Corporate Internship Report

Competitive Analysis of PepsiCo. & Coca-Cola Co.

Internship Report submitted as a partial requirement for the award of the two year Master of Business Administration Programme MBA 2011-13

Name: ADITI JAIN Enroll No.: (8503897)

(Varun beverages pvt. Ltd.) Corporate Internship Supervisor Name Mr. Dhirendra Bhaduriya JBS-Faculty Supervisor: Mrs. Sujata Kapoor Start Date for Internship: 1st June 2012 End Date for Internship: 16th July 2012
Report Date: 7th July 2012

1|Page

SELF CERTIFICATE

This is to certify that the Project Report titled Comparative analysis between Pepsi and Coca Cola for (Varun Beverages Pvt. Ltd.) is bona fide work carried out by Aditi Jain enroll no. 8503897 of Jaypee Business School for fulfillment of MBA course of Jaypee Institute of Information Technology, Noida.

Mrs. Sujata Kapoor Date: Place:

2|Page

3|Page

ACKOWLEDGEMENT

Achievement is finding out what you would be then doing, what you have to do. The higher the summit, the harder is the climb. The goal was fixed and we began with a determined resolved and put in ceaseless sustained hard work. Greater challenge, greater was our effort to overcome it. This project work, which is my first step in the field of professionalization, has been successfully accomplished only because of my timely support of well- wishers. I would like to pay my sincere regards and thanks to those, who directed me at every step in my project work. I would also like to thank my supervisor Mrs. Sujata Kapoor, the corporate trainer Mr. Dhirendra Bhadouria and the staff members of VARUN BEVERAGES PVT. LTD for their kind support and help during the project.

ADITI JAIN Enroll No. 8503897 (DDM 2008-2013)

4|Page

TABLE OF CONTENTS
S NO. TOPIC Page no

1 2 3 4 5 6
7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Self certificate Acknowledgement Executive summary Introduction Company profile :PepsiCo Industry analysis Industry overview PepsiCo Organizational structure PepsiCo in India Product positioning of pepsico Slogan used by pepsico SWOT analysis Five forces Model 4 Ps of Marketing Competitive strategy Analysis The Manufacturing Process Financial Analysis Intrafirm Analysis (Pepsico. & Coca-cola co.) Interfirm Analysis (PepsiCo. Vs Coca-cola Co.) Cash Flow Analysis Research Project Research Design Methods of data collection The market research process Finding and observation Conclusion

2 3 6 8 10 14
14 17 21 23 29 30 34 36 39 41 42 46 46 64 72 74 75 76 77 83 92

5|Page

28 29 30 31

Recommendations Annexure I Annexure II References

93 96 103 105

6|Page

EXECUTIVE SUMMARY
This project is an extensive research on the marketing strategies of the two Cola giants Pepsi and Coca Cola. It covers an extensive survey and depicts all graphs, fact and figures of two companies. It begins with the introduction of soft drink industry and introduction of these two companies of soft drink industry. It covers some of the major strategies adopted by Pepsi and Coca-Cola like their pricing policy, sales promotion and advertising policy, distribution policy etc. The project has been made interesting with the inclusion of the topics, which covers the 4Ps of marketing.

The major players in the soft drink industry in India are Coke and Pepsi. Pepsi holds the major market share followed by Coke. They have a cut throat competition between themselves. Whatever strategy is followed by one company, it is copied by the other. Sample of two brands were selected on the basis of their uses and noticeciability.

One of the selected brands is NO1 brand in their respective product categories the other one brand is close competitor of the No 1 brands. Total sample of size of 100 respondents selected on the basic of convenience was surveyed which include consumers. Data was collected from secondary as well as primary sources. Structure questionnaire and EDS was use to collect primary data PEPSI boasts of having the maximum market share in the beverage segment in Delhi and is in

constant process for the betterment of its product performance and customer as well retailers satisfaction

7|Page

INTRODUCTION
The Project Comparative analysis between PepsiCo and Coca Cola in Delhi Is designed on the lines of basic investment decisions to be taken by the senior officials of PEPSI for the purpose of amendments in the pre-existing distribution network in order to review and strengthen the routes. The findings of the project are very crucial for the analysis of the market share of PEPSI in the Delhi & Beverage Market. Though the process is an ongoing one but the decisions have to be taken on a strong base, supported by facts and figures and that too on papers. This support can only be provided with the help of an extensive and through analysis of the market and the data collected thereof. The Marketing Development Coordinator who was the lead or the project head delivered the objectives of the project to us expressly and we had to submit the day report to him along with the draft report. He was the in charge of the project and gave guidelines and directions to approach the project. In the modern urban culture consumption of soft drinks particularly among younger generation has become very popular. Soft drinks in various flavors and tastes are widely patronized by urbane population at various occasions like dinner parties, marriages, social get together; birthday calibration etc. children of all ages and groups are especially attracted by the mere mention of the word soft drinks. With the growing popularity of soft drinks, the technology of its production, preservation, transportation and or marketing in the recent years has witnessed phenomenal changes.

The so-called competition for this product in the market is from different other brands. Mass media, particularly the emergence of television, has contribute to a large extent of the ever growing demand for soft drinks the attractive jingles and sport make the large audience remember this product at all times.

8|Page

It is expected that with the sort of mass advertising, reaching almost the entire country and offering various varieties annual demand for the product is expected to rise sharply in the times to come. In any marketing situation, the behavioral / environmental variables relating to consumers, competition and environment are constantly influx. The competitors in a given industry may be making many tactical maneuvers in market all the time. They may introduce or initiate an aggressive promotion campaign or announce a price reduction. The marketing man of the firm has to meet all these maneuver and care of competitive position of his firm and his brand in the market. The only route open to him for achieving this is the manipulation of his marketing tactics. In todays highly competitive market place, three players have dominated the industry; The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury Schweppes. Through the globe, these major players have been battling it out for a bigger chunk of the ever growing soft drink market. Now this battle has been evolved up to India too with the arrival of these three giants. Soft drink industry is on amazing growth; ultimately these are only one person who will determine their fortunes. The Indian consumer the real War to quench his thirst has just begun

9|Page

COMPANY PROFILE: PEPSI CO.

Caleb Bradham a New Bern N.C druggist who formulated Pepsi Cola founded Pepsi Cola Beverage business at turn of the century. Pepsi Cola Company now produces and markets nearly 200 refreshment beverages to retail, restaurants and food service customers in more then 190 countries and territories around the world and generates revenue of over 18 billion dollars PepsiCo World Headquarters is located in Purchase, New York.

Pepsi Co. is the world leader in the food chain business. It consists of many companies amongst which the prominent ones are Pepsi Cola, Frito-lay, Pepsi food international, Pizzahut, KFC and Taco bell. The group is presently into three most profitable businesses namely, Beverages Snacks foods and Restaurants. The beverages segment primarily market it Pepsi diet, Pepsi Mountain Dew and other brands worldwide and 7UP outside the U.S.market. They are positioned in close competition with Coca Cola inc. of USA. The Snacks food divisions manufacture and distribute and markets others snacks worldwide. The restaurant segment primarily consists of the operations of the worldwide Pizza-Hut, Taco bell and KFC chains PFS, PepsiCos restaurant distribution operation, supplies to Company owned and Franchise restaurants in the U.S.

10 | P a g e

Source:pepsico.com

When Coca Cola changed its formula in 1985, Pepsi Stepped up its competition with its long time archrival claiming victory in the Cola-wars. Coke and Pepsi expended their rivalry to tea in 1991 when Pepsi formed a venture with No.1 Lipton in response to Cokes announced venture with Nestle (Nestea).

Pepsi Co is going blue. This was the new color adopted by the company to strengthen its brand globally. Also the company is changed colors from Generation X to GENERATION NEXT. Although Pepsi holdings over the years have become diverse in such fields as the Snacks industry and Restaurants industry, this portfolio will discuss its core business and its highly successful business of Beverages. The soft drink industry customer base is probably the widest and deepest base in a world that is flooded with some many categories. According to Beverage

11 | P a g e

Digest the customer base for soft drinks is a whopping 95% of regular users in the United States. This represents a large field of potential customers for Pepsi Cola.

Pepsi prefers to segment itself as the beverage choice of the

New Generation,

Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are referring to the markets that marketers refer to as Generation X. The Generation X consumer is profiled to be between the ages of 18 to 29. They have high expectations in life and are very mobile and active. They adopt a lifestyle of living for today and not worrying about long-term goals. Those Pepsis main emphasis on this segment they also have a focus on the 12 to 18 year old market. Pepsi believes if they can get this market to adopt their product then they could establish a loyal customer for life. Pepsi Cola throughout its 100 plus year of existence has developed much strength. One of the strengths that have developed Pepsi into such a large corporation is a strong franchise system. The strong franchise system was the backbone of success along with a great entrepreneur spirit. Pepsis franchise system and distributors is credited to bring Pepsi from a 7,968 gallons of soda sold in 1903 to nearly 5 billion gallons in the year of 1997. Pepsi also has the luxury to spend 225 million dollars in advertising a year. This enormous ad budget allows Pepsi to reinforce their products with reminder advertising and promotions. This large budget also allows Pepsi to introduce new products and very quickly make the consumer become aware of their new products.

Pepsi also has the good fortune of making very wise investments. Some of the best investments have been in their acquiring several large fast food restaurants. They have also made wise investments in snack food companies like Frito Lay, which at present time is the largest snack company in the world. Probably high on the list of strengths is Pepsis beverage line up.

12 | P a g e

Source:pepsico.com

Pepsi has four soft drinks in the top ten beverages in the world. These brands are Pepsi, Mountain Dew, Diet Pepsi, and Caffeine Free Diet Pepsi. Some other strong brands are All Sport, Slice, Tropicana, Starbucks, Aquarian and a license agreement with Ocean Spray Juices. PepsiCo has established itself as a very stable and profitable company in North America and all over the world. As we mentioned above they are number two in the non-alcoholic beverage industry and number one in the snack industry by owning Frito-Lay. PepsiCo, Inc operates four major businesses: Frito-Lay North America, 34% of the sales and 41% of operating profit; PepsiCo Beverages 29% of sales and 30% of operating profit; Quaker Food 5% of sales and 9% of operating profit; PepsiCo Intl 32% of sales and 20% of operating profit. (Value Line) All these brands have a strong market position in North America and because of these PepsiCo has a growth potential for the years to come.

13 | P a g e

Industry Analysis
Industry Overview:
The U.S. food and nonalcoholic beverage industry comprises establishments that process or manufacture foods and beverages for human consumption, plus related products like chewing gum and vegetable and animal fats and oils. According to estimates by the U.S. Department of Agriculture (USDA), total food and beverage expenditures rose 3.8% to $844.2 billion in 2001, from $813.4 billion in 2000. Total expenditures include products for consumption at home ($443.9 billion in 2001) and away from home ($400.3 billion). Figure 1 displays the worlds leading food and beverage companies according to sales in 2002. PepsiCo is ranked fourth behind Nestle, Kraft Foods, and Unilever.

Source: PepsiCo Annual Report 2003 Figure 1

14 | P a g e

Several food companies have undertaken some form of restructuring or realignment in recent years in an effort to improve volume growth and profitability. These actions, the 14 benefits of which are now being fully realized, have addressed the need to cut costs in a competitive marketplace that leaves little room for price increases. Food and beverage companies have also targeted logistics and supply chain costs for improvement. A number of business-to-business (B2B) electronic marketplaces have been launched to aid these efforts. These marketplaces allow buyers and sellers of similar goods to carry out procurement activities over the Internet. They may help companies update business transactions with their suppliers, buyers, and distributors. They may also reduce transaction costs; generate volume-related scale economies by combining orders from multiple purchasers, improve inventory management, and facilitate bidding by a broad spectrum of potential suppliers. Given the mature state of the U.S. food industry and our expectation for low levels of food price inflation, we expect that realignment and cost-cutting activities will remain a major focus within the industry.

