CHAPTER-1

INTRODUCTION TO THE STUDY

Beverage industry is one of the fast growing industries in India. It can be divided into two

sections i.e. carbonated and non-carbonated. The carbonated drinks can be further classified

into cola, lemon, orange, mango and apple segments. Marketing includes all the activities like

promotion, distribution, advertising etc. Marketing is also to convert social needs into

profitable opportunities. So this topic provides all the essentials to theoretical as well as

practical knowledge and inculcates efficiencies. It will help the company ultimately to achieve

their goals. The soft drinks companies are experiencing a boom in soft drinks, although growth

of other cold drinks is not quite encouraging. The markets of soft drinks are mainly triggered

by the entry of two players i.e. Coca Cola and Pepsi.

PepsiCo India is striding ahead rapidly towards enabling the global vision to be the world's

premier consumer products company focused on convenience foods and beverages. PepsiCo

India seeks to produce healthy financial rewards for investors as it provide opportunities of

growth and enrichment to its employees, business partners and the community’s in which it

operates. PEPSI has gained its dominance in terms of beverages as well as food. In partial

fulfillment of the above mentioned course a project was undertaken by me on the topic” A

COMPARATIVE STUDY ABOUT THE SALES AND DISTRIBUTION SYSTEM OF

PEPSI AND COCA-COLA IN PATNA”. To know the facts regarding the above topic, a

market survey particularly for customers, retailers and distribution in Patna by me. My interest

was to look into customers perception and satisfaction level about PepsiCo with other

beverages present in the market.

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The company wants to give maximum satisfaction to its customers, so that they can get

good value for their capital. The company wants to know whether the consumers are satisfied

with their services or not? Whether consumers have faced any problem with the product and if

any then what type of problem they are facing?Whether the retailers are satisfied with the

promotional schemes of the company? What should be the changes that will improve the

quality of services? What are the competitive advantages the company has over the

competitors and where the company lacks? What are the opportunity and threats in the external

environment and how the company schemes for the opportunity and how the company

overcomes these threats?

Since this study was aimed at knowing the customer as well as retailer’s satisfaction,

dissatisfaction level ,therefore it required to collect information related to quality of services

provided by PepsiCo Company as well as about its competitors.

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IMPORTANCE OF THE STUDY

The project report titled “A COMPARATIVE STUDY ABOUT THE SALES AND

DISTRIBUTION SYSTEM OF PEPSI AND COCA-COLA IN PATNA” can be

of great importance to the organization.

It will help the company in following major way:-

To ascertain the satisfaction level of consumers

To identify their competitors and about their strength and weaknesses

To design their market strategies

In other way it can also influence the decision on the requirement of the sales and

distribution & comparison between Pepsi and Coca Cola. Though I have tried to do my

project study honestly and sincerely and in case, if there are any weaknesses and

shortcomings, those are unintentional.

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OBJECTIVE OF THE STUDY

Every project is carried out with a view to attain certain predetermined objectives. Following

are the objectives of this project:-

To know the brand perception of PEPSICO BEVERAGES.

To know the choice of brands of the consumers and reason for the same

To know the Stock Keeping Unit (SKU) of Pepsi and its competitors at different

outlets.

To ascertain the satisfaction level of consumers

To identify the products image.

To find the distribution channel adopted by Lumbini Beverages Pvt. Ltd.

Hajipur.

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IMPORTANCE AND RELEVANCE OF

THE STUDY

Cold drinks were started with the idea of quenching the thirst of the persons travelling. It was

also felt that reliable good water was not available everywhere. So people would prefer packed

bottle and with this idea its makers made these drinks available mostly at those places where

water was not available i.e. on highways and long distance trains. But slowly and slowly with

its good taste these become very popular and now they are available not only in the market and

street corners, but also people have started keeping it in their house. The credit of popularizing

the soft drink goes to Coca Cola. This was the drink which is liked by all ladies, gents and

children. Now days soft drinks are not only the quenching thirst but these are also taken due to

habits. Gold Sport is considered as the first branded soft drinks, established 53 years ago before

all empowering Coca Cola faced competitions and its euphoric image built up in the western

countries helped it get ready client and glamour. Parle Export Pvt. Ltd. is regarded as the first

Indian Company introducing Limca a lemon drink complementary to it .Cola Peptones was

also introduced which was withdrawn because of the tough competition from Coca Cola. When

Coca Cola bid a Farwell in 1977, Indian market was open for various new and different brands

in the markets. Parle People introduced their Cola, Thumps Up with a mighty saying “Happy

days are here again” as if happy days went away with Coca Cola. Modern Bakeries entered the

market with Double Cola Seven, Mohan Makings with Merry & Plkup and McDowell with

Thrill, Rush and Sprint. This was Indian market where there was not much competition but

huge advertising was done by every company for selling their product. Each one was trying

their best to become number one company with ‘A’ class product in the field of Soft Drink

Business. Now after a long gap, government of India had given permission to Coca Cola,

which joined with Parle to do business in India. They were trying their best to regain prestige

which it had before. The much rival of Parle was Pepsi an American concern. It started

business on the Indian soil just a few years ago.

