pepsi distribution channel

DISTRIBUTION CHANNEL

PEPSI CO.• Entered India in 1989• One of the largest multinational investors• Provides direct and indirect employment 1,50,000

people (including suppliers and distributors)BEVERAGES Pepsi, 7UP, Mirinda, Mt. Dew and Diet

PepsiHYDRATING AND NUTRITIONAL BEVERAGES

Aquafina

ISOTONIC SPORTS DRINKS Gatorade

JUICE BASED DRINKS Tropicana 100%, Tropicana Nectars, Tropicana Twisters and Slice

LOCAL BRANDS Lehar Evervess Soda and Dukes Lemonade

PEPSI

DISTRIBUTORS

BOTTLERS

RETAILERS

WAREHOUSES

RETAILERS

RETAILERS

WHOLESALERWAREHOUSES

Paym

ent

Chilled DSD

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 NeedsAssortment of Goods: Pepsi has a wide

assortment of goods. In beverages some very famous are Pepsi Mirinda, 7up, Slice etc Aquafina, Lehar Soda also.

Ubiquitous: Restaurant, Pan shops, Kirana Stores, Confectionaries, Pepsi on wheels, all these are some examples of the fact that the product Pepsi is ubiquitous.

• Number Of IntermediariesIntensive Distribution: Pepsi Co follows an

intensive distribution strategy. To support their ubiquitous feature they want to place their product in as many outlets as possible.

Increases market coverageCompeting against Coca Cola and other local

companies.

• Terms And ResponsibilitiesPrice Policy:

Distributors: 3 to 5 % is the profit marginRetailers: 10 % to 16 % is the profit margin

Territorial Rights: Distributors are given territorial rights and are not allowed to work beyond their territories.

Conditions of Sale: Payment done through bank or cash. Option of credit sales remains at the lower part of the chain. Guarantee of damaged goods provided.

MARKETING SYSTEMSHORIZONTAL

MARKETING SYSTEMVERTICAL

MARKETING SYSTEM

Pepsi – Lipton Alliance Pepsi - Bottler

CHANNEL MEMBERS AND ROLES

• PepsiCo – Assigns a territory to the distributor.– Assigns sales target acc to region and seasons.– Evaluates performance against predefined parameters.– Sales incentives– Promotional offers.

• Distributors• Wholesalers• Retailers

INTERMEDIARY STATISTICSDISTRIBUTORS

Jain distributors - Munirka, New Delhi Manages buffer for 10 days and uses TALLY and EXCEL software

SS drinks Private Limited -do-

WHOLESALERS

EKTA Wholesalers Private Limited Manages buffer for 2-3 days and uses EXCEL software

RETAIL

Amit Corner, Katwaria Sarai

Transportation cost , vehicle cost at each stage is borne by each intermediaries

GENERIC CHANNEL OUTPUTS• 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

EVALUATION

Contd…• KEY PARAMETERS

Total lines sold per dayAverage of SKU per orderPenetration % No. of SKU salesOutlet booking orderCompleted sales

CONFLICTS• Hybrid Channel in place - Wholesalers do

not have a control over retailers• Rigidity from franchisees.

SUGGESTIONS• Install Vending machines for direct

distribution.• Financial support to the franchisees.

THANK YOU

By: Akhil Gupta (91064)

Ambreen Fatma (91066)Subhrajit Dutt (91112)