PROJECT REPORTON

DISTRIBUTION STRATEGY OF PEPSI

PEPSI

MASTERS OF BUSINESS ADMINISTRATION

Submitted By :

Mr. MOHIT JAIN M.B.A. 2ND YEAR

Enrollment No.:4740801071

Under The Guidance:

Project Guide: - Mr. Prashant M.

ANNAMALAI UNIVERSITY

DIRECTORATE OF DISTANCE EDUCATION

ANNAMALAI NAGAR

CERTIFICATE

This is to certify that the project titled “DISTRIBUTION

STRATEGY OF PEPSI is a bonafied work in partial fulfillment

of the requirement for the award of the degree of Masters of

Business Administration from NIS Academy, Annamalai.

University under the guidance and direction.

Project Guide:

Mr. Prashant M.

TABLE OF CONTENTS

1. INTRODUCTION :-

. COMPANY PROFILE-IN U.S.

COMPANY PROFILE-IN INDIA BUSINESS SEGMENT BEVERAGE INDUSTRY FOOD INDUSTRY ADVERTISEMENT AND ADD CONCEPT

2. DISTRIBUTION NETWORK

NETWORK DESIGN DISTRIBUTION STRATEGIES DISTRIBUTION CHANNELS

3. OBJECTIVE OF THE STUDY

4. RESARCH METHODOLOGY

5. DATA ANALYSIS MARKET FINDINGS ROUTEWISE QUESTIONNAIREWISE

6. SWOT ANALYSIS

7. CONCLUSION

8. LIMITATIONS

9. RECOMMENDATIONS/SUGGESTIONS

10. BIBLIOGRAPHY

11. ANNEXURE QUESTIONNAIRE EVERY DEALER SURVEY (EDS)

EXECUTIVE SUMMARY

“Analyzing the Distribution Strategy of PEPSI in “ Kanpur ”

Channels of distribution are an important aspect of marketing strategy. Channels chosen for the company’s products effect every other marketing decision.

Number of Retailers Covered:- 640

Market Area Of Kanpur :- 1.Kidwai Nagar 2.Vijay Nagar

3.Lajpat Nagar

4.Civil Lines

5.Swaroop Nagar

6. Saket Nagar

7.Govind Nagar

8.Rajendra Nagar

9.Bhauti

10.Ratan Lal Nagar

11.Arya Nagar

12.Gumti

13.Dada Nagar

14.Naubasta

15. P. Road

PREFACE

Marketing plays pivotal role in today’s business scenario in consumer

product Company, when there is such a high competition in the market.

The emphasis in the project is providing the study and an insight into

Indian FMCG Business Scenario. The Summer Project is designed to

provide participation of MBA program as on the job experience. This has

given a chance to try and apply the academic knowledge and gain insight

into corporate culture. This helps in developing decision-making abilities

and emphasizes on active participation by the student.

We undertook our Project in Varun Beverages, a leading Bottler and

Marketing partner of the Pepsi Foods. During the training, we had

worked on the project “Distribution strategy of PEPSI in Sahibabad.”

We gained valuable experience & knowledge during the survey. The

Project consists of our findings after data analysis & then SWOT analysis

& conclusions were drawn and finally recommendations were put

forward.

ACKNOWLEDGEMENT

I express our thanks to Varun Beverages Ltd for granting me the permission to work with the esteem organization. I am also thankful to Mr. Manoj Rawat / Md.Imran(C.E.), Varun Beverage Ltd. who guided and helped us in all possible ways they could, at every stage of the project.

My humble thanks are due to all our professors for guiding me during the two months training as my training mentor.

I would also like to thank all the Executives, distributors & staff of Sahibabad area who provided us all the relevant information and their kind support, on the basis of which this report has been prepared.

Lastly I would like to pay our special regards to my parents for their encouragement and full support for completion of this project work.

Mohit Jain

INTRODUCTION

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.

Soft drinks industry has become big business in India in recent years.

