and brand building were taken up locally. A Regional

General Manager (RGM) headed each region with the regional functional heads

reporting to him. All the RGMs reported to VP (Operations, who in turn reported to

CEO. The four bottling operations, with 37 bottling plants, were merged into

Hindustan Coca-Cola Beverages (HCCB). Each of the six regions had on an average

six bottling plants. Each plant was headed by an Area General Manager (AGM) and

held profit center responsibility for a business territory. He reported to the RGM as

well as the head of bottling at the head quarters.

PROMOTION:-

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The



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marketing campaign positioned Coca-Cola as an international brand and did not

emphasize local association. Coke, as a deliberate strategy, decided not to spend

heavily on promoting Thums Up. Indeed the marketing spend on Thums Up between

1993 and 1996 was almost negligible. The overall marketing effort was also not

focused as CCI changed the head of marketing three times during the period.

Thumps Up remained neglected. Inadequate marketing support for other Parle

brands also led to their declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture.

They argued that CCI's lack of interest in promoting Thumps Up was resulting in

falling sales and asked CCI to take corrective action.Coke is primarily targeted at

young individuals over the age of twenty-five. This can be seen by Coca-Colas

advertising campaigns, which are aimed towards the young, by featuring well known

personalities popular to this age group. During 90'ies Coke's promotion efforts did

not seem to be effective. They were focused on mega events like the 1996 Cricket

World Cup held in India. CCI's World Cup Cricket campaign was overshadowed by

Pepsi's "Nothing official about it" campaign. Major analysts were surprised that

Thumps Up was totally out of the picture during such a mega event. In 1998localization of marketing efforts, CCI signed up celebrities like Aamir Khan,

Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke also began efforts to

rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was declared the

fastest growing market within the Coca-Cola system. But things were far from

normal. Attempts at building growth through discounts and PET take home segment

were not very successful because of lack of coordination between the launches and

marketing back-up.

To maintain good relationships with bottlers and avoid defections to the other camp,

dealers had been pampered by offering expensive overseas trips. In 2000, Coke



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wrote off investments in India, amounting to $400 Mn. The revised value of CCI's

assets after the charge was $300 mn.CCI spent $3.5 mn to beef up advertising and

distribution for Thumps Up. By 2002, it had become India's No.2 cola drink after

Pepsi. Maaza, the mango drink, was repositioned as a juice brand and saw a growth

of almost 30% in 2001. Since India was a large country of different tastes and

cultures, CCI customized its marketing strategy for different regions. It promoted the

Coke brand in Delhi, Thumps Up in Mumbai and Andhra Pradesh, and Fanta in

Tamil Nadu. Coke had plans to launch Rimzim, a spicy soda drink in North

Maharashtra.

PESTEL ANALYSIS OF COCA-COLA INDIA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to

know the EXTERNAL environment in which the organisation is working and is

going to work in the future.

Political Factors:

Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather

than revealing its formula to the government. They re-entered the country in 1993.

However, the primary barrier for Coca- Cola‟s entry into the Indian market was its

political environment. Despite the liberalization of the Indian economy in 1991 and

introduction of the New Industrial Policy to eliminate barriers such as bureaucracy

and regulation, there was still a lot of protectionism. India‟s past promotion o“Indigenous availability” or “Swadeshi movement” depicted its affinity for local

products. Due to India‟s suspicion of foreign busi ness entering Indian markets, Coca

Cola received alien status its re-entry. This and some of the policies imposed on



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foreign enterprises proved as a hindrance to the growth of the company in the

country. To make things worse, the policies were neither clear nor unchanging.

Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August

5th 2003, The Centre for Science and Environment (CSE), an activist group in India

focused on environmental sustainability issues (specifically the effects o

industrialization and economic growth) issued a press release stating: "12 major cold

drink brands sold in and around Delhi contain a deadly cocktail of pesticide

residues". According to tests conducted by the Pollution Monitoring Laboratory(PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-

Cola brands from across the city were found to contain pesticide residues surpassing

global standards by 30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-

40%1 in only two weeks on the heels of a 75% five-year growth trajectory. Many

leading clubs, retailers, restaurants, and college campuses across the country had

stopped selling Coca-Cola. This threatened the newly achieved leadership attainedover Pepsi due to a successful marketing campaign.

