Sales & Distribution of Coca-Cola

Company Overview
•The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-
Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly
through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian
distributors and more than 2.2 million retailers.
•Today, their brands are the leading brands in most beverage segments. The Coca- Cola Company's brands in India include Coca-Cola,
Fanta Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the Georgia
Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients).

•In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca- Cola Company namely Coca-Cola India Pvt Ltd
which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely,
Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola Company, who are authorized to prepare,
package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution
system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to
authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop
local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these
customers make our beverages available to consumers across India.
PRODUCT PORTFOLIO

1.CARBONATED BEVERAGES
A. COCA COLA
 B. LIMCA

C. THUMS UP

D. SPRITE

E. FANTA

F. DIETCOKE

2.NON CARBONATED BEVERAGES

A. MAAZA
 Market Classification

•The Market is classified on two parameters.

•Geographic Area- Under this HCCB segments its market on the basis of region
and also on variations as per taste and income.
•Competition which includes strong players like PepsiCo and RC Cola

•Segmentation:
•Income Level – Divided into three parts: High, Medium and Low
•Consumer. Choice – Divided. into three types : Convenience Stores, Restaurants
and Grocery Stores
 Sales Role
Strategic Role:
• Setting sales targets and quotas
• Establishing sales quotas
• Sales forecasting
• Demand planning and sales planning

Control role
• Setting up of sales routes
• Recruitment and training
• Analyzing the sales report
ORGANIZATION STRUCTURE
 Different Roles within
STMO
Regional Sales Manager
• Looks after the profit and loss account of the assigned territory and the various
analysis that needs to be done
• Responsible for looking after the issues of whether or not the sales team is
abiding by the policies that has been laid by the company
• Responsible for maintaining the cohesiveness of the entire sales.
force under him
• Involved in the training and development programs that are there for the Area
Sales Manager
 Area Sales Manager

• Responsible for all the primary targets that have been assigned to
him and his team of sales executives
• Accompanies various executives on sales calls when the
account is crucial and when some assistance is required and also
participates in the training program of them
• Communicates all the company policies and philosophy to his team and
is required to maintain good relations with the clients, major account,
legal accounts and other influential sources in his designated area
• Works with the Distribution team to draw up the route plan of the
Route Salesmen
 Sales Executives

• Responsible for secondary target achievements and is required to maintain

good relations with the retailers, distributors and
dealers
• Ensure the smooth execution of the various strategies like selling, promotion
etc and takes care of the training program of the distributor salesperson.
• travelling to different markets and distributor points providing them a
fair idea as to what is required at the ground level
• information about the needs of the consumers which is helpful in
designing marketing campaigns
 Presellers

• Take orders from retailers and dealers in the market, execute

various promotional activities
• Stay in touch with them round the year for any operations related to their day to
day job
• Every distributor has 3-4 Salesperson of their own who are on third party payrolls
and eventually become Presellers depending on their productivity
 Marketing Objectives &
Strategy
Objectives

Strategies
Coca Cola is using push strategy
in. which it uses its sales force and
This basically includes. trade promotion money to induce
Understanding Customer. intermediaries to carry, promote
Needs, Developing. new and the sell the products to end
users. It also uses pull strategies
products, Increasing. brand like .promotions and
awareness, Increasing advertisements are used to persuade
profitability, Increasing consumers to ask the intermediaries
Market Share, for the company brand product
Marketing strategies generate sales
Diversifications and Re leads and sales strategies gain
Launch of any particular agreement to purchase a product or
products service,
 Coca-Cola Logistics
Logistics is an integral part of any supply chain, and Coca-Cola’s logistics expertise definitely
contributes to its supply chain success. Here are some of the logistics-related best practices
implemented by Coca-Cola:
• Manufacturing products on a more frequent basis, e.g. once a week
• Implementing weekly meetings between the teams worldwide
• Moving the production plants closer to customers
• Introducing daily interaction between the main sites
• Introducing seamless processes that are shared between all supply chain participants
 Recruitment & Selection

