SUMMER INTERNSHIP PROJECT REPORT

ON

MARKETING STRATEGY FOR RETAIL STORE EXCEUTION

at

DMS PROJECTS PVT. LTD.

Submitted in partial fulfillment of the requirements for the award of BBA Markt degree

Submitted by

HIMANSHU PREMI

BBA MARKETING

Batch – (2017–2020)

Roll No.: 170241135

Under The Guidance Of

Mr.Rohit Verma

Manager, DMS PROJECTS PVT. LTD.

SCHOOL OF BUSINESS STUDIES

SHARDA UNIVERSITY, GREATER NOIDA-201307

1
 EXECUTIVE SUMMARY

Shadowing members of the Accounts department as they perform their

duties. Assisting with filling, data entry and recording maintaining the

inventory to complete financial records. Working with book keeping

software. Handling confidential and sensitive information with

honesty and integrity.

Learning how to work as aa part of accounting team and analyzing

inventory to compile, track information, and support the client or the

company. Taking on addition tasks and projects to learn more about

accounting and how to manage inventory in the organization.

2
 PREFACE

This Project Report has been prepared in partial fulfillment of

the requirement for the subject. The Project Report,

we have visited the Beverage company during the suggested

duration for the period of 21 days, to avail the necessary

information. The blend of learning and knowledge acquired

during our practical studies at the company is presented in this

project report . The rationale behind visiting the Beverage company

and preparing the project report . Report is to study the

Beverage basics, history and development of market growth

of economy and its functional areas like Inventory department and

financial department . The Project Report starts with the

basic concepts of company history and its funct ional

depart ments like Inventory department and financial department.

AKNOWLEDGEMENT

3
I express my sincere gratitude to my industry guide Mr.Rohit Verma,

Manager, VARUN BEVERAGES (PEPSICO) pvt. Limited. For his

able guidance, continuous support and cooperation throughout my

project, without which the present work, would not have been possible.

I would also like to thank the entire team of VARUN BEVERAGES

(PEPSICO) pvt. Limited. For the constant support and help in the

successful completion of my project.

Also, I am thankful to my faculty guide Dr. K.R. GOLA,, for his

continued guidance and invaluable encouragement.

Signature

Himanshu Bhati

CERTIFICATE OF ORIGIN

4
This is to certify that Mr. Himanshu Bhati, student of B.com (Hons). ,

Sharda University, Greater Noida has worked in the Marketing

department, under the able guidance and supervision of Mr.Rohit

Verma, Manager VARUN BEVERAGES (PEPSICO) pvt. Limited.

The period for which he was on training was for 6 weeks, starting from

18th June 2018 to 2th July 2018. This Summer Internship report has the

requisite standard for the partial fulfillment of the bachelors Degree in

Commerce. To the best of our knowledge no part of this report has

been reproduced from any other report and the contents are based on

original research.

Dr. K.R. GOLA

Himanshu Bhati

(Faculty Guide)

(Student)

TABLE OF CONTENT

5
Chapter Particular(s) Page No.

1 INTRODUCTION 6

2 ORGANIZATION STRUCTURE 14

3 PERFORMANCE 15

4 PRODUCTS 16

5 COMPETITORS 18

6 SWOT ANALYSIS 19

7 PROBLEMS FOUNDED 20

PARI - II

8 RESEARCH OBJECTIVES 21

9 RESEARCH METHODOLODGY 22

10 THERITICAL ANALYSIS 24

11 DATA ANALYSIS 42

12 FINDINGS 53

13 CONCLUSION 56

6
 PART - I

INTRODUCTION

We are the second largest franchisee in the world (outside US) of

carbonated soft drinks (“CSDs”) and non-carbonated beverages

(“NCBs”) sold under trademarks owned by PepsiCo and a key player

in the beverage industry. We produce and distribute a wide range of

CSDs, as well as a large selection of NCBs, including packaged

drinking water. PepsiCo CSD brands sold by us include Pepsi, Diet

Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew,

Seven-Up Nimbooz Masala Soda, Evervess Soda, Sting and Gatorade.

PepsiCo NCB brands sold by us include Tropicana (100%, Essentials

& Delight), Tropicana Slice, Tropicana Frutz, Seven-Up Nimbooz and

Quaker Oat Milk as well as packaged drinking water under the brand

Aquafina. In addition, we have also been granted the franchise for Ole

brand of PepsiCo products in Sri Lanka.

We have been associated with PepsiCo since the 1990s and have over

two and half decades consolidated our business association with

PepsiCo, increasing the number of PepsiCo licensed territories and

sub-territories covered by us, producing and distributing a wider range

of PepsiCo beverages, introducing various SKUs in our portfolio, and

expanding our distribution network. As of March, 2018, we have been

granted franchises for various PepsiCo products spread across 21

States and two Union Territories in India namely Himachal Pradesh,

Punjab, Chandigarh, Haryana, Delhi, Uttarakhand, Uttar Pradesh,

7
Rajasthan, Madhya Pradesh (designated parts), Chhattisgarh, Odisha,

Bihar, Jharkhand, West Bengal, Assam, Arunachal Pradesh,

Meghalaya, Mizoram, Tripura, Manipur, Nagaland, Goa and

Maharashtra (designated parts).

Our share of PepsiCo beverages volume sales increased from ~ 26% in

Fiscal 2011 to ~51% in Fiscal 2018. Although, India is our largest

market, we have also been granted the franchise for various PepsiCo

products for the territories of Nepal, Sri Lanka, Morocco, Zambia and

Zimbabwe.

As of March 2018, VBL has 20 manufacturing plants in India (Gr.

