Summer internship project report On Competitive analysis and market development strategy Of COCA-COLA in Bhubaneswar market

At Hindustan Coca-Cola beverage Pvt. Ltd

(Project report submitted in partial fulfillment for the degree of PGDM)

Prepared By Manas Ranjan Mishra Shovan kumar. Kar Amit Ranjan Roll No. : - IBS11PGDM015 Roll No. : - IBS11PGDM027 Roll No. : -IBS11PGDM014

Under the guidance of

Name of the External guide Mr. Bhabesh Prajapati Area Sales Manager (ASM) Hindustan Coca-Cola Beverage Pvt. Ltd Bhubaneswar

Name of the internal guide Mis. Dipika Mishra Professor of Economics and Research Methodology Innovation-The Business School, Khurda

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DECLARATION
We Manas Ranjan Mishra, Shovan Kumar Kar and Amit Ranjan do here by declare that project report on COCA-COLA is an honest attempt, to put entire findings on actual data gathered through survey of Bhubaneswar markets. The work presented in our original work and has not been copied from any other sources. This project has not been submitted for the award of any other degree from any other institution neither in full nor in part and has not been published anywhere else before.

Manas Ranjan Mishra IBS11PGDM015 Shovan Kumar Kar IBS11PGDM027 Amit Ranjan IBS11PGDM014

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ACKNOWLEDGEMENT
Any project cant be completed in isolation. It is always the outcome of co-ordination and support of the people of corresponding field. We would like to thank M/s Dipti Tripathy, chair person of Innovation The-Business School, Khurdha for giving us an opportunity to do this internship in Hindustan COCA-COLA. We are highly indebted to Mr. Santosh Kumar padhi for his guidance and contact supervision. We would like to thank Mr. Bhabesh Prajapati for his co-operation and giving us an opportunity to work on various area of Bhubaneswar. We are also grateful to Miss Papori Roy for giving us a great platform to perform. We are thankful to our internal guide Miss Dipika Mishra and Mr. Bhagabat Barik for their encouragement and valuable suggestion on this topic without whom the project would not have completed. We would like to express my special gratitude and thanks to all outlets in Bhubaneswar for giving us such attention and time.

Manas Ranjan Mishra IBS11PGDM015 Shovan Kumar Kar IBS11PGDM027 Amit Ranjan IBS11PGDM014

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Innovation-The Business School Muktapur, Khurda - 752055

BONAFIDE CERTIFICATE
Certified that this summer internship project report titled Competitive analysis and market development strategy Of COCA-COLA in Bhubaneswar market is the confide work of Manas Ranjan Mishra Roll Number IBS11PGDM015, Shovan Kumar Kar Roll Number

IBS11PGDM027, Amit Ranjan Roll Number IBS11PGDM014 who carried out the project work under my supervision and guidance.

SIGNATURE (Candidates Signature)

SIGNATURE (Signature of the Internal Guide)

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Executive Summary
Among the Indian Beverage industries Hindustan COCA-COLA beverages Pvt. Ltd. is the Indias most popular and leading soft drink producer. As the survey is done particularly for Bhubaneswar city, so the market share is 70% among other competitors. it is one of the well grown soft drink company in India as well as in the world. The report on COCA-COLA is done to find out certain objective regarding the competitive analysis and market development strategy. In this study I used both data from primary as well as secondary sources. The whole process is like meeting the retailers and new out lets and asking questions and collecting information. Here we have found out the gap and problem which are faced by the retailers having competitors products and how to switch over to COCA-COLA products. The outcomes of this project are to properly analyze and to find out various aspects like companys position and competitors position in the market. It also talks about problems which are faced by the retailers. This analysis gives an idea about the market leader in the particular market and satisfaction level of retailers towards the brand and market response to the brand. All those factors which are responsible for the problems created in COCA-COLA are discussed thoroughly in the analysis part and also findings are given accordingly. A recommendation also discussed at the last part.