LIMITATIONS OF RESEARCH

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Some of the limitations of this project are as follows:

1) It was not possible to understand thoroughly about the different marketing aspects

of soft drinks in a span of two months.

2) The survey was conducted in the peak season when the sale was too high. By this I

cannot get the appropriate result.

3) No stipend was given, so it was difficult to cover a wide area.

4) All the work was limited to Patna area only, so the finding could not be

generalized .The finding of survey was strictly based on the response of consumers,

retailer/dealers so it is difficult to ascertain the authenticity of their statement.

5) Shortage of time factor was one of the biggest constraints.

6) Most stress was given on the secondary primary data as it was difficult to collect

primary data from the organization.

PEPSICO MISSION AND VISION

MISSION:

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The mission of Pepsi co is to be the world's premier consumer Products Company focused on

convenient foods and beverages. It seeks to produce financial rewards to its investors as it

provides opportunities for growth and enrichment to their employees, business partners as well

as to the communities in which it operates and it also strives for honesty, fairness and integrity.

in everything that it does.

VISION:

PepsiCo's responsibility is to continuously improve all aspects of the world in which it

operates - environment, social, economic - creating a better tomorrow than today. “Their vision

is put into action through programs and a focus on environmental stewardship, activities to

benefit society, and a commitment to build shareholder value by making PepsiCo a truly

sustainable company.

FUTURE PLANS

Every company has some future plans. So Pepsi Company also has its future plans to increase

its sales and the market share in the soft drinks industry. In order to capture Indian food market

PepsiCo India has planned to launch indigenous food products. PepsiCo is going to make an

investment of around $110 million in its beverages business in India to increase the production

capacity and the quality of the products. On future plans, the company is also planning to

launch Lipton ice tea all over the country during summer season.

The company is also seriously considering bringing some products from Quaker Oats into the

country. PepsiCo’s beverage business has also decided to invest $220 million in the current

year. Clearly, the snacks business — which has grown five-fold in the past four years — is

lifting PepsiCo’s fortunes. The CEO of Pepsi India, Ms. Nooyi says the company is now

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looking at tripling this business in the next three years or so, and is even testing Lehar Kurkure

for the US and UK markets. It is learnt that the total investment for the beverage business of

PepsiCo India for the next three year will be around $350 million. PepsiCo India has also

announced Rs 1,000-crore investment for this calendar year that will see the food and beverage

major expanding its manufacturing capacity and supply chain, among others, in the country. In

this way Pepsi India Company is taking steps to increase their sales and their market share in

the soft drinks industry.

CHAPTER-2

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HISTORY OF PEPSI

Pepsi-Cola Company was founded by CALEB D. BRADHAM in 1890 at North Carolina in

USA. It’s CEO is ROGER ENRICO and in India PepsiCo chairman is Mr. RAJIV

BAKSHI. The head quarter of PepsiCo in India is at Gurgaon. Presently it is operated in 196

countries. Pharmacist CALEB invented it to cure the disease “DISPARSIA”. It is from this

word that was Pepsi is related to. Soon it entered the American market as soft drink which at

that time was mostly dominated by Coca-Cola, but soon Pepsi was able to dominate the cola

market & thereafter there has been no looking back. Pepsi & Coca-Cola was engaged in

ferocious cold war that has taken the whole world by storm. Pepsi stands 51st position among

the fortunate 500 companies of the World. Its total capital is approx $3000 crore, total sales

annually is worth $37 crore, half of which comes from beverages and other half from division.

The beverages arm of the PepsiCo is Pepsi-Cola Company and the snack food country is

called Frinto-Lay-Inc. The year 1998 was centennial year for Pepsi. Its total profit in the year

1996-1997 was worth Rs. 45 crore approx. The total number of employees engaged in this

business is 4.25 lakhs globally.

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HISTORY OF PEPSI IN INDIA

Soft drink PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab

government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This

joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was

allowed; PepsiCo bought out its partners and ended the joint venture in 1994. Others claim that

firstly Pepsi was banned from import in India, in 1970, for having refused to release the list of

its ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly

afterwards. These controversies are a reminder of "India's sometimes acrimonious relationship

with huge multinational companies." Indeed, some argue that PepsiCo and The Coca-Cola

Company have "been major targets in part because they are well-known foreign companies that

draw plenty of attention."Soon it was giving the local contenders the run for their money in the

soft drink market. It comes out with dazzling marketing innovation that rocket the cola market

line selling the product through function, Pepsi outlets. Pepsi’s success in creating a brand

almost from scratch in India is the stuff that marketing case studies are made off. Given the

problems of doing business in markets like ours, Pepsi entered the market as an under-dog. Its

first even advantage- it entered before Coke returned was considerable reduced by the

enormous export obligations stepped on the company. Yet right from the beginning, Pepsi

demonstrated a far more focused approach. So while it entered the market like any other MNC,

it was quick to adapt, it realized that consumers, particularly the youth, to whom it consciously

reached out, would identify better with a brand that they see as globe, yet Indian, Pepsi was

built as a desi brand. Hence its deliberate attempt to build advertises campaigns using the