Noida 1, Gr. Noida 2, Kosi, Sathariya 1, Sathariya 2, Bazpur, Jainpur

& Hardoi in Uttar Pradesh, Bhiwadi & Jodhpur in Rajasthan, Nuh &

Panipat in Haryana, Phillaur in Punjab, Kolkata in West Bengal,

Guwahati Unit 1 & 2 in Assam, Goa, Mandideep in Madya Pradesh,

Bargarh & Cuttack in Odisha and Jamshedpur in Jharkhand) and 5

manufacturing plants in international geographies (one each in Nepal,

Sri Lanka, Morocco, Zambia and Zimbabwe). In addition, we have set

up backward integration facilities for production of preforms, crowns,

corrugated boxes, plastic crates and shrink-wrap films in certain of our

production facilities to ensure operational efficiencies and quality

standards.

We are part of the RJ Corp group, a diversified business conglomerate

with interests in beverages, quick-service restaurants, dairy and

healthcare. Our Promoter and Chairman Mr. Ravi Kant Jaipuria has an

8
established reputation as an entrepreneur and business leader and is the

only Indian to receive PepsiCo’s International Bottler of the Year

award, which was awarded in 1997.

COMPANY PROFILE

ABOUT THE COMPANY

VARUN BEVERAGES (PEPSICO) was the leading soft drink

brand in India until 1990, when it left rather than reveals its formula to

the Government and reduces its equity stake as required under the

foreign regulation Act (FERA) which governed the operations of

foreign companies in India. VARUN BEVERAGES (PEPSICO)

reentered the Indian market in 1990 An agreement with Parle group

gave the company instant ownership of the top soft drink brands of the

nation. The VARUN BEVERAGES (PEPSICO) Company acquired

soft drink brands like including packaged drinking water. PepsiCo

CSD brands sold by us include Pepsi, Diet Pepsi, Seven-Up, Mirinda

Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala

Soda, Evervess Soda, Sting and Gatorade, which were floated by Parle,

as these products had achieved a strong consumer base and formed a

strong brand image in Indian market during the re-entry of VARUN

BEVERAGES (PEPSICO) in 1993.Thus these products became a part

of range of products of the VARUN BEVERAGES (PEPSICO)

company.

3C Report

9
Company Profile: The VARUN BEVERAGES (PEPSICO)

Company is an American multinational beverage corporation and

manufacturer, retailer and marketer of non-alcoholic beverage

concentrates and syrups , which is headquartered

in Atlanta, Georgia..[2] The company is best known for its flagship

product VARUN BEVERAGES (PEPSICO) invented in 1886 by

pharmacist John Stith Pemberton in Columbus, Georgia.[3] The

VARUN BEVERAGES (PEPSICO) formula and brand was bought in

1889 by Asa Griggs Candler (December 30, 1851 – March 12, 1929),

who incorporated The VARUN BEVERAGES (PEPSICO) Company

in 1892. The company operates a franchise distribution system dating

from 1889 where The VARUN BEVERAGES (PEPSICO) Company

only produces syrup concentrate which is then sold to various bottlers

throughout the world who hold an exclusive territory. The VARUN

BEVERAGES (PEPSICO) Company owns its anchor bottler in North

America, VARUN BEVERAGES (PEPSICO) Refreshments.

Its stock is listed on the NYSE and is part of DJIA S&P 500 index,

the Russell 1000 Index and the Russell 1000 Growth Stock Index. As

of 2015, its chairman and CEO is Muhtar Kent.

10
The Customer: At VARUN BEVERAGES (PEPSICO) , customers

are at the heart of VARUN BEVERAGES (PEPSICO) . Customer

preference is a core value of the business. This means building true

partnerships that create sustainable value and profitable growth for the

business and the customers across all key channels. By finding new

ways to win together in the marketplace, VARUN BEVERAGES

(PEPSICO) aim to be the preferred supplier to all of the customers.

VARUN BEVERAGES (PEPSICO) target to the whole crowed. It

stage to the rich to the poor. It’s not only adopted by rich it also reach

to the pool with its small size bottle. Mass generation adopt pepsi co.

In the new liberalized and deregulated environment in 1993,

VARUN BEVERAGES (PEPSICO) made its re-entry into India

through its 100% owned subsidiary, HCCBPL , the Indian bottling arm

of the VARUN BEVERAGES (PEPSICO) company. However this

was based on numerous commitments and stipulations which the

company agreed to implement in due course. On such major

11
commitment was that, the Hindustan VARUN BEVERAGES

(PEPSICO) Holdings would invest $5 billion in India from 2012 to

2020 to capture the Indian market.

VARUN BEVERAGES (PEPSICO) is made up of 7000 local

employees, 500 managers, over 60 manufacturing location. It also has

a supporting distribution network consisting of 15, 00,000 retail outlets

and 15000 distributors. Almost all goods and services required to cater

to the Indian market are made locally, with help of technology and

skills within the company.

“Think local, act local”, was the mantra that VARUN

BEVERAGES (PEPSICO) follows, with punch lines like “Yeh hai

Youngistaan Meri Jaan! Hindi – meaning “This is the Young era my

dear” BEVERAGES (PEPSICO)” for the Rural India. The resulted in

a 37% growth rate in rural India visa-vie 24% growth seen in urban

India between 2011 and 2012, the per capita consumption of cold

drinks doubled due to the launch of the new packaging of the 200 ml

returnable glass bottles which were made available at price of Rs.10

per bottle. This new market accounted for over 80% of India’s new

VARUN BEVERAGES (PEPSICO) drinkers. At VARUN

BEVERAGES (PEPSICO) , they have a long standing belief that

everyone who touches their business should benefit, thereby including

them to upload these values, enabling the company to achieve success,

recognition and loyalty worldwide.

12
 HISTORY

Rapid Growth

The three pioneer bottlers divided the country into territories and

sold bottling rights to local entrepreneurs. Their efforts were boosted

by major progress in bottling technology, which improved efficiency

and product quality by 1990. Some were open only during hot-weather

months.

