A

Project Report

On

“The Study of THE CONSUMER BEHAVIOUR OF COCA COLA”

Submitted to:

As a Partial Fulfillment of the Requirement for the Award of Bachelor of

Business Administration Programme BBA (Class of 2016-2019)

Under the Guidance& Supervision

Of

.
Prof /Dr VV Krishna Reddy
Faculty Guide
AGBS Hyderabad

Summer Assignment Project

Submitted by:

Student Name: Kaushik Chetty

Enrollment No: 47

AMITY GLOBAL BUSINESS SCHOOL

HYDERABAD
 College Certificate
This is to certify that Mr. Kaushik Chetty student of Semester II Class of BBA
2016-2019 has completed the Summer Assignment Project titled “The Study of
THE CONSUMER BEHAVIOUR OF COCA COLA under my
guidance has worked sincerely for the partial fulfilment of Bachelor of Business
Administration for the year 2016 to 2019 to the best of my knowledge and wish
him/her success for the future endeavours.

Prof/Dr. VV Krishna Reddy

AGBS Hyderabad

Date: - 1.8.17
Place: - Hyderabad
 AMITY GLOBAL BUSINESS SCHOOL
HYDERABAD
DECLARATION

I Adarsh Gilada, Student of Amity Global Business School, Hyderabad hereby

declare that the Project titled “The Study of THE CONSUMER
BEHAVIOUR OF COCA COLA “is the record of authentic work done by me
for submission of the Summer Assignment Project as a partial fulfillment and has not
been submitted in any other university or Institute for the award of any other Degree.

An attempt has been made by me to provide all relevant and important details
regarding the topic to support the theoretical aspect and practical evidence related to
the topic.

Kaushik Chetty - A30606416047

Date:-1.8.17

Hyderabad
 Acknowledgment
My heartfelt sincere Thanks to Dr P Prasad Rao, Director General, Amity Global
Business School Hyderabad for giving me this opportunity for doing my project on
Volkswagen

My sincere & grateful thanks to my Faculty Guide Prof/Dr.VV Krishna Reddy for
guiding me throughout my Project.

My sincere thanks to my Family members who stood by me motivating me to

complete my project successfully.

Kaushik Chetty - A30606416047

Date:-1.8.17

Hyderabad
 CONTENTS
EXECUTIVE SUMMARY - PAGE 2
CHAPTER 1 INTRODUCTION - PAGE 4-6
CHAPTER 2 INDUSTRY PROFILE - PAGE 7-11
CHAPTER 3 COMPANY PROFILE - PAGE 12-63
 COCA-COLA COMPANY - PAGE 13-17
 GLOBAL MARKET SHARE OF COCA-COLA - PAGE 17-
18
 TRENDS AND FORCES - PAGE 19-22
 POTER’S FIVE FORCES - PAGE 22-29
 PESTLE ANALYSIS - PAGE 29-33
 SWOT ANALYSIS - PAGE 33-40
 COCA-COLA INDIA - PAGE 41-42
 PRODUCTS IN INDIA - PAGE 42-46
 MARKETING MIX - PAGE 49-58
 PESTLE ANALYSIS - PAGE
58-62
 SWOT ANALYSIS - PAGE 60-62
CHAPTER 4 RESEARCH METHODOLOGY - PAGE 63-
68
CHAPTER 5 DATA ANALYSIS - PAGE 69-
79
CHAPTER 6 SUGGESTIONS AND CONCLUSION - PAGE 80-
82
BIBLIOGRAPHY - PAGE 83
ANNEXURE - PAGE 84-85

EXECUTIVE SUMMARY
This report has been prepared with a specific purpose in mind. It outlines the history
and current scenario of the Coca-Cola Company globally and locally. The first part of
the study takes us through the present state of affairs of the beverage industry and
Coca-Cola Company globally.
The report contains a brief introduction of Coca Cola Company and Coca-Cola India
and a detailed view of the tasks, which have been undertaken to analyze the market of
Coca-Cola i.e. we have performed Competitive, PESTLE and SWOT analysis of
Coca-Cola Company and PESTLE and SWOT analysis of Coca-Cola India in order to
identify areas of potential growth for Coca-Cola. We have also given a brief
description of Trends and Forces that are affecting Coca-Cola Company globally.

The main objective of this project report is to analyze and study in efficient way the
current position of Coca- Cola Company. The study also aims to perform Market
Analysis of Coca-Cola Company & find out different factors effecting the growth of
Coca-Cola. Another objective of the study was to perform Competitive analysis
between Coca-Cola and its competitors. Apart from these objectives this study is also
conducted to understand the Customer preferences towards various Coca-Cola
products.

BE THE BRAND:

Inspire creativity, passion, optimism and fun.

HISTORY OF COCA-COLA

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical
Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca
wine called Pemberton's French Wine Coca. He may have been inspired by the
formidable success of Vin Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton
responded by developing Coca-Cola, essentially a non-alcoholic version of French
Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8,
1886. It was initially sold as a patent medicine for five cents a glass at soda fountains,
which were popular in the United States at the time due to the belief that carbonated
water was good for the health.[9] Pemberton claimed Coca-Cola cured many diseases,
including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.
Pemberton ran the first advertisement for the beverage on May 29 of the same year in
the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on

the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, while suffering
from an ongoing addiction to morphine, Pemberton sold the rights a second time to
four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H.
Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling
his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the
other two manufacturers could continue to use the formula. So, in the summer of
1888, Candler sold his beverage under the names Yum Yum and Koke. After both
failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888,
in order to force his two competitors out of the business. Candler purchased exclusive
rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker.
However, in 1914, Dozier came forward to claim her signature on the bill of sale had
been forged, and subsequent analysis has indicated John Pemberton's signature was
most likely a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company (the

current corporation), and in 1910 Candler had the earliest records of the company
burned, further obscuring its legal origins. By the time of its 50th anniversary, the
drink had reached the status of a national icon in the USA. In 1935, it was certified
kosher by Rabbi Tobias Geffen, after the company made minor changes in the
sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor
wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans
of Coke first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg,
Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A.
Biedenharn. The original bottles were Biedenharn bottles, very different from the
much later hobble-skirt design that is now so familiar. Asa Candler was tentative
about bottling the drink, but two entrepreneurs from Chattanooga, Tennessee,
Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and were so
persuasive that Candler signed a contract giving them control of the procedure for
only one dollar. Candler never collected his dollar, but in 1899 Chattanooga became
the site of the first Coca-Cola bottling company. The loosely termed contract proved
to be problematic for the company for decades to come. Legal matters were not
helped by the decision of the bottlers to subcontract to other companies, effectively
becoming parent bottlers. Coke concentrate, or Coke syrup, was and is sold separately
at pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly
upset stomach.

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula
of the drink with "New Coke". Follow-up taste tests revealed that most consumers
preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management
was unprepared for the public's nostalgia for the old drink, leading to a backlash. The
company gave in to protests and returned to a variation of the old formula, under the
name Coca-Cola Classic on July 10, 1985.

On February 7, 2005, the Coca-Cola Company announced that in the second quarter
of 2005 they planned to launch a Diet Coke product sweetened with the artificial
sweetener sucralose, the same sweetener currently used in Pepsi One. On March 21,
2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a
blend of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a
new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc,
marketed as "Diet Coke Plus”. On July 5, 2005, it was revealed that Coca-Cola would
resume operations in Iraq for the first time since the Arab League boycotted the
company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-
Cola." The word "Classic" was truncated because "New Coke" was no longer in
production, eliminating the need to differentiate between the two. The formula
remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-
ounce bottles sold in parts of the southeastern United States. The change is part of a
larger strategy to rejuvenate the product's image. In November 2009, due to a dispute
over wholesale prices of Coca-Cola products, Costco stopped restocking its shelves
with Coke and Diet Coke.

GLOBAL MARKET SHARE OF COCA-COLA

In 2009, the company generated revenues of $31 billion with $6.8 billion net income.
An increased consumer preference for healthier drinks has resulted in slowing growth
rates for sales of carbonated soft drinks (abbreviated as CSD), which constitutes 78%
of KO’s sales. KO’s profits are also vulnerable to the volatile costs for the raw
materials used to make drinks - such as the corn syrup used as a sweetener, the
aluminium used in cans, and the plastic used in bottles. Furthermore, slowing
consumer spending in Coke's large North American market compounds the challenge
of increasing costs and a weak economic environment. Finally, Coca-Cola earns
approximately 75% of revenue from international sales, exposing it to currency
fluctuations, which are particularly adverse with a stronger U.S. Dollar (USD).

Despite these challenges, Coca-Cola has remained profitable. Though the non-CSD
market is growing quickly, the traditional CSD market is still large in terms of both
revenues and volume and highly lucrative. The size and variety of KO’s offerings in
the CSD category, coupled with the unparalleled brand equity of the Coca-Cola
trademark, has allowed KO to maintain its share of this important market. KO has
also responded to consumers’ changing tastes with new, non-CSD product launches
and acquisitions such as that of Glaceau in 2007. Strong international growth has also
more than offset a weak domestic market.

On February 25, Coca-Cola Company announced its plan to buy Coca-Cola

Enterprises (CCE) for $12.3 million.[7] Since spinning of Coca-Cola Enterprises
(CCE) 24 years ago, the soft drink market has changed dramatically with consumers
buying fewer soft drinks and more non-carbonated beverages, such as Powerade and
Dasani water. Under the new deal, Coca-Cola Company will take control of the
bottler's North America operations, giving the company control over 90% of the total
North America volume. In return, Coca-Cola Enterprises will take over Coke's
bottling operations in Norway and Sweden, becoming a European-focused producer
and distributor.

In March 2010, Coca-Cola Company entered into discussions to buy the Russian juice
company, OAO Nidan Juices. The company is 75% owned by a private equity firm in
London and 25% by its Russian founders and controls 14.5% of the Russian juice
market. If successful, the purchase would add to Coca-Cola's 20.5% market share,
passing Pepsi's 30% market share. The Russian juice market is estimated to be $3.2
billion dollars, and estimates of Nidan's purchase price are between $560-$620
million.

In April 2010, Coca-Cola Company purchased a majority share of Innocent, the

British fruit smoothie maker. Last year the company bought an 18% share of the
company for more than $45 million, and recent purchases of additional shares
increased Coke's stake to 58%.

In June 2010, Coca-Cola Company agreed to pay Dr Pepper Snapple Group (DPS)
$715 million for the continued right to sell their products following the company's
acquisition of Coca-Cola Enterprises (CCE). The deal covers the next 20 years with
an option to renew for an additional 20 years.

TRENDS AND FORCES

 The Global Economic Recession Threatens Overall Demand:

In 2008 and 2009, the global economy has fallen into a recession. Not just the United
States but countries from all over the world have felt the impacts of the 2008
Financial Crisis. This may be a problem for Coke, which derives approximately 75%
of its sales from outside North America. Still, the company has positioned itself well
in international markets both organically and through acquisitions, such as that of
Chinese juice maker Huiyuan for $2.4 billion. However the company was
unsuccessful with its purchase of Huiyuan as it broke antitrust laws in China. On
March 5, 2010, Coke's CEO said that emerging markets are bouncing back quicker
than more developed markets.

 New Aversion to Soda Threatens Main Business:

74% of the Coca Cola Company's products are classified as carbonated soft drinks,
making it particularly sensitive to changes in demand for CSD. Consumer demand for
CSD has been negatively affected by concerns about health and wellness. This is true
across most of KO's markets. There has been an increase in the number of regulations
regarding CSD in the United States in response to the heightened desire for healthy
food consumption.

In 2006, many state public school systems banned the sale of soft drinks on their
campuses. The Centre for Science and Public Interest proposed that a warning label
be placed on all beverages containing more than 13g of sugar per 12-oz serving. This
proposal would affect all non-diet, full calorie drinks produced by KO. These factors
have driven a shift in consumption away from CSD to healthier alternatives, such as
tea, juices, and water.

Within the CSD segment consumers have been moving away from sugared drinks,
opting instead for diet beverages, which do not generally contain any sugar or
calories.

Though KO has been somewhat slow to respond to this shift in consumer preferences,
it has recently begun to increase its development of both diet CSD and non-CSD
beverages. KO is faced with the task of balancing the risk of new innovations with the
low growth rates of established brands, a predicament for manufactures throughout
the beverage industry.

 Integrated Bottler Strategy Increases Flexibility:

After CEO Neville Isdell was brought out of retirement in 2004 to revive the then
flagging beverage maker, one of the first areas that he targeted for improvement was
KO's frayed relations with its extensive network of bottlers. Since consolidating all
company-owned bottlers into the Bottling Investments division, Isdell has continued
to increase KO's interest in its bottlers through stake purchases or outright buyouts.
This strategy represents a weakening of the division between KO's production and
distribution operations. Isdell believes that by combining production and distribution
operations the company will have enhanced its ability to quickly respond to changing
market conditions. In KO's 2007 Q3 Analyst call, Isdell credited the outright purchase
of Coca-Cola Bottlers Philippines (CCBPI) for double-digit volume growth in that
country. Additionally, KO has signed new agreements with many of its bottlers which
allow them to distribute drinks produced by other companies. For example, Coca-
Cola Enterprises (CCE) now distributes Arizona, a ready-to-drink tea made by
Ferolito, Vultaggio & Sons, an American iced-tea company. Isdell sees these
agreements as another way of taking advantage of the rapidly growing non-CSD
market.

 Bottled Water Falling Out of Favour:

In Q3 2009, Dasani bottled water's revenues fell by double digits; this decrease is
emblematic of the bottled water industry as a whole. In August 2009, the Wall Street
Journal reported that sales of bottled water had fallen for the first time in five years.
The combination of the recession and upper class consumers' increased environmental
consciousness has lead many customers to cut back on bottled water in favour of tap
water and reusable containers.

Following this trend, at least one town in Washington state and one in Australia have
outlawed the selling of bottled water within their city limits. In 2008, bottled water
was the third most popular beverage (behind soda and milk), but compared to 2007,
Americans consumption declined for the first time, down to 8.7 billion gallons from
8.8 billion gallons. Although this is a seemingly small decrease, industry experts don't
expect bottled water to bounce back anytime soon.

 Dollar Affects International Performance:

Another trend affecting Coca-Cola is the relative strength of the U.S. Dollar (USD).
Although the company is based in the US, KO derives about 75% of its operating
income from outside United States. Because of this, the company is very sensitive to
the strength of the dollar. As foreign currencies weaken relative to the dollar, goods
sold in foreign markets are suddenly worth fewer dollars back in the US, lowering
earnings. Thus, if the dollar strengthens (as it did in the second half of 2008 and
2009), it has a negative effect on KO's earnings. Coca-Cola executives expect
currency fluctuations to adversely affect 3Q09 operating income by 10-12% and
4Q09 operating income by high single digits.

KO has broad exposure to foreign currencies and actively hedges a large portion of
these to avoid wide swings in earnings from currency fluctuations. Although this
hedging insulates from the potential downside of a strengthening dollar, it also limits
larger gains from drastic downswings in the dollar's value.

 Commodity Cost Fluctuations Affect Margins:

The Coca-Cola Company’s profitability can be affected both directly and indirectly
by the costs of various production inputs. KO itself is responsible for purchasing the
raw materials used to make its concentrates and syrups. Variations in the prices for
these goods can affect the company’s total cost of production as well as its profit
margins. Changes in the production costs of bottlers can also impact KO’s
profitability, though in a more indirect way. If the raw materials necessary for bottling
become more expensive, the bottler may be forced to drastically raise prices to
compensate.

Such a price increase would likely hurt KO, given the competitive nature of the non-
alcoholic beverage industry, and provide a possible incentive for consumers to switch
to other companies’ beverages.

Aluminium, corn, and PET resin are three examples of such production goods used by
bottlers that could have significant bearing on the Coca-Cola Company’s profit
margins. In 2007, the prices of these commodities rose drastically with general
commodities bubble and dramatically pressured margins. They receded in 2008, but
the possibility of another significant rise in Commodities represents a constant threat
to profits.

POTER’S FIVE FORCES

 RIVALRY AMONG EXISTING FIRMS:

The greatest competition that Coca-cola faces is from the rival sellers within the
industry. Coca-Cola, Pepsi Co, and Cadbury Schweppes are among the largest
competitors in this industry, and they are all globally established which creates a great
amount of competition. Aside from these major players, smaller companies such as
Cott Corporation and National Beverage Company make up the remaining market
share. All five of these companies make a portion of their profits outside of the United
States.
Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke,
Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo (Murray, 2006c).
However, Coca-Cola has higher sales in the global market than PepsiCo, PepsiCo is
the main competitor for Coca-Cola and these two brands have been in a power
struggle for years (Murray, 2006c). Coke has been more dominant with a 53% of
market share as in 1999 compared to Pepsi with a market share of 21%.

According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S.
market share has increased to 30.8%, while the Coca-Cola Company's has decreased
to 42.7% due to Pepsi marketing schemes still the higher large gap between the
market share can be attributed to the fact that Coca-Cola took advantage of Pepsi
entering the market late and has set up its bottler's and distribution network especially
in developed markets.

"The Coca-Cola Company" is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. Bottling
plants with some exceptions are locally owned and operated by independent business
people who are native to the nations in which they are located. Coca-Cola
manufactures, distributes and markets non-alcoholic beverage concentrates and
syrups, including fountain syrups.

It supplies concentrates and beverage bases used to make the products and provides
management assistance to help it's bottler's ensure the profitable growth of their
business. This has put Pepsi at a significant disadvantage compared to US market.
Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world.
However, exceptions include India, Saudi Arabia and Pakistan.
By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left
India after a new government ordered, The Coca-Cola Company to turn over its secret
formula for Coke and dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA).

In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India
Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of
foreign brands was allowed. PepsiCo bought out its partners and ended the joint
venture in 1994. In 1993, The Coca-Cola Company returned in pursuance of India's
Liberalization policy. In 2005, The Coca-Cola Company and PepsiCo together held
95% market share of soft-drink sales in India. Coca-Cola India's market share was
52.5%.

In Russia, Pepsi initially had a larger market share than Coke but it was undercut once
the Cold War ended. In 1972, Pepsi Co Company struck a barter agreement with the
government of the Soviet Union, in which Pepsi Co was granted exportation and
Western marketing rights to Stolichnaya vodka in exchange for importation and
Soviet marketing of Pepsi-Cola.

This exchange led to Pepsi-Cola being the first foreign product sanctioned for sale in
the U.S.S.R. Pepsi, as one of the first American products in the Soviet Union, became
a symbol of that relationship and the Soviet policy.

Brand name loyalty is another competitive pressure. The Brand Keys Customer
Loyalty Leaders Survey (2004) shows the brands with the greatest customer loyalty in
all industries. Diet Pepsi ranked 17th and Diet Coke ranked 36th as having the most
loyal customers to their brands. The new competition between rival sellers is to create
new varieties of soft drinks, such as vanilla and cherry, in order to increase sales and
getting new customers.

Pepsi is however trying to counter this by competing more aggressively in the

emerging economies where the dominance of Coke is not as pronounced, with the
growth in emerging markets significantly expected to exceed the developed markets,
rivalry in international market is going to be more pronounced.

Pepsi advertisements often focused on celebrities, choosing Pepsi over Coke,

supporting Pepsi's positioning as "The Choice of a New Generation." In 1975, Pepsi
began showing people doing blind taste tests called Pepsi Challenge in which they
preferred one product over the other. Pepsi started hiring more popular spokespersons
to promote their products.

In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola
Wars, Pepsi Stuff. Consumers were invited to "Drink Pepsi, Get Stuff" and collect
Pepsi Points on billions of packages and cups. They could redeem the points for free
Pepsi lifestyle merchandise. After researching and testing the program for over two
years to ensure that it resonated with consumers, Pepsi launched Pepsi Stuff, which
was an instant success.

Tens of millions consumers participated. Pepsi outperformed Coke during the summer
of the Atlanta Olympics, held at Coke's hometown where Coke was the lead sponsor
for the Games. Due to its success, the program was expanded to include Mountain
Dew into Pepsi's international markets worldwide. The company continued to run the
program for many years, continually innovating with new features each year.

Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff
in 2005 & Coca-Cola retaliated with Coke Rewards. This cola war has now
concluded, with Pepsi Stuff ending its services and Coke Rewards still offering prizes
on their website. Both were loyalty programs that give away prizes and product to
consumers after collecting bottle caps and 12 or 24 pack box tops, then submitting
codes online for a certain number of points. However, Pepsi's online partnership with
Amazon allowed consumers to buy various products with their "Pepsi Points", such as
mp3 downloads. Both Coca-Cola and coke previously had a partnership with the
iTunes Store.
  POTENTIAL ENTRANTS:

New entrants are not a strong competitive pressure for the soft drink industry. Coca-
Cola and Pepsi Co dominate the industry with their strong brand name and great
distribution channels. In addition, the soft-drink industry is fully saturated and growth
is small. This makes it very difficult for new, unknown entrants to start competing
against the existing firms.

Another barrier to entry is the high fixed costs for warehouses, trucks, and labour,
and economies of scale. New entrants cannot compete in price without economies of
scale. These high capital requirements and market saturation make it extremely
difficult for companies to enter the soft drink industry therefore new entrants are not
a strong competitive force.

Capital requirements for producing, promoting, and establishing a new soft drink
traditionally have been viewed as extremely high. According to industry experts, this
makes the likelihood of potential entry by new players quite low, except perhaps in
much localized situations that matter little to Coke or Pepsi. Yet, while this view may
reflect conventional wisdom, some industry observers question whether a new time is
coming, with 'new age' beverages selling to well-informed and health-informed and
health-conscious consumers. This issue was beginning to grab the attention of both
Coke and Pepsi in the summer of 1992, when they both were not able to explain a
drop in their June 1992 sales.

 SUBSTITUTES:

Numerous beverages are available as substitutes for soft drinks. Citrus beverages and
fruit juices are the more popular substitutes. Availability of shelf space in retail stores
as well as advertising and promotion traditionally has had a significant effect on
beverage purchasing behaviour. Overall total liquid consumption in the United States
in 1991 included Coca-Cola's 10% share of all liquid consumption.

“For years the story in the non-alcoholic sector centred on the power struggle between
Coke and Pepsi. But as the pop fight has topped out, the industry's giants have begun
relying on new product flavours and looking to noncarbonated beverages for growth.”

Substitute products are those competitors that are not in the soft drink industry. Such
substitutes for Coca-Cola products are bottled water, sports drinks, coffee, and tea,
juices etc.
Bottled water and sports drinks are increasingly popular with the trend to be a more
health conscious consumer. There are progressively more varieties in the water and
sports drinks that appeal to different consumer's tastes, but also appear healthier than
soft drinks.

In addition, coffee and tea are competitive substitutes because they provide caffeine.
The consumers who purchase a lot of soft drinks may substitute coffee if they want to
keep the caffeine and lose the sugar and carbonation.

Blended coffees are also becoming popular with the increasing number of Starbucks,
Barista and CCD stores that offer many different flavours to appeal to all consumer
markets. It is also cheap for consumers to switch to these substitutes making the threat
of substitute products very strong (Datamonitor, 2005).

The growth rate has been recently criticized due to the market saturation of soft
drinks. Datamonitor (2005) stated, “Looking ahead, despite solid growth in
consumption, the global soft drinks market is expected to slightly decelerate,
reflecting stagnation of market prices.” The change attributed to the other growing
sectors of the non-alcoholic industry including tea & coffee is 11.8% and bottled
water is 9.3%. Sports drinks and energy drinks are also expected to increase in growth
as competitors start adopting new product lines.

Profitability in the soft drink industry will remain rather solid, but market saturation
has caused analysts to suspect a slight deceleration of growth in the industry (2005).
Because of this, soft drink leaders are establishing themselves in alternative markets
such as the snack, confections, bottled water, and sports drinks industries.

In order for soft drink companies to continue to grow and increase profits they will
need to diversify their product offerings. So in order to compete with the substitutes
industry, coca-cola has diversified from just carbonated drink industry to other
substitute and so have other brands like Pepsi, Dr pepper/Snapple.

 BARGANING POWER OF BUYERS:

Individual consumers are the ultimate buyers of soft drinks. However, Coke and
Pepsi's real 'buyers' have been local bottlers who are franchised -or are owned,
especially in the case of Coke- to bottle the companies' products and to whom each
company sells its patented syrups or concentrates. While Coke and Pepsi issue their
franchise, these bottlers are in effect the 'conduit' through which these international
cola brands get to local consumers

Through the early 1980's, Coke's domestic bottlers were typically independent family
businesses deriving from franchises issued early in the century. Pepsi had a collection
of similar franchises, plus a few large franchisees that owned many locations. Until
1980, Coke and Pepsi were somewhat restricted in owning bottling facilities, which
was viewed as a restraint of free trade. Jimmy Carter, a Coke fan, changed that by
signing legislation to allow soft-drink companies to own bottling companies or
territories, plus upholding the territorial integrity of soft-drink franchises, shortly
before he left office.

Also, the three most important channels for soft drinks are supermarkets, fountain
sales, and vending. In 1987, supermarkets accounted for about 40% of total U.S. soft
drink industry sales, fountain sales represented about 25%, and vending accounted
for approximately 13%. Other retailers represent the remaining percentage.

While both Coca-Cola and Pepsi distribute their bottled soft drinks through a
network of bottling companies, Coca-Cola uses its own network of wholesalers for
their fountain syrup distribution, and Pepsi distributes its fountain syrup through its
bottlers.

 BARGANING POWER SUPPLIERS:

The principal raw material used by the soft-drink industry in the United States is
high fructose corn syrup, a form of sugar, which is available from numerous
domestic sources. The principal raw material used by the soft-drink industry outside
the United States is sucrose. It likewise is available from numerous sources.
Another raw material increasingly used by the soft-drink industry is aspartame, a
sweetening agent used in low-calorie soft-drink products. Until January 1993,
aspartame was available from just one source -the NutraSweet Company, a
subsidiary of the Monsanto Company- in the United States due to its patent, which
expired at the end of 1992.

Coke managers have long held 'power' over sugar suppliers. They view the recently
expired aspartame patents as only enhancing their power relative to suppliers.

PESTEL ANALYSIS OF COCA- COLA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.

Coca-Cola beverage, which is the leading manufacturer and distributor of non-

alcoholic drinks also need to undergo this PESTLE analysis to know about the
external environment (especially their competitors and the opportunities available) in
order to keep pace with the fast growing economy.

Political Analysis:

Political factors are how far a government intervenes in the operations of the
company. The political factors may include tax policy, trade restrictions,
environmental policy, laws imposed on the recruiting labours, amount of permitted
goods by the government and the service provided by the government.

Globally, Coca-Cola beverages being a non-alcoholic industry falls under the FDA
(Food and Drug Administration), it is an agency in the United States Department of
Health and Human Services. Its headquarters is in USA and it has started opening
offices in foreign countries as well. The job of the FDA is to check and certify
whether the ingredients used in the manufacturing of Coca-Cola products in the
particular country is meeting to the standards or not. In Coca-Cola the company takes
all the necessary steps to analyze thoroughly before introducing any ingredients in its
products and get prior approval from the FDA. The company also has to take into
consideration of the regulation imposed by FDA on plastic bottled products.

Apart from FDA the other political factors includes tax policies and accounting
standards. The accounting standards used by the company changes from time to time
which have a significant role in the reported results.

The company also is subjected to income tax policies according to the jurisdiction of
various countries. In addition to this, the company is also subjected to import and
excise duties for distribution of the products in the countries where it does not have
the outsourcing units.

Moreover, if there is any unrest or changes in the government and any kind of protest
by the political activists may decline the demand for the products. Also the situations
like the unsure conditions prevailing in Iraq and escalation of the terrorist activities in
these areas could affect the international market of our product. It creates an inability
for the company to penetrate in the markets of such countries.

Economic Factors:

The economic factors analyze the potential areas where the firm can grow and
expand. It includes the economic growth of the country, interest rates, exchange rates,
inflation rates, wage rates and unemployment in the country.

The company first analyzes the economic condition of the country before venturing
into that country. When there is an economic growth in the country, the purchasing
power among people increases. It gives the company or the marketer a good chance to
market the product. Coca-Cola, in the past identified this correctly and rightly started
its distribution across various countries. The net operating profits for the company
outside US stands at around 72%. Along with this the company uses 63 various types
of currencies other than US Dollar. Hence there is a definite impact in the revenues
due to the fluctuating foreign currency exchange rates. A strong and weak currency
tends to affect the exporting of the products globally.

Interest rates are the rate which is imposed on the company for the money they have
borrowed from government. When there is an increase in the interest rates, it may
deter the company in further investment as the cost for borrowing is higher. Coca-
Cola uses derivative financial instruments to cope up with the fluctuating interest
rates. Inflation and wage rate go hand in hand, when there is an increase in the
inflation the employee demand for a higher wage rate to cope up with the cost of
living.

This comes as additional cost for the company which cannot be reflected in the price
of the final product as the competition and risk in this segment is higher. This is a
threat in the external environment faced by the company. From the above explanation
it is clearly seen that the economic factors involves a major impact in the behaviour of
the company during various economic situations.

Social Factors:

Social factors are mainly the culture aspects and attitude, health consciousness among
people, population growth with age distribution, emphasis on safety. The company
cannot change the social factors but the company has to adjust itself to the changing
society. The company adapts various management strategies to adapt to these social
trends.

Coca-Cola which is a B2C company, is directly related to the customer, so social

changes are the most important factors to consider. Each and every country has a
unique culture and attitude among the people. It is very important to know about the
culture before marketing in a particular country. Coca-Cola has about 3300+ products
in their stable, when entering into a country it does not introduce all the products. It
introduces minimum number of products according to the culture of the country and
the attitude of the people.

Consumers and government are becoming increasingly aware of the public health
consequences, mainly obesity which is the second social factor in the soft drinks
industry. It inspired the company to venture into the areas of Diet coke and zero
calorie soft drinks. The problem of obesity is taken seriously among the youngsters
who like to maintain a good physique. Hence coke introduced dietary products for
those youngsters who can enjoy coke with zero calories. In one of the study it is said
that “Consumer from the age groups 37 to 55 are also increasingly concerned with
nutrition”. Since many are aware, they are concerned with the longevity of their lives.
This will affect the demand of the company in the existing product and also is an
opportunity to venture into new health and energy drinks industry.
Population growth rate and the age distribution is another social factor to be
considered. It is very important because non-alcoholic markets have most of its share
from the children and youngsters. Adults used to celebrate mostly with alcohol. The
age distribution of the country becomes important for the success of the product in a
country.

Technological Factors:

Technology plays a varied role in the soft drinks industry. The manufacturing and
distribution of the products is relatively a Low-Tech business, although the creation of
a new product with the perfect blend and taste is a science (an art in itself).

Technological contributions are most important in packaging. The company rely on

their bottling partners for a significant portion of their business. Nearly 83% of the
worldwide unit case volume is manufactured and distributed by their bottling partners
in whom the company does not have controlling power. Hence it is necessary for the
company to maintain a cordial relation with their bottling partners. If the company do
not give ample support in pricing, marketing and advertising then the bottling industry
while increase their short term profits, may become detrimental to the company.

The advancement in technology in the company has led to: Introduction of new ways
for the availability of Coca-Cola, it introduced general vending machines all over the
world. In products it led to the development of new products like Cherry Coke, Diet
Coke etc. The technical advancement in the bottling industries include, introduction
of recyclable and non refillable bottles, introduction of cans which are trendy, stylish
and popular among the youngsters.

Legal Factors

The legal factors include discrimination law, customer law, antitrust law, employment
law and health and safety law. In Coca-Cola the business is subjected to various laws
and regulation in the numerous countries in which they do the business, the laws
include competition, product safety, advertising and labelling, container deposits,
environment protection, labour practices.

In the US the products of the company is subjected to various acts like Federal Food,
Drug and Cosmetic Act, the Federal Trade Commission Act, Occupation Safety and
Health Act, various environment related acts and regulations, the production,
distribution, sale and advertising of all the products are subjected to various laws and
regulations. Changes in these laws could result in increased costs and capital
expenditures, which affects the company profitability and also the production and
distribution of the products.

Various jurisdictions may adopt significant regulations in the additional product

labelling and warning of certain chemical content or perceived health consequences.
These requirements if become applicable in the future the company must be ready to
accept and have necessary changes in hand for the same.

Environment Factors

These factors include the environment such as the weather conditions and the seasons
in which people prefer to buy cool beverages. Also the company must follow the
environmental issues related to the product manufacturing, packaging and distributing
in various countries. It must adhere to the norms and market the product accordingly.
Usage of renewable plastic in the PET bottles is followed by the company strictly.

SWOT ANALYSIS OF COCA-COLA

 WEAKNESS
STRENGTHES
Negative Publicity.
World's leading brand.
Decline in cash from Operating
Large scale of operations. Activities.
Robust revenue growth in 3 Sluggish Performance in North
SWOT
segments. America.
ANALYS THREATS
OPPORTUNITIES IS
Acquisitions. Intense Competition.
Growing bottled water market. Dependence on bottling Patners.
Growing Hispanic Population Sluggish growth of Carbonated
in U.S. beverages.

STRENGTHES:

 WORLD’S LEADING BRAND

Coca-Cola has strong brand recognition across the globe. The company has a leading
brand
value and a strong brand portfolio. Business-Week and Inter-brand, a branding
consultancy,
recognize. Coca-Cola as one of the leading brands in their top 100 global brands
ranking in
2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006.
Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22
having a brand value of $12,690 million Furthermore; Coca-Cola owns a large
portfolio of product brands. The company owns four of the top five soft drink brands
in the world: Coca-Cola, Diet Coke, Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke,
Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments
in brand promotions. Consequently, Coca-cola is one of the best recognized global
brands. The
company’s strong brand value facilitates customer recall and allows Coca-Cola to
penetrate new markets and consolidate existing ones.

 LARGE SCALE OF OPERATIONS

With revenues in excess of $24 billion Coca-Cola has a large scale of operation.
Coca-Cola is the largest manufacturer, distributor and marketer of non-alcoholic
beverage concentrates and syrups in the world. Coco-Cola is selling trademarked
beverage products since the year 1886 in the US. The company currently sells its
products in more than 200 countries. Of the approximately 52 billion beverage
servings of all types consumed worldwide every day, beverages bearing trademarks
owned by or licensed to Coca-Cola account for more than 1.4 billion.

The company’s operations are supported by a strong infrastructure across the world.
Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup
manufacturing plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage

bottling and canning plants located outside the US. The company also owns bottled
water production and still beverage facilities as well as a facility that manufactures
juice concentrates. The company’s large scale of operation allows it to feed upcoming
markets with relative ease and enhances its revenue generation capacity.

 ROBUST REVENUE GROWTH IN 3 SEGMENTS

Coca-Cola’s revenues recorded a double digit growth, in three operating segments.

These three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and
Bottling investments. Revenues from Latin America grew by 20.4% during fiscal
2006, over 2005. During the same period, revenues from ‘East, South Asia, and
Pacific Rim’ grew by 10.6% while revenues from the bottling investments segment by
19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific
Rim” bottling investments, accounted for 34.8% of total revenues during fiscal 2006.
Robust revenues growth rates in these segments contributed to top-line growth for
Coca-Cola during 2006.

WEAKNESS:

 NEGATIVE PUBLICITY

The Coca-Cola Company has been involved in a number of controversies and lawsuits
related to its relationship with human rights violations and other perceived unethical
practices. There have been continuing criticisms regarding the Coca-Cola Company's
relation to the Middle East and U.S. foreign policy. The company received negative
publicity in India during September 2006.The company was accused by the Centre for
Science and Environment (CSE) of selling products containing pesticide residues.
Coca-Cola products sold in and around the Indian national capital region contained a
hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr.
Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had
concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of
the Federal Food, Drug, and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest
filed a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims
made, along with the company's flavours, of Vitamin Water. Claims say that the
33 grams of sugar are more harmful than the vitamins and other additives are helpful.

 SLUGGISH PERFORMANCE IN NORTH AMERICA

Coca-Cola’s performance in North America was far from robust. North America is
Coca-Cola’s core market generating about 30% of total revenues during fiscal 2006.
Therefore, a strong performance in North America is important for the company.
In North America the sale of unit cases did not record any growth. Unit case retail
volume in North America decreased 1% primarily due to weak sparkling beverage
trends in the second half of 2006 and decline in the warehouse-delivered water and
juice businesses. Moreover, the company also expects performance in North America
to be weak during 2007. Sluggish performance in North America could impact the
company’s future growth prospects and prevent Coca-Cola from recording a more
robust top-line growth.

 DECLINE IN CASH FROM OPERATING ACTIVITIES

The company’s cash flow from operating activities declined during fiscal 2006. Cash
flows from operating activities decreased 7% in 2006 compared to 2005. Net cash
provided by operating activities reached $5,957 million in 2006, from $6,423 million
in 2005. Coca-Cola’s cash flows from operating activities in 2006 also decreased
compared with 2005 as a result of a contribution of approximately $216 million to a
tax-qualified trust to fund retiree medical benefits.

The decrease was also the result of certain marketing accruals recorded in
2005.Decline in cash from operating activities reduces availability of funds for the
company’s investing and financing activities, which, in turn, increases the company’s
exposure to debt markets and fluctuating interest rates.

OPPORTUNITIES:

 ACQUISITIONS

During 2006, its acquisitions included Kerry Beverages, (KBL), which was
subsequently, reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired
a controlling shareholding in KBL, its bottling joint venture with the Kerry Group, in
Hong Kong.
The acquisition extended Coca-Cola’s control over manufacturing and distribution
joint ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral
water. Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling
company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006.
These acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or
greater penetration of existing markets. Stronger international operations increase the
company’s capacity to penetrate international markets and also gives it an opportunity
to diversity its revenue stream. On 25 February 2010, Coco cola confirms to acquire
the Coca cola enterprises (CCE) one the biggest bottler in North America. This
strategy of coca cola strengthens its operations internationally.

 GROWING BOTTLED WATER MARKET

Bottled water is one of the fastest-growing segments in the world’s food and beverage
market owing to increasing health concerns. The market for bottled water in the US
generated revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The

market's consumption volume is expected to rise to 38.6 billion units by the end of
2010. This represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end
of 2010. In the bottled water market, the revenue of flavoured water (water-based,
slightly sweetened refreshment drink) segment is growing by about $10 billion
annually. The company’s Dasani brand water is the third best-selling bottled water in
the US. Coca-Cola could leverage its strong position in the bottled water segment to
take advantage of growing demand for flavoured water.

 GROWING HISPANIC POPULATION IN U.S

Hispanics are growing rapidly both in number and economic power. As a result, they
have become more important to marketers than ever before. In 2006, about 11.6
million US households were estimated to be Hispanic. This translates into a Hispanic
population of about 42 million.
The US Census estimates that by 2020, the Hispanic population will reach 60 million
or almost 18% of the total US population. The economic influence of Hispanics is
growing even faster than their population. Nielsen Media Research estimates that the
buying power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003
levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the
company.

THREATS:

 INTENSE COMPETITION

Coca-Cola competes in the non-alcoholic beverages segment of the commercial

beverages industry. The company faces intense competition in various markets from
regional as well as global players. Also, the company faces competition from various
non-alcoholic sparkling beverages including juices and nectars and fruit drinks. In
many of the countries in which Coca-Cola operates, including the US, PepsiCo is one
of the company’s primary competitors. Other significant competitors include Nestle,
Cadbury Schweppes, Groupe DANONE and Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising,

sales promotion programs, product innovation, and brand and trademark development
and protection. Intense competition could impact Coca-Cola’s market share and
revenue growth rates.

 DEPENDENCE ON BOTTLING PARTNERS

Coca-Cola generates most of its revenues by selling concentrates and syrups to

bottlers in whom it doesn’t have any ownership interest or in which it has no
controlling ownership interest. In 2006, approximately 83% of its worldwide unit case
volumes were produced and distributed by bottling partners in which the company did
not have any controlling interests. As independent companies, its bottling partners,
some of whom are publicly traded companies, make their own business decisions that
may not always be in line with the company’s interests. In addition, many of its
bottling partners have the right to manufacture or distribute their own products or
certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling

partners, then the partners may take actions that, while maximizing their own short-
term profits, may be detrimental to Coca-Cola. These bottlers may devote more
resources to business opportunities or products other than those beneficial for Coca-
Cola. Such actions could, in the long run, have an adverse effect on Coca-Cola’s
profitability. In addition, loss of one or more of its
major customers by any one of its major bottling partners could indirectly affect
Coca-Cola’s business results. Such dependence on third parties is a weak link in
Coca-Cola’s operations and increases the company’s business risks.

