Baidyanath chaubey(sip)


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Baidyanath chaubey(sip)

  1. 1. SUMMER TRAINING PROJECT REPORT ON DISTRIBUTION STRATEGY OF PEPSI VARUN BEVERAGES LTD PEPSICO (Greater Noida) Submitted for the partial fulfillment of the requirement for the award Of POST GRADUATION DIPLOMA IN MANAGEMENT [Affiliated to A.I.C.T.E Approved, New Delhi] (2011-2013)UNDER THE GUIDENCE OF :- SUBMITTED BY :- Mr. Amit Sharma BAIDYANATH CHAUBEY(Senior Customer Executive) I D no. 111012 PGDM Batch : 2011- 2013 GNIT –COLLEGE OF MANAGEMENT GREATER NOIDA –201306 (U.P) 1
  2. 2. CONTENT PAGE NO.Project Detail 1Certificate 2Preface 3Acknowledgement 4Observations 5Executive Summary 6Introduction 7 to 9Company Profile 10 to 17Overview PepsiCo 18 to 19PepsiCo Overcame Competition 20 to 24Business Segment 25 to 35Key Element of Trade 36 to 43Promotion 44 to 47Distribution Strategy 48 to 54Research Methodology 55 to 56Data Analysis From Retailer and Distributor 57 to 91Analysis of Finding and Observation 92SWOT Analysis 93 to 94Conclusion 95 to 96Limitation 97 to 98Recommendation 99 to 101Bibliography 102Annexure 103 to 108 2
  3. 3. GREATER NOIDA COLLEGE OF MANAGEMENT 6-c, Knowledge Park-II, Greater Noida, U.P Date:- TO WHOM IT MAY CONCERNThis is to certify that BAIDYANATH CHAUBEY student of PGDMcourse (2011-2013) at GNIT COLLEGE OF MANAGEMENT with dualspecialization in “MARKETING & IB” has satisfactorily completed thesummer research project on “DISTRIBUTION STRATEGY OFPEPSI”. This study is done under the guidance of the undersigned forpartial fulfillment for the award of PGDM. I wisher all the best forbright future ahead.Mentor:-Mr PRASHANT DEV YADAV 3
  4. 4. PREFACEMarketing plays import role in today’s business scenario in consumerproduct Company, there is such a high competition in the market. Summerproject in PGDM program is providing job experience. In The summerprogram we gain academic knowledge as well as corporate culture.The emphasis in the project is providing the study and an insight into IndianFMCG Business Scenario. The Summer Project is designed to provideparticipation of PGDM program as on the job experience. This has given achance to try and apply the academic knowledge and gain insight intocorporate culture. This helps in developing decision-making abilities andemphasizes on active participation by the student.We undertook our Project in Varun Beverages, a leading Bottler andMarketing partner of the Pepsi Foods. During the training, we had workedon the project “Distribution strategy of PEPSI in GREATER NOIDA.”We gained valuable experience & knowledge during the survey. The Projectconsists of our findings customer behave relate goods market search afterdata analysis & then SWOT analysis & conclusions were drawn and finallyrecommendations were put forward. 4
  5. 5. ACKNOWLEDGEMENTI owe my gratitude to many people who helped and supported me during theentire Summer Training.My sincere thanks to Mr.Prashant Dev Yadav the Guide of the project, forinitiating and guiding the project with attention and care. He/ She havealways been available for me to put me on track from time to time to bringthe project at its present form.My deep sense of gratitude is due to Mr. Ashvani Sharma, Mr. Amit Sharma(Marketing Manager , Senior Customer Executive) Of Varun Beverages Ltd.Surajpur, Greater Noida (U.P). for allowing me to carry out the SummerInternship and this Project at the organization and to be constantly availableto me for the period, for guidance. He/ She also helped me to see the subjectof study in its proper perspective. Thanks and appreciation is also due to theofficials, employees and respondents of Varun Beverages Ltd. Surajpur,Greater Noida (U.P), for their support.I also thank my Institution and myfaculty members without whom this project would have been a distantreality.Signature(Baidyanath Chaubey) Place: Greater NoidaDate: 5
