deepshikha CHAPTER -1 (1)

8/7/2019 deepshikha CHAPTER -1 (1)

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CHAPTER 1: INTRODUCTION

1.1. COMPANY PROFILE

1.1.1. Coca-Cola, the corporation nourishing the global community with theworlds largest selling soft drink concentrates since 1886, returned to India in1993 after a 16 year hiatus, giving new thumbs up to the Indian soft drink market. Inthe same year, the Company took over ownership of the nations top soft-drink brandand bottling network. Its no wonder our brands have assumed an iconic status in theminds of the worlds consumers.

1.1.2. Ever since, Coca-Cola India has made significant investments to build andcontinually consolidate its business in the country, including new production facilities,waste water treatment plants, distribution systems, and marketing channels.Coca-Cola India is among the countrys top international investors, having investedmore than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations.

The Company has shaken up the Indian carbonated drinks market greatly, givingconsumers the pleasure of world-class drinks to fill up their hydration, refreshment, andnutrition needs. It has also been instrumental in giving an exponential growth to thecountrys job listings. With virtually all the goods and services required to produce andmarket Coca-Cola being made in India, the business system of the Company directlyemploys approximately 6,000 people, and indirectly creates employment for more than125,000 people in related industries through its vast procurement, supply, anddistribution system.

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1.1.3. The Indian operations comprises of 50 bottling operations, 25 owned by theCompany, with another 25 being owned by franchisees. That apart, networks of 21contract packers manufacture a range of products for the Company.

On the distribution front, 10-tonne trucks open bay three-wheelers that can navigatethe narrow alleyways of Indian cities constantly keep our brands available in everynook and corner of the countrys remotest areas.These are only some of the facts that speak about our commitment to the growth of theIndian Economy.

1.1.4. General Information

Address: Emkay Towers, Udyog Vihar, Gurgaon, Haryana 122106Telephone No. : 91 - 0124 - 2348041 / 234857124 Hours Coco Cola Helpline No: 1800 180 2653Website: www.coca-colaindia.com/index.aspxPresident : Mr. Atul Singh

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1.2. About the organization

1.2.1. Coca-Cola was the leading soft drink brand in India until 1977, when it left rather

than reveal its formula to the Government and reduce its equity stake as required under the

Foreign Regulation Act (FERA) which governed the operations of foreign companies in

India. Coca-Cola re-entered the Indian market on 26 th October 1993 after a gap of 16 years,

with its launch in Agra. An agreement with the Parle Group gave the Company instant

ownership of the top soft drink brands of the nation. With access to 53 of Parles plants and

a well set bottling network, an excellent base for rapid introduction of the Companys

International brands was formed. The Coca-Cola Company acquired soft drink brands like

Thumps Up, Gold spot, Limca, Maaza, which were floated by Parle, as these products had

achieved a strong consumer base and formed a strong brand image in Indian market during

the re-entry of Coca-Cola in 1993.Thus these products became a part of range of products

of the Coca-Cola Company.

1.2.2. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-

entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of

the Coca-Cola Company. However, this was based on numerous commitments and

stipulations which the Company agreed to implement in due course. One such major

commitment was that, the Hindustan Coca-Cola Holdings would divest 49% of itsshareholding in favor of resident shareholders by June 2002.

1.2.3. Coca-Cola is made up of 7000 local employees, 500 managers, over 60

manufacturing locations, 27 Company Owned Bottling Operations (COBO), 17 Franchisee

Owned Bottling Operations (FOBO) and a network of 29 Contract Packers that facilitate

the manufacture process of a range of products for the company. It also has a supporting

distribution network consisting of 700,000 retail outlets and 8000 distributors. Almost all

goods and services required to cater to the Indian market are made locally, with help of

technology and skills within the Company. The complexity of the Indian market is

reflected in the distribution fleet which includes different modes of distribution, from 10-

tonne trucks to open-bay three wheelers that can navigate through narrow alleyways of

Indian cities and trademarked tricycles and pushcarts.

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1.2.4. Think local, act local, is the mantra that Coca-Cola follows, with punch lines like

Life ho to aisi for Urban India and Thanda Matlab Coca-Cola for Rural India. This

resulted in a 37% growth rate in rural India visa-vie 24% growth seen in urban India.

Between 2001 and 2003, the per capita consumption of cold drinks doubled due to the

launch of the new packaging of 200 ml returnable glass bottles which were made available

at a price of Rs.5 per bottle. This new market accounted for over 80% of Indias new Coca-

Cola drinkers. At Coca-Cola, they have a long standing belief that everyone who touches

their business should benefit, thereby inducing them to uphold these values, enabling the

Company to achieve success, recognition and loyalty worldwide.