Packaging innovations

For the first time, consumers had choices of VARUN

BEVERAGES (PEPSICO) package size and type the traditional 6.5-

ounce contour bottle, or larger servings including 10-, 12- and 26-

ounce versions. Cans were also introduced, becoming generally

available in 1960.

Consolidation to serve customers

As technology led to a global economy, the retailers who sold

VARUN BEVERAGES (PEPSICO) merged and evolved into

international mega-chains. Such customers required a new approach. In

response, many small and medium-size bottlers consolidated to better

serve giant international customers. The Company encouraged and

invested in a number of bottler consolidations to assure that its largest

bottling partners would have capacity to lead the system in working

with global retailers.

21st Century …

13
 The VARUN BEVERAGES (PEPSICO) bottling system grew

up with roots deeply planted in local communities. This heritage serves

the Company well today as people seek brands that honor local identity

and the distinctiveness of local markets. As was true a century ago,

strong locally based relationships between VARUN BEVERAGES

(PEPSICO) bottlers, customers and communities are the foundation on

which the entire business grows.

Hindustan VARUN BEVERAGES (PEPSICO) Beverage Pvt. Ltd

Company Overview:-

Hindustan VARUN BEVERAGES (PEPSICO) Beverage Pvt. Ltd.

Khordha. It is one of the bottling plants of “VARUN BEVERAGES

(PEPSICO) PepsiCo Inc. (PEP) is a leading food and beverage

company that manufactures and distributes its products in more than

200 countries. Food products that PepsiCo manufactures include chips,

flavored snacks, cereals, rice, pasta, and dairy-based products. The

company’s beverage product portfolio includes carbonated soft drinks,

juices, ready-to-drink tea and coffee, sports drinks, and bottled water.

Headquartered in Purchase.

According to Information Resources, Inc. (or IRI), a market research

company, PepsiCo owns nine of the 40 largest packaged goods

trademarks in the United States. The company owns several brands,

and 22 of them, including Pepsi, and Gatorade, generate more than $1

billion each in revenue

14
 ORGANIZATION STRUCTURE

Ravi Kant Jaipuria Chairman & Promoter Director

Girish Ahuja Independent Director
Geeta Kapoor Independent Director
Naresh Kumar Trehan Independent Director
Sanjoy Mukerji Independent Director
Ravindra Dhariwal Independent Director
Pradeep Sardana Independent Director
Ravindra Dhariwal Non Exe. & Ind. Director
Geeta Kapoor Non Exe. & Ind. Director
Pradeep Sardana Non Exe. & Ind. Director
Girish Ahuja Non Exe. & Ind. Director
Naresh Kumar Trehan Non Exe. & Ind. Director
Ravi Kant Jaipuria Promoter Director
Varun Jaipuria Promoter Director
Raj Pal Gandhi Whole Time Director
Varun Jaipuria Whole Time Director
Kamlesh Kumar Jain Whole Time Executive Director
Kapil Agarwal Whole Time Executive Director
Raj Pal Gandhi Whole Time Executive Director
Kapil Agarwal WholeTime Director & CEO
Kamlesh Kumar Jain WholeTime Director & CFO

15
 PERFORMANCE

In an interview with CNBC-TV18, Raj Gandhi, Group CFO of

Varun Beverages spoke about the latest happenings in his
company and sector.

Going forward, 8-10 percent growth in carbonated beverage

industry is quite possible. To achieve the growth target set by
the company itself, there is a lot of product innovation
happening and the portfolio enrichment is happening, he said.

Pepsi has 38 percent share and the competition has larger

market share, he added.

We expect a good revenue growth for the company, said

Gandhi.

16
 Products

VARUN BEVERAGES (PEPSICO) Products include:

 Pepsi

 Diet Pepsi

 Seven-Up

 Mirinda Orange

 Mirinda Lemon

 Mountain Dew

 Seven-Up Nimbooz Masala Soda

 Evervess Soda

 Sting

 Gatorade

 Tropicana Slice

 Seven-Up Nimbooz

 Quaker Oat s

 Packaged drinking water under the brand Aquafina

17
COMPETITORS

The Competitors: The main competitors of VARUN BEVERAGES

(PEPSICO) are :

Coca-Cola

Red Bull

Dabur Real juice

Kellogg’s

HUL

18
 SWOT ANALYSIS

STRENGTH-

 Brand value 77839 billion

 World large beverage company

 Strong marketing and advertising

WEAKNESS-

 Lack of diversification

 Negative publicity

OPPORTUNITY-

 Growth in beverage consumption

 Increase bottled water demand

 Reduce the price of material production

THREATS-

 Changing user demand for the competitor drink

19
  Local brand are increase

Increase competition

PROBLEMS FOUNDED

 Delay from buyer end.

 Rejections of lot.

 Production delay.

 Miscommunication.

 Approval delay.

 Testing delay.

 Over booking by factory.

 Work load on staff on peak time.

20
 PART – II

RESEARCH OBJECTIVES

OBJECTIVES OF THE STUDY

The present study revolves around the following broad objectives:-

 To understand the objective of inventory management.

 To identify how much inventory of bottles of VARUN BEVERAGES

(PEPSICO) is maintained.

SCOPE OF THE STUDY

Many companies use inventory system in their production or retail

operations. Inventory management provides the foundation to meet

customer demands and composes one of the largest assets owned by

the company. Companies incorporate inventory system as a way of

managing inventory level. Each inventory system falls within a

specific scope and experiences certain limitations. Management needs

to understand the scope of each in order to choose the best inventory

system for the company. The scope of an inventory system considers

which needs the inventory system addresses. These include:

 Valuing the inventory, measuring the change in inventory and planning

for future inventory levels.

