Title: Distributions Channel Strategies for Sustainable in the market for Beverages IndustriesAuthor: Dr. Kiran Kumar Thoti, B.E, MBA, PhD, Sr. Asst. Professor, Sree Vidyanikethan Institute of Management, Sree Sainath Nagar, Tirupati- 517102, Andhra Pradesh, Ph: +91-9686261185, 9642176451, Email: kirankumar3561@gmail.com

ABSTRACTThe days are gone when people were very unsure about the future and hardly cared about it in terms of technological developments. But the situation has changed now. In the new millennium, people often feel a growing uneasiness about the future. Certainly many countries today are suffering from chronic high unemployment, a persistent deficit of economy and gradual deterioration of purchasing power. Nations are passing through a phase of rapid transformation. Two forces are mostly responsible for these types of drastic changes; they are explosive growth of trade and international competition and the other force like technological change. This new era has witnessed remarkable advancement in the availability of information and a number of large companies operations in such market where the principal of natural selection lead to survival of the fittest. Market provides a key to gain actual success only to those companies which match best to the current environment i.e. imperative which can be delivered what are the people needs and they are ready to buy at the right time without any delay. It is perfectly true but this also depends on the availability of good quality products and excellent services, which further attract and add a golden opportunity for huge sales. This also depends on the good planning approach and provide ample opportunity plus sufficient amount of products for sales in the coming next financial year. This report introduces a brief study of marketing strategy and sales promotion technique of cool drink for retailers. The study report will provide an opportunity to know retailers psychographic needs, it may provide an opportunity to the cool drink to frame a good future plan to satisfy maximum needs, taste preferences of the retailers and established its guiding role in the market.Keywords: Distribution Channel, Marketing Strategies, Channel Strategies, Marketing plansINTRODUCTION:Modern age is full of competition. Today only way of success is your continuous efforts towards the growing market needs and in satisfying them. It is the marketer job to know what the market speaks i.e. the ever changing needs of the customer through market research & adopt them fruitfully. It is must for all the companies to make policies according to the customers and the govt. Today to succeed for any organization has to target its customer needs, to create a culture in the organization i.e. market conscious & responsive to customer needs. To make its products available at the right place, at the right time in the market, at the right place, the sales department of the company plays major attention towards controlling the channel of distribution. The company right from its beginning stage maintains single type of marketing channel. The nature of channel is as follows:

