A STUDY ON DISTRIBUTION CHANNEL AT

PEPSICO

Submitted in partial fulfillment of the requirement for the award of degree

In

Post Graduate Diploma in Management

Submitted by

MD. FARUQUE ANSARI

09/KA/NHLI/PGDM/FT/B/045

Under the guidance of

MR. T. SIDDHARTH

POST GRADUATE DIPLOMA IN MANAGEMENT

NEW HORIZON LEADERSHIP INSTITUTE

Outer Ring Road, Panathur Post, Near Marathalli

Bangalore-560103

May 2011

1

STUDENT DECLARATION

I, Md. Faruque Ansari, student of Post Graduate Diploma in Management, New Horizon

Leadership Institute Bangalore, bearing Reg: 09/KA/NHLI/PGDM/FT/B/045 declare that

this project titled “A study on distribution channel At PepsiCo”, submitted in partial

fulfillment for the award of Post Graduate Diploma in Management is a record of independent

research work carried out by me, under the guidance of Mr. T. Siddharth, Professor, New

Horizon Leadership Institute, Bangalore. I also declare that this project is the result of my own

original work and has not submitted at anytime to other University or Institute for the award of

any degree/diploma.

PLACE: BANGALORE

DATE:

MD. FARUQUE ANSARI

2

GUIDE CERTIFICATE

Certified that this Report entitled, “A study on distribution channel At PepsiCo”, submitted in

partial fulfillment for the award of Post Graduate Diploma in Management is a record of

independent research work carried out by Md. Faruque Ansari bearing Reg Number 09/KA/

NHLI/PGDM/FT/B/045 under my guidance and no part of this Corporate Exposure Training

has been previously submitted earlier for the award of any degree/diploma/associates ship/prize

by New Horizon Leadership Institute.

Place: Bangalore

Date:

Mr. T. Siddharth

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ACKNOWLEDGEMENT

The satisfaction of the successful completion of any task wouldn’t be complete without the

expression of gratitude to the people who made it possible.

I am very thankful to Mr. T. Siddharth, New Horizon Leadership Institute, Bangalore. For the

guidance and support in the preparation of this project.

I also extend my heartfelt gratitude and thanks to, Prof. Dr. S.K Prasad, Director of NEW

HORIZON LEADERSHIP INSTITUTE, Bangalore.

I take this opportunity, also to express my love and sincere thanks to my family members and

friends for their support and advice during various stage of work. But last not the least I thank

God almighty for giving me the support for the completion of the task.

Md. Faruque Ansari

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TABLE OF CONTENT

EXECUTIVE SUMMARY

1 CHAPTER 1

INTRODUCTION 07 – 09

2 CHAPTER 2

INDUSTRY PROFILE

COMPANY PROFILE

HISTORY MARKETING STRATEGY MARKETING OVERVIEW SALES AND DISTRIBUTION

10 - 13

13 - 29

14172123

3 CHAPTER 3

REVIEW OF LITERATURE 30 – 31

4 CHAPTER 4

RESEARCH METHODOLOGY

TITLE OF THE STUDY STATEMENT OF THE PROBLEM OBJECTIVES OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATIONS OF THE STUDY

32 - 36

333434343536

5 CHAPTER 5

ANALYSIS AND INTERPRETATION 37 – 51

6. CHAPTER 6

FINDINGS AND RECOMMENDATIONS 52 – 54

7. CHAPTER 7

CONCLUSION 55 – 56

8 CHAPTER 8

BIBLIOGRAPHY 57 – 58

ANNEXURE 53 -

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EXECUTIVE SUMMARY

PepsiCo is one of the oldest, largest and most successful beverage and snack food companies in

the world. PepsiCo was founded by Caleb Bradham in 1902 in USA. Today PepsiCo and its

affiliates operate in more than 140 countries in the world and generate revenues 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 the market owing to its expertise in sales,

marketing, operations and local collaboration. PepsiCo maintained its market dominance for

many more years to come. However, this advantage 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 we know that distribution channel is tool by which we can make reach our

product to the final consumers Discontinuation of slums in the distribution network by PepsiCo.

This move by PepsiCo adversely affected its position of a market leader because while PepsiCo

discontinued the use of Slums in its distribution network, Coke continued it and within one year,

it was able to snatch considerable market share from PepsiCo. Acquisition of well-established

and favored brands like Thumps Up and Limca by Coca Cola India. These two brands still

constitute a bulk of sales for Coca Cola India.

To explore the reasons behind these developments this study will analyze the marketing

initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship

management.

The data collected for laid the foundations for the study and gave a platform for the analysis and

findings which lead to the fulfillment of the objectives. The data collected for research is primary

and secondary.

Primary data is collected by observation, interviews and questionnaires. The data collection and

analysis paves way for the recommendation ad conclusion of the study that reveals some

important findings regarding the strategy and corporate structure and strategy of PepsiCo India.

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INTRODUCTION

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1. INTRODUCTION

Distribution Channel is the chain of businesses or intermediaries through which a good or

service passes until it reaches the end consumer. A distribution channel can include wholesalers,

retailers, distributors and even the internet. Channels are broken into direct and indirect forms,

with a "direct" channel allowing the consumer to buy the good from the manufacturer and an

"indirect" channel allowing the consumer to buy the good from a wholesaler. Direct channels are

considered "shorter" than "indirect" ones.

The Distribution Channel

Distribution is also a very important component of Logistics & Supply chain management.

Distribution in supply chain management refers to the distribution of a good from one business

to another. It can be factory to supplier, supplier to retailer, or retailer to end customer. It is

defined as a chain of intermediaries; each passing the product down the chain to the next

organization, before it finally reaches the consumer or end-user. This process is known as the

'distribution chain' or the 'channel.' Each of the elements in these chains will have their own

specific needs, which the producer must take into account, along with those of the all-important

end-user.

Channels

A number of alternate 'channels' of distribution may be available:

Distributor, who sells to retailers,

Retailer (also called dealer or reseller), who sells to end customers

Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alice from producer to consumer

in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may

sell their services (typically rooms) directly or through travel agents, tour operators, airlines,

tourist boards, centralized reservation systems, etc. process of transfer the products or services

from Producer to Customer or end user.

There have also been some innovations in the distribution of services. For example, there has

been an increase in franchising and in rental services - the latter offering anything from

televisions through tools. There has also been some evidence of service integration, with services

linking together, particularly in the travel and tourism sectors. For example, links now exist

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between airlines, hotels and car rental services. In addition, there has been a significant increase

in retail outlets for the service sector. Outlets such as estate agencies and building society offices

are crowding out traditional grocers from major shopping areas.

Market factors

An important market factor is "buyer behavior"; how do buyer's want to purchase the product?

Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet? Another

important factor is buyer needs for product information, installation and servicing. Which

channels are best served to provide the customer with the information they need before buying?

Does the product need specific technical assistance either to install or service a product?

Intermediaries are often best placed to provide servicing rather than the original producer - for

example in the case of motor cars.