Beverage Industry
Earnings for major soft-drink companies showed substantial improvement in the first three quarters of 2002, and full-year operating earnings increased 7% to 9% on average. Companies are still dealing with sluggish carbonated soft drink trends in the United States. However, despite higher levels of marketing and promotional spending, and economic weakness in many international markets, noncarbonated beverage products continue to drive growth. Operating profits for the beverage industry are projected to raise 9%-10% in 2003 reflecting 7%-8% higher North American profits, a strong 14%-15% increase in Gatorade/Tropicana profits and a 4%-5% increase for international beverages. Beverage profits should benefit from a favorably pricing environment.

15 | P a g e

For 2003, modestly higher prices for soft drinks and other beverage products in U.S. supermarkets should boost profits for manufacturers. Noncarbonated drinks should continue to show strong growth, while volume trends for carbonated beverages should continue to show improvement. In addition to marketing and promotions, aggressive new product introductions by the major manufacturers should also help to boost volume trends. The projected increases in operating profits for the beverage industry in 2003 will be driven by a further rise in per capita consumption in the United States and abroad, strong growth in sales of new products, lower advertising costs, and modest price increases. The consolidation of bottling networks by both the Coca-Cola Co. and PepsiCo has helped to reduce retail price competition; after several years of intense pressure, soft drink prices have risen steadily since mid-1999. While raw material costs appear more challenging than in recent years, most companies are not expecting substantial increases in their overall cost structure. 15 Year to date the S&P Soft Drink Index fell 3.8% versus a 1.4% rise in the S&P 1500. During 2002, the industry index significantly outperformed the broader market with a decline of 8.0% versus a 22.5% decrease in the S&P 1500. Performances in recent months has been affected by volatility in the shares of Coca-Cola as investors question whether drink volumes and earnings will resume their historical growth patterns. Shares of PepsiCo have also experienced some weakness on concerns of slowing growth. We however expect the industry to outperform the market in the near term with rebounds in growth and margin trends. Sales and earnings for PepsiCo in 2003 are expected to show positive gains, benefiting from favorable material costs and retail pricing in the U.S Domestic unit sales. Volumes in 2003 should benefit from increased penetration into non-traditional distribution channels and growing consumer demand for nonalcoholic beverage products (soft drinks, ready to drink teas, juices, bottled water and sport drinks) which should continue to raise non- alcoholic beverage consumption levels and margin per capita.

16 | P a g e

PepsiCo:
PepsiCo was founded in 1919 in Delaware and was reincorporated in North Carolina in 1986. Now this company is one of the world leaders in snacks, foods and beverages. PepsiCo produces and market different kind of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages. PepsiCo had revenue of about $29 billion in 2004, 27 billion in 2003 and over 200,000 employees. The company is organized in four divisions which consist of the Frito-Lay North America, PepsiCo Beverage North America (Pepsi-Cola America and Gatorade/Tropicana North America), PepsiCo International, and Quaker Foods North America. The international division operates in around 200 countries. The largest of operations are held in United Kingdom and Mexico. PepsiCo has emerged as a vast and diverse company, involved in beverages as well as snack foods. PepsiCos division Frito-Lay holds a significant leadership in the snack industry even though is faced with different competition every day. The company produces eight of the ten best selling snacks in the nation. Frito-Lay controls 60% of the U.S. salty snack-food market and has the number one position in corn chips, potato chips, tortilla chips and pretzels The beverage industry is dominated by three major players which together control the global market. These players are Coca-Cola, PepsiCo, and Cadbury Schweppes (Dr Pepper and Seven Up). For years this industry is known for the war between Coke and Pepsi on the cola principals. Now this war has ended and the industrys giants have been focusing in on creating new product flavors to compete with each other. It all began in 1886, when a tree legged brass kettle in Hohn Styth pembertons backyard in Atlanta was brewing the first P of marketing legeent Unaware the pharmacist has given birth to a caramel colored syrup, which is now the chief ingredient of the worlds favorite drink. The syrup combined with carbonated the soft drink market. It is estimated that this drink is served more than one thousand million times in a day. Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and book keeper. Pemberton & Robinson laid the first foundation of this beverage when an average nine drinks per day to begin with, upping volumes as sales grew.

17 | P a g e

In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the 1950s Colas was a daily consumption item, stored in house hold fridges. Soon were born other non- cola variants of this product like orange & Lemon. Now, the soft drink industry has been dominated by three major player (1) The New York based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3) The united Kingdom based Cadbury Schweppes. Though out the glove these major players have been battling it. Out for a bigger chunk of the ever-growing cold drink market. Now this battle has begun in India too. India is now the part of cold drink war. Gone are days of Ramesh Chauhan, Indias one time cola king and his bouts of pistol shooting. Expect now to hear the boon of cannons when the Coca Cola & Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By buying

Over local competition, the two American Cola giants have cleared up the arena and are packing all their power behind building the Indian franchisee of their globe girdling brands. The huge amount invested in fracture has never been seen before. Both players seen an enormous potential in his country where swigging a carbonated beverage is still considered a treat, virtually a luxury. Consequently, by world standards Indias per capita consumption of cold drinks as going by survey results is rock bottom, less than over Neighbors Pakistan & Bangladesh, where it is four times as much. Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994) to add muscle to its infrastructure in bottling and distribution. This is apart from money that companys franchised bottles spend in upgrading their plants all this has contributed to substantial gains in the market. In colas, Pepsi is already market leader and in certain cities like Banaras, Pepsi outlets are on one side & all the other colas put together on the other. While coke executive scruff at Pepsis claims as well as targets, industry observers are of the view that Pepsi has definitely stolen a march over its competitor coke.

18 | P a g e

Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image turnaround is no small achievements, considering that since it was established in 1989, taking the hardship route prior to liberalization and weighed down by export commitments. Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff competition between first two, both Pepsi and coke have started, sponsoring local events and staging frequent consumer promotion campaigns. As the mega event of this century has started, and the marketers are using this event world cup football, cricket events and many more other events. Like Pepsi, coke is picking up equity in its bottles to guarantee their financial support; one side coke is trying to increase its popularity through. Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink only coca cola. Eat movies, sleep movies. Drink only coca cola. On the other side of coin Pepsi has introduced AMITABH BACHHAN for capturing the lemon market through MIRINDA Lemon with zor ka jhatka dhere se lage. But no doubt that UK based Cadbury is also recognizing its presence. So there is a real crush in the soft drink market. with launch of the carbonated organize drink Crush, few year ago in Banaras ., the first in a series of a launches , Cadbury Schweppes beverage India (CSBI) HAS PLANNED:- The world third largest soft drink marketers all over the country.CSBI o wholly owned subsidiary of the London based $ 6.52billion. Cadbury Schweppes is hoping that crush is going well and well not suffer the same fate as the Rs. 175 crore Cadbury Indias apple drink Apella. CSBI is now with orange (crush), and Schweppes soda in the market.

19 | P a g e

As orange drinks are the smallest of non-cola categories that is Rs. 1100 crore markets with 10% market share and cola heaving 50% is followed by Lemon segment with 25%. The success of soft drink industry depends upon 4 major factors viz. Availability Visibility Cooling Range

AVAILABILITY

Availability means the presence of a particular brand at any outlet. If a product is now available at any outlet and the competitor brand is available, the consumer will go for it because generally the consumption of any soft drink is an impulse decision and not predetermined one.

VISIBILITY

Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi cola and this brand is not displayed in the outlet, then its availability is of no use. The soft drink must be shown off properly and attractively so as to catch the attention of the consumer immediately Pepsi achieves visibility by providing glow signboards, hoarding, calendars etc. to the outlets. It also includes various stands to display Pepsi and other flavors of the company.

20 | P a g e

COOLING

As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the sales. The brand, which is available chilled, gets more sales then the one which is not, even if it is more preferred one. RANGE

This is the last but not the least factor, which affects the sale of the products of a particular company. Range availability means the availability of all flavors in all sizes.

ORGANIZATIONAL STRUCTURE:

21 | P a g e

PepsiCo is one the largest companies in the U.S. It figures amongst the largest 15 companies worldwide according to the number of employees hired. It has a U.S. Fortune rank of 50.The company profits for 1997 were $2.14 billion on revenues of $20.92 billion and Pepsi is bottled in nearly 190 countries. PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43 billion and over 198,000 employees. Take a journey through our past and see the key milestones that define PepsiCo.

PepsiCo is a world leader in the food chain business. It consists of many companies amongst which the prominent once are Pepsi-Cola, Frito-Lay and Pepsi Food International. The group is presently into two of the most profitable and profitable and growing industries namely, beverages and snack foods. It has scores of big brands available in nearly 150 countries across the globe. The group has established for itself once of the strongest brands in various segments of its operations. The beverages segment primarily markets its Pepsi, Diet Pepsi, Mountain Dew and other brands worldwide and 7-UP outside the U.S. markets. These are positioned in close competition with Coca-Cola Inc. of USA. A point which is worth a mention is that Coca-Cola gets 80% of its profits for International operations while the same figure for PepsiCo stands at 6%. The segment is also in the bottling plants and distribution facilities and also distributes the ready to drink tea products of Lipton in North America. In a joint venture with orient spray juice products PepsiCo also manufactures and distributes fruit juices.

22 | P a g e

PepsiCo in India

Source: pepsico.com

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab governmentowned 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. Others claim that firstly Pepsi was banned from import in India, in 1970, for having refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These controversies are a reminder of "India's sometimes acrimonious relationship with huge multinational companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have "been major targets in part because they are well-known foreign companies that draw plenty of attention." 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 The Coca-Cola Company, contained toxins, including lindane, DDT, malathion and chlorpyrifos pesticides that can contribute to cancer, a breakdown of the immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Miranda,

23 | P a g e

Fanta, Thumps Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found no such residues. However, this was the European standard for water, not for other drinks. No law bans the presence of pesticides in drinks in India. The Coca-Cola Company and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a government-appointed committee, is now trying to develop the world's first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks. As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of soft-drink sales in India. PepsiCo has also been accused by the Puthussery panchayat in the Palakkad district in Kerala, India, of practicing "water piracy" due to its role in exploitation of ground water resources resulting in scarcity of drinking water for the panchayat residents, who have been pressuring the government to close down the PepsiCo unit in the village. In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that their drinks are safe for consumption and have published newspaper advertisements that say pesticide levels in their products are less than those in other foods such as tea, fruit and dairy products. In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft drinks, was banned by the state government in 2006, but this was reversed by the Kerala High Court merely a month later. Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals

24 | P a g e

Brand Facts:
PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats that deliver enjoyment, nutrition, convenience as well as affordability. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 42 bottling plants in India, of which 13 are company owned and 29 are franchisee owned. In addition to this, PepsiCos Frito Lay division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

Beverages:

Source: pepsico.com

PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Nimbooz, Miranda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks Gatorade, Tropicana100% fruit juices, and juice based Drinks Tropicana Nectars, Tropicana Twister and Slice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands 25 | P a g e

Quick Facts

PepsiCo established its business operations in India in 1989 Invested more than USD 1 Billion since inception Well known and loved global brands that delight and nourish consumers

Source: pepsico.com

It provides direct and indirect employment to 150,000 people in India It has more than 42 bottling plants in India, of which 13 are company owned & 29 franchisee owned

3 State-of-the-art food plants in Punjab, Maharashtra and West Bengal

26 | P a g e

Brand History
Pepsi is a hundred year old brand loved by over 200 million people worldwide. The largest single selling soft drink brand in India is the ubiquitous' socialiser' at every occasion.

Youngistan loves it. 200 million people worldwide love it. But what has made Pepsi the single largest selling soft drink brand in India is actually a formula concocted a century ago in a far away continent.

