A PROJECT REPORT ONPEPSI

Goa Bottling Company Pvt. Ltd.

Project report submitted in partial fulfilment of requirements for the award of the degree of BACHELOR OF BUSINESS ADMINISTRAION of Pt. Ravi Shankar Shukla University, Raipur.

Under the guidance of: Submitted By:

Co-ordinator Roll No: 721145 School of Management Studie BBA VI-SEM

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SELF DECLARATION

I hereby declare that the project report entitled A PROJECT REPORT ON PEPSI

Goa Bottling Company Pvt. Ltd.is done by me is an authentic work carried out for the partial fulfilment of the requirement for the award of the degree of Bachelor of business Administration under the guidance of. The matter embodied in the project work has not been submitted for the award of any other degree, diploma or any other similar title or prizes to the best of my knowledge and belief.

(signature)

Name of student: Vikram Goel Roll no.: 721145 BBA: VI-SEM

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EXAMINER CERTIFICATION

The project report ofVIKRAM GOEL titled A PROJECT REPORT ON PEPSIGoa Bottling Company Pvt. Ltd.is approved and is acceptable in quality and form.

Internal Examiner External Examiner

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COLLEGE CERTIFICATION

This is to certify that project report entitled A PROJECT REPORT ON PEPSI

Goa Bottling Company Pvt. Ltd.is submitted in partial fulfillment of the requirement for the degree of Bachelor of Business administration of Pt. Ravishankar Shukla University, Raipur. VIKRAM GOEL has worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree , diploma, fellowship or other similar titles or prizes and that the work has not been published in any journal or magazine.

Certified

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ACKNOWLEDGEMENT

Firstly, I would like to thank ‘God’ for his cordial and merciful

blessings which have enabled me to complete this project.

This project is an outcome of effort, guidance and channelization of

my teachers and parents.

I wish to extend my deepest regards and obligation to Mr. Anil

Agrawal (CEO, Sky Automobiles, Raipur) who has guided me in this

project and helped me in all possible ways to collect and analyse all

the data.

Also, without the help, kind support and valuable time given by my

elder brother Uday, this project could not have been possible.

I am obliged and grateful to my Professor Mr. Dinesh Kumar Soni

for his help and guidance in completing the project.

Last but not the least, my special gratitude goes to my friends and

classmates who indirectly assisted me in the successful completion of

this project. Thank you all for teaching me endlessly how to become a

better person, friend and student.

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TABLE OF CONTENTS

DESCRIPTION PAGE NO.

1. Introductive Summary

1.1 Problem Introduction

2. Industry Introduction Profile

2.1About Carbonated Soft Drinks

2.2 Global CSD Market

2.3 Indian CSD Market

2.4 Major Players in Indian CSD Industry

2.5 Porter’s Force Model

3. Introduction and Marketing Strategies of Goa

Bottling Factory Pvt. Ltd.

4. Research Methodology

4.1 Methodology

4.2 Sample Size

5. Data Analysis

5.1 Volume Analysis

5.2 SKU Mix Analysis

5.3 Bills Cut Analysis

5.4 Survey Analysis

6. Survey Findings

6.1Present Study About GTM

6.2 Summary and Suggestions

7. Scope For Further Research

8. Learning Outcomes

9. Bibliography & Reference

10. Annexure

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INTRODUCTIVE SUMMARY

The Indian FMCG industry is increasingly following the international trend and

convenient packaging has been a part of the overall change in the consumer

preference. The Indian carbonated soft drink (CSD) industry, which is highly

dominated by the returnable glass bottles, is also witnessing a gradual shift

towards the non-returnable mode of packaging. The primary cause for the

evolution of this trend is the change in consumer tastes and preferences. The

urban population is more attracted towards the packaging in PET and Cans.

This project entitled the “Study on the Customized Hybrid Sell” Go To Market,

was undertaken at the Goa Bottling Factory Pvt. Ltd. (GBCL), the company is

located in Arlem area of the Margao city in Goa. The company is a Franchisee

Owned Bottling Operation (FOBO) for manufacturing and marketing PepsiCo

brand of Stock Keeping Units (SKU’s).

The study was carried out mainly in the “Fringe SKU” (PET, Cans and Tetra

Pack) segment of products and the main objective was to gain a clear

understanding on the selling and distribution of this fringe SKU’s. The study

conducted was carried out in two phases. The first phase of the project was to

get an overview of the entire selling and distribution process of fringe SKU’s and

the other SKU’s. Consequently, the second phase comprised of collecting

information and related data in order to evaluate the efficiency of operations in

the customized hybrid GTM system that was followed by GBCL.

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The main aim of this project on the hybrid system at GBCL was to study the

process in details and understand the process of carrying out a particular

marketing function (i.e. sales & distribution). The second aim was to provide

GBCL with valuable inputs and information on the efficiency of the system.

The objective of this project is to relate the theory to concepts learnt in the

classroom and to find out whether theoretical knowledge is really applied in the

practical business world.

Looking at this opportunity Goa Bottling Factory Pvt. Ltd. during the period of my

project assigned me the task of gathering information about the customized

hybrid GTM system and compare with the actual Hybrid GTM as per PepsiCo

standards. The information pertaining to the function was collected through

various methods such as questionnaires, interviews, outlet surveys and

conducting route rides along with the salesman.

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1.1 PROBLEM INTRODUCTION

The problem/issue to be studied at the GBCL was concerned with the strategic

business unit (SBU). The SBU was started by GBCL in the year 2002 to support

its selling and distribution activities for its Stock-keeping units (SKUs). The

company had three distribution depots under the SBU, which, catered exclusively

to the Margao and Panjim market, which are very important markets in the North

and South Goa for the company.

The company till 9th May, 2006 followed a “Pre-sell Hybrid” GTM method to

distribute its fringe SKU’s (PET, Cans and Tetra Packs) in the Margao market but

after the following date it made certain changes to the system, to make it more

efficient. The changes were made to the system by also keeping the follwing

objectives that had to be achieved.

Increase the market share to 60 per cent from the current 48 per cent.

Increase the fringe SKU’s share in the total product mix for the Margao

market.

Increase the penetration of fringe SKUs in the market.

Therefore the focus of the study was to understand and analyze whether the

modified hybrid GTM system, benefited the company in attaining the efficiency or

not.

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CHAPTER – 2

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Carbonated Soft Drink (CSD) Industry Profile

2.1 About “Carbonated Soft Drink”

CSD (Carbonated Soft Drink) is also popularly called as Cold drinks, it is a non-

alcoholic, flavored and carbonated beverage commercially prepared and sold in

bottles and cans. Water accounts to nearly 86-96% in a soft drink. A CSD is

prepared by injecting carbon dioxide into the flavored drink at a pressure of

several atmospheres. In cold beverages carbon dioxide dissolves readily at

atmospheric pressure. When the CSD is exposed it releases the carbon dioxide

to the atmosphere forming numerous bubbles. After some time when the entire

carbon dioxide is released from the drink the drink is termed as flat. The CSD

taste “Fizzy” is due to carbonic acid inducing a burning sensation and indirectly

resulting in bubbles in the soft drinks.

As CSD contains mainly water, aromatic substances, sweeteners, carbon

dioxide, acids, coloring matters, preservatives, antioxidants, and other additives

form a part of it.

The Beverage Family Tree

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Beverages

Alcoholic Non-Alcoholic

Cold BeveragesHot Beverages

Bottled Water

Fruit Juices Carbonated Soft Drinks

Dairy Products

Tea Coffee

Carbonated Water:

According to PFA Act 1945 – Carbonated Water (commonly called as soda)

means potable water impregnated with carbon dioxide under pressure and may

contain any of the following singly or in combination. Sugar, liquid glucose, invert

sugar, fructose, sorbitol, permitted flavoring and preservatives, emulsifying and

stabilizing agents, acids, (citric acids, fumaric acid, tartaric acid, phosphoric acid,

lactic acid, ascorbic acid, and malic acid) edible gums such as (guar, karaya,

Arabic, carobean, furcellaran, tragacanth, gum ghatti, edible gelati, albumin,

licrice and its derivatives) salts of sodium, calcium and magnesium, vitamins,

caffeine. Carbonated water constitutes a defined homogenous range, designated

by a generic denomination and utilizing some common list of additives.

Carbonated water includes the beverages which comply with this definition,

which utilize these additives and which do not claim to be a part of adjacent

categories such as fruit juices and nectars, dairy drinks, mineral water, etc.

Definition of the “Soft Drink Market”.

The soft drink market consists of establishments primarily engaged in the

process of manufacturing non-alcoholic, carbonated beverages, bottled waters,

fruit juices, other syrups, ready to drink tea & coffee and concentrates used to

manufacture carbonated beverage. The soft drink industry is the secondary

manufacturer using products of food industry to produce soft drinks for home and

food service consumption.