The willingness of channel intermediaries to market product is also a factor. Retailers in

particular invest heavily in properties, shop fitting etc. They may decide not to support a

particular product if it requires too much investment (e.g. training, display equipment,

warehousing).

Another important factor is intermediary cost. Intermediaries typically charge a"mark-

up" or "commission" for participating in the channel. This might be deemed unacceptably high

for the ultimate producer business.

Producer factors

A key question is whether the producer have the resources to perform the functions of the

channel? For example a producer may not have the resources to recruit, train and equip a sales

team. If so, the only option may be to use agents and/or other distributors.

Another factor is the extent to which producers want to maintain control over how, to whom and

at what price a product is sold. If a manufacturer sells via a retailer, they effective lose control

over the final consumer price, since the retailer sets the price and any relevant discounts or

promotional offers. Similarly, there is no guarantee for a producer that their product/(s) are

actually been stocked by the retailer. Direct distribution gives a producer much more control

over these issues.

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INDUSTRY &

COMPANY PROFILE

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2. INDUSTRY PROFILE

Barbara Murray (2006c) explained the soft drink industry by stating, “For years the story

in the nonalcoholic sector centered on the power struggle between…Coke and Pepsi. But as the

pop fight has topped out, the industry's giants have begun relying on new product flavors…and

looking to noncarbonated beverages for growth.” In order to fully understand the soft drink

industry, the following should be considered: the dominant economic factors, five competitive

sources, industry trends, and the industry’s key factors. Based on the analyses of the industry,

specific recommendations for competitors can then be created.

Soft Drink Industry, the production, marketing, and distribution of nonalcoholic, and generally

carbonated, flavored, and sweetened, water-based beverages. The history of soft drinks in the

United States illustrates important business innovations, such as product development,

franchising, and mass marketing, as well as the evolution of consumer tastes and cultural trends.

Many Europeans long believed natural mineral waters held medicinal qualities and favored them

as alternatives to often-polluted common drinking water. By 1772, British chemist Joseph

Priestley invented a means to synthetically carbonate water, and the commercial manufacturing

of artificial mineral waters began with Jacob Schweppes’s businesses in Geneva in the 1780s and

London in the 1790s. The first known U.S. manufacturer of soda water, as it was then known,

was Yale University chemist Benjamin Silliman in 1807, though Joseph Hawkins of Baltimore

secured the first U.S. patent for the equipment to produce the drink two years later. By the 1820s,

pharmacies nationwide provided the beverage as a remedy for various ailments, especially

digestive.

Though the drinks would continue to be sold in part for their therapeutic value, customers

increasingly consumed them for refreshment, especially after the 1830s, when sugar and

flavorings were first added. Soda fountains emerged as regular features of drugstores by the

1860s and served beverages flavored with ginger, vanilla, fruits, roots, and herbs. In 1874 a

Philadelphia store combined two popular products to make the first known ice-cream soda. The

first cola drink appeared in 1881.

In the late 1800s, several brands emerged that were still popular a century later. Pharmacists

experimenting at local soda fountains invented Hires Root Beer in Philadelphia in 1876, Dr.

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Pepper in Waco, Texas, in 1885, Coca-Cola in Atlanta, Georgia, in 1886, and Pepsi-Cola in New

Bern, North Carolina, in 1893, among others. Reflecting two of the middle-class mores of the

period—temperance and feeling overwhelmed by the pace and burdens of modern life—early

marketing touted these drinks as alternatives to alcohol and/or as stimulants. Coca-Cola inventor

John S. Pemberton's first print advertisement for his creation read "Delicious! Refreshing!

Exhilarating! Invigorating!," while Asa Candler, the eventual founder of the Coca-Cola

Company, promoted his product in the years leading up to Prohibition as "The Great National

Temperance Beverage."

The history of Coca-Cola reveals how national markets in soft-drink brands developed. To limit

the cost of transportation, manufacturers of syrup concentrates licensed bottlers to mix the

product, package, and distribute it within a specific territory. Candler underestimated the

importance of the bottling side of the business and in 1899 sold the national rights to bottle Coke

for a fairly small sum to Benjamin F. Thomas and Joseph B. Whitehead, who then started a

national network of bottlers, creating the basic franchising format by which the industry is still

run. Candler and his successor after 1923, Robert Woodruff, were aggressive and innovative in

marketing Coke as a leading consumer product and cultural icon. Coupons for free samples and

giveaways of items bearing the drink's name and logo publicized the beverage, and pioneering

efforts in market research helped define how best to take advantage of advertising and

promotions. During World War II, Woodruff opened bottling operations overseas to supply U.S.

military personnel, and after the war, Coke was poised to enter these international markets, not

only as a consumer product, but also as a symbol of "the American Century."

After World War II, the soft-drink industry became a leader in television advertising, the use of

celebrity endorsements, catchy slogans, tie-ins with Hollywood movies, and other forms of mass

marketing, particularly focusing on young consumers and emphasizing youth-oriented themes.

As health and fitness consciousness and environmental awareness became popular, the industry

responded with sugar-free and low-calorie diet sodas, beginning in the 1960s, and later, caffeine-

free colas and recyclable containers.

The most famous rivalry within the industry has been between Coke and Pepsi, which waged two

rounds of "cola wars" in the twentieth century. In the 1930s and 1940s, Pepsi challenged the

industry leader by offering a twelve-ounce bottle for the same five-cent price as Coke's standard

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six ounces. In the 1970s and 1980s, "Pepsi challenge" taste-tests led Coke to change its formula

in 1985, a campaign that failed because it underestimated the attachment Coke drinkers had to

the tradition and symbolism of the brand.

In 2001, the soft-drink industry included approximately five hundred U.S. bottlers with more

than 183,000 employees, and it achieved retail sales of more than $61 billion. Americans that

year consumed an average of 55 gallons of soft drinks per person, up from 48 in 1990 and 34 in

1980. The nine leading companies accounted for 96.5 percent of industry sales, led by Coca-Cola

with more than 43 percent of the soft drink market and Pepsi with 31 percent. Seven individual

brands accounted for almost two-thirds of all sales: Coca-Cola Classic (itself with nearly 20

percent of the market), Pepsi-Cola, Diet Coke, Mountain Dew (a Pepsi product), Sprite (a Coca-

Cola product), Dr. Pepper, and Diet Pepsi. Domestic sales growth slowed in the late 1990s

because of increased competition from coffee drinks, iced teas, juices, sports drinks, and bottled

waters. The industry continues, however, to tap lucrative international markets; Coke and Pepsi

each have bottling operations in more than 120 countries.

COMPANY PROFILE

Type : Public (NYSE: PEP)

Founded : Chicago, Illinois, U.S. (1965)

Headquarters : Purchase, New York, U.S.

Area served : Worldwide

Key people : Indra Krishnamurthy Nooyi(Chairwoman, President & CEO )

Industry : Food Non-alcoholic beverage

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HISTORY OF THE COMPANY

It was first introduced in North Carolina in 1898 by Caleb Braham who made a pharmacy

which sold the drink which was known back then as "Brad's Drink", and was later named

Pepsi Cola possibly due the digestive enzyme pepsin and kola nuts used in the recipe. Braham

sought to create a fountain drink that was delicious and would aid in digestion and boost energy.

