1. Project study report
on
Distribution strategy of PepsiCo
SESSION 2014-2016
SUBMITTED TO:SWATI KHANDEWAL SUBMITTED BY: ANAND SHARMA
IILM Academy of Higher Learning
35/95, Sector-10, Kumbha Marg, RHB Colony Pratap Nagar,
Sanganer, Jaipur - 302033

2. INTRODUCTION
Pepsi was first introduced as "Brad's Drink", in New Bern, North
Carolina, United States, In 1893 the pharmacy of Caleb Bradham,
who made it at his drugstore where the drink was sold. It was later
labelled Pepsi Cola, named after 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.
(Pepsistore.com)
In 1903, Bradham moved the bottling of Pepsi-Cola from his
drugstore to 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 1909, automobile race
pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola,
describing it as "A bully drink...refreshing, invigorating, a fine bracer
before a race." The advertising theme "Delicious and Healthful" was
then used over the next two decades. In 1926, Pepsi received its first
logo redesign since the original design of 1905. In 1929, the logo was
changed again.
In 1931, at the depth of the Great Depression, the Pepsi-Cola
Company entered bankruptcy – 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. Mega gel bought the
Pepsi trademark.

3. MISSION
 “Our mission is to be the world's premier consumer Products
Company focused on convenient foods and beverages. We seek
to produce 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.”
VISION
 PepsiCo's responsibility is to continually improve all aspects of
the world in which we operate - environment, social, economic
- creating a better tomorrow than today Our vision is put into
action through programs and a focus on environmental
stewardship, activities to benefit society, and a commitment to
build shareholder value by making PepsiCo a truly sustainable
company.”

4. STRENGTHS:-
 PEPSICO has an excellent brand image.
 Retailer friendly schemes.
 Continuous & strategic improvements in the promotional
strategies.
 Strong dealer network.
 PEPSI has got goodwill in the market with regard to the
brand name.
 It has a very wide product mix.
 Large number of celebrity endorsed.
 A very good sales force.
WEAKNESSES:-
 PEPSI not able to keep the retailers satisfied as they are not
providing with the coolers on time as compared to others
 Interior part of the city is not looked after as the main city
as the roads are not good enough for the vehicles to reach
there.
 Support material not provided to the retailers as being
provided by the competitor.

5.  PEPSI has only cola flavor where its competitor has coca
cola has coke and Thumps up.
 Its one of the Popular brands PEPSI in cola flavor is lagging
behind with its nearest competitor only due to high sugar
content and less thrilling.
 More emphasis is given to larger dealers.
OPPORTUNITIES:-
 Consumers are showing increased interests in PEPSI
products.
 Promotional activities provide it an edge over the
competitors.
 Top position in C.S.D. products in India gives it an
advantage.
 Pepsi can explore its distribution network in interior area
also.

6. THREATS:-
 Some dealers are not very satisfied with the services of
Pepsi which directly affect the sale of product.
 Competitor’s products already available in the market with
similar schemes.
 Tough competition from others.
 Strategic pricing by competitor may affect the company’s
margins.
 Pesticide controversy taking away the consumer. Many
religious Guru asking their followers not to consume soft
drinks.

7. 4Ps:
Product:
A product (in Pepsi's case, a popular soda drink with cola
flavoring) must appeal to the marketplace and deliver taste to
consumers.
Price:
The second element, price, is all about offering a product for an
appealing price - one that still allows PepsiCo to make a tidy
profit from the sale of their drinks.
Place:
The third element, place, is about distribution of soda drinks.
Drinks may be sold in mass chain stores, such as Wal-Mart, and
in an array of other retail stores, such as drug stores, grocery
stores, and corner stores or bodegas. Distribution is the key to
getting the product in front of consumers, so place is a very
important part of the overall sales equation.
Promotion:
Promotion includes the marketing and advertising of a product.
In the case of Pepsi, marketing is international and takes place
in every form of mass media - including television ads, print
ads, and online marketing.

8. PRODUCTS DETAILS
Aquafina
Bottled water goes through a state-of-the-art purification process so
that you get the refreshment your body craves in its purest form.
Brisk
The original iced tea with tons of attitude. The one with the bold
lemon flavor that kicked iced tea off the back porch and gave it some
street cred. Now that's Brisk, baby!
Cheetos
CHEETOS Snacks are the playfully mischievous cheesy crunch that
add a little lighten-up moment to any day. Proof positive, you simply
can’t eat a Cheetos Snack without smiling. The CHEETOS brand
strives to provide consumers with fun times every step of the way.
Diet Mountain Dew
All the great taste and intensity of DEW without the calories.
Diet Pepsi
With its light, crisp taste, Diet Pepsi gives you all the refreshment you
need - with zero sugar, zero calories and zero carbs. Light. Crisp.
Refreshing. Diet Pepsi. Nothing refreshes like a Diet Pepsi