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2.2 Global CSD Market

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The global market for soft drinks has grown steadily over the past five years and

is set to continue in the coming future. Globally Carbonated soft drinks are the

third most consumed beverages and the leading source of revenue for the global

soft drink market is the sale of carbonated soft drinks. Per-capita consumption of

CSD is four times more then compared to per capita consumption of fruit

beverages. Soft drink consumption is growing by nearly 5 per cent a year. In the

year 2001 the global per capita consumption of soft drinks was 67.5 litres per

year. North America is the largest consumer of the CSD, it is also the worlds

largest soft drink market with 27 per cent of the total world soft drink sales and

consumptions of 48 gallons per person per year (192 litres/person/year). The

European market accounts for 21 per cent, with a per capita consumption of 12.7

gallons per year (50.8litres/person/year). Globally the supermarkets and hyper

markets form the most significant distribution channels, sales through this

channels accounts approximately 34.7% of the market volume, On-trade sales,

which refers to retail of drinks for consumption on premise, form a further 18.8%

of the market, and the remaining 46.3% of sales in the market is through a range

of other channels.

The five fastest growing soft drink markets are from Asia, East Europe, and the

Middle East. Amongst the Asian countries Pakistan is expected to have the

highest percentage growth rate while India is expected to make sizeable volume

gains, as affluence spreads to more of its vast population. Globally Europe is

the largest regional market, accounting for 38.50%, followed by US with a share

of 29.40% of the global market value.

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Fig 2. World Market Share of Soft Drinks.

World Market Share

38.50%

29.40%

20.00%

12.10%

Europe US Asia-Pacific Rest of the World

Table 1. Global Market Value Growth

Soft Drink Market Values

($ billion, 2001 – 2005)

Year: $ billion % Growth

2001 286.5

2002 297.9 4.00%

2003 309.4 3.80%

2004 319.1 3.10%

2005 (e) 330.0 3.40%

CAGR, 2001 – 2005 3.60%

(e) – estimated Source: Datamonitor

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Table 2. Global Market Volume Table

Soft Drink Market Values

($ billion, 2001 – 2005)

Year: Litres billion % Growth

2001 295.8

2002 305.3 3.20%

2003 316.4 3.60%

2004 325.8 3.00%

2005(e) 336.7 3.30%

CAGR, 2001 – 2005 3.30%

Source: Datamonitor

Table 3. Global Market Segmentation

Soft Drink Market Segmentation($ billion, 2001 – 2005)

Category: % Share

Carbonated 45.90%

Bottled Water 19.10%

Juices 14.70%

RTD Tea & Coffee 8.70%

Functional drinks 7.60%

Concentrates 4.00%

Total 100.0%

Source: Datamonitor

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Fig 2. Global market Segmentation based on Product Category

Soft drinks Market Segmentation

45.90%

19.10%

14.70%

8.70%

7.60%4.00%

Carbonated Bottled WaterJuices RTD Tea & CoffeeFunctional drinks Concentrates

The global market is segmented into 3 major geographical regions, which are

Europe, US and Asia Pacific. The largest market for CSDs in year 2005 was in

Europe whereas Asia-Pacific had a share f 20 percent. The market for soft drinks

in Asia-Pacific region has fluctuated over the past five years, however the growth

rates has been consistently positive, and this is set to continue. Market revenues

have grown by 10.60 percent during the period between 2001 – 2005, and set to

grow further by a further 20 percent by 2010. In terms of value growth, Asia –

Pacific market performed worse than that of Europe, which grew at 2.3 percent

CAGR.

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2.2.1 Asia – Pacific Soft Drink Market

Market consumption volumes increased at a CAGR of 4 percent between 2001-

2005, to reach a total of 67.2 billion liters. In terms of volume growth, both the US

and Europe under-performed against the Asia-Pacific market, with CAGRs of 2.9

percent and 3 percent respectively. The carbonated drinks sector was worth

$17.6 billion, which represented a 26.7 percent share of market’s value.

Looking ahead, the Asia-Pacific CSD market is expected to accelerate from its

current growth rate. A CAGR of 3.7 percent is anticipated over 2005-2010 period

and the market consumption volumes are forecasted to reach a total of 85.5

billion liters by the end of 2010, which will make a CAGR of 4.9 percent between

2005-2010.

Table 4. Asia – Pacific, Category wise Market Segmentation

Asia-Pacific Soft Drinks Market Segmentation

(% Share, by Value, 2005)

Category % Share

RTD tea & Coffee 32.00%

Carbonated Soft Drinks 26.70%

Functional Drinks 17.50%

Juices 14.70%

Bottled water 7.00%

Concentrates 2.10%

Total 100.0%

Source:Datamonitor

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Fig 3. Chart showing category wise Market Segmentation

Future Challenge

Asia-Pacific Market Segmentation (% Share, by Value 2005)

Concentrates2%

Juices15%

Bottled Water7%

Functional Drinks18%

RTD tea & Coffee31%

CSD27%

Challenges of Global aMarket:

The global challenge for the CSD market is the trend towards healthier life

styles that is affecting consumer behavior across the globe. This trend has

brought about a noticeable decline in sales of high-sugar content carbonated

drinks., although we can see from the below given table 3 we can see that

carbonated soft drinks market remains the largest in the global market. Juices

and functional drinks have gained a significant market share in the recent years

as consumer have become more health conscious and are shifting from CSD to

these drinks.

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In the future the trend in the consumption of the CSD will see a change; primary

cause for this change would be the growing health concerns and demographic

changes in many countries. Markets like the USA have already started to

experience this change where the aging U.S. population has cut down on the

consumption of carbonated beverages. With such change in the consumption

pattern, the beverage industry will have to gear up to face the competition from

other substitutes and particularly the bottled water category and the health juices.

Globally the Diet Carbonated beverages category is expected to receive utmost

attention from the three leading beverage companies (Coca-Cola, PepsiCo, and

Cadbury Schweppes) and looking forward, the global soft rink market is expected

to maintain its current growth position. It is anticipated that the CAGR of 3.6

percent over the 2005-2010 period.

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2.3 Indian CSD Market

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The Indian CSD industry has been showing an impressive growth, the market

growth rate in the 80s was around 2-3% which increased to 5-6% in the early 90s

and is presently 7-8% per annum. The per capita consumption in India is among

the lowest in the world at 8 bottles per annum compared to 80 bottles in Thailand

ad 800 bottles in USA. The Delhi market has the highest per capita consumption

in the country with 50 bottles per annum. The market preference is highly

regional based. The cola drinks have the main market in the metro cities and

northern states of UP, Punjab, Haryana etc. Orange flavored drinks have their

main markets in the southern states. Soda also comprises in major sales in the

southern states besides sale through bars. Mango flavored drinks attract more of

the Western markets. The Indian CSD consumer are also getting health

conscious and are opting more towards DIET CSD which currently accounts to

0.7 per cent of the total carbonated beverage market,

The soft drink market until early 1990s was in hands of domestic players like

Campa cola, Thumps up, Limca tc. But with the opening of the economy and

coming of MNC players like Pepsi and Coke the market has come totally under

their control, with the acquisition of the major brands.

For the promotion of the soft drink industry the Government has adopted

liberalized policies for soft drink trade to boast and promote Indian brands

internationally. With the entry of big companies like PepsiCo and Coke local

brands are bleeding as this MNC’s do extensive advertising, provide good quality

an at low cost.

The Indian soft drink beverage market can be divided into fruit drinks and soft

drinks. Soft drinks are further divided into carbonated and non-carbonated drinks.

Cola, lemon and orange are carbonated drinks while mango drinks come under

non-carbonated category. The market can be segmented on the basis of types of

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products into cola products and non-cola products. Cola products account nearly

61-62 per cent of the total soft drinks market. The brands that fall in this category

are Pepsi, Coca-Cola, Thumps Up, Diet Coke, and Diet Pepsi etc. The non-cola

segment constitutes 36 per cent and can be divided into four categories based

on the types of flavors available, namely: Orange, Cloudy Lime, Clear Lime and

Mango.

Per Capita Consumption in major Asian Markets

Source: GBCL

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813

18

55

0

10

20

30

40

50

60

India

Pakistan

Sr Lanka

China

Fig 3. Beverage Consumption Per Capita Comparison between

India & World Average

Source: GBCL

Opportunity: As we can see from both the above given figures that India has the

lowest Per capita consumption of CSD in comparison with major Asian countries

as well the lowest in comparison with the world average, this also means that

there is a opportunity for the industry to grow in the country, and as the Indian

demographic (age of the population) is expected to change in the near future,

there is ample scope for the industry to grow and increase the per capita

consumption of CSD.

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2.4 Major Players in the CSD industry

The carbonated soft drink industry is dominated by three major players, which

together contribute nearly 90 per cent of the global market. Coco – Cola is the

king of the soft drink-empire and boasts a global market share of around 36 per

cent, followed closely by PepsiCo at about 35 per cent, and Cadbury Schweppes

at 17 per cent. For many years now the CSD has centered on the power struggle

between Cola War principals Coke and Pepsi.