.Economic Analysis :

The Indian economy sustained the global economic slowdown in the previous year

and has shown a tremendous economic growth. It showed 8.6% of growth in the last

quarter of 2009-10 as compared to 5.8% same time in the previous year. It has

emerged as an attractive economy to invest in as many opportunities has been

recognized.

Economic growth



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India is ranked second in economic growth, just behind China. Analysts have said

that India will be the third biggest economy of the world in the coming year behind

China and USA. With economic growth many opportunities have been seen, which

have attracted many foreign investor to the company.

Coca cola India returned to the country in 1993, despite few problems in the start

they have emerged as the king of soft drink industry in India. The strong economic

growth of India has resulted in coca cola to invest heavily in sales and distributive

channels. It has introduced two new products, Nimbu Fresh and an energy drink

„Burn‟.Coca cola registered 22% growth in their unit case volume in the second

quarter (April-June). It is the 16 th consecutive quarter of such growth out of which

13 are double digit. Coca cola India‟s growth is in contrast to its overall

performance, the beverage king reported a growth of just 5% (worldwide) in the

same quarter.

Inflationary effects

Inflation is one of the main problems that Indian economy has been facing for a year

now. Rising prices in the food and other products doesn‟t only effect the consumersit also has an adverse effect on a company. The inflation rate for the year 2009 was

recorded to be 11.49%. As prices have gone up in India for various products,

especially oil, there has been uncertainty in decision making of almost every

company. Coca cola India has also been affected by the same; it has been forced to

think about their input costs, as they have been rising due to inflation. Their

expenditure has been rising, with more costs in salaries, distribution channels and

other operating costs. Beverage industry being price competitive market, they have

not revised their product prices.

Exchange rate



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The exchange rate of rupee to US Dollar has been stable but in the previous months

the rate has had a tumultuous period. Exchange rate determines at what price will the

company export its products and import whatever is required by it. The previous

year, the rate of rupee to USD touched 44, on an average it has been around 47, so

the exports earned less and the imports cost more. Therefore, coca cola India had to

bear some low profitable times. However, in the present scenario rates have reached

a stable level and exports are on an increasing trend.

Social Analysis:

Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition fromLeher Pepsi which had the advantage of entering the country 7 years earlier.

Initially, it struggled to find acceptance as there were already other brands such as

Parle‟s Thums Up which existed in the market. Coca -Cola had earlier focussed more

on the American way of life in their advertising campaigns, which the Indian

consumers could not identify with. Also, they did not focus on competition from

other alternatives such as lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives toCoca-Cola. However, things were brought under control when Thums Up was

bought over by Coca Cola, and more attention was paid by the company on their

marketing mix.

With the lowering of their prices by almost 15-20%, introduction of newer products

which appealed to the Indian tastes, more investment in market research and

focussing on the target group of 18-24 year olds, they were able to increase their

market share and build brand loyalty.

Coca Cola today, has made significant investments to build its business in India. It

has also generated employment for almost 1,25,000 people in related industry



23

through its procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy,

strengthened middle class and low per capita consumption. With the increase in

health consciousness among the urban consumers, the company has introduced

newer products such as Diet Coke, which contain lesser calories than ordinary Coca

Cola. This is also responsible for the company shifting focus from carbonated drinks

to Fruit Drinks / Juices and bottled water.

The rural market had also been identified by Coca-Cola India as an attractive target,

with almost 70% of the country‟s population. The company has recorded significantgrowth in recent yearsCoca Cola India has also taken many initiatives as a

responsible corporate citizen, by tying up with many NGOs such as BAIF (or

Bharatiya Agro Industrie s Foundation), SOS Children‟s Villages and Save the

Children. It has also taken initiatives to promote education in rural areas.