FIGURE 1: LOCATIONS OF COBO, FOBO & CONTRACT PACKAGING IN INDIA

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COBO

FOBO

CONTRACT PACKAGING


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1.3 VISION AND MISSION OF COCO COLA

1.3.1 VISION OF COCO-COLA

Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achievingsustainable, quality growth.

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

1.3.1.2. Portfolio: Bring to the world a portfolio of quality beverage brands that

anticipate and satisfy people's desires and needs.1.3.1.3. Partners: Nurture a winning network of customers and suppliers, together wecreate mutual, enduring value.

1.3.1.4. Planet: Be a responsible citizen that makes a difference by helping build andsupport sustainable communities.

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

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

1.3.2. MISSION OF COCO-COLA

Our Roadmap starts with our mission, which is enduring. It declares our purpose as acompany and serves as the standard against which we weigh our actions and decisions.

1.3.2.1. To refresh the world...

1.3.2.2. To inspire moments of optimism and happiness...

1.3.2.3. To create value and make a difference.

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1.4. PRODUCTS OF COCO-COLA

1.4.1. Coco Cola

Coco Cola was a leading soft drink till 1977 when government policiesnecessititated its departure. Coco-Cola made its return to the country in1993 and madesignificant investments to ensure that the beverage is available to more and more

people even in the remote and inaccessible part of the nation. In 2002 Coco-Colalaunched it iconic campaign Thanda Matlab Coco-Cola which sky-rocketed the

brand to make it Indias favorite soft-drink brand.In 2003, coke was make available for just Rs. 5 across the country and this pricing initiative together with enhanceddistribution ensured that all brands in the portfolio grew exponentially. Coco cola hadsigned various celebrities such has Karishma Kapoor, Aamir Khan, Sourav Ganguly,Srinath

Table 1: Table showing availability of Coco-Cola

GLASS PET CAN FOUNTAIN200ml,300ml,

500ml,1000ml

500ml,1.5l,2L, 2.25L,500ml+100ml

330ml Various Sizes

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1.4.2. Thums Up

Thums Up is a leading soft drink and most trusted brand in India.Originally introduced in 1977, Thums Up was acquired by Coco Cola Company in1993.It is known for its strong, fizzy taste and its confident, mature and uniquelymasculine attitude. This brand clearly seeks to separate the men from the boys.

Table 2: Table showing availability of Thums Up

GLASS PET CAN FOUNTAIN200ml,300ml,

500ml,1000ml

500ml,1.5l,2L, 2.25L,500ml+100ml

330ml Various Sizes

1.4.3.Sprite

Sprite a global leader in the lemon lime category is the second largestsparkling beverage brand in India. Launched in 1999, with its cut-through perspectivehas managed to be a true teen icon.

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Table 3: Table showing availability of Sprite

RGB PET CAN FOUNTAIN200ml,300ml 500ml,600 ml,

1250ml,1500ml,

2000ml, 2250ml

330ml Various Sizes

1.4.4 . Fanta

Fanta entered the Indian market in the year 1993.Perceived as a funyouth brand, Fanta stands for its vibrant color, tempting taste and tingling bubbles that not

just uplift feeling but also helps free spirit thus encouraging one to indulge in the moment.This positive imagery is associated with happy, cheerful and special times with friend.

Table 4: Table showing availability of Fanta

GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5l,

2L, 2.25L,500ml+100ml

330ml Various Sizes

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1.4.5. Lime n Lemoni Limca

Lime n Lemoni Limca can cast a tangy refreshing spell toanyone, anywhere. Limca has lived up to its promise of refreshment and has been anoriginal thirst choice of millions of consumers for over 3 decades. Born in 1971, Limca hasretained unchallenged as the number one sparkling drink in the cloudy lemon segment. Thesuccess formula is the sharp fizz and Lemoni bite combined with the single minded

proposition of the brand as the provider of Freshness.

Table 5: Table showing availability of Lime n Lemoni Limca

GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5l,

2L, 2.25L,500ml+100ml

330ml Various Sizes

1.4.6. Minute Maid Pulpy Orange

The history goes as far back as 1945 when the Florida Food Corporationdeveloped orange juice powder. The company developed the process that eliminated 80%of the water in orange juice, forming a frozen concentrates that when reconstituted created

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orange juice. They branded it a Minute Maid, a name connoting the convenience and theease of preparation9in a minute).