1886, United States of America. Caleb Brad man, the man with a plan, got on to formulate a blockbuster digestive drink and decided to call it Brads drink. It was this doctors potion that was to become Pepsi Cola in 1898, and eventually, Pepsi in 1903.

Pepsi has always played on the front foot and since its inception has come out with revolutionary concepts like Diet, 2L bottles, recyclable plastic cola bottles and the enviable My Can.

Brand Advantage

Pepsi has become a friend to the youth and has led many youth cultures. Youngsters over the generations have grown up with Pepsi and share an emotional connect with it, unlike any other cola brand. Be it parties, hangouts, or just another day at home, a day is never complete without the fizz of Pepsi!

Pepsi, Cricket and Bollywood have been joined at the hip since the beginning. Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena Kapoor, Priyanka Chopra, Virender Sehwag, M. S. Dhoni, John Abraham, Ranbir Kapoor and Deepika Padukone are a few celebrities who will go any length for a chilled Pepsi.

The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is not just a pack but a style statement for todays youth.

27 | P a g e

PEPSI PRODUCTS IN INDIA

Source: pepsico.com

28 | P a g e

PRODUCT POSITIONING OF PEPSI CO.

Source: picsearch.com Pepsi prefers to position itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation.

These terms adopted in Pepsis advertising campaigns are referring to the markets that marketers refer to as Generation X. The Generation X consumer is profiled to be between the ages of 18 to 29. They have high expectations in life and are very mobile and active. They adopt a lifestyle of living for today and not worrying about long-term goals. Though Pepsis main emphasis is on this segment but they also have a focus on the 12 to 18 year old market.

The rich deep blue coloring represents eternal youthfulness and openness. Marketing plans like Yeh Dil Maange More, Got Another Pepsi, Ye Pyass Hai Badi have made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category.

29 | P a g e

SLOGANS USED BY PEPSI COMPANY:

1898 Brad's Drink

Exhilarating, 1903 Digestion

Invigorating,

Aids

1906

Original Pure Food Drink

1908

Delicious and Healthful

1915

For All Thirsts - Pepsi:Cola

1919

Pepsi:Cola - It makes you Scintillate

1920

Drink Pepsi:Cola - It Will Satisfy You

1928

Peps You Up!

1929

Here's Health!

1932

Sparkling, Delicious

1933

It's the Best Cola Drink

Double 1934 Refreshing and Healthful

Size

30 | P a g e

1938

Join the Swing to Pepsi

1939

Twice as Much for a Nickel

1943

Bigger Drink, Better Taste

1947

It's a Great American Custom

1949

Why Take Less When Pepsi's Best?

1950

More Bounce to the Ounce

The 1954

Light

Refreshment

Refreshing Without Filling

1958

Be Sociable, Have a Pepsi

Now It's Pepsi for Those Who Think 1961 Young

Come Alive! You're in the Pepsi 1963 Generation

Taste that Beats the Others Cold, 1967 Pepsi Pours It On.

31 | P a g e

You've Got a Lot to Live, Pepsi's Got 1969 a Lot to Give

1973

Join the Pepsi People Feelin' Free

1976

Have a Pepsi Day!

Catch 1979

That

Pepsi

Spirit

Take the Pepsi Challenge

1981

Pepsi's Got Your Taste for Life

1983

Pepsi Now!

1984

The Choice of a New Generation

1987

America's Choice

1989

A Generation Ahead

1992

Gotta Have It

1993

Be Young, Have Fun, Drink Pepsi

1995

Nothing Else is a Pepsi

1997

Generation Next

32 | P a g e

1998

Same Great Taste

1999

The Joy of Cola

2000

The Joy of Pepsi

2003

2004 Pepsi. It's the Cola 2005

2008

33 | P a g e

SWOT analysis:

STRENGTH: One of the biggest strengths of PepsiCo is its Officers and Directors. They are a master of being honest, having analytical assessment and they have no shyness in terms doing what needs to be done. Minority Business News names PepsiCo Chairman and CEO Steve Reinemund Executive of the Year. (www.Forbes.com). It is because of them that the PepsiCo is one of the best companies in the beverage and food industry. Another strength of this company is their division Frito-Lay which has surpassed companies of all sizes through a combination of restructuring, new products, and lower prices. While Coke is synonymous with soda, so are Frito-Lays Fritos is with corn chips demonstrating its product-name association. Like James Stack an editor of InvesTech Research says, While the company trails Coca Cola on the soft-drink industry, in the snack foods, Frito-Lay which controls 60% of the U.S. salty snack-food market, has the number one position in corn chips, potato chips, tortilla chips and pretzels. They are the best-run company in the food business. For the twelve months ended Sept, 4, 2004 PepsiCo earned $3.93 billion on sales of $16.49 billion. This shows that company is very profitable, has a good financial footing, and is continuing to grow. While the soft drink segment is, as ever, PepsiCo is number 2, but is an extremely strong number 2. They control 21% of the soft-drink market. It is going to be hard to compete with Coke in the soft drink industry but PepsiCo is not just staying and accepting defeat. The companys purchase of The Quaker Oats Company and its Gatorade brand show that they are still highly competitive.

WEAKNESS: Pepsi maybe is one of the weaknesses of PepsiCo due that is really far from the leader Coca-Cola in the international market. Coke is three times Pepsi's size in fountain sales and has more than ten times as many salespeople as Pepsi. In the U.S., Pepsi's market share lags behind Coke's by the widest margin in over two decades. The net sales of PepsiCo had increase in the past years but it is important to notice that this increase is only because of sales in USA. Internationally, 34 | P a g e

Pepsi's drink business was a mess. They still havent figured out a way to increase their sales in the international market. But lately they have improved internationally and especially after Coke have lost a lot of sales in Europe. But PepsiCo has showed difficulties in the past in the international market and they are trying very hard to improve these weaknesses. Another weakness is their historically late entrance into carbonated beverage industry. Coca-Cola entered the market in 1886 while Pepsi emerged in 1919 giving Coca-Cola a three decade head start.(www.pepsico.com) Regardless of PepsiCos size, diversification, business acumen or bottom line, consumers still see the company as only Pepsi, a product. While Coke has fans (collectors clubs, items, Christmas tree ornaments, etc.), Pepsi has purchasers.

OPPORTUNITY: There are still some undeveloped markets in the world that PepsiCo should try to penetrate. They need to look for these markets and get established there before their competitors. PepsiCo traditional carbonated soft drinks and salty snacks continue to symbolize the company and it is going to do so for a long time. But you have to be risky to succeed in business and to beat your competition. PepsiCo is thinking about taking a risky strategy to make at least half of its newproduct offering nutritious (www.new-nutrition.com). We know that we live in a society where many people are worried about their nutrition. We hear about this topic through the media and we read it in magazines all the time. New good-for-you products from PepsiCo are going to include soon dairy products, more whole-grain items in its Frito-Lay line of salty snacks, products based on olive oil and a soy-enhanced Tropicana orange juice. This is going to be a great opportunity for PepsiCo to make healthier product and to expand its market. The key for the beverage companies is differentiation. The giants of the industry have different formulas and appearances. PepsiCo for being one of these giants has the opportunity to make better formulas and appearances for their customers so they can beat their competition. PepsiCo is going to introduce a lime-flavored soda that is going to compete with a similar offering of their rival Coca-Cola. By using a better formula and appearance and a great advertising plan in these new drinks, they have the opportunity to beat Coca-Cola.

35 | P a g e

THREATS: The prices of the items that PepsiCo purchase are subject of fluctuation. For example the increase the prices of the raw materials or the fuel can cause an increase of the costs of the production of their product, and in the business environment that PepsiCo operates, it is not possible to increase the product price because they are part in a very competitive environment. In the marketing department the PepsiCo brand image is very much linked to Pepsi image, which has label of second best brand. This can still give them the label of loser, linking its image to the rest of firms company. This can give them a bad brand image in their markets. They need to improve in their marketing department through advertising campaigns where they are appeared together with other PepsiCo Brands.

Five Forces Model :

Competitive Force 1: Rivalry Among Existing Firms

Due to the fact that this industrys growth has had relevantly little growth over the years, there is tremendous competition within the industry. This industry has low concentration. Three major firms account for 80% of the global market. These firms include PepsiCo, Coca-Cola, and Cadbury Schweppes. Coca-Cola has achieved 50% in global market share, while PepsiCo controls 21%, and Cadbury Schweppes maintains 7% . Competition amongst these firms is not mainly based on price competition but rather product differentiation. Many firms rely on new flavors and have also branched into non-carbonated beverages and snack foods to give there firm a competitive advantage over others. PepsiCo has also been exceeding in this by acquiring Quaker Oats which owns Gatorade. PepsiCo has also added Tropicana, Aquafina, and Lipton into its product line making PepsiCo number one in the non-carbonated beverage industry. CocaCola has also entered into this arena by emerging with Nestea, Powerade, and Minute Maid brands to compete in this movement. PepsiCo has also branched into the breakfast and snack food industry with Quaker Oats and Frito-Lay. While PepsiCo has remained at number two in soft drinks, this diversification has helped make up the difference in competition. Switching

36 | P a g e

costs are virtually inexistent in this industry as there are no costs for consumers to switch products. The only costs to switching would be a different taste, appearance, and appeal. This is mainly due to the fact that firms have cooperated to maintain the same price for there products. Consumers are faced with a decision of choosing a product not based on price but rather on style, taste, and other contributing factors. Under these circumstances, companies have spent considerable energy to market their products to achieve brand awareness. There is also a tremendous learning curve for these companies, resulting in extreme barriers to entrance of other emerging companies. Most companies have developed extensive distribution systems and have created relationships with suppliers and buyers. Also there are extensive economies of scale resulting in companies with massive size. This has been created by obtaining extreme amounts of capital and diversifying the company into other markets. In this type of industry there are relatively few exiting barriers which have left only a few companies to compete in.

Competitive Force 2: Threat of New Entrants

Within this industry there are large economies of scale. This results in an extreme amount of capital to propel the company. Using capital for manufacturing isnt much of a concern as there are generic brands which cost less. Much capital is used to market and advertise their products to achieve brand awareness and differentiate their products from others. PepsiCo has done a tremendous job by creating a household name rivaling that of Coca-Colas. Such common household names are Pepsi, Mountain Dew, Gatorade, Tropicana, Lipton, and Quaker and FritoLay products. New companies trying to emerge into the industry have a distinct disadvantage due to the fact that the top companies have already developed such traits. This has caused new companies to not be able to compete head on with rivals. Also companies within the industry have developed extensive arrangements and relationships with manufactures and distributors. PepsiCo for example has Pepsi Bottling Group. This independent entity makes, sells, and distributes Pepsi brands around the world.

37 | P a g e

Competitive Force 3: Threat of Substitute Products

In PepsiCos industry there is a considerable threat of product substitution. Products offering the same qualities and features at a lower price can initiate customers to substitute. In this day of age of health consciousness, new products have been developed to meet this trend. To meet this concern many of the companies offer healthier alternatives that ultimately cut into their other brands profits. Brands such as Pepsi One, Diet Pepsi, and Coca-Colas C2, and Diet Coke have been developed to meet this concern head on. Another concern is that of generic brands such as grocery store brands. The relative concern is based on price. For example most grocery stores have their own brands of soda, juices, breakfast, and snack items. While the top companies have their own distinct image, these generic brands offer a similar taste but at a much lower price. This industrys main concern is if customers become price conscious and stray away from popular brands such as PepsiCo products. As long as consumers place value on these companies products there shouldnt be that much of a concern.