Popular Hinglish in the process. Slogans like, ‘YEHI HAI RIGHT CHOICE BABY’,

“YEH DIL MAANGE MORE –AHA” and “YEH PYASS HAI

BADI” became part of India’s popular consciousness. When Pepsi lost the bidding battle to

sponsor a cricket tournament to Coke, the loss was turned into triumph with the catch line,

“NOTHING OFFICIAL ABOUT IT”. It cashed in on the untapped consumer aspiration in

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smaller towns, the hinterlands of metropolitan cities and now days the slogan which is on air is

“YE HAI YOUNGISTAAN MERI JAAN”. It showed a rare ability not only to survive, but

also grow through India’s tortuous policy twists and turns, which threw many other MNC’s off

balance. Its top management team did not suffer from the frequent changes seen at rival. Coke

consequently paid enormous prices to buy out established local brands, Pepsi brought its own

stuff over and pushed those aggressively with dealers, retailers and consumers. Right now, it

can bark outstanding success in building a brand that has become synonymous with soft drinks

across the length and breadth of the country. Pepsi-Cola Company was founded by CALEB D

BRADHAM in 1890 at North Carolina in USA. It’s CEO is Indira Nooyi and in India

PepsiCo chairman is Mr. Rajiv Bakshi. The head office of PepsiCo in India is at Gurgaon.

Presently it operates in 196 countries. Pharmacist CALEB invented it to cure the disease

“DISPARSIA”. It is from this word that was Pepsi is related to. Soon it entered the American

market as soft drink which at that time was mostly dominated by Coca-Cola, but soon Pepsi

was able to dominate the Cola market and thereafter there has been no looking back. Pepsi and

Coca-Cola are engaged in a ferocious cold war that has taken the whole world by storm.Pepsi

stands 51st position among the fortunate 500 companies of the world. Its total capital is approx

$3000crore and total sales annually are worth $37crore, half of which comes from beverages

and other half from food division. The beverages arm of the PepsiCo is Pepsi-Cola company

and the snack food company is called Frinto-lay-Inc.

CHARACTERSISTICS OF SOFT DRINKS

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Unfinished goods (Required chilling before consumption)

Two -way transportation (Once filled bottles to market and then empty bottles from

market).

Heavy expenses on advertisement and promotions.

More attention to retailers is given. Several schemes and other facilities provided to

them.

New flavours are introduced from time to time.

Highly competitive market with only two equally strong Players

CHAPTER-3

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HISTORY OF LUMBINI BEVERAGES

PVT.LTD

With the urbanization of economy in 1991, about 13 year after the exit of Coca Cola from

Indian market, an MNC globally known as PCI (Pepsi Cola International) entered the Indian

market with its name PFL (Pepsi Foods Ltd.).It started bottling its products in Bihar by Steel

City Beverages, Jamshedpur on 24th March 1991. Late D. N. Kamani installed this bottling

unit in 1969. The company entered the soft drink market with the introduction of Coca Cola

and entered in the market of Bihar, parts of Bengal, Orissa and Nepal. The company was the

pioneer of soft drink in Bihar. Due to urbanization and behavioral changes the number of soft

drink consumers increased. The Steel City Beverages Ltd. Jamshedpur, was unable to meet the

demand of supply as per the seasonally graph in North Bihar due to increases in the number of

consumers. To fulfill the demand in that region, PFL established a plant in Hajipur, under the

auspicious guidance of Mr. Charan Khilani in December, 1997 famous as Lumbini

Beverages Pvt. Ltd.

It is one of those bottling units of PFL which comes under FOBO (Franchise Owned Bottling

Operation).Mr. Ravi Khilani is MD of this company. The plant has 57 production staff, 30

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executives and 32 team members within marketing and selling functions .During the peak

session i.e. between April-July, the no. of production staff at times is increased to take care of

increased production functions.

The unit has capacity of bottling 400-600 bottles per minute or 3000 carates of 24 bottles on a

daily basis, i.e. when production schedule is throughout the day with three shift production

system. The plant follows international quality audit standard for the purpose of maintaining

quality controls in the quality of the product because the quality control function, by far is the

most important criteria for purpose of competing in terms of quality in the contest of the

market competition.

This bottling unit at Hajipur has created a source of employment for a large no. of population

residing in the Bihar and has also come out with quality/treated water resources, which is now

being thought of diverting into nearby agriculture sector as an ongoing source to facilitate of

management. PLACE- Lumbini Beverage Pvt. Ltd. is situated at Industrial Area, Hajipur

in Vaishali district of Bihar. Mr. Charan Khilani, who is a resident of Kolkata, established

it in the year 1997.