• The skills that are. mostly sought after by the company includes productivity,
selling skills, improvisation and communication.
• The Area Sales Manager are mostly recruited from premier B Schools in the country.
• The Sales Executives are graduates and are hired from various B Schools in the country.
The initial screening is done by the HR team and final selection is made by the ASM.
There is a preference for hiring freshers particularly since they want fresh outlook and
they believe they have a very robust training structure in place for the new joinees to
learn.
• The Selection process involves various activities like Group Discussions., Situational
Tasks, Interviews and Psychometric Tests. Fluency in the local language is a must
 Training & Development
• ASM goes through the Management Trainee Program for a minimum of 6 months. Other
than that various training programs are arranged round the year
• Sales Executives in contrast goes through a 15 days induction program after joining

The basic aim is to familiarize them with the challenges that are there on the to day job.
They are given some time to adapt to their territory and .are sometimes introduced to
few distributor retailer existing in the region. Since these are the people who promote
various products on field they have a session with marketing. Team who understand the
objectives and various promotional campaigns that are in place. They are also given IT
and computer system training. They are also provided with SKU information
 Compensation & Targets
• HCCB pays its sales employees a basic salary with incentives depending
on allotted quotas.
• The basic salary can be around 17,000/- for a fresher and it can go up with
the years of experience.
• Those who are hired from competitors like PepsiCo has the advantage of
negotiating their base salary based on their skills
• These are basically set keeping in mind various parameters.
 Performance Ratings

• Exceptional Performers(EP) are those who exceed their

allocated quota in terms of quality and quantity
• Successful Performers (SP) are those who meet their allocated quota
• Developing performers(DP) are those whose contributions meet
some/most of the quota but necessary improvements are expected
• No performers(NP) are those who did not meet their stated quota for quite
a considerable amount of time
 Appraisals
The steps involved in Performance Measurement steps at HCCB
is as follows
• Step 1 - Annual Performance Review which involves assesing results and
prepare. a development plan
• Step 2 – Planning performance of the year which involves
finalising on the development plan
• Step 3 - Rewards and Recognition which involves identifying the performers and
generate performance linked pay and other benefits
• Step 4 - Mid Term Review which involves revewing the
competencies of the development plan
The steps involved in appraising. the salesperson performance involves defining the job,
appraising the performance and providing feedback. Performance review meetings are
very common within HCCB
 Rewards

• Employee salary increment

• Grade Jump, Designation change
Yearly Basis • Annual incentive Plan (AIP) (for business performance, but fixed)
• Personal Progress report (PPR) (Annual Appraisal)

• Making the move (MTM, sales target achieve)

Monthly Basis • Monthly turn hall (extraordinary performance)

• Employee of the Quarter (EOQ, non sales)

Quarterly Basis • Sales Dangle context
• Gold Context
 Sales Force Motivation

no. of units/total revenue every executive needs to

work as a base for add new outlets every year
incentives to get unit incentives

target achievers are

recognized by giving
foreign trips for managerial
certificates, trophies, luch
level or above
or outing with senior
management, tv, fridge etc
 Sales Promotion
The various sales promotion activities that are implemented by HCCB
Iincludes
Price Offs, Discount Sales, Buy 1 Get 1 etc.
Besides these there are other lucrative offers like Gold Coins for High
performing Distributors, Paid Foreign Trips, Gifting Branded watches,
Dinner Meet forretailers.
•
 Some of the promotional offers that are currently valid now

•Soft Drink : 1 case (600 ml bottles) . + 2*500ml. soda free

• 2 case (600 ml bottles) .+ 5*500ml. soda free
 Sales Coverage

• It is the responsibility of the SM to ensure that all the salesperson are following an
optimized route that includes the active accounts as well as potential accounts.
• The IDAS software is in place which contains the details of all the retailers and
distributors in various territories and on entering a few parameters which are set
according to the objectives for the day. The software generates a route. The main
function of the software is to ensure that the expenses are minimal keeping in mind
the coverage that each salesperson has to do to meet their targets.
Each salesperson were provided with a Blackberry with which the system was
synced and the GPS of the phone used to serve as a basis for evaluating whether or
not the salesperson is following the given orders.
Recently the use of blackberry has stopped with the advent of various smartphones
for the purpose of order taking.
 Sales Program
RED (Right Execution Daily)
• The objective of this program is to ensure that the coolers are in the prime position in
the outlet with clear visibility. The products of HCCB has to be in the order specified
that is Coke – Fanta – Sprite – Limca – Thums up – Maaza. The salesperson are to
ensure that the availability is always there. It is a must that two of the shelves must be
filled with Immediate consumption packs.
• The Area Sales Manager is responsible for ensuring that this program is
happening smoothly and the Sales Team Lead is required to submit a report for
all the salespersons under him.
• Implementation starts with a meeting with a Distributor and 3-4 Pre Sellers for half to
one hour to discuss the agenda for the day where the performance of everyone is
reviewed and at the same time it is ensured that they follow a pre journey plan
 co
Sales Forecasting m
pa
ny
forecast general economic condition
sal
es
market potential for
zone wise,
ec
region
ast
sales potential
combined into territory
for
forecast
sales forecast
eca
sts
for
zon sales person forecat of accounts
es,r
egi
Sale Forecasts are based on various factors:

economic seasonal
historical data
parameters variations

weekly reviews to
festivals,
adjust monthly
ceremonies etc.
forecasts
 Designing of Sales Territories
• Territory

It is the segment of the market for which a salesperson is responsible. Territory assignments may be exclusive, meaning no
other salesperson can sell in that territory, or nonexclusive. Territories may be defined in terms of geographic or market
segments, product or product lines, size of customer or by specific target customers or prospect. The reason for setting up
or reviewing sales territories in Coca Cola Company

• Increase their coverage

• Control the selling expenses specially travel expenses.

• Better evaluation of sales force performance

• Improve customer relation.

• Improve sales force effectiveness

• The process of designing sale territory is as follows

Select control
unit

Find location
and potential
customer

Decide basic
territory

We have two
type of decide
basic territory

Break down
method/Build
up method
territory
 Sales Quota
• PARAMETER ON WHICH COCA COLA FIXED THEIR QUOTA:

• Planning the sales quotas involves identifying the right quota depending upon several factors and assigning them to the sales representatives. We know that
sales representatives of each region or territory may not be assigned the same sales quota. Let us understand the list of factors which help in setting the sales
quotas to sales representatives. Some of the parameter given below:

1. MARKET SIZE AND POTENTIAL

• For each territory or region the market size and potential must be analysed by COCA COLA. The market potential can be known by the forecasting techniques
which were discussed earlier.The once the existing market size is determined, quotas have to be planned accordingly so that the market potential is fully
utilized to achieve the maximum productivity levels. It must be remembered most of the times that the sales quotas would be proportional to

• the size and potential of the market. The quotas would not only depend upon the size and potential because various other factors have to analysed which will
be discussed in this section. 

2. LEVEL OF COMPETITION

• Even if the market size and potential is huge, the sales quotas may not be high due to the level of competition. For example, if the potential for the COCA
COLA in a particular region is 5 million, then you cannot assign quotas to grab that 5 million. Quotas must be realistic in nature taking the account of
competition. If there are 6000-7000 customer then assigning the quotas to generate 30 – 40 percent of the potentials practical. Again the quotas depend
upon another factor current position of the organization in that region.
3. CURRENT POSITION OF THE ORGANIZATION

• In the previous example, gaining a 30-35 percent market potential is a practical task if the COCA COLA is the
top players in that region. But if the COCA COLA is a low level player or an entrant, then getting 10 percent of
the potential also would be a huge task. Hence the sales quotas have to be planned accordingly based upon
the current position of the organization.

4. SKILLS OF THE SALES PERSON

• All the employees within the company may not be able to generate huge number of leads. Hence, setting
same quotas for all the employees may not be achievable and may become a de-motivating factor. The sales
manager has to plan the quotas according to the skill of the sales manager and may increase it in future. The
new employee may need to have a different sales quota while compared to the already existing employee. If
the quotas are not achievable, sometime should be given by the sales.
• Coca cola forms its sales territories on the basis of two aspects:

1. On the basis of prospective consumers

2. On the basis of dealers and distributors 

Conclusion:

For example coca cola has followed extensive distribution strategy. So it targets high traffic areas such as railways, bus
stands etc. recently it has sold its some distribution territories to independent bottlers so as to:

 Cut costs
 Reap local knowledge
 Community connections
 outstanding commercial capabilities of a strong local bottling system