 SLIGGISH GROWTH OF CARBONATED BEVERAGES

US consumers have started to look for greater variety in their drinks and are becoming
increasingly health conscious. This has led to a decrease in the consumption of
carbonated and other sweetened beverages in the US. The US carbonated soft drinks
market generated total revenues of $63.9 billion in 2005, this representing a
compound annual growth rate (CAGR) of only 0.2% for the five-year period spanning
2001-2005. The performance of the market is forecast to decelerate, with an
anticipated compound annual rate of change (CAGR) of -0.3% for the five-year
period 2005-2010 expected to drive the market to a value of $62.9 billion by the end
of 2010.

Moreover in the recent years, beverage companies such as Coca-Cola have been
criticized for selling carbonated beverages with high amounts of sugar and
unacceptable levels of dangerous chemical content, and have been implicated for
facilitating poor diet and increasing childhood obesity. Moreover, the US is the
company’s core market. Coca-Cola already expects its performance in the region to
be sluggish during 2007. Coca-Cola’s revenues could be adversely affected by a
slowdown in the US carbonated beverage market.

Coca-Cola India was the leading soft drink brand in India till 1977 when it was forced
to close down its operation by a socialist government in the drive for self sufficiency.
After 16 years of absence, coca cola returned to India and witnessed a different
culture and economic platform. During their absence, Parle brothers introduced a new
type of cola called THUMS UP. Along with, they also formulated a lemon flavoured
drink, LIMCA, and mango flavoured, MAAZA. In 1993, coca cola bought the whole
Parle Brother operation, in a hope to beat the main competitor (Pepsi). They presumed
that with the tried and tested products of Parle they will be able to regain their throne
in the Indian soft drink market. Pepsi having a 6 year head start helped revive the
demand for global cola but it was not easy for the soft drink giant (coca cola) to return
to India. Pepsi put more focus on the youth of the country in their advertisements but
coca cola tried influencing Indians with the ‘American’ way of life, which turned out
to be a mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit of
being one of the biggest investor in the country; however, their sales figures were not
so impressive. Hence, they had to re-think their market strategies. Coca-Cola learned
from Hindustan Lever that reducing their will result in more turnover, hence leading
to profit. They launched an extensive market research in India. They ascertained that
in India 3 As must be applied; Affordability, Availability and Acceptability. Coca-
Cola learnt that they were competing with local drinks such as “Nimbu Pani”, “Narial
Pani”, “Lassi” etc. and reached to a conclusion that competitive pricing was
unavoidable. Since then they introduced a 200 ml glass bottle for Rs.5.

Further, they had different advertising campaigns for different regions of the country.
In the southern part, their strategy was to make Bollywood or Tamil stars to endorse
their products. In various regions they tried portraying coca cola products with
different regional food products. One of the most famous ad campaigns in India was
‘Thanda Matlab Coca-Cola’; they featured the same quote with different regional
entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market
share i.e. 60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment, 33%
in Packaged water Segment, compared to its arch rival, Pepsi. Diversifying their
product range and having a competitive pricing policy, they have regained their
throne. With virtually all the goods and services required to produce and market
Coca-Cola being made in India, the business system of the Company directly employs
approximately 6,000 people, and indirectly creates employment for more than
125,000 people in related industries through its vast procurement, supply, and
distribution System.

The Indian operations comprises of 50 bottling operations, 25 owned by the

Company, with another 25 being owned by franchisees. That apart, a network of 21
contract packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate
the narrow alleyways of Indian cities – constantly keep our brands available in every
nook and corner of the Country’s remotest areas.
 PRODUCTS OF COCA-COLA INDIA

COCA-COLA:-

In India Coca-Cola was leading soft drink till 1977 when Government policies
necessitated its departure. Coca-Cola made its return to the country in 1993 and made
significant investments to ensure that the beverage is available to more and more
people, even in remote and inaccessible parts of the nation.

Over the past fourteen years has enthralled consumers in India by connecting with
passions of India – Cricket, movies, music & food. Coca-Cola’s advertising
campaigns “Jo Chaho Ho Jaye” & “Life Ho Toh Aise” were very popular & had
entered youths vocabulary. In 2002.Coca-Cola launched its iconic campaign
“Thanda Matlab Coca-Cola” which sky rocketed the brand to make it India’s
favourite soft drink brand.

PET CAN FOUNTAIN

GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml
Table - 1.0

LIMCA:-

Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1
sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz
and lemoni bite combined with the single minded proposition of the brand as the
provider of “Freshness”.

Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from “Nimbu”
+ “Jaise” hence Lime Sa, Limca has lived up to its promises of refreshment and has
been the original thirst choice of millions of customers for over 3 decades.
 PET CAN FOUNTAIN
GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml
Table - 1.1

THUMS UP:-

Thums up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993.
Thums up is known for its strong, fizzy taste and it confident, mature and uniquely
masculine attitude. This brand clearly seeks to separate the men from the boys.

PET CAN FOUNTAIN

GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS
500ml, 1000ml 2.25L, 500ml, SIZES
100ml
Table - 1.2

SPRITE:-

Sprite a global leader in the lemon lime category is the second largest sparkling
beverage brand in India. Launched in 1999, Sprite with its cut-thru perspective has
managed to be a true teen icon.
 PET CAN FOUNTAIN
RGB
200ml, 300ml 500ml, 600ml, 330 ml VARIOUS SIZES
1250ml, 1500ml,
2000ml, 2250ml
Table – 1.3

FANTA:-

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a
strong market place and is identifies as “The Fun Catalyst”. Perceived as a fun youth
brand, Fanta stands for its vibrant colour, tempting taste and tingling bubbles that not
just uplifts feelings but also helps free spirit thus encouraging one to indulge in the
moment. This positive imagery is associated with happy, cheerful and special times
with friends.

PET CAN FOUNTAIN

GLASS
200ml, 300ml 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
2.25L, 500ml, 100ml
Table – 1.4

MINUTE MAID PULPY ORANGE:-

The history of the Minute Maid brand goes as far back as 1945 when the Florida Food
Corporation developed orange juice powder. The company developed a process that
eliminated 80% of the water in the orange juice, forming a frozen concentrate that
when reconstitute created orange juice. They branded it Minute Maid a name
connoting the convenience and the ease of preparation. Minute Maid thus moved from
a powdered concentrate to the first ever orange juice from concentrate.

The launch of Minute Maid in India (started with the south of the country) is aimed to
further extend the leadership of Coca-Cola in India in the juice drink category.

Available in 3 PET pack sizes i.e. 400ml, 1 litre, 1.25 litres.

MAAZA:-

Maaza was introduced in late 1970’s. Maaza has today come to symbolise the very
spirit of mangoes. Universally loved for its taste, colour, thickness and wholesome
properties, Maaza is the mango lover’s first choice.

PET POCKET MAAZA

RGB
200ml, 250ml 250ml, 600ml, 1.2L 200ml

Table – 1.5

KINLEY:-

The importance of water can never be understated, Particularly in a nation such as

India where water governs the lives of the millions, be it as a part of everyday ritual or
as the monsoon which gives life to the sub continent. Kinley water comes with the
assurance of safety from the Coca-Cola Company.

Available in PET 500ml and 1000ml.

GEORGIA GOLD COFFEE:-

Georgia coffee was introduced in India in 2004. The Georgia gold range of Tea and
coffee beverages is the perfect solution for office and restaurant needs. Today Georgia
coffee is available at Quick-Service Restaurants, Airports, Cinemas and in Corporates
across all major metros in India.

Espresso, Americano, Cappuccino, Caffe Latte,

HOT BEVERAGES
Mochaccino, Hot Chocolate, Cardamon Tea.
COLD Ice Teas, Cold Coffee.
BEVERAGES
Table – 1.6

MARKETING MIX OF COCA-COLA INDIA

 PRODUCT:-

Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola, Fanta,
Sprite, Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was another
area where Coca-Cola identified major opportunities. In 2002, Packaged drinking
water in India was a Rs 1,000 cr industry and growing by 40% every year. PDW was
a low margin – high volume business, but it was an attractive proposition for bottlers
as it increased plant utilization rates. In this market Coke’s Kinley was pitched against
Ramesh Chauhan’s Bisleri and Pepsi’s Aquafina. The product not only faced intense
competition but also was difficult to differentiate. Coke positioned Kinley as natural
water with the tag line “Bhoond Bhoond Mein Vishwas” (Trust in each drop of
water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result 12 more
bottlers were brought into CCI’s fold. This acquisition added Crush, Canada Dry and
Sport Cola to CCI’s product line. This meant CCI had three orange, clear lime and
cola drinks each in its portfolio.

 PRICE:-

Coke learnt with experience that price was a strategic weapon in an emerging market
like India. An increase in value added tax in 1996 had taken the price of the 300ml
bottle beyond the reach of many Indian customers. In 2000, CCI conducted a yearlong
experiment in coastal Andhra Pradesh by introducing a 200ml bottle at Rs 7. The
volumes went up by 30% demonstrating the importance of consumer affordability. So
the 200ml pack priced at Rs 5 was rolled out countrywide in January 2003. The
advertising Campaign highlighted the affordability and Indian image.

To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in selected
places in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3 per cup in
testing marketing exercise conducted in mid – 2002. In 2002 Kinley with 35% market
share had become the leader in the retail PDW segment and was contributing 20% of
CCI’s revenues.

 PLACE:-

Coke pushed down responsibilities from corporate headquarters to the local business
units. The aim was to effectively align CCI's corporate resources, support systems and
culture to leverage the local capabilities. CCI's operations had been divided into
North, Central and Southern regions. Each region had a president at the top, with
divisions comprising marketing, finance, human resources and bottling operations.
The heads of the divisions reported to the CEO. Bottling operations were divided into
four companies directed by the bottling head from headquarters. Under the new plan,
CCI shifted to a six region profit center set up where product customization and
packaging, marketing and brand building were taken up locally. A Regional General
Manager (RGM) headed each region with the regional functional heads reporting to
him. All the RGMs reported to VP (Operations, who in turn reported to CEO. The
four bottling operations, with 37 bottling plants, were merged into Hindustan Coca-
Cola Beverages (HCCB). Each of the six regions had on an average six bottling
plants. Each plant was headed by an Area General Manager (AGM) and held profit
center responsibility for a business territory. He reported to the RGM as well as the
head of bottling at the head quarters.

 PROMOTION:-

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The
marketing campaign positioned Coca-Cola as an international brand and did not
emphasize local association. Coke, as a deliberate strategy, decided not to spend
heavily on promoting Thums Up. Indeed the marketing spend on Thums Up between
1993 and 1996 was almost negligible. The overall marketing effort was also not
focused as CCI changed the head of marketing three times during the period. Thumps
Up remained neglected. Inadequate marketing support for other Parle brands also led
to their declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture.
They argued that CCI's lack of interest in promoting Thumps Up was resulting in
falling sales and asked CCI to take corrective action.

Coke is primarily targeted at young individuals over the age of twenty-five. This can
be seen by Coca-Colas advertising campaigns, which are aimed towards the young, by
featuring well known personalities popular to this age group. During 90'ies Coke's
promotion efforts did not seem to be effective. They were focused on mega events
like the 1996 Cricket World Cup held in India. CCI's World Cup Cricket campaign
was overshadowed by Pepsi's "Nothing official about it" campaign. Major analysts
were surprised that Thumps Up was totally out of the picture during such a mega
event. In 1998 localization of marketing efforts, CCI signed up celebrities like Aamir
Khan, Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke also began efforts
to rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was declared
the fastest growing market within the Coca-Cola system. But things were far from
normal. Attempts at building growth through discounts and PET take home segment
were not very successful because of lack of coordination between the launches and
marketing back-up.

To maintain good relationships with bottlers and avoid defections to the other camp,
dealers had been pampered by offering expensive overseas trips. In 2000, Coke wrote
off investments in India, amounting to $400 Mn. The revised value of CCI's assets
after the charge was $300 mn.

CCI spent $3.5 mn to beef up advertising and distribution for Thumps Up. By 2002, it
had become India's No.2 cola drink after Pepsi. Maaza, the mango drink, was
repositioned as a juice brand and saw a growth of almost 30% in 2001. Since India
was a large country of different tastes and cultures, CCI customized its marketing
strategy for different regions. It promoted the Coke brand in Delhi, Thumps Up in
Mumbai and Andhra Pradesh, and Fanta in Tamil Nadu. Coke had plans to launch
Rimzim, a spicy soda drink in North Maharashtra.

PESTEL ANALYSIS OF COCA-COLA INDIA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.

Political Factors:

 Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather
than revealing its formula to the government. They re-entered the country in 1993.
However, the primary barrier for Coca-Cola’s entry into the Indian market was its
political environment. Despite the liberalization of the Indian economy in 1991 and
introduction of the New Industrial Policy to eliminate barriers such as bureaucracy
and regulation, there was still a lot of protectionism. India’s past promotion of
“Indigenous availability” or “Swadeshi movement” depicted its affinity for local
products. Due to India’s suspicion of foreign business entering Indian markets, Coca
Cola received alien status its re-entry. This and some of the policies imposed on
foreign enterprises proved as a hindrance to the growth of the company in the country.
To make things worse, the policies were neither clear nor unchanging.

For example, foreign businesses were not allowed to market their products under the
same name if selling within the Indian market. Thus, Coca Cola had to be changed to
Coca Cola India (and Pepsi had to be renamed to Lehar Pepsi). However, the most
controversial, and by far, the most damaging was when Coca-Cola was forced to sign
an agreement to sell 49% of its equity in order to buy out Indian bottlers. Due to the
lack of consistency in the legal aspects, more importance was being given to lobbying
the politicians.
  Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August
5th 2003, The Centre for Science and Environment (CSE), an activist group in India
focused on environmental sustainability issues (specifically the effects of
industrialization and economic growth) issued a press release stating: "12 major cold
drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues".
According to tests conducted by the Pollution Monitoring Laboratory (PML) of the
CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands
from across the city were found to contain pesticide residues surpassing global
standards by 30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1
in only two weeks on the heels of a 75% five-year growth trajectory. Many leading
clubs, retailers, restaurants, and college campuses across the country had stopped
selling Coca-Cola. This threatened the newly achieved leadership attained over Pepsi
due to a successful marketing campaign.

But this was not the end of Coca Cola’s troubles. There was widespread discontent
around many of their plants. For example, in Plachimada, Kerala, the communities in
and around the Coca Cola plant blamed the factory for their water problems. Due to
this, the local Panchayat decided not to renew the license issued to Coca Cola to
“protect public interest". The company has also been accused of illegally occupying a
portion of the village property resources in Mehdiganj, near Varanasi. However, there
are certain positives as well, with a 22 percent increase in its unit case volume last
quarter.
Economic Analysis:

The Indian economy sustained the global economic slowdown in the previous year
and has shown a tremendous economic growth. It showed 8.6% of growth in the last
quarter of 2009-10 as compared to 5.8% same time in the previous year. It has
emerged as an attractive economy to invest in as many opportunities has been
recognized.

 Economic growth
India is ranked second in economic growth, just behind China. Analysts have said that
India will be the third biggest economy of the world in the coming year behind China
and USA. With economic growth many opportunities have been seen, which have
attracted many foreign investor to the company.

Coca cola India returned to the country in 1993, despite few problems in the start they
have emerged as the king of soft drink industry in India. The strong economic growth
of India has resulted in coca cola to invest heavily in sales and distributive channels. It
has introduced two new products, Nimbu Fresh and an energy drink ‘Burn’.

Coca cola registered 22% growth in their unit case volume in the second quarter
(April-June). It is the 16th consecutive quarter of such growth out of which 13 are
double digit. Coca cola India’s growth is in contrast to its overall performance, the
beverage king reported a growth of just 5% (worldwide) in the same quarter.

 Inflationary effects

Inflation is one of the main problems that Indian economy has been facing for a year
now. Rising prices in the food and other products doesn’t only effect the consumers it
also has an adverse effect on a company. The inflation rate for the year 2009 was
recorded to be 11.49%. As prices have gone up in India for various products,
especially oil, there has been uncertainty in decision making of almost every
company. Coca cola India has also been affected by the same; it has been forced to
think about their input costs, as they have been rising due to inflation. Their
expenditure has been rising, with more costs in salaries, distribution channels and
other operating costs. Beverage industry being price competitive market, they have
not revised their product prices.

Exchange rate

The exchange rate of rupee to US Dollar has been stable but in the previous months
the rate has had a tumultuous period. Exchange rate determines at what price will the
company export its products and import whatever is required by it. The previous year,
the rate of rupee to USD touched 44, on an average it has been around 47, so the
exports earned less and the imports cost more. Therefore, coca cola India had to bear
some low profitable times. However, in the present scenario rates have reached a
stable level and exports are on an increasing trend.

Social Analysis:
Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition from
Leher Pepsi which had the advantage of entering the country 7 years earlier. Initially,
it struggled to find acceptance as there were already other brands such as Parle’s
Thums Up which existed in the market. Coca-Cola had earlier focussed more on the
American way of life in their advertising campaigns, which the Indian consumers
could not identify with. Also, they did not focus on competition from other
alternatives such as lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives to
Coca-Cola. However, things were brought under control when Thums Up was bought
over by Coca Cola, and more attention was paid by the company on their marketing
mix.
With the lowering of their prices by almost 15-20%, introduction of newer products
which appealed to the Indian tastes, more investment in market research and
focussing on the target group of 18-24 year olds, they were able to increase their
market share and build brand loyalty.

Coca Cola today, has made significant investments to build its business in India. It has
also generated employment for almost 1,25,000 people in related industry through its
procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy,
strengthened middle class and low per capita consumption. With the increase in health
consciousness among the urban consumers, the company has introduced newer
products such as Diet Coke, which contain lesser calories than ordinary Coca Cola.
This is also responsible for the company shifting focus from carbonated drinks to
Fruit Drinks / Juices and bottled water.
The rural market had also been identified by Coca-Cola India as an attractive target,
with almost 70% of the country’s population. The company has recorded significant
growth in recent years

Coca Cola India has also taken many initiatives as a responsible corporate citizen, by
tying up with many NGOs such as BAIF (or Bharatiya Agro Industries Foundation),
SOS Children’s Villages and Save the Children. It has also taken initiatives to
promote education in rural areas.
Technological Analysis:
Coca-Cola has started operations of its R&D facility in India, with the view of
localizing its product portfolio. The major focus would be on non carbonated drinks
and flavours. The company’s R&D team has already rolled out drinks such as Maaza
aam panna and also a Maaza mango milk drink, and is exploring options to enter new
categories in India such as juices in localised flavours, energy drinks, sports drinks
and flavoured water. These initiatives are being taken by the company to further
expand their product portfolio.
With the increasing importance of 360 degree media tools and overall ad spend on
social media sets likely to grow by almost 44%, Coca-Cola has increased ad spend on
the internet. Case in point is the recent 2009 Sprite campaign, which was first
launched on the internet.

Environmental Analysis:

Coca Cola has earned a title of environment friendly company and Coca Cola India
too has followed in the footsteps. Coca Cola India’s Corporate Social Responsibility
(CSR), is an initiative that prioritizes many social and environmental issues; one of
them being ‘water conservation’. They support many community based rainwater
harvesting projects and help lending conservation education.

The company has made sure that the following ideas are considered during their
operations:

1. Environmental due diligence before acquiring land

2. Environmental impact assessment before commencing project

3. Ground water and environment survey before selecting the site

 4. Ban on purchasing CFC emitting refrigerating equipment

5. Waste water treatment facilities

6. Compliance with all regulatory environmental requirements

7. Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment with
consistent profits and success. They seek to provide leadership in three different areas,
these are as follows:

1. Water efficiency and water quality

2. Energy efficiency

3. Eliminating or minimizing solid waste.

Though being an environmental friendly company, Coca Cola India had to face its
share of controversies. On 4th February, 2003, Centre of Science and Environment in
India, released a report based on experiment done by Pollution Monitoring
Laboratory. In the experiment, they tested 17 packaged drinking water brands and
found that, Coca Cola’s Kinley has 15 times more pesticide residual levels than the
stipulated norms, Bisleri had 59 times and Aquaplus had 109 times.