ORGANIZATIONAL STRUCTURE OF

LUMBINI BEVERAGESPVT.LTD

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An ideal organizational structure facilities management and the operation of the enterprise and

it help the organization in achieving its goal. In a simple term in various parts or component are

interrelated or interconnected and this way it is the established pattern or relationship among

various function of the organization in the established manner. …The managing director holds

the top position. At present, the managing director (MD) of Lumbini Beverages Pvt. Ltd. is

Mr. Charan Khilani. But the overall policies regarding management decisions and all

executive functions or performance look, and general administration as well as management

are looked by Mr. Ravi Khilani. The MD has given the power of attorney and authority to

director Mr. Ravi Khilani. He is well advised by the MD. The director Mr. Ravi Khilani

looks after all functional departments like sales production, account, personnel and purchase.

The overall organizational structure can be shown as:

PROFILE OF LUMBINI BEVERAGES

Company Land Area : 9.30 Acres

Location & Authority : EPIP, Industrial Area, Hajipur

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Name of Director/occupier : Mr. Ravi Khilani

Name of the MD : Mr. Charan Khilani

Name of the CEO : Mr. G. P. Singh

Name of the HOS : Mr. Madan Nagar

Name of T.D.M : Mr. GyaneshAwasthi

Name of H.R.M : Mr. N. K Prasad

Industrial License No. : Registration No. – H 12475 (C)

Factory License No. : 66750/VLI

F. P. O. No. : 10607/97

Capacity : 850 bottles per minute

Nature of product : Soft Drinks

Control Board : No. 1877

ORGANIZATIONAL HIERARCHY

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SWOT ANALYSIS OF THE ORGANISATION

STRENGTHS: -

Lumbini Beverages Pvt. Ltd (LBPL) is Franchise Owned Operation (FOBO) of

world’s most famous soft drink PepsiCo.

LBPL uses state of the art and fully automatic machines and technology for the

production of soft drinks.

It has very strong network and built market and currently holds all the parts of the

state.

It has wide range of product varieties.

WEAKNESS: -

No cost cutting program for the products.

A promotional activity in the rural market is not upto the mark as compared to the

urban market.

Brand Pepsi in cola flavor is one of the popular lagging

behind with its nearest Competitor, only due to high sugar

content and less thrilling taste.

No availability of the entire product on demand.

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OPPORTUNITIES: -

LBPL makes the buying process more convenient (it provides the Pepsi products at

required places i.e. direct to distributors & retailers through distributors)

It takes return the leakage, burst bottles etc.

THREATS:-

Coca-Cola is now spending more and more to boost up the sale.

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PEPSI

UNIT MANAGER FINANCE

UNIT MANAGERHRD

UNIT MANAGER F.O.B.O.

MANAGING DIRECTOR

CEO

FINANCE

H.O.F.

A/C AND FINANCE

MANAGER

A/C ASSISTANT

PRODUCTION

PLANT MANAGER

SHIFT ENGINEER CHEMIST

SALES

H.O.S.

T.D.M.

A.S.M

C.E.

ROUTE ADVISER MERCHANDISER SALES MAN

H.R.D.

HR EXECUTIVE

PERSONAL EXECUTIVE

UNIT MANAGER MARKETING

THE PRODUCT PROFILE OF

LUMBINI BEVERAGE PVT.LTD

PepsiCo makes products like Doritos, Lay's, Cheetos, Fritos, Ruffle potato chips, Tostitos,

Quaker Chewy granola bars, Sun Chips, Rold Gold pretzels, Stacy's pita chips, Smart food

popcorn, Pepsi, Mountain Dew, Gatorade, Tropicana Pure premium, Sierra Mist, Propel,

Tropicana juice drinks, Dole, SOBE Life Water, Aquafina, Capon Crunch, Life cereal,

Starbucks ready to drink coffee, Lipton ready to drink tea, Quaker oatmeal, Aunt Jemina

pancake syrup. But the major brand categories owned by PepsiCo, Inc. include Pepsi, Frito-

Lay, Gatorade, Quaker Oats and Tropicana. Each of these products has numerous other product

offerings in their respective categories, both at U.S. and in international market. For example,

the Pepsi-cola family includes over two dozen beverage brands, such as Mountain Dew, Mug

(root beer) and several partnerships (e.g., Lipton ice tea). Quaker Oats includes Rice-a-Roni

side dishes, Aunt Jemima mixes and syrups, etc.

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THE PRODUCT PROFILE OF LUMBINI

BEVERAGE PVT.LTD

Product Name Quantity

PEPSI : 200ml, 300ml, 600ml, and 2000ml

MIRINDA : 200ml, 300ml, 600ml, and 2000ml

SLICE : 200ml, 250ml, 500ml, and 1200ml

MOUNTAIN DEW : 200ml, 600ml, and 2000ml

7UP : 200ml, 300ml, 600ml, and 2000ml

NIMBOOZ : 350ml

AQUAFINA : 1000ml

SODA : 350ml, 500ml, and 1000ml

TROPICANA JUICE : 250ml, 200ml, and 1000ml

MY CAN : 250ml

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CHAPTER-4

MARKET SEGMENTATION

The soft drink being a FMCG product has a wider and scattered market. Thus to enable

concentrated effort of marketing activities in different scattered market, the entire market is

broken down into the following segments.

