Pepsi Distribution

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Entered India in 1989
One of the largest multinational investors
Provides direct and indirect employment 1,50,000people (including suppliers and distributors) BEVERAGES
Pepsi, 7UP, Mirinda,Mt. Dew and DietPepsi
HYDRATINGAND NUTRITIONAL BEVERAGES
Aquafina
ISOTONIC SPORTS DRINKS
Gatorade
JUICE BASED DRINKS
Tropicana100%, Tropicana Nectars,Tropicana Twisters and Slice LOCAL BRANDS
Lehar Evervess Soda and DukesLemonade

Manufacturer
Sponsored
Retail
 Franchisee

Pepsi Co licenses bottlers in various markets that buy its syrup concentrate. 
These bottlers then carbonate and bottle the syrup to sell them to distributors or retailer

FACTORS FOR CHANNEL DESIGN

Customer Needs

Assortment of Goods:Pepsi has a wideassortment of goods. In beverages some veryfamous are Pepsi Mirinda, 7up, Slice etc Aquafina,Lehar Soda also. 
Ubiquitous:Restaurant, Pan shops, Kirana Stores,Confectionaries, Pepsi on wheels, all these aresome examples of the fact that the product Pepsiis ubiquitous.


Number Of  Intermediaries

Intensive Distribution: Pepsi Co follows anintensive distribution strategy. To support theirubiquitous feature they want to place theirproduct in as many outlets as possible. 
Increases market coverage

Competing against Coca Cola and other localcompanies.

Terms And Responsibilities

Price Policy:Distributors: 3 to 5 % is the profit marginRetailers: 10 % to 16 % is the profit margin 
Territorial Rights:Distributors are given territorialrights and are not allowed to work beyond theirterritories. 
Conditions of Sale:Payment done through bank orcash. Option of credit sales remains at the lowerpart of the chain. Guarantee of damaged goodsprovided.

CHANNEL MEMBERS AND ROLES

PepsiCo
 ±
Assigns a territory to the distributor.
 ±
Assigns sales target acc to region and seasons.
 ±
Evaluates performance against predefinedparameters.
 ±
Sales incentives
 ±
Promotional offers.

Distributors

Wholesalers

Retailers

GENERIC
CHANNEL TPUTS

Spatial convenience
 ±
High availability
 ±
Strong presence

Shorter delivery span (time)

CHANNEL MANAGEMENT

PepsiCo has lot of control over the channel
 ±
In case of Pepsi to Authorised distributor to retail shops (defined territory of distributor)  ±
Pepsi assigns a particular territory to the distributor under an agreement.  ±
No intervention into others territory without company’s knowledge.  ±
Retailers accountable to the authorized distributors

Contd

KEY PARAMETERS

Total lines sold per day

Average of SKU per order

Penetration %

No. of SKU sales

Outlet booking order

Completed sales

CONFLICTS

Hybrid Channel in place -Wholesalers do nothave a control over retailers 
Rigidity from franchisees.
SUGGESTIONS

Install Vending machines for directdistribution.

Financial support to the franchisees.

 
LITERATURE REVIEW
PepsiCo is one of the oldest, largest and most successful beverage and snack foodcompanies in the world. PepsiCo was founded by Caleb Bradham in 1902 in USA. TodayPepsiCo and its affiliates operate in more than 140 countries in the world and generaterevenues in excess of $ 40 Billion. In its pursuit of never ending growth and expansion,PepsiCo entered India in 1989 in a joint venture with Punjab Government. However,PepsiCo India very soon started its beverage operations in collaboration with the R K Jaipuria group.Soon after entering the beverage segment PepsiCo Established its dominance in themarket owing to its expertise in sales, marketing, operations and local collaboration.PepsiCo maintained its market dominance for many more years to come. However, thisadvantage slipped and PepsiCo had to concede the market leadership to Coca Cola India.Several actors were responsible for this development. But, the most important are;Distribution channel is having an important role in positioning of the product because weknow that distribution channel is...
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