A STUDY REPORT ON PRICING STRATEGIES OF DEALERS AT COCA COLA COMPANY WITH REFRENCE TO IN AND AROUND PUTTAPARTHI

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CONTENTS
Chapter No. Chapter 1 Chapter 2 Topic
1.Introduction to the study 2.1 Problem statement 2.2 Objectives of the study 2.3 Scope of the study 2.4 Research methodology 2.5 Limitations

Page number
7- 9
10 11

Chapter 3

3.1 Company Profile 3.2 Product Profile 3.3 Review of literature Data Analysis and Interpretation 5.1 Findings 5.2 Suggestions 5.3 C onclusion Bibliography Questionnaire

12 - 21

Chapter 4 Chapter 5

22 -28

29 - 30

ANNEXURE

31 - 32

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INTRODUCTION

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CHAPTER 1
Pricing Strategies
Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives

Captive Product Pricing

Where products have complements, companies will charge a premium price since the consumer has no choice. For example a razor manufacturer will charge a low price for the first plastic razor and recoup its margin (and more) from the sale of the blades that fit the razor. Another example is where printer manufacturers will sell you an inkjet printer at a low price. In this instance the inkjet company knows that once you run out of the consumable ink you need to buy more, and this tends to be relatively expensive. Again the cartridges are not interchangeable and you have no choice.

Penetration Pricing.
The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV. These companies need to land grab large numbers of consumers to make it worth their while, so they offer free telephones or satellite dishes at discounted rates in order to get people to sign up for their services. Once there is a large number of subscribers prices gradually creep up. Taking Sky TV for example, or any cable or satellite company, when there is a premium movie or sporting event prices are at their highest so they move from a penetration approach to more of a skimming/premium pricing approach.

Price Skimming.
Price skimming sees a company charge a higher price because it has a substantial competitive advantage. However, the advantage tends not to be sustainable. The high price

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attracts new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented. New products were developed and the market for watches gained a reputation for innovation.

The diagram depicts four key pricing strategies namely premium pricing, penetration pricing, economy pricing, and price skimming which are the four main pricing policies/strategies. They form the bases for the exercise. However there are other important approaches to pricing, and we cover them throughout the entirety of this lesson.

Psychological Pricing.
This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For example Price Point Perspective (PPP) 0.99 Cents not 1 US Dollar. It's strange how consumers use price as an indicator of all sorts of factors, especially when they are in unfamiliar markets. Consumers might practice a decision avoidance approach when buying products in an unfamiliar setting, an example being when buying ice
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cream. What would you like, an ice cream at $0.75, $1.25 or $2.00? The choice is yours. Maybe you're entering an entirely new market. Let's say that you're buying a lawnmower for the first time and know nothing about garden equipment. Would you automatically by the cheapest? Would you buy the most expensive? Or, would you go for a lawnmower somewhere in the middle? Price therefore may be an indication of quality or benefits in unfamiliar markets.

Product Line Pricing.

Where there is a range of products or services the pricing reflects the benefits of parts of the range. For example car washes; a basic wash could be $2, a wash and wax $4 and the whole package for $6. Product line pricing seldom reflects the cost of making the product since it delivers a range of prices that a consumer perceives as being fair incrementally over the range. If you buy chocolate bars or potato chips (crisps) you expect to pay X for a single packet, although if you buy a family pack which is 5 times bigger, you expect to pay less than 5X the price. The cost of making and distributing large family packs of chocolate/chips could be far more expensive. It might benefit the manufacturer to sell them singly in terms of profit margin, although they price over the whole line. Profit is made on the range rather than single item.

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CHAPTER 2

2.1 Problem statement

The principle cause behind of this project is to know that how to fix price of product and what pricing strategies are using of coca cola company and what further improvement can be done in future in this area of pricing strategies.

2.2 Objectives
To study the problem of pricing strategies of coca cola company. To identify the parameters affecting the problem. To identifies the how much price the dealers charged from costumers.

How coca cola company fix pricing of products based on the cost or competitive price. To devise a plane for solution the stated problem.

To make recommendation for implementing of the problem.

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2.3 Scope of the study

This study covers data on pricing strategy of coca cola Company in and around puttaparth. It is also applicable to all over India. The study main purpose is to know what strategies following coca cola Company to fix price their products. It also helps to understand the consumer behaviour about price.