9. Doritos
DORITOS brand tortilla chips deliver a powerful crunch that unlocks
the bold and unique flavors you crave. The DORITOS brand is
constantly creating new ways to give you immersive and memorable
experiences, to put you in control of the things you love most.
Fritos
The popularity of FRITOS Corn Chips has put the snack in a class of
its own. From small towns and family barbecues to parties in the big
city, this classic snack is a true icon. The hearty chip even inspired the
creation of another American classic, FRITOS Chili Pie.
Gatorade
Available in over 80 countries, Gatorade's line of performance drinks
adds over 40 years of rehydration and sports nutrition research to
the PepsiCo portfolio. Born in the lab In early summer of 1965, a
University of Florida assistant coach sat down with a team of
university physicians and asked...
Lay's
Wherever smiles happen and happiness is celebrated, you’ll find
LAY'S potato chips. From backyard BBQs and birthday parties to 4th
of July picnics, LAY'S chips are there to share the moment. It’s no
wonder these deliciously fresh-tasting and perfectly crispy potato
chips have been America’s.
.

10. Lipton
Made with natural ingredients, new 100% Natural Lipton Iced Tea
unlocks the natural goodness of tea, blending it with delicious flavors
to hydrate and refresh you.
Mirinda
Mirinda is here to be your carefree laugh out loud partner. The bold
fruity taste and the vibrant fizz will remind everyone; don’t take life
too seriously. Enjoy the sensorial fruity Mirinda experience with
Orange, Citrus, Green Apple, Strawberry, Tangerine and
Pomegranate flavors. Release Mirinda....
Mountain Dew
Mountain Dew exhilarates and quenches with its one of a kind great
taste.
Pepsi MAX
Pepsi MAX is the only soda with zero calories and maximum Pepsi
taste.
Quaker
Quaker's family of brands includes household names you know and
love. These consumer brands which deliver great taste, nutrition,
quality and variety, have been around for as long as 130 years.
Ninety-two percent of our U.S. brands hold the number-one or
number-two position in their respective.
.

11. Ruffles
Chip lovers have come to know that ―R R R Ruffles Have Ridges The
thick ridges of RUFFLES® Potato Chips help hold more great potato
chip flavors and stand up to the thickest dips.
Sierra Mist
Sierra Mist Natural is made with real sugar and nothing artificial - just
natural ingredients so the crisp, clean lemon-lime flavor shines
through. It's simple, delicious, and refreshing - naturally!
Tostitos
TOSTITOS® tortilla chips are made for dipping. Whether it’s a couple
of friends gathered to watch the game or a giant backyard barbecue,
TOSTITOS are the must-have chips the ultimate salsa and dip delivery
system. With their perfect shape, texture and taste, TOSTITOS chips
are a reminder that the.
Tropicana
Tropicana, the strongest name in juices, extends the PepsiCo
portfolio of brands with plenty of nutritious, high-quality flavors.
Tropicana Products, Inc. is the leading producer and marketer of
branded fruit juices. Its products are marketed in the U.S. under a
variety of brand names, including.

12. DISTRIBUTION STRATEGY
Distribution strategy is sets of interdependent organization involves
in the process of making a product or service available for use or
consumption.”By channel distribution of Pepsi means the
intermediaries or the process through which Pepsi is transferred
from the producer to the ultimate users. There are a lot of
intermediaries between Pepsi producers and consumers. Some
intermediaries like wholesalers and retailers buy and resale the
product. They are known as merchant middle men.
Intensive Distribution:
Pepsi Co follows an intensive distribution strategy to distribute Pepsi.
To support their universal feature they want to place their product in
as many outlets as possible.
Distribution Model of Pepsi:
Pepsi uses two types of distribution model to distribute the product
among the consumers. They are
 Direct Distribution System
 Indirect Distribution System
Direct Distribution System:
Pepsi uses its direct distribution system to deliver suppliers. It
Supplies the product directly with
 PIZZA HUT
 KFC
According to the marketing channel Pepsi uses zero level of
marketing channels. It means

13. We can see there are no intermediaries between manufacturer and
consumer. This single type of marketing channel is maintained by
Pepsi.
Indirect Distribution System:
In this system, there are a lot of intermediaries such as distributors,
retailers, wholesaler etc. To make the product available at the right
places at the right time in the market, the sales department of
PepsiCo Company pays major attention on controlling the channel of
distribution. The nature of the channel is as follows
Manufacturer Consumer
DISTRIBUTORSPEPSI
WHOLESALER
CONSUMERSRETAILERS