 The value of the Inventory at the end of each period provides a basis

for financial reporting on the balance sheet.

 Measuring the change in inventory allows the company to determine

the cost of inventory sold during the period.

21
 The inventory level and changes allow the company to plan for future

inventory needs.

RESEARCH METHODOLOGY

DATA COLLECTION

Two types of data are collected, one is primary data and second

one is secondary data. The primary data were collected from the

Department of finance, VARUN BEVERAGES (PEPSICO)

COMPANY. The secondary data were collected from the Annual

Report of VARUN BEVERAGES (PEPSICO) COMPANY, its

website, etc.

PLACE OF STUDY

The project study is carried out at the Accounts(inventory)

Department of VARUN BEVERAGES (PEPSICO)

COMPANY.The study is undertaken as a (B.COM) MASTERS IN

SCHOOL OF BUSINESS STUDIES OF SHARDA UNIVERSITY,

GREATER NOIDA in the form of SUMMER INTERNSHIP

TRAINING.

PERIOD OF STUDY

I have done my project from 18th June 2018 to 2nd July 2018 in

GREATER NOIDA plant of VARUN BEVERAGES (PEPSICO) Pvt.

Limited.

LIMITATIONS

22
 There may be limitations to this study because the study

duration (summer placement) is very short and it’s not possible to

observe every aspect of inventory management and control system

practices.

1. Interest on invested capital.

2. Physical handling.

3. Accounting.

4. Depreciation and determination.

23
 1. THEORETICAL ANALYSIS

INVENTORY MANAGEMENT:

Inventory is defined as a stock of goods that are maintained by

a business in anticipation of some future demand. Inventory

management is primarily about specifying the size and placement of

stocked goods. It has an impact on all business functions, particularly

operations, marketing, accounting, and finance. Itis required at

different locations within a facility or within multiple locations of a

supply network to protect the regular and planned course of production

against the random disturbance of running out of materials or goods.

Inventory management refers to all the activities involved in

developing and managing the inventory levels of raw materials, semi-

finished materials (work-in- progress) and finished goodsso that

adequate supplies are available and the costs of over or under stocks

are low. The cost of maintaining inventory is included in the final price

paid by the consumer. Good in inventory represents a cost to their

owner. The manufacturer has the expense of materials and labour. The

wholesaler also has funds tied up.

The major objective of inventory management and control is to

inform managers how much of a good to re-order, when to re-order the

good, how frequently orders should be placed and what the appropriate

safety stock is, for minimizing stockouts.And alsoinventory

24
management should involve to balance the conflicting economics of

not wanting to hold tool much stock. Thereby having to tie up capital

so as to guide against the incurring of costs such as storage, spoilage,

pilferage and obsolescence and, the desire to make items or goods

available when and where required (quality and quantity wise) so as to

avert the cost of not meeting such requirement. Inventory problems of

too great or too small quantities on hand can cause business failures.

Thus, the overall goal of inventory is to have what is needed, and to

minimize the number of times one is out of stock.

25
 OBJECTIVES OF INVENTORY MANAGEMENT

There are three main objectives of inventory management, as follows:

 PROVIDE THE DESIRED LEVEL OF CUSTOMER SERVICE:

Customer service refers to a company’s ability to satisfy the needs

of its customers. There are several ways to measure the level of

customer service, such as: (1) percentage of orders that are shipped on

schedule, (2) the percentage of line items that are shipped on schedule,

(3) the percentage of dollar volume that is shipped on schedule, and (4)

idle time due to material and componentshortage. The first three

measures focus on service to external customers, while the fourth

applies to internal customer service.

 ACHIEVE COST-EFFICIENT OPERATIONS:

Inventories can be facilityfor the cost-efficient operations in several

ways. Inventories can provide a buffer between operations so that each

phase of the transformation process can continue to operate even when

output rates differ. Inventories also allow a company to maintain a

level workforce throughout the year even when there is seasonal

demand for the company’s output. By building large production lots of

items, companies are able to spread some fixed costs over a larger

number of units, thereby decreasing the unit cost of each item. Finally,

26
 large purchases of inventory might qualify for quantity discounts,

which will also reduce the unit cost of each item.

 MINIMIZE INVENTORY INVESTMENT:

As a company achieves lower amounts of money tied up in

inventory, that company’s overall cost structure will improve, as will

its profitability. A common measure used to determine how well a

company is managing its inventory investment (i.e., how quickly it is

getting its inventories out of the system and into the hands of the

customers) is inventory turnover ratio, which is a ratio of the annual

cost of goods sold to the average inventory level in dollars.

27
 TYPES OF INVENTORY

 Raw materials: The purchased items or extracted materials that are

transformed into components or products.

 Components: Parts or subassemblies used in building the final

product.

 Work-in-process (WIP): Any item that is in some stage of completion

in the manufacturing process.

 Finished goods: Completed products that will be delivered to

customers.

 Distribution inventory: Finished goods and spare parts that are at

various points in the distribution system.

 Maintenance, repair, and operational (MRO) inventory (often

called supplies): Items that are used in manufacturing but do not

become part of the finished product.

NATURE OF INVENTORY: Adding Value through Inventory

 QUALITY - inventory can be a “buffer” against poor quality;

conversely, low inventory levels may force high quality

 SPEED- location of inventory has gigantic effect on speed

 FLEXIBILITY - location, level of anticipatory inventory both have

effects

 COST - Direct: purchasing, delivery, manufacturing

Indirect: holding, stock out.

28
 REASONS FOR MAINTAINING INVENTORY

 TIME: The time lags present in the supply chain, from supplier to user

at every stage, requires that you maintain certain amounts of inventory

to use in this "lead time." and also to provide effective customer

service.