2.4 Research methodology

Methodology is the systematic, theoretical analysis of the methods applied to a field of study, or the theoretical analysis of the body of methods and principles associated with a branch of knowledge. It, typically, encompasses concepts such as paradigm, theoretical model, phases and quantitative or qualitative techniques. A Methodology does not set out to provide solutions but offers the theoretical underpinning for understanding which method, set of methods or so called best practices can be applied to a specific case.

Primary data
The direct interview through questionnaire. Collected from consumers and dealers.

Secondary data
The secondary data collected from business magazines, Industry survey and Internet.

Limitations
This study is confined to in and around puttaparthi area only. There is possibility of sampling errors in the study. The questions included in the questionnaire may not be comprehensive.

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CHAPTER 3
The Coca-Cola Company profile

Profile

Type Traded as Industry Founded Founder(s) Headquarters Area served Key people Products Revenue Operating income Net income Total assets Total equity Employees Subsidiaries Website

Public NYSE: KO Dow Jones Industrial Average Component S&P 500 Component Beverage 1886 Asa Griggs Candler Coca-Cola headquarters, Atlanta, Georgia, U.S. Worldwide Muhtar Kent (Chairman & CEO) List of The Coca-Cola Company products US$48.01 billion (2012) US$10.84 billion (2012) US$9.01 billion (2012) US$86.17 billion (2012) US$32.79 billion (2012) 146,200 (Dec 2011)[2] List of The Coca-Cola Company subsidiaries Coca-ColaCompany.com

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The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is an American multinational beverage corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler (December 30, 1851 - March 12, 1929), who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day.[5] The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.

Figure 2coca cola products

Figure 1 One of The Coca-Cola

Company's headquarters buildings in Atlanta

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PRICING STRATEGY OF COCA COLA

The amount of money charged for a product or service, or sum of the values that Consumers exchange for the benefits of having or using the product or services. As price gives us the profit so this P is very important for business price of product should be that which gives maximum benefit to the company and which gives maximum satisfaction to the customer. Following factors Coca Cola kept in mind while determining the pricing strategy. Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is charging from Their customers otherwise nobody will buy your product. Price must be keeping the view of your target market. The price of Coca Cola, despite being market leader is the same as that of its competitor Sometimes, Pepsi places its customers into some psychological pricing strategies by reducing a high priced bottle and consumers think that they save a lot of money from this. PRICES OF DIFFERENT BOTTLES: Size of Coca Cola Price of Coca Cola (RS.) Regular bottle 13 Non returnable or disposable bottle 30 1.5 litter bottle 70 2.25 litter bottle 90 Coca Cola can 40 PRICING STRATEGIES: Coca Cola has intense competition with Pepsi so its pricing cant exceed too much nor decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed

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too much from the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of Coca Cola decreases people might get the impression that its quality is also low.

PROMOTIONAL PRICING POLICY Coca Cola has offered promotional prices very frequently. Especially on some occasion Coca Cola reduces its rates like in Ramadan Coca Cola reduces its rate unto 5 Rupees on 1.5 litter bottle. MARKET PENETRATION PRICING POLICY In an economy like that of Pakistan, consumers tend to switch towards a low priced product. Coca Colas objective is to target every consumer of the country so Coca Cola has to set its prices at such a level which no one can offer to its consumers. That is why Coca Cola charges the same prices as are being charged by its competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at relatively high price. DISTRIBUTION CHANNEL Coca Cola Company makes two types of selling Direct selling Indirect selling DIRECT SELLING In direct selling they supply their products in shops by using their own transports. They have almost 550 vehicles to supply their bottles. In this type of selling company have more profit margin. INDIRECT SELLING They have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and Agencies to assure their customers for availability of Coca Cola products.

