Acknowledgement

Acknowledgement

Co-operation and building up of moral are the essence of success. These are two factors that go

a long way in achieving it. It is a Herculean task, which lacks these two determinants of success.

Summer training was an exposure to corporate environment. It was an opportunity and great

pleasure for me to be in such an environment and having interaction with concerned people. I

express my heartily respect and profound thanks to Mr. Arpan Saikia (Marketing and Channel

Executive) for his enlightening and meticulous guidance for the consummation and evaluating of

this project.

I am also very thank full to the Market Developers (MD) for their corporation while doing the

research on topic.

Lecturer Rahul Purkayastha, Faculty, NERIM, Guwahati, who was in the role of my Faculty

Guide, left no stone unturned in guiding me along the course of my Summer Training Project

work. I am grateful to them those given me this opportunity to work on such type of project,

without them, it is not possible for me to complete the project.

I sincerely hope that my first venue in this field is appreciated.

Offering thanks,

Biswajeet Gogoi.

.

.

Declaration

I hereby declare that this work on “Analysis of Horizontal Expansion Strategy of Coke in Guwahati”, has been originally carried out by me. This work has not been earlier submitted either in full or in part for any other purposes elsewhere.

Biswajeet Gogoi

M.B.A 4th Semester.

Roll No. 17.

NERIM, Guwahati.

Company Name: HINDUSTAN COCA COLA BEVRAGES PVT.LTD.Industry: Consumer product / FMCG products.

Types of Company: Private Limited Company, Foreign Based Company

Location: Guwahati

Sales Office: 3- Dihang Arcade

G. S. Road, near Rajiv Bhawan

Guwahati.

ABOUT THE COMPANY Every person who drinks a Coca-Cola enjoys a moment of refreshment. And shares an

experience that millions of others have served. All of those individual experiences combined

have created a worldwide phenomenon – a truly global brand. On the distribution front, 10-tonne

trucks, open-bay three wheelers that can navigate the narrow alleyways of Indian cities, ensure

availability of our brands in every nook and corner of the country. The company-owned Bottling

arm of the Indian Operations, Hindustan Coca-Cola Beverages Private Limited is responsible for

the manufacture, sale and distribution of beverages across the country. A career at Hindustan

Coca-Cola Beverages Pvt. Ltd. is truly a one-of-a-kind experience. Come taste life at Coca-

Cola.

Coca-Cola Company, nourishing the global community with the world’s 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),Kinley Soda, Minute Maid Pulpy

Orange ,Minute Maid Nimbu Fresh.

Mission, Vision and Values

The world is changing all around us. To continue to thrive as a

business over the next ten years and beyond, it is important to look ahead, understand the trends and

forces that will shape the business in the future and move swiftly to prepare for what's to come. All must

get ready for tomorrow today. That's what the 2020 Vision is all about. It creates a long-term destination

for our business and provides us with a "Roadmap" for winning together with our bottling partners.

Mission

The Roadmap starts with the mission, which is enduring. It declares the purpose as a company and

serves as the standard against which the actions and decisions are weighed.

To refresh the world...

To inspire moments of optimism and happiness...

To create value and make a difference.

Vision

The vision serves as the framework for the Roadmap and guides every aspect of the business by

describing what is needed to accomplish in order to continue achieving sustainable, quality growth

People: Be a great place to work where people are inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy

people's desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual,

enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable

communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.

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

Winning Culture

The Winning Culture defines the attitudes and behaviors that will be required to make the 2020

Vision a reality.

Values

The values serve as a compass for the actions and describe how they 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

The History of Coca-Cola

In May 1886, Coca-Cola was invented by Doctor John Pemberton, a pharmacist from Atlanta,

Georgia. John Pemberton concocted the Coca-Cola formula in a three legged brass kettle in his

backyard. His bookkeeper friend, Frank Robinson chose the name for the drink and penned it in the

flowing script that became the Coca- Cola trademark. Mr. Frank suggested the name Coca- Cola

because they represented the two key ingredients; Cocaine derived from the coca leaf and Caffeine from

Kola nut. Now Coca- Cola is available in 200 countries and territories. At the time of introduction,

Coca- Cola sold 9 drinks a day but today it sales averages 800,000,000 per day around the world.

It has been a steady and confident journey to growth and success.

1886: Coca Cola sold for the first time marked as an Esteemed Brain Tonic and Intellectual

Beverages

1886: John Pemberton Drink became known as Coca Cola

1887: Pemberton’s “ Coca Cola Syrup & Extract “ registered trade mark granted

1891: Asa Candler acquired the Coca Cola Business for $ 2300

1893: Asa Candler registered the Coca Cola Company as Coca Cola trade mark with U S patent

office

1893: The Trade mark “Coca Cola” first registered with the U.S. Patent Office

1899: Coca Cola company signed its first agreement with an Independent bottling company and

sell Coca Cola across the US, which was allowed to buy the Syrup and produce bottle and

distribute Coca Cola drink

1919: The Company sold to a group of investors for $25000000 led by Atlanta business man