  6. 6. Observations:- • To collect order from each and every outlet. • To check visi-cooler with 100% purity. • To see is the soft drink is in Brand Order. • To see every outlet, is the soft drink present in display rack. • To see every outlet visi- cooler will present in prime location or not. • To visit every outlet in regular basis. • To go every outlet and listen the problems of retailer and shopkeeper related to visi- cooler and soft drink which is to be noted in complaint diary. • To see each that each and every outlet worked in better condition. • To see as a Market developer (M.D) every outlet full fills in terms and conditions with visi-Cooler. • To see as a Market developer (M.D.) if any outlet will not selling your product than you asked why you are not selling my product. Then you give advice to outlet. 6
  7. 7. EXECUTIVE SUMMARYThe distribution network of PEPSI is well known for its efficiency butcompany constantly strives for the betterment of their distribution networksystem. Emphasis of our study was to focus on the customer of companyi.e., the retailers.The Retail Mapping of Greater Noida is an integral step for the assessment,development and betterment of this system. The distribution system not onlycomprises the movement of the products but also incorporates themerchandising of the product, which is very broad in its purview.The project incorporates the analysis of the perform of PEPSI and probinginto opportunities of increasing the market share in Greater Noida. Theentire process had to be in an organized manner in order to delivermeaningful results for the purpose of decision-making. The project was thatof market research with surveys and observations as its major phases withthe objective of gathering of all important information material forstrengthening the position of PEPSI in Greater Noida.PEPSI boasts of having the maximum market share in the beverage segmentin Greater Noida and is in constant process for the betterment of its productperformance and customer as well retailer’s satisfaction. 7
  8. 8. INTRODUCTIONModern age is full of competition. Today only way of success is yourcontinuous 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 changingneeds of the customer through market research & adopt them fruitfully. It ismust for all the companies to make policies according to the customers andthe govt. Today to succeed for any organization has to target its customerneeds, 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 PEPSIand re-entry of COCA-COLA in India in the late 80s when Parley withbrands like Thums up, Limca & Gold spot was a clear leader. Coca-Colatook up the product line of parley in 1993-94; today both brands are theIndians favorite soft drinks. 8
  9. 9. PepsiCo Inc.Type PublicTraded as NYSE: PEP S&P 500 ComponentIndustry Foods, BeveragesFounded North Carolina, U.S. (1965)Founder(s) Donald Kendall, Herman LayHeadquarters Purchase, New York, U.S. 9
  10. 10. Area served WorldwideKey people Indra Nooyi (Chairman & CEO)[1]Products See list of PepsiCo productsRevenue US$ 66.504 billion (2011)[2]Operating income US$ 9.633 billion (2011)[2]Net income US$ 6.462 billion (2011)[2]Total assets US$ 72.882 billion (2011)[2]Total equity US$ 20.899 billion (2011)[2]Employees 297,000 (2011)[2]Divisions PepsiCo Americas Foods; PepsiCo Americas Beverages; PepsiCo Europe; PepsiCo Asia, Middle East & AfricaSubsidiaries List of subsidiariesWebsite 10
  11. 11. COMPANY PROFILE-PEPSI CO. (US) COMPANY PROFILE-PEPSI CO. (US)PepsiCo is a world leader in convenient foods and beverages, with revenuesof about $66.50 billion, over 2, 97,000 employees and total equity $20.899billion. The company consists of the snack business of Frito-Lay NorthAmerica and the beverage and food businesses of PepsiCo Beverages andFoods, which includes PepsiCo Beverages North America (Pepsi-Cola NorthAmerica and Gatorade/Tropicana North America) and Quaker Foods NorthAmerica. PepsiCo International includes the snack businesses of Frito-LayInternational and beverage businesses of PepsiCo Beverages International.PepsiCo brands are available in nearly 200 countries and territories.Many of PepsiCos brand names are over 100-years-old, but the corporationis relatively young. PepsiCo was founded in 1965 through the merger of 11