The soft drink business under went major change with the entry of PEPSI and re-entry of COCA-COLA in India in the late 80s when Parley with brands like Thumsup, Limca & Gold spot was a clear leader. Coca-Cola took up the product line of parley in 1993-94; today both brands are the Indians favorite soft drinks

COMPANY PROFILE-PEPSI CO. (US)

PepsiCo is a world leader in convenient foods and beverages, with

revenues of about $27 billion and over 143,000 employees. The company

consists of the snack business of Frito-Lay North America and the

beverage and food businesses of PepsiCo Beverages and Foods, which

includes PepsiCo Beverages North America (Pepsi-Cola North America

and Gatorade/Tropicana North America) and Quaker Foods North

America. PepsiCo International includes the snack businesses of Frito-

Lay International and beverage businesses of PepsiCo Beverages

International. PepsiCo brands are available in nearly 200 countries and

territories.

Many of PepsiCo's brand names are over 100-years-old, but the

corporation is relatively young. PepsiCo was founded in 1965 through the

merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and

PepsiCo merged with The Quaker Oats Company, including Gatorade, in

2001.

Pepsi-Cola Company - Pepsi-Cola (formulated in 1898), Diet Pepsi

(1964) and Mountain Dew (Introduced by Tip Corporation in 1948).

 

Frito-Lay, Inc. - Fritos brand corn chips (created by Elmer Doolin in

1932), Lay's brand potato chips (created by Herman W. Lay in 1938),

Cheetos brand cheese flavored snacks (1948), Ruffles brand potato chips

(1958) and Rolled Gold brand pretzels (acquired 1961)

Pepsi co is the world leader in the food chain business. It consists of many companies amongst which the prominent one is Pepsi cola, frito lay, Pepsi food international, pizza hut, and KFC and taco bell. The group is presently into three most profitable businesses namely, beverages, snack foods and restaurants. It has scores of big brand available in nearly 150 countries across the globe.

The beverages segment primarily market Pepsi diet, mountain dew and other brands worldwide and 7UP outside the U.S. market. They are positioned in close competition with Coca-Cola inc. of USA. A point to be noted is that coca cola get 80% of its profit from international operation while same figure of Pepsi co. stand at 6%, the segment is also in the bottling plants and distribution facilities.

The restaurant segment primarily consists of the operations of the worldwide pizza hut, Taco Bell and KFC.

Long time no.2 player in the cola wars, Pepsi co. is widening the play field, over the last years; the company has invested more than $2billion in its worldwide operations. When Coca-Cola changed its formula in 1985, Pepsi stepped up its competition with its long time archival claiming victory in the cola wars. Coke and Pepsi expanded their rivalry to tea in 1991 when Pepsi formed a venture with #1 Lipton in response to coke’s announced venture with nestle (Nestea) it has won over 30% of the ready to drink tea market, a part of the so called "new age” beverages segment.

The beverage industry has witness the phenomenal growth over the last few years necessitating capacity increase and builds up of commensurate infrastructure to meet the businessgrowth, which is accordingly matched. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people.

COMPANY PROFILE-JAIPURIA GROUP: IN INDIA

With a Legacy of decades in the industrial arena, the Jaipuria Group of

Companies now stands at the one thousand five hundred Crore marks.

The group boasts of its several world-class business arenas like those of

Textiles, Bottling, education, and information technology, Food Chain

and Retailing, apart from numerous other business segments

JAIPURIA GROUP is a Rs.1500 Crore, family controlled, reputed

business house with over a century of operations in diversified fields.

The group as on today can boast of expertise and leadership in the fields

of food and beverages, textiles and real estate development with varied

interests in a wide

range of products and services.

The Jaipuria Group under the leadership of the three brothers SK Jaipuria,

RK Jaipuria and CK Jaipuria has today become one of the leading

business houses of

the country.

The following are the major areas of operations of the Jaipuria Group:

Food and Beverages

Textiles

Information Technology

Real Estate

Education

It can be said with absolute certainty that the RKJ Group has carved out a

special niche for itself. Our services touch different aspects of

commercial and civilian domains like those of Bottling, Food Chain and

Education. Headed by Mr. R. K. Jaipuria, the group as on today can lay

claim to expertise and leadership in the fields of education, food and

beverages.