About Coca-Cola

The Coca-Cola Company was established in the year 1886; the company has

invested over US$ 1 billion in India and has employed nearly 5000 people. The

Coca-Cola system in India comprises 25 wholly owned bottling operations and

another 35 franchisee-owned bottling operations.

Coca-Cola is a leading player in the Indian beverage market with nearly 60 per

cent share in the carbonated soft drink segment, 36 per cent in the fruit drink

segment and 33 percent share in the packaged water segment.

In keeping with its goal of emerging as the single largest entity in the beverage

market, Coca-Cola has a presence in multiple segments.

In CSD (Coke, Diet Coke, Fanta, Thumps Up, Sprite and Limca), fruit juice

based drinks (Maaza), powdered soft drink (Sunfill) and coffee and tea

(Georgia), bottled water (Kinley) and bottled soda (Kinley Soda)

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The company leverages this comprehensive portfolio, which includes a

mix of its global brands as well as the locally acquired brands like Thumps

Up, Limca and Mazaa.

It sells these beverages in multiple volumes of 200 ml, 300 ml, 1500 ml,

600 ml, Cans, Tetra Packs as well as through vendors (fountain machine)

Future Plans

Increase the per capita consumption of its beverages

Coca-Cola continues its efforts at increasing the per capita consumption of

its beverages in the country. India PCC is at 8 servings a year (up from 6

in 2000). Coca-Cola plans to achieve this by addressing the issues like

acceptability, affordability and availability of its products.

Expanding its distribution networks

The company has decided to expand its retail network; it had also targeted

a total number of retailers to 1.3 million across the country by the year

2006

The company continues to build on its foundations in India. While it continues to

maximize its carbonated soft drink potential through various pack, pricing, and

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

revolution in India.

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About PepsiCo

PepsiCo International is ranked as world’s fifth largest food and beverages

companies with 16 brands. PepsiCo International includes the snack business of

Frito-Lay International and beverage business of PepsiCo Beverages

International; PepsiCo brands are available in nearly 200 countries and

territories.

PepsiCo stated its operations in India from the year 1989. PepsiCo and its

partners have invested more than US$ 700 million in India – building businesses,

which today provide direct or indirect employment to more than 60,000 people.

PepsiCo products portfolio of beverage brands in India includes the flagship cola

brand Pepsi; Diet Pepsi; two flavors of Mirinda – Orange and Lemon; 7Up;

Mountain Dew; packaged drinking water – Aquafina; variants of the fruit drink

brand Slice; the 100 per cent fruit juice brand Tropicana in several variants and

the worlds leading sorts drink Gatorade. It also includes the local brands Lehar

Evervess Soda. Through its tie-up with Hindustan Lever Limited, the company

also markets and distributes ready to drink beverages such as iced tea, green

teas and herbal teas.

PepsiCo’s success in India centers around a strong focus on satisfying and

delighting Indian consumers. This was achieved by forging strong relationships

with local franchise partners, distributors and suppliers and building a talented

local workforce.

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To produce its beverages PepsiCo has 37 bottling plants and 20owned by

franchisee partners. The flavour concentrates used to make soft drinks are

produced at separate state-of-art plant at Channo in the Sangrur district of

Punjab and supplied across South Asia.

Coca – Cola and PepsiCo path of global expansion

Coco – Cola stayed in the soft drinks, fruit juice, sports drinks and bottled

water, while PepsiCo ventured beyond beverages into snack foods and

breakfast cereals.

PepsiCo invested in fast-food restaurants that have since spun off. Quaker

Oats with its subsidiary Gatorade is part of the PepsiCo domain. PepsiCo

also expanded into other marketing channels – particularly restaurants.

Both PepsiCo and Coco – Cola relied on licensing and special bottling

agreement to establish markets abroad. PepsiCo, for instance, bottles for

Dole juice, Starbucks coffee drinks and canned iced tea.

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2.5 PORTER’S FIVE-FORCE MODEL

In CSD industry there are four parties that are involved in the process of

production and distribution, namely, concentrate producer, bottlers, retail

channels, and suppliers. Porter’s 5 forces analysis reveals the following

characteristics of the CSD industry:

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1. A fierce competition exists among very few players: The industry is an

oligopoly, or even duopoly, given the intense rivalry between Coke and

Pepsi.

2. The threat of substitute is reduced by expansion of product portfolio:

CSD have many alternative beverages, such as bottled water, health juice

and tea, which became more popular. Coke and Pepsi have responded,

either by launching new non carbonated soft drinks or by acquiring new

brands.

3. Suppliers have less bargaining power: The primary ingredients of CSD

are sugar and packaging, which have many substitutes. For instance

sugar can be replace by corn syrup or other sweeteners, and packaging

can be done by using glass, plastic or cans. All these products have

multiple suppliers.

4. Different level of bargaining power exist among the groups of

buyers: The retail channels basically include food stores, convenience

stores, fountain outlets, and sales through vending machines, so

depending upon the sales generated and the profits earned the bargaining

power differs at various levels.

5. Strong Barriers to new entrants in the CSD industry: It is very difficult

for a new producer to enter the market. Both Coke and Pepsi are in the

industry for more than 100 years of existence in the market. Over the

years both the companies have built a brand image. Investment required

to setup a bottling plant is also high, thus making it more difficult for a new

entrant.

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Competition Intensity:

The competition in the CSD market is very much high, especially between

Coke and Pepsi. This fierce competition often creates a pressure on the

product price, which can affect profitability, and substantial investment in

marketing and advertising campaigns to strengthen the brand image and

loyalty. In addition to price the competition is also to grab the retail space in

order to broaden the customer base, as there are many distribution channels

in the industry. Pepsi attempted to differentiate its products from Coke’s by

targeting a different category of consumers as Pepsi focused on the teen’s

market segment. The competition goes beyond the domestic borders where

Coke and Pepsi have fought over international market to increase sales and

market share.

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CHAPTER – 3

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Introduction and Marketing Strategies of Goa Bottling Company Limited

(GBCL)

3.1 Introduction

The GBCL commenced its operations activities from the year 1965, with soft

manufacturing. Initially it operated a small “Fuski” a hand operated machine used

for filling bottles. The unit in its inception had the capacity to produce 200 cases

of 200ml bottles per 8 hours.

In the year 1985-86 the company saw a financial downfall, primarily because of

the introduction of the “Fanta” in the market by the competitors which turned to

be a leading brand in the orange segment and which lead to a fall in the demand

of companies “Gold Spot” which was a product of the company and produced in

that year. In the year 1972 the GBCL entered the franchise business by signing a

franchisee agreement with “Parle” who then renovated the plant and introduced

its popular brand “Limca” in the Goan market followed by “Thumps Up” in the

year 1978. After this start the company never looked back, and kept growing, in

the later stages it also introduced some other brands in different packaging.

In the last decade, GBCL has experienced revolutionary changes in its business

with major up gradations of its plant and machinery.

Pepsi was introduced in the Goan market on the 23rd November 1997, and in the

year 2000 GBCL was take over by the “bottling king of India” Mr. Ravi Kant

Jaipuria from the “Fomento Group” owned by the Timblo’s. The company

continued its operations under the same “Manufacturing Franchisee” with Pepsi.

GBCL is a private company owned wholly by Mr.Jaipuria now.

[Type text]

Today Mr. Jaipuria owns eight soft drink companies sending out millions of Pepsi

bottles into the market annually. Mr. Jaipuria controls nearly 10 per cent to 15 per

cent of the soft drink production in the country, i.e. nearly 450 million cases.

The company address

Head Office: “33 DLF, Corporate Park

‘S’ Block, Qutab Enclave.

Gurgaon – Haryana 122002

Plant Address: Goa Bottling Company Pvt. Ltd.

Arlem Raia, Salcete

Margao – Goa 403720

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3.2 The Company Vision

“Produce the best quality products at lower cost through optimization of

resources, better discipline, team-work and multi-skilling and achieve higher

customer satisfaction.”

GBCL is an organization that has distinct characteristics like any well planned

and laid out organization.

A Distinct Purpose: The purpose of the company is clearly stated in its vision

statement. In brief, it is to produce to meet the demand and expectations of every

customer or consumer.

The People: Like any other organization, GBCL also considers its human

resources as its assets and not just only employees. The company has a total

employee strength of 125 people, who work with perfect coordination and

cooperation to achieve its vision.

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Systematic Structure: The organization chart of the company depicts that it has a

systematic structure; this structure can be diagrammatically represented in the

conventional in pyramidcal form.

Structure of the Organization

Strategic Management: At the strategic management Mr. Ravi Kant Jaipuria is

the Director who makes all the strategic business related decisions at GBCL.

Tactical Management: At this management level Mr.Sudhin Gaonkar, plays the

major role, he handles all the unit level strategies, and manages all the

departments of GBCL.

Operational Management: At the operational management are all the functional

managers, who handle and manage all the day-to-day functioning of GBCL.