 UNCERTAINTY: Inventories are maintained as buffers to meet

uncertainties in demand, supply and movements of goods.

 ECONOMIES OF SCALE: Ideal condition of "one unit at a time at a

place where a user needs it, when he needs it" principle tends to incur

lots of costs in terms of logistics. So bulk buying, movement and

storing brings in economies of scale, thus inventory.

 ANTICIPATION INVENTORY OR SEASONAL

INVENTORY:Inventory are often built in anticipation of future

demand, planned promotional programs, seasonal demand fluctuations,

plant shutdowns, vacations, etc.

 FLUCTUATION INVENTORY OR SAFETY STOCK: Inventory

is sometimes carried to protect against unpredictable or unexpected

variations in demand.

 SPECULATIVE OR HEDGE INVENTORY: Inventory can be

carried to protect against some future event, such as a scarcity in

supply, price increase, disruption in supply, strike, etc.

MAINTENANCE, REPAIR, AND OPERATING (MRO)

INVENTORY: Inventories of some items (such as maintenance

supplies, spare parts, lubricants, cleaning compounds, and office

supplies) are used to support general operations and maintenance.

29
Pepsi co is currently the largest beverage company in the world having

the widest spread of consumers, over 200 countries with nearly two

billion servings per day. This huge network incorporates nearly one

hundred and forty thousand company associates to distribute this huge

amount of drink. It is important to note that we are not talking about

one particular drink, for example Pepsi co or Diet Pepsi co but a whole

range of beverages. In fact the Pepsi co Company has developed

bought and conglomerated more than three thousand five hundred

different drinks and has successfully or otherwise marketed and

positioned these drinks in the global market. (The Pepsi co Company,

2011a)

Having such a huge portfolio of products and ranging such a different

spectrum of customers, cultures and mind sets needs a very specific

and energetic marketing approach both as a global marketing strategy,

narrowing down to a more focused cultural approach to specific

country particular marketing strategies. A strategy that works in one

country could be irrelevant to another. The first paper to be discussed

is one which was published in 2005 in the ‘Thunderbird International

Business Review’ called ‘Pepsi co’s Marketing Challenges in Brazil:

The Tubainas War’. In this paper, the author discusses the marketing

challenges of the Pepsi co company as it combats its competitors, both

its nemesis Pepsi but also hundreds of local brands (called tubainas),

some which are supported by the government through specific tax

incentives, thus effectively effecting the price. Brazil is clearly an

important strategic country since it corresponds to Pepsi co third

30
largest operation while having a significantly low consumption rate of

only 144 bottles per day when compared with the bench mark of the

US with 462 bottles per year. To try and grow in the emergent market,

Pepsi co employed many different marketing strategies, from lowering

the price of its products in 1999 (from R$1.80 to R$1.25) to expand the

number of brands in the market. They also expanded on the particular

type of drink that was more in line with the taste of the Brazilian

population. In fact focus was given to Kuat, a particular drink

flavoured with Guarana, a Brazilian popular Amazonian fruit. In fact

the Brazilian subsidiary planted 200 hectares of this fruit to try and win

back the Brazilian market. Eventually the ‘winning strategy’ was a mix

of price positioning, changing the bottling technology (from plastic

going back to glass). To judge the effectiveness of the strategy that

Pepsi co employed in Brazil, it is relevant to see the current

consumption of the drinks under the Pepsi co umbrella. According to

Pepsi co’s own figures, last year’s consumption for Brazil was 229 per

capita, an increase from the 144 of 2005. This amounts to nearly 60%

growth in five years, a mammoth growth in such a small time period.

Clearly more work could be done to reach the consumption of other

high consumers that hit the 675 per capita. It is interesting to note that

in Malta, the Pepsi co consumption is the second highest in the world

with a staggering 606 bottles per capita ! (The Pepsi co Company,

2011d)

Continuing on the marketing aspect but now going over to the

European side of the globe, more specifically to Spain, one can

31
appreciate the different marketing techniques employed to enter into

the Spanish market. In the paper ‘Brand communities on the internet –

A Case Study of Pepsi coSpanish virtual community’, the authors

Maria Sicilia and Mariola Palazon discussed the ‘technological’

approach the Pepsi co took to penetrate this market. The innovative

approach was the use of virtual communities as an alternative strategy.

The paper first deals with what are virtual communities and how they

function. The data that the authors collected was from the period

September 2006 to July 2007. The paper is offers a very interesting

exposition of this virtual reality, social networking concept when

seeing the growth from 2000 to 2010, the Spanish consumption grow

from 251 to 284, a growth of 13% whereby the overall European

market grow by 20% and the Worldwide market grow by 33% ! (The

Pepsi co Company, 2011e)

The third paper discussed in this literature review deals with the

strategic positioning of Pepsi co in their Global Marketing Operation.

This means that now we are going to zoom out from the individual

country and go to the less specific. The paper written in 2003 by

Demetris Vrontis and Iain Sharp is titled ‘The Strategic Positioning of

Pepsi coin their Global Marketing Operation’ and was published in the

Marketing Review journal. This paper examines how Pepsi co has

strategically positioned itself within the world’s softdrink marketing.

The paper focusing at the models that Pepsi co has utilized for such a

‘global take over’. This paper explains that the Pepsi coCompany has

adopted both a Differentiation and a Cost Leadership Strategy. The use

32
of a differentiation strategy is where the firm attempts to be diverse

from its competitors by adding something to its product that will

provide a unique value to its customers. There are also various ways a

firm can differentiate depending on the industry it is in, however the

costs of this differentiation policy must be lower than the additional

pricing the firm can obtain.

Differentiation for Pepsi co is achieved through perceived superior

quality product, which surpasses their nearest rivals, and high brand

image and recognition. The company has also used their promotion

and packaging as a means of further differentiation, for example, the

Pepsi bottle, which has become an internationally recognized symbol.