In 1903, Braham moved the bottling of Pepsi-Cola from his drugstore into a rented warehouse.

That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce

bottles, and sales increased to 19,848 gallons. In 1926, Pepsi received its first logo redesign

since the original design of 1905. In 1929, the logo was changed again. In 1929, automobile race

pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing,

invigorating, a fine bracer before a race".

In 1931, the Pepsi-Cola Company went bankrupt during the Great Depression- in large part

due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of

World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years

later, the company went bankrupt again. Pepsi's assets were then purchased by Charles Guth; the

President of Loft Inc. Loft was a candy manufacturer with retail stores that contained soda

fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give him

a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup formula.

During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-

ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five

cents, sales increased substantially. With a radio advertising campaign featuring the jingle "Pepsi

cola hits the spot Twelve full ounces, that's a lot / Twice as much for a nickel, too Pepsi-Cola is

the drink for you," arranged in such a way that the jingle never ends. Pepsi encouraged price-

watching consumers to switch, obliquely referring to the Coca-Cola standard of six ounces per

bottle for the price of five cents (a nickel), instead of the 12 ounces Pepsi sold at the same price.

Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. In 1936

alone 500,000,000 bottles of Pepsi were consumed. From 1936 to 1938, Pepsi-Cola's profits

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doubled.

1940s advertisement specifically targeting African Americans.

Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had

initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt

Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v.

Loft, then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a

loss for Guth.

PepsiCo in India

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab government-

owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint

venture marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was allowed;

PepsiCo bought out its partners and ended the joint venture in 1994. Others claim that firstly

Pepsi was banned from import in India, in 1970, for having refused to release the list of its

ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards.

These controversies are a reminder of "India's sometimes acrimonious relationship with huge

multinational companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have

"been major targets in part because they are well-known foreign companies that draw plenty of

attention."

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In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in

New Delhi, said aerated waters produced by soft drinks manufacturers in India, including

multinational giants PepsiCo and The Coca-Cola Company, contained toxins, including lindane,

DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer, a breakdown of the

immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Mirinda,

Fanta, Thumps Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink

products had 36 times the level of pesticide residues permitted under European Union

regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found

no such residues. However, this was the European standard for water, not for other drinks. No

law bans the presence of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their products

manufactured in India contained toxin levels far above the norms permitted in the developed

world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a

government-appointed committee, is now trying to develop the world's first pesticides standards

for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough

to detect minute traces of pesticides in complex drinks. On December 7, 2004, India's Supreme

Court ruled that both PepsiCo and competitor The Coca-Cola Company must label all cans and

bottles of the respective soft drinks with a consumer warning after tests showed unacceptable

levels of residual pesticides. Both companies continue to maintain that their products meet all

international safety standards without yet implementing the Supreme Court ruling. As of 2005,

The Coca- Cola Company and PepsiCo together hold 95% market share of soft-drink sales in

India.

PepsiCo has also been accused by the Puthussery panchayat in the Palakkad district in Kerala,

India, of practicing "water piracy" due to its role in exploitation of ground water resources

resulting in scarcity of drinking water for the panchayat's residents, who have been pressuring

the government to close down the PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high

levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that

their drinks are safe for consumption and have published newspaper advertisements that say

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pesticide levels in their products are less than those in other foods such as tea, fruit and dairy

products. In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft

drinks, was banned by the state government in 2006, but this was reversed by the Kerala High

Court merely a month later. Five other Indian states have announced partial bans on the drinks in

schools, colleges and hospitals.

MARKETING STRATEGY

In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind

tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of

participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great

advantage of the campaign with television commercials reporting the test results to the public.

In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise

Muck, to coincide with the United States bicentennial celebration.

Pepsi logo (1973-87). In 1987, the font was modified slightly to a more rounded version

which was used until 1991.

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the

strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine

promotion marketing."

In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included

more than thirty different backgrounds on each can, introducing a new background every three

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weeks. One of their background designs includes a string of repetitive numbers 73774. This is a

numerical expression from a telephone keypad of the word "Pepsi”.

“Pepsi’s logo (2003-09. Currently using with Pepsi Wild Cherry and Pepsi ONE)

In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a

minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of

their can and bottle designs. Due to the timing of the new logo release, some have criticized the

logo change, as the new logo looked strikingly similar to the logo used for Barack Obama's

successful presidential campaign, implicating a bias towards the President. Also in 4th quarter of

2008 Pepsi teamed up with Google/YouTube to produce the first daily entertainment show on

YouTube. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Pop

tub is refreshed daily from Pepsi. Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring

Home the Cup™," contest for Canada's biggest hockey fans. Hockey fans were asked to submit

content (videos, pictures or essays) for a chance at winning a party in their hometown with The

Stanley Cup and Mark Messier.

In 2009, "Bring Home the Cup™," changed to "Team Up and Bring Home the Cup™." The new

installment of the campaign asks for team involvement and an advocate to submit content on

behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by

Mark Messier. Pepsi has official sponsorship deals with three of the four major North American

professional sports leagues: the National Football League, National Hockey League and Major

League Baseball. Pepsi also sponsors Major League Soccer.

Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team are just

one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test

and ODI test match clothing.18

COMPETITION

The Coca-Cola Company has historically been considered PepsiCo’s primary competitor in the

beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in market

value for the first time in 112 years since both companies began to compete. In 2009, the Coca-

Cola Company held a higher market share in carbonated soft drink sales within the U.S. In the

same year, PepsiCo maintained a higher share of the U.S. refreshment beverage market,

however, reflecting the differences in product lines between the two companies. As a result of

mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business

has shifted to include a broader product base, including foods, snacks and beverages. The

majority of PepsiCo's revenues no longer come from the production and sale of carbonated soft

drinks. Beverages accounted for less than 50 percent of its total revenue in 2009. In the same

year, slightly more than 60 percent of PepsiCo's beverage sales came from its primary non-

carbonated brands, namely Gatorade and Tropicana.

PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food

market, accounting for approximately 39 percent of U.S. snack food sales in 2009. One of

PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in the

same year held 11 percent of the U.S. snack market share.

PRODUCTS AND BRAND

PepsiCo’s product mix as of 2009 (based on worldwide net revenue) consists of 63 percent

foods, and 37 percent beverages. On a worldwide basis, the company’s current products lines

include several hundred brands that in 2009 were estimated to have generated approximately

$108 billion in cumulative annual retail sales.

The primary identifier of companies' main brands within the food and beverage industry are

those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this

description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up, Doritos,

Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra

Mist, Fritos, and Walker's.

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PACKAGING AND RECYCLING

Environmental advocates have raised concern over the environmental impacts surrounding the

disposal of PepsiCo’s bottled beverage products in particular, as bottle recycling rates for the

company’s products in 2009 averaged 34 percent within the U.S. The company has employed

efforts to minimize these environmental impacts via packaging developments combined with

recycling initiatives. In 2010, PepsiCo announced a goal to create partnerships that prompt an

increase the beverage container recycling rate in the U.S. to 50 percent by 2018.