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Table of Contents

Sl. No. 1 2 3 4 5 6 7 8 9

Contents Introduction Company Overview production process of COCA-COLA products distribution channel of COCA-COLA Objective of research Scope of research Research Methodology SWOT analysis PESTL analysis

Page Number 2 3 6 7 8 9 10 11 13

10 11 12 13 14 15 16 17 18 9

BCG matrixes Porters five forces model data analysis and interpretation

15 16 18 23 24 25 26 27 28 29

Findings from the survey

suggestion Limitation of survey Conclusion Questionnaires Annexure Bibliography

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INTRODUCTION Soft Drinks in India - Industry Overview

In 2011, soft drinks registered its highest off-trade value growth rate for the review period. This growth was helped by high double-digit volume sales growth in most categories as well as appreciably higher unit prices in 2011. Sports and energy drinks, bottled water, ready to drink (RTD) tea and fruit/vegetable juice all maintained bullish growth even as abundant rainfall seemed to halt the spectacular recovery of carbonates witnessed in 2010. National brands engage in rebranding strategies to revive sales growth Several leading soft drinks brands made use of extensive marketing campaigns to revive fledging volume sales in 2010. Parle Agro rolled out widespread advertising of its flagship brand Frooti, while Hamdard Laboratories followed nuances of modern marketing for Rooh Afza. Carbonates brands 7-Up and COCA-COLA also invested in excessive marketing to achieve higher brand visibility. Pioma Industries concentrate brand Rasna also shifted product positioning, while continuing to target its products towards children. Major players maintain dominance of soft drinks Soft drinks players COCA-COLA and PEPSICO were the leaders in overall soft drinks off-trade value sales in 2010. Although domestic players, such as Parle Bisleri, Parle Agro and Dabur, also held notable shares, they remained some distance behind COCA-COLA or PEPSICO. While COCA-COLA entered two high growth categories in the shape of energy drinks and lemonflavoured juice drinks in 2010, PEPSICO launched its carbonates brand PEPSI Max. As the value sales of both of these companies came primarily from carbonates in 2010, they are expected to experience a reduction in their share of soft drinks in the forecast period. Domestic players will benefit from this development as consumers will opt for health-orientated soft drinks. Soft Drinks company in India: 1. 2. 3. 4. 5. 6. 7. 8. 9. COCA-COLA India Pvt Ltd - Soft Drinks - India Dabur India Ltd - Soft Drinks - India Dhariwal Industries Ltd - Soft Drinks - India Field Fresh Foods Pvt Ltd - Soft Drinks - India Hamdard (Wakf) Laboratories - Soft Drinks - India Parle Agro Pvt Ltd - Soft Drinks - India Parle Bisleri Ltd - Soft Drinks - India PEPSICO India Holdings Pvt Ltd - Soft Drinks India Pioma Industries Ltd - Soft Drinks - India

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COMPANY OVER VIEW

Company Information Full name Hindustan Coca-Cola Beverages Pvt Ltd Legal Address 13, Abul Fazal Road, Bengali Market, ; New Delhi; Delhi; 110001 Status: Non-Listed Legal Form: Limited Liability Company Operational Status: Operational
Website:

http://www.coca-colaindia.com

COMPANY DESCRIPTION Hindustan COCA-COLA Beverages Private Limited produces cool drinks. The company was founded in 1999 and is based in Gurgaon, India. Hindustan COCA-COLA Beverages Private Limited operates as a subsidiary of The COCA-COLA Company.

COMPANY ANALYSIS: According to the Individual - Audited financial statement for the Year of 2011, total net operating revenues increased with 17.76%, from INR 3,886.72 tens of millions to INR 4,576.9 tens of millions. Operating result increased from INR 430.65 tens of millions to INR 537.49 tens of millions which means 24.81% change. The results of the period decreased -7.10% reaching INR 198.1 tens of millions at the end of the period against INR 213.23 tens of millions last year. Return on equity (Net income/Total equity) went from 78.17% to 8.56%, the Return On Asset (Net income / Total Asset) went from 14.07% to 8.19% and the Net Profit Margin (Net Income/Net Sales) went from 5.49% to 4.33% when compared to the same period of last year. The Debt to Equity Ratio (Total Liabilities/Equity) was 104.59% compared to 555.55% of last year. Finally, the Current Ratio (Current Assets/Current Liabilities) went from 0.80 to 1.14 when compared to the previous year.