At first, soft drink is supplied to distributors. Retailers cannot take the delivery directly from the company. They have to take it from their respective of nearest distributors. The distributors selected on the basis of assurance given by them regarding minimum sales, which they have mention annually. The selection is also done on the financial position and reputation of distributing in the market. As for the example, first priority is given to those people who are in cigarette business. Depending upon market each distributor in its initial stage deposits some security money; this amount varies from five thousand to ten thousand. The distributors at first have to seek the permission to the sales department for the number of cases of soft drinks required by them. After getting for the proper authority from the sales department, they take the delivery from the shipping department paying the requisite either in cash or as demand draft. The supply of soft drinks to the distributors depends upon the ups and downs in the sales. But, in the initial stages, the distributors have to sell up to a minimum target set by the company or as decided by an agreement between the company and the distributors. In the last stages or as decided by an agreement between the company and the distributors; In the last stages soft drink is supplied as and when demanded by the distributors. Industry Profile:The beverage industry in India occupies USD 230 million markets in the USD 65 billion food processing industry in India. Coca cola, pepsi, and Nestle are the leading beverage brands that have been ruling the Indian beverage market since past few decades. Among all the beverages, tea and coffee are manufactured as well as exported heavily in the international markets succumbing to the individual demands around the world according the business maps of India, 2013. Pepsi is a soft drink that is produced and manufactured by PepsiCo. The drink was first made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since 1898,including Diet Pepsi, Pepsi Wild Cherry, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Free, Pepsi AM, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi Vanilla, Pepsi X (available in Finland and Brazil), Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, Pepsi Ice Cucumber and Pepsi White in Japan. On April 20, 2009, Pepsi released a natural sugar sweetened version of its drink named Pepsi Throwback, along with Mountain Dew Throwback for a limited time, for veteran Pepsi drinkers to remember the original Pepsi formula before the sweetener was changed to high fructose corn syrup in the mid 80s. ORIGIN: Pepsi was originally named "Brad's Drink", after its creator, a pharmacist in New Bern, North Carolina. It was created in the summer of 1893 and was later renamed Pepsi Cola in1898, possibly due the digestive enzyme pepsin and kola nuts used in the recipe Bradham sought To create a fountain drink that was delicious and would aid in digestion and boost energy .In 1903, Bradham 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 war1. 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. RISE: During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a12-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 Peps 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," Pepsi encouraged price-watching consumers to switch, obliquely referring to the Coca-Cola standard of six ounces a 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.CORPORATE PROFILE OF PEPSI: PepsiCo entered India in 1989 and in the span of a little more than a decade, has grown to become the country's largest selling soft drinks company. The Company has invested heavily in India making it one of the largest multinational investors. The group has built an expansive beverage, snack food and exports business and to support the operations are the group's 39 bottling plants in India, of which 17 are company owned and 22 are franchisee owned. PepsiCo stays committed to providing its consumers with top quality beverages. Its diverse portfolio of brands includes the flagship cola brand - Pepsi; Diet Pepsi; 7Up; Mirinda; Mountain Dew; Slice fruit drink; Tropicana brand 100% fruit juices in various flavours; Aquafina packaged drinking water; Gatorade plus local brands Lehar Evervess Soda, Dukes Lemonade and Mangola. PepsiCo is also a dominant player in the snack food segment in India. PepsiCo's snack food company Frito-Lay is the leader in the branded potato chip market. It manufactures Lay's Potato Chips; Cheetos extruded snacks, Uncle Chipps; traditional namkeen snacks under the Kurkure and Lehar brands; and Quaker Oats. PepsiCo is one of the largest MNC exporters in India and its export business consist of three categories - agro business, commodities and Pepsi system sales. PepsiCo has made significant investments with the Punjab Agriculture University to develop a comprehensive agro -technology program that has helped thousands of farmers across India improve the yield of their farms and the quality of their agricultural products. PepsiCo has leveraged its knowledge in contract farming to develop seaweed cultivation in Tamil Nadu and has partnered with the Government of Punjab to help farmers of the state through the utilization of developed technology for citrus farming. As part of its sustainable development initiatives, PepsiCo India has been a committed leader in the promotion of rain water harvesting, water conservation recycling and the reduction of effluent discharge. PepsiCo has also established zero waste centers and PET recycling supply chains and assisted victims of natural disasters. PepsiCo stays dedicated in its endeavor to develop community outreach programs by supporting rural water supply schemes, administering medical camps in villages, providing computers to rural schools and creating opportunities for women in rural areas through vocational training as an alternate means of livelihood. PepsiCo India has worked closely with the Defense forces in rehabilitation of Defense Personnel through projects like Mission Vijay-2. Under this project Pepsi in association with Castrol helped soldiers set booths in rural area to sell Pepsi and Castrol products there by helping them to not only earn a decent living but to also add some color to their lives. Through this project PepsiCo India also tries to give these soldiers distribution rights for its soft drinks. It gives PepsiCo India great pleasure in associating with Defense India and Samvedna for an event to bring cheers and smiles for our Jawaans of BSF (Border Security Force) at Wagah.Objective of the study: To find out the problems faced by the channels of distribution. To increase penetration in the market. To find out availability of Pepsi & Coke in the outlets. To see the distribution gap by which the product is selling Scope of the study: Scope of the study mainly to know the channel of distribution of pepsico. Scope of the study mainly to know the loyalty of the customer towards the company. To give suggestion regarding improvement of performance standard of the Company. To inform the management about current level.Problems of distribution channel: These are real conditions that exist in too many distribution