(Vrontis and Sharp, 2003) These are basically the two overall methods

that Pepsi co employees for its strategic management and direction.

With these measures, Pepsi co managed to diverse from its competitors

and create a product which provided a unique value to its customer.

The products generated were well incorporated into a comprehensive

product portfolio which enabled world penetration and the ability to

hold on to this huge market share. It is clear that to manage a

corporation this big, involves challenges in Human Resource

management which are not to be disregarded. Specifically in this line

of literature, the next paper will discuss aspects of Human Resource

management specifically with respect to mentoring and coaching. The

paper is called ‘Case Study: Mentoring and Coaching as part of a

human resource development strategy: an example at Pepsi coFoods’.

33
This paper, written by David J Veale and Jeffrey M Wachtel, published

in the Management Development Review in 1996 highlights the three

approaches that Pepsi co took to this aspect of training. These three

approaches include the need to strengthen the link between their

business strategy and development focus, the need to involve

leadership of the organisation in all aspects of development and to use

of a variety of development tools to match personal and organisational

needs better. The three approaches were employed to reach the first of

the companies’ vision:

‘People: Be a great place to work where people are inspired to be the

best they can be’. (The Pepsi co Company, 2011f)

This paper explains that Pepsi co manages to use both coaching and

mentoring methods concurrently for the benefit of its employees.

Coaching is a relationship activity designed to increase performance of

the particular company. Coaching is a more informal method and

occurs between the employee and his or her employer. Mentoring is

more formal. It is based on a one-to-one relationship with someone

who normally is not in the same department or area. A mentor can or

normally uses all of the coaching types, but the purpose of mentoring

is much broader. Pepsi co believes that both mentoring and coaching

have their own important role in the HR development effort. Pepsi co

ascertains that people (staff) development is a main key to ensure

building competitive advantage and to create as high a performing

organisation as possible. (Vaele and Wachtel, 1996)

34
 Inventory consists of stock of raw materials, work-in-progress,

spare pa consumables for production and finished goods for sale. Thus,

inventory com includes control over raw materials, spare parts,

consumables, partly finished goods, and finished goods. The following

are the common techniques of inventory control:

1. Determination of various levels of materials.

2. Economic Order Quantity.

3. ABC Analysis.

4. Perpetual Inventory System.

1. Determination of various Levels of Materials :

The store-keeper plays an important role in deciding upon the

various levels materials. In order to ensure that the optimum quantity

of materials is purchased stocked neither less nor more, the store

keeper applies scientific techniques of materials management. Fixing

of certain levels for each item of materials in one of techniques.

These levels are not permanent but require revision according

to the change in the factors which determine these levels. The

following levels are generally fixed.

(a) Re-order Level.

(b) Maximum Level.

(c) Minimum Level.

(d) Average Level.

35
(e) Danger Level

(a). Re-order Level :

This level is that level of material at which it is necessary to

initiate purchase requisition for fresh supplies. This is normally the

point lying between the maximum and the minimum levels. Fresh

orders must be placed before the actual stocks touch the minimum

level.

This level is fixed in such a manner that the quantity of

materials represented by the difference between the re-order level and

the minimum level will be sufficient to meet the requirement of

production till such time as the order materializes and materials are

delivered.

(b). Maximum Level:

The maximum level is that level of stock which can be held at any

time. In other words, it is the level beyond which stock should not be

maintained. The purpose is to avoid over-stocking and thereby using

working capital in a proper way.

(c) Minimum Level:

This is the level below which the stock of an item should not fall. This

is known as safety or buffer stock. An enterprise must maintain

minimum quantity of stock so that the production is not hampered due

to non-availability of materials

36
(d) Average Level:

Average level can be calculated by applying the following formula:

Maximum level + Minimum Level Average Level =

……………………………..

Or Average level = Minimum level + of Re-order Quantity.

(e) Danger Level:

Usually stack should not be lower than the minimum level. But

if for any reason, stock comes down below the minimum level, it is

called danger level. When the stock reaches danger level, it is

necessary to take urgent action on the part of the management for

immediate replenishment of stock to prevent stock-out situation. The

danger level can be calculated by applying the following formula:

Danger Level = Average consumption x Maximum Re-order

period for emergency purchases.

2. Economic Order Quantity (EOQ):

The economic order quantity, known as EOC, represents the

most favorable quantity to be ordered each time fresh orders are

placed. The quantity to be ordered is called economic order quantity

because the purchase of this size of material is most economical. It is

helpful to determine in advance as to how much should one buy when

the stock level reaches the re-order level. If large quantities arc

purchased, the carrying costs would be large.

On the other hand, if small quantities are purchased at frequent

intervals she ordering costs would be high. The economic order

37
 quantity is fixed at such a level as to minimize the cost of ordering and

carrying the stock. It is the size of the order which produces the lowest

cost of material ordered.

On the other hand, if orders are placed for small quantities, the

ordering cost is more but the carrying cost would be less. Thus the

economic order quantity is determined at a point when the ordering

costs and the carrying costs are equal. Only at this stage the total of

ordering cost and carrying cost is minimum.

3. ABC Analysis:

This technique of inventory control is also known as always

Better Control technique. ABC analysis is an analytical method of

control which aims at concentrating effects on those areas where

attention is needed most.

According to this approach to inventory control high value

items are more closely controlled than low value items. Each item of

inventory is given A, B or C denomination depending upon the amount

spent for that particular item. “:A” or the highest value items should be

under the tight control and under responsibility of the most

experienced personnel, while “C” or the lowest value may be under

simple physical control.

It may also be clear with the help of the following examples:

“A” Category – 5% to 10% of the items represent 70% to 75% of the

money value.