14. So according to the marketing channel Pepsi uses 2-level marketing
channel. It means
Number of Intermediaries:
Pepsi Provides direct and indirect employment of 1, 50, 000 people
(including suppliers and distributors).
Distributors:
Distributors frequently have a business relationship with
manufactures that they represent. The distributors of Pepsi maintain
exclusive buying agreements that limit the number of participants.
The distributor becomes the company’s direct point of contact.
Distributors don’t sell the product directly to consumers. At first
PepsiCo supplies Pepsi to the distributors. Then they resale the
product to wholesaler or retailer. According to there are 70
distributors of Pepsi. Some of them are:
OTC GLOBAL LTD, INDIA (Exporting and importing Pepsi in 500 ML
pet Bottles )
SUNRISE FOODSTUFF JSC, VIET NAM (Exporting Famous-
Brand Pepsi Soft Drinks 330ml.)
ConsumerRetailersWholesalersManufacturer

15. Wholesalers:
The wholesalers of Pepsi generally buy a large quantity of products
directly from distributors or the company. Then they resale the
product to the retailers. According to http://www.exporters.sg/there
are 70 wholesalers of Pepsi. Some of them are:
FAR WAY GENERAL TRADING LLC (Exporting and importing Pepsi )
Brand Distribution Poland LTD, POLAND (Exporting Pepsi 0,33L 24
cans case)
Retailers:
Retailers consist of small and large for-profit businesses that sell
products directly to consumers. The retailers buy small quantities of
an item from a distributor or a wholesaler. Then resale them to
consumers. According to http://www.exporters.sg/ there are 563
retailers of Pepsi. Some of the retailers are

16. MARKET SEGMENTATION
As we know that Pepsi is provided among a huge population which is
called market. To distribute it and increasing the revenue the market
should be segmented. Pepsi has segmented their market keeping
four major segmentation variables in their mind which are:
 Geographic
 Demographic
 Psychographic
 Behavioral
Geographic Segmentation:
Geographic segmentation means dividing the market into different
geographical units such as nations, regions, states, countries, cities or
even neighborhood. Pepsi has put little emphasis to segment their
market geographically. They are doing business almost in maximum
places around the world.
Demographic Segmentation:
Despite the large customer base in the Soft Drink industry, Pepsi
prefers to segment itself as the beverage choice of the “New
Generation”, Generation Next, or just as the “Pepsi Generation”.
These terms adopted in Pepsi’s advertising campaigns are what
marketers refer to as Generation X, which are profiled to be between
the ages of 18 to 29. In addition, Pepsi shifted its focus to the
growing American teenage market in the 1990s by forming exclusive
contracts with American schools and developing advertising
campaigns such as “The Next Generation” and the “Joy of Pepsi”,
featuring Britney Spears. Pepsi believes that if they can get this

17. market to adopt their product, they could establish a loyal customer
in a long run.
Psychographic segmentation:
Psychographic segmentation divides buyers into different groups
based on social class, lifestyle or personality characteristics. People
from same demographic group can have very different
psychographic makeups. Pepsi’s segmentation has also been
emphasized psycho graphically. Their beverages are very much
focusing towards lower and upper middle class as they can afford to
drink Pepsi. They have a product like “Mountain Dew” a particular
drink which is focused especially who has adventurous personality.
Their campaign of this drink totally focuses to adventurous young
people.
Behavioral segmentation:
Behavioral segmentation divides buyers into groups based on their
knowledge, attitudes, uses or responses to a product. In this
segment, Pepsi has been concentrating carefully. Because they offer
in every special occasions, for the people who seek for benefits off
their products, to their loyal customer base. Occasional cases like
religious festivals; special days like mothers’ day, valentine’s day,
friendship day, any individual’s birthday or marriage ceremony or
anniversary in a word in every special occasions there are people to
whom buying Pepsi for celebration is must.

18. Segmentation
Variables
Data
Geographical
World region Asia
Country Bangladesh
Cities All major cities
Density Urban
Climate Tropical wet
Demographic
Age 14-30
Gender Male, Female
Family Size 1-2, 3-4, 5+
Family Life Cycle Married, Unmarried
Psychographic
Social Class Middle Class, Upper Class
Lifestyle Actualizes, Believers, Fulfilled, Achievers,
Strivers, Experience makers, Strugglers
Personality Adventurous
Behavioral
Occasions Parties, Birthdays, Sports, Regular
occasions