Route Market

Home Market

At Work Market

ROUTE MARKET:-

Outlets in this market cater to those people who are engaged in shopping, eating, outgoing for enjoyment in amusement centers etc.

HOME MARKET:-

Outlets in this market cater to people buying prominently for home consumption either by carats or loose bottles.

AT WORK MARKET:-

Outlets in this market cater to people working in office, factories etc., An attempt is always made to make soft drinks readily and conveniently available all day long while people are actively working.

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WHY COCA-COLA IS DOMINATING?

The Coca-Cola Company has historically been considered PepsiCo’s primary competitor in the

beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in

market value for the first time in 112 years since both companies began to compete. In 2009,

the Coca-Cola Company held a higher market share in carbonated soft drink sales within the

U.S. In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage

market, however, reflecting the differences in product lines between the two companies. As a

result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its

business has shifted to include a broader product base, including foods, snacks and beverages.

The majority of PepsiCo's revenues no longer comes from the production and sale of

carbonated soft drinks. Beverages accounted for less than 50 per cent of its total revenue in

2009. In the same year, slightly more than 60 per cent of PepsiCo's beverage sales came from

its primary non-carbonated brands, namely Gatorade and Tropicana.

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Two primary reasons contributed to domination of Coca Cola in the international market, the

first one was the strategy that Coca-Cola used when investing in a foreign market. Coca-Cola

entered foreign markets differently than Pepsi, providing it an edge over Pepsi. While Pepsi

invested heavily in foreign markets, Coca-Cola’s appointed bottlers with significant experience

easily neutralized any threat PepsiCo could pose. The second reason was that the Coca-Cola

holds such a dominant position in world market during World War II. During World War II,

Coca-Cola offered American servicemen its product for 5 Cents, wherever they were and

whatever the costs the company would incur. The company would establish bottling plants

(subsidized by US government), and send its product overseas wherever US troops went. With

its inexpensive price, and widespread popularity among servicemen, coupled with the eventual

victory of US in Europe and Asia, the product was widely adopted throughout Europe and

Asia. Due to familiarity of the product, Coca-Cola still retains a dominant position throughout

Europe and Asia.

COMPETITOR COCA-COLA

Quick and prompt to their service.

This company is more dominant and securing a positive image in the market.

Regular to their service.

More chillers are made available in comparison to Pepsi.

Scheme is properly conveyed to shopkeepers.

Close watch on current market trends.

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PROMOTIONAL ACTIVITIESPromotional activities play a greater and important role in the marketing and selling of a product.

PROMOTIONAL ACTIVITIES CARRIED OUT BY "LUMBINI BEVERAGES PVT. LTD"

Lumbini Beverages Pvt. Ltd (LBPL) carries out its promotional activities as a controlled and integrated program of communication and material design to present its soft drink to the

prospective customer.

The Tools used by “Lumbini Beverage Pvt. Ltd.” for fulfilling various purposes of its

(i) Point of purchase :

Every item of sale in a shop is displayed in front where people can see it at the first sight. It is the same with all the shops vendors in town who is either selling Consumer goods or selling soft drinks. Rather in selling a product like PEPSI display is more helpful as it is an essential element because soft drink has brought an impulse on the spur of the movement. Thus the product is tested when it is brought at people's attention.

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(ii) Special event market:-

The dealer at special event, places the banners and stall of Pepsi's products. The special event market includes picnic spot, cricket match, social activities etc It helps in promoting the sale as well as in creating an image of products.

(iii) Media planning :-

A very important part of advertising is to decide the medium of advertising and how much to spend in each media:

Newspaper

Radio

Television

Hoarding

Product of sales materials include paintings, glow signs D. Board. Advertising is one of the

important factors, when all put together, results in sales of a product. It has to be backed

by the distribution network, effective servicing, dealers, goodwill and so on. Thus advertising

has to be very carefully woven with the entire demands of marketing.

PROMOTIONAL ACTIVITIES CARRIED IN PATNA

Point of purchase (POP)

Special events (fair show, Road show etc.)

Hoarding

By newspaper, TV, radio etc.

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MERCHANDISING POLICYIn today’s fast moving industry and highly competitive market, only those products are likely to be

purchased which are capable of hitting the impulse of the consumers. The products appeal should be

able to penetrate and get embedded into the perpetual space of the consumer’s mind. The concerned

product should induce to the consumers. Pepsi believes that “Jo Dikhta Hai Wahi Bikta Hai” i.e. any

product which is visible is bound to be sold.

METHODS OF MERCHANDISING:-

Visi-cooler placement

Glow sign board

Paintings

Carat stacking

Umbrella

Display

Special Schemes

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ADVERTISING STRATEGY OF THE COMPANY

The main motive behind the purpose of advertising of the PepsiCo is to maintain the

brand loyalty through recalling the memory of the users of soft drinks as to attract the potential

consumers who consume a soft drink. On the national basis the media extensively used are:

Newspaper, short advertising films, Radio, T.V etc.