Ernest Woodruff

1923: Woodruff introduced six bottle cartoons

1929: Coca cola started to be available through Vending machine

1933: Coca cola expanded its business into 44 countries

1934; Coca cola introduced Santa as Christmas Promotion

1936: Coca cola celebrated 50th Anniversary

1940: Coca cola was bottled in more than 45 countries

1941: “COKE” first appeared in bottle

1945: Coke registered as a trademark in US patent office

1946: Minute Maid frozen orange juice concentrate was introduced

1946: Coca Cola Company purchased rights to the Fanta Soft Drink

1960: Fanta was introduced

1960: Coke can available for twelve once

1960: Company purchased Minute Maid Corporation and entered the Citrus beverages market

1961: Company introduced the lemon – lime drink Sprite

1963: Company introduced sugar free cola Tab

1963: TAB was introduced

1964: Coca Cola company merged with Duncan Food Company

1967: Coke formed Coca Cola Company Food Division from Minute Maid Company and Duncan

Foods

1968: Frozen Coca Cola Introduced

1972: Mr. Pibb was introduced

1977: Coca Cola Contour was patented

1978: Two-litre and plastic bottle of Coca cola Introduced

1979: Diet Coke was introduced

1983: Caffeine free Coca Cola Diet Coke, TAB were introduced

1985: Diet Fanta was introduced

1985: New Coke was introduced

1985: Coca cola introduced New product named Diet Coke

1985: Coca Cola announced the flavour changes

1985: Plastic Can was introduced

1986: Coca Cola Enterprise Inc. was formed from existing and acquired bottling operations

1986: Coca Cola celebrated 100th Anniversary

1987: Minute Maid brand Soft Drinks were introduced

1889: Diet Mello Yello was introduced

1990: Caffeine-free Coca Cola Classic and PowerAde introduced

1990: World of Coca Cola in Atlanta opened

1991: Blend of recycled and virgin plastics bottles was introduced

1992: New Coke renamed as Coke 11

1992: Coca Cola was available in 195 countries and territories & appeared in more than

80 languages

1993: Coca Cola re-entered in India

1993: Contour PET bottles were introduced

1993: Tab clear was introduced 1994; Fruitopia was introduced

1995: Coca Cola completes its acquisition of Barq’s Inc.

1997: 0.5 L contour bottler was introduced

1997: Surge was introduced

1997: Citra was introduced

1998: Coca Cola bought Cadbury Schweppers non US beverages business in 155countries

1998: Coca Cola Card promoted

2000: Coca cola and AOL signed multi-year global strategic marketing

2000: Coca Cola online store Cocoa-Colastre.com opened

2000: Coca Cola lauched new job website –coca-cola on campus.com

2001: Simply oranged introduced

2001: Coca Cola introduced iFountain.

2001: Diet Coke Introduced

2002: Vanilla Coke was introduced

COCA COLA in India

Coca-Cola is a carbonated beverage that is produced and manufactured by Coca-Cola Company and

is often referred to simply as Coke. It is sold in stores, restaurants and from vending machines in more

than 200 countries. On the distribution front, 10-tonne trucks, open-bay three-wheelers that can navigate

the narrow alleyways of Indian cities, ensure availability of coke brands in every nook and corner of the

country.

Coca Cola, which is one of the most reputed companies among top five companies in the world

entered in India in 1952. Coca Cola India had made significant investment to build and continuously

improve its business in India, including new production facilities, waste water treatment plants,

distribution system and marketing equipment. In 1960 Coke Introduced another brand Fanta in Indian

market. Coca cola introduced brands as Sprite Tab in the decade of sixties. Coca cola was a leading Soft

drink company till 1977. In 1977 Indian Government has decided to throw Coke out of the country

because it was refusing to adhere to a particular provision of Foreign Exchange Regulation Act.

After 16 years of absence in India Coca cola company again entered in India when ministry of

Foreign Investment allow it to Invest in India. In January 1993, Government of India granted approval

to Coca Cola South Asia Holding Inc. USA (CCSAH) to set up two wholly owned subsidiaries named

Hindustan Coca Cola Holding Private Ltd and Bharat Coca Cola Holding Pvt. Ltd. Hindustan Coca

Cola Holding Pvt. Ltd. set up two downstream subsidiaries for bottling operations named Hindustan

Coca Cola Bottling North West Pvt. Ltd. (with investment of 435 crores ) and Hindustan Coca Cola

Bottling South West Pvt. Ltd (with an investment of 250 crores). Bharat Coca Cola Holding Pvt. ltd set

up Bharat Coca Cola Bottling North West (with an investment of Rs 250 crores) and Bharat Coca cola

Bottling South East Pvt. Ltd (with an investment of Rs 345 crores). These four subsidiaries merged into

a single company called Hindustan Coca Cola Beverages Pvt. Ltd.

Operations of Coca Cola:

The operations of Coca Cola in India can be broadly categorized under two heads- Coca Cola India and

Hindustan Coca Cola Beverages Private Limited.