Competitive Force 4: Bargaining Power of Buyers

PepsiCo is more sensitive to price due to the fact that there are low switching costs involved in producing their products. Because the total cost of manufacturing their product comes from packaging, PepsiCo is more apt to search for the lowest price of their raw materials being that are readily available and are a common material (i.e. plastics and aluminum). Being that PepsiCo is such a large producer enables them to hold a strong bargaining position. Since they buy so many raw materials they are able to get lower prices for them buying in such bulk. Also the number of readily available materials to PepsiCo increases their bargaining power due to the fact if a specific supplier cannot match a price or does not have the material available; it is not difficult to find it quickly and inexpensively. However these packaging and distribution expenses are taken by Pepsi Bottling Group which is a separate entity of PepsiCo and became publicly traded in early 1999. Even though PBG is a separate company; PepsiCo owns 40% of PBGs equity interest.

38 | P a g e

Competitive Force 5: Bargaining Power of Suppliers

There are many different suppliers in PepsiCos industry. These suppliers are the bottlers and metal can suppliers. PepsiCo is in a unique position in which it used to own Pepsi Bottling Group. In 1999, Pepsi Bottling Group became independent and in which PepsiCo retains 40% of its shares. Because of this suppliers of bottlers have a relatively low bargaining power relative to PepsiCo because they are a continued vested interest of PepsiCo. This makes Peingredients that are used in the food and beverage businesses, these include: almonds, cocoa, corn, flavorings, flour, juice, oranges, potatoes, and different kind of fruits.(www.pepsico.com) This gives PepsiCo the chance to produce low cost products over competitors. PepsiCo also employs specialists to secure the best suppliers that are in the market for many of these items in order to produce quality products too. pepsiCo able to have a distinct advantage over other competitors in production and distribution. Pepsi Bottling Group also provides other.

4PS OF MARKETING:
PepsiCo is one of the world's largest food and beverage companies, with 2010 annual revenues of more than $39 billion. The company employs approximately 185,000 people worldwide, and its products are sold in approximately 200 countries through four P's of the Marketing Mix which are following. 1. Product 2. Promotion 3. Place 4. Price

1. PRODUCT:

The Pepsi-Cola drink contains basic ingredients found in most other similar

drinks including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains the same ingredients but no caffeine. Some of the different and varied brands of Pepsi are as follows: 39 | P a g e

Pepsi Diet pepsi Mirinda Mountain dew 7 up Aquafina Slice Pepsi my can 7up lemon bite

2. PROMOTION: Promotion is one of the four aspects of marketing. Promotioncomprises four subcategories: 1. Advertising 2. Personal selling 3. Sales promotion 4. Publicity and public relations The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product of acceptance, a corporate creation of brand image. Pepsi is

equity, positioning, competitive

retaliations, or creation

famous for their promotions. Pepsi started with its blind taste tests known as the Pepsi Challenge. Pepsi has 35% share on television advertisement. That is the maximum in beverages.

3. PLACE: Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone but it looks for partners and mergers. Till now Pepsi has collaborated with companies like Quaker Oats, Frito-lays, Lipton, Starbucks, etc. Pepsi like Coke has spread all over the world. It is because of this worldwide spread that now it is coming up with Advertisements which can be broadcasted in the different nations in the world. There cent example with would be the Pepsi advertisements having David Beckham as it brand ambassador. 40 | P a g e

4. PRICE: Pepsi decides it price on the basis of competition. The best think about the company Pepsi is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. But this risk taking attitude has also earned Pepsi losses. Though lowering the price would attract the customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier but now Pepsi is a full-fledged and growing company. It has covered all its losses and is now growing at a rapid rate.

Competitive Strategy Analysis:

The beverage and snack industry is very competitive. Their competitive strategy is based on differentiation instead of cost leadership. This means that the giants of the business like PepsiCo should explore new formulas, flavors and appearances to compete with each other. This is what PepsiCo is already doing by introducing two different lime flavor drinks by the end of this month. PepsiCo is known for producing a variety of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods. They invest many resources to produce superior products and in marketing for brand awareness. This is one of the reasons that PepsiCo has been one of the leaders in the beverage and snack industry. Another competitive advantage that PepsiCo has is its non-carbonated beverage. PepsiCo has lost the war against Coke for the carbonated beverages, but they are the leader in the noncarbonated beverages category. They have done this by adding Gatorades 73% share of the sports drink market to its Tropicana and Lipton tea holdings. (www.finance.yahoo.com) This means that PepsiCo is not only focusing on competing with Coke on the carbonated beverages but they are looking to win battles in other competitive areas. This is going to make PepsiCo maintain a competitive advantage over a wider array of its competitors. Another competitive advantage of PepsiCo is their flexibility of their distribution network. PepsiCo products are brought to the market through direct-store delivery, vending distribution networks and broker-warehouse. This distribution system is developed in a way to 41 | P a g e

satisfy customer needs and to show product characteristic. By having a flexible distribution network PepsiCo is going to maintain their great reputation and their product are going to satisfy their customers. The last competitive advantage that PepsiCo has is its capital. PepsiCo is number one in the snack industry, number two in the non-alcoholic industry and they have revenue of about $29 billion. This means that they have excess money to spend on advertising, quality of products and differentiation. PepsiCo by having such great capital provides advertising, sales and promotional support to their beverage and food customers. Thats why PepsiCo has some of the mostrecognized advertising in the world. By having such extensive capital PepsiCo is making some research and development to find new flavors and to produce an even higher quality product. In conclusion PepsiCo believes that their capital, differentiation, flexibility of their distribution network and their non-carbonated beverage is going to allow them to compete efficiently.

PROCESS:
RAW MATERIALS
Carbonated water constitutes up to 94% of a soft drink. Carbon dioxide adds that special sparkle and bite to the beverage and also acts as a mild preservative. Carbon dioxide is an uniquely suitable gas for soft drinks because it is inert, non-toxic, and relatively inexpensive and easy to liquefy. The second main ingredient is sugar, which makes up 7-12% of a soft drink. Used in either dry or liquid form, Sugar-free soft drinks stemmed from a sugar scarcity during World War II. Soft drink manufacturers turned to high-intensity sweeteners, mainly saccharin, which was phased out in the 1970s when it was declared a potential carcinogen. Other sugar substitutes were introduced more successfully, notably aspartame, or Nutra-Sweet, which was widely used throughout the 1980s and 1990s for diet soft drinks. Because some high-intensity sweeteners do not provide the desired mouth-feel and aftertaste of sugar, they often are combined with sugar and other sweeteners and flavors to improve the beverage.

42 | P a g e

THE MANUFACTURING PROCESS

Most soft drinks are made at local bottling and canning companies. Brand name franchise companies grant licenses to bottlers to mix the soft drinks in strict accordance to their secret formulas and their required manufacturing procedures.

Clarifying the water

The quality of water is crucial to the success of a soft drink. Impurities, such as suspended particles, organic matter, and bacteria, may degrade taste and color. They are generally removed through the traditional process of a series of coagulation, filtration, and chlorination. Coagulation involves mixing a gelatinous precipitate, or floc (ferric sulphate or aluminum sulphate), into the water. The floc absorbs suspended particles, making them larger and more easily trapped by filters. During the clarification process, alkalinity must be adjusted with an addition of lime to reach the desired pH level.

Filtering, sterilizing, and dechlorinating the water

The clarified water is poured through a sand filter to remove fine particles of floc. The water passes through a layer of sand and courser beds of gravel to capture the particles. Sterilization is necessary to destroy bacteria and organic compounds that might spoil the water's taste or color. The water is pumped into a storage tank and is dosed with a small amount of free chlorine. The chlorinated water remains in the storage tank for about two hours until the reaction is complete. Next, an activated carbon filter dechlorinates the water and removes residual organic matter, much like the sand filter. A vacuum pump de-aerates the water before it passes into a dosing station.

43 | P a g e

Mixing the ingredients:

The dissolved sugar and flavor concentrates are pumped into the dosing station in a predetermined sequence according to their compatibility. The ingredients are conveyed into batch tanks where they are carefully mixed; too much agitation can cause unwanted aeration. The syrup may be sterilized while in the tanks, using ultraviolet radiation or flash pasteurization, which involves quickly heating and cooling the mixture. Fruit based syrups generally must be pasteurized. The water and syrup are carefully combined by sophisticated machines, called proportioners, which regulate the flow rates and ratios of the liquids. The vessels are pressurized with carbon dioxide to prevent aeration of the mixture.

Carbonating the beverage:

Carbonation is generally added to the finished product, though it may be mixed into the water at an earlier stage. The temperature of the liquid must be carefully controlled since carbon dioxide solubility increases as the liquid temperature decreases. Many carbonators are equipped with their own cooling systems. The amount of carbon dioxide pressure used depends on the type of soft drink. For instance, fruit drinks require far less carbonation than mixer drinks, such as tonics, which are meant to be diluted with other liquids. The beverage is slightly over-pressured with carbon dioxide to facilitate the movement into storage tanks and ultimately to the filler machine.

Filling and packaging:

The finished product is transferred into bottles or cans at extremely high flow rates. The containers are immediately sealed with pressure-resistant closures, either tinplate or a steel crown with corrugated edges; twists off, or pull tabs. Because soft drinks are generally cooled during the manufacturing process, they must be brought to room temperature before labeling to prevent condensation from ruining the labels. 44 | P a g e

This is usually achieved by spraying the containers with warm water and drying them. Labels are then affixed to bottles to provide information about the brand, ingredients, shelf life, and safe use of the product. Most labels are made of paper though some are made of a plastic film. Cans are generally pre-printed with product information before the filling stage. Finally, containers are packed into cartons or trays which are then shipped in larger pallets or crates to distributors.

45 | P a g e

FINANCIAL ANALYSIS
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios allow for comparisons

between companies between industries between different time periods for one company between a single company and its industry average Ratios generally hold no meaning unless they are benchmarked against something else, like past performance or another company.

The financial analysis is being carried out in two ways: (i) (ii) Intrafirm: Analysis of performance of PepsiCo. In past 5 years. Interfirm: Analysis of performance of PepsiCo. in comparison with its biggest competitor Coca Cola Co.

Intrafirm Analysis (Pepsico. & Coca-cola co.)

Liquidity Ratios: PepsiCo. 2011 0.96 0.62 0.24 2010 1.11 0.80 0.40 2009 1.44 1.00 0.47 2008 1.23 0.79 0.26 2007 1.31 0.89 0.32

Current ratio Quick ratio Cash ratio

46 | P a g e

ANALYSIS:
CURRENT RATIO: A liquidity ratio calculated as current assets divided by current liabilities. The current ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which shows that companys ability to pay its current debt liabilities has decreased. For the lenders, current ratio is very helpful to determine whether a company has a sufficient level of liquidity to pay liabilities. Decrease in current ratio has increased the risk. By observing the trend of current ratio of Pepsico. it is interpreted that the ability of company to convert the current assets into cash to meet current liabilities is decreasing.

QUICK RATIO: A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. The quick ratio, defined also as the acid test ratio, reveals a company's ability to meet short-term operating needs by using its liquid assets. In theory, the higher the ratio is, the better the position of the company is. The quick ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which implies that the companys ability to pay their current debt liabilities without relying on the sale of inventory has deteriorated. The decrease in quick ratio implies that companys position is downgrading.

CASH RATIO: A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. The cash ratio measures the liquidity of a company by calculating the ratio between all cash and cash equivalents assets and current liabilities. A strong cash ratio is useful to creditors when deciding how much debt, if any, they would be willing to extend to the asking party.

47 | P a g e

The cash ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which implies that the ability of company to pay current liablities without relying on the sale of inventory or receipts of account receivables has decreased. The trend shows that the most liquid cash of all assets against current liabilities is decreasing.

Pepsico. Liquidity Ratios

1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2006 2007 2008 2009 Year 2010 2011 2012 Current ratio Quick ratio Cash ratio

Coca-Cola Co. 2011 1.05 0.78 0.58 2010 1.17 0.85 0.61 2009 1.28 0.95 0.67 2008 0.94 0.62 0.38 2007 0.92 0.58 0.33

Current ratio Quick ratio Cash ratio

ANALYSIS
CURRENT RATIO: A liquidity ratio calculated as current assets divided by current liabilities. The current ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which shows that companys ability to pay its current debt liabilities has decreased. For the lenders, current ratio is

48 | P a g e

very helpful to determine whether a company has a sufficient level of liquidity to pay liabilities. Decrease in current ratio has increased the risk. By observing the trend of current ratio of Pepsico. it is interpreted that the ability of company to convert the current assets into cash to meet current liabilities is decreasing.

