BRAND AFFINITY OF CORE CLASS RETAILERS AND ITS IMPACT ON

SALES OF PEPSI PRODUCTS

Cratto Tony13BSPHH010160

IBS HyderabadPepsiCo India Holdings Pvt. Ltd

Swot Analysis of PepsiCo. Theoretical Background. Topic Introduction. My findings. My suggestions. Briefing of My experience.

Contents

SWOT ANALYSIS

Brand Value of PepsiCo Strong Distribution Network Huge Customer Base Backup of Media Advertisements Presence of a manufacturing unit in the

state. 80% Market Share (Survey Results, ac

nielsen)

Strength

Promotional activities in State level are not up to the mark.

Rural markets are ignored and faces deterioration in market share.

Sweeter taste of Pepsi compared to competitor.

Health concerns of consumers.

Weakness

International Brand image. Increasing temperature in the state and

especially cochin city. Consumerist culture of residents of cochin. Primary competitor do not have a plant in

Kerala. Weak distribution network of primary

competitor.

Opportunities

Increasing number of competitors in soft drinks industry.

Losing grip in Core class outlets. Articles in newspapers regarding the health

issues of soft drinks. Increasing sales of local drinks and fresh

juices.

Threats

Theoretical Background

Brand Affinity is actually a metric used by the firms to determine how a customer will behave. Brand affinity brings an emotional attachment with the brand for the customers. A customer with strong affinity towards a particular brand has high chances that he will purchase only that brand.

Brand Affinity

Brand Resonance Model

Introduced By Kevin Lane Keller,Strategic Brand Management.

The customers of PepsiCo are the retailers to which they sell their products. It is observed that the thirsty customers of these retailers are not so brand conscious while choosing a soft drink. Even though brand awareness exists for Pepsi products, consumers are not very brand conscious. They choose for any drink because of their thirst. Curbing the thirst is the primary objective of the consumers. The brand affinity of the retailers (Pepsi’s Customers) plays an important role here. If the retailer is pushing Pepsi Products, it can make a huge difference in the sales figures especially in summer season. But, the biggest challenge for Pepsi is the margin offered to the retailers by the local players. The retailer will obviously try to push the sales of local drinks as it is giving them higher margin. But if Pepsi develops an affinity in retailers towards the brand, they may try to push the sales of Pepsi products. So, the task is to put up the Brand affinity of the customers over margin affinity.

Topic Introduction

Universe :- Core class outlets of Cochin City

Sample :- Core Class outlets of GMG

Sample Size :- 600

Primary Data Collection Method :- Interview Schedule

Primary Details of Survey

There were two primary objectives for my project and they were:-

1. Find the Brand Affinity level of the Core Class Retailers of Cochin City based on Keller’s Brand Resonance Model.

2. Find the impact of Brand Affinity level of a Core Class Retailer in his final sales.

Project Report

My questionnaire was structured in such a way that each question was related to any of the four phases of the resonance model i.e. identity, meaning, response or relationship. To measure each step, there were a few questions included in the questionnaire. Based on the questions and answers received from each store, marks were given to each step of the resonance model and for each step, the maximum marks was 25. So, adding up the scores for each step in the resonance model gives the score of an outlet out of 100.After discussing with my company guide, I have set 75 as a considerably good score for Brand affinity. The benchmark was set after considering many factors like limitations of putting up SKU’s, considering unavoidable customer grievances and certain other factors.

1) Finding Brand Affinity Level

I collected the outlet wise sales report of a distribution centre in Cochin, named GMG. While my universe was all the core class outlets in Cochin City, the outlets under GMG served as my sample. My sample size was 600 and I had the sales figures of April 2014 and the yago (Year Ago, Technical Term, PepsiCo) sales figures. According to the information I received from the company guide, the sales in GMG compared to yago for the month of April had a growth of around 50%. Since the general trend of the distribution centre was growth favoured, it is obvious that all the outlets with a brand affinity score more than 75 should record a growth in sales. The mean values of growth rate of all the outlets with Brand affinity level more than 75 and less than 75 are taken and compared to find the impact of the affinity score in sales.