Coca Cola India (CCI)CCI is responsible for

manufacturing the syrup formulation

advertising the products and creating awareness in the minds of the consumers and the market

Hindustan Coca Cola Beverages Pvt. Ltd. (HCCBPL)

HCCBPL is responsible for

bottling operations marketing, promotion and distribution of the products in the market

Coca Cola in North East

Coca Cola is the market leader of Soft Drink market in North Eastern Part of India. It is

available in all seven states of the region.

HCCBPL operates in the North East with a single city sales office in Guwahati , at the following

address-

3- Dihang Arcade

G. S. Road, near Rajiv Bhawan

Guwahati.

The Company has two plants in this region. In the Jorhat plant, the bottling of the 300ml RGB

Bottles is done; whereas in Byrnihat Plant, the bottling of 600ml Mobile and 1.5l PET bottle.

Organization Structure

Fig: Organisation Stucture

Coca Cola company in Guwahati:

Coca Cola Company is the market leader in the cold drink market all over the Guwahati. It

distributes its product through two distributors and its Depot in the city. The names of the distributor

with their area of distribution have been mentioned below-

1.Ramdeo Associates

Areas Covered : Lokhra, Kalapahar, Fatasil Ambari, Sarab Bhatti, Paltan Bazar , Ulubari, B. Barooah

Road, Rajgarh Link Road, Bhangagarh.

2. Purnima Enterprise

General Manager

General Sales Manager

Marketing Manager

Marketing Executive

Road To

Market

ManagerRoad To Market Executive

Area Sales Manager

Sales

Team

LeaderMarke

t Developer

Human Resource Manager

Asst. Human Resource Manager

Human Resource Executive

Finance Manager

Asst. Finance Manage

r(Fixed

Capital)

Finance

Executive

Asst. Finance Manage

r (Workin

g Capital)Financ

e Execut

ive

Sales Generating Assets

Sales Generating

Assets Executive

Mechanic

Areas Covered : Fancy Bazar, A T Road, Bharalumukh, Santipur, Durga Sarobar, Guwahati Railway

Station.

3.Depot: Areas Covered : Byrnihat, Jorabat, Jagiroad, Sonapur, Khanapara, Beltola, Ganeshguri,

Panjabari, Satgaon, Narengi, Noonmati , Chandmari, Guwahati Club, Silpukhuri, Zoo Road, Commerce

College, Bhangagarh, Uzan Bazar.

Bottlers:-In general, The Coca-Cola Company (TCCC) and/or subsidiaries only produces(produce)

syrup concentrate which is then sold to various bottlers throughout pharmacist John Stith

Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who

incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage,

Coca-Cola currently offers nearly 400 brands in over 200 countries or territories. The company

operates a franchised distribution system dating back to 1889 where TCCC only produces syrup

concentrate which is then sold to various bottlers throughout the world who hold an exclusive

territory. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the

NYSE and is part of DJIA and S&P 500.

All India Division COBO’s are now ISO 14001

Certified

All 25 of the Divisions Company-owned bottling plants have gained the international

standard ISO 14001 Environment Management System certificate. The ISO 14001 certificate is

the internationally recognized standard of Environmental Management. A company must

demonstrate management commitment, the total involvement of all employees and a compliance

with applicable regulatory and internal company standards. Strict division compliance with eco

system ensured that the bottling plants were ready to meet the tough evaluation criteria and

standards of the ISO auditors.

RIGHT EXECUTION DAILY (R.E.D.)

The red color has always signified the brand “Coke” since its inception. The brand has come a long way, but

the color still remains an inseparable part. The abbreviation ‘RED’ stands for Right Execution Daily, which has

been the breakthrough concept, which has helped Coca Cola to fully utilize the market and lead far ahead of its

competitors in the recent years.

According to this concept, the company’s customers (outlets) have been divided into two categories-

▪ RED Outlets

▪ Non RED Outlets

The field force of Market Developers of the company has to visit the RED outlets and carry out the regular right

execution of three aspects viz. Visicooler Standards, Product Availability and Activation. The first distinct feature

in RED Activation is to maintain some visicooler standards like its prime position, proper working condition,

purity, brand order compliance etc. The next important thing is to ensure the product availability in the three

channels of outlets. The availability standards of the Coca-Cola brands are different for the three channels.

Finally, Activation is the last but the most important feature which encourages sale of beverages in an outlet. In

simple words, Activation can be termed as silent salesman. It ensures proper availability of activation elements

like rack, flange, glow sign board etc. in an outlet. The activation elements differ from one channel to the other.

This execution takes place by what is called a Call. The 7 steps of Call are as

under-

Check the Outside Advertising , i.e. if the outside activation elements are properly placed or

not, e.g. Glow Sign Board outside the outlet

Go inside the outlet and Greet the Customer (shopkeeper)

Visi-Merchandising , i.e. check if the visicooler (if present) is working properly and if the coke

products are available.

Warm Merchandising, i.e. check the warm display, i.e. whether the coke products that have been

kept outside the visicooler are displayed properly or not

Check Inside Advertising , i.e. if the Inside activation elements are properly placed or not, e.g.