The main law governing the food safety is the 1954 Prevention of food alteration act,
which stated that pesticides should not be present in any food item but did not have
law against pesticides being present in soft drinks. However, the Food Processing
Order 1955 stated that the main ingredient used in soft drinks must be ‘potable water’
but the Bureau of Indian Standards had no prescribed standards for pesticides in
water.

But later it was found that BIS had stated that pesticides should not be present or it
should not exceed 0.001 part per million. Further, the health ministry of India
admitted that ‘there were lapses in PFA regarding carbonated drinks’.
 Fig 2.2 GRAPH OF PESTICIDES IN SOFT DRINKS IN INDIA

Legal Analysis:

As the Indian consumer is getting more educated, the government is also paying
special attention to consumer laws. In the past, there were not so many laws
protecting the benefits to the consumer but now every business has to go by the law
and fix their operations, strategies so as to satisfy their consumers, and employees.
Keeping in mind the consumer laws, employment laws, antitrust law, discrimination
laws etc. a business should plan out everything.

 Consumer Laws

In the present scenario, consumer is the king, if a product is defective, not meeting the
stated standards a consumer can complain against the manufacturer. Complaining and
getting the verdict the court has made very fast and efficient as government of India
has installed new consumers courts. Their main job is to see that the consumer
benefits are being met or not. When producing their beverages, Coca Cola India has to
make sure that they have written price, manufacturing date, expiry date, batch no,
nutritional facts are written on the packed product.
  Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have
stipulated norms on employing people from the country and getting expatriates in the
company as well. India has strict laws against employing child labour. Being a male
dominated society, the ministry has made sure that female employees are treated with
respect and given equal importance at the work place. Every field of work has got its
own wage, these are to meet the norms and laws set by the labour ministry. When
employing anyone, coca cola India cannot discriminate on social, regional or any
racists’ basis. If it is found that the company has been violating the law, it has to face
strict action and fines.

 Health and safety laws

As coca cola produces a product that is consumed by the consumer as a food item,
there are laws that the company must abide by when producing it. Ministry of Food
Processing Industries makes and oversees the laws and norms for the food processing
industries.

The Indian Parliament has recently passed the Food Safety and Standards Act, 2006
that overrides all other food related laws.

It will specifically repeal eight laws:

 The Prevention of Food Adulteration Act, 1954.

 The Fruit Products Order, 1955.
 The Meat Food Products Order, 1973.
 The Vegetable Oil Products (Control) Order, 1947.
 The Edible Oils Packaging (Regulation) Order, 1998.
 The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order,
1967.
 The Milk and Milk Products Order, 1992.
 Essential Commodities Act, 1955 relating to food.
From now on, the act establishes a regulatory body, the Food Safety and Standards
Authority of India. Anything that coca cola makes, have to make accordingly to the
laws. They have to check the weight, volume and ingredients of the product. The
export or the import of the products by the company has to meet the quality standards
stipulated by the law.

 Anti-trust law
The Competition Commission of India was made under the Indian Competition Act
2002, Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. This
committee looks after all the issues regarding unethical means of doing business,
competition issues and any dispute between two different business entities. CLG
competition and anti trust practices are as follows:

 Representing clients before the MRTP Commission in ‘monopolistic and

restrictive trade practices’ and ‘unfair trade practices’ matters.
 Legal Advice and sophisticated insight into the international best practices on
competition law.
 Consultancy services on specific issues - supply and distribution, pricing and
marketing, ‘promotional materials’, mergers, acquisitions, amalgamation,
licensing, joint operation and research, joint buying, ‘dominant-firm’ status
etc.
 Competition Audit and Due Diligence for developing appropriate guidelines
for employees, distributors, agents, franchisees etc.
 Legal Due Diligence on anti-competition, unfair and restrictive   market
practices.
 Drafting claims, counter-claims, replies, rejoinders, representations etc. on
Competition Law and related legal issues.
 Strategic policing on anti-competition market practices and trends.
 Policy due diligence for mergers, acquisitions, joint ventures with appropriate
anti-trust safeguard measures and policy.  

All these laws help Coca Cola India to maintain its own brand and values. Any other
business trying to copy the brand of coca cola will face the strict action against itself.
These laws help every business to compete in a fair environment. As it is known that
the coca cola and Pepsi are the fiercest rivals in the beverage industry, the CCI makes
sure that either of them does not indulge in unfair means to make profits and hurt each
other’s business.

SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES WEAKNESSES
Health Care Issues.
Distribution Network.
Small Scale Sector
Strong Brand Image. Reservations.
Low Cost of Operation.
SWOT
OPPORTUNITIES ANALYSIS
THREATS
Large Domestic Markets. Imports.
Export Potential. Tax & Regulatory Sector.
High Income among People. Slowdown in Rural Demand.

Fig 2.3 SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES:

 DISTRIBUTION NETWORK

The Company has a strong and reliable distribution network. The network is formed
on the basis of the time of consumption and the amount of sale yielded by a particular
customer in one transaction. It has a distribution network consisting of a number of
efficient salesmen, 700,000 retail outlets and 8000 distributors. The distribution fleet
includes different modes of distribution, from 10 tonne to open bay three wheelers
that can navigate the narrow alleyways of Indian cities – constantly keep Coca-Cola
brands available in every nook and corner of the Country’s remotest areas.

 STRONG BRAND IMAGE

Coke has its history of about more than a century and this prolonged sustenance has
definitely added to the brand image in the minds of the consumers and to its wallet.
The products produced and marketed by Coca-Cola India have a strong brand image.

Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up to
the brand name of Coca-Cola Company as a whole. Coca Cola India for the first time
has come out with corporate campaign in India targeting its stakeholders. The
multimedia campaign “Little Drops of Joy " is aimed at raising the corporate brand
image of the company which took a heavy beating with a number of controversies it
faced in different domains.

The new campaign is a part of a complete restructuring exercise in the Indian arm of
this global change. Coca Cola recently announced its new corporate strategy called
the “5 Pillar" strategy. The company has identified the 5 pillars as

 People.
 Planet.
 Portfolio.
 Partners.
 Performance.

 LOW COST OF OPERATIONS

In light of the company’s Affordability Strategy, Coca-Cola went about bringing a

cost-focus culture in the company. This included procurement Efficiencies – through
focus on key input materials, trade discipline and control and proactive tax
management through tax incentives, excise duty reduction and creating marketing
companies. These measures have reduced the costs of operations and increased profit
margins.

WEAKNESSES:

 HEALTH CARE ISSUES

In India, there exists a major controversy concerning pesticides and other harmful
chemicals in bottled products including Coca-Cola. In 2003, the Centre for Science
and Environment (CSE), a non- governmental organization in New Delhi, said aerated
waters produced by soft drinks manufacturers in India, including multinational giants
PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and
chlorpyrifos - pesticides that can contribute to cancer and a breakdown of the immune
system.

 SMALL SCALE SECTOR RESERVATIONS

The Company’s operations are carried out on a small scale and due to Government
restrictions and ‘red-tapism’, the Company finds it very difficult to invest in
technological advancements and achieve economies of scale.

OPPORTUNITIES:

 LARGE DOMESTIC MARKETS

The domestic market for the products of the Company is very high as compared to
any other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the
soft drinks market; this includes a 42 per cent share of the cola market.

Other products account for 16 per cent market share, chiefly led by Limca. The
company appointed 50,000 new outlets in the first two months of this year, as part of
its plans to cover one lakh outlets for the coming summer season and this also covered
3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage
market.

 EXPORT POTENTIAL

The Company can come up with new products which are not manufactured abroad,
like Maaza etc and export them to foreign nations. It can come up with strategies to
eliminate apprehension from the minds of the people towards the Coke products
produced in India so that there will be a considerable amount of exports and it is yet
another opportunity to broaden future prospects and cater to the global markets rather
than just domestic market.

 HIGHER INCOME AMONG PEOPLE

Development of India as a whole has lead to an increase in the per capita income
thereby causing an increase in disposable income. Unlike olden times, people now
have the power of buying goods of their choice without having to worry much about
the flow of their income. Coca-Cola Company can take advantage of such a situation
and enhance their sales.

THREATS:

 IMPORTS
As India is developing at a fast pace, the per capita income has increased over the
years and a majority of the people are educated, the export levels have gone high.
People understand trade to a large extent and the demand for foreign goods has
increased over the years.
If consumers shift onto imported beverages rather than have beverages manufactured
within the country, it could pose a threat to the Indian beverage industry as a whole in
turn affecting the sales of the Company.

 TAX & REGULATORY SECTOR

The tax system in India is accompanied by a variety of regulations at each stage on
the consequence from production to consumption. When a license is issued, the
production capacity is mentioned on the license and every time the production
capacity needs to be increased, the license poses a problem. Renewing or updating a
license every now and then is difficult. Therefore, this can limit the growth of the
Company and pose problems.

 SLOWDOWN IN RURAL DEMAND

The rural market may be alluring but it is not without its problems: Low per capita
disposable incomes that is half the urban disposable income; large number of daily
wage earners, acute dependence on the vagaries of the monsoon; seasonal
consumption linked to harvests and festivals and special occasions; poor roads; power
problems; and inaccessibility to conventional advertising media. All these problems
might lead to a slowdown in the demand for the company’s products.
 OBJECTIVES OF THE STUDY

 The main objective of the project is to analyze and study in efficient way the
current position of Coca- Cola Company.

 To perform PESTLE and SWOT analysis of Coca-cola globally as well as

locally. This would help us identify areas of potential growth.
  The study was aimed to perform Market Analysis of Coca-Cola Company &
find out different factors effecting the growth of Coca-Cola.

 Another objective of the study was to perform Competitive analysis between

Coca-Cola and its competitors.

 To understand the reasons behind the purchase of Coca-Cola products.

RESEARCH

METHODOLOGY

SCOPE OF THE STUDY:-

This study basically tries to discover the current position of Coca-cola in the
market. It also tries to discover the preferences of the customers when posed with
a choice between Coca-Cola and Pepsi. It is primarily directed to the general
public but was done only in New Delhi, Noida and Greater Noida

RESEARCH DESIGN

A research design is the specification of methods and procedures for acquiring the
needed information. It is overall operational pattern or framework of the project that
stipulates what information is to be collected from which source by what procedure.

There are three types of objectives in a marketing research project:-

 Exploratory Research.
 Descriptive Research.
 Casual Research.
1. Exploratory Research:-

The objective of exploratory research is to gather preliminary information that

will help define problems and suggest hypothesis.
 2. Descriptive Research:-

The objective of descriptive research is to describe things, such as the market

potential for a product or the demographics and attitudes of consumers who buy
the product.

3. Casual Research:-

The objective of casual research is to test hypothesis about casual and effect
relationships.

Based on the above definitions it can be established that this study is a Descriptive
Research as the attitudes of the customers who buy the products have been stated.
Through this study we are trying to analyze the various factors that may be
responsible for the preference of Coca-Cola products.

SOURCES OF DATA

The data has been collected from both primary as well as secondary sources.

SECONDARY DATA:-

It is defined as the data collected earlier for a purpose other than one currently being
pursued.

As a researcher I have scanned lot of sources to get an access to secondary data which
have formed a reference base to compare the research findings. Secondary data in this
study has provided an insight and forms an outline for the core objectives established.

The various sources of secondary data used for this study are:-

 News papers.
 Magazines.
  Text books.
 Marketing reports of the company.
 Internet.

PRIMARY DATA:-

The primary data has been collected simultaneously along with secondary data
for meeting the established objectives to provide the solution for the problem
identified in this study.

The methods that have been used to collect the primary data are:-

 Questionnaire.
 Personal Interview.

RESEARCH MEASURING TOOLS & TECHNIQUES

The primary tool for the data collection used in this study is the respondent’s response
to the questionnaire given to them. The various research measuring tools used are:-

 Questionnaire.
 Personal interview.
 Tables.
 Percentages.
 Pie-charts.
 Bar-charts.
 Column charts.

SAMPLING DESIGN

An integral component of a research design is the sampling plan. Especially it

addresses three questions: Whom to survey (sample Unit), how many to survey
(Sample Size) and how to select them (sampling Procedure). Making the census study
of the entire universe will be impossible on the account of limitations of time and
money. Hence sampling becomes inevitable. A sample is only his portion of
population. Properly done, sampling produces representative data of the entire
population.

SAMPLE SIZE:-

i. Through questionnaire – 150 respondents.

ii. Through personal interview – 27 respondents.

SAMPLING TOOL:-

Questionnaire was used as a main tool for the collection of data, mainly because it
gives the chance for timely feedback from respondents. Moreover respondents feel
free to disclose all necessary detail while filling up a questionnaire. Respondents
seeking any clarification can easily be sorted out through tool.

Sampling Tools Respondents Number

Questionnaire Customers 150
Personal Interview Customers 27
Total 177
Table – 1.7

FIELD WORK:-

The study was conducted in New Delhi, Noida and Greater Noida.

 The questionnaires were given to the respondents to fill in order to get their
feedback.
 Questions were read out to the respondents and the answers were noted.

LIMITATIONS OF THE STUDY:-

The main purpose of this study is get idea about the preference of the customers
towards various Coca-Cola products. But there are certain factors which affects this
study they are as follow:
  Since the sampling procedure was judgmental, the sample selected may not be
true representative of the population.

 Economic and market conditions are very unpredictable (Present and future).

 The project duration is limited to 4 weeks so it limits the area of study.

 The study was confined to New Delhi, Noida and Greater Noida due to which
the result cannot be applied universally.

INTRODUCTON

Let reason go before every enterprise,

And counsel before every action

Research is a human activity based on intellectual investigation and is aimed at

discovering, interpreting, and revising human knowledge on different aspects of the
world.

MARKETING RESEARCH:-

Marketing research is the function that links the consumer, customer and public to the
marketer through information used to identify and define marketing opportunities and
problems; generate, refine, and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process. Marketing
research specifies the information required to address these issues, designs the
methods for collecting information, manages and implements the data collection
process, analyzes and communicates the findings and their implications.

-American Marketing Association

Marketing research is about researching the whole company’s marketing process.

 -Palmer (2000)

INTRODUCTION TO COCA-COLA

Coca-Cola, the product that has given the world its best-known taste was born in
Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading
manufacturer, marketer and distributor of non-alcoholic beverage concentrates and
syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates
and syrups to bottling and canning operators, distributors, fountain retailers and
fountain wholesalers. The Company’s beverage products comprises of bottled and
canned soft drinks as well as concentrates, syrups and not-ready-to-drink powder
products. In addition to this, it also produces and markets sports drinks, tea and
coffee. The Coca- Cola Company began building its global network in the 1920s.
Now operating in more than 200 countries and producing nearly 400 brands, the
Coca-Cola system has successfully applied a simple formula on a global scale:
“Provide a moment of refreshment for a small amount of money- a billion times a
day.”

The Coca-Cola Company and its network of bottlers comprise the most sophisticated
and pervasive production and distribution system in the world. More than anything,
that system is dedicated to people working long and hard to sell the products
manufactured by the Company. This unique worldwide system has made The Coca-
Cola Company the world’s premier soft-drink enterprise. From Boston to Beijing,
from Montreal to Moscow, Coca-Cola, more than any other consumer product, has
brought pleasure to thirsty consumers around the globe. For more than 115 years,
Coca-Cola has created a special moment of pleasure for hundreds of millions of
people every day.
The Company aims at increasing shareowner value over time. It accomplishes this by
working with its business partners to deliver satisfaction and value to consumers
through a worldwide system of superior brands and services, thus increasing brand
equity on a global basis. They aim at managing their business well with people who
are strongly committed to the Company values and culture and providing an
appropriately controlled environment, to meet business goals and objectives. The
associates of this Company jointly take responsibility to ensure compliance with the
framework of policies and protect the Company’s assets and resources whilst limiting
business risks.
 INDUSTRY PROFILE

A BRIEF INSIGHT - THE FMCG INDUSTRY IN INDIA

Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods
(CPG) are products that have a quick turnover and relatively low cost. Consumers
generally put less thought into the purchase of FMCG than they do for other products.

The Indian FMCG industry witnessed significant changes through the 1990s. Many
players had been facing severe problems on account of increased competition from
small and regional players and from slow growth across its various product
categories. As a result, most of the companies were forced to revamp their product,
marketing, distribution and customer service strategies to strengthen their position in
the market.
By the turn of the 20th century, the face of the Indian FMCG industry had changed
significantly. With the liberalization and growth of the Indian economy, the Indian
customer witnessed an increasing exposure to new domestic and foreign products
through different media, such as television and the Internet. Apart from this, social
changes such as increase in the number of nuclear families and the growing number of
working couples resulting in increased spending power also contributed to the
increase in the Indian consumers' personal consumption. The realization of the
customer's growing awareness and the need to meet changing requirements and
preferences on account of changing lifestyles required the FMCG

producing companies to formulate customer-centric strategies. These changes had a

positive impact, leading to the rapid growth in the FMCG industry. Increased
availability of retail space, rapid urbanization, and qualified manpower also boosted
the growth of the organized retailing sector.

HLL led the way in revolutionizing the product, market, distribution and service
formats of the FMCG industry by focusing on rural markets, direct distribution,
creating new product, distribution and service formats. The FMCG sector also
received a boost by government led initiatives in the 2003 budget such as the setting
up of excise free zones in various parts of the country that witnessed firms moving
away from outsourcing to manufacturing by investing in the zones.
Though the absolute profit made on FMCG products is relatively small, they
generally sell in large numbers and so the cumulative profit on such products can be
large. Unlike some industries, such as automobiles, computers, and airlines, FMCG
does not suffer from mass layoffs every time the economy starts to dip. A person may
put off buying a car but he will not put off having his dinner.

Unlike other economy sectors, FMCG share float in a steady manner irrespective of
global market dip, because they generally satisfy rather fundamental, as opposed to
luxurious needs. The FMCG sector, which is growing at the rate of 9% is the fourth
largest sector in the Indian Economy and is worth Rs.93000 cr. The main contributor,
making up 32% of the sector, is the South Indian region. It is predicted that in the year
2010, the FMCG sector will be worth Rs.143000 cr. The sector being one of the
biggest sectors of the Indian Economy provides up to 4 million jobs. (Source:
HCCBPL, Monthly Circular)

A BRIEF INSIGHT - BEVERAGE INDUSTRY IN INDIA

In India, beverages form an important part of the lives of people. It is an industry, in
which the players constantly innovate, in order to come up with better products to
gain more consumers and satisfy the existing consumers.

BEVERAGES

NON-
ALCOHOLIC
ALCOHOLIC

NON-
CARBONATED
CARBONATED

COLA NON-COLA NON-COLA

The beverage industry is vast and there various ways of segmenting it, so as to cater
the right product to the right person. The different ways of segmenting it are as
follows:
  Alcoholic, non-alcoholic and sports beverages.
 Natural and Synthetic beverages.
 In-home consumption and out of home on premises consumption.
 Age wise segmentation i.e. beverages for kids, for adults and for senior
citizens.
 Segmentation based on the amount of consumption i.e. high levels of
consumption and low levels of consumption.

If the behavioural patterns of consumers in India are closely noticed, it could be

observed that consumers perceive beverages in two different ways i.e. beverages are
a luxury and that beverages have to be consumed occasionally. These two
perceptions are the biggest challenges faced by the beverage industry. In order to
leverage the beverage industry, it is important to address this issue so as to
encourage regular consumption as well as and to make the industry more affordable.

Four strong strategic elements to increase consumption of the products of the

beverage industry in India are:

 The quality and the consistency of beverages needs to be enhanced so that

consumers are satisfied and they enjoy consuming beverages.
 The credibility and trust needs to be built so that there is a very strong and safe
feeling that the consumers have while consuming the beverages.
 Consumer education is a must to bring out benefits of beverage consumption
whether in terms of health, taste, relaxation, stimulation, refreshment, well-
being or prestige relevant to the category.
 Communication should be relevant and trendy so that consumers are able to
find an appeal to go out, purchase and consume.
 The beverage market has still to achieve greater penetration and also a wider
spread of distribution. It is important to look at the entire beverage market,
as a big opportunity, for brand and sales growth in turn to add up to the
overall growth of the food and beverage industry in the economy.
 COMPANY PROFILE

MISSION:

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

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference.

VISION:
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 achieving
sustainable, quality growth.
  People: Be a great place to work where people are inspired to be the best they
can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together we
create mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build and
support sustainable communities.

 Profit: Maximize long-term return to shareowners while being mindful of our

overall responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.
WINNING CULTURE:
Our Winning Culture defines the attitudes and behaviours that will be required of us
to make our 2020 Vision a reality.