Besides the advertising being carried out by PepsiCo. Lumbini Beverages Pvt. Ltd.,

Hajipur also carries out its own promotional programme of which advertisement is an

important aspect. The Lumbini Beverages Pvt. Ltd. is free to use any media, messages, copy

etc. as and when required by them but single factor which remains the same as used for each

PepsiCo's bottling company on national level is the main slogan being used by PEPSICo.

bottle all over India for its Cola Products has been "The choice of new generation". The main

model in the advertising is the Best Cricketer – M.S.Dhoni, Best Actors – Amitabh Bachhan,

Shahrukh Khan, and Best Actress – Kareena Kapoor, Pretty Zinta, and Deepika Padukone.

CHAPTER-5

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DISTRIBUTION CHANNEL OF “LUMBINI BEVERAGES PVT. LTD”

To make its products available at the right places at the right time in the market, the sales

department of the company pays major attention on controlling the channels of distribution.

Single type of markets channel is maintained by the company right from its pioneering

stage. The nature of the channel is as follows:-

Company

Distributors

Dealers

Different Outlet Owners

Consumers

At first the soft drinks is supplied to the distributors directly. Retailers or owners of any outlet

cannot take the delivery from company. They have to take the products from their respective or

nearest distributor.

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There are about 50 distributors and innumerable number of retail outlets operating with the

company in its entire market areas which includes total Bihar. In all the important places of

entire territory this company has its distributors. These distributors are selected on the basis of

assurance given by them regarding the minimum sales which they have to maintain annually.

The selection is also done on the basis of the financial position and reputation of distributor in

the market. As for example in appointing a distributor the following things are looked upon

such as first the distributor was engaged in soft drink business earlier or not , second priority is

given to those people who are in cigarette selling business. Depending upon the market, each

distributor in the initial stage has to deposit some security money. The retailers are selected by

the distributor. Fixed criteria for the selection or appointment of retailers are done which is

from the side of the distributor. Any one like Panwala, Cigarettewala or any other shopkeeper

can have the stall for the sale of soft drinks and they are called retailers or outlet owners. They

have to give assurance to the concerning distributor for better sale and at the time of taking

delivery they have to deposit the security money. The distributor at first has to seek the

permission of sales department for the number of cases of soft drinks required by them. After

getting the proper authority from sales department paying the requisite amount either by cash

or by demand draft the permission is then granted.

WAREHOUSING:-

Every company has to store its finished goods until they sold. A good facility for

keeping the finished good is necessary because production and consumption cycles rarely

match.

Warehousing is not a simply storing activity but a package of services that enables the

smooth running of the industry.

The stores must be in constant touch with the use department in order to provide

uninterrupted services to the manufacture.

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The stores functions can be organized in the following manner:-

a) To receive raw material components, equipments etc.

b) To meet the demand of use department by issuing the order.

c) Accounting the transaction properly.

d) Minimizing obsolescence surplus and scarce by right identification and using

correct preservation method.

The company supply finished products frequently to different distributors as per the

demand. Every distributor keeps a minimum stock of different products of the product line so

that the uninterrupted supply does not get affected. The problem arises from the materials that

are in stock in the form of capital cost, storage loss, pilferage obsolescence, insurance,

handling, documentation etc.

INVENTORY DECISION:-

(1) Branding and Packaging:-

Out of the total market activities some are directly performed and controlled by

“Lumbini Beverages Pvt. Ltd.” itself some are followed according to the standing

instruction of “Pepsi Foods Pvt. Ltd”. As far as the process of branding and

packaging is concerned the “Lumbini Beverages Pvt. Ltd.” along with the authorized

bottle in India adopt the same pattern as “Pepsi Foods Pvt. Ltd”.

(2) Whole selling:-

Whole selling includes all the activities involved in selling goods or services to those

who buy for resale or business use. Manufactures use wholesalers because wholesalers

can perform function better and more cost effectively than the manufacture can. These

functions are not limited to selling and promoting, buying and assortment building, but

also warehousing, transporting, financial risk bearing, dissemination of marketing

information, provision of management services and consulting. Like retailers

wholesaler must decide on target market, product assortment and services promotion

30 | P a g e

and place. The most successful wholesalers are those who adopt their services to target

and meet customer’s needs.

Retailing:-

Retailing includes all the activities involved in selling goods or services directly

to find consumer for their personal non-business use. A retailer or retail store is any

enterprise which sells volume of product that comes primarily from retailing. All

market retailers must prepare marketing plans that include decision on target market. So

the marketing channels can be viewed as a set of interdependent organization with high

potential for conflict.

TRANSPORTATION:

Transportation is life of any business management and commerce. The purchasing officer’s

job in incomplete until and unless he ensures that the material is shipped from the vendor’s

premises located in different areas to his organization. Purchasing the transportation is a key

element in his job particularly in the context of the transportation cost. In deciding to

transporting models shippers can choose from private contract and common carriers.

Transport decisions must consider the complex tradeoff between various transportation

mode and their implications for other distribution elements such as warehousing and

inventory.