Technological Analysis:

Coca-Cola has started operations of its R&D facility in India, with the view o

localizing its product portfolio. The major focus would be on non carbonated drinks

and flavours. The company‟s R&D team has already rolled out drinks such as Maaza

aam panna and also a Maaza mango milk drink, and is exploring options to enter

new categories in India such as juices in localised flavours, energy drinks, sports

drinks and flavoured water. These initiatives are being taken by the company to

further expand their product portfolio.

With the increasing importance of 360 degree media tools and overall ad spend on

social media sets likely to grow by almost 44%, Coca-Cola has increased ad spend

on the internet.



24

Environmental Analysis:

Coca Cola has earned a title of environment friendly company and Coca Cola Indiatoo has followed in the footsteps. Coca Cola India‟s Corpo rate Social Responsibility

(CSR), is an initiative that prioritizes many social and environmental issues; one o

them being „water conservation‟. They support many community based rainwater

harvesting projects and help lending conservation education.

The company has made sure that the following ideas are considered during their

operations:

Environmental due diligence before acquiring land .Environmental impact

assessment before commencing project .Ground water and environment survey

before selecting the site:Ban on purchasing CFC emitting refrigerating

equipmen,Waste water treatment facilities,Compliance with all regulatory

environmental requirements

Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment withconsistent profits and success. They seek to provide leadership in three different

areas, these are as follows:

Water efficiency and water quality

Energy efficiency

Eliminating or minimizing solid waste.

Though being an environmental friendly company, Coca Cola India had to face its

share of controversies. On 4 th February, 2003, Centre of Science and Environment in



26

Legal Analysis:

As the Indian consumer is getting more educated, the government is also payingspecial attention to consumer laws. In the past, there were not so many laws

protecting the benefits to the consumer but now every business has to go by the law

and fix their operations, strategies so as to satisfy their consumers, and employees.

Keeping in mind the consumer laws, employment laws, antitrust law, discrimination

laws etc. a business should plan out everything.

Consumer Laws

In the present scenario, consumer is the king, if a product is defective, not meeting

the stated standards a consumer can complain against the manufacturer.

Complaining and getting the verdict the court has made very fast and efficient as

government of India has installed new consumers courts. Their main job is to see

that the consumer benefits are being met or not. When producing their beverages,

Coca Cola India has to make sure that they have written price, manufacturing date,

expiry date, batch no, nutritional facts are written on the packed product.

Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have

stipulated norms on employing people from the country and getting expatriates in the

company as well. India has strict laws against employing child labour. Being a male

dominated society, the ministry has made sure that female employees are treated

with respect and given equal importance at the work place. Every field of work has

got its own wage, these are to meet the norms and laws set by the labour ministry.

When employing anyone, coca cola India cannot discriminate on social, regional or

any racists‟ basis.



27

Health and safety laws

As coca cola produces a product that is consumed by the consumer as a food item,

there are laws that the company must abide by when producing it. Ministry of Food

Processing Industries makes and oversees the laws and norms for the food

processing industries.

The Indian Parliament has recently passed the Food Safety and Standards Act, 2006

that overrides all other food related laws.

It will specifically repeal eight laws:

The Prevention of Food Adulteration Act, 1954.

The Fruit Products Order, 1955.

The Meat Food Products Order, 1973.

The Vegetable Oil Products (Control) Order, 1947.

The Edible Oils Packaging (Regulation) Order, 1998.

The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967.



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SWOT ANALYSIS OF COCA-COLA INDIA

Fig 2.3 SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES:

DISTRIBUTION NETWORK

The Company has a strong and reliable distribution network. The network is formed

on the basis of the time of consumption and the amount of sale yielded by a

particular customer in one transaction. It has a distribution network consisting of a

number of efficient salesmen, 700,000 retail outlets and 8000 distributors. The

distribution fleet includes different modes of distribution, from 10 tonne to open bay

three wheelers that can navigate the narrow alleyways of Indian cities – constantly

STRENGTHESDistribution Network.Strong Brand Image.

Low Cost of Operation.

WEAKNESSESHealth Care Issues.Small Scale Sector

Reservations.