QUICK RATIO: A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. The quick ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which implies that the companys ability to pay their current debt liabilities without relying on the sale of inventory has deteriorated. The decrease in quick ratio implies that companys position is downgrading.

CASH RATIO: A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.

The cash ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which implies that the ability of company to pay current liablities without relying on the sale of inventory or receipts of account receivables has decreased. The trend shows that the most liquid cash of all assets against current liabilities is decreasing.

49 | P a g e

Coca-Cola Co. Liquidity Ratios

1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2006 2007 2008 2009 Year 2010 2011 2012 Current ratio Quick ratio Cash ratio

PROFITABILITY RATIOS:

PepsiCo. 2011 Return on Sales Gross profit margin Operating profit margin Net profit margin Return on Investment Return on equity (ROE) Return on assets (ROA) 52.49% 14.48% 9.69% 31.29% 8.84% 2010 54.05% 14.41% 10.93% 29.86% 9.27% 2009 53.51% 18.61% 13.75% 35.38% 14.92% 2008 52.95% 16.09% 11.89% 42.47% 14.29% 2007 54.30% 18.19% 14.33% 32.83% 16.34%

50 | P a g e

ANALYSIS:
GROSS PROFIT MARGIN:

Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. The gross profit margin improved from 2009 to 2010 but then deteriorated from 2010 to 2011. A higher gross profit margin indicates that a company can make a reasonable profit on sales, as long as it keeps costs in control. The profit margin of company improved in 2009-2010 but then decreased in 2010-2011 which indicates that the profit company makes after paying off its Cost of Goods sold has deteriorated. Efficiency of company using its raw materials and labor during the production process has downgraded.

OPERATING PROFIT MARGIN: A profitability ratio calculated as operating income divided by revenue. It is expressed as a percentage of sales and shows the efficiency of a company controlling the costs and expenses associated with business operations. Operating profit margin ratio analysis measures a companys operating efficiency and pricing efficiency with its successful cost controlling. The higher the ratio, the better a company is. The operating profit margin deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011 which indicates that the profit company makes after paying for variable costs of production such as wages, raw materials, etc. has increased in 2010-2011 period. The higher operating profit margin indicates that a company has lower fixed cost and a better gross margin or increasing sales faster than costs, which gives management more flexibility in determining prices.

51 | P a g e

NET PROFIT MARGIN: An indicator of profitability, calculated as net income divided by revenue. Net margin measures how successful a company has been at the business of making a profit on each rupee sales. It is one of the most essential financial ratios. The higher the ratio, the more effective a company is at cost control. With net profit margin ratio all costs are included to find the final benefit of the income of a business. The net profit margin deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates that the net income company makes with total sales achieved has deteriorated. That is, the efficiency of company of converting sales into actual profit has downgraded. RETURN ON EQUITY (ROE): A profitability ratio calculated as net income divided by shareholders' equity. A company with high return on equity is more successful to generate cash internally. Investors are always looking for companies with high and growing returns on equity. The ROE deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011 which indicates that the profit company earned in comparison to the money a shareholder has invested has increased in 2010-2011. It tells investors how effectively their capital is being reinvested. A higher ratio indicates better position of company.

RETURN ON ASSETS (ROA): A profitability ratio calculated as net income divided by total assets. The return on assets (ROA) percentage shows how profitable a company's assets are in generating revenue. This number tells you what the company can do with what it has, i.e. how many rupee of earnings they derive from each rupee of assets they control. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; companies that require large initial investments will generally have lower return on assets. The higher the ratio, the better it is for the firm. 52 | P a g e

The ROA deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates that company's assets are less profitable in generating revenue. The lower ROA indicates that the position of company is downgrading.

Pepsico. Profitability Ratios

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 Year Gross profit margin Operating profit margin Net profit margin Return on equity (ROE) Return on assets (ROA)

Coca-Cola Co. 2011 Return on Sales Gross profit margin Operating profit margin Net profit margin Return on Investment Return on equity (ROE) Return on assets (ROA) 60.86% 21.82% 18.42% 27.10% 10.72% 2010 63.86% 24.06% 33.63% 38.09% 16.19% 2009 64.22% 26.56% 22.02% 27.52% 14.02% 2008 64.39% 26.44% 18.18% 28.37% 14.33% 2007 63.94% 25.13% 20.73% 27.51% 13.82%

53 | P a g e

GROSS PROFIT MARGIN: Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. The gross profit margin deteriorated from 2009 to 2010 and from 2010 to 2011. A lower gross profit margin indicates that a companys ability to make a reasonable profit on sales is deteriorating. Efficiency of company using its raw materials and labor during the production process has downgraded.

OPERATING PROFIT MARGIN: A profitability ratio calculated as operating income divided by revenue. The operating profit margin deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates that the profit company makes after paying for variable costs of production such as wages, raw materials, etc. has decreased.

NET PROFIT MARGIN: An indicator of profitability, calculated as net income divided by revenue. The net profit margin improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011 which indicates that the net income company makes with total sales achieved has improved in 2010-2011 period. That is, the efficiency of company of converting sales into actual profit has improved.

54 | P a g e

RETURN ON EQUITY (ROE): A profitability ratio calculated as net income divided by shareholders' equity. The ROE improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011 which indicates that the profit company earned in comparison to the money a shareholder has invested has decreased in 2010-2011. It tells investors how effectively their capital is being reinvested. The lower ratio indicates that companys position has downgraded. RETURN ON ASSETS (ROA): A profitability ratio calculated as net income divided by total assets. The ROA improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011 which indicates that company's assets are less profitable in generating revenue in 2010-2011 period as compared to 2009-2010 period. The lower ROA indicates that the position of company is downgrading.

Coca-Cola Co. Profitability Ratios

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 Year Return on equity (ROE) Return on assets (ROA) Gross profit margin Operating profit margin Net profit margin

55 | P a g e

ACTIVITY RATIOS:

PepsiCo. 2011 Turnover Ratios Inventory turnover Receivables turnover Payables turnover Working capital turnover 17.38 9.62 16.29 9.99 2010 17.15 9.15 14.96 9.92 2009 16.51 9.35 15.01 9.91 2008 17.15 9.24 15.20 9.92 2007 17.24 8.99 15.41 9.59

ANALYSIS
INVENTORY TURNOVER: An activity ratio calculated as revenue divided by inventory. Inventory turnover ratio, defined as how many times the entire inventory of a company has been sold during an accounting period, is a major factor to success in any business that holds inventory. A low inventory turnover ratio shows that a company may be overstocking or deficiencies in the product line or marketing effort. The inventory turnover improved from 2009 to 2010 and from 2010 to 2011 which indicates that the company is efficiently converting its inventory to sales. It will reduce the holding cost of inventory however it does increase the risk of cost of out stocking. A higher inventory turnover is better because inventories are the least liquid form of asset.

RECEIVABLES TURNOVER: An activity ratio equal to revenue divided by receivables. The receivables turnover deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. The high ratio implies either that a company operates on a cash basis or

56 | P a g e

that its extension of credit and collection of accounts receivable is efficient. The improvement in
Receivables turnover shows that company has now more liquid assets.

PAYABLES TURNOVER: An activity ratio calculated as revenue divided by payables. The payables turnover declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level. The increase in turnover ratio means that the company is paying of
suppliers at a faster rate. Earlier in 2009-2010 period the company was taking longer to pay off its suppliers.

WORKING CAPITAL TURNOVER: An activity ratio calculated as revenue divided by working capital. The working capital turnover improved from 2009 to 2010 and from 2010 to 2011 which means
that the company is generating a lot of sales compared to the money it uses to fund the sales as compared to previous years.

PepsiCo. Activity Ratios

20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2006 2007 2008 2009 2010 2011 2012 Year Inventory turnover Receivables turnover Payables turnover Working capital turnover

57 | P a g e

Coca-Cola Co., short-term (operating) activity ratios 2011 Turnover Ratios Inventory turnover Receivables turnover Payables turnover Working capital turnover 15.05 9.46 21.43 7.97 2010 13.25 7.93 18.61 6.76 2009 13.16 8.25 21.98 6.59 2008 14.61 10.34 23.32 8.18 2007 13.00 8.70 20.91 6.94

ANALYSIS:

INVENTORY TURNOVER: An activity ratio calculated as revenue divided by inventory. The inventory turnover improved from 2009 to 2010 and from 2010 to 2011 which indicates that the company is efficiently converting its inventory to sales. It will reduce the holding cost of inventory however it does increase the risk of cost of out stocking. A higher inventory turnover is better because inventories are the least liquid form of asset.

RECEIVABLES TURNOVER: An activity ratio equal to revenue divided by receivables. The receivables turnover deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. The high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient. The improvement in
Receivables turnover shows that company has now more liquid assets.

58 | P a g e

PAYABLES TURNOVER: An activity ratio calculated as revenue divided by payables. The payables turnover declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level. The increase in turnover ratio means that the company is paying of
suppliers at a faster rate. Earlier in 2009-2010 period the company was taking longer to pay off its suppliers. But overall payoff rate has decreased in 2009-2011 period.

WORKING CAPITAL TURNOVER: An activity ratio calculated as revenue divided by working capital. The working capital turnover improved from 2009 to 2010 and from 2010 to 2011 which means
that the company is generating a lot of sales compared to the money it uses to fund the sales as compared to previous years.

Coca-Cola Co. Activity Ratios

25.00 20.00 15.00 10.00 Payables turnover 5.00 0.00 2006 2007 2008 2009 2010 2011 2012 Year Working capital turnover Inventory turnover Receivables turnover

59 | P a g e

LEVERAGE RATIOS:
PepsiCo. 2011 1.30 0.57 11.32 2010 1.18 0.54 10.12 2009 0.47 0.32 21.35 2008 0.68 0.40 22.41 2007 0.24 0.20 35.12

Debt to equity Debt to capital Interest coverage

ANALYSIS:
DEBT-TO-EQUITY RATIO: A leverage ratio calculated as total debt divided by total shareholders' equity. The debt ratio means an indication of the gearing level of a company. A high ratio means that a company may be over-leveraged with debt. This can result in high insolvent risk since excessive debt can lead to a heavy debt repayment burden. The debt-to-equity ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates the companys capacity to repay its creditors. Debt to equity ratio is an indication of managements reliance to finance its asset on debt rather than on equity. The Lower ratio is a sign of companys better position.

DEBT-TO-CAPITAL RATIO:

A leverage ratio calculated as total debt divided by total debt plus shareholders' equity.

The debt-to-capital ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates that company is financing its operations more with equity i.e. company is more prone to
using equity financing. This shows strong financial strength of company.

60 | P a g e

INTEREST COVERAGE RATIO: A leverage ratio calculated as EBIT divided by interest payments. The interest coverage ratio deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011. The higher ratio means that a company is able to meet its interest obligations because earnings are significantly greater than annual interest obligations.

PepsiCo. Leverage Ratios

40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 2006 2007 2008 2009 Year 2010 2011 2012 Debt to equity Debt to capital Interest coverage

Coca-Cola Co. 2011 0.90 0.47 28.43 2010 0.76 0.43 20.43 2009 0.48 0.32 26.20 2008 0.45 0.31 18.14 2007 0.43 0.30 18.37

Debt to equity Debt to capital Interest coverage

61 | P a g e

ANALYSIS:
DEBT-TO-EQUITY RATIO: A leverage ratio calculated as total debt divided by total shareholders' equity. The debt-to-equity ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates the companys capacity to repay its creditors. Debt to equity ratio is an indication of managements reliance to finance its asset on debt rather than on equity. The Lower ratio is a sign of companys better position.