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3.3 The Franchisee Agreement

The nature of franchisee agreement is such that Pepsi assumes responsibility for

supplying the essential ingredients of the products and it assumes the bottler of

exclusive right of sales within their specified geographical franchisee areas. The

franchisee company works with the supplier firms to assure the availability of

quality packaging, merchandising and other related equipments made for the

standard specification. The companies under this agreement are called as FOBO

i.e Franchise owned bottling operator. PepsiCo under this agreement provides

advertising campaigns and a medium support and also conducts suitable

promotional campaigns and marketing strategies. It offers aid impersonal training

for sales & production staff. It provides quality control facilities and technicians. It

develops national publicity efforts and offers aid in formulating local level

community relations project, in addition to this Pepsi offers service through large

field force including specialist in a number of technical and marketing skills.

Today there are 400 Pepsi Cola bottlers in U.S.A and more than 600

internationally. Furthermore GBCL today produces nearly 500 cases of 300ml in

8 hours shift, which has doubled from its inception.

GBCL also has to its credit 3 awards:

“2003 center of excellence for Best Sales Practice”.

“Champion of Champions”, Asia Region 2002”.(for highest volume growth

in Asia)”

“Pepsi Beverages International, Bronze Quality Award 2001”.

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Consumer Marketing Channel

0 – Level 1 – Level 2 – Level 3 –

Level

39 | P a g e

Manufacturer Manufacturer Manufacturer Manufacturer

Consumer

Retailer

Consumer

Wholeseller

Retailer

Consumer

Wholeseller

Jobber

Retailer

Consumer

GBCL

CHAPTER – 4

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Research Methodology

4.1 METHODOLOGY

The methodology used to collect information and data about the customized

hybrid GTM process for the project was mainly analytical and quantitative in

nature. Allotted time was spent with the Territory Development manager

(TDM), the Customer Executive (CE) and the other sales team members to

understand how the functions of sales and distribution are carried out in the

customized hybrid system. The data collection was done in the following

manner:

1. Primary Data Collection: Data collection from source through personal

interview and collection of data through magazines, books and company

records etc.

2. Secondary Data Collection: Data collection through surveys,

questionnaires

3. Data Collection through Observation: Data collected by observation at

the outlets and interacting with each outlet.

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4.2 SAMPLE SIZE

The population for the survey done was for 88 outlets, and all the outlets

were in close proximity of the city, and hence the sample size taken is 88

outlets. The outlets were chosen as per the list provided by the company.

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Objective:

The survey was carried out to understand the perception about the outlets,

which were serviced by the “Customized Hybrid Sell”. The survey was carried out

on 88 outlets in the Margao Market, and data was collected through an informal

discussion. The survey was carried out also to understand the performance of

the salesman and also verify some of the KPI’s.

The scaling of the parameters in the survey was done as followed:

Salesman Quality: This parameter was used to understand the performance of

the salesman at the outlet i.e. whether he followed all the 8 selling steps.

Stock Out Position: This parameter was helped to understand the frequency of

the salesmen’s visit to a particular outlet, the response “never” was given by

outlets which were visited very often, the response “rarely” meant that the

salesman was needed to be called to the outlet through the R.A. who sold GRB’s

and “frequently” was the response given by outlets where the salesman never

visited.

Service Quality: The parameter helped to determine if there were any changes

in the salesmen’s performance after making the modifications. The modifications

were done in order to improve the efficiency of the salesman and so that he

could be more focused on the fringe SKU’s.

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CHAPTER – 5

[Type text]

Data Analysis

Route Schedule Analysis:

A route schedule is prepared by the Customer Executive (CE) to have a proper

plan for the R.A’s and the P.S.R about their route and the outlets that they need

to visit, it is strategic marketing plan, which is done by the CE, it is then approved

by the Territory Development Manager (TDM). It is done to have an efficient and

cost effective distribution system. The below given route schedule is given to

each P.S.R by the marketing department, the schedule gives the name of the

outlets and the total number of outlets that each R.A or a P.S.R which need to be

visit on a particular day.

All the P.S.R given below are on the direct sell GTM distribution system except

for Sanjay who is on the customized hybrid sell GTM distribution system and who

sells only the fringe SKU’s of the company.

The outlets, outlined differ from one week day to the next day for many R.A’s,

(wherein some R.A’s visit the same outlets everyday but whereas some RA’s

have to visit the outlets on alternate days.)

Route Schedule – I

Salesman Name Area Number of OutletsBabuni Gandhi Market 60

Sarvesh City II 61Shashikant Khareband 70Shantesh City I 65

Mahesh Velip Aquem 47Ramesh Old Market 56Santosh Pajifond 61

Sanjay (Balu) Market I 50Total 470

Route Schedule – II

[Type text]

Salesman Name Area Number of OutletsBabuni Gandhi Market 60

Sarvesh City II 61Shashikant MCC 63Shantesh City I 65

Mahesh Velip Aquem 47Ramesh City III / Comba 46Santosh Metropole 44

Sanjay (Balu) Market II 46Total 432

Approximate Total Number of Outlets

Route I ------- 470Route II (No. of New Outlets)------- 199

Total 669

It was observed that R.A. Shashikant, R.A. Ramesh, R.A. Santosh and P.S.R

Sanjay had to visit outlets on alternate days and it was found that altogether the

number of outlets was 669. As per the company limits each R.A or a P.S.R could

be given a maximum of 60 – 65 outlet for each day.

Scheme & Offers related to fringe SKUs

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The data related to the various schemes was collected through observation and

with interviews with the P.S.R of the company.

The following table shows us the different schemes that the company has to offer

to its retail outlets, the scheme are given to promote the low selling SKU and to

increase the overall sales. The Promo Packs are special promotional packs,

which are designed along with the scheme, to promote the entire pack.

SCHEME/OFFERS CHART FOR FRINGE SKUs

Product Category Scheme Scheme Value At M.R.PPET

600 ml 1 Case + 2 Bottles Free of 600 ml.

40.00

2 ltrs 1 Case + 2 Bottles Free of 600 ml.

40.00

2 ltrs 8 Case + 1 Case Free of 2 ltrs.

480.00

TETRA PACK600 ml 1 Case + 2 Tetra Pack

Free20.00

Slice 1 Case + 3 Tetra Pack Free

30.00

PACKAGED DRINKING WATER

Aquafina 1000 ml 5 Case + 1 Case Free of 1000 ml

240.00

PROMO PACKCans 330 ml 5 Cans + 1 Can Free of

330 ml15.00

Cost Per Case (CPC) for fringe SKUs

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The cost per case is calculated by adding the scheme amount to the bill amount

and then by dividing it with the respective product on which the scheme is given.

COST PER CASE (CPC) TO COMPANY

Product Category Scheme CPCPET

600 ml 1 Case + 2 Bottles Free of 600 ml

482.08

2 ltrs. 1 Case + 2 Bottles Free of 600 ml

410.08

2 ltrs 8 Case + 1 Case Free of 1000 ml

419.62

TETRA PACK 600 ml 1 Case + 2 Tetra Pack

Free462.91

Slice Tetra Pack 1 Case + 3 Tetra Pack Free

232.91

PACKAGED DRINKING WATER

Aquafina 1000 ml 5 Case + 1 Case Free of 1000 ml

248.40

Volume Analysis: -

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If we look at the above given table we can see that there has been a significant

decline in the sales from the year 2005 to year 2006, but the decline it could be

due to decline in the outlets being covered. In the year 2005 the total number of

outlets where sales was done were 392 which in the modified hybrid sell were

schemed to 96, which were the high volume accounts amongst the 392.

Compared to the decline in the number of outlets there has been an

improvement in the sales efficiency, this could be either due to the increasing

trend in the industry towards PET and other fringe SKU’s or due to improved

skills and more focused selling by the salesman Sanjay.

Table showing Comparative Sales Volume between June 2005 –

June 2006

Line Graph Showing Comparative Sales Volume

(June 2005 & June 2006)

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Fringe SKU's Sales SalesJun-05

Jun-06 % Change

Flavored Pet 600ml 524 380 -27.50Soda Pet 600ml 189 185 -2.10Soda Pet 1500ml 58 45 -22.40Flavored Pet 2000ml 286 240 -16.04

Can 15 0 N.A

Aquafina 436 675 54.80

Percentage of Fringe SKU Contribution to the Total Product

Mix

Product Mix Jun-05 Jun-06 % Change(In %) (In %)

Flavored Pet 600ml 3.72 2.8 -0.92Soda Pet 600ml 1.34 1.4 0.06Soda Pet 1500ml 0.41 0.3 -0.11Flavored Pet 2000ml 2.03 1.8 -0.23Can 0.1 0 -0.1Aquafina 0 0 0

Similar to the previous chart of Volume analysis, in this table we can see a

decline in the percentage mix of fringe SKU from the year 2005 – year 2006,

except for Soda PET 600ml which has shown a marginal increase of .06 per

cent. This decline in the product mix could be correlated with the decline in sales

year on year due to decrease in the number of outlets and modifications of the

hybrid sell strategy.