LIVE OUR VALUES:

Our values serve as a compass for our actions and describe how we behave in the
world.
 Leadership: The courage to shape a better future.
 Collaboration: Leverage collective genius.
 Integrity: Be real.
 Accountability: If it is to be, it's up to me.
 Passion: Committed in heart and mind.
 Diversity: As inclusive as our brands.
 Quality: What we do, we do well.
FOCUS ON THE MARKET:
 Focus on needs of our consumers, customers and franchise partners.
 Get out into the market and listen, observe and learn.
 Possess a world view.
 Focus on execution in the marketplace every day.
 Be insatiably curious.
WORK SMART:
 Act with urgency.
 Remain responsive to change.
  Have the courage to change course when needed.
 Remain constructively discontent.
 Work efficiently.

ACT LIKE OWNERS:

 Be accountable for our actions and inactions.
 Steward system assets and focus on building value.
 Reward our people for taking risks and finding better ways to solve problems.
 Learn from our outcomes -- what worked and what didn’t.
BE THE BRAND:

Inspire creativity, passion, optimism and fun.

HISTORY OF COCA-COLA

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical
Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca
wine called Pemberton's French Wine Coca. He may have been inspired by the
formidable success of Vin Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton
responded by developing Coca-Cola, essentially a non-alcoholic version of French
Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8,
1886. It was initially sold as a patent medicine for five cents a glass at soda fountains,
which were popular in the United States at the time due to the belief that carbonated
water was good for the health.[9] Pemberton claimed Coca-Cola cured many diseases,
including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.
Pemberton ran the first advertisement for the beverage on May 29 of the same year in
the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on

the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, while suffering
from an ongoing addiction to morphine, Pemberton sold the rights a second time to
four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H.
Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling
his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the
other two manufacturers could continue to use the formula. So, in the summer of
1888, Candler sold his beverage under the names Yum Yum and Koke. After both
failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888,
in order to force his two competitors out of the business. Candler purchased exclusive
rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker.
However, in 1914, Dozier came forward to claim her signature on the bill of sale had
been forged, and subsequent analysis has indicated John Pemberton's signature was
most likely a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company (the

current corporation), and in 1910 Candler had the earliest records of the company
burned, further obscuring its legal origins. By the time of its 50th anniversary, the
drink had reached the status of a national icon in the USA. In 1935, it was certified
kosher by Rabbi Tobias Geffen, after the company made minor changes in the
sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor
wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans
of Coke first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg,
Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A.
Biedenharn. The original bottles were Biedenharn bottles, very different from the
much later hobble-skirt design that is now so familiar. Asa Candler was tentative
about bottling the drink, but two entrepreneurs from Chattanooga, Tennessee,
Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and were so
persuasive that Candler signed a contract giving them control of the procedure for
only one dollar. Candler never collected his dollar, but in 1899 Chattanooga became
the site of the first Coca-Cola bottling company. The loosely termed contract proved
to be problematic for the company for decades to come. Legal matters were not
helped by the decision of the bottlers to subcontract to other companies, effectively
becoming parent bottlers. Coke concentrate, or Coke syrup, was and is sold separately
at pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly
upset stomach.

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula
of the drink with "New Coke". Follow-up taste tests revealed that most consumers
preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management
was unprepared for the public's nostalgia for the old drink, leading to a backlash. The
company gave in to protests and returned to a variation of the old formula, under the
name Coca-Cola Classic on July 10, 1985.

On February 7, 2005, the Coca-Cola Company announced that in the second quarter
of 2005 they planned to launch a Diet Coke product sweetened with the artificial
sweetener sucralose, the same sweetener currently used in Pepsi One. On March 21,
2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a
blend of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a
new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc,
marketed as "Diet Coke Plus”. On July 5, 2005, it was revealed that Coca-Cola would
resume operations in Iraq for the first time since the Arab League boycotted the
company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-
Cola." The word "Classic" was truncated because "New Coke" was no longer in
production, eliminating the need to differentiate between the two. The formula
remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-
ounce bottles sold in parts of the southeastern United States. The change is part of a
larger strategy to rejuvenate the product's image. In November 2009, due to a dispute
over wholesale prices of Coca-Cola products, Costco stopped restocking its shelves
with Coke and Diet Coke.

GLOBAL MARKET SHARE OF COCA-COLA

In 2009, the company generated revenues of $31 billion with $6.8 billion net income.
An increased consumer preference for healthier drinks has resulted in slowing growth
rates for sales of carbonated soft drinks (abbreviated as CSD), which constitutes 78%
of KO’s sales. KO’s profits are also vulnerable to the volatile costs for the raw
materials used to make drinks - such as the corn syrup used as a sweetener, the
aluminium used in cans, and the plastic used in bottles. Furthermore, slowing
consumer spending in Coke's large North American market compounds the challenge
of increasing costs and a weak economic environment. Finally, Coca-Cola earns
approximately 75% of revenue from international sales, exposing it to currency
fluctuations, which are particularly adverse with a stronger U.S. Dollar (USD).

Despite these challenges, Coca-Cola has remained profitable. Though the non-CSD
market is growing quickly, the traditional CSD market is still large in terms of both
revenues and volume and highly lucrative. The size and variety of KO’s offerings in
the CSD category, coupled with the unparalleled brand equity of the Coca-Cola
trademark, has allowed KO to maintain its share of this important market. KO has
also responded to consumers’ changing tastes with new, non-CSD product launches
and acquisitions such as that of Glaceau in 2007. Strong international growth has also
more than offset a weak domestic market.

On February 25, Coca-Cola Company announced its plan to buy Coca-Cola

Enterprises (CCE) for $12.3 million.[7] Since spinning of Coca-Cola Enterprises
(CCE) 24 years ago, the soft drink market has changed dramatically with consumers
buying fewer soft drinks and more non-carbonated beverages, such as Powerade and
Dasani water. Under the new deal, Coca-Cola Company will take control of the
bottler's North America operations, giving the company control over 90% of the total
North America volume. In return, Coca-Cola Enterprises will take over Coke's
bottling operations in Norway and Sweden, becoming a European-focused producer
and distributor.

In March 2010, Coca-Cola Company entered into discussions to buy the Russian juice
company, OAO Nidan Juices. The company is 75% owned by a private equity firm in
London and 25% by its Russian founders and controls 14.5% of the Russian juice
market. If successful, the purchase would add to Coca-Cola's 20.5% market share,
passing Pepsi's 30% market share. The Russian juice market is estimated to be $3.2
billion dollars, and estimates of Nidan's purchase price are between $560-$620
million.

In April 2010, Coca-Cola Company purchased a majority share of Innocent, the

British fruit smoothie maker. Last year the company bought an 18% share of the
company for more than $45 million, and recent purchases of additional shares
increased Coke's stake to 58%.

In June 2010, Coca-Cola Company agreed to pay Dr Pepper Snapple Group (DPS)
$715 million for the continued right to sell their products following the company's
acquisition of Coca-Cola Enterprises (CCE). The deal covers the next 20 years with
an option to renew for an additional 20 years.

TRENDS AND FORCES

 The Global Economic Recession Threatens Overall Demand:

In 2008 and 2009, the global economy has fallen into a recession. Not just the United
States but countries from all over the world have felt the impacts of the 2008
Financial Crisis. This may be a problem for Coke, which derives approximately 75%
of its sales from outside North America. Still, the company has positioned itself well
in international markets both organically and through acquisitions, such as that of
Chinese juice maker Huiyuan for $2.4 billion. However the company was
unsuccessful with its purchase of Huiyuan as it broke antitrust laws in China. On
March 5, 2010, Coke's CEO said that emerging markets are bouncing back quicker
than more developed markets.

 New Aversion to Soda Threatens Main Business:

74% of the Coca Cola Company's products are classified as carbonated soft drinks,
making it particularly sensitive to changes in demand for CSD. Consumer demand for
CSD has been negatively affected by concerns about health and wellness. This is true
across most of KO's markets. There has been an increase in the number of regulations
regarding CSD in the United States in response to the heightened desire for healthy
food consumption.

In 2006, many state public school systems banned the sale of soft drinks on their
campuses. The Centre for Science and Public Interest proposed that a warning label
be placed on all beverages containing more than 13g of sugar per 12-oz serving. This
proposal would affect all non-diet, full calorie drinks produced by KO. These factors
have driven a shift in consumption away from CSD to healthier alternatives, such as
tea, juices, and water.

Within the CSD segment consumers have been moving away from sugared drinks,
opting instead for diet beverages, which do not generally contain any sugar or
calories.

Though KO has been somewhat slow to respond to this shift in consumer preferences,
it has recently begun to increase its development of both diet CSD and non-CSD
beverages. KO is faced with the task of balancing the risk of new innovations with the
low growth rates of established brands, a predicament for manufactures throughout
the beverage industry.

 Integrated Bottler Strategy Increases Flexibility:

After CEO Neville Isdell was brought out of retirement in 2004 to revive the then
flagging beverage maker, one of the first areas that he targeted for improvement was
KO's frayed relations with its extensive network of bottlers. Since consolidating all
company-owned bottlers into the Bottling Investments division, Isdell has continued
to increase KO's interest in its bottlers through stake purchases or outright buyouts.
This strategy represents a weakening of the division between KO's production and
distribution operations. Isdell believes that by combining production and distribution
operations the company will have enhanced its ability to quickly respond to changing
market conditions. In KO's 2007 Q3 Analyst call, Isdell credited the outright purchase
of Coca-Cola Bottlers Philippines (CCBPI) for double-digit volume growth in that
country. Additionally, KO has signed new agreements with many of its bottlers which
allow them to distribute drinks produced by other companies. For example, Coca-
Cola Enterprises (CCE) now distributes Arizona, a ready-to-drink tea made by
Ferolito, Vultaggio & Sons, an American iced-tea company. Isdell sees these
agreements as another way of taking advantage of the rapidly growing non-CSD
market.

 Bottled Water Falling Out of Favour:

In Q3 2009, Dasani bottled water's revenues fell by double digits; this decrease is
emblematic of the bottled water industry as a whole. In August 2009, the Wall Street
Journal reported that sales of bottled water had fallen for the first time in five years.
The combination of the recession and upper class consumers' increased environmental
consciousness has lead many customers to cut back on bottled water in favour of tap
water and reusable containers.

Following this trend, at least one town in Washington state and one in Australia have
outlawed the selling of bottled water within their city limits. In 2008, bottled water
was the third most popular beverage (behind soda and milk), but compared to 2007,
Americans consumption declined for the first time, down to 8.7 billion gallons from
8.8 billion gallons. Although this is a seemingly small decrease, industry experts don't
expect bottled water to bounce back anytime soon.

 Dollar Affects International Performance:

Another trend affecting Coca-Cola is the relative strength of the U.S. Dollar (USD).
Although the company is based in the US, KO derives about 75% of its operating
income from outside United States. Because of this, the company is very sensitive to
the strength of the dollar. As foreign currencies weaken relative to the dollar, goods
sold in foreign markets are suddenly worth fewer dollars back in the US, lowering
earnings. Thus, if the dollar strengthens (as it did in the second half of 2008 and
2009), it has a negative effect on KO's earnings. Coca-Cola executives expect
currency fluctuations to adversely affect 3Q09 operating income by 10-12% and
4Q09 operating income by high single digits.

KO has broad exposure to foreign currencies and actively hedges a large portion of
these to avoid wide swings in earnings from currency fluctuations. Although this
hedging insulates from the potential downside of a strengthening dollar, it also limits
larger gains from drastic downswings in the dollar's value.

 Commodity Cost Fluctuations Affect Margins:

The Coca-Cola Company’s profitability can be affected both directly and indirectly
by the costs of various production inputs. KO itself is responsible for purchasing the
raw materials used to make its concentrates and syrups. Variations in the prices for
these goods can affect the company’s total cost of production as well as its profit
margins. Changes in the production costs of bottlers can also impact KO’s
profitability, though in a more indirect way. If the raw materials necessary for bottling
become more expensive, the bottler may be forced to drastically raise prices to
compensate.

Such a price increase would likely hurt KO, given the competitive nature of the non-
alcoholic beverage industry, and provide a possible incentive for consumers to switch
to other companies’ beverages.

Aluminium, corn, and PET resin are three examples of such production goods used by
bottlers that could have significant bearing on the Coca-Cola Company’s profit
margins. In 2007, the prices of these commodities rose drastically with general
commodities bubble and dramatically pressured margins. They receded in 2008, but
the possibility of another significant rise in Commodities represents a constant threat
to profits.
 POTER’S FIVE FORCES

 RIVALRY AMONG EXISTING FIRMS:

The greatest competition that Coca-cola faces is from the rival sellers within the
industry. Coca-Cola, Pepsi Co, and Cadbury Schweppes are among the largest
competitors in this industry, and they are all globally established which creates a great
amount of competition. Aside from these major players, smaller companies such as
Cott Corporation and National Beverage Company make up the remaining market
share. All five of these companies make a portion of their profits outside of the United
States.

Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke,
Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo (Murray, 2006c).
However, Coca-Cola has higher sales in the global market than PepsiCo, PepsiCo is
the main competitor for Coca-Cola and these two brands have been in a power
struggle for years (Murray, 2006c). Coke has been more dominant with a 53% of
market share as in 1999 compared to Pepsi with a market share of 21%.
According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S.
market share has increased to 30.8%, while the Coca-Cola Company's has decreased
to 42.7% due to Pepsi marketing schemes still the higher large gap between the
market share can be attributed to the fact that Coca-Cola took advantage of Pepsi
entering the market late and has set up its bottler's and distribution network especially
in developed markets.

"The Coca-Cola Company" is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. Bottling
plants with some exceptions are locally owned and operated by independent business
people who are native to the nations in which they are located. Coca-Cola
manufactures, distributes and markets non-alcoholic beverage concentrates and
syrups, including fountain syrups.

It supplies concentrates and beverage bases used to make the products and provides
management assistance to help it's bottler's ensure the profitable growth of their
business. This has put Pepsi at a significant disadvantage compared to US market.
Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world.
However, exceptions include India, Saudi Arabia and Pakistan.

By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left
India after a new government ordered, The Coca-Cola Company to turn over its secret
formula for Coke and dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA).
In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India
Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of
foreign brands was allowed. PepsiCo bought out its partners and ended the joint
venture in 1994. In 1993, The Coca-Cola Company returned in pursuance of India's
Liberalization policy. In 2005, The Coca-Cola Company and PepsiCo together held
95% market share of soft-drink sales in India. Coca-Cola India's market share was
52.5%.

In Russia, Pepsi initially had a larger market share than Coke but it was undercut once
the Cold War ended. In 1972, Pepsi Co Company struck a barter agreement with the
government of the Soviet Union, in which Pepsi Co was granted exportation and
Western marketing rights to Stolichnaya vodka in exchange for importation and
Soviet marketing of Pepsi-Cola.

This exchange led to Pepsi-Cola being the first foreign product sanctioned for sale in
the U.S.S.R. Pepsi, as one of the first American products in the Soviet Union, became
a symbol of that relationship and the Soviet policy.

Brand name loyalty is another competitive pressure. The Brand Keys Customer
Loyalty Leaders Survey (2004) shows the brands with the greatest customer loyalty in
all industries. Diet Pepsi ranked 17th and Diet Coke ranked 36th as having the most
loyal customers to their brands. The new competition between rival sellers is to create
new varieties of soft drinks, such as vanilla and cherry, in order to increase sales and
getting new customers.

Pepsi is however trying to counter this by competing more aggressively in the

emerging economies where the dominance of Coke is not as pronounced, with the
growth in emerging markets significantly expected to exceed the developed markets,
rivalry in international market is going to be more pronounced.

Pepsi advertisements often focused on celebrities, choosing Pepsi over Coke,

supporting Pepsi's positioning as "The Choice of a New Generation." In 1975, Pepsi
began showing people doing blind taste tests called Pepsi Challenge in which they
preferred one product over the other. Pepsi started hiring more popular spokespersons
to promote their products.

In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola
Wars, Pepsi Stuff. Consumers were invited to "Drink Pepsi, Get Stuff" and collect
Pepsi Points on billions of packages and cups. They could redeem the points for free
Pepsi lifestyle merchandise. After researching and testing the program for over two
years to ensure that it resonated with consumers, Pepsi launched Pepsi Stuff, which
was an instant success.

Tens of millions consumers participated. Pepsi outperformed Coke during the summer
of the Atlanta Olympics, held at Coke's hometown where Coke was the lead sponsor
for the Games. Due to its success, the program was expanded to include Mountain
Dew into Pepsi's international markets worldwide. The company continued to run the
program for many years, continually innovating with new features each year.

Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff
in 2005 & Coca-Cola retaliated with Coke Rewards. This cola war has now
concluded, with Pepsi Stuff ending its services and Coke Rewards still offering prizes
on their website. Both were loyalty programs that give away prizes and product to
consumers after collecting bottle caps and 12 or 24 pack box tops, then submitting
codes online for a certain number of points. However, Pepsi's online partnership with
Amazon allowed consumers to buy various products with their "Pepsi Points", such as
mp3 downloads. Both Coca-Cola and coke previously had a partnership with the
iTunes Store.

 POTENTIAL ENTRANTS:

New entrants are not a strong competitive pressure for the soft drink industry. Coca-
Cola and Pepsi Co dominate the industry with their strong brand name and great
distribution channels. In addition, the soft-drink industry is fully saturated and growth
is small. This makes it very difficult for new, unknown entrants to start competing
against the existing firms.

Another barrier to entry is the high fixed costs for warehouses, trucks, and labour,
and economies of scale. New entrants cannot compete in price without economies of
scale. These high capital requirements and market saturation make it extremely
difficult for companies to enter the soft drink industry therefore new entrants are not
a strong competitive force.

Capital requirements for producing, promoting, and establishing a new soft drink
traditionally have been viewed as extremely high. According to industry experts, this
makes the likelihood of potential entry by new players quite low, except perhaps in
much localized situations that matter little to Coke or Pepsi. Yet, while this view may
reflect conventional wisdom, some industry observers question whether a new time is
coming, with 'new age' beverages selling to well-informed and health-informed and
health-conscious consumers. This issue was beginning to grab the attention of both
Coke and Pepsi in the summer of 1992, when they both were not able to explain a
drop in their June 1992 sales.

 SUBSTITUTES:

Numerous beverages are available as substitutes for soft drinks. Citrus beverages and
fruit juices are the more popular substitutes. Availability of shelf space in retail stores
as well as advertising and promotion traditionally has had a significant effect on
beverage purchasing behaviour. Overall total liquid consumption in the United States
in 1991 included Coca-Cola's 10% share of all liquid consumption.

“For years the story in the non-alcoholic sector centred on the power struggle between
Coke and Pepsi. But as the pop fight has topped out, the industry's giants have begun
relying on new product flavours and looking to noncarbonated beverages for growth.”

Substitute products are those competitors that are not in the soft drink industry. Such
substitutes for Coca-Cola products are bottled water, sports drinks, coffee, and tea,
juices etc.
Bottled water and sports drinks are increasingly popular with the trend to be a more
health conscious consumer. There are progressively more varieties in the water and
sports drinks that appeal to different consumer's tastes, but also appear healthier than
soft drinks.

In addition, coffee and tea are competitive substitutes because they provide caffeine.
The consumers who purchase a lot of soft drinks may substitute coffee if they want to
keep the caffeine and lose the sugar and carbonation.

Blended coffees are also becoming popular with the increasing number of Starbucks,
Barista and CCD stores that offer many different flavours to appeal to all consumer
markets. It is also cheap for consumers to switch to these substitutes making the threat
of substitute products very strong (Datamonitor, 2005).

The growth rate has been recently criticized due to the market saturation of soft
drinks. Datamonitor (2005) stated, “Looking ahead, despite solid growth in
consumption, the global soft drinks market is expected to slightly decelerate,
reflecting stagnation of market prices.” The change attributed to the other growing
sectors of the non-alcoholic industry including tea & coffee is 11.8% and bottled
water is 9.3%. Sports drinks and energy drinks are also expected to increase in growth
as competitors start adopting new product lines.

Profitability in the soft drink industry will remain rather solid, but market saturation
has caused analysts to suspect a slight deceleration of growth in the industry (2005).
Because of this, soft drink leaders are establishing themselves in alternative markets
such as the snack, confections, bottled water, and sports drinks industries.