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History:
The COCA-COLA Company, nourishing the global community with the worlds largest selling soft drink since 1886, returned to India in 1993 after a gap of 16 years giving a new thumbs-up to the Indian Soft Drink Market. In the same year, the Company took over ownership of the nation's top soft-drink brands and bottling network. No wonder, our brands have assumed an iconic status in the minds of the consumers. COCA-COLA serves in India some of the most recalled brands across the world including names such as COCA-COLA, Diet COKE, SPRITE, FANTA, Thums Up, LIMCA, Maaza and KINLEY (packaged drinking water). Product and Services: The business system of the Company in India directly employs approximately 6,000 people, and indirectly creates employment for many more in related industries through our vast procurement, supply and distribution system. The vast Indian operations comprise 25 company-owned bottling operations and 24 franchisee-owned bottling operations. That apart, a network of contract-packers also manufactures a range of products for the Company. COCA-COLA Diet COKE SPRITE FANTA Thums Up LIMCA Maaza and KINLEY are Trademarks of The COCA-COLA Company Cultures and Values: The Secret Of Formula Commitment, tempered by Passion and seasoned with a great deal of Fun is the COKE way of life. Drawing upon our collective energies, this Secret Formula drives us to achieve greater results collaboratively and thoroughly enjoy ourselves while doing it! The pace, energy and passion of our people constitute the invisible glue that make us one of the most sought after workplaces. Participative Leadership Right from our interactions in the market, our Business Planning and our Brand launches, to our Employee Engagement Programs, our Values Agenda, and employee processes, every system is available for continuous improvement. A learning atmosphere, enabled by our Manifesto for Growth, helps us seek and replicate the learnings from within and outside our organization. Our Engagement programs enable us to examine, validate and improve ourselves, constantly. Our colleagues involve themselves in our opportunities for participative leadership volunteering for work groups that assist decision-making in critical processes.

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Values: We are guided by the shared values that guide us a Company and as individuals Leadership The courage to shape a better future Passion Committed in heart and mind Integrity Be real Accountability If it is to be, its up to me Collaboration Leverage collective genius Innovation Seek, imagine, create, delight Quality What we do, we do well

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PRODUCTION PROCESS OF COCA-COLA PRODUCTS

Figure: 1 - production process of COCA-COLA products

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DISTRIBUTION CHANNEL OF COCA-COLA

MANUFACTURING PLANT, KHORDHA

SALES AND DISTRIBUTION OPERATIONS

DISRINUTERS

OUTLETS

OUTLETS

Figure: 2 - Distribution channel

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OBJECTIVES OF RESEARCH
To know the competitors status. To know the strategy applied by the competitors. To make the product available at the existing outlets. To collect facilities related information of competitors high volume outlets (HVO). To convince the competitors outlets to have COCA-COLA products. To help Market Developer in new outlet activation.

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SCOPE OF RESEARCH
By this study as well as attitude towards COCA-COLA has been found out, which can be used in strategy formulation in Bhubaneswar market. Lacking and factors for dissatisfaction has been studied from various outlets which can be taken care and improved. To know the demand and supply gap directly from the retailers. Problem in motivation and promotion at the point of sell has been found out.

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REASERCH METHODOLOGY
SAMPLE UNIVERSE: All retailers having PEPSI products and new out lets will be taken as the sample universe. SAMPLE SIZE: All the items considered in any field of enquiry constitutes a universe of population. In this research only few items can be selected from the population for our study purpose. Those are 84 outlets in different areas of Bhubaneswar market. SAMPLING METHOD: Convenience sampling and Purposive sampling SAMPLE AREA: Luwis road Jaydev vihar Master canteen Ashok Nagar Bapuji Nagar Unit-ii From Unit-iv to PMG square Sailasree vihar Niladree vihar KIIT square Chandaka Industrial Area DATA COLLECTION: Data are collect through primary and secondary sources. PRIMARY SOURCES: The primary data required for this project was collect through questionnaires. This method consisted of preparing a structured questionnaires and collecting data from retail outlets. Data are collected through survey in Bhubaneswar market. SECONDARY SOURCES: The secondary data are collected through different web sites and books. STATISTICAL TOOLS: BAR CHART COLUMN CHART PIE CHART

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SWOT ANALYSIS
STRENGTH

THREATS

SWOT
OPPORTUNITY

WEAKNESS

STRENGTH

High market share Popular for its taste Branding obvious and easily recognized A lot of finance customer loyalty International Trade

WEAKNESS
Unable to meet retailers demand with respect to stocks. Lack of coverage in inside markets. Problems in supply chain management. Lacking in proper communication with the retailers. Unable to concentrate on each and every retailer due to huge distribution.