1-tier or 3-tier rack inside the outlet

Take the Order from the customer. Also, make sure if the order has been delivered by salesman

and the products the products have been arranged as per standard

Thank the Customer and leave the outlet

Each MD’s area is divided into 2-3 routes based upon the size of the area and each route is visited per day. As

such, every RED outlet should get visited by the respective MD every alternate or third day. This helps build a

continuous and close relation between the customer and the company, thus creating the company’s goodwill

among the customers. Such a relation creates an enduring customer base for the company.

Brand Order:-

Cola ► Lemon ► Orange ► Juice ► Kinley

i.e.

Coca-Cola ► Thums-up ► Sprite ► Limca ► Fanta ► Maaza ► Minute Maid Pulpy Orange ► Minute Maid Nimbu Fresh ► Kinley Soda ► Kinley Water

RED Score:-

Every RED Outlet needs to be scored on the basis of the Execution Standards set by the company. The

MDs record the condition of the execution standards in each outlet regularly in what is called the Red

Tracker, which reflect the performance of the MD in his/her area. The monthly average of the RED

Scores of all the outlets of an area becomes the RED score for the MD of the given area. Also the

scoring of each area is done by A. C. Nelson, on a monthly basis.

The RED Scoring is done on three parameters- Visi-cooler, Availability and Activation. However the

total scores on each parameter varies form on channel type to another.

For Grocery, E&D Type 1 and Convenience

Total Visi-Cooler Score – 25 points

Total Availability Score – 60 points

Total Activation Points – 15 points

For E&D Type 2

Total Visi- Cooler Score – 25 points

Total Availability Score – 50 points

Total Activation Points – 25 points

Market Developers (MDs)

These are the employees of HCCBPL. Their job is to visit and develop a given set of outlets.

They have to ensure outlet execution with respective to availability, merchandising and activation

standards. It is their responsibility to increase the number of RED outlets in their area on a quarterly

basis. They have to work close with the customers and try to continuously increase the market

capitalization of the company. They build a good relationship with the customers, which creates the

company’s goodwill in the market.

Role of MDs can be briefly summed up as under-

Market Visit

Cooler Merchandising

Warm Display

Activation

Availability

Reporting

Customer Relationship

Sales Executives

These are the immediate superiors or supervisors of the MDs. Every distributor may have one or more SE

based on the area they cover. The SEs must keep a regular vigil on the amount of products sold in their

respective area per day. Also, they keep a close eye on the performance of the company’s products against the

competitors’ products

Salesmen These are the employees of the distributors. Their job is to sell the products to the outlets of their respective

area and collect the amount from the customers.

PRODUCTS AND BRANDS

The Coca Cola India offers a rich bunch of brands that stand ahead of their rival brands of Pepsi, Frooti,

Annapurna and Pran. There are various brands of sparkling drinks & juices, soda and water under the umbrella of

Coca Cola Company. Some of these are owned, others used under license by the Company. These have been

listed herein.

Coca-Cola

Open Happiness!

Coca Cola is the world’s favourite brand and the most valuable brand. Coca Cola has a truly remarkable

heritage. From a humble beginning in 1886, it is now the flagship brand of the world’s largest

manufacturer, marketer and distributor of non-alcoholic beverages in the world.Coca-Cola has made

significant investments to ensure that the beverage is available to more and more people, even in the

remote and inaccessible parts of the nation.

Thumps Up

Strong Cola Taste, Macho Personality!

Thums Up is a leading carbonated soft drink and most trusted brand in India. Originally introduced in

1977, Thums Up was acquired by the Coca-Cola Company in 1993. It has a strong cola taste with an

exciting personality. Thums up is known for its strong, fizzy taste and its confident, mature and

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

Sprite

Sudden Refreshment! Fast, Intense and Surprising!

Sprite, the global leader in lemon-lime category, is the second largest sparkling beverage brand in India.

Launched in year 1999, Sprite with its cut-thru perspective has managed to be the true teen icon.

Its crisp clear lemon lime taste refreshes the body and mind. Straightforward and unpretentious,

Sprite is all about being true to oneself and living by simple and honest code of one’s own

instincts.

Limca

Lime n’ lemoni Limca

Derived from Nimbu+Jaisa, hence Lime-Sa, Limca refreshes, renergizes, rejuvenates not just the body

but also the emotions. Born in 1971, 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 of Emotions’. The

idea is an emotional platform for the young-adult, who pursue success and achievement,

but still want freshness to rejuvenate the fun, energy, excitement and romance in their lives.

Fanta

Bolder Taste!

Internationally, Fanta is the orange drink of the Coca-Cola Company. The favorites drink since 1940’s;

Fanta entered the Indian market in the year 1993. Fanta has occupied a strong place 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. This positive imagery associated with happy, cheerful and special times with

friends.

Maaza

Maaza Lao, Aam Ki Pyaas Bujhao

Launched in 1976, Maaza is bottled mango, the fruit associated with good times like no other. Universally loved

for its taste, colour, thickness and wholesome properties, Maaza is the mango-lovers first choice. Its universal

appeal is responsible for the brand being recognized as a drink that provides ‘wholesome family

fun’.Maaza has been realized as the ultimate mango indulgence. It provides the most

authentic experience of rich, juicy alphonso mangoes to satisfy the thirst for mangoes-

anytime and anywhere.