The business of the company was started in 1991 with a tie-up with Pepsi

Foods Limited to manufacture and market Pepsi brand of beverages in

geographically pre-defined territories in which brand and technical

support was provided by the Principals viz., Pepsi Foods Limited. The

manufacturing facilities were restricted at Agra Plant only.

Varun Beverages Ltd. is the flagship company of the group.

The group also became the first franchisee for Yum Restaurants

International [formerly PepsiCo Restaurants (India) Private Limited] in

India. It has exclusive franchise rights for Northern & Eastern India. It

has total 27 Pizza Hut Restaurants under its company.

We diversified into education by opening our first school in Gurgaon

under management of Delhi Public School Society. The schools of the

group are run under a Registered Trust namely Champa Devi Jaipuria

Charitable Trust.

Companies are medium sized, professionally managed, unlisted and

closely held between Indian Promoters and foreign collaborators.

The group added another feather to its cap when the prestigious PepsiCo

“International Bottler of the Year” award was presented to Mr. R. K.

Jaipuria for the year 1998 at a glittering award ceremony at PepsiCo’s

centennial year celebrations at Hawaii, USA. The award was presented by

Mr. Donald M. Kendall, founder of PepsiCo Inc. in the presence of Mr.

George Bush, the 41st President of USA, Mr. Roger A. Enrico, Chairman

of the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President

of Pepsi Cola Company.

Vision of the Company:

Being the best in everything we touch and handle.

Mission of the Company:

Continuously excel to achieve and maintain leadership position in the

chosen businesses; and delight all stakeholders by making economic

value additions in all corporate functions.

MAIN CREDENTIALS

1. VARUN BEVERAGES LIMITED received" GOLD STANDARD

AWARD" for the production and quality control for the year 1996-97.

2. Jaipuria group was adjudged “Best Bottler “out of more than 2000

bottles all over the world for the year 1996-97.

BUSINESS SEGMENTS

The RKJ Group is divided into three-business segments- Beverage, Food

and Education. It has a leading market position in each of its three

business segments. Our balanced portfolio produced a solid business

performance. Products and services, which look to the future, ensure that

we will be well placed in growth markets.

Cream Velley

BEVERAGE INDUSTRY

Indian Beverages industry’s size is Rs. 8000 Crores and it is dominated

by two player’s viz. Pepsi & Coke only. This high profile industry has lot

of potential for growth as per capita consumption in India is 8 bottles a

year as compared to 20 bottles in Sri Lanka, 14 in Pakistan, while 12

bottles a person in Nepal.

The RKJ group is India's leading supplier of retailer brand Carbonated

and Non-Carbonated soft drinks, with beverage manufacturing facilities

in India and Nepal. Its experience in the beverage industry dates back to

the sixties when it had the first franchise at Agra.

The group manufactures and markets carbonated and Non-Carbonated

Soft Drinks and Mineral Water under Pepsi brand. The various flavors

and sub-brands are Pepsi, Mirinda Orange, Mirinda Lemon, Mountain

Dew, and 7UP, Slice Mango, Evervess Soda and Aquafina.

It has the license to supply beverages in the territories of Western U.P.,

part of M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts of

Maharashtra, 9 districts of Karnataka and whole of Nepal. The group has

in total 18 bottling plants in India & Nepal and is responsible for

producing and marketing 44% of Pepsi requirement in India.

In order to later to this increasing demand, new bottling plants are being

set up at alwer, kosi, Jodhpur, Kathmandu and goa to produce400-600

bottles per minute, which would mainly cater to northern markets of

India. And in future, they will also be used to manufacture fruits mince-

based soft drinks like slice and mangola.

INGREDIENTS OF SOFT DRINK:

We only use the finest ingredients to make Pepsi-Cola products. To

guarantee our consumers consistent quality, each ingredient must pass our

high standards, rigorous quality control tests and strict bottling

procedures.