Line Graph depicting Percentage Contribution of SKU’s

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00.5

11.5

22.5

33.5

4

% Contribution 2005

% Contribution in2006

KPI Analysis

Key Performing

Indicators

Before Customization

June 2005

After Customization

June 2006

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Scheduled Call 2592 1560

Completed Calls N.A N.A

No. of Orders Booked 587 476

No. of Orders delivered 587 476

Strike Rate 22% 31%

Lines Per Cash Memo 1.41 3.63

Drop Size N.A N.A

Total Mix 9% 7%

Analysis:

The above given table shows us the different KPI which are tracked at GBCL to

measures the efficiency of the “Hybrid Sell” GTM. The above given KPI’s weer

tracked before (June 2005) and after (June 2006) making the changes to the

“Hybrid Sell” GTM.

The changes were made where the number of scheduled calls was reduced from

2592 to 1560, this was done by filtering the key accounts that made regular

purchases and were mainly bulk buyers. The decrease was done with regards to

manpower re-sourcing too, as there were two PSR before customization, which

was know reduced to one salesman, with merging the functions of PSR and a

RA. But if we look at the Number of orders booked, we can see although there

has been a decrease in the total from 587 to 486 there has been an increase in

the strike rate which was 22.64 percent in 2005, which increased to 30.50%, thus

showing us that the number of outlets covered and bills made after the changes

were made was higher and thus showing that there has been a positive change.

The number of orders delivered has remained the same, as the orders have

been booked. The Lines Per Cash Memo (LPCM) also has increased from 1.41

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to 3.63 which indicates that the salesman is doing range selling and the

penetration has increased, with the number of SKU kept by the outlets also.

Finally the total mix of Fringe SKU’s has reduced from 9% to 7%, thus we can

say that the mix has declined due to poor sales or because there has been an

increase in RGB sale.

Volume analysis for the month of June - 2006

A detailed volume analysis of the month also helps us understand the

consumption trend, due to delayed start of the monsoons in the state we can see

that till the 13th of June, there has been a steady growth trend in the consumption

of the SKU’s, another factor that could have influenced this trend could be the

high level of discretionary income with the people till the 15 th of the month, and

which keeps declining till the end of the month. The table shows a growth trend in

the initial period of the month when the modified hybrid system was implemented

might be because of dumping of stocks by the salesman at the out lets or could

be driven by demand due to late arrival of monsoons, and later we see that the

percentage has been decreasing trend.

PERCENTAGE OF FRINGE SKU SALES IN TOTAL VOLUME For the Month of June 2006

DATE TOTAL BILLS TOTAL VOL FRINGE SKU VOL MIX %01/06/ 145 349 30 8%

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0602/06/

06128 261 N.A N.A

03/06/06

184 537 35 6%

05/06/06

161 555 39 7%

06/06/06

200 552 57 10%

07/06/06

210 630 25 4%

08/06/06

202 478 23 5%

09/06/06

216 706 32 4%

10/06/06

231 683 64 9%

12/06/06

212 659 113 17%

13/06/06

206 505 55 11%

14/06/06

222 479 23 5%

15/06/06

226 602 32 5%

16/06/06

208 573 28 5%

17/06/06

233 518 48 9%

19/06/06

252 807 42 5%

20/06/06

178 713 56 8%

21/06/06

184 513 41 8%

22/06/06

217 500 56 11%

23/06/06

222 556 41 7%

24/06/06

208 610 49 8%

26/06/06

128 370 16 4%

27/06/06

99 239 9 3%

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28/06/06

147 343 20 5%

29/06/06

137 290 14 4%

30/06/06

196 472 36 7%

Total 13500 984 7.28%

Bill Cut Analysis

Bill cuts analysis is being done in order to understand the percentage of outlets

being done and to get an idea on percentage of outlets that are purchasing the

fringe SKU’s. Below we can see that although product mix percentage was high

in the initial period of the month, the bill cuts were less, which means that outlets

which bought large quantities were only attended and by the end of the month all

the outlets were attended and therefore bill cuts has increased, another

influencing factor for this phenomenon could be achievement of targets which

has driven the increase in bill cuts by the end of the month.

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Bills Cut Analysis

For the Month of June- 2006

Date No of outlets Bill Cuts Percentage of Bill Cuts01/06/0

650 11 22%

02/06/06

46 13 28%

03/06/06

50 15 30%

05/06/06

46 26 56%

06/06/06

50 24 48%

07/06/06

46 12 26%

08/06/06

50 16 32%

09/06/06

46 20 43%

10/06/06

50 22 44%

12/06/06

46 36 78%

13/06/06

50 28 56%

14/06/06

46 14 30%

15/06/06

50 14 28%

16/05/06

46 11 23%

17/06/06

50 08 17%

19/06/06

46 14 30%

20/06/06

50 25 54%

21/06/06

46 23 46%

22/06/06

50 25 50%

23/06/0 46 20 43%

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624/06/0

650 23 46%

26/06/06

46 15 30%

28/06/06

50 15 30%

29/06/06

46 10 21%

30/06/06

50 21 42%

Total 1202 446 37%

CHAPTER – 6

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Survey Findings

Merchandising: As it is popularly known “Jo Dikhta hein, woh bikta hein”,

merchandising was a parameter which also influenced the sales of the fringe

SKU’s therefore it was important to make an observation on the merchandising of

the outlet. Data for this was merely collected through the process of observations

at the outlets. The outlets which displayed the full range of SKU’s was graded

under “Dominant”, the outlets that kept 7-8 SKU’s were graded as “Average” and

the outlets that displayed only 3-4 SKU’s was graded “Below Average”.

The survey for the following research project was conducted through a structured

questionnaire, the values or the characteristics of the questions were derived

from the respondent through a discussion and not through mere filling of the

questionnaire or neither by asking direct questions. The total respondents for the

survey were from 88 outlets in the Margao market. The questionnaire and data

has been analyzed below.

Q1. Grading of the Salesman Quality?

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From the 88 respondents of the survey it was found that 27 outlets were satisfied

with the service provided by the salesman, 22 of the respondents felt that the

service quality of the salesman was excellent and had no complains against the

salesman. 21 of the respondents said that the salesman quality was bad and

were unhappy with the salesman and finally 17 outlets graded the salesman as

just good.

Q2. Do you get into out of stock positions?

This response was taken with respect to the frequency of visits to the outlets, to

find out whether the salesman visits the outlets thrice or not. But it was found out

that 43 respondents gave the response of rarely being out of stock which also

meant that

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Q4. Did you observe any change in the service quality over a period of 1 month?

Service Quality Improveme`nt

Yes23%

No77%

Yes No

This parameter was used to check if there was a change in the performance of

the salesman after making the changes to the hybrid GTM, the question was an

open ended, with only two options either yes or no. The results of the survey

were that nearly 66 of the outlets i.e. more than 75% of the total surveyed outlets

felt that there was no significant change, and that the performance was the same

as before, and nearly 22 of the outlets observed certain changes in the

performance.

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Q5. Level of Outlet Merchandising:

Store Merchandising

Dominant22%

Average24%

Below Average

54%

DominantAverageBelow Average

The survey on merchandising shows us that nearly 54% of the outlets had a

merchandising level of below average i.e. only 3-4 SKU’s were on display,

around 24% of the outlets had average merchandising level with 7-8 SKUs on

display, and 22% had merchandising level of dominant. The outlets at the

dominant level of merchandising were in the category of modern trade, and the

outlets in the category of below average were the convenience stores, which had

space constraints, and make the display of the SKUs.

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Conclusion:

The survey finding reveled that from the 88 outlets surveyed 30 per cent of the

respondents were just satisfied by the salesman quality, which meant that there

was no significant change in the salesman’s quality with respect to the sales

performance, 49 per cent of the respondents went out of stock position “Rarely’

which meant that the salesman’s visits to these outlets was not very frequently

and therefore the R.A. carrying Glass Bottles had to be asked for the service.

The most significant response showed 75 per cent of the respondents did not

notice any significant change in the salesman’s behavior after making the

modifications to the hybrid sell, which meant that the quality of the service

rendered remained unchanged from the customer perspective and lastly the

merchandising at 53 per cent of the outlets was below average, which meant that

only 19 outlets kept full range of SKU’s and nearly 75 per cent of the outlets had

poor merchandising.

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63 | P a g e

The Present Study“About GTM”

Introduction

The below given information was collected after conducting an interview with the

Territory Development Manager, Mr. Matheu Diniz at the Goa Bottling Factory

Pvt. Ltd.

Given below are the standard form in which PepsiCo expects its marketing and

distribution partners to carry out the operations related to marketing and

distribution of its SKUs:

The PepsiCo way

PepsiCo India has different methods in which it distributes its SKUs and all

this are clubbed under the term “Go to market” (GTM). The GTM also includes

the process of marketing its product portfolio, the basic intent for this is to

establish an efficient and cost effective marketing operations. The GTM are

based on market dynamics and retail relevance that will deliver sustainable

competitive advantage and executional excellence at the optimal cost.