2) Finding Its Impact on Final Sales

My Findings

20 to 25 15 to 19 10 to 14 5 to 9 0 to 40

50

100

150

200

250

300

350

400

Salience Level Score

No: of outlets

Score

20 to 25 15 to 19 10 to 14 5 to 9 0 to 40

50

100

150

200

250

300

Brand Meaning Score

No: of outlets

Score

20 to 25 15 to 19 10 to 14 5 to 9 0 to 40

50

100

150

200

250

300

350

Brand Response Score

No: of outlets

Score

20 to 25 15 to 19 10 to 14 5 to 9 0 to 40

50

100

150

200

250

Brand Relation Score

No: of outlets

Score

A total of 393 stores among the 600 stores surveyed have got a score of 75

and above. That means 65.5% of the total Core class outlets in Cochin City has an

excellent “Brand Affinity Score”.

Extra Findings

85%

13%2%

Customers reaction on Merchandizing

ExcellentgoodSatisfactoryBad Very Bad

14%

17%

44%

21% 4%

Customer Reaction on P3 Outlets

ExcellentgoodSatisfactoryBad Very Bad

85%

15%

Customer expectation on appreciation

Personalized giftsCash DiscountsVerbal Appreciation

Step 1 Growth Percentage of all the stores are

collected from the sales report provided by PepsiCo.

There are a total of 393 stores with a score of 75 and more and the mean value of the growth percentage of these stores is found from the sales report.

According to the sales report, Mean Value = 98%

Part twoMeasuring the Impact on Sales

The second step is to find out the average growth of all the stores which has a brand affinity score less than 75.

There are a total of 208 stores with a score less than 75.

According to the sales report,Mean value = -21%

Step 2

From the experiment, it is affirmative that Brand Affinity has a considerable

impact in the sales figures.

The experiment has successfully proven that high levels of brand affinity prompts the customers to push pepsi products to the final consumers and by thus improve

the sales figures.

Outlets with Brand affinity score > 75 Outlets with Brand affinity score < 75

-40%

-20%

0%

20%

40%

60%

80%

100%

Growth Comparison among excellent outlets and poor outlets based on Brand affinity.

Average growth

According to Keller’s Brand Resonance model, 393 stores among my total sample size of 600 are having an excellent rating in Brand affinity.

The average Brand Affinity score of the retailers in Cochin is 78.1, which are again considered as excellent.

Pepsi has excellent Brand identity, Brand Meaning and Brand Relation in Cochin City, while the Brand response is poor.

The reason for poor Brand response is due to the prejudices in customers’ mind about the preservatives added in Pepsi Products.

Further Details

My Recommendations

The first and major recommendation is that, Brand building techniques should be also considered as a part of ground level sales team.

My research proves that increased level of brand affinity results in more sales.

My research has found out that “BETTER MERCHANDIZING” from the PSR’s and “PROVIDING PERSONALISED MERCHANDISE” as gifts can improve the brand relations to a big extend.

The customers should be made felt that selling pepsi is important as they are also a part of the team.

Making the customers much more associated with the brand will make them more loyal to the brand.

Received excellent exposure in Ground level Sales and distribution operations.

Worked in three major distribution centres in cochin, namely Marwa Enterprises, GMG Traders, Thannickel Agencies.

Got opportunity to visit the sales routes along with the PSR’s and study the actual market conditions.

Visited around 1500 stores in Cochin City and had business communication with the retailers.

Understood the real life challenges and threats of running a sales team.

My internship Experience

I was included in gate meetings in DB points and strategy meetings in the head office.

Got on the job training on working in a sales team.

Improved soft skills like Excel, Business communication, Man Handling, Diplomacy etc.

Excellent Corporate Exposure and organisation analysis.

Thank You