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OPPORTUNITY

To increase production capacity due to huge demand. Increase promotional activity for less selling products. Buy out competition. More Brand recognition. To concentrate more on new outlets.

THREATS
Competitors may take over market share due to insufficient stock. Unable to provide cooler to the beginners where competitor can take the advantage. Unconditional discount from the competitor to beat the market share. Late response for activation of new outlets.

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PESTL ANALYSIS
POLITICAL FACTORS Globally, COCA-COLA beverages being a non-alcoholic industry fall under the FDA (Food and Drug Administration), It is an agency in the United States Department of Health And Human Services. Their head quarter is in USA and it has started opening offices in foreign countries as well. The job of FDA is to check and certify whether the ingredients used in the manufacturing of COCA-COLA products in the particular country is meeting to the standards or not in the COCACOLA the company takes all the necessary steps to analyze thoroughly before introducing any ingredients in its products and gate prior approval from the FDA. The company also takes into consideration of the regulation imposed by FDA on plastic bottle products. Apart from FDA the other political factors includes tax policies and accounting standards. The accounting standards used by the company changes from time to time which have a significant role in the reported results.

ECONOMIC FACTORS The economic factors analyze the potential areas where the farm can grow and expand. It includes the economic growth of the countries, interested exchange rate, inflection rate, wage rate and unemployment in the country. The company first analyzes the economic condition in the country before venturing into that country. When there is an economic growth in the country, the purchasing power among people increases. It gives the company or the marketer a good chance to market the product. COCACOLA, in the past identified this correctly and rightly started its distribution across various countries. The net operating profits for the company outside US stands at around 72%. Along with this the company uses 63 various countries other than US dollar.

SOCIAL FACTORS COCA-COLA which is a B2C company is directly related to the customer, so social changes are the most important factor to consider. Each and every country has a unique culture and attitude among the people. It is very important to know about the culture before marketing in a particular country. COCA-COLA has about 3300+ products in their stable, when entering into a country it does not introduce all the products. It introduces minimum number of products according to the culture of the country and the attitude of the people.

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TECHNOLOGICAL FACTORS Technological factor has very less effect in soft drink industry. The advancement in technology in the company has led to : introduction of new ways for the availability of COCA-COLA, it introduced general vending machines all over the world. In products it led to the development of new products like Cherry COKE, Diet COKE etc. The technical advancement in the bottling industries includes, introduction of recyclable and refillable bottles, introduction of cans which are trendy, stylish and popular among the youngsters.

LEGAL FACTORS The legal factors include discrimination law, customer law, anti-trust law, employment law and health and safety law. In COCA-COLA the business is subjected to various laws and regulation in the numerous countries in which they do the business, the laws include competition, product safety, advertising and labeling, container deposits, and environment protection labor practices.

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BCG Matrix
STARS
In this segment products having high market share and high growth should be kept. Around 95% of outlets have stated that THUMP UP, MAAZA, SPRITE is being sold more than others. And they have experienced the growth in the sales volume and demand. (THUMP UP, MAAZA, SPRITE)

CASH COW
In this segment products having consistent growth and good market share should be kept. About 40% of outlets are doing well with this products and rest have stated these are not that demanded by the consumers. But problems can be solved if some necessary effort will be done. (LIMCA, KINLEY)

QUESTION MARK
Businesses with low point share but which may have a high growth rate. This suggests that they have potential but may require huge ever, a competing force extraordinary effort in order to grow point share. Good performance has seen in very few outlets among all. (FANTA, MINUTE MAID)

DOGS
Businesses that have low relative share and low expected growth rate. Dogs may generate enough points to sustain but they are very rare. Around 90% of outlets have stated that COKE is not at all demanded by the consumer. (COCA-COLA)

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Figure: 3 BCG matrixes

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PORTERS FIVE FORCES MODEL

1. Threat of New Entrants
Agreements: prohibit bottlers from taking on new competing brands for similar products. Backward integration: buying significant percent of bottling companies. Retailers enjoy significant margins: 15-20% on soft drinks. Difficult for the new entrants: at a lower margin. Heavy advertising. Strong brand name. Loyal customers.