  12. 12. Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiComerged 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),Lays brand potato chips (created by Herman W. Lay in 1938), Cheetosbrand cheese flavored snacks (1948), Ruffles brand potato chips (1958) andRolled Gold brand pretzels (acquired 1961).PepsiCo is the world leader in the food chain business. It consists of manycompanies amongst which the prominent one is Pepsi cola, frito lay, Pepsifood international, pizza hut, and KFC and taco bell. The group is presentlyinto three most profitable businesses namely, beverages, snack foods andrestaurants. It has scores of big brand available in nearly 150 countriesacross the globe.The beverages segment primarily market Pepsi diet, mountain dew and otherbrands worldwide and 7UP outside the U.S. market. They are positioned inclose competition with Coca-Cola inc. of USA. A point to be noted is thatcoca cola get 80% of its profit from international operation while samefigure of Pepsi co. stand at 6%, the segment is also in the bottling plants anddistribution facilities.The restaurant segment primarily consists of the operations of the worldwidepizza 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 $2billion in itsworldwide operations.When Coca-Cola changed its formula in 1985, Pepsi stepped up itscompetition with its long time archival claiming victory in the cola wars.Coke and Pepsi expanded their rivalry to tea in 1991 when Pepsi formed aventure with #1 Lipton in response to coke’s announced venture with nestle(Nestea) it has won over 30% of the ready to drink tea market, a part of theso called "new age” beverages segment. 12
  13. 13. The beverage industry has witness the phenomenal growth over the last fewyears necessitating capacity increase and builds up of commensurateinfrastructure to meet the business growth, which is accordingly matched.PepsiCo’s success is the result of superior products, high standards ofperformance, distinctive competitive strategies and the high integrity of ourpeople. PEPSI – THE INDIAN EXPERINCES• Pepsi is one of the most well known brands in the world today available inover 200 countries. The company has an extremely positive outlook forIndia. "Outside North America two of our largest and fastest growingbusinesses are in India and China, which include more than a third of theworld’s population." (PepsiCo’s annual report, 1999) • This reflects that India holds a central position in Pepsi’s corporatestrategy. India is a key market for PepsiCo, and at the same time thecompany has added value to Indian agriculture and industry. PepsiCoentered India in 1989 and is concentrating in three focus areas – Soft drinkconcentrate, Snack foods and Vegetable and Food processing • Faced with the existing policy framework at the time, the companyentered the Indian market through a joint venture with Voltas and PunjabAgro Industries. With the introduction of the liberalization policies since1991, Pepsi took complete control of its operations. The government hasapproved more than US$ 400 million worth of investments of which overUS$ 330 million have already flown in • One of PepsiCo’s key strategies was to develop a completely localmanagement team. Pepsi has 19 company owned factories while their Indianbottling partners own 21 13
  14. 14. The two advertisements tags: ‘yehi hai right choice baby’ and ‘nothingofficial about it’ immediately ring a bell- it’s got to be Pepsi.The advertisement tag ‘yehi hai right choice baby’ was the first ‘Hinglish’slogan ever used in the in the Indian market. This slogan proved to be thebest suited one for Pepsi and it was a mega hit and at that moment of time.Pepsi in a short span of its operations in India has found a place in the heartsand minds of the Indian consumers. The success has primarily been due tothe innovative and passionate Indian team, which has been built over theyears. Pepsi is a trendsetter managed and run by Indians, where importantdecisions are taken locally.Pepsi started its operations in India in 1989 and since then PepsiCo has setup a fully integrated operation in India viz. Manufacturing, Research &Development, Marketing, Distribution and Franchising- coveringfruit/vegetable processing, Exports, and Snack Foods & Beverages. In themean time Pizza Hut and Frito Lay’s are the examples in this regard onlyPepsi has 40 bottling plants in India, out of which 16 are company ownedand 24 are owned by Indian franchisees. One of the major players infranchisee is RKJ Group. The RKJ group is Indias leading supplier of retailer brandCarbonated and Non-Carbonated soft drinks, with beverage