DISTRIBUTION OF PEPSI:-

Here there are four systems of distribution channels:-

Channel 1. Manufacturer…………………………………………………Consumer

Channel 2. Manufacturer……………Retailer……………………………Consumer

Channel 3. Manufacturer………Wholesaler………….Retailer…………Consumer

Channel 4. Manufacture…….Wholesaler……Jobber……Retailer……..Consumer

31 | P a g e

Channel of distribution of Lumbini Beverages Pvt. Ltd.

By Lorry or Truck

Distributor

Dealers of customer

PERFORMANCE IN PATNA

Patna has a significant role for Pepsi products and is supplied by “Lumbini Beverages

Pvt. Ltd., Hajipur”. There are more than eight hundred outlets including exclusive and

nonexclusive outlets of Pepsi in proper Patna.

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Hierarchy is also necessary to understand the capacity of Patna

Town.

HIERARCHY OF PATNA

Distributor Consumer Executive Sales Man Accountant Vehicle Loader and Unloader

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CHAPTER-6

REPORTANALYSIS

CHANNEL TOTAL OUTLET PCI COKE PCI (%) COKE (%)

GROCERY

(General stores) 24 6 18 25 75

EATRY

(Restaurant) 20 5 15 25 75

COVENIENT

(Pan shops ,cigarette shops) 44 14 30 32 68

88

FINDINGS: - The above bar graph shows that 25% Pepsi is available in grocery whereas

coke is available with 75%.

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TYPES OF OUTLETS

25

2532

75 7568

0

10

20

30

40

50

6070

80

90

GROCERY EATRY COVENIENT

OUTLETS

PERCENTAGE

PCI(%)

COKE(%)

25% Pepsi is available in entry whereas coke is available with 75%.

32% Pepsi is available in convenient whereas coke is available with 68%.

CHANNELS TOTAL OUTLETS

NO.OF PACKS(SKU)

PCI COKE

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Grocery

(General stores)

24 6 13

Entry

(Restaurant)

20 6 10

Convenient

(Pan shops ,cigarette shops)

44 4 12

88

AVAILABILITY OF TOTAL PACKS "SKU" (AVG)

6 6

4

13

10

12

0

2

4

6

8

10

12

14

Grocery Eatry convenient

CHANNELS

AV

ER

AG

E

FINDINGS: - The above graph shows that out of 88 outlets, the average number of packs

in pepsin is 6 whereas coke is 13 in grocery.

In entry, the average number of packs in Pepsi is 6 whereas coke is 10

In convenient, the average number of packs in Pepsi is 4 whereas

coke is 12.

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AVAILABILITY OF CHILLING CAP.(AVG)

0

50

100

150

200

250

300

350

GROCERY EATRY CONVENIENT

CHANNELS

AV

ER

AG

E

FINDINGS:-The above bar graph shows that out of 88 outlets the average chilling

capacity of Pepsi is 118 whereas coke average is 259 in grocery.

In entry, the average chilling capacity of Pepsi is 106 whereas coke is 300.

In convenient, the average chilling capacity of Pepsi is 69

whereas coke chilling capacity is 267.

SATISFACTION LEVEL

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CHANNELS TOTAL OUTLET CHILLING CAP.

PCI COKE

GROCERY 24 118 259

EATRY 20 106 300

CONVENIENT 44 69 267

88

SATISFACTION LEVEL

68

32

0

10

20

30

40

50

60

70

80

COKE PEPSI

BRANDS

PE

RC

EN

TA

GE

COKE

PEPSI

FINDINGS:-The above bar graph shows that coke has reached the higher satisfaction

level with 68% whereas PepsiCo is only with 32% having satisfactory level.

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BRANDS No. Of Retailers

%

COKE 60 68

PEPSI 28 32

88

STUDY ON RETAILERS

Retail Shop type:-

I. Monopoly Retail Shop : The shop selling only one company’s

Products

II. Mix Shop : The shop selling many company’s

Products

The retailers can build a great deal of goodwill for the firm. The marketing strength

depends on the strengths of retail dealers. Researchers had conducted survey on different types

of outlet like bakeries, cold drink parlor and general stores etc. According to these survey, the

major reasons for selling Pepsi products are:

Brand Image 18%

Customer Demand 20%

Profit Margin 05%

Advertisement 30%

Good Quality 10%

Sales Promotion for Retailers 07%

Sales Promotion for Consumers 10%

BRAND PREFRENCE

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Pepsi products are most popular brand but Coke products are very dear brand of consumers due

to advertisement.

After the collection of different views from consumer which includes servicemen,

students, businessman and observing the sale of Pepsi products thefollowing is the brand

preference of consumers in patna.

Brand Preference of Consumers:-

Flavors % Consumption

Cola 49%

Orange 16%

Lemon 12%

Lime 07%

Mango 17%

49%

16%12%

7%

17%

15%

Cola

Orange

Lemon

Lime

Mango

7 Up

STUDYING THE MARKET POTENTIAL

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Coca Cola

48%

Pepsi

52%

Pepsi

Coca Cola

The market potential is an estimate of the maximum possible sales opportunities present

in a particular market segment and open to all sellers of a good and service or during a stated

future period. A market potential indicates how much of a particular product can be sold to a

particular market segment. Market potential can be determined by measuring the sales in

different areas. The data has collected from 88outlets, which are situated in different areas of

Patna. According to that, the per day sale of Pepsi Products is 154 carats and the per day sale of

sale of Coke Products is 148 crates.