Available in 3 Pet Pack sizes : 400mL, 1 Litres and 1.25 Litres.

1.4.7. Maaza

Mango-the fruit associated with good time like no other. Aptly called theking of fruit, bottled. This is what Maaza is all about. Introduced in the late 1970s, Maazahas come to symbolize the very spirit of mangoes. Universally loved for its taste, color,thickness and wholesome properties, Maaza is the mango lovers first choice.

Table6: table showing availability and prices of Maaza

PET 1.2Litres

PET 600 ml 200ml RGB 250ml RGB 250ml PET PocketMaaza200ml

Rs.45 Rs.25 Rs.8 Rs.10 Rs15 Rs15

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1.4.8. Kinley

Water, a thirst quencher that refreshes, alife giving forcethat washes all the toxins away. A ritual purifier that cleanses, purifies, transforms. Themost basic need of life, the very sustenance of life a celebration of life itself

Available in PET Packed bottles: 500ml and 1000 ml

1.3.9. Georgia Gold

In 2004, Georgia Gold was launched in India to cater to theincreasing demand for quality tea and coffee. Take a break for Georgia Golds freshlyground Cappuccino, or indulge senses with rich chocolate. Catch up with friends over achilled cup of Georgia Gold iced tea or cold coffee.

Hot Beverages: Coffee, Tea and Hot Chocolate

Cold Beverages: Iced tea and Cold Coffee

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1.5. FUNCTIONAL AREAS OF COCO-COLA

The main functional areas of Coco cola India are as follows:

1.5.1. Manufacturing Department : It situated at Bidadi, is the third largest plant and one

of the bottling operations owned by the company. The Plant has one PET line which has

the capacity of yielding 209 bottles, per minute, two RGB (Returnable glass bottles) lines

which yields 600 bottles per minute each and one Juice line which yield 155 bottles per

minute. It caters to the whole of South Karnataka through a network of more than 80

distributors. There are three depots in Bangalore; North Depot, East Depot and Mega

Depot.

1.5.2. Distribution Department: It has a wide and well managed network of salesmenappointed for taking up the responsibility of distribution of products to diverse parts of the

cities. The distribution channels are constructed in such a way that the demand of

customers is fulfilled at the right place and the right time when it is needed by them.

A typical distribution chain in this organization would be:

Production --- Plant Warehouse --- Depot Warehouse --- Distribution Warehouse ---

Retail Stock --- Retail Shelf --- Consumer

The customers of the Company are divided into different categories and different routes,

and every salesman is assigned to one particular route, which is to be followed by him on a

daily basis. A detailed and well organized distribution system contributes to the efficiency

of the salesmen. It also leads to low costs, higher sales and higher efficiency thereby

leading to higher profits to the firm. The distribution system is as follows:

1.5.2.1. Direct distribution: In direct distribution, the bottling unit or the bottler partner

has direct control over the activities of sales, delivery, and merchandising and local account

management at the store level.

1.5.2.2. Indirect distribution: In indirect distribution, an organization which is not part of the Coca-Cola system has control on one or more of the distribution elements (Sales,

delivery, merchandising and local account management)

1.5.2.3. Merchandising: Merchandising means communication with the consumer at the

point of purchase to convey product benefit, value and Quality. Sales people and delivery

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personnel both have this responsibility. In certain locations special teams who go into

business locations to specifically merchandise our products.

1.5.3. Finance Department: It checks credit limits and approves sales orders in

compliance with the credit policy followed by the firm, records collections from

distributors, periodically reconciles outstanding balances from distributors, obtains balance

confirmation from distributors and follows up outstanding balances.

1.5.4. Shipping or Warehousing Department: It dispatches goods as per approved by

order, ensures that stocks are dispatched on a FIFO basis, ensures physical control over

load out area and updates warehouse stock records in a timely manner.

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1.6 SIZE IN TERMS OF MANPOWER AND TURNOVER OF COCO-COLA

1.6.1. Coke is it -- it being the world's #1 soft-drink company. The Coca-Cola Company(TCCC) owns four of the top five soft-drink

brands (Coca-Cola, Diet Coke, Fanta, andSprite). Its other brands include Minute Maid,PowerAde, and Dasani water. In North Americait sells Group Danone's Evian; it also sells

brands from Dr Pepper Snapple Group (Crush,Dr Pepper, and Schweppes) outside Australia, Europe, and North America. The firm makesor licenses more than 3,000 drinks in some 200 nations. It owns 32% of Mexico's bottler Coca-Cola FEMSA and 23% of European bottler Coca-Cola Hellenic Bottling. In late 2010TCCC bought out its leading bottler, Coca-Cola Enterprises (CCE), and renamed it Coca-Cola Refreshments USA.