These new territories will include some of the largest cities in the geographies that border these bottlers’ existing
territories, allowing each bottler to better service local customers and provide more efficient execution.
 DISTRIBUTION
DISTRIBUTION ROUTE
 Key Accounts -The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations
that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by
them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc.
 Future Consumption -This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future
consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or
non-availability of the product.Examples: Departmental stores, Super markets etc.
 Immediate Consumption-The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored
for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples:
Small sized bars and restaurants, educational institutions etc.
 General-Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption
period is not taken into consideration in this particular route.
It Focus on high traffic locations-Railway stations, Bus stand.Coke India distributes using 2 routes

 Direct Route Direct Market

 Indirect Route
Route
Plant Warehouse
Indirect
Distributor Market
Route
 3 COBO Regions – 27 COBO units
 1 FOBO Region – 12 FOBO units
DISTRIBUTION STRUCTURE

 Direct Route: Direct On Order & Ready Stock

 Indirect Route: Distributors cover: 500-600 outlets

DELHI-NCR DISTRIBUTION
Distribution of Coca-Cola includes full Coverage of Delhi-NCR with 59 Routes spread across region. The Retailer is Handling 45 Pre sellers. Company owned & contracted vehicles
for efficient distribution. The vehicles owned by company are 56 particularly for this region only. Each of the transporting vans of company has one driver and two loaders to
efficiently load and unload goods.
 Sources of Channel Conflict
• One of channel conflict is a conflict among channel members. The Coca Cola Company want
to provide a discount on its bottles and cans in order to increase its sales and enlarge its
market. However, some retailers believe that the profits of products will be reduced by
offering discounts. Some retailers will discounts Coca Cola provided. Moreover, Coca Cola sell
to Costco at cheaper price in order to increase sales, but its full service retailers will be
dissatisfied with that. There are lots of solutions to solve this problem, but these solutions
are not perfect. One of effective solution is to share information. It will enable to build trust
between Coca Cola and retailers, however, it will take much money in sharing information
and lead to the information being available to its competitors.
• Another conflict is commotion in price. In order to increase their profits,
some distributors try to attract customers by lowering their price. It will result in retailers
buy the products at different price, thus leading to customers are dissatisfied with price of
products. It will have a bad influence on sale of products. The coca Cola company should
establish a same standard of price. In the contract signed by the distributor, the company
needs to make clear the recommended retail price. In addition, the company needs to make
contributor understand common interests.
 Source of Channel Power
• There are several sources of power. Reward power involves a
channel member being able to positively reinforce another’s
performance—e.g., Coca Cola may be able to give a price break or
pay a fee for additional shelf space. A retailer that meets a certain
goal—e.g., the sale of 50,000 cases per month—may receive a bonus.
In contrast, coercive power involves the threat of a punishment. A
large retailer, for example, may tell a small manufacturer that no
further orders will be forthcoming unless a price discount is offered
 Channel ROI
•CALCULATION OF ROI (RETURN ON INVESTMENTS) FOR DISTRIBUTORS:
The deposit of 1500 cases at the rate of Rs200 per case = 3, 00,000
Liquid Value on an average including all mini, 300 ml, half litre and 2 litre =2, 00,000
Godown deposit = 20,000
Vehicle = 4,80,000, Therefore the total investment is Rs10,00,000
•Now to calculate the ROI = (Net Margin/Investment)
({Volume X Case rate} – Expenses) / Investment
•If a distributor has 50,000 volume, Rs11 per case and Other Expenses 35,000 then
• 50,000 X 11 =55,000 – 35,000 =20,000
•Therefore ROI = 20,000 /10, 00,000 = 0.20 = 20%
•Hence the ROI is favourable
•Therefore from the above calculations we can see that the return on investment is favourable, so the distributor will operate efficiently as he is getting a
good return on investment.
 Recommendation
• Since the territory is a bit large and it is considered as a Hot Spot for Delhi NCR region, the
Presellers should be increased in number to ensure smooth functioning. It has been pointed
out by my SM that sometimes Thumbs Up whose sales are highest at the moment are not
available at various junctures
• Also the salary for fresh Graduates are quite low and hence sometimes they are demotivated
and are looking for fresh jobs while they are on duty
• The communication is also an issue at specific points like if any salesperson is on leave and
the outlets he serves requires some immediate restocking. Hence a new policy should be
implemented for addressing such issues.
• A special section should be in place for high profile hospitality segment since the territory is
filled with such. The shelf display can also be implemented in restaurants which is currently
missing