In order for soft drink companies to continue to grow and increase profits they will
need to diversify their product offerings. So in order to compete with the substitutes
industry, coca-cola has diversified from just carbonated drink industry to other
substitute and so have other brands like Pepsi, Dr pepper/Snapple.

 BARGANING POWER OF BUYERS:

Individual consumers are the ultimate buyers of soft drinks. However, Coke and
Pepsi's real 'buyers' have been local bottlers who are franchised -or are owned,
especially in the case of Coke- to bottle the companies' products and to whom each
company sells its patented syrups or concentrates. While Coke and Pepsi issue their
franchise, these bottlers are in effect the 'conduit' through which these international
cola brands get to local consumers

Through the early 1980's, Coke's domestic bottlers were typically independent family
businesses deriving from franchises issued early in the century. Pepsi had a collection
of similar franchises, plus a few large franchisees that owned many locations. Until
1980, Coke and Pepsi were somewhat restricted in owning bottling facilities, which
was viewed as a restraint of free trade. Jimmy Carter, a Coke fan, changed that by
signing legislation to allow soft-drink companies to own bottling companies or
territories, plus upholding the territorial integrity of soft-drink franchises, shortly
before he left office.

Also, the three most important channels for soft drinks are supermarkets, fountain
sales, and vending. In 1987, supermarkets accounted for about 40% of total U.S. soft
drink industry sales, fountain sales represented about 25%, and vending accounted
for approximately 13%. Other retailers represent the remaining percentage.

While both Coca-Cola and Pepsi distribute their bottled soft drinks through a
network of bottling companies, Coca-Cola uses its own network of wholesalers for
their fountain syrup distribution, and Pepsi distributes its fountain syrup through its
bottlers.

 BARGANING POWER SUPPLIERS:

The principal raw material used by the soft-drink industry in the United States is
high fructose corn syrup, a form of sugar, which is available from numerous
domestic sources. The principal raw material used by the soft-drink industry outside
the United States is sucrose. It likewise is available from numerous sources.

Another raw material increasingly used by the soft-drink industry is aspartame, a

sweetening agent used in low-calorie soft-drink products. Until January 1993,
aspartame was available from just one source -the NutraSweet Company, a
subsidiary of the Monsanto Company- in the United States due to its patent, which
expired at the end of 1992.

Coke managers have long held 'power' over sugar suppliers. They view the recently
expired aspartame patents as only enhancing their power relative to suppliers.

PESTEL ANALYSIS OF COCA- COLA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.

Coca-Cola beverage, which is the leading manufacturer and distributor of non-

alcoholic drinks also need to undergo this PESTLE analysis to know about the
external environment (especially their competitors and the opportunities available) in
order to keep pace with the fast growing economy.

Political Analysis:

Political factors are how far a government intervenes in the operations of the
company. The political factors may include tax policy, trade restrictions,
environmental policy, laws imposed on the recruiting labours, amount of permitted
goods by the government and the service provided by the government.

Globally, Coca-Cola beverages being a non-alcoholic industry falls under the FDA
(Food and Drug Administration), it is an agency in the United States Department of
Health and Human Services. Its headquarters is in USA and it has started opening
offices in foreign countries as well. The job of the FDA is to check and certify
whether the ingredients used in the manufacturing of Coca-Cola products in the
particular country is meeting to the standards or not. In Coca-Cola the company takes
all the necessary steps to analyze thoroughly before introducing any ingredients in its
products and get prior approval from the FDA. The company also has to take into
consideration of the regulation imposed by FDA on plastic bottled products.

Apart from FDA the other political factors includes tax policies and accounting
standards. The accounting standards used by the company changes from time to time
which have a significant role in the reported results.

The company also is subjected to income tax policies according to the jurisdiction of
various countries. In addition to this, the company is also subjected to import and
excise duties for distribution of the products in the countries where it does not have
the outsourcing units.

Moreover, if there is any unrest or changes in the government and any kind of protest
by the political activists may decline the demand for the products. Also the situations
like the unsure conditions prevailing in Iraq and escalation of the terrorist activities in
these areas could affect the international market of our product. It creates an inability
for the company to penetrate in the markets of such countries.

Economic Factors:

The economic factors analyze the potential areas where the firm can grow and
expand. It includes the economic growth of the country, interest rates, exchange rates,
inflation rates, wage rates and unemployment in the country.

The company first analyzes the economic condition of the country before venturing
into that country. When there is an economic growth in the country, the purchasing
power among people increases. It gives the company or the marketer a good chance to
market the product. Coca-Cola, in the past identified this correctly and rightly started
its distribution across various countries. The net operating profits for the company
outside US stands at around 72%. Along with this the company uses 63 various types
of currencies other than US Dollar. Hence there is a definite impact in the revenues
due to the fluctuating foreign currency exchange rates. A strong and weak currency
tends to affect the exporting of the products globally.

Interest rates are the rate which is imposed on the company for the money they have
borrowed from government. When there is an increase in the interest rates, it may
deter the company in further investment as the cost for borrowing is higher. Coca-
Cola uses derivative financial instruments to cope up with the fluctuating interest
rates. Inflation and wage rate go hand in hand, when there is an increase in the
inflation the employee demand for a higher wage rate to cope up with the cost of
living.

This comes as additional cost for the company which cannot be reflected in the price
of the final product as the competition and risk in this segment is higher. This is a
threat in the external environment faced by the company. From the above explanation
it is clearly seen that the economic factors involves a major impact in the behaviour of
the company during various economic situations.

Social Factors:

Social factors are mainly the culture aspects and attitude, health consciousness among
people, population growth with age distribution, emphasis on safety. The company
cannot change the social factors but the company has to adjust itself to the changing
society. The company adapts various management strategies to adapt to these social
trends.

Coca-Cola which is a B2C company, is directly related to the customer, so social

changes are the most important factors to consider. Each and every country has a
unique culture and attitude among the people. It is very important to know about the
culture before marketing in a particular country. Coca-Cola has about 3300+ products
in their stable, when entering into a country it does not introduce all the products. It
introduces minimum number of products according to the culture of the country and
the attitude of the people.

Consumers and government are becoming increasingly aware of the public health
consequences, mainly obesity which is the second social factor in the soft drinks
industry. It inspired the company to venture into the areas of Diet coke and zero
calorie soft drinks. The problem of obesity is taken seriously among the youngsters
who like to maintain a good physique. Hence coke introduced dietary products for
those youngsters who can enjoy coke with zero calories. In one of the study it is said
that “Consumer from the age groups 37 to 55 are also increasingly concerned with
nutrition”. Since many are aware, they are concerned with the longevity of their lives.
This will affect the demand of the company in the existing product and also is an
opportunity to venture into new health and energy drinks industry.

Population growth rate and the age distribution is another social factor to be
considered. It is very important because non-alcoholic markets have most of its share
from the children and youngsters. Adults used to celebrate mostly with alcohol. The
age distribution of the country becomes important for the success of the product in a
country.
Technological Factors:

Technology plays a varied role in the soft drinks industry. The manufacturing and
distribution of the products is relatively a Low-Tech business, although the creation of
a new product with the perfect blend and taste is a science (an art in itself).

Technological contributions are most important in packaging. The company rely on

their bottling partners for a significant portion of their business. Nearly 83% of the
worldwide unit case volume is manufactured and distributed by their bottling partners
in whom the company does not have controlling power. Hence it is necessary for the
company to maintain a cordial relation with their bottling partners. If the company do
not give ample support in pricing, marketing and advertising then the bottling industry
while increase their short term profits, may become detrimental to the company.

The advancement in technology in the company has led to: Introduction of new ways
for the availability of Coca-Cola, it introduced general vending machines all over the
world. In products it led to the development of new products like Cherry Coke, Diet
Coke etc. The technical advancement in the bottling industries include, introduction
of recyclable and non refillable bottles, introduction of cans which are trendy, stylish
and popular among the youngsters.

Legal Factors

The legal factors include discrimination law, customer law, antitrust law, employment
law and health and safety law. In Coca-Cola the business is subjected to various laws
and regulation in the numerous countries in which they do the business, the laws
include competition, product safety, advertising and labelling, container deposits,
environment protection, labour practices.

In the US the products of the company is subjected to various acts like Federal Food,
Drug and Cosmetic Act, the Federal Trade Commission Act, Occupation Safety and
Health Act, various environment related acts and regulations, the production,
distribution, sale and advertising of all the products are subjected to various laws and
regulations. Changes in these laws could result in increased costs and capital
expenditures, which affects the company profitability and also the production and
distribution of the products.
Various jurisdictions may adopt significant regulations in the additional product
labelling and warning of certain chemical content or perceived health consequences.
These requirements if become applicable in the future the company must be ready to
accept and have necessary changes in hand for the same.

Environment Factors

These factors include the environment such as the weather conditions and the seasons
in which people prefer to buy cool beverages. Also the company must follow the
environmental issues related to the product manufacturing, packaging and distributing
in various countries. It must adhere to the norms and market the product accordingly.
Usage of renewable plastic in the PET bottles is followed by the company strictly.

SWOT ANALYSIS OF COCA-COLA

 WEAKNESS
STRENGTHES
Negative Publicity.
World's leading brand.
Decline in cash from Operating
Large scale of operations. Activities.
Robust revenue growth in 3 Sluggish Performance in North
SWOT
segments. America.
ANALYS THREATS
OPPORTUNITIES IS
Acquisitions. Intense Competition.
Growing bottled water market. Dependence on bottling Patners.
Growing Hispanic Population Sluggish growth of Carbonated
in U.S. beverages.

STRENGTHES:

 WORLD’S LEADING BRAND

Coca-Cola has strong brand recognition across the globe. The company has a leading
brand
value and a strong brand portfolio. Business-Week and Inter-brand, a branding
consultancy,
recognize. Coca-Cola as one of the leading brands in their top 100 global brands
ranking in
2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006.
Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22
having a brand value of $12,690 million Furthermore; Coca-Cola owns a large
portfolio of product brands. The company owns four of the top five soft drink brands
in the world: Coca-Cola, Diet Coke, Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke,
Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments
in brand promotions. Consequently, Coca-cola is one of the best recognized global
brands. The
company’s strong brand value facilitates customer recall and allows Coca-Cola to
penetrate new markets and consolidate existing ones.

 LARGE SCALE OF OPERATIONS

With revenues in excess of $24 billion Coca-Cola has a large scale of operation.
Coca-Cola is the largest manufacturer, distributor and marketer of non-alcoholic
beverage concentrates and syrups in the world. Coco-Cola is selling trademarked
beverage products since the year 1886 in the US. The company currently sells its
products in more than 200 countries. Of the approximately 52 billion beverage
servings of all types consumed worldwide every day, beverages bearing trademarks
owned by or licensed to Coca-Cola account for more than 1.4 billion.

The company’s operations are supported by a strong infrastructure across the world.
Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup
manufacturing plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage

bottling and canning plants located outside the US. The company also owns bottled
water production and still beverage facilities as well as a facility that manufactures
juice concentrates. The company’s large scale of operation allows it to feed upcoming
markets with relative ease and enhances its revenue generation capacity.

 ROBUST REVENUE GROWTH IN 3 SEGMENTS

Coca-Cola’s revenues recorded a double digit growth, in three operating segments.

These three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and
Bottling investments. Revenues from Latin America grew by 20.4% during fiscal
2006, over 2005. During the same period, revenues from ‘East, South Asia, and
Pacific Rim’ grew by 10.6% while revenues from the bottling investments segment by
19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific
Rim” bottling investments, accounted for 34.8% of total revenues during fiscal 2006.
Robust revenues growth rates in these segments contributed to top-line growth for
Coca-Cola during 2006.

WEAKNESS:

 NEGATIVE PUBLICITY

The Coca-Cola Company has been involved in a number of controversies and lawsuits
related to its relationship with human rights violations and other perceived unethical
practices. There have been continuing criticisms regarding the Coca-Cola Company's
relation to the Middle East and U.S. foreign policy. The company received negative
publicity in India during September 2006.The company was accused by the Centre for
Science and Environment (CSE) of selling products containing pesticide residues.
Coca-Cola products sold in and around the Indian national capital region contained a
hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr.
Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had
concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of
the Federal Food, Drug, and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest
filed a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims
made, along with the company's flavours, of Vitamin Water. Claims say that the
33 grams of sugar are more harmful than the vitamins and other additives are helpful.

 SLUGGISH PERFORMANCE IN NORTH AMERICA

Coca-Cola’s performance in North America was far from robust. North America is
Coca-Cola’s core market generating about 30% of total revenues during fiscal 2006.
Therefore, a strong performance in North America is important for the company.
In North America the sale of unit cases did not record any growth. Unit case retail
volume in North America decreased 1% primarily due to weak sparkling beverage
trends in the second half of 2006 and decline in the warehouse-delivered water and
juice businesses. Moreover, the company also expects performance in North America
to be weak during 2007. Sluggish performance in North America could impact the
company’s future growth prospects and prevent Coca-Cola from recording a more
robust top-line growth.

 DECLINE IN CASH FROM OPERATING ACTIVITIES

The company’s cash flow from operating activities declined during fiscal 2006. Cash
flows from operating activities decreased 7% in 2006 compared to 2005. Net cash
provided by operating activities reached $5,957 million in 2006, from $6,423 million
in 2005. Coca-Cola’s cash flows from operating activities in 2006 also decreased
compared with 2005 as a result of a contribution of approximately $216 million to a
tax-qualified trust to fund retiree medical benefits.

The decrease was also the result of certain marketing accruals recorded in
2005.Decline in cash from operating activities reduces availability of funds for the
company’s investing and financing activities, which, in turn, increases the company’s
exposure to debt markets and fluctuating interest rates.

OPPORTUNITIES:

 ACQUISITIONS

During 2006, its acquisitions included Kerry Beverages, (KBL), which was
subsequently, reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired
a controlling shareholding in KBL, its bottling joint venture with the Kerry Group, in
Hong Kong.
The acquisition extended Coca-Cola’s control over manufacturing and distribution
joint ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral
water. Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling
company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006.
These acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or
greater penetration of existing markets. Stronger international operations increase the
company’s capacity to penetrate international markets and also gives it an opportunity
to diversity its revenue stream. On 25 February 2010, Coco cola confirms to acquire
the Coca cola enterprises (CCE) one the biggest bottler in North America. This
strategy of coca cola strengthens its operations internationally.

 GROWING BOTTLED WATER MARKET

Bottled water is one of the fastest-growing segments in the world’s food and beverage
market owing to increasing health concerns. The market for bottled water in the US
generated revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The

market's consumption volume is expected to rise to 38.6 billion units by the end of
2010. This represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end
of 2010. In the bottled water market, the revenue of flavoured water (water-based,
slightly sweetened refreshment drink) segment is growing by about $10 billion
annually. The company’s Dasani brand water is the third best-selling bottled water in
the US. Coca-Cola could leverage its strong position in the bottled water segment to
take advantage of growing demand for flavoured water.

 GROWING HISPANIC POPULATION IN U.S

Hispanics are growing rapidly both in number and economic power. As a result, they
have become more important to marketers than ever before. In 2006, about 11.6
million US households were estimated to be Hispanic. This translates into a Hispanic
population of about 42 million.
The US Census estimates that by 2020, the Hispanic population will reach 60 million
or almost 18% of the total US population. The economic influence of Hispanics is
growing even faster than their population. Nielsen Media Research estimates that the
buying power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003
levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the
company.

THREATS:

 INTENSE COMPETITION

Coca-Cola competes in the non-alcoholic beverages segment of the commercial

beverages industry. The company faces intense competition in various markets from
regional as well as global players. Also, the company faces competition from various
non-alcoholic sparkling beverages including juices and nectars and fruit drinks. In
many of the countries in which Coca-Cola operates, including the US, PepsiCo is one
of the company’s primary competitors. Other significant competitors include Nestle,
Cadbury Schweppes, Groupe DANONE and Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising,

sales promotion programs, product innovation, and brand and trademark development
and protection. Intense competition could impact Coca-Cola’s market share and
revenue growth rates.

 DEPENDENCE ON BOTTLING PARTNERS

Coca-Cola generates most of its revenues by selling concentrates and syrups to

bottlers in whom it doesn’t have any ownership interest or in which it has no
controlling ownership interest. In 2006, approximately 83% of its worldwide unit case
volumes were produced and distributed by bottling partners in which the company did
not have any controlling interests. As independent companies, its bottling partners,
some of whom are publicly traded companies, make their own business decisions that
may not always be in line with the company’s interests. In addition, many of its
bottling partners have the right to manufacture or distribute their own products or
certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling

partners, then the partners may take actions that, while maximizing their own short-
term profits, may be detrimental to Coca-Cola. These bottlers may devote more
resources to business opportunities or products other than those beneficial for Coca-
Cola. Such actions could, in the long run, have an adverse effect on Coca-Cola’s
profitability. In addition, loss of one or more of its
major customers by any one of its major bottling partners could indirectly affect
Coca-Cola’s business results. Such dependence on third parties is a weak link in
Coca-Cola’s operations and increases the company’s business risks.

 SLIGGISH GROWTH OF CARBONATED BEVERAGES

US consumers have started to look for greater variety in their drinks and are becoming
increasingly health conscious. This has led to a decrease in the consumption of
carbonated and other sweetened beverages in the US. The US carbonated soft drinks
market generated total revenues of $63.9 billion in 2005, this representing a
compound annual growth rate (CAGR) of only 0.2% for the five-year period spanning
2001-2005. The performance of the market is forecast to decelerate, with an
anticipated compound annual rate of change (CAGR) of -0.3% for the five-year
period 2005-2010 expected to drive the market to a value of $62.9 billion by the end
of 2010.

Moreover in the recent years, beverage companies such as Coca-Cola have been
criticized for selling carbonated beverages with high amounts of sugar and
unacceptable levels of dangerous chemical content, and have been implicated for
facilitating poor diet and increasing childhood obesity. Moreover, the US is the
company’s core market. Coca-Cola already expects its performance in the region to
be sluggish during 2007. Coca-Cola’s revenues could be adversely affected by a
slowdown in the US carbonated beverage market.

Coca-Cola India was the leading soft drink brand in India till 1977 when it was forced
to close down its operation by a socialist government in the drive for self sufficiency.
After 16 years of absence, coca cola returned to India and witnessed a different
culture and economic platform. During their absence, Parle brothers introduced a new
type of cola called THUMS UP. Along with, they also formulated a lemon flavoured
drink, LIMCA, and mango flavoured, MAAZA. In 1993, coca cola bought the whole
Parle Brother operation, in a hope to beat the main competitor (Pepsi). They presumed
that with the tried and tested products of Parle they will be able to regain their throne
in the Indian soft drink market. Pepsi having a 6 year head start helped revive the
demand for global cola but it was not easy for the soft drink giant (coca cola) to return
to India. Pepsi put more focus on the youth of the country in their advertisements but
coca cola tried influencing Indians with the ‘American’ way of life, which turned out
to be a mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit of
being one of the biggest investor in the country; however, their sales figures were not
so impressive. Hence, they had to re-think their market strategies. Coca-Cola learned
from Hindustan Lever that reducing their will result in more turnover, hence leading
to profit. They launched an extensive market research in India. They ascertained that
in India 3 As must be applied; Affordability, Availability and Acceptability. Coca-
Cola learnt that they were competing with local drinks such as “Nimbu Pani”, “Narial
Pani”, “Lassi” etc. and reached to a conclusion that competitive pricing was
unavoidable. Since then they introduced a 200 ml glass bottle for Rs.5.

Further, they had different advertising campaigns for different regions of the country.
In the southern part, their strategy was to make Bollywood or Tamil stars to endorse
their products. In various regions they tried portraying coca cola products with
different regional food products. One of the most famous ad campaigns in India was
‘Thanda Matlab Coca-Cola’; they featured the same quote with different regional
entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market
share i.e. 60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment, 33%
in Packaged water Segment, compared to its arch rival, Pepsi. Diversifying their
product range and having a competitive pricing policy, they have regained their
throne. With virtually all the goods and services required to produce and market
Coca-Cola being made in India, the business system of the Company directly employs
approximately 6,000 people, and indirectly creates employment for more than
125,000 people in related industries through its vast procurement, supply, and
distribution System.