The various types of GTM distribution system:

[Type text]

GTM

TELE SELL PRE SELL DIRECT SELL HYBRID SELL

GTM Strategic Intent

To establish an efficient cost effective Go To Market system based on

market dynamics and retail relevance that would deliver sustainable competitive

advantage and executional excellence at optimal cost

Different Go-to-market in brief1. Tele Sell:

Tele sell GTM is a technique used by PepsiCo, to book orders over the phone,

without making a visit to the outlets, this is the cheapest form of GTM amongst all

the four distribution systems, as the salesman or RA only visits only those

outlets. Tele-sell also increases the depth of sale through planned quality order

taking. This also increases the selling time that is required at every outlet, and it

eliminates the process of range selling, in other words the selling capability is

low. It reduces the transaction time, and increases the number of outlets on the

route. This sell type is used when the market share is high and when the storage

capacity at the outlet is high. This selling technique is used for institutional clients

such as hotel, cinema halls and modern trade.

2. Pre – Sell:

This is a GTM technique where the PSR (Pre-sell Representative) personally

visits every outlet and books the order, which then delivered to the outlet on the

next day. This is a very time consuming technique, which is not commonly used

in India. This technique increases the in-store execution time, where the PSR

gets ample time to merchandise the store, this technique also improves the

quality of sale, and there can be focused sales on the entire portfolio of products.

The purchase frequency is low, for this technique. Selling skills required for this

type of sales is very high, this type of selling is required at groceries shops,

railway stations, and other small outlets.

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3. Direct Sell:

In this selling the salesman carries the full range of SKU’s en route, there is no

order taking in advance, orders are taken on the spot and delivered at the same

time. This is used when the sales ratio of glass bottles is more, and this is the

most widely used GTM method in India. This GTM is used frequently and in

cases of intense competition in the market. This GTM also requires high selling

capability. This type of GTM is used at convenience store, restaurants and bars,

etc.

4. Hybrid Sell:

Hybrid sell is a GTM technique, which is used for products, which require more

focused selling. This reduces the cost of sales (taxi rates), hybrid sell also

reduces the problem of improper load outs, which is common in direct sell GTM.

Hybrid sell aims at targeting the niche markets. GTM is used the SKU has a low

percentage of sale. This technique can be used across channels.

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“Hybrid Sell” GTM in details:

“Hybrid Sell” GTM Distribution System as per PepsiCo requirement:

Hybrid Sell is a sales & distribution strategy, which is a very focused way of

marketing only one range of product, which are called “Fringe SKUs”. The fringe

SKU’s are those products that a very small share of the entire sales of the

company. The Hybrid Sell strategy does not stress on marketing and selling

other SKUs that are fast moving.

(Ex. The PSR in this case will exclusively sell PET Bottles, Cans and the Tetra

pack range of products as these range of SKUs constitute the ‘fringe SKU’)

Why Hybrid Distribution System?

Improper Load outs

The hybrid system helps the company to have an appropriate plan of the quantity

of the SKUs to be loaded in the vehicle, the RA loads the SKUs only which the

orders have been booked at does not carry any extra SKUs like the other

systems which turn saves a comparative amount of time and cost.

High Taxi Rates

Taxi rates are the total cost that is incurred by the company of carrying the SKUs

to the outlets; it is calculated with respect to sale done over the route. In hybrid,

sell the taxi rates can be reduced by only carrying the SKUs only for which orders

have been booked where the cost of distribution gets spread over the number of

outlets.

Compromise on main SKU load outs, loss of sale

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Hybrid system also eliminates the problem of loss of sale, wherein in a

conventional system the RA carried only SKU which sold more and did not carry

other SKUs, whereas in a Hybrid system the orders are booked on the previous

day and there a very chances of losing on sales.

Lower capacity utilization of vehicles

Resource like vehicles in a hybrid sell are completely utilized without being

wasted, hybrid system reduces the fuel cost of the vehicles where the RA only

makes a visit to outlets where orders have been booked and not to all outlets on

the route.

When Hybrid Distribution System

Low Per Centage contribution to sale

A hybrid GTM strategy is to be implemented when a particular SKU has a low

contribution to sales; the hybrid system is designed to promote more sales of

those SKU’s, which have low sales. The focus is completely given to the SKUs.

Targeted Niche Segment

This system is specially designed to target the niche segments of the market

where there is more focus on a particular segment.

High level of Selling Skills required

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The Hybrid system of selling is used by PepsiCo India when the SKUs require

more selling skills to sell a product.

Where Hybrid Distribution System?

A Hybrid sell strategy cannot be used in all the market places, it can be

implemented for niche SKUs as per outlet consumer profile. The hybrid system is

used at all the potentially penetrable outlets.

Through the Hybrid system for the fringe SKU’s, GBCL has attempted to use the

Michael Porters third generic strategy i.e. FOCUS. GBCL through the new

customized hybrid GTM focuses on a narrow market segments.

Objective of PepsiCo for implementing “Hybrid Sell” GTM strategy for its fringe SKU’s

Market Penetration

Goa Bottling Company Pvt. Ltd. is a company, which strongly believes in

availability (i.e. gaining a larger market share) and not in creating high volumes.

The main objective of adopting a Hybrid system for GBCL is to increase share

penetration for its PET, Cans and Tetra pack range of products (i.e. they want

their fringe SKUs to be widely available throughout all the outlets) the hybrid

system does not stress on achieving high sales volume.

GBCL has attempted to do intensive distribution of its SKU’s through the “Hybrid

Sell” GTM, wherein GBCL wants its SKU’s to be placed in as many outlets as

possible.

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The growth strategy used by GBCL as per the Igor Ansof Market Expansion Grid:

Current Product New Product

Current

Market

New Market

The chart given in (Annexure 1) is a standard requirement which needs to be

fulfilled in a Hybrid system of distribution and this chart helps the marketing

division to understand the market penetration level of the fringe SKUs of

PepsiCo.

The chart provides the management with information on the current mix of the

product and the expected mix of the product in the market. This analysis helps

the company to know about its product mix concentration in the market.

The chart also helps the marketing department to determine the current market

penetration, and compare it with the expected market penetration. The current

market penetration is derived from the sales figures of each SKUs divided by the

number of outlets done in a particular month and the expected market

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1. Market – penetration Strategy

2. Product – developmentStrategy

3. Market – development Strategy

(Diversification Strategy)

penetration is calculated by analyzing the last years sales figures for the month

and the growth trend in the industry. The chart also has a column, which

specifies the level of selling skills required by the PSR for each of the SKUs and

finally the projected sale figure can only be achieved if the expected market

penetration is achieved as per expected.

Factors to consider in Hybrid distribution system:

Manpower Resourcing in Hybrid selling for fringe SKUs.

Number of Outlets/ PSR/ Week = 300

Number of Visits = Alternate days

Number of PSR = 2

Therefore Number of Outlets = 50 outlets.

PepsiCo India has limited the number of outlets to be visited to 50 after

considering the time required by a salesman to perform all the 8 essential steps

of selling.

Measuring the effectiveness and efficiency of a Hybrid System

To measure the effectiveness of the Hybrid GTM strategy PepsiCo has laid down

certain Key Performance Indicators (KPI), which needs to be tracked, the

following are KPI to be tracked:

1. Volume

2. Strike rate

3. Completed Calls

4. Range Selling

5. Merchandising.

6. Lines Per Cash Memo.

PSR is given monthly EP with SKU wise target

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In the Hybrid distribution system the Pilot Sales Representative (PSR) gets a

monthly Execution Plan, which a salesman has to follow, and also achieve the

Stock Keeping Unit (SKU) target, which is set by the company.

6.3 Hybrid Sell Process

The standard Hybrid Sell Process flow chart:

From PSR to Outlet From PSR to R.A From R.A to Outlet

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PSR Outlet

R.A

From PSR to Outlet: PSR greets the customer Checks for stocks and informs the

customer about the stock position. Does range selling and

merchandising. Takes the order and does the bill.

From PSR to RA: Gives two

copies of the bill to R.A in the evening

The R.A on the next day goes to the outlet gives one copy of bill to the outlet delivers the stock.

From R.A to outlet:

Retains one copy and gives the second copy of the bill to the customer.

Then makes the delivery of the stock to the outlet.

A functional description of a PSR at work in a “Hybrid Sell” system:

The key person in the hybrid process is the PSR, the PSR plays a very crucial

role in the selling of the SKUs, The hybrid distribution can be best understood

from the point of view of the PSR and if understand his role in the distribution

system.

A functional day in a PSR life:

At Depot Level (Before leaving on route):

1. The PSR would start his day by first arriving at the Depot and ensuring

that the scoreboard has been updated and review the previous day’s route

sale. Then he would have a discussion over the tactical marketing plan

with the C.E and the Route Assistant and discuss individual performance.