2. Threat of Substitutes Strong. Many kinds of substitutes appear. (bottled water, sports drinks and coffee etc) Increase of numbers and varieties of water and sports drinks. Trend to healthier drinks. Coffee and tea caffeine. Low switching costs. Substitute products are quality and innovation.

3.

Threat of Suppliers Low. Does not do any bottling itself. Done by independent bottlers. COCA-COLA Enterprises. COCA-COLA integrated COCA-COLA Enterprises earlier in 2010. Better control distribution. Quicker to market with products.

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4. Bargaining Power of Buyers Moderate. Buyers: Large grocers, convenience stores, supermarkets, and restaurants. Buy large volumes - bargain a lower price. Decreased demand for unhealthy soft-drinks - larger bargaining power.

5. Competitive Rivalry Strong. The competitive pressure from rival sellers is the greatest challenging faced by COCACOLA. Main competitor : PEPSICO - power struggle COCA-COLA owns four of the top five soft drink brands : COCA-COLA, Diet COKE, FANTA, and SPRITE. Global market: COCA-COLA has higher sales. Brand name loyalty. The Brand Keys Customer Loyalty Leaders Survey (Brand Loyalty, 2010). Diet PEPSI ranked 258th (the highest ranking of soft drink). Diet COKE ranked 336th (the highest ranking of COCA-COLAs product).

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DATA ANALYSIS AND INTERPRETATION

Competitors status:
From this research we obtained that COCA-COLA is having 70% market share with respect to other competitors in Bhubaneswar market. COCA-COLA: 70% PEPSICO: 30%

Market Share of Coca-Cola

Coca-Cola PepsiCo

30%

70%

Figure: 4 Competitors status with respect to COCA-COLA F Number of High Volume Outlet (HVO) of PEPSICO in the researched area:

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Number of High Volume Outlet (HVO) of PEPSICO in the researched area:

Total number of outlets: Number of HVO: 84 14

90 80 70 60 50 40 30 20 10 0 Total No. of outlets-84 No of HVO -14 Sales

Figure: 5 Status of HVO of PEPSICO

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FIGURE ABOUT PROVIDING COOLING SYSTEM BY PEPSICO:

From this research we found that about 95% of PEPSI outlets are being provided with required cooling system. And also we conclude that PEPSICO is facilitating cooling system initially without caring about the status of that particular outlet. They are also paying electricity charges for the cooler that have provided to some outlets. Total no of PEPSI and Combine outlets Outlets having cooling system by PEPSICO 84 79

100 90 80 70 60 50 40 30 20 10 0 percentage of outlets having cooling facility Not having cooling facility from Pepsi Sales

Figure: 6 Status of cooling system provided by PEPSICO

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RATIO OF OUTLETS WHO ARE INTERESTED FOR SWITCH TO COCA-COLA

Most of the outlets are quite satisfied with PEPSICOs services but some are there who are really interested to go for COCA-COLA due to high demand of customer. From the survey we have concluded that there are about 45% of retailers who want to switch and the graphical chart is like this below Total PEPSI Outlets: No of convinced outlets: 42 18

60

50

40

30

20

10

0 Not intrested to switch intrested to switch for for Coca-Cola Coca-Cola

Figure: 7 Percentage of PEPSI outlets interested for switch COCA-COLA

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CUSTOMER DEMANDS TOWARDS COCA-COLA PRODUCTS

Though COKE could not perform well in the market where as product like THUMPS UP is the market champion. Likewise SPRITE and MAZZA are also doing so well and contributing in a perfect way. But LIMCA and FANTA are not so appreciated by the customer like other products which may need extra ordinary promotional activities.