Pepsi-Cola products contain natural flavors, including extracts of the

kola nut ND flavor oils derived from natural sources such as citrus and

other fruits. Caramel (made from corn sugar) adds color and flavor to our

colas. Other ingredients add a refreshing taste: phosphoric acid in colas;

citric acid and sodium citrate in Mountain Dew, Slice and Diet Pepsi.

We also put a freshness date on every can and bottle. Soft drinks may

lose some flavor over time so our freshness date tells consumers when the

product is freshest and best tasting.

Every can and bottle of Pepsi-Cola products has a Nutrition Facts panel,

which shows the number of calories and other nutrients per serving.

There is essentially no fat in any Pepsi-Cola a product. The main

ingredients found in Pepsi-Cola products include carbonated water,

carbohydrates, sugar, sodium, potassium and caffeine. For a complete

breakdown by ingredients by product, see our product information for

Pepsi, Diet Pepsi, Mountain Dew, Slice and Aquafina.

Ascorbic Acid

Another name for Ascorbic Acid is Vitamin C the Ascorbic Acid used in

our carbonated soft drinks functions as an antioxidant to protect the

flavors, color, and taste. In some beverages we also add it to provide the

nutritive value found in Vitamin C.

Aspartame

Aspartame is a sugar substitute used in our diet beverages and many other

food products. Aspartame is made of the same building blocks as protein,

so it is considered a "nutritive sweetener," but the very small amounts

used in diet drinks contribute no calories.

Blue1

Blue 1 is a FDA-approved food coloring used in a variety of products

such as jellies, condiments, puddings, and beverages.

Brominated Vegetable Oil (BVO)

Brominated vegetable oil has been used by the soft drink industry since

1931. It is a widely used food additive that has been extensively tested

and approved by the U.S. Food & Drug Administration.

Brominated vegetable oil is derived from soybean oil that has been

modified in order to keep the flavoring oils well blended.

Caffeine

Caffeine provides a characteristic flavor to soft drinks. Caffeine is

naturally found in coffee, tea and chocolate. For comparison, an 8-oz. cup

of brewed coffee can have from 85-120 mg of caffeine on average, while

an 8-oz. serving of Pepsi contains about 25 mg of caffeine. An 8-oz. cup

of coffee therefore contains three to four times as much caffeine found in

a caffeinated colon.

There is no caffeine in Caffeine Free Pepsi, Caffeine Free Diet Pepsi,

Aquafina, Slice, Mountain Dew or Mirinda.

Caramel

Caramel is a flavoring that is added to some of our beverages.

Citric Acid

Citric Acid can be found in citrus fruits such as lemons and oranges.

Citric acid is used to bring out the flavor of other ingredients and imparts

a tang or tartness to beverages. Citric acid is not Vitamin C. the same

fruits that have citric acid often have Vitamin C but the technical name

for Vitamin C is ascorbic acid.

Gum Arabic

Gum Arabic is a purified natural vegetable gum obtained from the acacia

tree and is used in keeping our carbonated beverages well blended.

High Fructose Corn Syrup

High Fructose Corn Syrup (HFCS) is a sugar derived from corn and

provides sweetness and taste to our beverages.

HFCS has the same sweetness as table sugar (sucrose) and has almost the

identical composition of fructose and glucose.

Natural Flavorings

Natural Flavorings are flavoring ingredients that are the essences or

extracts derived from natural plant sources.

Natural Flavorings are what gives a product its distinctive flavor and

taste. Pepsi products are the only products with these distinct flavor

blends, which are considered part of our secret formula. The term natural

flavor is defined by the food and drug administration and all of our

natural flavorings meet this definition.

Phosphoric Acid

A small amount of phosphoric acid is added to our soft drinks. However,

it is greatly diluted and is fully approved by the U.S. Food and Drug

Administration for use in soft drinks. Phosphoric acid provides tartness,

essential to a well-rounded flavor.

Phosphorus, like calcium, is an essential mineral in bone. It is widely

distributed in the food supply, including fish, milk, meat, eggs and cereal

grains.