One strategy enacted to reach this goal has been the placement of interactive recycling kiosks

called “Dream Machines” in supermarkets, convenience stores and gas stations, with the intent

of increasing access to recycling receptacles.[85][86] The use of resin to manufacture its plastic

bottles has resulted in reduced packaging weight, which in turn reduces the volume of  fossil

fuels required to transport certain PepsiCo products. The weight of Aquafina bottles was reduced

nearly 40 percent, to 15 grams, with a packaging redesign in 2009. Also in that year, PepsiCo

brand Naked Juice began production and distribution of the first 100 percent post-consumer

recycled plastic bottle.

Our Mission

"To be the world's premier consumer Products Company focused on convenience food and

beverages. We seek to produce healthy financial rewards to investors as we provide opportunities

for growth and enrichment to our employees, our business partners and the communities in

which we operate. And in everything we do, we strive for honesty, fairness and integrity."

Our Vision

"To build India’s leading total beverage company, delighting consumers by best meeting their

everyday beverage needs, and stakeholders, by delivering performance with purpose, through our

talented people."

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MARKETING OVERVIEW OF PEPSICO INDIA

Marketing Environment:

Marketing environment is the overall environment in which a Company operates. This consists

of the Task Environment and the Broad Environment.

Task Environment

Task Environment includes the immediate players involved in producing, distributing and

promoting the offering. The main players are the company, suppliers, distributors, dealers and

the target customers. Suppliers include the material and service suppliers such as marketing

research agencies, advertising agencies, banking and insurance companies, transportation

companies, and telecommunications companies. The dealers and distributors include agents,

brokers, manufacturer representatives and others who facilitate finding and selling to customers.

The suppliers for PepsiCo India include the bottle suppliers for the soft drinks. These include the

Pet bottles and the Glass bottles. One of the most vital products required in the operation is

Refrigerator. PepsiCo does not manufacture the refrigerators; instead they are supplied by

different vendors who get time bound contracts from the company.

The distributors and dealers are part of the sales and distribution network. This will be explained

later under the section of ‘Place’, in the 4 P’s segment.

The target customer for PepsiCo is primarily the youth. But, because of increasing competition

from Coke PepsiCo has expanded its target customer base which now includes people who are

prospects for beverages beyond the CSD category. PepsiCo has started targeting this segment by

offering products in the Non- CSD category, these include fruit based non-carbonated drinks,

juice based drinks, energy drinks, sports drinks, snack food (from the snack food division i.e.

‘Frito Lay’).

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Broad Environment:

This contains forces that can have a major impact on the players in the task environment. This

includes six components: demographic environment, economic environment, physical

environment, technological environment, political – legal environment, and socio – cultural

environment. Companies need to pay close attention to the trends and developments in these

environments and make timely adjustments to their marketing strategies in order survive and

succeed in the market. This will be explained in detail in the strategic marketing segment.

Value Delivery Process:

The value delivery process consists of the value creation and delivery sequence. This is done in

three phases. The first phase, choosing the value, represents the homework done by the

marketing department before the product exists. Marketing is required to segment the market,

select the appropriate the target market, and develop the offering’s value proposition. This is

known as Segmentation, Targeting and Positioning and is the essence of strategic marketing.

Once the business unit has chosen the value, the second phase is providing the value. Marketers

need to determine specific product features, prices and distribution.

The task in the third phase is communicating the value by utilizing the sales force, sales

promotion, advertising, and other communication tools to announce and promote the product.

Each of these value phases has different cost implications.

22

SALES AND DISTRIBUTION NETWORK OF PEPSICO INDIA.

COMPANY

COBO

WAREHOUSE

C & F Agents

SALESMAN

WHOLESALER

RETAILER

23

RETAILER

CUSTOMER

FOBO

DISTRIBUTERS

SALESMAN

SLUMS

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the

franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for

Pepsi.

Warehouses: These are Company or franchisee owned warehouses spread over various locations

that cover the respective territories and come under the purview of their respective Area or

Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where they

are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution network and receive proper

assistance from the Company (either COBO or FOBO). The C & F center is owned by a private

player and not by the Company. The vehicles (Delivery Vans) are owned by the Company, and

the Salesmen at the C & F points are on the Company Payroll.

Distributors: These are small, compared to C & F centers. Everything at the Distributor point

owned and managed by the distributor, even the salespersons are on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get the stock

directly from the Company or Franchisee. They get their stock directly from the Company and

thus get special rates and extra discounts from the Company.

Slums: They are generally smaller than the Wholesalers are. However, they get special discounts

from the C & F centers and Distributor points. All the different players in the distribution

channel namely C & F centers, Distributor points, Wholesalers and Slums have different

designated markets and are not supposed to operate in the market designated to any other player.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi as they are

the only point of contact with the customers. Retailers get their stock from all the other channel

members in the distribution channel.

24

SALES AND MARKETING HIERARCHY OF PEPSICO INDIA.

MUM – Marketing Unit Manager:

In charge of specific zones (e.g. north, south, east, west) and report to the corporate office.

UM - Unit Manager:

In charge of day to day operations and supervision of all the functions within the organizations

including operations, logistics, sales and distribution, marketing. The Unit Manager reports to the

MUM.

25

MUM

UM UM

MDM

TDM

MDC ADC

ME CE

MARKETING ASSISTANT

SALES PERSON

TDM - Territory Development Manager:

TDM is the in charge of the sales and distribution network of a particular territory within a zone.

Responsible for the daily, monthly and annual sales within the territory decides the daily

schemes for products and incentives for salespersons. He is also responsible for cost

effectiveness, profit generation and profit maximization within the territory.

MDM - Marketing Development Manager:

MDM is responsible for all the marketing activities and their effectiveness within a territory.

Decides the format and time frame of the marketing and promotional activities and the incentives

given to the retailers.

ADC - Area Development Coordinator:

Reports to the TDM, and is in charge of a C & F center and the distributor point in the area. He is

directly responsible for any issues in the area and is supposed to ensure the smooth functioning

of the entire sales and distribution network in the area. ADC is responsible for timely disposal of

any issue faced by the retailers. He decides and approves the boards, displays and hoardings in

the area.

MDC - Marketing Development Coordinator:

Reports to MDM, and is in charge of carrying out all the marketing activities in the area. He is

responsible for the execution and success of marketing and promotional activities. Coordinates

with the outside agencies for displays, boards, checks conducted in the market. He is also

responsible to keep a check on the expenditure of the marketing activities in the market.

CE - Customer Executive:

Reports to the ADC and is in charge of the salespersons. He is required to visit the market and

accompany every salesperson as frequently as possible. He is the first person to get information

about the market / area and is the first contact if the salespersons or retailers face issue.

Responsible for assigning and achieving daily sales target given to the salespersons.