19. Benefits Quality, Taste
User Status First Time User
Loyalty Status Strong
Readiness Stage Aware, Interested
MARKET TARGETING:
Market Targeting can be carried out at several different levels.
Companies can target very broadly through “Undifferentiated
Marketing”, very narrowly through “Micromarketing” or somewhere
between “Differentiated Marketing” and “Concentrated or Niche
Marketing”. There are four strategies of market targeting. Pepsi
follows the strategy of “Concentrated or Niche Marketing”. In niche
marketing companies goes after a large share of one or a few
segments or niches. Through concentrated marketing, the firm
achieves a strong market position because of its greater knowledge
of customer it serves in the niches it serves and the special
reputation in acquires. Pepsi customers are mostly Teenagers and
Young Adults between the ages of 14 to 30. It also targets at Schools,
Colleges, Universities, Homes, Restaurants, Hotels, and Stores They
focused on varietal differentiation since 1990 by introducing a string
of niche products. To increase volume in order to counter flat Coca-
Cola sales, Pepsi introduced Sierra Mist in 2002-2003 to take the
place of 7-up and go head-to-head with Sprite. Pepsi has also tried to
boost volume by introducing products that appeal to specific target
markets that it currently is not reaching. Pepsi has introduced Code
Red and Live Wire, extensions of Mountain Dew, Pepsi One, and

20. Pepsi Blue. Finally, Pepsi is countering declining sales of carbonated
drinks through the marketing and distribution of Starbucks ready to
drink products, and the acquisition of SOBE and Gatorade. The
success of Pepsi’s Mountain Dew Code Red launched in 2001 was the
most successful soft drink innovation in 20 years and has spurred
even more niche product introductions for PepsiCo as well as other
competitors. In some sense Pepsi also follows the idea of
“Micromarketing”. As they are they are promoting their brands to
the local customer groups. They are sponsoring the signboards for
the little or big shopkeepers in town. They are also providing
refrigerator logoed “Pepsi”. All these they are doing to attract their
target customers.
MARKET POSITIONING:
PepsiCo plans to further create positions that will give products the
greatest advantage in their target markets. Pepsi has been
positioned based on the process of positioning by direct comparison
and have positioned their products to benefit their target market.
Positioning Strategies of Pepsi:
To find points of differentiation, Pepsi have followed some strategies
which have differentiated themselves from others. Usually marketers
try to differentiate along the lines of following things
• Product Differentiation
• Channel Differentiation
• Image Differentiation

21. Pepsi have differentiated themselves in the field of Product
Differentiation, Channel Differentiation and Image Differentiation.
The unique characteristic of their product and their brand image has
differentiated themselves from the other beverages in market.
Product Differentiation:
Product differentiation comes into play for sure in the case of Pepsi.
When looking at Pepsi, people think of soda.
Channel Differentiation:
Coke and Pepsi distribute their drinks through independent bottlers.
These firms make the ingredients for the drinks and then ship them
to the local bottlers, who pretty much finalize the product. After this
is done, this bottler has the right to distribute whatever brand it
wants to a specific region. On the other hand, a brand such as
Canady Dry does something much different. Canady Dry packages its
product in several locations and then ships them to wholesale
grocers who distribute them to the local grocery stores and outlets.
This is a great example as to why Canady Dry is strong within local
grocery stores, but why they are not present in vending machines

22. like Pepsi is. Furthermore, I found it really interesting that since the
vending machine market is dominated by Pepsi and Coke, that
Canady Dry actually has to be purchased in order to get into a
vending machine; something that doesn’t happen too often.
Image Differentiation:
Creating a strong and distinctive image requires creativity and hard
work. Symbols, signs, logos and color are used to create strong-
company or brand recognition and image differentiation.
Positioning statement for Pepsi:
As we discussed earlier that “Pepsi positions itself on points of
difference as well as points of parity. Pepsi's POD is their forward
thinking attitude. According to that Pepsi’s positioning statement is
“To new generation, those who want the best taste in drinks, Pepsi is
a cold drink which gave the best taste, low fat in a reasonable
spending.”

23. RECCOMONDATION
 This is one of the most important and most difficult part of
study. I arrived a certain recommendation for a company
after the analysis of data, some of the recommendations are
as follows.
 All brands should be making available in all outlets. The
distributor can do this with timeliness delivery. Availability
will increase visibilities, which in turn increase the sale.
 Pepsi distributor can convince the more retailers for
entering into agreement for exclusive outlet with some
extra benefit.
 He damage Product should be replaced as soon as possible.
 The Sign board should be provided to all the Retailers.
 Another brand of Cola flavor should be introduced and it
should have strong taste and more fizz so as to attract the
customers who like Thumps up more than Pepsi.

24. CONCLUSION
 PepsiCo was found by CELEB BRADHAM in 1902 at North
Carolina in USA, its present CEO is INDIRA NOOYI and
PepsiCo. India holding chairman is Mr. RAJIV BAKSI. In India
it has 34 bottling plant of them 8 are COBO and 26 are
FOBO, in which one is in (Mathura) Varun Beverages Pvt.
Ltd. chhata(Mathura). is a franchise owned bottling plant
(FOBO), producing Pepsi range bottled soft drinks.
 The conclusion of this project report is that PepsiCo
products are profitable and having good distribution
channel but should focus more on their distribution channel
and try to satisfied more by providing them better services.
Pepsi still had some distance to cover to catch up with Coke.