38
 “B” Category – 15% to 20% of the items represent 15% to 20% of the

money.

“C” Category – The remaining number of the items represent 5% to

10% of the money value.

Pricing of Raw Materials:

When issues are made out of various lots purchased at varying

prices, the problem arises to which of the receipt price should be

adopted for valuing the materials requisitions.

1. First in first out :

Materials received first will be issued first. The price of the earliest

consignment if taken first and when that consignment is exhausted the

price of the next consignment is adopted and so on. This method is

suitable in times of falling prices, because the material charge to

production will be high while the replacement cost of materials will be

low.

2. Last in first out :

Materials received last will be issued first. The price of the last

consignment is taken first and when that consignment is exhausted the

price of the second last consignment is adopted and so on. In timing of

rising prices this method will show a charge to production, which is

closely related to current price levels provided that the last purchase is

made recently.

3. Weighted average cost method :

39
 Under this method material issued is priced at the weighted average

cost of material in stock.

WAC= Value of material in stock / quantity in stock.

4. Standard price method :

Under this method a standard price is predetermined. The price of

issues predetermined for a stated period taken into account all the

factors affecting price such as anticipated market trends, transportation

charges, and normal quantity of purchase. Standard prices are

determined for each material and material requisitions are priced at

standard irrespective of the actual purchase price. Any difference

between the standard and actual price results in materials price

variance.

5. Current Price :

According to this method, material issued is priced at their replacement

or realizable price at the time of issue. So the cost at which identical

material could be purchased from the market should be ascertained and

used for valuing material issues.

40
 DATA ANALYSIS

1. How inventory control works in VARUN BEVERAGES (PEPSICO) ?

a) By efficiently tracking qualities across storage location.

b) By common application

c) By popular transaction

d) By improve accuracy

Sl. No. Opinions No. of Respondents Percentage

1 a 12 60

2 b 03 15

3 c 03 15

4 d 02 10

Total 20 100

How inventory control works in VARUN

BAVERAGES(PEPSI)

10%

15%

15% 60%

a b c d

Interpretation:

41
 From the above table it shows that inventory controls works in

VARUN BEVERAGES (PEPSICO) efficiently tracking qualities

across storage location is 60%, by common application 15%, by

popular transaction 15% and by improve accuracy by 10%.

2. Are policies and procedures current in waiting and properly approved

in VARUN BEVERAGES (PEPSICO)?

Sl. No. Opinions No. of Respondents Percentage

1 Yes 15 75

2 No 05 25

3 Can’t Say 00 00

Total 20 100

Policies and procedures current in waiting

and properly approved in VARUN
BAVERAGES(PEPSI)
0%

25%
Yes
No
Can't Say
75%

42
Interpretation:

From the above table it shows that75% respondents are positive

thatpolicies and procedures current in waiting and properly approved

in VARUN BAVERAGES Plant compare to only 25% are negative

respondents.

43
 3. Does the Inventory department compare qualities received against

receiving reports etc. in VARUN BEVERAGES (PEPSICO)?

Sl. No. Opinions No. of Respondents Percentage

1 Yes 15 75

2 No 05 25

3 Can’t Say 00 00

Total 20 100

Qualities received against receiving reports etc. in VARUN

BAVERAGES(PEPSI)

0%

25%
Yes
No
Can't Say
75%

Interpretation:

From the above table it shows that 75% respondents are positive

thatinventory department compare qualities received against receiving

reports etc. in VARUN BAVERAGES whereas compare to only 25%

respondents are negative answers.

44
 4. Are inventory records reconciled to advantage reports on a regular

basis in VARUN BEVERAGES (PEPSICO)?

5.

Sl. No. Opinions No. of Respondents Percentage

1 Yes 19 95

2 No 01 05

3 Can’t Say 00 00

Total 20 100

Inventory records reconciled to advantage reports on a regular

basis in VARUN BAVERAGES(PEPSI)

0%
5%

Yes
No
Can't Say

95%

Interpretation:

From the above table it shows that 95% respondentsstate that inventory

records reconciled to advantage reports on a regular basis in VARUN

BAVERAGES whereas compare to only 5% respondents are negative

answers.

45
5. Does management review the reconciliation of physical inventory counts to the inventory

records?

6.

Sl. No. Opinions No. of Respondents Percentage

1 Yes 17 85

2 No 02 10

3 Can’t Say 01 05

Total 20 100

Management review the reconciliation of physical inventory

counts to the inventory records

5%
10%

Yes
No
Can't Say

85%

Interpretation:

From the above table it shows that85% respondents are satisfied that

management review the reconciliation of physical inventory counts to

the inventory records and 10%are negative answers whereas 5% can’t

say anything.

46
 Is a perpetual inventory system (including quantities and value) in use as to all major classes of

inventory?

6.

Sl. No. Opinions No. of Respondents Percentage

1 Yes 19 95

2 No 01 05

3 Can’t Say 00 00

Total 20 100

Perpetual inventory system (including quantities and value)

in use as to all major classes of inventory

0%
5%

Yes
No
Can't Say

95%

Interpretation:

From the above table it shows that perpetual inventory system

(including quantities and value) in use as to all major classes of

inventory is 95% whereas compare to only 5% negative answers.

47
6. Are perpetual inventory records update promptly?

7.

Sl. No. Opinions No. of Respondents Percentage

1 Yes 18 90

2 No 02 10

3 Can’t Say 00 00

Total 20 100

Inventory records reconciled to advantage reports on a

regular basis in VARUN BAVERAGES(PEPSI)

0%

10%

Yes
No
Can't Say

90%

Interpretation:

From the above table it shows that perpetual inventory system

(including quantities and value) in use as to all major classes of

inventory is 90% whereas compare to only 10% negative answers.