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SWOT Analysis of Coca Cola Company

The Coca-Cola is the world's largest beverage company, offering consumers almost 500 still and sparkling brands. Coke has the world's largest beverage distribution network; consuming in more than 200 countries enjoys the Cokes beverages at an average of nearly 1.6 billion servings a day. In 2011, Coca-cola was declared the worlds most valuable brand according to Interbrands best global brand. Most diversified range of products such as Cola-Cola Cherry, Coca-Cola Vanilla, Diet Coke, Diet Coke Caffeine-Free, Caffeine-Free Coca-Cola and range of lime or coffee and lemon. Coca-Cola has very effective advertising campaign, its advertising also represent the US culture. By sponsoring different games and teams and also featured in countless television programs and films. Strengths The Coca-Cola is the world's largest beverage company, offering consumers almost 500 still and sparkling brands. Coke has the world's largest beverage distribution network; consuming in more than 200 countries enjoys the Cokes beverages at an average of nearly 1.6 billion servings a day. In 2011, Coca-cola was declared the worlds most valuable brand according to Interbrand's best global brand. Cola-Cola gets competitive advantage through the well-known global trade marks by achieving the premium prices. It means Cola-Cola have something that their competitors do not have. Coca-Cola is sold in restaurants, vending machine and stores in more than 200 countries. Coca-Cola achieve both competitive advantages, differentiation and low cost, which maintain its low cost whereas simultaneously differentiate its products. Most diversified range of products such as Cola-Cola Cherry, Coca-Cola Vanilla, Diet Coke, Diet Coke Caffeine-Free, Caffeine-Free Coca-Cola and range of lime or coffee and lemon.

Coca-Cola has very effective advertising campaign, its advertising also represent the US culture. By sponsoring different games and teams and also featured in countless television programs and films.

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Coke and its bottlers are among the world's top purchasers of citrus juice, coffee and sugar. Coke has started to work with the International Labour Organization's International Program on the removal of Child Labour. Weaknesses Coke is criticized for lofty levels of pesticides in its products, exploitative labor practices, environmental destruction, building plants in different countries those employed slave labor and monopolistic business practices. Less inventory turnover as compare to PepsiCo and product line restricted to the beverages only. By giving the distributing and bottling authorization of its own products, it results in dropping a major portion of potential revenue. Coke has been criticized for its aggressive marketing to children and suspected unfavourable health effects. Different studies has been conducted and found other drinks and Coke harmful if consumed excessively. In India Coca-Cola gaining negative publicity due to water issues, it resulted in lower growth and pitiable brand image. Lack of management enthusiasm for offering foreign products into U.S.A markets. Opportunities It is highly difficult for the new entrants to enter in the soft drink industry because of some factors such as brand image and loyalty, bottling network, advertising expense, retail distribution and fear of retaliation. Coke has significant opportunities within global supply chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities our supply chain engages. Cock Bill & Melinda Gates Foundation and nonprofits Techno Serve initiated a partnership to facilitate more than 50,000 small fruit farmers in Kenya Uganda to increase their productivity and double their incomes by 2014. Coke can diminish the fear of substitute by diversifying (related or unrelated) by offering substitute products.
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World population is expected to grow at 8 billion 2025, and 9.2 billion by 2050. Nearly 99% growth will take place in developing countries. Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Coke can relatively diversify and offering health conscious products. Coke promotes and support sustainable agriculture not only because it makes good business sense. Focusing on its advertising and differentiation can increase its profits. Bottled water consumption in increasing day by day, 11 percent growth is reported. Threats Pepsi is the major and primary rival of the Coca-Cola in the soft drink industry, Pepsi is 2nd in revenue behind the Coca-Cola, and also hit Coca-Cola in some markets. Its primary competitor PepsiCo is highly diversified by providing big range of food products. Central and South America Kola Real also known as Big Cola in Mexico is giving tough competition to Coca-Cola etc. Large numbers of substitutes are available in the market such as water, tea, juices coffee etc. Coca-Cola is facing different regulations and policies set by government in different countries. Low growth rate in carbonated drinks, which is recorded less than one percent in primary market of Coca-Cola. Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Different studies has been conducted and found other drinks and Coke harmful if consumed excessively.

Dealers profile; k.Prabakar coca cola dealer, peddakummavari palli road, govinda peta puttaparthi, 515134
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List of coca cola products

Coca-Cola

Diet Coke Thums Up Sprite Fanta Limca Maaza Minute Maid Pulpy Orange Minute Maid Nimbu Fresh Minute Maid Guava Minute Maid Apple Minute Maid Mango Minute Maid Mixed Fruit Minute Maid 100% Juice Grape Minute Maid 100% Juice Apple Minute Maid 100% Juice Orange Burn Kinley Water Kinley Soda Schweppes

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Product quality & safety

The global nature of our business requires that the Coca-Cola System uphold the highest standards and processes for ensuring consistent product safety and quality - from our concentrate production to our bottling and product delivery. We measure key product and package quality attributes to ensure our beverage products in the marketplace meet The Coca-Cola Company's requirements and consumer expectations. Consistency and reliability are critical to our product quality and to meeting global regulatory requirements and The Coca-Cola Company's standards.