Minute Maid-Pulpy Orange

The history of the Minute brand goes as far back as 1945 when the Florida foods Corporation

developed orange juice powder. The company developed a process that eliminated 80

percent of the water in the orange juice, forming a frozen concentrates that when

reconstituted created orange juice. They branded it Minute Maid, a name connoting the

convenience and the ease of preparation (in a minute). Minute Maid thus moved from a

powdered concentrate to the first ever orange juice from concentrate. Minute maid is

one of the world’s largest juice and juice drink brands. Over the years, through

innovations and unmatched consumer experience has established itself as a successful juice brand all

over the world.

Minute Maid Nimbu Fresh

Bachpan Nimbu Ka Chaska

Coca-Cola in India is enjoying market leadership in the juice drink segment with brand Maaza and

Minute Maid Pulpy Orange. Nimbu Fresh has further extend its leadership in this fast growing segment.

Minute Maid Nimbu Fresh, a lemon juice-based drink. The lemon juice content in Minute Maid Nimbu

Fresh brand is 5.7 per cent. It promises to be the flavour of the lime juice of the childhood.

Kinley Club Soda

Kinley Club Soda is a carbonated water owned by The Coca-Cola Company and sold in

many Central European countries and India.

Kinley Water

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 the rituals or as the monsoon which gives life to the sub-continent.

Kinley water understands the importance and value of this life giving force. Thus, it promises water that is as pure as it meant to be. It comes with the assurance of safety from the company. That is

why it is introduced with reverse osmosis. Right to pure, safe drinking water is fundamental. A universal need, that cannot be left to chance.

Channels

Grocery – Outlet primarily engaged in retailing of food & various household items. It includes Grocers (Outlets dealing mainly in grains, provisions, spices, edible oil, vanaspati etc.) and General Stores (Outlet selling items of day to day requirements & stocking a variety of branded products).

E&D types 1 – Outlet selling items of eat which are being consumed primarily standing in the outlet or being taken away for Future Consumption. Does not have place to sit. It includes bakery / sweet shops/ QSR / juice centers / soft drink shops/ Tea shops etc.

E & D type 2 – Outlet selling items of eats which are being cooked/made in outlet with the possibility of consuming those products within the outlet. The outlet should have a place to sit, it includes sit down restaurants /Bars/ Dhabas/Cafes etc.

Convenience - It includes outlets which are small stores, generally accessible locally. These are often located alongside busy roads. It includes Chemists /STD Booths / Pan – Beedi shops, etc.

Class

Bronze -Those outlets, which sells <= 200 carets per year.

Silve r - Those outlets, which sells 201 to 499 carets per year.

Gold - Those outlets, which sells 500 to 799 carets per year.

Diamond - Those outlets, which sells more than 800 carets per year.

What is Horizontal Expansion?

Expansion of business capacity through the absorption of facilities or buildings as well as

through the acquisition of new equipment to handle an increased volume in sales in which the

business is already engaged. In microeconomics and strategic management, the term Horizontal

Expansion describes a type of ownership and control. It is a strategy used by a business or

corporation that seeks to sell a type of product in numerous markets. Horizontal Expansion in

marketing is much more common than Vertical Expansion is in production. Horizontal

Expansion occurs when a firm is being taken over by, or merged with, another firm which is in

the same industry and in the same stage of production as the merged firm, e.g. Pepsi has adopted

strategy of Vertical Expansion by which Pepsi wants to improve its sale from Coke monopoly

outlets, means Coke’s monopoly outlets are being taken over by Pepsi now in this condition to

improve its sale Coke need to open new outlets which is called Horizontal Expansion Strategy. A

monopoly created through Horizontal Expansion is called a Horizontal Monopoly.This is the

expansion of a firm within an industry in which it is already active for the purpose of increasing

its share of the market for a particular product or service.

Reason of Horizontal Expansion?The ultimate objective of coke is to acquire more customers and serve them properly. While

doing Horizontal Expansion take care to the competitor’s strategy. The main competitor is

PEPSI, who has opted Vertical Expansion to generate more sell however Coke do not believe on

Vertical Expansion because Vertical Expansion has limited preview so COKE is great believer in

Horizontal Expansion and this strategy helped to the company to maintain its leadership in the

soft drink industry.

India is a big country having diversified taste and appearance and same character is reflected in

their demography. Horizontal Expansion helps the company to serve more people and more

customers touch point because in the waste country many customers commute.

Benefits of Horizontal Expansion :

Provides incremental volume & revenue for business.

By Horizontal expansion there will be more outlets of our product in the market which

will sell our product in more quantity. This will generate incremental revenue for the

business.

Helps improve route productivity. There are predetermined routes through which

products transported and delivered at the coke outlets. If we open more outlets on the

routes it will increase the productivity because more outlets will be covered and more

products will be delivered with a negligible increase in time and efforts. Hence it will

improve productivity of the route.