The Indian operations comprises of 50 bottling operations, 25 owned by the

Company, with another 25 being owned by franchisees. That apart, a network of 21
contract packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate
the narrow alleyways of Indian cities – constantly keep our brands available in every
nook and corner of the Country’s remotest areas.
 PRODUCTS OF COCA-COLA INDIA

COCA-COLA:-

In India Coca-Cola was leading soft drink till 1977 when Government policies
necessitated its departure. Coca-Cola made its return to the country in 1993 and made
significant investments to ensure that the beverage is available to more and more
people, even in remote and inaccessible parts of the nation.

Over the past fourteen years has enthralled consumers in India by connecting with
passions of India – Cricket, movies, music & food. Coca-Cola’s advertising
campaigns “Jo Chaho Ho Jaye” & “Life Ho Toh Aise” were very popular & had
entered youths vocabulary. In 2002.Coca-Cola launched its iconic campaign
“Thanda Matlab Coca-Cola” which sky rocketed the brand to make it India’s
favourite soft drink brand.

PET CAN FOUNTAIN

GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml
Table - 1.0

LIMCA:-

Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1
sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz
and lemoni bite combined with the single minded proposition of the brand as the
provider of “Freshness”.

Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from “Nimbu”
+ “Jaise” hence Lime Sa, Limca has lived up to its promises of refreshment and has
been the original thirst choice of millions of customers for over 3 decades.
 PET CAN FOUNTAIN
GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml
Table - 1.1

THUMS UP:-

Thums up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993.
Thums up is known for its strong, fizzy taste and it confident, mature and uniquely
masculine attitude. This brand clearly seeks to separate the men from the boys.

PET CAN FOUNTAIN

GLASS
200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS
500ml, 1000ml 2.25L, 500ml, SIZES
100ml
Table - 1.2

SPRITE:-

Sprite a global leader in the lemon lime category is the second largest sparkling
beverage brand in India. Launched in 1999, Sprite with its cut-thru perspective has
managed to be a true teen icon.
 PET CAN FOUNTAIN
RGB
200ml, 300ml 500ml, 600ml, 330 ml VARIOUS SIZES
1250ml, 1500ml,
2000ml, 2250ml
Table – 1.3

FANTA:-

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a
strong market place and is identifies as “The Fun Catalyst”. Perceived as a fun youth
brand, Fanta stands for its vibrant colour, tempting taste and tingling bubbles that not
just uplifts feelings but also helps free spirit thus encouraging one to indulge in the
moment. This positive imagery is associated with happy, cheerful and special times
with friends.

PET CAN FOUNTAIN

GLASS
200ml, 300ml 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
2.25L, 500ml, 100ml
Table – 1.4

MINUTE MAID PULPY ORANGE:-

The history of the Minute Maid brand goes as far back as 1945 when the Florida Food
Corporation developed orange juice powder. The company developed a process that
eliminated 80% of the water in the orange juice, forming a frozen concentrate that
when reconstitute created orange juice. They branded it Minute Maid a name
connoting the convenience and the ease of preparation. Minute Maid thus moved from
a powdered concentrate to the first ever orange juice from concentrate.

The launch of Minute Maid in India (started with the south of the country) is aimed to
further extend the leadership of Coca-Cola in India in the juice drink category.

Available in 3 PET pack sizes i.e. 400ml, 1 litre, 1.25 litres.

MAAZA:-

Maaza was introduced in late 1970’s. Maaza has today come to symbolise the very
spirit of mangoes. Universally loved for its taste, colour, thickness and wholesome
properties, Maaza is the mango lover’s first choice.

PET POCKET MAAZA

RGB
200ml, 250ml 250ml, 600ml, 1.2L 200ml

Table – 1.5

KINLEY:-

The importance of water can never be understated, Particularly in a nation such as

India where water governs the lives of the millions, be it as a part of everyday ritual or
as the monsoon which gives life to the sub continent. Kinley water comes with the
assurance of safety from the Coca-Cola Company.

Available in PET 500ml and 1000ml.

GEORGIA GOLD COFFEE:-

Georgia coffee was introduced in India in 2004. The Georgia gold range of Tea and
coffee beverages is the perfect solution for office and restaurant needs. Today Georgia
coffee is available at Quick-Service Restaurants, Airports, Cinemas and in Corporates
across all major metros in India.

Espresso, Americano, Cappuccino, Caffe Latte,

HOT BEVERAGES
Mochaccino, Hot Chocolate, Cardamon Tea.
COLD Ice Teas, Cold Coffee.
BEVERAGES
Table – 1.6

MARKETING MIX OF COCA-COLA INDIA

 PRODUCT:-

Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola, Fanta,
Sprite, Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was another
area where Coca-Cola identified major opportunities. In 2002, Packaged drinking
water in India was a Rs 1,000 cr industry and growing by 40% every year. PDW was
a low margin – high volume business, but it was an attractive proposition for bottlers
as it increased plant utilization rates. In this market Coke’s Kinley was pitched against
Ramesh Chauhan’s Bisleri and Pepsi’s Aquafina. The product not only faced intense
competition but also was difficult to differentiate. Coke positioned Kinley as natural
water with the tag line “Bhoond Bhoond Mein Vishwas” (Trust in each drop of
water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result 12 more
bottlers were brought into CCI’s fold. This acquisition added Crush, Canada Dry and
Sport Cola to CCI’s product line. This meant CCI had three orange, clear lime and
cola drinks each in its portfolio.

 PRICE:-

Coke learnt with experience that price was a strategic weapon in an emerging market
like India. An increase in value added tax in 1996 had taken the price of the 300ml
bottle beyond the reach of many Indian customers. In 2000, CCI conducted a yearlong
experiment in coastal Andhra Pradesh by introducing a 200ml bottle at Rs 7. The
volumes went up by 30% demonstrating the importance of consumer affordability. So
the 200ml pack priced at Rs 5 was rolled out countrywide in January 2003. The
advertising Campaign highlighted the affordability and Indian image.

To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in selected
places in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3 per cup in
testing marketing exercise conducted in mid – 2002. In 2002 Kinley with 35% market
share had become the leader in the retail PDW segment and was contributing 20% of
CCI’s revenues.

 PLACE:-

Coke pushed down responsibilities from corporate headquarters to the local business
units. The aim was to effectively align CCI's corporate resources, support systems and
culture to leverage the local capabilities. CCI's operations had been divided into
North, Central and Southern regions. Each region had a president at the top, with
divisions comprising marketing, finance, human resources and bottling operations.
The heads of the divisions reported to the CEO. Bottling operations were divided into
four companies directed by the bottling head from headquarters. Under the new plan,
CCI shifted to a six region profit center set up where product customization and
packaging, marketing and brand building were taken up locally. A Regional General
Manager (RGM) headed each region with the regional functional heads reporting to
him. All the RGMs reported to VP (Operations, who in turn reported to CEO. The
four bottling operations, with 37 bottling plants, were merged into Hindustan Coca-
Cola Beverages (HCCB). Each of the six regions had on an average six bottling
plants. Each plant was headed by an Area General Manager (AGM) and held profit
center responsibility for a business territory. He reported to the RGM as well as the
head of bottling at the head quarters.

 PROMOTION:-

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The
marketing campaign positioned Coca-Cola as an international brand and did not
emphasize local association. Coke, as a deliberate strategy, decided not to spend
heavily on promoting Thums Up. Indeed the marketing spend on Thums Up between
1993 and 1996 was almost negligible. The overall marketing effort was also not
focused as CCI changed the head of marketing three times during the period. Thumps
Up remained neglected. Inadequate marketing support for other Parle brands also led
to their declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture.
They argued that CCI's lack of interest in promoting Thumps Up was resulting in
falling sales and asked CCI to take corrective action.

Coke is primarily targeted at young individuals over the age of twenty-five. This can
be seen by Coca-Colas advertising campaigns, which are aimed towards the young, by
featuring well known personalities popular to this age group. During 90'ies Coke's
promotion efforts did not seem to be effective. They were focused on mega events
like the 1996 Cricket World Cup held in India. CCI's World Cup Cricket campaign
was overshadowed by Pepsi's "Nothing official about it" campaign. Major analysts
were surprised that Thumps Up was totally out of the picture during such a mega
event. In 1998 localization of marketing efforts, CCI signed up celebrities like Aamir
Khan, Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke also began efforts
to rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was declared
the fastest growing market within the Coca-Cola system. But things were far from
normal. Attempts at building growth through discounts and PET take home segment
were not very successful because of lack of coordination between the launches and
marketing back-up.

To maintain good relationships with bottlers and avoid defections to the other camp,
dealers had been pampered by offering expensive overseas trips. In 2000, Coke wrote
off investments in India, amounting to $400 Mn. The revised value of CCI's assets
after the charge was $300 mn.

CCI spent $3.5 mn to beef up advertising and distribution for Thumps Up. By 2002, it
had become India's No.2 cola drink after Pepsi. Maaza, the mango drink, was
repositioned as a juice brand and saw a growth of almost 30% in 2001. Since India
was a large country of different tastes and cultures, CCI customized its marketing
strategy for different regions. It promoted the Coke brand in Delhi, Thumps Up in
Mumbai and Andhra Pradesh, and Fanta in Tamil Nadu. Coke had plans to launch
Rimzim, a spicy soda drink in North Maharashtra.

PESTEL ANALYSIS OF COCA-COLA INDIA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.

Political Factors:

 Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather
than revealing its formula to the government. They re-entered the country in 1993.
However, the primary barrier for Coca-Cola’s entry into the Indian market was its
political environment. Despite the liberalization of the Indian economy in 1991 and
introduction of the New Industrial Policy to eliminate barriers such as bureaucracy
and regulation, there was still a lot of protectionism. India’s past promotion of
“Indigenous availability” or “Swadeshi movement” depicted its affinity for local
products. Due to India’s suspicion of foreign business entering Indian markets, Coca
Cola received alien status its re-entry. This and some of the policies imposed on
foreign enterprises proved as a hindrance to the growth of the company in the country.
To make things worse, the policies were neither clear nor unchanging.

For example, foreign businesses were not allowed to market their products under the
same name if selling within the Indian market. Thus, Coca Cola had to be changed to
Coca Cola India (and Pepsi had to be renamed to Lehar Pepsi). However, the most
controversial, and by far, the most damaging was when Coca-Cola was forced to sign
an agreement to sell 49% of its equity in order to buy out Indian bottlers. Due to the
lack of consistency in the legal aspects, more importance was being given to lobbying
the politicians.
  Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August
5th 2003, The Centre for Science and Environment (CSE), an activist group in India
focused on environmental sustainability issues (specifically the effects of
industrialization and economic growth) issued a press release stating: "12 major cold
drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues".
According to tests conducted by the Pollution Monitoring Laboratory (PML) of the
CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands
from across the city were found to contain pesticide residues surpassing global
standards by 30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1
in only two weeks on the heels of a 75% five-year growth trajectory. Many leading
clubs, retailers, restaurants, and college campuses across the country had stopped
selling Coca-Cola. This threatened the newly achieved leadership attained over Pepsi
due to a successful marketing campaign.

But this was not the end of Coca Cola’s troubles. There was widespread discontent
around many of their plants. For example, in Plachimada, Kerala, the communities in
and around the Coca Cola plant blamed the factory for their water problems. Due to
this, the local Panchayat decided not to renew the license issued to Coca Cola to
“protect public interest". The company has also been accused of illegally occupying a
portion of the village property resources in Mehdiganj, near Varanasi. However, there
are certain positives as well, with a 22 percent increase in its unit case volume last
quarter.
Economic Analysis:

The Indian economy sustained the global economic slowdown in the previous year
and has shown a tremendous economic growth. It showed 8.6% of growth in the last
quarter of 2009-10 as compared to 5.8% same time in the previous year. It has
emerged as an attractive economy to invest in as many opportunities has been
recognized.

 Economic growth
India is ranked second in economic growth, just behind China. Analysts have said that
India will be the third biggest economy of the world in the coming year behind China
and USA. With economic growth many opportunities have been seen, which have
attracted many foreign investor to the company.

Coca cola India returned to the country in 1993, despite few problems in the start they
have emerged as the king of soft drink industry in India. The strong economic growth
of India has resulted in coca cola to invest heavily in sales and distributive channels. It
has introduced two new products, Nimbu Fresh and an energy drink ‘Burn’.

Coca cola registered 22% growth in their unit case volume in the second quarter
(April-June). It is the 16th consecutive quarter of such growth out of which 13 are
double digit. Coca cola India’s growth is in contrast to its overall performance, the
beverage king reported a growth of just 5% (worldwide) in the same quarter.

 Inflationary effects

Inflation is one of the main problems that Indian economy has been facing for a year
now. Rising prices in the food and other products doesn’t only effect the consumers it
also has an adverse effect on a company. The inflation rate for the year 2009 was
recorded to be 11.49%. As prices have gone up in India for various products,
especially oil, there has been uncertainty in decision making of almost every
company. Coca cola India has also been affected by the same; it has been forced to
think about their input costs, as they have been rising due to inflation. Their
expenditure has been rising, with more costs in salaries, distribution channels and
other operating costs. Beverage industry being price competitive market, they have
not revised their product prices.

Exchange rate

The exchange rate of rupee to US Dollar has been stable but in the previous months
the rate has had a tumultuous period. Exchange rate determines at what price will the
company export its products and import whatever is required by it. The previous year,
the rate of rupee to USD touched 44, on an average it has been around 47, so the
exports earned less and the imports cost more. Therefore, coca cola India had to bear
some low profitable times. However, in the present scenario rates have reached a
stable level and exports are on an increasing trend.

Social Analysis:
Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition from
Leher Pepsi which had the advantage of entering the country 7 years earlier. Initially,
it struggled to find acceptance as there were already other brands such as Parle’s
Thums Up which existed in the market. Coca-Cola had earlier focussed more on the
American way of life in their advertising campaigns, which the Indian consumers
could not identify with. Also, they did not focus on competition from other
alternatives such as lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives to
Coca-Cola. However, things were brought under control when Thums Up was bought
over by Coca Cola, and more attention was paid by the company on their marketing
mix.
With the lowering of their prices by almost 15-20%, introduction of newer products
which appealed to the Indian tastes, more investment in market research and
focussing on the target group of 18-24 year olds, they were able to increase their
market share and build brand loyalty.

Coca Cola today, has made significant investments to build its business in India. It has
also generated employment for almost 1,25,000 people in related industry through its
procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy,
strengthened middle class and low per capita consumption. With the increase in health
consciousness among the urban consumers, the company has introduced newer
products such as Diet Coke, which contain lesser calories than ordinary Coca Cola.
This is also responsible for the company shifting focus from carbonated drinks to
Fruit Drinks / Juices and bottled water.
The rural market had also been identified by Coca-Cola India as an attractive target,
with almost 70% of the country’s population. The company has recorded significant
growth in recent years

Coca Cola India has also taken many initiatives as a responsible corporate citizen, by
tying up with many NGOs such as BAIF (or Bharatiya Agro Industries Foundation),
SOS Children’s Villages and Save the Children. It has also taken initiatives to
promote education in rural areas.
Technological Analysis:
Coca-Cola has started operations of its R&D facility in India, with the view of
localizing its product portfolio. The major focus would be on non carbonated drinks
and flavours. The company’s R&D team has already rolled out drinks such as Maaza
aam panna and also a Maaza mango milk drink, and is exploring options to enter new
categories in India such as juices in localised flavours, energy drinks, sports drinks
and flavoured water. These initiatives are being taken by the company to further
expand their product portfolio.
With the increasing importance of 360 degree media tools and overall ad spend on
social media sets likely to grow by almost 44%, Coca-Cola has increased ad spend on
the internet. Case in point is the recent 2009 Sprite campaign, which was first
launched on the internet.

Environmental Analysis:

Coca Cola has earned a title of environment friendly company and Coca Cola India
too has followed in the footsteps. Coca Cola India’s Corporate Social Responsibility
(CSR), is an initiative that prioritizes many social and environmental issues; one of
them being ‘water conservation’. They support many community based rainwater
harvesting projects and help lending conservation education.

The company has made sure that the following ideas are considered during their
operations:

8. Environmental due diligence before acquiring land

9. Environmental impact assessment before commencing project

10. Ground water and environment survey before selecting the site
 11. Ban on purchasing CFC emitting refrigerating equipment

12. Waste water treatment facilities

13. Compliance with all regulatory environmental requirements

14. Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment with
consistent profits and success. They seek to provide leadership in three different areas,
these are as follows:

4. Water efficiency and water quality

5. Energy efficiency

6. Eliminating or minimizing solid waste.

Though being an environmental friendly company, Coca Cola India had to face its
share of controversies. On 4th February, 2003, Centre of Science and Environment in
India, released a report based on experiment done by Pollution Monitoring
Laboratory. In the experiment, they tested 17 packaged drinking water brands and
found that, Coca Cola’s Kinley has 15 times more pesticide residual levels than the
stipulated norms, Bisleri had 59 times and Aquaplus had 109 times.

The main law governing the food safety is the 1954 Prevention of food alteration act,
which stated that pesticides should not be present in any food item but did not have
law against pesticides being present in soft drinks. However, the Food Processing
Order 1955 stated that the main ingredient used in soft drinks must be ‘potable water’
but the Bureau of Indian Standards had no prescribed standards for pesticides in
water.

But later it was found that BIS had stated that pesticides should not be present or it
should not exceed 0.001 part per million. Further, the health ministry of India
admitted that ‘there were lapses in PFA regarding carbonated drinks’.
 Fig 2.2 GRAPH OF PESTICIDES IN SOFT DRINKS IN INDIA

Legal Analysis:

As the Indian consumer is getting more educated, the government is also paying
special attention to consumer laws. In the past, there were not so many laws
protecting the benefits to the consumer but now every business has to go by the law
and fix their operations, strategies so as to satisfy their consumers, and employees.
Keeping in mind the consumer laws, employment laws, antitrust law, discrimination
laws etc. a business should plan out everything.

 Consumer Laws

In the present scenario, consumer is the king, if a product is defective, not meeting the
stated standards a consumer can complain against the manufacturer. Complaining and
getting the verdict the court has made very fast and efficient as government of India
has installed new consumers courts. Their main job is to see that the consumer
benefits are being met or not. When producing their beverages, Coca Cola India has to
make sure that they have written price, manufacturing date, expiry date, batch no,
nutritional facts are written on the packed product.
  Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have
stipulated norms on employing people from the country and getting expatriates in the
company as well. India has strict laws against employing child labour. Being a male
dominated society, the ministry has made sure that female employees are treated with
respect and given equal importance at the work place. Every field of work has got its
own wage, these are to meet the norms and laws set by the labour ministry. When
employing anyone, coca cola India cannot discriminate on social, regional or any
racists’ basis. If it is found that the company has been violating the law, it has to face
strict action and fines.

 Health and safety laws

As coca cola produces a product that is consumed by the consumer as a food item,
there are laws that the company must abide by when producing it. Ministry of Food
Processing Industries makes and oversees the laws and norms for the food processing
industries.

The Indian Parliament has recently passed the Food Safety and Standards Act, 2006
that overrides all other food related laws.

It will specifically repeal eight laws:

 The Prevention of Food Adulteration Act, 1954.

 The Fruit Products Order, 1955.
 The Meat Food Products Order, 1973.
 The Vegetable Oil Products (Control) Order, 1947.
 The Edible Oils Packaging (Regulation) Order, 1998.
 The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order,
1967.
 The Milk and Milk Products Order, 1992.
 Essential Commodities Act, 1955 relating to food.
From now on, the act establishes a regulatory body, the Food Safety and Standards
Authority of India. Anything that coca cola makes, have to make accordingly to the
laws. They have to check the weight, volume and ingredients of the product. The
export or the import of the products by the company has to meet the quality standards
stipulated by the law.

 Anti-trust law
The Competition Commission of India was made under the Indian Competition Act
2002, Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. This
committee looks after all the issues regarding unethical means of doing business,
competition issues and any dispute between two different business entities. CLG
competition and anti trust practices are as follows:

 Representing clients before the MRTP Commission in ‘monopolistic and

restrictive trade practices’ and ‘unfair trade practices’ matters.
 Legal Advice and sophisticated insight into the international best practices on
competition law.
 Consultancy services on specific issues - supply and distribution, pricing and
marketing, ‘promotional materials’, mergers, acquisitions, amalgamation,
licensing, joint operation and research, joint buying, ‘dominant-firm’ status
etc.
 Competition Audit and Due Diligence for developing appropriate guidelines
for employees, distributors, agents, franchisees etc.
 Legal Due Diligence on anti-competition, unfair and restrictive   market
practices.
 Drafting claims, counter-claims, replies, rejoinders, representations etc. on
Competition Law and related legal issues.
 Strategic policing on anti-competition market practices and trends.
 Policy due diligence for mergers, acquisitions, joint ventures with appropriate
anti-trust safeguard measures and policy.  