manufacturingfacilities in India and Nepal. Its experience in the beverage industry datesback to the sixties when it had the first franchise at Agra.It has the license to supply beverages in the territories of Western U.P., partof M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts ofMaharashtra, 9 districts of Karnataka and whole of Nepal. The group has intotal 18 bottling plants in India & Nepal and is responsible for producingand marketing 44% of Pepsi requirement in India.This group has brought name and fame to the Pepsi as in all this regionsPepsi is at the commanding position and in the mean this group hasdiversified itself into ice cream, suiting and shirting’s, restaurants, beer plantin Mauritius & edible oil plant in Sri Lanka. 14
  15. 15. COMPANY PROFILE-JAIPURIA GROUP: IN INDIAWith a Legacy of decades in the industrial arena, the Jaipuria Group ofCompanies now stands at the one thousand five hundred Crore marks. Thegroup 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 segmentsJAIPURIA GROUP is an Rs.1500 Crore, family controlled, reputed businesshouse with over a century of operations in diversified fields.The group as on today can boast of expertise and leadership in the fields offood and beverages, textiles and real estate development with variedinterests 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 businesshouses ofthe country.The following are the major areas of operations of the Jaipuria Group: 15
  16. 16. • Food and Beverages • Textiles • Information Technology • Real Estate • EducationIt can be said with absolute certainty that the RKJ Group has carved out aspecial niche for itself. Our services touch different aspects of commercialand civilian domains like those of Bottling, Food Chain and Education.Headed by Mr. R. K. Jaipuria, the group as on today can lay claim toexpertise and leadership in the fields of education, food and beverages.The business of the company was started in 1991 with a tie-up with PepsiFoods Limited to manufacture and market Pepsi brand of beverages ingeographically pre-defined territories in which brand and technical supportwas provided by the Principals viz., Pepsi Foods Limited. Themanufacturing 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 RestaurantsInternational [formerly PepsiCo Restaurants (India) Private Limited] inIndia. It has exclusive franchise rights for Northern & Eastern India. It hastotal 27 Pizza Hut Restaurants under its company.We diversified into education by opening our first school in Gurgaon undermanagement of Delhi Public School Society. The schools of the group arerun under a Registered Trust namely Champa Devi Jaipuria CharitableTrust.Companies are medium sized, professionally managed, unlisted and closelyheld 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’scentennial year celebrations at Hawaii, USA. The award was presented byMr. 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 16
  17. 17. the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President ofPepsi 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 thechosen businesses; and delight all stakeholders by making economic valueadditions in all corporate functions.MAIN CREDENTIALS1. VARUN BEVERAGES LIMITED received" GOLD STANDARDAWARD" for the production and quality control for the year 1996-97.2. Jaipuria group was adjudged “Best Bottler “out of more than 2000 bottlesall over the world for the year 1996-97.3. In 2011, The Brand Trust Report in India included Pepsi in the list of themost trusted brands of the country. 17
  18. 18. PepsiCo – The Parent CompanyPepsiCo, Inc. is one of the worlds largest food and beverage companies. Thecompanys principal businesses include: • Frito-Lay snacks • Pepsi-Cola beverages • Gatorade sports drinks • Tropicana juices • Quaker FoodsPepsiCo, Inc. was founded in 1965 through the merger of Pepsi-Cola andFrito-Lay. Tropicana was acquired in 1998. In 2001, PepsiCo merged withthe Quaker Oats Company, creating the world’s fifth-largest food andbeverage company, with 15 brands – each generating more than $1 billion inannual retail sales. PepsiCo’s success is the result of superior products, highstandards of performance, distinctive competitive strategies and the highlevel of integrity of our people.Pepsi-Cola North America, headquartered in Purchase, N.Y., is therefreshment beverage unit of PepsiCo Beverages and Foods North America,a division of PepsiCo, Inc. PepsiCo Beverages and Foods North Americaalso comprises PepsiCos Tropicana, Gatorade and Quaker Foods businessesin the United States and Canada. 18