Improves Profitability of our Distributors expenses on routes as delivery of product are

incurred by the distributers. Opening new outlets will give more revenue to our

distributors also. With the increase in route productivity will improve profitability of the

distributors.

Reduced Dependence on Large Customers, We know that coke products have a very

good demand. To comply with this we have to provide large amount of supply. In case

we have few outlets a large amount of stock is gathered at few retailers. In this case they

become monopolistic and demand many things like coolers refrigerators discounts

margins etc. from the company. So it is very necessary to reduce dependence on large

retailers by opening new outlets.

Increase market visibility, selling at more outlets give more market visibility of the

product which gives higher product recognition and brand value to the products.

Economies of Scale.

Increase in market power over supplier and downstream market channel.

What is Vertical Expansion

Vertical Expansion is the process whereby firm acquires another firm at different level of

distribution. For example manufacturer may acquire a wholesaler or wholesaler may acquire a

retailer. This is called forward integration. If retailers acquires wholesaler then it is known as

backward vertical integration. It is an effective means of coordination, commitment. Coca cola

shifted their several function like packaging, transportation and selling to retailers, to their

bottlers. It is cost saving for coca cola and to enlarge market for their products. In 1990’s coca

cola is engaged in the strategy of vertical integration, this means that in purchasing bottlers coca

cola will perform itself storage, transportation, packaging and marketing to retailers. At present

they in Guwahati they are buying off the distributors phase wise.

Advantage of horizontal expansion over vertical expansion:

Both expansion techniques are meant for increasing sales volumes. But in

Horizontal Expansion Company can earn more profits by spending less. Let’s see the profit story

of horizontal expansion with the help of this example.

The above table clearly indicates the importance of opening new outlets. By doing vertical expansion only growth in profit was not very effective but because of opening new outlets sales increased to a large extent.

Research Methodology:

The study is based on Primary data and Secondary data. Secondary Data was collected

from the Company’s website and MD’s Sales Presenter as well as Primary Data was collected

through structured questionnaire. The questionnaire was designed by keeping all the objectives

of the study in mind.

MEASURES 2010 2011

Number of existing outlet 10000 10000

Total volume in physical case(in lakh)

50 55

VPO in physical cases 500 550

Number of new outlets 2000

New outlets VPO 125

Incremental Volume(in lakh physical cases)

2.5

Grand Total(volume in lakh cases) 50 57.5

The type of research which is used to conduct survey was.

Sample Unit:

Sampling units are the retailers of grocery shop, General store, Betel shop, Medicine Store,

Restaurants from different parts of Guwahati city.

Sample Size:

My sample size was 50 outlets.

Sampling Technique:

Simple Random Technique is followed.

Sampling Method:

Data was collected by retailer survey. The retailers are directly contacted and interviewed at their

retail counter.

Method of data collection:

There are mainly two types of data:

1: Primary Data.

2: Secondary Data.

1. Primary Data Collection:

Primary Data can be collected by three methods:

a) Observation

b) Experiment

c) Surveys

But here only survey method of data collection is preferred which is very suitable to

reach the researchers motto.

Research Instruments:

Printed questionnaires were used as the research instrument to collect the required

information.

Area of Survey:

The survey was conducted in different location of Guwahati city.

2. Secondary Data Collection:

As secondary data were not available with shopkeepers as well as stockiest, so these were

collected from company records.

Q. No:- 1- What Type of Channel do you hold?

Table:- 1

Sl. No Channel name No. of store Percentage

1 Convenience Store 15 30

2 E & D Type 1 13 26

3 E & D Type 2 7 14

4 Grocery Type 1 10 20

5 Grocery Type 2 5 10

PIE DIAGRAM SHOWING TABLE:- 1

Convenience Store30%

E & D Type 126%

E & D Type 214%

Grocery Type 120%

Grocery Type 210%

No. of Store

Interpretation:- From the above diagram it is evident that, 30% outlets are convenience store , 26% are E & D Type 1 , 14% are E & D Type 2 , 20% are Grocery Type 1 and 10% are Grocery Type 2.

Q, No:- 2- What type of outlet are you in?

Table:- 2

Sl. No Type of outlets Total numbers Percentage

1 Pepsi Exclusive 10 20

2 Coke Exclusive 20 40

3 Never sell cold drinks 5 10

4 Both (a) and (b) 15 30


Pepsi Ex-clusive20%

Coke Exclusive40%

Never sell cold drinks

10%

Both (a) and (b)30%

Types of Outlets

Interpretation:- From the above diagram it is evident that, 20% are Pepsi Exclusive outlets, 40% are Coke Exclusive outlets,10% of the outlets never sell cold drinks outlets, and 30% sells both (a) and (b).