channels across the country, preventing some supply chains from operating efficiently. Theres no doubt that the end game of solving these problemswould be significant cost reduction, improved profits, and better service. Theres a natural synergy between various manufacturers to exploit this excess capacity, so what keeps it from coming together?It seems to me there are two main obstacles to making the most of the synergy and the capacity. The first is the inability or unwillingnessto collaborate effectively. The second is that even though technology exists that could develop a formula by which manufacturers could share in the cost reduction and savings, such a formula has rarely been achieved.Limitation of the study: Findings are based on the views expressed by the consumers. So it may suffer from biased prejudices. Some of the respondents were not co-operative & many seem to be having no interest. It is extremely difficult to persuade retailer to respond to questionnaire. The retailer knows us as people from Pepsi there by the responses could have been biased. I had lack of knowledge about the product of the local market. In beverage, we consider only Pepsi and Coca-Cola industries RESARCH METHODOLOGYResearch in common refers to a search of knowledge. One can also define research as a scientific & systematic search for pertinent information of a specific topic. It is the pursuit of truth with the help of study observation, comparison & experiment.DEVELOPING RESARCH PLANAfter deciding the objective of marketing research the next step is deciding Research plan for gathering effective information related to this research project. The research consists of following steps, which are discussed subsequently.Descriptive Research: In my market survey descriptive research process was carried out to describe the market characteristics, consumer profiles, distribution strategies, and market potential.Data Source: During project study I use both primary as well as secondary data source. For primary data collection I visited various retailers in Sahibabad & for secondary data I went through Books, Journals & Internet. The information collected is relevant, correct & unbiased.Research Design: I followed survey technique for collecting the data. In market survey research approach; Here, I carried out information from retailers have carefully selected the instrument & methods of surveying like I have chosen personal contact methods because of higher response rate & meaningful responses this helped me to get the general feedback in Pepsi, etc.Research Instrument: The research instrument used was EDS form. In which market information detail of each outlet should be filled in EDS form. For this I have visited each & every outlet & check all the brands & packs of Pepsi are available or not or which one is available in comparison with Coke & filled it in EDS forms. In my research process I have used closed ended & open-ended questionnaire where respondents could answer in their own manner. Through this I was able to extract information from the respondents about Pepsis products & the competitors. Sampling technique: The sampling technique adopted was simple random sampling. As the universe is mass and cannot survey the whole and due to lack of time. Among the total population researcher conveniently selected 100 retailers has been derived from the sample studied and the estimates are those based on a part and not whole. Hence there is a risk of the sampling giving rise to certain errors as sampling errors and also the opinion of the respondents may not be the opinion of the population. SIMPLE RANDOM SAMPLING:It refers to that sampling technique in which each and every unit of the population has an equal opportunity of being selected in the sample. In simple random sampling which items get selected in the sample is just a matter of chance personal bias of the investigator does not influence the selection.Sampling Unit: It includes who is to be a surveyed retailer of Sahibabad.Sampling Size: I have surveyed about 100 retailers.Contact Method: In my research process, I have collected information through personal interview process with the help of EDS. Form given by the company because it is the most reliable & accurate method for collecting primary data. Through this, the analysis of body language & facial expressions can be made.DISTRIBUTION STRATEGIESA Company can choose any of the following distribution types: - Exclusive Distribution Selective Distribution Intensive DistributionPEPSI HAS ADOPTED THE INTENSIVE DISTRIBUTION STRATEGY.INTENSIVE DISTRIBUTION:-A Strategy of intensive distribution is characterized by placing the goods or services in as many outlets as possible. When the consumer requires a great deal of location convenience, it is important to offer greater intensity of Distribution. This strategy is generally used for convenience items such as Tobacco, gasoline, and soap, snack foods & bubblegum. Manufactures are constantly tempted to move from exclusive or selective distribution to more intensive distribution to increase their coverage and sales and you could find Pepsi in nursing homes, confectionery shops, departmental stores; you name it & Pepsi is available there.DISTRIBUTION CHANNEL REDIFINED: Pepsi has redefined distribution to strengthen their competitive advantage in the emerging consumer and market scenario. Their earlier focus was to drive wide availability and enable easy access to their brands for consumers. Now they seek to go well beyond this distribution paradigm. Their new approach is more holistic touching consumers in multiple ways at the point of purchase and more importantly, creating opportunities for customers to receive brand message and experience our brands.They are proactively addressing these emerging trends by approaching distribution and channels in a much broader way. They are shifting emphasis from mere reach or availability expansion to touching consumers with a 3- way convergence- of product availability, brand communication and higher level of brand experience.They are thus going beyond delivering products and creating greater engagement and interaction around the purchasing experience.Pepsis reinvention of distribution is built on an understanding of emerging consumer trends, the retail environment and the growth drivers of our brands.Pepsis distribution system is a key external resource. Normally it has taken years to build and cannot be easily changed. It ranks in importance with key internal resources such as manufacturing, research, engineering and field sales personals. It represents significant corporate commitment to set policies and practices that constitute the basic fabric on which is woven an extensive set of long run relationship.Product AvailabilityPoint Of PurchaseBrand ExperienceBrand CommunicationCHANNEL FUNCTION AND FLOWSMarketing channel perform the following functions- To gather the information about potential and current customers, and competitors. To reach agreements on Price To list orders with manufacturers. They provide the successive storage and movement of physical products.It can be defined as backward and forward integration i.e. starting from supplier of the raw material to the end customer.