48
 FINDINGS

Improve data accuracy

Perfect inventory levels record is maintained. The best way to do that

is by using mobile wireless devices and product barcodes. Scanning

barcodes is faster and more accurate than typing product information

by hand. the inventory management solution chosen uses mobile

barcode scanner so it is not tied to a desktop computer. it should be

able to update the inventory records from anywhere.

Increase efficiency

One of the main purposes of using inventory management software is

to save time and make your company more efficient. With the right

inventory software, your company should see a decrease in the amount

of time it takes to place orders, receive products and pick. Then pack it

and ship products to customer.

 In VARUN BEVERAGES (PEPSICO) company there are various

products like in Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda

Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess

Soda, Sting and Gatorade.

 They use QAD(Quality Archery Design) software to maintain

inventory management system.

 They also maintain GRN(Goods Received Note) and SRN(Sells

Received Note).

 Very soon they sifted there new software SAP.

49
 SUGGESTIONS

Inventory management system is the best choice for replacing

the current system. The current system which is used in cola system by

using inventory management system transaction and any other thing

will run more efficient and effective with any data loss. Form run

group point of view inventory management system should be

implemented not for this but also the others and e-scan will be used in

office fact deal with warehousing like cargo, container, factory etc.

Inventory management system will be better if it improved with

programmed. That deal with website, so the customer by home can

communicate with the clerk and accountant of the shop and ask

products available then, it should deal transaction delivery to home.

The use of inventory management system, it suggest they need to be

trainee well in order to maintain wrong input of data may be trouble in

daily report. If there are new updates of inventory management system

we suggest that each office or organization always follow the update

show the current system will not let behind.

50
 CONCLUSIONS

Company which does not have in management system will get

problem when check. There are very much important to produce

Finished Goods(FG) at a right time because if the Finished Goods(FG)

are not produce at a right time then there will be a shortage of stock at

retailer shop. Then the retailer doesn’t satisfy to your service. Then the

profit showing very less. It’s totally depends upon the management

system. If the management teams don’t give the raw material at a

perfect time then the production teams don’t produce the Finished

Goods (FG) at the right time.

There is a linkage between the Finished Goods (FG), demand

and inventories of Raw material Packaging Material (RMPM) and

spares and other which required for day to day smooth operation of a

organization. They all are related to each other. If there is no Raw

Material (RM) then there is no Finished Goods (FG). If the machines

are not in good conditions then the production will be stop. Then the

Finished Goods (FG) are not produce at the right time.

Now the company use QAD software but very soon sifted to

the SAP software because to improve their inventory system. It also

enhances the strength of the company. I found the management should

be very much perfect and the teams do his work in a proper way. My

heart full gratitude to the staff and employees of VARUN

BEVERAGES (PEPSICO) Beverages Pvt. Ltd to co-operate with me

throughout my internship period.

51
 Questionnaire

INVENTORY MANAGEEMNT & CONTROL SYSTEM

Respected Sir/Madam,

I am HIMANSHU BHATI doing my project work on the topic

“Inventory Management & Control System in VARUN

BEVERAGES (PEPSICO)” under the guidance of Mr. ROHIT

VERMA, DY.G.M. (HR) your impartial opinions shall be kept

confidential.

Therefore kindly cooperate with me in this regard.

1. How inventory control works in VARUN BEVERAGES (PEPSICO) ?

a) By efficiently tracking qualities across storage location.

b) By common application

c) By popular transaction

d) By improve accuracy

2) Are Inventory policies and procedures current in waiting and properly

approved in VARUN BEVERAGES (PEPSICO) ?

Ans. (a) Yes (b) No (c) Can’t Say

3) Do the Inventory department compare qualities received against

receiving reports etc. in VARUN BEVERAGES (PEPSICO) ?

Ans. (a) Yes (b) No (c) Can’t Say

4) Are inventory records reconciled to advantage reports on a regular

basis in VARUN BEVERAGES (PEPSICO) ?

Ans. (a) Yes (b) No (c) Can’t Say

52
5) Does management review the reconciliation of physical inventory

counts to the inventory records?

Ans. (a) Yes (b) No (c) Can’t Say

6) Is a perpetual inventory system (including quantities and value) in use

as to all major classes of inventory?

7) Are perpetual inventory records update promptly?

Ans. (a) Yes (b) No (c) Can’t Say

8) Does internal control appear adequate for the inventory system

overall?

Ans. (a) Yes (b) No (c) Can’t Say

9) Does your department prepare an annual financial report? Are

managers hold accountable for financial performance?

Ans. (a) Yes (b) No (c) Can’t Say

10) Has the department established cross-training or contingency plans for

significant changes in personal?

Ans. (a) Yes (b) No (c) Can’t Say

11) Does your department maintain any confidential employee/student and

human subject research records that requires special treatment for

privacy protection?

Ans. (a) Yes (b) No (c) Can’t Say

12) Have employees been trained for workplace safety by the

Environmental Health & safety officer (EH&C) to comply with the

appropriate regular for requirements for their job responsibilities?

Ans. (a) Yes (b) No (c) Can’t Say

53
13) Do you believe that department personal are sufficiently informed

about important federal and state laws and regulations that govern

activities performed within your department?

Ans. (a) Yes (b) No (c) Can’t Say

14) Are the internal employee co-ordinate you for doing your survey?

60/30/10

Ans. (a) Yes (b) No (c) Can’t Say

15) Are you satisfied the entire inventory process and control system of

VARUN BEVERAGES (PEPSICO)? 80/10/10

Ans. (a) Yes (b) No (c) Can’t Say

54
 REFRENCES & BIBILOGRAPHY:

Websites:

 www.google.com

 www.emeraldinsight.com

 www.pepsico.in

 www.varunbeverages.com

55