Key number for fiscal year ending December 2010

1.6.1.1. Sales: $35,119.0M

1.6.1.2. One Year Growth : 13.3%

1.6.1.3. Net Income : $11,809.0M

1.6.1.4. Income Growth : 73.1%

1.7. ORGANIZATION STRUCTURE OF COCO-COLA INDIA

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FIGURE 2: ORGANIZATION STRUCTURE IN COCA-COLA, INDIA

1.8. MARKET SHARE AND POSITION OF COCO-COLA

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1.8.1.Established in 1886, Coca-Cola is the worlds most ubiquitous brand. The companyand its subsidiaries are present in over 200 countries employing over 49,000 individualsand generating revenues to the tune of US$ 21 billion. The Coca-Cola Company markets

four of the worlds top-five soft drink brands; its beverage products encompass nearly 400 brands, including non-carbonated beverages such as waters, juices, sports drinks, teas andcoffees. The companys net income registered a CAGR of 7.2 per cent over a 10-year

period. Till date, Coca-Cola has invested over US$ 1 billion in India and employs over 5,000 people. The Coca- Cola system in India comprises 25 wholly owned bottlingoperations and another 35 franchisee-owned bottling operations. A network of 27 contract-

packers also manufactures a range of products for the country. Coca-Cola is a leading player in the Indian beverage market with a 60 per cent share in the carbonated soft drinkssegment, 36 per cent share in fruit drinks segment and 33 per cent share in the packagedwater segment. In 2004, Coca-Cola sold 7 billion packs of its brands to more than 230million consumers across 4,700 towns and 175,000 villages. The company has doubled its

volumes and trebled its profits between 2001 and 2004. Coca-Cola continues to re-affirmits commitment to India through active Citizenship Efforts. All its plantsin India partner with local NGOs to alleviate local community issues in numerous smallways. It boasts of impeccable credentials on quality

1.8.2.Coke is it -- it being the world's #1 soft-drink company. The Coca-Cola Company(TCCC) owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, andSprite). Its other brands include Minute Maid, PowerAde, and Dasani water. In NorthAmerica it sells Group Danone's Evian; it also sells brands from Dr Pepper Snapple Group(Crush, Dr Pepper, and Schweppes) outside Australia, Europe, and North America. Thefirm makes or licenses more than 3,000 drinks in some 200 nations. It owns 32% of

Mexico's bottler Coca-Cola FEMSA and 23% of European bottler Coca-Cola HellenicBottling. In late 2010 TCCC bought out its leading bottler, Coca-Cola Enterprises (CCE),and renamed it Coca-Cola Refreshments USA.

1.8.3.Exploiting economies of scale and its bargaining power (on account of bulk purchases) in the country, Coca- Cola India has facilitated exports of commodities andmaterials like tea, coffee, PET resin, performs, closures, crowns and labels Coca-Colacontinues its efforts at increasing the percapita consumption of its beverages in the country.India PCC currently is at 11 Servings a Year (up from7 in 2001). This requires acomprehensive activation of the Indian market by addressing acceptability, affordabilityand availability of its products The Company continues to build on its foundations in India.

While it continues to maximize its carbonated soft drink potential through various pack, pricing, occasion-based strategies across town-classes in India. it is exploring other categories like juice, water and tea and coffee. It is poised to lead the beverage revolutionin India.

Coca-Cola, India: AT A GLANCE

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1.8.3.1. 200 countries. 49,000 employees. 400 brands. 4 out of the worlds top 5 soft drink brands. US$ 21 billion revenues

1.8.3.2. India: Investment of US$ 1 billion. 5,000 employees. 25 wholly-owned, 35franchisee owned bottling operations. 27 contract packers

1.8.3.3.Citizenship Efforts in tandem with local NGOs to alleviate community issues intheareas of its bottling plants

1.8.3.4.Factors for success: Diverse product portfolio. Brand building. Affordable entry

price point. Strong brand pull. Ultra low cost model. Minimized internal capitalrequirements

1.8.3.5. For Coca-Cola, India is: Sourcing base for various commodities. Huge market.

1.8.3.6. Future plans, India: Increasing per capita consumption of beverages. Expandingdistribution networks.

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