  19. 19. Pepsi-Cola North Americas carbonated soft drinks, including: Pepsi, DietPepsi, Pepsi Twist, Mountain Dew, Mountain Dew Code Red, Sierra Mist,and Mug Root Beer account for nearly one-third of total soft drink sales inthe United States.Pepsi-Cola North Americas non-carbonated beverage portfolio includesAquafina, which is the number one brand of bottled water in the UnitedStates, Dole single-serve juices and Sobs, which offers a wide range ofdrinks with herbal ingredients. The company also makes and markets NorthAmericas best-selling, ready-to-drink iced teas and coffees via jointventures with Lipton and Starbucks, respectively. Overview – PepsiCoThe PepsiCo challenge (to keep up with archrival The Coca-Cola Company)never ends for the worlds #2 carbonated soft-drink maker. The companyssoft drinks include Pepsi, Mountain Dew, and Slice. It owns Frito-Lay, theworlds #1 maker of snacks such as corn chips (Doritos, Fritos) and potatochips (Lays, Ruffles). Cola is not the companys only beverage: PepsiCosells Tropicana orange juice brands, Gatorade sports drink, and Aquafinawater. PepsiCo also sells Dole juices (licensed) and Lipton ready-to-drinktea (licensed from Unilever). Its Quaker Foods division offers breakfastcereals (Life), pasta (Pasta Roni), rice (Rice-A-Roni), and side dishes (NearEast). Wal-Mart is PepsiCos largest customer, accounts for 9% of sales.PepsiCo may be vying for more Pepsi-drinking people but its hefty snacksand juice sales help to quench the companys thirst for bottom-line growth.Frito-Lays salty snacks rule the US market; the snack division accounts forabout one-third of company sales.The company announced a major restructuring in 2007, splitting its twobusiness units (Pepsi-Cola North America and PepsiCo International) intothree: one for US food, a second for US drinks, and a third for food anddrinks abroad. CEO Indra Nooyi said that due to the companys healthygrowth in recent years, PepsiCo is approaching a size that can be bettermanaged as three units rather than two. 19
  20. 20. The split looks like this: PepsiCo Americas Foods includes Frito-Lay NorthAmerica, Quaker, and the Latin American food and snack businesses;PepsiCo Americas Beverages includes North American beverage sales,including Gatorade and Tropicana; and PepsiCo International includesbusiness in the UK, the rest of Europe, Asia, the Middle East, and Africa.With a saturated soft-drink market, the company continues to try newiterations: In 2007 the company introduced its first vitamin-enhanced water,called Aquafina Alive. It signed a licensing agreement with Ben & Jerrys in2006 for the sale of Ben & Jerrys milkshakes in the US, as well as a dealwith Starbucks for the distribution of the coffee purveyors Ethos waterbrand. Hot on the heels of Cokes introduction of Blak, in 2006 Pepsilaunched a coffee-flavored cola, named, Pepsi Max Cino, in the UK.Venturing further into the non-cola category, PepsiCo acquired sparklingjuice companies IZZE and Naked Juice in 2006. It also began sellingFuelosophy, a smoothie drink, at organic grocery store chain Whole Foods,and struck a deal to develop products with juice maker Ocean SprayCranberries.Bowing to the publics growing concern about childhood obesity, in 2006Pepsi, along with Coca-Cola, Cadbury Schweppes, and the AmericanBeverage Association agreed to sell only water, unsweetened juice, and low-fat milk to public elementary and middle schools in the US. As for highschools, the agreement calls for no sugary sodas to be sold and one-half ofthe offered drinks to be water, diet sodas, lemonade, or iced tea. Theagreement was facilitated by former president Bill Clinton.CEO Steve Reinemund stepped down as CEO in 2006 in order to spendmore time with his family. His replacement was Indra Nooyi, the companyspresident and CFO. Indian-born Nooyi, the 11th female CEO of aFORTUNE 500 company, has been instrumental in strategic decisions at thecompany, such as the acquisition of Tropicana and merger with QuakerOats.Shortly after her appointment, Nooyi restructured the top level of power atthe company. She appointed John Compton, previously head of the Quaker-Tropicana-Gatorade unit, to the newly created position of CEO for PepsiCoNorth America, reporting directly to her. 20