ME - Marketing Executive:

26

Reports to the MDC and is responsible for the daily functioning of the marketing activities in the

including awareness of promotions in the market and the response in the market

Salesperson:

They are the most important asset for the company as they are the ones who sell the products, are

responsible for acquiring new customers, and retain the old ones. Their work also includes

informing the retailers about the promotions and any new scheme launched. They are also

required to push for the sale of any new product launched in the market and make sure that the

retailers are following the company guidelines regarding the launch and the maintenance of V.C.

coolers. They report to the CE.

Marketing Assistant:

Reports to the ME and is responsible for the distribution and usage of the displays and boards in

the area. Also has to check whether retailers are following the guidelines of the company

regarding promotional displays, other displays and displays in the V.C coolers.

They report to the ME. Pepsi is one of the most well known brands in the world today available

in over 160 countries. The company has an extremely positive outlook for India. "Outside North

America two of our largest and fastest growing businesses are in India and China, which include

more than a third of the world’s population." (PepsiCo’s annual report, 1999) This reflects that

India holds a central position in Pepsi’s corporate strategy. India is a key market for PepsiCo,

and at the same time the company has added value to Indian agriculture and industry. PepsiCo

entered India in 1989 and is concentrating in three focus areas – Soft drink concentrate, snack

foods and vegetable and food processing. Faced with the existing policy framework at the time,

the company entered the Indian market through a joint venture with Voltas and Punjab Agro

Industries. With the introduction of the liberalization policies since 1991, Pepsi took complete

control of its operations. The government has approved more than US$ 400 million worth of

investments of which over US$ 330 million have already flown in. One of PepsiCo’s key

strategies was to develop a completely local management team.

Pepsi has 15 company owned factories while their Indian bottling partners own 28. The company

has set up 8 Greenfield sites in backward regions of different states. PepsiCo intends to expand

its operations and is planning an investment of approximately US$ 500 million in the next three

years.

27

Sustainable Competitive Advantage:

Competitive advantage is a company’s ability to perform in one or more ways that its

competitors cannot or will not match. When a company is able to maintain that advantage a long

period of time that gives it an edge over its competitors then, this advantage is termed as

sustainable competitive advantage. Any competitive advantage must be seen by customers as a

customer advantage. Then only that competitive advantage can be transformed into a sustainable

competitive advantage. Three major competitive advantages give PepsiCo India a competitive

edge in the market place. They are:

Big Muscular Brands built through better market positioning and heavy investment in

advertising and promotions;

Proven ability to innovate and create differentiated products through superior operating

base;

Powerful go to market system built with the help of superior relationship base and an

impeccable sales and distribution network. Making it all work are the extraordinarily

talented and dedicated people who are an integral part of PepsiCo India.

28

Communicating with the Customer:

Marketing Communication is the means by which firms attempt to inform, pursued and remind

consumers directly and indirectly about the products and brands they sell. Marketing

Communication is the central instrument of making brand equity. Marketing Communication

consists of six major modes of communications called the marketing communication mix.

Advertising.

Sales promotion.

Events and Experiences.

Public Relations and Publicity.

Direct Marketing.

Personal Selling.

Although PepsiCo uses all the modes in some form or the other, but this study will examine

various aspects of communication with the internal customers.

29

REVIEW OF

LITERATURE

3. REVIEW OF LITERATURE

PepsiCo is one of the oldest, largest and most successful beverage and snack food companies in

the world. PepsiCo was founded by Caleb Bradham in 1902 in USA. Today PepsiCo and its

affiliates operate in more than 140 countries in the world and generate revenues in excess of $ 40

Billion. In its pursuit of never ending growth and expansion, PepsiCo entered India in 1989 in a

30

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 the market

owing to its expertise in sales, marketing, operations and local collaboration. PepsiCo maintained

its market dominance for many more years to come. However, this advantage 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 we know that distribution channel is tool by

which we can make reach our product to the final consumers Discontinuation of slums in the

distribution network by PepsiCo. This move by PepsiCo adversely affected its position of a

market leader because while PepsiCo discontinued the use of Slums in its distribution network,

Coke continued it and within one year, it was able to snatch considerable market share from

PepsiCo. Acquisition of well-established and favored brands like Thumps Up and Limca by

Coca Cola India. These two brands still constitute a bulk of sales for Coca Cola India.

To explore the reasons behind these developments this study will analyze the marketing

initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship

management.

The above-mentioned objectives can be achieved by carrying a proper and planned research

involving different types and methods. The data collected for laid the foundations for the study

and gave a platform for the analysis and findings which lead to the fulfillment of the objectives.

The data collected for research is primary and secondary. Primary data is collected by

observation, interviews and questionnaires. The data collection and analysis paves way for the

recommendation ad conclusion of the study that reveals some important findings regarding the

strategy and corporate structure and strategy of PepsiCo India.

31

RESEARCH

METHODOLOGY

32

4. REARCH METHODOLOGY

MEANING OF RESEARCH:

Research in a parlance refers to a search for knowledge. One can also define research as a

systematic search for pertinent information on specific topic. In fact research is an art of

scientific investigation.

DEFINITION:

According to Clifford woody “Research comprises defining and redefining problem, formulating

hypothesis or suggested solutions, collecting, organizing and evaluating data, making deduction

and reaching conclusion to determine whether they fit the formulating hypothesis”. A research

design is a logical and systematic plan preparing for directing a research study. It specified the

objective of the study the methodology and techniques to be adopted for achieving the objective.

It constitutes the blue print for the collection, measurement and analysis of the data.

Methodology is defined as “A particular procedure or set of procedures, the analysis of the

principle or procedure of enquiry in particular fields.” This chapter gives a clear picture of how

the study has been carried on. It summarizes the procedure in this study. It describes the

objective of the study, the basic for the final analysis the methods of data collection, for selecting

samples and limitation of the study. The value of any scientific and systematic study lies in its

methodology.

TITLE OF THE STUDY:

“A STUDY ON DISTRIBUTION CHANNEL AT PEPSICO”

NEED OF THE STUDY:

The study was mainly conducted to identify distribution channel Strategy of PepsiCo.

33

STATEMENT OF THE PROBLEM:

The study was conducted to know the problems faced by the retailers and distributors and their

perception towards the company and the customer’s perception towards the PepsiCo.

PURPOSE AND OBJECTIVE OF THE STUDY:

The objective of the study was:

TO know distribution channel Strategy of PepsiCo.

To know the importance of Distribution channel strategy in Positioning of the product.

TO know the PepsiCo planning towards the distribution channel strategy.

How strong relationship PepsiCo has with the distributors and retailers.

Perception of consumer towards the PepsiCo product.

Perception of retailers towards the distribution channel of the PepsiCo.

STUDY DESIGN:

“A study design is the arrangement of the condition for the collection and analysis of data in a

manner which helps the purpose of the study.” As the study was made on the distribution

channel of PepsiCo and such documents being considered confidential, the questionnaire method

of surveying the distributer was adopted and separate questionnaire was prepared for the

customers and retailers. Each question has 2-4 options, giving sufficient options to the

respondents. On the bases of the answers to these questions, the findings are analyzed.

34

RESEARCH METHODOLOGY:

Method of research- Description research was used.

Tools used for data collection: A questionnaire was structured together the primary

Information.