Potassium

Potassium in Pepsi-Cola products may come from water or as part of

certain ingredients. For example, potassium may be combined with

benzoic acid, which helps prevent spoilage and flavor changes. Potassium

is an electrolyte that helps meet the mineral needs of active people.

Quillaia

Quillaia Extract is a purified extract derived from the bark of the Quillaia

tree. It is carefully selected based on its characteristics. It is cooked,

filtered and pasteurized. It is FDA-approved, non-hazardous. Quillaia is

found in some of our frozen drinks.

Red 40

Red 40 is a FDA-approved food coloring used in beverages.

Sodium

All of our products are "low sodium" and contains less than 110 mg per

eight-fluid-ounce serving. A number of beverages have less than 35-mg

sodium per serving, so they are considered "very low sodium" products.

Sugar

Regular soft drinks and sports drinks are sweetened with sugar. There are

many types of sugar available today. In soft drinks and sports drinks, the

sugar is primarily high fructose corn syrup, which comes from corn.

Total Carbohydrates

Total carbohydrates include the sugars and any carbohydrate-like parts of

ingredients, such as organic acids. Although diet drinks may have no

sugar, they may contain more than half a gram of carbohydrate.

Yellow5

Yellow 5 is a FDA-approved food coloring. Used since 1916, it is found

in a variety of products such as skim milk, yogurt and macaroni and

cheese.

FOOD INDUSTRY

The last decade has been a period of dynamic growth for non-alcoholic

drinks and has witnessed completely new segment of the food market in

India taking shape. Food market at stake in India is enormous. The food

chain and the forces acting on the food chain are changing rapidly, and in

a generally positive manner.

India's sheer size and diversity are enough to make it an attractive market

for nearly every major food, beverage and agribusiness company. A KSA

Technopak study indicates that the fast food industry in India will be

worth $1.27 billion by year 2005.

To capitalize on the RKJ group’s significantly important relationship with

Pepsi Foods, it decided to venture into food sector, which is second

largest business for Pepsi all over the world. Fast food is the most

happening thing across the world.

The group became the first franchisee for Yum Restaurants International

formerly PepsiCo Restaurants (India) Private Limited in India. It has

exclusive franchise rights for Northern & Eastern India. Out of 56

operational Pizza Hut restaurants in the country 27 restaurants are owned

and run by its company.

All these restaurants are making good profits & are dominating the

market. The name of business entity is Devyani International Private

Limited.

ICE CREAMS UNDER “CANDIA” BRAND

The India ice creams and frozen desserts market forms part of the food

industry. Ice creams and frozen desserts are convenience products, which

are ideally suited to the emerging lifestyles and eating trends of Urban

India.

The RKJ group has its presence in the Ice Cream segment since 1991,

when it started manufacturing and marketing Ice Cream under the brand

name of “Gaylord” in the state of U.P.

During 1996 it sold its brand to Brooke Bond and started supplying

Ice Cream to Hindustan Lever as their Ice Cream souring plant. After

working for 10 years in this field, during 2003 it has launched its own

brand in technical and marketing collaboration with Candia of France.

Advertisement and Add Concept:-

Advertisements are cost effective means to communicate

messages and ideas to build brand preferences and

awareness and it is one of the most important tools which

a company uses to direct persuasive communication to

directive buyers in public or to educated people to avoid

hard drink and so on.

The basic objective of advertising is sales promotion sales

promotion expenditure have been increasing as a percent

of budget expenditure annually and the growth is likely to

continue in future. Our celebrities signed by the PepsiCo

are as follows:

For PepsiCo.

Cricketers:-

Sachin Tendulka

Rahul Dravid

Mohd. Kaif.

Yuvraj singh

Harbhajan singh.

Sourav Ganguly.

Zaheer Khan

Ajit Agarkar

Cine Stars

Kareena Kapoor

Shahrukh

Kajol

Adnan Sami

Fardeen Khan

Amitabh Bachhan

Govinda

Rani Mukherjee.