OPPORTUNITIESLarge Domestic Markets.

Export Potential.High Income among People.

THREATSImports.

Tax & Regulatory SectorSlowdown in Rural Dema

SWOT ANALYSIS



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WEAKNESSES:

HEALTH CARE ISSUES

In India, there exists a major controversy concerning pesticides and other harmful

chemicals in bottled products including Coca-Cola. In 2003, the Centre for Science

and Environment (CSE), a non- governmental organization in New Delhi, said

aerated waters produced by soft drinks manufacturers in India, including

multinational giants PepsiCo and Coca-Cola, contained toxins including lindane,

DDT, malathion and chlorpyrifos - pesticides that can contribute to cancer and a

breakdown of the immune system.

SMALL SCALE SECTOR RESERVATIONS

The Company‟s operations are carried out on a small scale and due to Government

restrictions and „red -tapism‟, the Company finds it very difficult to invest in

technological advancements and achieve economies of scale.

OPPORTUNITIES:

LARGE DOMESTIC MARKETS

The domestic market for the products of the Company is very high as compared to

any other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the

soft drinks market; this includes a 42 per cent share of the cola market. Other products account for 16 per cent market share, chiefly led by Limca. The company

appointed 50,000 new outlets in the first two months of this year, as part of its plans

to cover one lakh outlets for the coming summer season and this also covered 3,500



31

new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage market.

EXPORT POTENTIAL

The Company can come up with new products which are not manufactured abroad,

like Maaza etc and export them to foreign nations. It can come up with strategies to

eliminate apprehension from the minds of the people towards the Coke products

produced in India so that there will be a considerable amount of exports and it is yet

another opportunity to broaden future prospects and cater to the global markets

rather than just domestic market.

HIGHER INCOME AMONG PEOPLE

Development of India as a whole has lead to an increase in the per capita income

thereby causing an increase in disposable income. Unlike olden times, people now

have the power of buying goods of their choice without having to worry much about

the flow of their income. Coca-Cola Company can take advantage of such a situation

and enhance their sales.

THREATS:

IMPORTS

As India is developing at a fast pace, the per capita income has increased over the

years and a majority of the people are educated, the export levels have gone high.

People understand trade to a large extent and the demand for foreign goods has

increased over the years. If consumers shift onto imported beverages rather thanhave beverages manufactured within the country, it could pose a threat to the Indian

beverage industry as a whole in turn affecting the sales of the Company.



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TAX & REGULATORY SECTOR

The tax system in India is accompanied by a variety of regulations at each stage on

the consequence from production to consumption. When a license is issued, the

production capacity is mentioned on the license and every time the production

capacity needs to be increased, the license poses a problem. Renewing or updating a

license every now and then is difficult. Therefore, this can limit the growth of the

Company and pose problems.

SLOWDOWN IN RURAL DEMAND

The rural market may be alluring but it is not without its problems: Low per capita

disposable incomes that is half the urban disposable income; large number of daily

wage earners, acute dependence on the vagaries of the monsoon; seasonal

consumption linked to harvests and festivals and special occasions; poor roads;

power problems; and inaccessibility to conventional advertising media. All these

problems might lead to a slowdown in the demand for the company‟s products.



33

CHAPTER III: Analysis II

DATA ANALYSIS

AGE GROUP & GENDER:

Fig 2.4

Below 20 20-30 30-40 40-50 above 50

Number of respondents 10 159 6 1 1

0

20

40

60

80

100

120

140

160

180

N u m

b e r o

f r e s p o n

d e n t s

Respondents based on age group

63%

37%

Respondents based on gender

Male

Female



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Fig 2.5

From Fig 2.4, we can comprehend that 90% of total respondents belong to the age

group of 20-30. This is because most of the consumers that prefer or consume Coca-

Cola products belong to this age group. About 6% belong to age group below 20 and

3% belong to age group of 30-40.Form Fig 2.5, we come to know that the gender

ratio of the total respondents is almost 2:1 (male: female).