All our products are manufactured in sites independently certified according to internationally recognized food safety management standards. Coca-Cola India has complied with all laws and regulations concerning the provision and use of our products and we take measures to ensure that compliance continues in the future too.

Our food safety commitment includes the following focus areas:

Risk Assessment and Mitigation: To implement food safety programs in manufacturing, warehousing and distribution facilities. Supplier Management: To ensure safety of raw materials, ingredients and packaging. Regulatory Compliance: To guarantee consistent execution of our policies from our suppliers, our co-packers, our customers and our bottling and distribution partners.

Continual Improvement across our global system to provide proactive identification and effective management of food sazzfety risks associated with products, processes, and technologies.

Literature review
The advertising and marketing spend in the industry is very high by Coke, Pepsi and their bottlers. This makes it extremely difficult for an entrant to compete with the incumbents and gain any visibility. Coke and Pepsi have a long history of heavy advertising and this has earned them huge amount of brand equity and loyal customers all over the world. This makes it virtually impossible for a new entrant to match this scale in this market place. Retailer Shelf Space (Retail Distribution): Retailers enjoy significant margins of 15-20% on these soft drinks for the shelf space they offer. These margins are quite significant for their

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bottom-line. This makes it tough for the new entrants to convince retailers to carry/substitute their new products for Coke and Pepsi. The several factors that make it very difficult for the competition to enter the soft drink market include: Network Bottling: Both Coke and PepsiCo have franchisee agreements with their existing bottlers who have rights in a certain geographic area in perpetuity. These agreements prohibit bottlers from taking on new competing brands for similar products. Also with the recent consolidation among the bottlers and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottlers willing to distribute their product. The other approach to try and build A Cricket Legend SACHIN TENDULKAR Says about coca cola I distinctly remember being proud of buying a second-hand international car in 1993, and today we are spoiled for choices with the best of brands available in the country. But, as they say, "the more things change, the more they remain the same," and Coca Cola is a manifestation of this idiom. The joy of sipping the Coke remains the same, several years hence! 2013 is all about re-inventing one self. For players like us who have been around for over two decades, there is a need to look beyond our current pre-occupation and identify new challenges and take on new roles. I have been associated with Coca-Cola for several years, and the one thing I have seen during this association is the ability of the company to keep re-inventing itself.

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CHAPTER 4
DATA ANALYSIS AND INTERPRITATION
1. Are you Heard about coca cola company

s.no 1 2 No.of Respondents

Options Yes No

Respondents 82 18 100

Percentages % 82% 18% 100

Heard about coca cola

Options Respondents 18% 0% Percentages %

82%

INFERENCE: From the above graph it is brought out that 82% of the Respondents are heard the coca cola brands. Remaining 18% of the Respondents did not know the coca cola brands.

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2 .Different soft drinks used by customer

S.NO 1 2 3 4

OPTIONS Coca cola Pepsi Dr.pepper None of the above

RESPONDENTS 48 36 8 8

Percentages % 48% 36% 8% 8%

different soft drinks

Percentages % 8% 8 8% 8 36% 36 48% 48 RESPONDENTS

None of the above Dr.pepper Pepsi Coca cola

INFERENCE: From the above graph shows that 48% of the respondents using coca cola brands and 36% of the respondents using Pepco brands and 8% of the respondents dont know the any soft drinks. It indicates coca cola is occupies large market.

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3.which product preferred within coca cola product

S.NO 1 2 3 4

OPTIONS Coca cola fanta sprite Thums up

RESPONDENTS 30 15 40 15

Percentages % 30% 15% 40% 15%

various bronds of coca cola

40 Axis Title 30 20 10 0 Coca cola 1 fanta 2 sprite 3 RESPONDENTS Percentages %

Thums up 4

INFERENCE: From the above graph shows that 40% of the respondents preferred sprite 30% of the respondents preferred coca cola brands and 15% of the respondents preferred fanta and thums up.