Per Day Sales in Carat of Products:-

CHAPTER-7

41 | P a g e

CONCLUSION

1. Coca-Cola has invested more in the market. Distribution of VISI coolers and display of

glow sign board is much more as compared to Pepsi but after that Pepsi give it very tuff

competition.

2. Most of the dealers want glow signboard and chilling equipments, which they they keep

on asking from time to time as and when needed.

3. In the Coca Cola segment thumbs-up and lime segment sprit is the main competitors of

Pepsi. But mountain dew lonely defeats them all.

4. Due to high demand, there is crisis in the market.

5. Pepsi is more sweet and low fizz. And that is why it is not like by customer more.

6. Pepsi should provide more supporting goods which is helpful to enhance the market

share of the Pepsi.

7. Pepsi should try to always satisfy the dialers which may be a big factor to enhance the

market share.

8. There should be a proper supply of Pepsi product in the market.

9. There should be a proper interaction between dealers and company employees.

10. Pepsi has the entire flavor i.e. Cola, Leman, Orange, Mango in the market but still its

market share is comparatively less than Coke.

11. The majority of the retailers deal in all the brands of Pepsi and Coca-Cola.

SUGGESTION

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Lumbini Beverages Pvt. Ltd. should introduce some change in its marketing function

and advertising to make market more rational. The following factors are worthy of

consideration:-

A complain Register should be provided by the company to every distributor in every

route so that, retailers/customers can write their problems. The complaint register

should be checked by costumer executive and depot in charge from time to time.

A clear notification should be given to teach distributor and to give cash memo to each

route agent (with printed number) and maintain route card for every transaction.

All these tricycles who targets the tired and thirsty consumer of the road or other place,

care should be taken that soft drinks in the ice box are always chilled and is readily

available them.

The vendors can also be provided with uniform information by the company in order to

give them better visibility.

An appropriate name should be given to these tricycles and properly advertisement

should be done thus giving them some sort of identity.

Now a days with the introduction of tetra packs such as fruity, Tree Top etc., Lumbini

Beverages Pvt. Ltd. should also think of introducing such packs of its various brands of

beverages for better sale.

Lumbini beverages Pvt. Ltd. should be available in the rural area also.

The numbers of outlets are too much. So it is required to short the route and extra

vehicles/tricycles provide in this route.

At last only this can be said that these suggestions are important to be used by the

Lumbini Beverages Pvt. Ltd. As it would better the company sales in this state and is

certain that if these suggestions are carried out by management , it will helpful in

establishing the Lumbini Beverages Pvt. Ltd. on a more stronger footing.

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Glossary of Terms

Bibliography

GLOSSARY OF THE TERMS:-

FOBO - Franchise Owned Business Operation

44 | P a g e

COBO - Company Owned Business Operation

FMCG - Fast Moving Consumer Goods

MNCs - Multi National Company

GOD - Glass on Deposit

RBG - Return on Bottle G

BIBLIOGRAPHY

www.pepsicoindia.com

www.pepsico.com

www.google.com

REFERENCES FROM BOOKS:-

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Kotler, Philip, Keller, Lane (2005) "Marketing Management", Prentice Hall, ISBN

0131457578.

Frey, A. (1961) Advertising, 3rd ed., Ronald Press, New York, 1961.

NEWS PAPERS & MAGZINE:-

The Times of India

The Economics Times

Hindustan Times

Business Today (July edition)

APPENDIX

A STUDY OF RETAIL OUTLETS AND THEIR

PROMOTION

QUESTIONNAIRE FOR RETAILERS

Name of the shop/outlet: ..................................................................

Address/Location : .......................................................................

Type of outlet : ........................................................................

(a) General Store (b) Pan Shop

(c) Sweet Shop (d) Lassi /Juice Shop

(e) Dhaba /Canteen (f) Others

l .Q. In which month Peak Season of Soft Drinks?

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(a) Jan-Feb (b) March-June

(c) July-Sept (d) Oct- Dec

2. Q. What is effect of advertisement on sales?

(a) Yes (b)No (c

3. Q. Are you satisfied with behaviors of staff visit?

(a) Excellent (b) Good

(c) Satisfactory (d) Poor (e) Very poor

4. Q Do you receive the delivery of PepsiCo products in time?

(a) Yes (b) No

5. Q what is percentage age share of satisfaction of distribution of PepsiCo and coke?

(a) PepsiCo (b) Coca Cola

6. Q. What is percentage share of chilling equipment’s?

(a) Pepsi (b) Coca-Cola

(c) Own

7. Which company’s signage you have in your outlet?

(a) Pepsi (b) Coca-Cola

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8. Q.Which types of product available always?

(a)PEPSICO

(b)Coke

(c) Both

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