DEBT-TO-CAPITAL RATIO:

A leverage ratio calculated as total debt divided by total debt plus shareholders' equity. . The debt-to-capital ratio deteriorated from 2009 to 2010 and from 2010 to 2011 which indicates that company is financing its operations more with equity i.e. company is more prone to
using equity financing. This shows strong financial strength of company.

INTEREST COVERAGE RATIO: A leverage ratio calculated as EBIT divided by interest payments. The interest coverage ratio deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. The higher ratio means that a company is able to meet its interest obligations because earnings are significantly greater than annual interest obligations.

62 | P a g e

Coca-cola Co. Leverage Ratios

30.00 25.00 20.00 15.00 10.00 5.00 0.00 2006 2007 2008 2009 Year 2010 2011 2012 Debt to equity Debt to capital Interest coverage

63 | P a g e

Interfirm Analysis (PepsiCo. Vs Coca-cola Co.)

LIQUIDITY RATIOS

2011 PepsiCo. CR Coca-cola Co. CR PepsiCo. QR Coca-cola Co. QR PepsiCo. Cash Ratio Coca-cola Co. Cash Ratio 0.96 1.05 0.62 0.78 0.24 0.58

2010 1.11 1.17 0.8 0.85 0.4 0.61

2009 1.44 1.28 1 0.95 0.47 0.67

2008 1.23 0.94 0.79 0.62 0.26 0.38

2007 1.31 0.92 0.89 0.58 0.32 0.33

Liquidity Ratios
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2006 2007 2008 2009 Year 2010 2011 2012 PepsiCo. CR Coca-cola Co. CR PepsiCo. QR Coca-cola Co. QR PepsiCo. Cash Ratio Coca-cola Co. Cash Ratio

64 | P a g e

Interpretation: Current Ratio: PEPSICO has increased its current assets over the past 3 years by extending short term loans and advances and by maintaining higher their cash and bank balances but also there is a significant growth in its current liabilities due to which there is a decreasing trend of current ratio. i.e. firm does not have enough cash to meet short term requirements. Similarly COCA COLA has also increased its current Assets by extending more inventory, receivables and increased cash and bank balances but it also has increased highly the current liabilities due to which there current ratio has decreased. However, the firm is better placed as compared to PEPSI in terms of meeting their short term requirements. Quick Ratio: The prepaid expenses of PEPSICO have increased over the time with its current assets and there is an increase in its current liabilities as well. Due to an overpowering increase of current liabilities over quick assets, both the firms have a drop in quick ratio over the last 3 years. COCA COLA still holds a better position over PEPSICO in terms of meeting the short term requirement of funds as per the industry requirements. Cash ratio: The cash ratio of PEPSICO has decreased badly over the last 3 years. However, COCA COLA has regained its position after a drop in 2010. Here also, COCA COLA maintains a better position than PEPSICO in terms of availability of readily available funds to pay off the current liabilities.

PROFITABILITY RATIOS

2011 Return on Sales PepsiCo. GPM Coca-Cola Co. GPM PepsiCo. OPM Coca-Cola Co. OPM 52.49% 60.86% 14.48% 21.82%

2010

2009

2008

2007

54.05% 63.86% 14.41% 24.06%

53.51% 64.22% 18.61% 26.56%

52.95% 64.39% 16.09% 26.44%

54.30% 63.94% 18.19% 25.13%

65 | P a g e

PepsiCo. NPM Coca-Cola Co. NPM Return on Investment PepsiCo. ROE Coca-Cola Co. ROE PepsiCo. ROA Coca-Cola Co. ROA

9.69% 18.42%

10.93% 33.63%

13.75% 22.02%

11.89% 18.18%

14.33% 20.73%

31.29% 27.10% 8.84% 10.72%

29.86% 38.09% 9.27% 16.19%

35.38% 27.52% 14.92% 14.02%

42.47% 28.37% 14.29% 14.33%

32.83% 27.51% 16.34% 13.82%

Return on Sales
70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 Year PepsiCo. GPM Coca-Cola Co. GPM PepsiCo. OPM Coca-Cola Co. OPM PepsiCo. NPM Coca-Cola Co. NPM

66 | P a g e

Return on Investment
45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 Year

PepsiCo. ROE Coca-Cola Co. ROE PepsiCo. ROA Coca-Cola Co. ROA

Interpretation Net profit margin: PAT (Profit after Tax) of PEPSICO has been increasing over the last 3 years and so are its net sales which nulls out the PAT inclination. It indicates a poor performance in terms of profitability, for which increasing tax and interest amounts are also responsible . However, COCA COLA has maintained its position w.r.t. 2009 performance, though it went significantly up in 2010 which was due to an increase in sources of other income. The PAT has decreased since last year though. Thus, its profitability has decreased since 2010 but is still at a much better stand as compared to PEPSI. Return on assets: Both the companies have seen a decline in the ROA over the last 3 years. Although, like earlier, COCA COLA still holds a better position than PEPSI in terms of its ability to generate profit before leverage. The total assets of COCA COLA as well as PEPSICO have increased by a huge amount. The Earnings, however havent seen such great an incline in either case. COCA COLA has seen a decrease in EBIT from 14976 (in millions of dollars) in 2010 to 11856 (in millions of dollars) in 2011. Return on equity: For PEPSICO, the PAT has increased by 8.3% and also has its Net Worth by 19.75%. 67 | P a g e

COCA COLAs PAT has increased by 21% and its net worth by 23..36% Here, PEPSICO has a higher return on equity as compared to COCA COLA.

ACTIVITY RATIOS:

2011 Turnover Ratios PepsiCo. turnover Coca-Cola Co. 15.05 Inventory 17.38

2010

2009

2008

2007

17.15

16.51

17.15

17.24

13.25

13.16

14.61

13

Inventory turnover PepsiCo. Receivables 9.62 turnover Coca-Cola Co. 9.46 7.93 8.25 10.34 8.7 9.15 9.35 9.24 8.99

Receivables turnover PepsiCo. turnover Coca-Cola Payables turnover PepsiCo. Working 9.99 9.92 9.91 9.92 9.59 Co. 21.43 18.61 21.98 23.32 20.91 Payables 16.29 14.96 15.01 15.2 15.41

capital turnover Coca-Cola Working turnover Co. 7.97 capital 6.76 6.59 8.18 6.94

68 | P a g e

Activity Ratios
25 PepsiCo. Inventory turnover 20 15 10 5 0 2006 Coca-Cola Co. Inventory turnover PepsiCo. Receivables turnover Coca-Cola Co. Receivables turnover PepsiCo. Payables turnover 2007 2008 2009 Year 2010 2011 2012 Coca-Cola Co. Payables turnover

Interpretation Working capital turnover ratio: Both the companies have seen a declining trend in working Capital Ratio by the year ending 2010-11. However, PEPSI stands higher as compared to COCA COLA in terms of its ability to generate more sales as compared to the money used to fund the sales.

LEVERAGE RATIOS:

2011 PepsiCo. Debt to equity Coca-Cola Co. Debt to equity 1.3 0.9

2010 1.18 0.76

2009 0.47 0.48

2008 0.68 0.45

2007 0.24 0.43

PepsiCo. Debt to capital

0.57

0.54

0.32

0.4

0.2

69 | P a g e

Coca-Cola Co. Debt to capital

0.47

0.43

0.32

0.31

0.3

PepsiCo. Interest coverage

11.32

10.12

21.35

22.41

35.12

Coca-Cola coverage

Co.

Interest 28.43

20.43

26.2

18.14

18.37

Leverage Ratios
40 35 30 25 20 15 10 5 0 2006 2007 2008 2009 Year 2010 2011 2012 PepsiCo. Debt to equity Coca-Cola Co. Debt to equity PepsiCo. Debt to capital Coca-Cola Co. Debt to capital PepsiCo. Interest coverage

Interpretation

Debt-equity ratio: PEPSICOs total debt has increased by 240% and its equity by just 22.69%. COCA COLAs debt has increased by 140% and its equity by 28%. Hence both the companies have been aggressive in financing their growth by debt. However due to a higher debt equity ratio of PEPSI, it is riskier to invest in it due to the interest amount to be paid on debt. Also, As the debt equity ratio of PEPSI is higher than 1, majority of the assets are financed through debt. Interest coverage ratio: Both firms have been successful in generating enough profit to meet the interest payments but COCA COLA has performed better in Interest Coverage Ratio as compared 70 | P a g e

to PEPSICO over the last 3 years. However, Since COCA COLA has seen an inclination not only in EBIT but also interest expenses from 2009 to 2011, its ICR has fallen over the time. Debt ratio: Total Debt has increased in more or less in same proportion for both the companies as compared to Total assets due to which Debt- Equity ratio is approximately the same as last year for both the companies. Since the debt ratio for both the companies is less than 1, they have total assets worth greater than the total debt. Although, PEPSICO is at a riskier position by a slight difference.

71 | P a g e

CASH FLOW ANALYSIS

Pepsico. Cash flow
Period Ending Net Income Total Cash Flow From Operating Activities Total Cash Flows From Investing Activities Total Cash Flows From Financing Activities Change In Cash and Cash Equivalents 2011 $6,443,000 8,944,000 -5,618,000 -5,135,000 -1,876,000 2010 6,320,000 8,448,000 -7,668,000 1,386,000 2,000,000 2009 5,946,000 6,796,000 -2,401,000 -2,497,000 1,879,00

Coca-cola Co. Cash Flow

Period Ending Net Income Total Cash Flow From Operating Activities Total Cash Flows From Investing Activities Total Cash Flows From Financing Activities Change In Cash and Cash Equivalents 2011 9,262,000 9,474,000 -2,524,000 -2,234,000 4,286,000 2010 12,834,000 9,532,000 -4,405,000 -3,465,000 1,496,000 2009 7,605,000 8,186,000 -4,149,000 -2,293,000 2,320,000

ANALYSIS:
The net income has increased from $5,946 million in 2009 to $6,443 million in 2011 for PepsiCo. While it has increased from $7,605 million in 2009 to $9,262 million in 2011 for Coca-Cola Co., indicating that Coca-Cola registered a higher net income. The change in cash and cash equivalents is negative in 2011 for PepsiCo. which shows that companys cash and cash equivalents have been decreased over the year which indicates the liquidity of company while in 2009 and 2010 the changes in cash and cash equivalents are positive which indicated the improvement in liquidity.

72 | P a g e

 However, the change in cash and cash equivalents is positive in 2009, 2010 & 2011 for Coca-cola co. which shows that company has worked significantly for increasing the cash and cash equivalents over these years to improve the liquidity positon. The increase in cash and cash equivalents have been more in 2011 as compared to previous years indicating the growth of the company. The net cash from operating activities increased from $6,796 million in 2009 to $8,944 million in 2011 for Pepsico., while for coca-cola, in the same period, it increased from $8,186 million in 2009 to $9,474 million in 2011. The net cash from investing activities decreased from $-2,401 million in 2009 to $-5,618 million in 2011 for Pepsico., while for coca-cola, in the same period, it increased from $4149 million in 2009 to $-2,524 million in 2011. The net cash from financing activities decreased from $-2,497 million in 2009 to $- 5,135 million in 2011 for Pepsico., while for coca-cola, in the same period, it increased from $2,923 million in 2009 to $-2,234million in 2011.

73 | P a g e

RESEARCH PROJECT

PRIMARY OBJECTIVE
To study the market position of PEPSI and do comparative analysis with COKE.