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4.what made to you preferred a particular product

S.NO 1 2 3 4 5

OPTIONS price Taste flavour brand quality

RESPONDENTS 24 20 12 36 10

Percentages % 24% 20% 12% 36% 10%

Verious charecterstics
RESPONDENTS Percentages % 36 24

20 12 24% 20% Taste 2 12% flavour 3 36% brand 4 10 10% quality 5

price 1

INFERENCE: From the above graph shows that 36% of the respondents see the brand and 24%, price and 20%, taste and 12% flavour. It evaluate the more customers see the brand only to choosing the brand.

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5.Are you satisfied with the price

S No 1 2 3 4 5

OPTIONS Strongly agree agree saturated disagree Strongly disagree

RESPONDENTS 26 42 5 21 6

Percentages % 26% 42% 5% 21% 6%

Price opinion of customer

RESPONDENTS 42 Percentages %

26 21 6 5% saturated 3 21% disagree 4 6% Strongly disagree 5

5 26% Strongly agree 1 42% agree 2

INFERENCE: From the above graph shows that 42% of the respondents the price and 26% of the respondents strongly agree the price and 5% of the respondents saturated and 21% of the respondents disagree the price.

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6.In which seasons you preferred much soft drinks

S No 1 2 3 4

OPTIONS Summer Winter Rain season Regularly

RESPONDENTS 72 14 8 6

Percentages % 72% 14% 8% 6%

Different
Percentages % RESPONDENTS

regularly Rain session winter summer

6% 8% 14% 72%

6 8 14 72

INFERENCE: From the above graph shows that 72% of the respondents are preferred soft drinks on summer. and14% of the respondents are preferred in winter and 8% of respondents are preferred in rain season and 6% of the respondents are preferred on regularly.

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7.Types of Respondents

S No 1 2

OPTIONS MALE FEMALE

RESPONDENTS 56 44

Percentages % 56% 44%

OPTIONS

MALE 0%

FEMALE

44% 56%

INFERENCE: From the above graph shows that 56% of the respondents are in male and 44% of the respondents are female.

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CHAPTER 5
5.1 Findings

The data which was collected from 56% are males and 44% are females. Out of 100% of respondents 80% of respondents know the coca cola company brands.

Huge competition from PepsiCo and new competition from herbal drinks and from Red Bull.

The coca cola products are more selling on summer. Most of the costumers satisfies the price of products

5.2 Suggestions
The coca cola have a good brand and quality. It improve the low price on big battles to reach the more customers. My suggestion is that you have your vendors put more of it in the stores! Promotional facilities are also to be manage well to improve the status of pricing strategies towords products. Coco cola brand is good but quality should be improved. The coca cola must improve the awareness of brand in particular areas such as rural areas.
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You have all the other flavours that no one buys!!! The green tea one which is called RESCUE never stays because customers buy it more!!!!!THAT'S MY SUGGESTION!

5.3 Conclusion
In the conclusion, it can be stated that the coca cola company having good pricing strategies. Most of the customer choosing the coca cola products on seem brand image. There is no much competition in the market of soft drinks. The main competitor of coca cola company is pepsi. The coca cola company always look in to competitor price to fix their price of product.

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ANNEXURE

Bibliography
www.google.com www.coca cola.com Philip Kotler marketing management 14th edition. Business research methods S N Murthy.

QUESTIONNAIRE
Name: Age : 1.Have you ever had any soft drink? a) yes b)no

2.which soft drink do you used more often? a) coca cola b) Pepsi c)Dr.pepper d) None of the abive 3. Are you heard about coca cola brand? a) yes b)no

4. Which products you preferred in coca cola brand? a)coca cola b) fanta c) sprite d) thums up 5.what made to you choose particular product?
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a)price

b) taste c) flavour d) brand e) quality

6. In which seasons you preferred more soft drinks a) summer b) winter c) rain season b) regularly 7. Are you satisfied with the price? a) Strongly agree b) agree c) saturated d) disagree e) strongly disagree 8. Are you male and female? a) male b) female 9 .How much are you willing to pay to buy a soft drinks? Ans: . 10. Would you suggest any plan to improve pricing strategy? Ans:

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