Data Analysis:

(3) Visicoolers :- No. of outlets having only Pepsi Visicoolers17.65%

No of outlets having only Coca-Cola Visicoolers.19.70%

No. of outlets having both Pepsi and Coca-Cola Visicoolers. 10.58%

No of outlets having only own Visicoolers 27.64%

No. of outlets having no Visicoolers 4.41%

There are 17.65% Visicoolers is of PepsiCo, 19.7% is of Coca Cola, 10.58% is both & 27.64% of total is own. Here it is very clear that the majority of the retailers are not having visicooler.SIGNAGE: - No. of outlets having only Pepsi Signage 11.66%

No of outlets having only Coca-cola signage 6.66%

No of outlets having both Pepsi & Coca-Cola signage 1.66%

No. of outlets having no signage 80.02%

There are 11.66% of signage is PepsiCos. 6.66% of signage is Coca Colas, 1.66% of signage is both & 80.02% of signage is no available. Most of the outlets are not having singage.

Pepsi 52 %

Coke 41 %

Thamsup 6 %

Campa 1 %

From the above table the market share of cola flavor of pepsi is 52 %, coke 41 %, thamsup 6 %, & campa is 1 %. Here it is very clear that Pepsi Co is having more market share of cola flavor.MARKET SHARE OF IN LEMON FLAVOUR LIMICA 70%

MIRINDA LEMON 30%

From the above table it shows that limica lemons market share is 70 % & mirinda lemon is only 30 %. Here it is very clear that limca has captured the market in lemon flavor. Number of soft drinks bottles sold each day in seasonal wise:

From the above table it can be seem that the 20.35 % soft drinks sold in winter season & 79.65 % sold in summer season. Here it is very clear that most of the customers want to drink soft drink in summer season.Better supply is give by:

From the above table it can be seem that 45 % respondents says better supply is given by pepsi, 40 % coke, & 15 % says both pepsi & coke. Here it is very clear that Pepsi Co is giving better supply to the retailers.Supply related problems of Pepsi :

From the above graph it can be seem that the problem is not on time is 44.44 %, incomplete product length is 22.22 % & other reason is 33.33 %. Here it is very clear that Pepsi Co supply related problem is mainly not on time & incomplete product length.Defect in Product:

From the above graph it can be seems that the 66 % defects in pepsi & 34 % defects in coke. Here it is very clear that Pepsi Co is having some problem thats why pepsi is providing more defective product to the customer.Type of Defect:Leakages14.29 %

Spurious28.57 %

Less fizzy57.14 %

From the above table it can be seem that the types of defect is mainly less fizzy 57.14%, than spurious problem 28.57 % leakages problem 14.29 %. Here it is very clear that Pepsi Co is having main problem is less fizzy.Peak Selling Period

From the above table it can be seem that selling of soft drinks jan-mar is 20%, Apr-Jun is 50 %, Jul-sep is 20 %, & Oct-Dec is 10 %. Here it is very clear that in the month of Apr-Jun selling of soft drinks is very high.Better relationship with the distributors:

From the above table it can be seem that the 40 % of the respondents are having good relationship with the Pepsi distributor, 50 % are with the coke distributor & 10% of the both Pepsi & coke. Here it is very clear that most of the retailer is having good relationship with the coke distributor & than Pepsi distributor.FINDINGS OF DISTRIBUTION NETWORKAfter visiting nearly 100 outlets I have found there are some common problems of retailers, which are:1. The problem is of non-availability of Lemon & Dew flavors of Pepsi.2. Every retailer wants that vehicle should come in the morning so that they will keep the bottles in the fridge as soon as possible.3. One of the major problems is that most of the chilling equipment is not in good working conditions. Retailers have complained many times but no response is being taken.4. Delay in replacement of burst bottles.5. Some shopkeepers do not get scheme on time.6. Some shopkeepers require signage.7. All the retailers appraised the regular supply of the companys products.8. Also at some places Pepsis signage is still hanging inspire of no transactions with those outlets. RECOMMENDATIONS1. PEPSI, the choice of Generation next is not providing the first choice of young generation. A young generation wants something strong in cold drinks & thus prefers Thumsup. Pepsi should come out with some extra strong taste to catch up maximum young generation & to become exactly Generation Next drink.2. Company should appoint competent & honest salesman so that they could provide schemes to the entire retailers & cover their full route.3. It is often seen that some salesman do not intimate schemes to the retailer & few of the retailers complained about it. So there should be frequent visits of Customer Executives to their respective areas to keep the shopkeepers benefited with various schemes.4. Delay in starting of supply vans from respective depot should be checked & a proper time register should be maintained.5. Most of the retailers are complaining about non-fulfillment of commitments regarding their sampling. Company should make sure that the retailers get the sampling on time so that they are satisfied.6. Most of the retailers are complaining about delay & no replacement of burst bottles. Marketing Management should sort some solutions to this major problem of replacing burst bottles.7. Half filled bottles should also be checked at the time of issue of goods from the distributors go down to the respective routes.8. Company should try to give some credit facility to the distributors so that they get motivated.9. Credit facility for retailers should be provided.10. Proper feedback system should be developed by ensuring regular visits & check randomly at the various outlets.

CONCLUSION:After visiting nearly 100 outlets I found that Pepsi & its Brands is not doing a good job in Sahibabad. It is clear that Pepsi (58%) has lagging Coke (38%) in the soft drink market in Sahibabad region. If we compare it with Signage or display material than Pepsi has an edge over coke;1. At this time it is solely depends on the retailer which brand he offers to the consumer? Although the company has been unable to satisfy the retailers. The company must take immediate steps in order to resolve its disputes with these retailers.2. It was also found that the schemes that are brought up in the market by Pepsi & Coke after every couple of day is not making any net effect on the sale of Cola, whereas one is cannibalizing others market only.3. It was also seen that Pepsi brand is better sold than coke. But it is Thumsup, which is making the major difference in the market.4. The sale in age wise section, it was found that 200ml is sold in all the age groups with same frequency but 300ml is sold mostly in 16 to 45yr. of age group where as CAN is sold in hi younger generation only. Finally 2lit. Are used only for family or party purpose. 5. It was also seen that Pepsi brand is lagging the Coke especially in Muslim dominated area, which makes a major difference in the market.Reference: Booms, B. H., & Bitner, M. J. (1981). Marketing strategies and organization structures for service firms. Marketing of services, 47-51. Buhalis, D. (2000). Relationships in the distribution channel of tourism: Conflicts between hoteliers and tour operators in the Mediterranean region. International Journal of Hospitality & Tourism Administration, 1(1), 113-139. Desiraju, R., & Moorthy, S. (1997). Managing a distribution channel under asymmetric information with performance requirements. Management Science, 43(12), 1628-1644. El-Ansary, A. I., & Stern, L. W. (1972). Power measurement in the distribution channel. Journal of Marketing research, 47-52. Grobler, S., Senekal, P., & Laubscher, J. (1990). In vitro demineralization of enamel by orange juice, apple juice, Pepsi Cola and Diet Pepsi Cola. Clinical preventive dentistry, 12(5), 5-9. Hibbard, J. D., Kumar, N., & Stern, L. W. (2001). Examining the impact of destructive acts in marketing channel relationships. Journal of Marketing research, 38(1), 45-61. Kotler, P., & Roberto, E. L. (1989). Social marketing. Strategies for changing public behavior. Sculley, J., Byrne, J. A., Kouzes, J. M., & Posner, B. Z. (1987). Odyssey: Pepsi to Apple--a journey of adventure, ideas, and the future: Harper & Row. Smith, W. R. (1956). Product differentiation and market segmentation as alternative marketing strategies. The Journal of Marketing, 3-8. Tsay, A. A. (2002). Risk sensitivity in distribution channel partnerships: implications for manufacturer return policies. Journal of Retailing, 78(2), 147-160.

Winter

20.35%

Summer

79.65%

Pepsi,

66.00%

Coke,

34.00%