The discussion with the C.E would be in respect to the progress and the

status of any specific account, the P.S.R would also ask the C.E about the

scheme and different promotion strategies for any specific SKU. The

discussion a with the R.A. would be in respect to the previous days order

deliveries, bills and discuss with him if there are any discrepancies, the

PSR would also ask the R.A for any specific issues.

2. The next step for the PSR would be to plan his day’s operations, he will

have to decide on his sales target to be achieved and plan for activities

that need to be executed.

3. The PSR should also do a pre-check the list of outlets, and understand the

outlets that have not purchased for a long period, and understand the

cause of not purchasing.

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At Outlet Level (En Route):

1. The PSR on the route carries a route book (annexure 1) along with the bill

book before going on the route. The route book would consist the names

of the outlets in the rows and would consist the different SKUs brands in

the columns, the PSR would then record the sales of each SKU in the

respective row for the particular purchase made by the outlet. It also helps

the PSR to now which outlet had bought which SKU and the frequency of

his purchase over a period. The PSR also has to take the signature of the

customer as he visits the outlets on the route book and has to mention

about any remarks if there are any.

2. The Selling Process:

The PSR after going to the outlets follows the 8 selling steps as specified

by PepsiCo:

To follow this steps the PSR first goes to the outlet and greets the

customer, the next step in sequence is to check for field stock and the

SKUs that are out of stock.

Then it is the PSR responsibility to inform the customer about the stock

status at the outlet, after which he has to do the range selling i.e. he asks

for all the full range of SKUs,

After range - selling the PSR does the promotion of the low selling SKU

and explains the customer about the different schemes that the company

is offering.

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After the selling is over the PSR does the visi-cooler charging wherein he

is to check the cooler for charging and that there are sufficient SKUs in the

cooler and are being displayed properly. The PSR does the

merchandising at the outlet wherein he puts the PET bottles, cans and

tetra packs on display (racks, hanger table stands etc) wherein it is clearly

visible at outlets to the consumers.

The last and the final step of a PSR at the outlet is to do the billing for the

purchases made by the customer and do the settlement of payment.

The above given 8 selling steps can be briefly classified as:

Step 1 – Wish the Customer

Step 2 – Check Field Stock and Empty Stock

Step 3 – Inform the customer about stock position

Step 4 – Range Selling (Selling the whole range of SKUs)

Step 5 – Promotion and explaining different schemes

Step 6 – Visi-Cooler Charging (Putting bottles in the cooler)

Step 7 – Merchandising Display

Step 8 – Billing and Settlement

Post Work (Day Closing):

1. As per the requirements of PepsiCo for Hybrid distribution a “Territory

Sales Board” needs to be maintained by the PSR. The territory sales

board is specifically designed to track the activities and sales that take

place in this type of distribution system.

The board consists of the various “Key Performing Indicators” (KPI),

which will help the PSR to evaluate his performance on a day-to-day

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basis. It is mandatory for the PSR to record his daily report on this board,

which is placed at the depot.

2. The PSR then conducts a discussion with the “Customer Executive” (CE)

on any market issues at makes a note of it in his execution plan for the

next days visit.

3. Finally, the PSR closes the day by segregating all the orders from the

order-booking sheet and forwards the same along with two copies of the

bill to the R.A who then does the delivery on the next day.

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Key Performing Indicators (KPI) which, need to be recorded on the

“Territory Score Board” (TSB).

Scheduled Calls : Scheduled calls are the number of outlets that a

PSR needs to visit everyday, the stem time (to/from warehouse) as

well as drop size impact the number of calls, which could be

scheduled for the day. For most markets 40-45 calls/day is idea.

This outlet limit has been decided by calculating the time required

to perform the 8 Selling Steps. This also helps him to make a route

journey plan.

Completed Calls: Completed calls are the number of outlets called

on by the salesman from the route book (Ex. If 50 outlets have

been scheduled to be visited and if the PSR visits 30 outlets then

the Completed Calls on the board would be 30.) Non completed

calls are those where salesman could not reach due to reasons

beyond his control, e.g vehicle breakdown, stock out, no time, law

and order problem, etc. Route Jump calls, are those calls made to

outlets not included in the Route Book for the day, are not counted

as completed calls. The national norm for completed calls is 100

percent.

Calls Completed Rate = Calls Completed % Scheduled Calls

Number of Orders Booked: This figure on the score board consists

of the orders booked for the respective outlet visited on that

particular day. This helps the PSR to determine the “Strike rate”.

Number of Orders Delivered: This cell on the scoreboard consists

the number of orders delivered in respect to the number of the

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orders taken on the previous day, this also helps the R.A to know

his delivery status and plan his route.

Strike Rate: These are calls, which result in a sale, i.e. such calls

where an invoice has been raised (any flavour, any SKU).

Strike Rate = Strike Calls___

Scheduled Calls

The national norm for strike rate is:

< 330 ml minimum 6 bottles

500 ml minimum 4 bottles (for both BSD & PET)

1000 ml & above minimum 2 bottles

Sales made / invoices cut for Route Jump and Misc. calls are not

considered as 'Strike Calls'

Lines Per Cash Memo: LPCM are the average SKUs purchased by

the outlet per day.

LPCM = __Total SKUs Sold____

Total No. of Bill Cuts.

Drop Size: Total sales for the route / Total Invoices made for the route

Route Jumps are also included

Miscellaneous customers are not included

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In the research process, it was observed that the following changes had

been made to the actual process of Hybrid sell GTM market strategy by

GBCL:

Hybrid GTM Customized Hybrid GTMGTM: Pre-sell GTM: Direct SellHuman Resource Required:

1. 2 Pre-sell Representatives (PSR)

2. 1 Route Assistant3. 2 Loaders

Human Resource Required: Downsizing done

1. 1 P.S.R cum R.A2. 2 Loaders

Transaction Time: 2 Days1. Order taken on previous

day.2. Delivered by R.A on next

day

Transaction Time: 1 Day1. Orders taken on the same day

and delivery done on the spot.

Outlet Coverage: 392 Outlet Coverage: 96Type of outlets covered: All Type of outlets covered: High end

Accounts.Outlets distributed: The 392 outlets were divided amongst the 2 P.S.Rs

P.S.R 1 = 200 outlets P.S.R 2 = 192 outlets

These outlets were further divided by 3 so that each P.S.R can visit each of the outlets twice in one week.

Outlets distributed: The 96 high-end accounts were identified and given to the salesman.

Salesman 1 = 96 outlets

These outlets were divided by 2 so that the salesman could visit the outlets thrice in a week 50 on one day and 46 on the next day.

Merchandising (Display): Done by P.S.R

Merchandising (Display): Done by the helpers

R.A Status: High loadHad to deliver to all the outlets who had booked orders as well collect the payment.

R.A.Status: No R.A.R.A role was eliminated delivery done and payment collected by salesman for all the outlets.

Stock Loading: As per orders taken by the PSR and outlet requirements.

Stock Loading:Randomly based on salesman’s expectations.

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The above given changes were done to overcome the following problems:

Immediate Delivery: Outlets wanted on spot delivery and did not

want to wait for the next day for the orders to be delivered.

High workload on R.A.: Under the hybrid system the R.A. had to

deliver to the orders that were booked by both the P.S.R on the

previous day and do both the routes and complete all the orders.

Outlets Scheming: The route plan given to the P.S.R contained the

names of all the outlets (392 outlets), it included outlets, which

bought very less quantities, or even outlets which did not sell fringe

outlets. Therefore, the high-end outlets were identified and given to

currently functional salesman.

Customer Denials: The customer in the pre-sell booked orders on

the previous day but denied the orders on the next day when the

R.A. went to deliver the orders.

Payment Problems: The Company also faced problems with

respect with payments of the bills, the outlets refused to make

payments to the R.A. and would tell reasons like the proprietor is

not there.

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Customized Hybrid Sell GTM system followed by GBCL.

In the modified hybrid process the functions and roles of a P.S.R and R.A were

merged together and which were carried out by one salesman. The new system

was more of a direct distribution where the process of pre-selling was eliminated

and direct sales and distribution was implemented.

At Depot Level (Before leaving):

1. The salesman starts his day by coming to the Depot where his duty

started with

a. Preparing the load out slip and giving it to the helpers who would

load the delivery van.

b. Then he has to update the KPI’s on the Territory Score Board for

the reference of the TDM and the CE.

c. By the time the delivery van would get loaded the salesman should

have a brief discussion on the tactical marketing plan with the C.E

and discuss if any issues with regards to any of the outlets done by

the salesman on the previous day. The salesman would also ask

for any schemes that could be offered to the outlets.

At Outlet Level (En Route):

1. The salesman at the outlet level should carry a route book, fill the route

book as he visits the outlets, and take the customers initial if the call is

completed and if there are any specific remarks, they should be noted.

The salesman should then carry out the selling process by performing the

8 selling steps as mentioned earlier by PepsiCo standards, and by the

time the transaction takes place the helpers on route should perform the

function of merchandising the outlets.