  21. 21. How PepsiCo overcame Competition How PepsiCo outgunned Coke:Losing the cola wars was the best thing that ever happened to Pepsi whileCoke was celebrating; PEPSI took over a much larger market.Pepsi beat Coke in December for the first time in their 108-year rivalry,surpassing its nemesis in market capitalization. The great irony of Pepsisrise is this: It has never sold more soda than Coke, even today."Pepsis been on fire," notes Robert van Brugge, beverage analyst withSanford 55Bernstein. Over the past five years its stock has risen more than athird, while Cokes has sunk 30 percent.Even ten years ago, it was easy to write off PepsiCo (Research) as the loserin the cola wars against Coke (Research): the proof was everywhere. Thecompanys profits trailed those of its rival in Atlanta by 47 percent. Its valuein the stock market was less than half of Coca-Colas. Cokes CEO at thetime, Roberto Goizueta, was so sure of his companys dominance that hepractically dismissed Pepsi, telling FORTUNE, "As theyve become lessrelevant, I dont need to look at them very much anymore."PepsiCo turned its cola Waterloo into an opportunity to retrench, regroup,and ultimately outflank its old foe. Losing the cola wars, it turns out, was thebest thing that ever happened to Pepsi. It prompted Pepsis leaders to lookoutside the confines of their battle with Coke.A decade ago, Coke offered investors a compelling story: a recession-resistant product inexpensive enough that consumers would buy it in goodtimes and bad, but valued enough that they would willingly pay an extranickel or so above what no-name brands charged.What Coke investors didnt envision was that an emerging preference forother soft beverages --water, sports drinks -- would fracture demand. Nor didthey see that the business strengths that once applied to cola would take holdacross a broadened soft drink and snack-food market -- a market that Pepsi,and not Coke, dominated. 21
  22. 22. "They were the first to recognize that the consumer was moving tononcarbonated products, and they innovated aggressively," observes GaryHemphill of Beverage Marketing.PepsiCo embraced bottled water and sports drinks much earlier than its rival.Pepsis Aquafina is the No. 1 water brand, with Cokes Dasani trailing; insports drinks, Pepsis Gatorade owns 80 percent of the market while CokesPowerAde has 15 percent.Throughout the past five years under CEO Steve Reinemund, the companyhas deftly moved with every shift in consumer tastes. "Hes thinking aboutwhat the products should look like in the future," says Victor Dzau, adirector of PepsiCo. 22
  23. 23. SCA’sThree major sustainable competitive advantages give PepsiCo acompetitive edge as we operate in the global marketplace: • Big muscular brands; • Proven ability to innovate and create differentiated products; and • Powerful go to market systems.Build and Born SCA’s:Hyper competition; • Cost and Quality. • Timing and know how. • Strongholds. • Deep pockets. Strategic Competitive Advantage Exploitation Launch Counterattack Profits from a sustained competitive Traditional View advantage Time Firm has already moved to advantage 2 Exploitation Profits from a Counterattack series of actions Hypercompetition Time Launch 23
  24. 24. Fig: 1Coke: 1886; Pepsi: 1893.1933: Pepsi struggling to stave off bankruptcy. Dropped price of its 10c, 12oz. bottle to 5c, making it a better value. Ad jingle “twice as much for anickel” better known in the US than the Star Spangled Banner. Coke Price / Ounce Price / Ounce Pepsi Coke Pepsi Perceived Quality Perceived Quality Fig.2Pepsi keeps price advantage through 60s and 70s, when Pepsi charged itsbottlers 20% less for its concentrate.With rising ingredient costs, Pepsi could no longer offer twice as much forthe same price. So, it raised price to Coke’s level giving it a war chest to fuelan aggressive ad campaign. Battle shifted from Price to Quality, with Pepsitargeting the youth. Coke Price / Ounce Price / Ounce Pepsi Coke Pepsi 24 Perceived Quality Perceived Quality