Tennis Stars :-

Leander Paes

Mahesh Bhupati

Football Players

Cyrus Broacha

Bhaichung Bhutia

KEY ELEMENTS OF THE TRADE

1. JO DIKHTA HAI WHO BIKTA HAI: - This is a company slogan,

it is to increase the visibility of the product, the company stresses

more on increasing the number of outlets than on the volumes of sales.

That is the reason of the company providing visibility courses to the

shopkeepers.

2. A BOTTLE THAT IS CHILLED IS SOLD: - In the industry it is

considered that a bottle is chilled or putting in cooling compartment is

sold. That is the reason the policy providing triage’s come up because

according to the contract the shopkeeper has to keep only & only

Pepsi’s products in the visicooler.

3. A BOTTLE LOSS TO COKE IS A GAIN TO PEPSI: - The

competition is so strong between the two companies i.e. fighting is on

for each bottle that is to be sold in the market. Competitive bidding

goes on for each & every prestigious outlet in their region.

Monopolizing entries & fat foods joint s is their first priority.

4. EMPTY kA HI KHEL HAI: - [Empty plays an important role]: - As

discussed earlier the distribution points keeps on putting up

distribution schemes for retailers i.e. like two bottles of solution free

with the purchase of every one carat of solution. Now these schemes

have timed well keeping minding the environmental conditions &

schemes provided by the other company. These schemes are of

twenty-four hours duration. If a scheme is launched & there is no

empty in the market for refill, the whole effort goes in vain that is the

reason is said ki sub empty ka khel hai.

TYPES OF PACKS AVAILABLES

QUANTITY MRP/PCsRATES

200ml (24b/s per crate) 7/- 146/- 300ml (24b/s per crate) 9/- 192/-

600ml (24b/s per peti) 20/- 444/-

2-liter (9b/s per peti) 45/- 369/-

250ml (24b/s per crate) slice - 192/-

1000ml (12b/s per crate) slice 40/- 450/-

200ml (24PCspercrate) tetra slice 10/- 220/-

500ml (24b/spercrate) diet pepsi 20/- 376/-

330ml ( 24PCs ) diet pepsi cane 25/- 120/-

330ml (24PCs) pepsi cane 20/- 456/-

500ml (24PCs) pepsi café-chino 20/- 444/-

SODA: -

Lehar Soda 300ml (24PCs per crate) 6/- 120/-

Lehar Soda 600ml (24b/s per peti) 10/- 216/-

WATER: -

Aquafina-1liter (12b/s per peti) 103/-

Aquafina-2liter (12b/s per peti) 199/-

A price generally depends upon the company.

PRICING OF EMPTIES

QUANTITY PRICE

200ml Rs.244 per crate

300ml Rs.244 per crate

The Shell Cost Rs 100/- each

Empty bottle Rs 6/- each

ORGANIZATION STRUCTURE

VARUN BEVERAGES LTD.

CHAIRMAN (Mr. RAVI JAIPURIA)

MARKET UNIT MANAGER (Mr. KAPIL AGGARWAL)

UNIT MANAGER (Mr. SANJEEV AGGARWAL)

GENERAL MGR. TERRITORY DEV. MANAGER(Markt. Deptt.)

PRODUCTION MGR. AREA DEV. Co-ORDINATOR

QUALITY CONTROL MANAGER

MARKETING EXECUTIVE CUSTOMER EXECUTIVE

SHIPPING MGR. SALESMANTRANSPORT MGR.

DISTRIBUTION NETWORK

Total market of Sahibabad is divided into, 1 C&F Agent & 8 distributors

take care of Sahibabad. Market and Sahibabad is having a market share of

48% of the total Sahibabad .

PROMOTION: -

The promotion budget is set by the Head Office and thereby is distributed

among the different bottler’s all over the country on the basis of there

past performances & requirements.

Distribution Network in Sahibabad

PEPSI FOODS LTD (Parent Co.) Sahibabad

VARUN BEVERAGE LTD (Bottling Plant) Sahibabad

Distributors Distributors C&F

Distributors

Fat Dealer (2) Fat Dealers (4) Fat Dealers (2)

Retailers Retailers Retailers Retailers

CONSUMERS

DISTRIBUTION STRATEGIES

A Company can choose any of the following distribution types: -

Exclusive Distribution

Selective Distribution

Intensive Distribution

“PEPSI” 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.