SOFT DRINK CONSUMPTION & EXPENDITURE

Fig 2.6

0

10

20

30

40

50

Once aweek

Twice aweek

Thrice aweek

Everyday Rarely

Frequency of soft drink consumption

Series1



35

Fig 2.7

From Fig 2.6, we interpret that about 48% of the total respondents consume soft

drinks rarely or once a week. About 35% respondents consume soft drinks twice or

thrice a week and only 18% consumes soft drinks every day.

From Fig 2.7, we interpret that about 81% of the respondents spend only Rs. 50-100

a week on Coca-Cola products, which is very low as compared to the global

scenario. This creates a potential growth market for Coca-Cola India. About 12%

spends from 100-150 a week & 7% spend above 150.

SOFT DRINK PREFERENCE :

81%

12%

4% 3%

Weekly expenditure of coca-cola products

(INR)

50-100

100-150

150-200Above 200



36

Fig 2.10

From the above graph we interpret that about 70% of the respondents, prefer

consuming Coca-Cola product over Pepsi and other drinks. This clearly states why

Coca-Cola is market leader with almost 60% of market share. 23% prefer Pepsi

Products and only 75 prefer other drinks.

0

10

20

30

40

50

60

70

80

Coca-Cola Pepsi Other productsof Coca-Cola

Other productsof Pepsi

Other dr

N u m

b e r o

f r e s p o n s e s

Coca-Cola PepsiOther products of

Coca-ColaOther products of

PepsiOther d

Series1 72 34 52 7 12

Soft drink preference



37

Fig 2.11

Fig 2.12

0 20 40 60 80 100 120

Excellent

Good

Satisfactory

Below Satisfactory

Bad

NO. OF RESPONDENTS

Opnion About Coca-Cola Products

14%

40%26%

20%

Products expected by consumers fromCoca-Cola

Fizzy drinks Fruit drinks Energy drinks Alcoholic drinks



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CHAPTER-4

SUMMARY, RECOMMENDATIONS & CONCLUSION

SUGGESTION & CONCLUSION

SUGGESTIONS

The suggestions made in this section are based on the market study conducted as part

of “Coca -Cola India”. The suggestions are arranged in order of priority, highest first.

Perform a detail demand survey at regular interval to know about the unique needs

and requirements of the customer. The company should make hindrance free

arrangement for its customers/retailers to make any feedback or suggestions as and

when they feel.

The company should focus to bring some more flavors like health drinks and other

low-calorie offerings. Coca-Cola India can also introduce some fruit based drinks, asit has already entered the energy drink arena with “Burn”.

CONCLUSION

Though there were certain limitations in the study that was conducted. The sample

allowed for some conclusions to be drawn on the basis of analysis that was done on

the data collected. The data has clearly indicated that Coca-Cola products are more popular than the products of Pepsi mainly because of its TASTE , BRAND NAME ,

INNOVATIVENESS and AVAILABILITY , thus it should focus on good taste so

that it can capture the major part of the market. The study also indicated that the



40

consumers are satisfied with the Coca-Cola products and purchase them without any

specific occasions.

In today‟s scenario, customer is the king because he has got various choices around

him. If you are not capable of providing him the desired result he will definitely

switch over to the other provider. Therefore to survive in this cutthroat competition,

you need to be the best. Customer is no more loyal in today‟s scenario, so you need

to be always on your toes.



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BIBLIOGRAPHY

BOOKS:

Marketing Management – Kotler Philip.

Research Methodology – Kothari.

WEBSITES:

ww.thecoca-colacompany.com

ww.news.bbc.co.uk

ww.india-server.com

ww.magindia.com

ww.coca-colaindia.com

ww.wikiinvest.com

ww.open2.net

OTHERS

Annual report of Coca-Cola 2008.

Annual report of Coca-Cola 2009.

http://www.thecoca-colacompany.com/


http://www.news.bbc.co.uk/


http://www.india-server.com/


http://www.magindia.com/


http://www.coca-colaindia.com/


http://www.wikiinvest.com/


http://www.open2.net/











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rm project coca cola

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