SOURCES OF DATA COLLECTION:

The data has been collected from both primary and secondary methods have been used.

Primary data- It was collected by surveying the distributers of PepsiCo and Retailers and

randomly to the customers going to retailers.

Secondary data- it was collected from,

• General library research source like marketing book.

• Advertising journals like magazines and newspaper.

• Internet: PepsiCo website, wiki

Structured questionnaire: Structured questionnaire is a printed list of questions to be filled

by the respondents. The structured questions are being made as short as possible and simple to

understand. The questionnaire is designed such that it helps to elicit the accurate information.

TOOLS AND TECHNIQUES:

The first hand information was collected by interviewing the Distributor regarding the

Strategies followed by the company for distribution channel. A questionnaire was formulated

and circulated to the retailers and customers. Hence the survey method is the tool used here for

data collection.

SAMPLING DESIGN:

• Sample unit: Distributers of PepsiCo, Retailers and customers

• Sample size: 100 respondents

35

• Sampling technique: Random sampling

• Sampling method: Probability sampling

• Place of study: Marathahalli, Bangalore

PLAN OF ANALYSIS:

The questionnaires were tabulated using tally method. The tabulated data was analyzed and

inferences were drawn. The tabulated data has been depicted in the form of a graph. The

promoters of different brands working there were not taken for sample size.

LIMITATION OF THE STUDY:

• Biased- The study was purely based on the information provided by the respondents and they

may be biased.

• Time constraint- The study was conducted in a short period of time and a detailed

study was not possible.

• Cost constraint- This being a academic study suffers from cost constraint.

• Area constraint- The area of study is limited to only Bangalore city.

• Sample constraint- The sample size was not large enough as planned, as the time factor was

the key limitation in the study.

• Confidential constraint- Due to confidential constraint certain information, not all

details could be obtained.

36

ANALYSIS AND INTERPRETATION

37

5. ANALYSIS AND INTERPRETATION

TABLE 1.

Q.1. PepsiCo have good distributions channel?

TABLE SHOWING WHAT RESPONDENT THINKS ABOUT PEPSICO

DISTRIBUTION CHANNEL.

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 32 32

2 Agree 43 43

3 Can’t Say 05 05

4 Disagree 20 20

Total 100 100

ANALYSIS:

From above table it can be observed that it can be observed that 43% of the respondent believe

that PepsiCo has good distribution channel and 32 % of the retailer and distributer strongly agree

that company has best distribution channel while 20% disagree that PepsiCo don’t have good

distribution channel and 5% of them can’t say.

GRAPH: 1

SHOWING WHAT RESPONDENT THINKS ABOUT PEPSICO DISTRIBUTION

CHANNEL

33%

43%

5%

20%

Strong Agree Agree Can't say Disagree

INTERPRETATION: The data shows that company have good distribution channel but should

focus more on their distribution channel and try to convert customer in strongly agree respondent

by providing them better services and schemes.38

TABLE 2.

Q.2. Distribution channel has an important role in positioning of the product?TABLE SHOWING DOES DISTRIBUTION CHANNEL IMPORTANT FOR

POSITIONING THE PRODUCT

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 30 30

2 Agree 45 45

3 Can’t Say 05 5

4 Disagree 08 20

Total 100 100

ANALYSIS:

From above table it can be observed that 45% of the respondent agree that Distribution channel

plays an important role in building the positioning of the company and 30% strongly support that

While 20% doesn’t agree with the statement while 5% chooses can’t say.

GRAPH: 2

SHOWING DOES DISTRIBUTION CHANNEL IMPORTANT FOR POSITIONING

THE PRODUCT

30%

45%

5%

20%

Strong Agree Agree Can't say Disagree

INTERPRETATION: It shows that our objective is fulfilled by this research and we can say

that if we have to promote our product then we should have strong distribution channel. Most of

the retailer and distributer support the statement that means if distribution channel is improved

more it will help in the positioning of the company.

TABLE 3.

39

Q.3. you being provided the V.C coolers by the company?

TABLE SHOWING THAT RETAILERS ARE PROVIDED THE V.C COOLERS OR

NOT.

Sl No. Particulars No of Respondent Percentage

1 Yes 70 70

2 No 30 30

Total 100 100

ANALYSIS:

From above table it can be observed that 70% are saying that they are getting V.C. coolers from

the company side to keep their product but 30 % are saying that they are not getting any V.C

coolers from the company.

GRAPH 3:

SHOWING THAT RETAILERS ARE PROVIDED THE V.C COOLERS OR NOT.

70%

30%

Yes No

INTERPRETATION:

It means company is not focusing on all retailers that major concerns for the organization. Most

of the retailers having the V.C coolers which is given by the company but some of them don’t

have because they are smaller retails where sales are very less, also some of the retailers puts

different brands into the same V.C coolers by which also they loss their V.C coolers.

TABLE: 4

40

Q.4. PepsiCo has good relationship with the distributors/retailers?TABLE SHOWING THE RELATIONSHIP OF THE COMPANY WITH THE

DISTRIBUTORS AND RETAILORS

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 32 32

2 Agree 43 43

3 Can’t Say 05 5

4 Disagree 20 20

Total 100 100

ANALYSIS: From above table it can be observed that 43% of the retailer and distributor Agrees

that PepsiCo has a good relation with them and 32% strongly support the statement while 20% of

the retailer and distribution was against the statement means they said PepsiCo doesn’t having

good relation with them.

GRAPH 4:

SHOWING THE RELATIONSHIP OF THE COMPANY WITH THE RESPONDENT

INTERPRETATION: It shows that company should thing that how can they maintain better relationship with every retailers and distributors.

TABLE 5:

41

33%

43%

5%

20%

Strong Agree Agree Can't say Disagree

Q.5. Perception of retailers/distributors towards the PepsiCo’s Distribution Channel?TABLE SHOWS THE PERCEPTION OF RETAILERS / DISTRIBUTORS TOWARDS

THE PEPSICO’S DISTRIBUTION CHANNEL

Sl No. Particulars No of Respondent Percentage

1 Excellent 27 27

2 Good 55 55

3 Bad 13 13

4 Worst 05 05

Total 100 100

ANALYSIS: From above table it can be observed out of 100 % respondent only 27% are saying

that PepsiCo have excellent distribution channel and 5% are saying that PepsiCo have worst

distribution and 13% of them says it has bad distribution channel but 55 % are saying that

PepsiCo have good distribution channel.

GRAPH 5:

SHOWS THE PERCEPTION OF RETAILERS / DISTRIBUTORS TOWARDS THE

PEPSICO’S DISTRIBUTION CHANNEL

28%

55%

13%

5%

Excellent Good Bad Worst

INTERPRETATION: Here area of concern that how company can make happy those

respondent who are thinking that PepsiCo have worst/bad Distribution channel and how can

company develop good distribution channel and change the perception of retailers and

distributors.