Pepsi’s reinvention of distribution is built on an understanding of

emerging consumer trends, the retail environment and the growth drivers

of our brands.

Pepsi’s 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.

ProductAvailability

PointOf

Purchase

BrandExperience

BrandCommunication

CHANNEL FUNCTION AND FLOWS

Marketing 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. The physical flow of

Pepsi from its manufacturing unit at Kosi (Varun Beverages) to various

retailers in Sahibabad is as follows-

PRODUCT & PACK PROFILE

PRODUCT: -

Carbonated Soft Drinks (CSD) or Soft Drinks as they are popularly known are one of the largest FMCG market in the whole world with the total annual sales around $40 billion. This product is generally available in four kinds of packing.

Glass Bottles

Pet Bottles

Cans

Fountain rim

FLAVORS: -

Cola

Orange

Clear Lemon

Cloudy Lemon

Berry

Ginger

Mango Slice

Out of these products the 70% of the sales of the company come from the Cola brand, which is the market leader in the most part of the country of these kinds of packaging in which the product is available make them 80% of the sales come from these bottles. The businesses of returnable bottles are very cumbersome and make the market very complex and demanding.

FACILITIES PROVIDED BY THE COMPANY TO THE RETAILER

1. VISI COOLER

65 Liter

110 Liter

120 Liter

165 Liter

200 Liter

210 Liter

220 Liter

300 Liter

320 Liter

330 Liter

500 Liter

According to outlet nature, volume & investment of the outlet.

2. SCHEMES OF VOLUME PURCHASE

Cash discount

Card discount (sampling)

3. DISPLAY MATERIAL

Stickers

Banners

G.S. Boards

D.P.S. Boards

Racks

Counters

Umbrellas

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.

RESARCH METHODOLOGY

Research 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 PLAN:

After deciding the objective of marketing research the next step is

deciding Resach plan for gathering effective information related to this

research project. The research consists of following steps, which are

discussed subsequently.

Research Design:

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.

Reach 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 Pepsi’s products & the competitors.

Sampling Plan:

In designing the sampling plan following points were considered:

Sampling Unit: It includes who is to be a surveyed retailer of Sahibabad.

Sampling Size: I have surveyed about each & every outlet of the area

specified to me so size would reach upto 350 retailers.

Elementary Retailers.

The geographical limit is the area of Sahibabad.

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.

Methods of data interpretation:

In this market study I have used pie chart for data analysis &

interpretation because pie chart is the easiest & comprehensive medium

for presentation of data.

Sampling unit is a single retailers outlet which may be:-provision

store,stationery shop,eatery &kiosk.

The universe studied is the sum of the retailers in the sahibabad area.

Demographic Profile

5%20%

40%

20%

15%

Year 10-15 15-20 20-25 25-30 above 30

No. 1

Time Preference

30%

10%60%

Evening Morning Any time

No. 2

Market Share of Main Leaders

52%41%

6% 1%

Pepsi Coke Thums Up Other

No. 3

Market Share of Best Flavour Providers

60%

38%

2%

Pepsi Coke Others

s

No. 4

Flavour Awareness of Pepsi

2% 8%

90%

One Two More than two

No. 5

Market Share in Cola Flavour

52%

6%

41%

1%

Pepsi Thamsup Coke Campa

No. 6 (I)

Market Share in Lemon Flavour

70%

30%

Limca Mirinda Lemon

No. 6 (ii)

Market Share in Plane Flavour

51%

49%

Sprite 7 Up

No. 6 (iii)

Awarness about Diet Pepsi

89%

11%

Yes No

z

No. 7

FINDINGS OF DISTRIBUTION NETWORK

After visiting nearly 640 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. Majority of retailers is asking about Boards, Openers & Counters.