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Post Work (Day Close):

1. At the end of the day, the salesman prepares a

load-in-slip to give a report on the stock that is unsold in the vehicle to the

store-keeper, and notes the daily sales on a sale register, and should

make an analysis of the route book and calculate the necessary KPIs to

be recorded. He then debrief the CE about the days functioning.

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Summary and Suggestions

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Summary:

The research analysis carried out proves to us that there has not been significant

change in the sales and distribution of fringe SKU’s through the modified hybrid

sell GTM strategy.

We can see that except for Aquafina all the other SKUs have shown a de-growth

from the year 2005 to year 2006. The percentage of mix of fringe SKU’s from the

total sales have decreased, except for Soda 600ml. The overall percentage mix

of the SKU’s has been 7 per cent of the total sales volumes, which is significantly

low. The bills cut also has been around 37 per cent for the month of June – 2006,

which is quite low.

The outcome of the analysis with regards to the salesman quality also was not

satisfactory in terms of service improvement for sales and distribution. Another

significant observation which was made was that the company used the “Push

strategy” wherein the intermediary was induced to sell the fringe SKU because of

the schemes that were offered to him.

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Suggestions:

Route Plan: It was observed that the salesman failed to follow the route plan,

and outlets on both the routes were mixed and attended. It was also observed

that there were some outlets which were attended only twice a week, which

actually were needed to be visited thrice, the frequency of the visits to the

outlets was low, and hence it would be advised that proper route plan be

made and strictly been followed by the salesman.

Route Book: It was also observed that a route book was not maintained, and

which resulted in no maintenance of records of the outlets and their frequency

of purchases, a route book would also record the LPCM, which could not be

determined because of not maintaining a route book.

KPI Tracking: The KPI’s which needed to be recorded at the end of the day

were also not recorded. Hence the management should strictly make the

salesman record the KPIs, so that the daily status could be known and

necessary changes can be made.

Improved Merchandising: The purchasing behavior of the consumer for soft

drink is impulsive and hence the consumer would preferably buy a product

which he sees first. Therefore merchandising should be given more

importance, by the company by providing proper display racks, provide

coolers the high volume buyers. The company can also come with attractive

periodic schemes like a “Display Week” wherein the outlet would be rewarded

for displaying a rack with the entire range of fringe SKUs.

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Range Selling: The salesman also failed to do range selling at the outlet level

and would only do selling for the products that were fast moving. The

observation made was that the salesman did not ask for Cans and Tetra

Packs at many outlets, this were only offered when a customer asked for it.

Hence it would be suggested that the salesman does range selling at all the

outlets which would also result in increased LPCS.

Increase Bill Cuts: The salesman should be given targets of “Bill Cuts” and

not on volumes. The salesman should be given incentives based on the

number of bill cuts he does in a particular month, this would also make him

most of the outlets and influence the outlets to purchase.

Frequent Load – Outs: Frequent load outs was also observed at the depot

level, due to the size of the vehicle, wherein time was lost in transportation

and loading, which there would result in high taxi rates, therefore it would be

advised that proper load outs should be made or either another carriage

vehicle with bigger capacity should be provided.

Proposed Weekly Sales Report: (Annexure 2) The maintenance of weekly

sales report will make the salesman maintain record on a day-to-day basis,

which will be recorded and calculated on weekly bases, this will help the CE

understand whether the salesman has been attending the outlets on regular

bases and as per the route plan. It would also give an individual outlet wise

report for every week and every month, the salesman would also require to

take signature of the customers at least once in a week, so that the customer

is aware of his purchase records. It would also allow the management to

know if the SKU’s are selling and whether the salesman is doing the range

selling of the SKU’s. The Bill cuts of a particular outlet could be estimated

from the column designated under the title “Bill” wherein the salesman will

have to record the “Bill No” for the purchase made by the outlet. The

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maintenance of the report can also be done at the Depot as it was observed

that it is not possible for the salesman to keep the records on the route,

mainly due to limited time constraints. At the end of the month the salesman,

the customer and the CE would have to sign the record, which further can be

analyzed by the higher officials.

Creating Pull Strategy: GBCL should create a PULL Strategy for its fringe

SKU’s like PET and Cans, because this are products that allow the company

to earn more margins. If it is financially viable the company should carry out

more advertising and promotion to persuade consumers to ask the outlets for

these fringe SKU’s and thus inducing the intermediaries to order for it.

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LIMITATIONS

1. Time Scope: As the “PET HYBRID” system was implemented for the past

two months, data analysis was limited by time and seasonal scope.

2. Communication: The state of Goa is divided into North Goa and South

Goa the Konkani language spoken differs to a very large accent and so

during the research process language was a problem.

3. Confidentiality: Due to confidentiality aspect only non-classified

information and data was provided.

4. Owner Availability: In the process of survey due to unavailability of the

proprietor the data was collected from the employees, so information was

not provided very openly.

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CHAPTER 7

Scope for further Research

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Scope for Research:

Since the Customized Hybrid GTM has been implemented recently, 2-3

months back, the study can be carried out again to review the status later, after

making the suggested changes to the system.

As this system of sales and distribution is relatively new to GBCL old GTM of

Hybrid sell, it is not possible to determine whether the new customized GTM is

better than the old GTM, because of the time constraint.

For making a more precise judgment the Customized GTM should be carried out

for a period of one year or more so that a comparative analysis of both the

systems can be done.

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Chapter 8

Learning Outcomes

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Learning Outcomes:

The learning outcome derived from the project was valuable and many

new things about the CSD industry were learned. It was also learned that Cola

wars are not won on Televisions through commercial but in reality Cola wars are

won and lost at the door of every cooler and doorstep of every outlet.

In the process of my SIP I have also understood the practical aspects and

importance of the various concepts of marketing like importance of assessing

market potential, customer retention, and the need for promoting a brand by

delivering the right message to the customer which helped me in understanding

the research problem clearly.

During the process of data collection I had to communicate with many outlets of

different categories such as modern trades, convience stores, hotels and small

restaurants and have a brief discussion over the issue of customized Hybrid

GTM their feedback was then recorded in the questionnaire these process

helped me to understand the attitude of a customers towards the company and

how different customers responded differently to same product and same GTM

The data collection process also helped me improve my communication skills.

While preparing the plan of research and during the analysis of data collected, I

had applied the concepts learned in Research Methodology which gave me an

insight on practical application and importance of the subject learned.

During my stay in the organization I had the opportunity to meet people of

various departments and it helped me in understanding the functions of the

organization clearly.

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Bibliography & Reference

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BIBLIOGRAPHY

Some of the texts that were used as refernces are:

Marketing Management by Philip Kotler

Marketing Research by Naresh Malhotra

Research Methodology by C.K Kothari

REFERENCE

While making of this report information was taken from various sources

and used as a reference. Information was taken from various websites and

many research reports.

The sources are as follows:

www.wikipedia.com

www.site.securities.com

www.datamonitor.com

www.pepsico.com

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ANNEXURE

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Questionnaire I

Objective:

To understand the “PET HYBRID” distribution system at Goa Bottling Factory Pvt. Ltd. and the cause and effect of implementation of such system.

1. What is the “HYBRID” system of distribution?

2. Why was there a need for a new system like “PET HYBRID” at GBF?

3. What are the standards set by PepsiCo for implementation of “PET HYBRID” system?

4. How is “PET HYBRID” system to be executed?

5. What is the system being followed by GBH?

6. What are the parameters to measure the effectiveness of the system?

7. What are the difficulties faced in the hybrid system?

8. Has the hybrid system benefited the company?

9. Can the hybrid system be modified as per the requirements?

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Questionnaire II

Objective:To understand the quality of salesman and his functioning, in order

to analyze if the salesman are following the specified steps as per

standards lay down by PepsiCo India, which are very essential for the

success of “Hybrid” distribution system.

Date: Outlet Name: Type:

Category:

2. Salesman quality:

Excellent Good Satisfactory Bad

3. Do you get into out of stock positions?

Never Rarely Frequently

4. Did you observe any change in the service quality over a period of 1 month?

Yes No

5. Any specific issue with regards to:

Product Distribution Pricing

6. Merchandising (Display of all SKUs)

Dominant Average Below Average

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7. Any specific suggestion

Annexure 1 - Hybrid Model for Fringe SKUs

Brand

Pack % June Mix

Avg Monthly

Vol. (June)

Current Pene (June)

Required. Pene (June)

Selling Skills

Projected sale at

new Pene.Aquafina

1000 ml

Pepsi

2000 ml

600 ml330 ml

Mountain Dew

2000 ml

600 ml330ml

Mirinda

2000 ml

600 ml330 ml

7 Up 2000 ml600 ml330 ml

Slice 1200 ml500 mlTetra

Diet 250 ml330 ml

Teem Soda

1500 ml

600 ml

8

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SKUs

World Renowned PepsiCo Brand of Products

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