Q. No:- 3- What is the Chilling equipment you are using?

Table:- 3

Sl. No Name of Chilling equipment No. of chilling equipment

Percentage

1 Coca cola fridge 15 30%

2 Pepsi fridge 12 24%

3 Own fridge 5 10%

4 Ice Box 1 2%

5 Both (a) and (b) 17 34%

PIE DIAGRAM SHOWING TABLE- 3

Coca cola fridge30%

Pepsi fridge24%

Own fridge10%

Ice Box2%

Both (a) and (b)34%

Chilling Equipment

Interpretation:- From the above diagram it is evident that, 30% retailers use Coca cola fridge as chilling equipments,24% Pepsi fridge as chilling equipments, 10% Own fridge chilling equipments,2% Ice box chilling equipment, and 34% both (a) and (b).

Q. No:- 4 - Kindly rates the level of satisfaction on communication from the company?

Table:- 4

Sl. No Parameters No of Respondents

Percentage

1 Highly Satisfied 6 12%

2 Satisfied 19 38%

3 Neither satisfied nor dissatisfied 8 16%

4 Dissatisfied 13 26%

5 Highly Dissatisfied 4 8%

BAR DIAGRAM SHOWING TABLE- 4

Highly

Satisfi

ed

Satisfi

ed

Neither

satisfi

ed nor d

issati

sfied

Dissati

sfied

Highly

Dissati

sfied

05

10152025303540

12

38

16

26

8

Series1

Interpretation:- From the above diagram it is evident that, 12% are highly satisfied respondents, 38% are satisfied respondents, 16% respondents are neither satisfied nor dissatisfied.26% are dissatisfied respondents and 8% are highly dissatisfied.

Q. No:- 5- If a brand which you prefer is not delivered to you properly then what you do?

Table:- 5

Sl. No Options No. of Respondents Percentage

1 Go for other brand 32 64%

2 Call to distributor/ depot 0 0%

3 Stop selling that brand 5 10%

4 Call to company’s salesman 13 26%


Go for other brand64%

Stop selling that brand

10%

Call to company’s salesman

26%

Chart Title

Interpretation:- From the above diagram it is evident that, 64% of respondents wants to go for other brand. 0% of respondents want to call the distributor/ depot. 10% of respondents want to stop selling that brand. 26% respondents want to call to company’s salesman.

Q. No:- 6- Which of the following promotion effect the sales mostly?

Table:- 6

Sl. No Option No. of Respondents

Percentage

1 Scheme 21 42%

2 Case refund 7 14%

3 Price pack 4 8%

4 Under crown scheme 18 36%


Scheme42%

Case refund14%

Price pack8%

Under crown scheme36%

Respondents

Interpretation:- From the above diagram it is evident that, 42% respondents wants scheme, 14% of respondents wants case refund ,8% respondents wants price pack promotion, and 36% of respondents wants under crown scheme promotion .

Q. No:- 7 (a) - Is there any effect of mega events( e.g. World Cup/ IPL) on sale of Coke(in peak season like summer)

Table:- 7(a)

Sl. No Option No. of Respondents

Percentage

1 Increase 7 14%

2 Decrease 6 12%

3 No effect 22 44%

4 Can’t say 15 30%

PIE DIAGRAM SHOWING TABLE:- 7(a)

Increase14%

Decrease12%

No effect44%

Can’t say30%

No. of Respondents

Interpretation:- From the above diagram it is evident that, 14% of respondents says there is an increase on sale of Coke during mega events ( in peak season), 12% of respondents who says there is a decrease on sale of Coke,44% of respondents says there is no effect on sale of Coke during mega events, and 30% of respondents who can’t say.

Q. No. 7(b)- Is there any effect of mega events on sale of Coke( in non- peak season)?

Table:- 7(b)-

Sl. No Option No. of Percentage

Respondents1 Increase 14 28%

2 Decrease 5 10%

3 No effect 23 46%

4 Can’t say 8 16%

PIE DIAGRAM SHOWING TABLE:- 7(b)

Increase28%

Decrease10%No effect

46%

Can’t say16%

Respondents

Interpretation:- From the above diagram it is evident that, 28% respondents says there is an increase on sale of Coke during mega events ( in non- peak season) , 10% of respondents says there is decrease on sale of Coke,46% of respondents says there is no effect on sale of Coke during mega events, and the 16% of respondents can’t say.

Q. No:- 8- (a ) kindly rate the behavior of salesman in over all year towards:

(A) On time delivery

Table:- 8(a)-A

Sl. No Parameters No. of Respondents

Percentage


2 Satisfied 13 26%

3 Neither satisfied nor dissatisfied 22 44%



BAR DIAGRAM SHOWING TABLE:- 8(a)-A

Highly

Satisfi

ed

Satisfi

ed

Neither

satisfi

ed nor d

issati

sfied

Dissati

sfied

Highly

Dissati

sfied

00.10.20.30.40.5

0%

26%44%

14% 8%

Respondents

Series1

Interpretation:- From the above diagram it is evident that, 0% retailers are highly satisfied with the salesman’s On Time Delivery, 26% are satisfied, 44% are neither satisfied nor dissatisfied, dissatisfied and 8% are highly dissatisfied with the salesman.