5. Delay in replacement of burst bottles.

6. Sampling due.

7. Some shopkeepers do not get scheme on time.

8. Some shopkeepers require signage.

9. All the retailers appraised the regular supply of the company’s products.

10.Also at some places Pepsi’s signage is still hanging inspite of no transactions with those outlets.

SWOT ANALYSIS

STRENGTH

Pepsi is a well-established co., so it has a good reputation in the market.

Advertising of Pepsi is much more aggressive than Coke.

Backed by huge promotion at national & international level.

Lot of SGA’s provided in the market.

.

WEAKNESS

Non-fulfillment of commitments on time, made to shopkeepers.

Incompetent salesman who do not give the schemes in the market regularly.

Unavailability of various demanded flavors like Mountain Dew & Mirinda Lemon.

Not proper control over distribution network.

OPPURTUNITY

May tie up or liaison with major showrooms, computer centers & restaurant.

Huge publicity of Lemon Miranda /Slice has created a lot of demand.

Company has brand equity in the eyes of customers, so its new products can easily penetrates in the market.

Untapped market.

THREAT

Threat of competitors new brand entry in the market in near future.

Restrictions made by Govt. agencies that soft drinks are harmful & non-nutritive.

Natural juice are now available whose price are less or same as soft drinks.

CONCLUSION

1. After visiting nearly 350 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.

2. 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.

3. 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.

4. 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.

5. The sale in agewise 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.

6. It was also seen that Pepsi brand is lagging the Coke especially in Muslim dominated area, which makes a major difference in the market.

LIMITATIONS

Findings are based on the views expressed by the consumers. So it may suffer from biased prejudices.

Weather conditions were not favorable.

Some of the respondents were not co-operative & many seem to be having no interest.

The study has not been intended on a very large scale, have the possibility of errors, which cannot be ruled out.

Time limitations.

Area was specified.

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.

The company does not provide any financial assistance.

The time allowed for the project was very short (8 weeks). It was impossible to study deeply in that short period.

There was the staying place hearer to local market.

.

RECOMMENDATIONS:-

1. 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 retailer’s & 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 distributor’s godown 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.

BIBLIOGRAPHY

WEBSITES:

www.pepsi.com

www.pepsico.com

www.jaipuriagroup.com

www.rkjworld.com

BOOKS:

Marketing Management- Radha Swami/ Nam kumari

Research Methodology-C.R.Kothari

Principles of Marketing-P. Kotler & Armstrong

NEWS PAPERS:

The Times Of India

The Economics Times

Hindustan Times

Business Today (July edition)

LIST OF ANNEXURES

QUESTIONNAIRE Questionnaire related to academic purpose, which is prepared to take feedback from retailers.

Name of outletAddressContact person with phone no.Type of outlet:-Glossary,kiosk,provision store,eatery,other.

Present share of your outlet Pepsi Coke You are interested to sale Pepsi Coke Reason:- Salesman ‘s behaviour What are demands of various packs of Pepsi Pack Demand in % 200ml 250/300ml 500ml 1000ml 2000ml Demand of different customer group Group Pepsi Coke Male _____ _____ Female _____ _____ Children _____ _____

Do you get the delivery at right time?

Yes No

Are you happy with companies’ distribution channel? Yes No

Which of the company you feel have better distribution network?

Coke Pepsi Others

Do you get the benefits of daily schemes launched by the company?

Yes No

Do you receive the ordered quantity?

Yes No

Do you want Salesman to be changed at regular intervals?

Yes No

Companies’ Officers visit time to time?

Yes No

Which flavor is more demanded?PepsiMirinda-OrangeMirinda-LimeMountain Dew7UP

Slice

Is company responsive to your complaints? Yes/No The cooling machine is :-

Your own / Pepsi’s / Coke’s

Is any survey done by other softdrink company?Yes/No

Are you satisfied with the brands of Pepsi?

Yes / No

Do you get proper scheme at right time?Yes / No

Does coke offer better then Pepsi/Yes / No

How many times delivery van comes? Ones in a day

In alternate daysOnce in a weekAny other ,please specify

Your recommendations about Pepsi company? Any suggestion .

EDS (Every Dealer Survey)