All these laws help Coca Cola India to maintain its own brand and values. Any other
business trying to copy the brand of coca cola will face the strict action against itself.
These laws help every business to compete in a fair environment. As it is known that
the coca cola and Pepsi are the fiercest rivals in the beverage industry, the CCI makes
sure that either of them does not indulge in unfair means to make profits and hurt each
other’s business.

SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES WEAKNESSES
Health Care Issues.
Distribution Network.
Small Scale Sector
Strong Brand Image. Reservations.
Low Cost of Operation.
SWOT
OPPORTUNITIES ANALYSIS
THREATS
Large Domestic Markets. Imports.
Export Potential. Tax & Regulatory Sector.
High Income among People. Slowdown in Rural Demand.

Fig 2.3 SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES:

 DISTRIBUTION NETWORK

The Company has a strong and reliable distribution network. The network is formed
on the basis of the time of consumption and the amount of sale yielded by a particular
customer in one transaction. It has a distribution network consisting of a number of
efficient salesmen, 700,000 retail outlets and 8000 distributors. The distribution fleet
includes different modes of distribution, from 10 tonne to open bay three wheelers
that can navigate the narrow alleyways of Indian cities – constantly keep Coca-Cola
brands available in every nook and corner of the Country’s remotest areas.

 STRONG BRAND IMAGE

Coke has its history of about more than a century and this prolonged sustenance has
definitely added to the brand image in the minds of the consumers and to its wallet.
The products produced and marketed by Coca-Cola India have a strong brand image.

Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up to
the brand name of Coca-Cola Company as a whole. Coca Cola India for the first time
has come out with corporate campaign in India targeting its stakeholders. The
multimedia campaign “Little Drops of Joy " is aimed at raising the corporate brand
image of the company which took a heavy beating with a number of controversies it
faced in different domains.

The new campaign is a part of a complete restructuring exercise in the Indian arm of
this global change. Coca Cola recently announced its new corporate strategy called
the “5 Pillar" strategy. The company has identified the 5 pillars as

 People.
 Planet.
 Portfolio.
 Partners.
 Performance.

 LOW COST OF OPERATIONS

In light of the company’s Affordability Strategy, Coca-Cola went about bringing a

cost-focus culture in the company. This included procurement Efficiencies – through
focus on key input materials, trade discipline and control and proactive tax
management through tax incentives, excise duty reduction and creating marketing
companies. These measures have reduced the costs of operations and increased profit
margins.

WEAKNESSES:

 HEALTH CARE ISSUES

In India, there exists a major controversy concerning pesticides and other harmful
chemicals in bottled products including Coca-Cola. In 2003, the Centre for Science
and Environment (CSE), a non- governmental organization in New Delhi, said aerated
waters produced by soft drinks manufacturers in India, including multinational giants
PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and
chlorpyrifos - pesticides that can contribute to cancer and a breakdown of the immune
system.

 SMALL SCALE SECTOR RESERVATIONS

The Company’s operations are carried out on a small scale and due to Government
restrictions and ‘red-tapism’, the Company finds it very difficult to invest in
technological advancements and achieve economies of scale.

OPPORTUNITIES:

 LARGE DOMESTIC MARKETS

The domestic market for the products of the Company is very high as compared to
any other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the
soft drinks market; this includes a 42 per cent share of the cola market.

Other products account for 16 per cent market share, chiefly led by Limca. The
company appointed 50,000 new outlets in the first two months of this year, as part of
its plans to cover one lakh outlets for the coming summer season and this also covered
3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage
market.

 EXPORT POTENTIAL

The Company can come up with new products which are not manufactured abroad,
like Maaza etc and export them to foreign nations. It can come up with strategies to
eliminate apprehension from the minds of the people towards the Coke products
produced in India so that there will be a considerable amount of exports and it is yet
another opportunity to broaden future prospects and cater to the global markets rather
than just domestic market.

 HIGHER INCOME AMONG PEOPLE

Development of India as a whole has lead to an increase in the per capita income
thereby causing an increase in disposable income. Unlike olden times, people now
have the power of buying goods of their choice without having to worry much about
the flow of their income. Coca-Cola Company can take advantage of such a situation
and enhance their sales.

THREATS:

 IMPORTS
As India is developing at a fast pace, the per capita income has increased over the
years and a majority of the people are educated, the export levels have gone high.
People understand trade to a large extent and the demand for foreign goods has
increased over the years.
If consumers shift onto imported beverages rather than have beverages manufactured
within the country, it could pose a threat to the Indian beverage industry as a whole in
turn affecting the sales of the Company.

 TAX & REGULATORY SECTOR

The tax system in India is accompanied by a variety of regulations at each stage on
the consequence from production to consumption. When a license is issued, the
production capacity is mentioned on the license and every time the production
capacity needs to be increased, the license poses a problem. Renewing or updating a
license every now and then is difficult. Therefore, this can limit the growth of the
Company and pose problems.

 SLOWDOWN IN RURAL DEMAND

The rural market may be alluring but it is not without its problems: Low per capita
disposable incomes that is half the urban disposable income; large number of daily
wage earners, acute dependence on the vagaries of the monsoon; seasonal
consumption linked to harvests and festivals and special occasions; poor roads; power
problems; and inaccessibility to conventional advertising media. All these problems
might lead to a slowdown in the demand for the company’s products.
 RESEARCH

METHODOLOGY

OBJECTIVES OF THE STUDY

  The main objective of the project is to analyze and study in efficient way the
current position of Coca- Cola Company.

 To perform PESTLE and SWOT analysis of Coca-cola globally as well as

locally. This would help us identify areas of potential growth.

 The study was aimed to perform Market Analysis of Coca-Cola Company &
find out different factors effecting the growth of Coca-Cola.

 Another objective of the study was to perform Competitive analysis between

Coca-Cola and its competitors.

 To understand the reasons behind the purchase of Coca-Cola products.

SCOPE OF THE STUDY:-

This study basically tries to discover the current position of Coca-cola in the
market. It also tries to discover the preferences of the customers when posed with
a choice between Coca-Cola and Pepsi. It is primarily directed to the general
public but was done only in New Delhi, Noida and Greater Noida

RESEARCH DESIGN

A research design is the specification of methods and procedures for acquiring the
needed information. It is overall operational pattern or framework of the project that
stipulates what information is to be collected from which source by what procedure.

There are three types of objectives in a marketing research project:-

 Exploratory Research.
 Descriptive Research.
 Casual Research.
4. Exploratory Research:-

The objective of exploratory research is to gather preliminary information that

will help define problems and suggest hypothesis.

5. Descriptive Research:-
 The objective of descriptive research is to describe things, such as the market
potential for a product or the demographics and attitudes of consumers who buy
the product.

6. Casual Research:-

The objective of casual research is to test hypothesis about casual and effect
relationships.

Based on the above definitions it can be established that this study is a Descriptive
Research as the attitudes of the customers who buy the products have been stated.
Through this study we are trying to analyze the various factors that may be
responsible for the preference of Coca-Cola products.

SOURCES OF DATA

The data has been collected from both primary as well as secondary sources.

SECONDARY DATA:-

It is defined as the data collected earlier for a purpose other than one currently being
pursued.

As a researcher I have scanned lot of sources to get an access to secondary data which
have formed a reference base to compare the research findings. Secondary data in this
study has provided an insight and forms an outline for the core objectives established.

The various sources of secondary data used for this study are:-

 News papers.
 Magazines.
 Text books.
 Marketing reports of the company.
  Internet.

PRIMARY DATA:-

The primary data has been collected simultaneously along with secondary data
for meeting the established objectives to provide the solution for the problem
identified in this study.

The methods that have been used to collect the primary data are:-

 Questionnaire.
 Personal Interview.

RESEARCH MEASURING TOOLS & TECHNIQUES

The primary tool for the data collection used in this study is the respondent’s response
to the questionnaire given to them. The various research measuring tools used are:-

 Questionnaire.
 Personal interview.
 Tables.
 Percentages.
 Pie-charts.
 Bar-charts.
 Column charts.

SAMPLING DESIGN

An integral component of a research design is the sampling plan. Especially it

addresses three questions: Whom to survey (sample Unit), how many to survey
(Sample Size) and how to select them (sampling Procedure). Making the census study
of the entire universe will be impossible on the account of limitations of time and
money. Hence sampling becomes inevitable. A sample is only his portion of
population. Properly done, sampling produces representative data of the entire
population.

SAMPLE SIZE:-

iii. Through questionnaire – 150 respondents.

iv. Through personal interview – 27 respondents.

SAMPLING TOOL:-

Questionnaire was used as a main tool for the collection of data, mainly because it
gives the chance for timely feedback from respondents. Moreover respondents feel
free to disclose all necessary detail while filling up a questionnaire. Respondents
seeking any clarification can easily be sorted out through tool.

Sampling Tools Respondents Number

Questionnaire Customers 150
Personal Interview Customers 27
Total 177
Table – 1.7

FIELD WORK:-

The study was conducted in New Delhi, Noida and Greater Noida.

 The questionnaires were given to the respondents to fill in order to get their
feedback.
 Questions were read out to the respondents and the answers were noted.

LIMITATIONS OF THE STUDY:-

The main purpose of this study is get idea about the preference of the customers
towards various Coca-Cola products. But there are certain factors which affects this
study they are as follow:

 Since the sampling procedure was judgmental, the sample selected may not be
true representative of the population.
 Economic and market conditions are very unpredictable (Present and future).

 The project duration is limited to 4 weeks so it limits the area of study.

 The study was confined to New Delhi, Noida and Greater Noida due to which
the result cannot be applied universally.
 5.

DATA ANALYSIS

Respondents based on age group

180
160
140
Number of respondents

120
100
80
60
40
20
0
Below 20 20-30 30-40 40-50 above 50
Fig 2.4

Respondents based on gender

37%

Male
Female

63%

Fig 2.5
AGE GROUP & GENDER:

From Fig 2.4, we can comprehend that 90% of total respondents belong to the age
group of 20-30. This is because most of the consumers that prefer or consume Coca-
Cola products belong to this age group. About 6% belong to age group below 20 and
3% belong to age group of 30-40.Form Fig 2.5, we come to know that the gender ratio
of the total respondents is almost 2:1 (male: female).

Frequency of soft drink consumption

50
45
40
35
30
25
20
15
10
5
0
Once a week Twice a week Thrice a week Everyday Rarely

Fig 2.6

Weekly expenditure of coca-cola

products (INR)
12% 4% 3% 50-100
100-150
150-200
Above 200

81%

Fig 2.7
SOFT DRINK CONSUMPTION & EXPENDITURE:

From Fig 2.6, we interpret that about 48% of the total respondents consume soft
drinks rarely or once a week. About 35% respondents consume soft drinks twice or
thrice a week and only 18% consumes soft drinks every day.

From Fig 2.7, we interpret that about 81% of the respondents spend only Rs. 50-100 a
week on Coca-Cola products, which is very low as compared to the global scenario.
This creates a potential growth market for Coca-Cola India. About 12% spends from
100-150 a week & 7% spend above 150.

Purchasing Portal Preference

120

100

80

60

40

20

0
Supermarkets Retails Vendor Machines Pubs & Restaurant Multiplexes

Fig 2.8

PURCHASING PORTAL PREFERENCE:

From the above data, we have ascertained that preferred portal for purchase of Coca-
Cola products is the retail shops i.e. 58%. This is probably because not all
communities in India have supermarkets and other purchasing channels present
nearby, whereas, we can find retail shops in every corner.19% prefer to purchase from
Supermarkets and Vendor machines. 23% prefer to purchase from Pubs, Restaurants
and Multiplexes.

Occasions/Reasons for consumption

Just like that

Parties

Cinemas

Picnics

Festivals

0 20 40 60 80 100 120
Number of respondents

Fig 2.9

REASON FOR CONSUMPTION:

From this graph, we infer that there is no specific occasion why people purchase
Coca-Cola products. Although some of the advertising campaigns target special
occasion or festivals. From Fig 2.9 it is concluded that 59% respondents purchase
Coca-Cola without any specific reason. About 23% purchase for the purpose of
parties, 15% purchase while watching movies in the cinemas and only about 4%
purchase during festivals and for picnic purposes.
 Soft drink preference
80

70

60

50

40
Number of responses

30

20

10

0
la i la si ks
Co ps Co ep in
- Pe - P dr
ca ca of r
Co Co ts he
of u c Ot
cts r od
u
ro
d rp
p the
r O
he
Ot

Fig 2.10

SOFT DRINK PREFERENCE:

From the above graph we interpret that about 70% of the respondents, prefer
consuming Coca-Cola product over Pepsi and other drinks. This clearly states why
Coca-Cola is market leader with almost 60% of market share. 23% prefer Pepsi
Products and only 75 prefer other drinks.
 Opnion About Coca-Cola Products
Bad

Below Satisfactory

Satisfactory

Good

Excellent
0 20 40 60 80 100 120
NO. OF RESPONDENTS

Fig 2.11

Products expected by consumers from Coca-Cola

Fizzy drinks Fruit drinks Energy drinks Alcoholic drinks
20% 14%

27% 40%

Fig 2.12

OPINION ABOUT COCA-COLA PRODUCTS

& PRODUCTS EXPECTED BY CONSUMERS:

From Fig 2.11, we infer that though the respondents are more than satisfied by the
Coca-Cola product range they would still like the company to introduce new drinks.
From Fig 2.12, we conclude that about 40% would like to see a new fruit drink being
added to the product basket, 26% want energy drinks, 20% alcoholic drinks and only
14% want another fizzy drink. Majority of the people wanting to see a fruit drink is
mainly because people are more health conscious now and want to manage their
calorie intake.

Quantity preference
90
80
70
60
50
Number of responses

40
30
20
10
0
le an le r e r e
ott lC ott lit lit
s b m t b 1 2
Glas 30
0
l Pe
l m
m 00
2 50 5
0-
20

Fig 2.13

QUANTITY PREFERENCE:

From Fig 2.13, we infer that about 47% of respondents prefer to purchase PET bottle
of Coca-Cola Products. About 27% prefer to purchase glass bottles, 19% prefer Can
of 300ml and only 8% prefer 1 & 2 litre bottles of Coca-Cola.
 Branding

Pepsi products

Coca-Cola products

0 20 40 60 80 100 120
NO. OF RESPONDENTS

Fig 2.14

Pricing

120
100
80
60
40
20
0
Coca-Cola products Pepsi products

Fig 2.15

BRANDING & PRICING:

From Fig 2.14, it is concluded that respondents find Coca-Cola products better than
that of Pepsi products. About 62% respondents said that they find Coca-cola products
better than Pepsi and only 38% supported Pepsi products.

From Fig 2.15, we infer that about 62% of the respondent considers the pricing of
Coca-Cola much more reliable than that of Pepsi. About 38% respondents think that
Pepsi have better pricing than that of Coca-Cola.
 Quality
140
120
100
80
60
40
20
0
Coca-Cola products Pepsi products

Fig 2.16

TASTE

Pepsi products

Coca-Cola products

0 20 40 60 80 100 120 140

NO. OF RESPONDENTS

Fig 2.17

QUALITY & TASTE:

From Fig 2.16 & 2.17, it’s clear that Coca-Cola products have better taste and quality
than that of Pepsi. About 73% respondents consider that Coca-Cola products have
very good quality and taste. 27% respondents consider Pepsi products have better
taste and quality.
 Availability

Pepsi products

Coca-Cola products

85.5 86 86.5 87 87.5 88 88.5 89 89.5 90

Number of respondents

Fig 2.18

Satisfaction

Pepsi products

Coca-Cola products

0 20 40 60 80 100 120 140

Fig 2.19

AVAILABILITY & SATISFACTION:

From Fig 2.18, it’s clear that there is slight difference between the availability of
products of Coca-Cola and Pepsi. About 51% respondents think that Coca-Cola
products are much easily available in the market.49% consider that availability of
Pepsi products is more in the market.

About 70% of respondents are satisfied with the Coca-Cola products while as 30%
respondents are satisfied with the Pepsi products as shown in Fig 2.19.
6.

SUGGESTIONS

AND

CONCLUSION
 SUGGESTIONS

The suggestions made in this section are based on the market study conducted as part
of “Coca-Cola India”. The suggestions are arranged in order of priority, highest first.

 Perform a detail demand survey at regular interval to know about the unique
needs and requirements of the customer.

 The company should make hindrance free arrangement for its

customers/retailers to make any feedback or suggestions as and when they
feel.

 The company should focus to bring some more flavors like health drinks and
other low-calorie offerings. Coca-Cola India can also introduce some fruit
based drinks, as it has already entered the energy drink arena with “Burn”.

 Coca-Cola’s distribution channel is mostly through retail. Whereas the

competitors also concentrates more on the multiplexes, pubs and restaurants.
Coca-Cola should try to increase their distribution in these areas.

 The company must keep a watch on its primary competitors in market in

order to be able to compete with them.

 The company should use new attractive system of word of mouth

advertisement to keep alive the general awareness in the whole market as a
whole.

 The company should be always in a position to receive continuous feedback

and suggestions from its customers/ consumers as well as from the market
and try to solve it without any delay to establish its own good credibility.

 A strong watch should be kept on distributors so that the goodwill of the

BRAND doesn’t get affected.
 CONCLUSION

Though there were certain limitations in the study that was conducted. The sample
allowed for some conclusions to be drawn on the basis of analysis that was done on
the data collected.

The data has clearly indicated that Coca-Cola products are more popular than the
products of Pepsi mainly because of its TASTE, BRAND NAME,
INNOVATIVENESS and AVAILABILITY, thus it should focus on good taste so
that it can capture the major part of the market. The study also indicated that the
consumers are satisfied with the Coca-Cola products and purchase them without any
specific occasions.

In today’s scenario, customer is the king because he has got various choices around
him. If you are not capable of providing him the desired result he will definitely
switch over to the other provider. Therefore to survive in this cutthroat competition,
you need to be the best. Customer is no more loyal in today’s scenario, so you need
to be always on your toes.
 BIBLIOGRAPHY

BOOKS:

 Marketing Management – Kotler Philip.

 Research Methodology – Kothari.

WEBSITES:

 www.thecoca-colacompany.com
 www.news.bbc.co.uk
 www.india-server.com
 www.magindia.com
 www.coca-colaindia.com
 www.wikiinvest.com
 www.open2.net

OTHERS

 Annual report of Coca-Cola 2008.

 Annual report of Coca-Cola 2009.

ANNEXURE

QUESTIONNAIRE

 NAME:
..............................................................................
 GENDER:
 a) Male b) Female

 Do you drink Soft drinks?

a) Yes
b) No

 How often do you have soft drinks per week?

a) Once a week
b) Twice a week
c) Thrice a week
d) Everyday
e) Rarely

 What drink comes to your mind when you think of soft drinks?
a) Coca-Cola
b) Pepsi
c) Other products of Coca-Cola
d) Other products of Pepsi
e) Other drinks

 What quantity do you usually prefer to buy?

a) 200-250 ml Glass bottle
b) 300 ml Can
c) 500 ml Pet bottle
d) 1 litre
e) 2 litre

 What do you feel about Coca-Cola product range?

a) Excellent
b) Good
c) Satisfactory
d) Below Satisfactory
e) Bad

 What occasions do you prefer to buy Coca-Cola products?

a) Festivals
b) Picnics
c) Parties
d) Cinemas
e) Just like that
 What is your most preferred channel for purchasing Coca-Cola products?
a) Super markets
b) Retails
c) Vendor Machines
d) Pubs & Restaurants
e) Multiplexes

 How much do you spend on Coca-Cola products per week?

a) 50-100
b) 100-150
c) 150-200
d) Above 200

 Put (X) mark in which ever you feel is appropriate?

Parameters / Product Coca-Cola Pepsi Products

Products
1) Branding
2) Quality
3) Price
4) Taste
5) Availability
6) Satisfaction

 What kind of products do you want Coca-Cola to introduce in the future?

a) Fizzy Drinks
b) Fruit Drinks
c) Energy Drinks
d) Alcoholic Drinks