SECONDARY OBJECTIVES
1) To find out the market share of PEPSI and COKE 2) To study promotional strategies adopted by PEPSI and COKE 3) To study consumers perception and believe about PEPSI and COKE 4) To analyze of the strong and weak point of the competitors products and compare it with PEPSI. 5) To assess the reach and feasibility of the product and give the output for further investment for enhancing the distribution network along with assessing the efficiency of the current distribution system. 6) To assess the promotional measures in the context to the sales of PEPSI and focusing our study on the customer of company i.e., the retailers.

The market research conducted by us was in accordance to the companys rules and policies which were quite material for the efficient and effective results and inferences to be drawn from the entire process.

74 | P a g e

RESEARCH DESIGN
The Design Of our research is statistical as it concerns the items are to be observed and how the information and data gathered are to be analyzed.

Purpose of the study Types of investigation Extent of researcher interference Study setting Measurement and measures Unit of analysis Sampling Time horizon Data collection method
SAMPLE DESIGN
For both customer end (i.e. retailers) and consumer end, we used convenience sampling while choosing the market where the research has to be done. We also used probabilistic sampling while doing the survey since all the shops selling beverages in a particular market, and random consumers were taken as sample.

75 | P a g e

METHODS OF DATA COLLECTION Data can be collected in a variety of ways in different settings, and form different sources. Data collection methods include: Interviews o o o o Face-to-face interview, Telephone interviews, Computer-assisted interviews and Electronic media

Questionnaires Observation Statistical data available from experts Statistical data available in market.(secondary data analysis) At customer end the data was collected through observations and personal interviews, which was in the form of direct personal investigation. The interview was very structured because we only ask the question as per the EDS format. At consumer end the data was collected through questionnaires.

76 | P a g e

THE MARKET RESEARCH PROCESS

The entire project was divided into four phases and each phase had its individual significance and supplemented each other. The process had to be started from the grass root level and it was very important to understand the market for this FMCG product, which is very fast in production, distribution and consumption.

The five phases into which the project was divided were: A. Daily sales Riding B. Personal Interviews C. Questionnaires

D. Analysis of finding and observations

The entire process was more of a Descriptive Research type and incorporated a formal study of the specific problems faced by most FMCG companies an exploring the opportunities in the untapped market. The data collected had to be systematically arranged, analyzed and reported in a form congenial to take on the spot decisions. The observation approach was adopted in the process by gathering the data essential and material for the decision-making and with clear objective of analyzing the market share of PEPSI in the Delhi market. Customer preferences and satisfaction was also important in assessing the market share but that was very clear that customers generally do not have loyalty towards the product in the Beverage industry rather what matters the most is the product availability which will be discussed later. All the phases mentioned above have been discussed along with the observations, problems, and other dimensions which have been encountered and experience in detail in the following pages.

77 | P a g e

A. DAILY SALES RIDING:

The Beverage Industry or to be more specific, the Soft Drinks Industry has one of the most active network in term of its production, supply, distribution, marketing, consumption and also personal relations at the very second level of its distribution network. That is the reason why it is sometimes said to be Very Fast Moving Consumer Goods. Due to the above stated reason it becomes very essential to study and analyze the market of these products from the grass root level. So in the Soft Drinks Company as PEPSI, route riding becomes the first and foremost step in any of the activities to be undertaken be it any official so we were no exceptions. During the very initial days we were required to exercise daily sale Riding, the objective of which was: To understand and analyze the market in its PSR and basic form. To gain an in depth knowledge of the merchandising and processing activities of the PSR and understand the Beverage market. To undertake the comparative study of the various brands and flavour packs of all existing beverages or soft drinks market and the market share and growth potential of each brand individually. To develop innovative ideas to enhance the distribution system.

Route Riding is basically accompanying Pepsi Vans along with the route agents and understanding the way they conduct merchandising activities right from the charged vans leave the depot to the entry of empty vans back to the depot. The DSR is a crucial phase because the actual dealing with the retailers and their dealing with the customers can be very efficiently understood through this process which is important at all levels of decision making in the industry. The Routes i.e., the Pepsi Vans were charged and left the depot by 7:30 in the morning, accompanied by the PSR. The PSR were given the route planners and the particulars of the 78 | P a g e

products, flavors, and quantities along with the billing materials. The vans had to cover the entire route and the PSR had to do the merchandising and sales against cash, which was a significant feature of this industry. The targets were given twice or thrice in a week that was a challenge for them and after achieving these targets the PSR was awarded with some special incentives. As there exists a player like Coca Cola, So it had a lot to do with schemes, discounts and other incentives.

VISI PURITY
The routes were allocated on the basis of individual areas and the demand of the product in that particular area. The PSR been responsible for the accomplishment of their sales target on their routes and was given incentives on achieving the targets. Not only this, the PSR also had the responsibility of moving the flavors and packs in proportion along with the proper display of the products for proper visibility and arrangement of products in brand order along with VISI purity. The PSR had the responsibility of setting up Monopoly PEPSI Sales Counters where no products except that of PEPSI would be available amongst the soft drinks and especially of Coca Cola. These monopoly sales counters enjoyed special benefits in terms of discounts, schemes, VISIs (fridges), display boards, glow signboards, wall paintings, banners, posters and other incentives. The PSR had to achieve their sales target and surrender the daily sales proceeds with the concerned Customer Executives along with the route planner and billing materials and gate pass along with the details of sales on their route. The entire activity of the PSR was controlled by the Customer Executives, who also assisted the PSR in achieving their targets and were in charge of the sales performance in their assigned areas. A Customer Executive had nine to ten PSR under him and was responsible for their performances as well. He was also concerned with the promotional activities on his routes and handling of policy matters in the corporate regarding supply to industrial canteens and cafeterias. 79 | P a g e

We as Research trainees were required to study and analyze the activities of the PSR and be familiar with the market. We had been provided Market Analysis Sheets by the ADC in which we were required to record the observations of the retail outlets on a particular route. The observations, which were required to be recorded in, were: The quantity of the cold and warm stocks of all brands and flavors available at the outlet along with the outlet details.

Inquiring about the satisfaction of the retailers in terms of sales of PEPSI products, schemes, discounts, combo offers, and the benefits of promotional activities. Inquiring about the satisfaction by the current distribution network in context to product availability of all flavors packs or individual flavors according to demand of customers, rates billings.

Inquiring about the behavior and merchandising of PSR in accordance with the companies regulations and record complaints against PSR, company or products, if any.

Inquire about the performance of various brands and flavors packs and customers response to those brands or flavors and also to educate the retailers about various schemes and incentives to increase sales volume.

Last but not the least, assessment of the effectiveness of, assessment of the effectiveness of promotional materials and activities like, display boards, glow signs, signage, wall paintings, posters, banners, racks, shelves, counters, VISIs, and also impact of nationwide advertising on brand loyalty by the customers.

The information so collected was required to be filled in the Market Analysis Sheet (specimen on the next page) and reported to the ADC along with other information in order of their seriousness. 80 | P a g e

B. PERSONAL INTERVIEWS
After the route riding phase was over, we had primary knowledge about the sales process of PEPSI, and raw information about the positioning of PEPSI and COKE To start the study and converting our raw information to detailed analyses, we started doing personal interviews. We chose 3 different markets, according to our convenience where we could find maximum outlets. The three markets namely, Laxmi Nagar, Krishna Nagar, and Vivek Vihar are the Hub of retailers. The Interviews were taken in well structured format. EDS format from which market share, promotional schemes, monopolies and other relevant information can be easily calculated. Besides EDS, information was also collected through observations. All the outlets whether selling PEPSI or not were surveyed in a particular market.

81 | P a g e

C. QUESTIONNAIRE
While in phase B. the personal interviews were taken at customer end, in phase C the survey was done via questionnaire targeting the consumer segment. In each market mentioned above, people were chosen at random and surveyed about their preferences. The questionnaire included queries about favorite brands, favorite flavors, handy packs mostly purchased, place of consumption, relevance of Ad campaigns etc. The questionnaire was done in all three markets with sample size of 50 each and for each age group.

D. ANALYSIS OF FINDINGS AND OBSERVATIONS:

The main objective of the company is to increase the brand preference and market share so any information material form this point of view had to be take into account along with the formats provided by the company for daily sales recording and analysis of those recordings and present the information in an organize and systematic manner in a condensed form reflecting the actual position of the market. The information had to be recorded in the format along with the relevant information as per the objectives of the research and an analysis of that information had to be made and present them in an understandable format so that immediate inferences can be drawn. Generally those information had to be presented in percentages and the other findings and observations had to be evaluated and a list of findings had to be arranged in order of their seriousness and areas of serious concern along with the outlet details. After the analysis sheets and formats have been surrendered to the C.Es after analysis by the trainees it was further analyzed and evaluate by him and a brief analysis was made each day

82 | P a g e

of the daily report. The CEs further forwarded these reports after retaining the reference copy, to ADC for further review and reference.

FINDINGS & OBSERVATION

The reports of each phase of the project had to be supplemented by the information, data, facts and figures and significant findings and observation to support the feasibility of decisions to be taken on the basis of the Retail mapping Summary or the CDR. The information so recorded in each phases of the project had to be listed in order of their relevance and seriousness and presented in a form to facilitate immediate inference.

Some of the important observations have been listed below:

Soft drink businesss behavior is not governed by brand loyalty so the availability of the right brand, at the right place, at the right time is the key for winning consumer in soft drink business.

The most important and satisfying observation was that, PEPSI had approximately 64% market share in the soft drinks market in Delhi and some of its brands like Mirinda Orange and Mountain Dew were performing above standards apart from PEPSI Cola in spite of the Coca Cola with two cola flavor packs i.e., Coke and Thumps up.

The present distribution system of PEPSI is the best in the entire FMCG industry in Delhi and the major strength of PEPSI. The enhancement in the distribution network would definitely increase the market share of PEPSI.

83 | P a g e

The retailers played a very critical role in the increment in the sales volume of the product and they had to be kept satisfied in order to increase the market share by offering better schemes, discounts, display materials such as VISIs, racks, counter, signage, wall paintings and better amount for purchase of shelf space for display.

The existence of sub-dealers and super stockiest are also the major area of problem, as they do not move the schemes and other display materials and incentives information to the retailers, which is one of the reasons for the dissatisfaction of retailers.

The cut throat competition between PEPSI and COKE had lead to the never ending cola war and price war which has brought down the profit margins which is one of the major grievances apart from the common complains pertaining to schemes, incentives and display materials.

The other major issue was the supply of PEPSI from the bottling plants in Delhi and Punjab against the company policies. These plants supplied the products at discounted rates and violated merchandising principles of PEPSI.

Another critical issue was the presence of duplicate products of PEPSI in the market.

The position of PEPSI in the corporate was not up to the mark and Coca Cola had a better scene in this context. One of the reasons can be assigned to the product positioning of PEPSI and Coca Cola.

The other important issue was retailers buy products from nearest whole sale market where they get products at lower rates.

84 | P a g e

Besides the big players like coke in market, other local players like Jayanti, give competition to sale of product through low prices though low quality.

ANALYSIS
The Analysis is presented in two parts. The market position of PEPSI and COKE and The consumer perception.

Market share
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Laxmi nagar

coke pepsi

krishna nagar

vivek vihar

The above graph clearly shows that the market share of PEPSI and COKE depends on locality and standard of living of people.

85 | P a g e

VISI Share
100% 80% 60% 40% 20% 0% Laxmi nagar krishna nagar coke pepsi

vivek vihar

The VISI share is representing the share of promotional activities implemented by the companies

Daily sales
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Laxmi nagar krishna nagar vivek vihar

coke pepsi

The above graph represents Daily Sales of PEPSI and COKE in respective markets.