TABLE 6:

42

Q.6. How much time, Company takes to make reach the product at retailer shop?TABLE SHOWS IN HOW MUCH TIME RETAILER SHOP GET THEIR PRODUCTS

Sl No. Particulars No of Respondent Percentage

1 One day 46 46

2 Three Day 37 37

3 One Week 17 17

4 One Month 00 00

Total 100 100

ANALYSIS: From above table it can be observed out of 100 % respondent only 46% of retailers

get their stock in one day and 37% of the respondent gets their stock in 3 days while only 17% of

the respondent gets their stock in 01 week.

GRAPH 6:

SHOWS IN HOW MUCH TIME RETAILER SHOP GET THEIR PRODUCTS

47%

37%

17%

One Day Three Day OneWeek One Month

INTERPRETATION: Here area of concern that how company can make happy those

respondent who don’t receive their stock in time. They should provide all the retailers on time

stock which help to make good distribution channel and well as build the positioning of the

company.

TABLE 7:

43

Q.7. If better scheme is given then replace with coke"TABLE SHOWS THAT IF BEETER SCHEME IS PROVIDED BY COKE TO THE

DISTRIBUTER OF PEPSICO CAN THEY SWITCH

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 30 30

2 Agree 40 40

3 Can’t Say 20 20

4 Disagree 10 10

Total 100 100

ANALYSIS: From above table it can be observed that 40% of the respondent (distributors)

Agrees that they can switch over coke if better scheme is provide to them and 30% are strongly

agree to switch over coke while 20% can’t able to decide but 10% of distributer are loyal to their

company they don’t want to switch over the Company.

GRAPH 7:

THAT IF BEETER SCHEME IS PROVIDED BY COKE TO THE DISTRIBUTER OF

PEPSICO CAN THEY SWITCH

30%

40%

20%

10%

Strong Agree Agree Can't say Disagree

INTERPRETATION: It shows that if company has to maintain good relationship with retailers

and distributors then company will be focus on better services and schemes otherwise they are

ready to switch over the company.

TABLE 8:

44

Q.8. You are having logistics facility of company or own?TABLE SHOWS THE STATUS OF THE LOGISTIC FACILITY

Sl No. Particulars No of Respondent Percentage

1 Own 70 70

2 Company 30 30

Total 100 100

ANALYSIS:

From above table it can be observed that 70% of the respondent (distributer) having their own

logistics so that they can keep some stock with them while 30% of the respondent don’t have

their own logistic they depends on company logistics.

GRAPH 8:

SHOWS THE STATUS OF THE LOGISTIC FACILITY

70%

30%

Own Company

INTERPRETATION:

Most of the respondents having their own logistics which is good for both the company and

retailers or customers because retailer can easily got the stock by their distributers and can fulfill

the customers wants but if distributers don’t have their own logistics then it takes time to reach

the products to the retailer.

TABLE 9:

45

Q.9. Does Logistic Facility affects the Distribution Channel?TABLE SHOWS THERE IS AN AFFECT OF LOGISTIC FACILITY ON

DISTRIBUTION CHANNEL

Sl No. Particulars No of Respondent Percentage

1 Strong Agree 30 30

2 Agree 60 60

3 Can’t Say 10 10

4 Disagree 00 00

Total 100 100

ANALYSIS: From above table it can be observed that 60% of the respondent (distributor)

Agrees that logistic facility affects the distribution channel and 30% strongly supports the

statement while 10% of the respondent is against the statement means they said PepsiCo doesn’t

having good relation with them while there is no respondent disagree that logistic facility affects

distribution channel.

GRAPH 9:

TABLE SHOWS THERE IS AN AFFECT OF LOGISTIC FACILITY ON

DISTRIBUTION CHANNEL

30%

60%

10%

Strong Agree Agree Can't say Disagree

INTERPRETATION: It shows that Company and the distributor must have best logistic facility

to deliver the stock and maintain a good relationship with retailers.

TABLE 10:

46

Q.10. Perception of respondent towards the PepsiCo Distribution channel if V.C coolers

provided by the company.

TABLE SHOWS THE PERCEPTION OF RESPONDENT TOWARDS PEPSICO IF V.C

COOLERS IS PROVIDED BY THE COMPANY

Sl No. Particulars No of Respondent Percentage

1 Excellent 37 37

2 Good 58 58

3 Bad 05 05

4 Worst 00 00

Total 100 100

ANALYSIS: From the above table it can be observed that 58% of the respondent (retailer and

distributor) says that it is good if company provides them the V.C Coolers and 37% of them says

it’s excellent if they got the V.C coolers by the company while 5% of the respondent says its bad

but says it worst.

GRAPH 10:

SHOWS THE PERCEPTION OF RESPONDENT TOWARDS PEPSICO IF V.C

COOLERS IS PROVIDED BY THE COMPANY

38%

57%

5%

Excellent Good Bad Worst

INTERPRETATION: PepsiCo have good distribution channel because they are giving V.C

coolers to the retailers, they should provide the V.C Coolers to the entire retailer so that it help to

attract the customers as well building the brand positioning.

TABLE 11:

Q.11. How many times you go for soft drink in a week?47

TABLE SHOWS THE NUMBER OF TIMES CUSTOMER VISITING RETAILER FOR

SOFT DRINK IN A WEEK

Sl No. Particulars No of Respondent Percentage

1 One 10 10

2 Two - Three 25 25

3 Three - Five 53 53

4 More than Five 12 12

Total 100 100

ANALYSIS: If we see the table then we find that out of 100%respondent, only 53% respondent

are going 3-5 times for soft drink in a week and 25% respondent are saying that they are going 2-

3 times in a week while 10% of them goes only once in a week and more there are 12 % of

customers who goes more than 5 times in a week.

GRAPH 11:

SHOWS THE NUMBER OF TIMES CUSTOMER VISITING RETAILER FOR SOFT

DRINK IN A WEEK

10%

25%

53%

12%

One One to Three Three to Five More than Five

INTERPRETATION: Here we find that walk-in of the customer is more to the retailers shop

means large number of soft drinks is selling in the market.

TABLE 12:

Q.12. Which brand’s soft drink you usually drink?

48

TABLE SHOWS THAT WHICH BRAND IS PREFERRED MORE

Sl No. Particulars No of Respondent Percentage

1 PepsiCo 42 42

2 Coke 33 33

4 Others 25 25

Total 100 100

ANALYSIS:

If we see the chart then we find that out of 100%respondent, 42% respondent prefers PepsiCo

while 33% respondent prefers Coke and rest 25% respondent prefer others.

GRAPH 12:

SHOWS THAT WHICH BRAND IS PREFERRED MORE

42%

33%

25%

Pepsico Coke Others

INTERPRETATION:

In this we find that after having different products in PepsiCo, it can’t able to capture the market

in larger market. Their competitors are giving tuff competition to their Company.

TABLE 13:

Q.13. Do you get easily your demanded brand in the market?49

TABLE SHOWS DO THE CUSTOMER EASILY GETS THEIR PREFERRED BRAND

IN THE MARKET

Sl No. Particulars No of Respondent Percentage

1 Yes 87 87

2 No 13 13

Total 100 100

ANALYSIS:

From the above table we find that out of 100%respondent, only 87% respondent are agree to say

whatever brand they demanded they are easily get that but 13% respondent are saying that they

are not getting the demanded brand, it is major concern that why these respondent are not able to

get their demanded brand.