Q. No. 8(a)- kindly rate the behavior of salesman in over all year towards:

(B) Visit Frequency

Table:- 8(a).B

BAR DIAGRAM SHOWING TABLE:- 8(a)-B

0%5%

10%15%20%25%30%35%40%

10%

30%

36%

14%10%

Series1

Interpretation:- From the above diagram it is evident that, 10% of retailers are highly satisfied with the salesman during visiting frequency, 30% are satisfied with the salesman, 36% are neither satisfied nor dissatisfied with the salesman during visiting frequency, 14% are dissatisfied, and 10% are highly dissatisfied with the salesman.

Highlights of Findings

.

Sl. No Parameters No. of Respondents

Percentage


2 Satisfied 15 30%

3 Neither satisfied nor dissatisfied

18 36%



1. It is found that, 30% outlets are convenience store , 26% are E & D Type 1 , 14% are E

& D Type 2 , 20% are Grocery Type 1 and 10% are Grocery Type 2

2. It is found that, 20% are Pepsi Exclusive outlets, 40% are Coke Exclusive outlets,10% of the outlets never sell cold drinks outlets, and 30% sells both (a) and (b). Hence we found out that Coke is the market leader and Pepsi is the market challenger.

3. It is found that, 30% retailers use Coca cola fridge as chilling equipments,24% Pepsi

fridge as chilling equipments, 10% Own fridge chilling equipments,2% Ice box chilling

equipment, and 34% both (a) and (b).

4. It is found that, 12% respondents are highly satisfied with the communication from the

company, 38% are satisfied respondents, 16% respondents are neither satisfied nor

dissatisfied.26% are dissatisfied respondents and 8% are highly dissatisfied.

5. It is found that, 64% of respondents want to go for other brand. 0% of respondents want

to call the distributor/ depot. 10% of respondents want to stop selling that brand. 26%

respondents want to call to company’s salesman.

6. It is found that, 42% respondents wants scheme, 14% of respondents wants case refund, 8% respondents wants price pack promotion, and 36% of respondents wants under crown scheme promotion .

7. (a). It is found that, 14% of respondents says there is an increase on sale of Coke during mega events ( in peak season), 12% of respondents who says there is a decrease on sale of Coke,44% of respondents says there is no effect on sale of Coke during mega events, and 30% of respondents who can’t say. (b). It is found that, 28% respondents says there is an increase on sale of Coke during mega events ( in non- peak season) , 10% of respondents says there is decrease on sale of Coke,46% of respondents says there is no effect on sale of Coke during mega events, and the 16% of respondents can’t say.

8. (a) . It is seen that, 0% retailers are highly satisfied with the salesman’s On Time Delivery, 26% are satisfied, 44% are neither satisfied nor dissatisfied, dissatisfied and 8% are highly dissatisfied with the salesman

8. (b) B. It is seen that, 10% of retailers are highly satisfied with the salesman during visiting frequency, 30% are satisfied with the salesman, 36% are neither satisfied nor dissatisfied

with the salesman during visiting frequency, 14% are dissatisfied, and 10% are highly dissatisfied with the salesman.

Suggestions and Recommendations Training should be given to encourage marketers to promote coke at new areas where

there is not yet competitors involved.

Sales person should be provided with all the facilities that will help those in reaching

shops that are generally inaccessible due to factors like distance, time etc. For this

purpose, the company should enable its marketing wings in such a way that they can

facilitate communication and accessibility to penetrate into markets devoid of sales

person services.

A strange feedback from the market has, however, paused comprehension about Coke’s market.

The survey has shown that the practice of delay for supplying products in the market can create a

compelling situation for the shopkeepers to change or switch over from Coke. Coke should

always step forward to verify and maintain its supply chain system in striking a balance between

‘what is produce’ and ‘how much is sold’.

Schemes and offers will always trigger shopkeeper’s enthusiasm in selling the product.

Coke should find out a cost effective solution so that it could extend favor to the

shopkeepers in keeping beverages from the company along with competitor’s products. A

round of preliminary survey about shopkeeper’s preferred schemes could be solicited that

can excavate an alternative that best balances both of the company’s cost factors and

shopkeeper’s selling spree as well.

Conclusion

Hindustan Coca - Cola beverage Pvt. Ltd. is world’s largest beverage company and as we

know that the Coca-Cola Company is on that stage because of its large number of products and

by giving the customer complete satisfaction regarding taste and quality. Now a day it’s

necessary to show customer and to make believe them that our product is better than others in the

aspects which can be done in a better way through merchandising the products. As far as journey

with the company, I grasped lots of knowledge within two months. Because many of the

company officials has assisted and given me the valuable notes and experience of their life. The

primary objective of the my research is to analyze the horizontal expansion strategy of Coke and

at the end of the research I found that there is requirement of changing the strategy for acquiring

new customer for Coke but company should take care of its existing customer because they are

the main instrument of promotion for any company so old customer should be fully satisfied with

the company.

Limitations

The training was for shorter period of time that is why it was not possible to carry out a detail study.

The sample size was limited. The strategies of the company changes very frequently it is difficult to make exact

recommendation.

Behavior of many retailers was not co-operative.

Acknowledgement

Documents

Transcript of Acknowledgement