86 | P a g e

The Graphs for Responses by Consumer are shown below: 1) Favorite Flavour

2) Preferred Brand

3) Between the flavor Mirinda and Fanta

87 | P a g e

4) Favorite Brand in Lemon

7up Sprite M. Dew Mirinda Lemon 7up Lemon Bite Minute Maid lemon Nimooz

5) Popular Brand among juices

88 | P a g e

6) Preferred packaging

RGB pack (Glass bottles) PET (single serve) (350ml/600ml/CAN ) PET (multi serve) (1 Ltr/1.25 Ltr/2 Ltr)

7) Frequency of consumption and place of consumption

100% 80% 60% 40% 20% 0% Daily Alternately

Weekends

Occasionally

Market

Home/Office

Entertainment(Clubs/movies/parties)

89 | P a g e

8) Relevance of Ad Campaign
60 50 40 30 20 10 0 Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree

9) Loyalty towards Favorite Brand

100% 70% 50% Not Loyal

FINDINGS FROM QUESTIONNAIRE

1. YOUNGSETRS prefer COKE over PEPSI 2. Older age group prefer Mirinda lemon and limca over coke and Pepsi cola 3. ADS play a major role in choosing of brand 4. Celebrities have a great effect on people consuming cold drinks 5. People prefer Nimbooz (Pepsi co)over Pepsi cola and coke in summers. 90 | P a g e

6. In terms of innovative and exciting offers Pepsi co leads coca-cola. 7. When the question of more effective advertisements was asked mixed reactions came with 50-50 response for both Coke and Pepsi. 8. Price plays an effective role for choosing of product among INDIAN CONSUMERS. 9. TASTE came out to be most important for the consumers in preferring for a particular brand. 10. TELEVISION came out to be most effective for ad campaigns as respondents of all age groups watch tv.

91 | P a g e

CONCLUSION
The business of Soft Drink industry is significantly based upon the impulse buying, so it is very necessary to Merchandise products of PEPSI efficiently and present them in such a manner so that it can motivate the consumer and generate a thirst in consumer to consummate it. Though, PEPSI has a strong position in Delhi with the support of its efficient distribution network, aggressive marketing efforts and advertisements along with attractive schemes but there still exists potential market in Delhi to be exploited. PEPSI as well as COKE have attained a strong position in market. The cut throat competition between the two is decreasing the profit margin while introducing new strategies. The Market share of PEPSI and COKE is dynamic and depends on the retailers who play an important role in shaping up the competition. Soft drink businesss behavior is not governed by brand loyalty so the emphasis is not only on creating the market but also on retaining it. The availability of the right brand and flavor pack, at the right place, at the right time is a key for winning the customer in soft drink business. Keeping these facts in mind it becomes very important to treat the retailers with concern and satisfy them by various measures and so that they are loyal towards PEPSI. Public relation is also critically important in this industry.

92 | P a g e

PRESENT COMPETITON BETWEEN COCA COLA AND PEPSI

If we see the present scenario it is hard to tell which brand is winning the cola wars as Pepsi had extended its cola wars to other sectors like FRITO-LAYS and NIMBOOZ which is giving tough competition to coca cola which doesnt target on these sectors.

Second aspect which is to be given in consideration is that, both the companies are spending heavily on advertisement and more celebrities are roped in by both the companies to fight the competition.

Recently COLA-COLA beverages ACTORS IMRAN KHAN AND KALKI for a new ad ;to reply back to this a new ad by PEPSI beverages featuring ACTOR RANBIR KAPOOR and VINDHU DARA SINGH came up which is making waves at present.

Coke is served in MC DONALDS and there we wont find Pepsi products even the coffee served is of GEORGIA which is a coca-cola brand, same is the case of PIZZA HUT and KFC which is owned by PEPSI CO there only Pepsi products are served. This had lead to clear war in restaurant segment as well.

PEPSI is targeting young generation and their ad campaigns are a clear example of that, whereas coca-cola is targeting the family as a whole which has been its old formula from ages.

Presently coca-cola may be leading in beverages like coke, but its facing severe competition from Mirinda, Nimbooz and snack industry where PEPSI is ruling thanks to its KURKURE ad that has led to great sales for PEPSI CO.

Though in packed drinking water KINLEY (COCA-COLA BRAND) and AQUAFINA (PEPSI CO BRAND) both are treated equally by customers. Moreover BISLERI still rules in this segment.

93 | P a g e

RECOMMENDATIONS
Soft drinks are an impulse product. When a person is thirsty, he would first think of water or tea. Some even would prefer Nimbooz The Indian population is the largest in the world today, there can be no other country in the world, which provides so much of an opportunity for the soft-drink manufacturers. The Indian soft drink market is at 140 million cases per year, this is very low. Thus the consumption of soft drink can go up. Availability is a major factor, which makes the consumer buy a soft drink. Soft drinks should be made available more readily than present. There are only 300, 000 retailers stocking soft drinks in India. Thus retailing outlets should be increased.

Tempt a person into buying the soft drink. So if vending machines are put in strategic areas, it would definitely increase consumption of soft drinks. Soft drink cans which are very convenient, as the consumer can take them anywhere, unlike a bottle, are very expensive. To increase sale of cans, this price should be brought down. Innovations increase sales of company. Companies should try to educate the consumer about the health related subject. For e.g. Limca is recommended to patients by doctors. Television advertising seems to make a impact on the consumers (based on questionnaire answers) so companies should concentrate more on television advertisements.

94 | P a g e

 Sales promotion tools such as coupons, contests, premiums and the like should be used to dramatize product offers and to boost sales.

95 | P a g e

ANNEXURE I

BALANCE SHEET of PEPSICO. (5 YEARS)

in Millions of Dollars Dec-11 Dec-10 Dec-09 Dec-08 Dec-07

ASSETS

Cash and Equivalents Restrictable Cash Marketable Securities Receivables Inventories Prepaid Expenses Current Deferred Income Taxes Other Current Assets Total Current Assets Gross Fixed Assets Accumulated Depreciation Net Fixed Assets Intangibles Cost in Excess Non-Current Deferred Income Taxes Other Non-Current Assets Total Non-Current Assets Total Assets

4,067 358 6,912 3,827 2,277 17,441 35,140 -15,442 19,698 16,445 16,800

5,943 426 6,323 3,372 1,505 17,569 33,041 -13,983 19,058 13,808 14,661

3,943 192 4,624 2,618 1,194 12,571 24,912 -12,241 12,671 2,623 6,534

2,064 213 4,683 2,522 1,324 10,806 22,552 -10,889 11,663 1,128 5,124

910 1,571 4,389 2,290 991 10,151 21,896 -10,668 11,228 2,044 5,169

2,498 55,441 72,882 in Millions of Dollars Dec-11

3,057 50,584 68,153

5,449 27,277 39,848

7,273 25,188 35,994

6,036 24,477 34,628

Liabilities [+]

Dec-10 3,865

Dec-09 8,127

Dec-08 8,273

Dec-07 2,562

Accounts Payable

4,083

96 | P a g e

Short Term Debt Notes Payable Accrued Expenses Accrued Liabilities Deferred Revenues Current Deferred Income Taxes Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Income Tax Other Non-Current Liabilities Minority Interest Capital Lease Obligations Preferred Securities of Subsidiary Trust Preferred Equity Outside Shareholders' Equity Total Non-Current Liabilities Total Liabilities Preferred Shareholder's Equity Common Shareholder's Equity Total Equity Total Liabilities & Shareholder's Equity

6,205 3,686 4,180 18,154 20,568 4,995 8,109 311 -

4,898 3,620 3,509 15,892 19,999 4,057 6,579 312 -

464 165 8,756 7,400 659 5,487 638 -

369 145 8,787 7,858 226 6,541 476 -

2,894 2,297 7,753 4,203 646 4,792 -

33,983 52,137 41 20,704 20,745

30,947 46,839 41 21,273 21,314

14,184 22,940 41 16,867 16,908

15,101 23,888 41 12,065 12,106

-91 9,550 17,303 17,325 17,325

72,882

68,153

39,848

35,994

34,628

BALANCE SHEET of Coca-Cola Co. ( 5 Years)

ASSETS
Dec-11 Cash and Equivalents

in million dollars
Dec-10 684 Dec-09 321 Dec-08 404 Dec-07 722 223

97 | P a g e

Restrictable Cash Marketable Securities Receivables Inventories Prepaid Expenses Current Deferred Income Taxes Other Current Assets Total Current Assets Gross Fixed Assets Accumulated Depreciation Net Fixed Assets Intangibles Cost in Excess Non-Current Deferred Income Taxes Other Non-Current Assets Total Non-Current Assets Total Assets

1,451 403 148 2,686 4,617 -2,387 2,230 3,771 124 283 6,408 9,094 in Millions of Dollars Dec-11

1,415 367 127 2,230 4,392 -2,172 2,220 3,828 131 187 6,366 8,596

1,540 288 124 2,356 4,071 -2,188 1,883 3,487 246 5,616 7,972

2,308 901 408 244 4,583 14,517 -8,274 6,243 3,234 604 925 11,006 15,589

2,361 924 318 206 4,032 15,632 -8,870 6,762 11,767 606 932 20,067 24,099

Liabilities [+]

Dec-10 606 162 936 238 1,942 2,124 1,238 149 -

Dec-09 1,572 620 2,192 235 1,172 1,194 -

Dec-08 2,907 1,782 385 5,074 7,247 1,086 2,213 -

Dec-07 2,977 2,002 417 5,396 7,391 4,190 1,433 -

Accounts Payable Short Term Debt Notes Payable Accrued Expenses Accrued Liabilities Deferred Revenues Current Deferred Income Taxes Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Income Tax Other Non-Current Liabilities Minority Interest Capital Lease Obligations Preferred Securities of Subsidiary Trust Preferred Equity Outside Shareholders' Equity

589 16 907 336 1,848 2,996 1,191 160 -

98 | P a g e

Total Non-Current Liabilities Total Liabilities Preferred Shareholder's Equity Common Shareholder's Equity Total Equity Total Liabilities & Shareholder's Equity

4,347 6,195 2,899 2,899 9,094

3,511 5,453 3,143 3,143 8,596

2,601 4,793 3,179 3,179 7,972

10,546 15,620 -31 -31 15,589

13,014 18,410 5,689 5,689 24,099

99 | P a g e

100 | P a g e

101 | P a g e

ANNEXURE II
QUESTIONNAIRE

Name: Age: 15-25 26-35 35+ Q. Monthly Income: 0-20,000 20,000-50,000 50,000+

Phone No:

Q. What is your favorite flavor in drinks? Cola Orange Lemon Juices

Q. What do you prefer in Cola? Diet Q. Which brand do you prefer? Coca cola Pepsi Regular

102 | P a g e

Q. What do you prefer in orange? Mirinda Fanta Q. Tick the preferred flavor among the following combinations. 7up / sprite Limca / Mirinda lemon / 7up lemony bite Nimbooz / Minute maid / Juices(Tropicana , Real , others) Q. Which packing do you buy the most? RGB pack (Glass bottles) PET (single serve) 350ml PET (multi serve) 1 Ltr 1.25 Ltr 2 Ltr 600ml CAN

Q. What is your handy place of consumption and how often? Market : Home/Office: Entertainment: Daily Weekends Clubs Alternately Alternately Movies Daily Parties Occasionally

Q. Do you feel Ad Campaigns help in brand remembrance? 1. 2. 3. 4. 5. Strongly Agree Agree Neutral Disagree Strongly Disagree

103 | P a g e

Q. Which Ad do you remember of your favorite brand? _____________________________________________________

Q. How loyal you are towards you favorite brand? 100% 70% 50% Not loyal

104 | P a g e

REFERENCES

BOOKS Kotler Philip, Marketing Management, Pearson Education Singapore 12th edition. Gary Armstrong, Marketing of Principle, Pearson Education 11th edition. Kothari C. R., Research Methodology, New age international publisher DELHI 2nd revised edition 2008 reprint 2009. 4) Chandra Prasanna, Financial Management, Tata McGraw Hill 7th edition 2008.
WEBSITES

1) 2) 3)

5) 6) 7)

www.pepsiworld.com www.pepsico.com www.forbes.com

105 | P a g e