DAILY SALES PROJECTION OF COCA-COLA PRODUCTS

9 8 7 6 5 4 3 2 1 0 Thumps up sprite coke Mazza Fanta Limca

Here, X-axis represents the sell in the market Y-axis represents the products Figure: 8 Daley sales projections of COCA-COLA products

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FINDINGS FROM THE SURVEY

From the analysis the information collected from the outlets say that out of all verity of soft drinks, Coco-cola is selling with a good standard. Retailers are satisfied by giving their opinion that Coco-cola is considered about the problems of retailers as its own problem.

65% retailers have given their opinion that Coco-cola has been emphasizing on its highly demanded products. From the analysis 80% retailers are satisfied by the timely supply of Coco-cola products & it avails expected no. of carets.

The distributer gives the associated services with all range of Coco-cola soft drinks products. Still there are some retailers who have complained about the distribution on time.

Some of the retailers are unhappy with the late response of the company personnel about providing cooler and other facilities. Some of the new outlets are being inspected and still waiting for the response about activation.

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CONCLUSION
In this summer internship project we have visited around 84 outlets over 4 different populated areas. Apart from the mixed outlets we have collected necessary data from 42 PEPSI outlets. We had made necessary questionnaires as far as the projects topic is concerned which is competitive analysis and market development strategy. As COCA-COLA is the most recognized and well appreciated brand it has got 70% market share as compared to other competitors in Bhubaneswar. In this survey we have found that most of the new outlets are willing to have the dealership but somehow they are being unrecognized due to miss communication between company personnel and retailers. Even some outlets have a complaint of late delivery due to insufficient stock. So finally we conclude that if the production volume will be increased and proper supply chain will be maintained then major problems can be solved. Along with it is also important to have regular touch with the retailers to identify the service related problems. As our research is done by taking a small sample within a less time period so it gives some detail structure about market performance of COCA-COLA.

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SUGGESTION
Through the company and its personnel try to attract more customers towards the company, but there are big areas to focus to retain the consumer, like There should be regular communication between the distributer & consumer. The proper distribution of the product to the demanded places. There should be more production in the summer session to fulfill the market demand. The more supply of sign board, & rack will create more demand of the product than competitor. The demand of two or three product is high, so the attention should be given towards those products and the availability of the product. The salesman and the distributer should be well trained so that the retailer and consumer can know the regular offer and get attracted. The views of customer, retailer should collect to find the need of the market.

Beside the above suggestion one thing can also be suggested that we have enough number of outlets and we should take care of them pretty well so that we should not let them think about any other competitors.

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LIMITATION OF PROJECT
The time period of study was only for two month so it was not possible to cover all the areas and go into the depth of the problem and make analysis. The area of survey was Bhubaneswar and it was concentrated on urban area only. The psychological condition varies from place to place because in many places outlet owner was not supportive. The training was carried out in the peak season so concerned company personnel could not concentrate more on this project due to their own work pressure. Some respondents left some of the questions unanswered either due to inability to put a strain on mind or they did not know the answer.

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Annexure
List of Figure:

Figure No. 1 2 3 4 5 6 7 8

Figure Name production process of COCA-COLA products Distribution channel BCG matrixes Competitors status with respect to COCA-COLA Status of HVO of PEPSICO Status of cooling system provided by PEPSICO

Page No. 6 7 15 18 19 20

Percentage of PEPSI outlets interested for switch COCA- 21 COLA sales projections of COCA-COLA products 22

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QUESTIONNAIRES
1. Detail of the outlet. Name of the outlet: Contact person: . Mobile No.: ... Address: 2. Status of the PEPSI outlet: Status of the cooling equipment: .. HVO: Yes No Total volume: Getting a discount of: .. 3. Support required to switch for COCA-COLA: Volume needed: . Need of cooling equipment: .. Discount needed: ... 4. Remarks:

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BIBLIOGRAPHY Reference

www.google.co.in www.wikipedia.org www.theCoca-Colacompany.com

Books: Authors name- V S Ramaswami, S Namakumari, 4th edition marketing management Authors name- Kotler, Keller, Koshy, Jha 13th edition Marketing management Authers name- Azhar Kazmi 3rd edition Strategic Management and Business Policy

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