GRAPH 13:

TABLE SHOWS DO THE CUSTOMER EASILY GETS THEIR PREFERRED BRAND

IN THE MARKET

87%

13%

Yes No

INTERPRETATION:

It proves that PepsiCo is having a good distribution Channel because customers are find to find

out their desired product in the retailer shop.

TABLE 14:

Q.14. Why you prefer this brand?

50

TABLE SHOWS THE FACTOR FOR CHOOSING BRAND

Sl No. Particulars No of Respondent Percentage

1 Availability 18 18

2 Advertisement 38 38

3 Taste 42 42

4 Others 02 02

Total 100 100

ANALYSIS:

From the above table we can find that 42% respondent prefer the brand because its taste while

38% of the respondent prefers this brand because of its Advertisements while 18% prefers

because of Availability while 2% go for others things.

GRAPH 14:

SHOWS THE FACTOR FOR CHOOSING BRAND

18%

35%

43%

3%

Availability Advertisement Taste Others

INTERPRETATION: This proves what a customer prefers to choose the brand, advertisement

also plays a major role in attracting the customer and the taste. Most of the respondent like the of

its carbonated fizz so PepsiCo should make their product more fizzy.

51

FINDINGS & RECOMMENDATION

52

6. FINDINGS AND RECOMMENDATION

FINDINGS

Some retailers are unable to get the services which are provided by the company

There are some retailers are not happy with services provided by the distributors and the

company.

There is a gap between the retailers and the company

Distributers are not satisfied with the services like margins, product availability, credit

facility

Customers prefer the taste of Thumbs Up more than the PepsiCo’s product.

Most of the time desired products are not available or not chilled due to unavailability of

visi coolers.

In most of the mix outlet company has not provided its Visi Cooler, so it is becoming the

major cause for not getting fulfill of the demand. Because retailers are promoting that

brand to the consumer which company is satisfying them more in terms of Visi Cooler,

Schemes, Relationship etc

Retailers are not happy with the MDC (Marketing Development Coordinator) of

PepsiCo. Retailers are saying that what they promise, do not fulfill that.

Marinating good relationship with the retailers as well distributors is very important for

having a strong distribution channel

Visi cooler have an important role in enhancing the distribution channel and policy.

Time concern is very important in good distribution channel, it means providing product

at retailers door within a time.

Company should provide better facility of logistics because without logistics any

company cannot maintain good distribution strategies.

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RECOMMENDATION

This is one of the most important and most difficult part of the study. I arrived at certain

recommendations for PepsiCo India after the analysis of the data. Some of the important

recommendations are as follows.

There should be and correct feedback from the retailers on the performance of salesmen.

This will help improve their efficiency and accountability. Moreover, this will also help

in reducing the confusing that the retailers have at times because the salesman does not

explain the schemes properly.

As already mentioned V.C. coolers are a major reason of dissatisfaction among retailers.

The periodical maintenance check of V.C. coolers is done at three months. This should be

done at an interval of 45 days or 60 days instead of the current practice of 90 days.

Company should adopt aggressive marketing strategy that it could reach each and every

place.

Company should have better logistics facility for making reach the product at retailer’s

door at a right time.

Marketing Development Coordinators/ Marketing Executives/ Sales Executives of the

company must focus more for making better relationship with retailers.

Company should provide visi cooler to every retailer. Because who is having visi cooler

of which company they are promoting the same brand to the consumer.

Company should more focus on youth of the country because youths more prefer the soft

drinks.

Company should focus on the consumers taste and preferences and launch new product

according to the consumer taste and need.

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CONCLUSION

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7. CONCLUSION

After analyzing all the aspects of the data available and giving some important recommendations

a suitable conclusion which should be derived for this study. However, before starting the

conclusion part, the objective of the research must be kept in mind so that we can arrive at a

befitting conclusion for the research problem. The primary objective of this research was to

know distribution channel Strategy of PepsiCo and to know the importance of Distribution

channel strategy in Positioning of the product. The data collected provided a sound base for

understanding the overall organizational set up of PepsiCo in India. By analyzing the data and

the literature review, following conclusion was inferred:

The Sales and Distribution Network of Pepsi is very strong and almost flawless. PepsiCo India

had the first mover advantage when it entered the market and it capitalized on that advantage to

grab the market. Franchisee based operations combined with the Company’s operations add

strength to the overall presence of the Company in the market.

Franchisee takes care of its operations and PepsiCo does not interfere in its operations. The

Franchisees are required to report to the Company at specific time intervals.

The Advertising Campaigns are conceived, implemented by the PepsiCo and Franchisee has no

say in that. It is very important to develop good relationship with the retailers by providing them

better services and schemes. Maintaining the good relationship with the distributors are very

important for the company because they are the main part of the distribution channel.

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BIBLIOGRAPHY

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8. BILBLIOGRAPHY

BOOKS:

I. Philip Kilter, Marketing management, Pearson education, New Delhi, seventh Indian

print 2005.

WEB/INTERNET RESOURCES:

PEPSICO INTERNATIONAL OFFICIAL WEBSITE,

PEPSICO INDIA WEBSITE.

PEPSICO INTERNATIONAL INTERNAL REPORT.

http://en.wikipedia.org/wiki/PepsiCo

www.pepsicoindia.com.

http://www.pepsico.com/

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Questionnaire:

Dear SirOn behalf of PepsiCo India Ltd. Please help me in doing my project by taking a couple of minutes to tell me about the service that you have received so far. This will be used only for academic purpose only

Name _______________________

01. PepsiCo have good distributions channel?a. Strongly agree b. Agree c. Can’t say d. strongly disagree e. Disagree

02. Distribution channel has an important role in positioning of the product?a. Strongly agree b. Agree c. Can’t say d. disagree

03. Are you being provided the V.C.coolors by the company?a. yes b. no

04. PepsiCo has good relationship with the distributors/retailers?a. Strongly agree b. Agree c. Can’t say d. disagree

05. Perception of retailers/distributors towards the PepsiCo’s Distribution Channel?a. Excellent b. good c. bad d. worst

06. How much time, Company takes to make reach the product at retailer shop?a. One day b. 3 day c. One week 4. One month.

07. If better scheme is given then replace with coke"a. Strongly agree b. Agree c. Can’t say d. strongly disagree e. Disagree

08. You are having logistics facility of company or own?a. own b. Company

09. Does Logistic Facility affects the Distribution Channel?a. Strongly agree b. Agree c. Can’t say d. disagree

10. Perception of retailers/distributors towards the PepsiCo Distribution channel if V.C coolers provided by the company.

A. Excellent

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B. Good

C. Bad

D. Worst

11. How many times you go for soft drink in a week?a. One b. Two to three c. three to five d. more than five

12. Which brand’s soft drink you usually drink?a. PepsiCo b. Coke c. others.

13. Do you get easily your demanded brand in the market?a. yes b. No

14. Why you prefer this brand?a. Availability b. Advertisement c. Taste d. Others………..

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