  25. 25. What followed was the Pepsi Challenge & “Real Thing” Coke adsFig.3 Pepsi Coke First move:Price / Ounce Price / Ounce Pepsi Challenge Youth & Middle Class Segments 2nd move: Coke’s Ad warFig.4 Perceived Quality Perceived QualityPerceived quality caught up. Deeper pocketed and lower cost Coke initiateda price war in selective markets where Pepsi was weak in the 70s. Pepsiresponded with its discounts and by the end of the 80s, 50% of food storesales were on discount.Other companies moved into the lower left quadrant of. 25
  26. 26. BUSINESS SEGMENTSThe RKJ Group is divided into three-business segments- Beverage,Food and Education. It has a leading market position in each of itsthree business segments. Our balanced portfolio produced a solidbusiness performance. Products and services, which look to thefuture, ensure that we will be well placed in growth markets. 26
  27. 27. BEVERAGE INDUSTRYIndian Beverages industry’s size is Rs. 8000 Crore and it is dominated bytwo player’s viz. Pepsi & Coke only. This high profile industry has lot ofpotential for growth as per capita consumption in India is 8 bottles a year ascompared to 20 bottles in Sri Lanka, 14 in Pakistan, while 12 bottles aperson in Nepal.The RKJ group is Indias leading supplier of retailer brand Carbonated andNon-Carbonated soft drinks, with beverage manufacturing facilities in Indiaand Nepal. Its experience in the beverage industry dates back to the sixtieswhen it had the first franchise at Agra. 27
  28. 28. The group manufactures and markets carbonated and Non-Carbonated SoftDrinks and Mineral Water under Pepsi brand. The various flavors and sub-brands are Pepsi, Mirinda Orange, Mirinda Lemon, Mountain Dew, and7UP, Slice Mango, Evervess Soda and Aquafina.It has the license to supply beverages in the territories of Western U.P., partof M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts ofMaharashtra, 9 districts of Karnataka and whole of Nepal. The group has intotal 18 bottling plants in India & Nepal and is responsible for producingand 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 bottlesper minute, which would mainly cater to northern markets of India. And infuture, they will also be used to manufacture fruits mince- based soft drinks Like slice and mangola. INGREDIENTS OF SOFT DRINK:In the United States, Pepsi is made with carbonated water, high fructose cornsyrup, caramel color, sugar, Phosphoric acid, caffeine, citric acid and naturalflavors. A can of Pepsi (12 fl ounces) has 41 grams of carbohydrates (allfrom sugar), 30 mg of sodium, 0 grams of fat, 0 grams of protein, 38 mgof caffeine and 150 calories. The caffeine-free Pepsi-Cola contains the sameingredients but without the caffeine.The original Pepsi-Cola recipe was available from documents filed with thecourt at the time that the Pepsi-Cola Company went bankrupt in 1929. Theoriginal formula contained neither cola nor caffeine.In August 2010, PepsiCo entered into a 4-year agreement with Senomyx forthe development of artificial high-potency sweeteners for PepsiCo 28
  29. 29. beverages. Under the contract, PepsiCo is paying $30 million to Senomyxfor the research and future royalties on PepsiCo products sold usingSenomyx technology.According to PepsiCo, PepsiCos collaboration with Senomyx will focus onthe discovery, development and commercialization of sweet enhancers, withthe purpose of providing lower-calorie PepsiCo beverages. PepsiCo willhave exclusive rights to the Senomyx sweet flavor ingredients developedthrough the collaboration.See also Diet Pepsi Pepsi spokespersons Pepsi Max Big One (Roller coaster) Pepsi Orange Streak (Roller coaster) Pepsi Python (Roller coaster) Pepsi Billion Dollar Sweepstakes Mountain Dew AMP Energy Citrus Blast Pepsi NextWe only use the finest ingredients to make Pepsi-Cola products. Toguarantee our consumers consistent quality, each ingredient must pass ourhigh standards, rigorous quality control tests and strict bottling procedures. Pepsi-Cola products contain natural flavors, including extracts of the kolanut ND flavor oils derived from natural sources such as citrus and otherfruits. Caramel (made from corn sugar) adds color and flavor to our colas.Other ingredients add a refreshing taste: phosphoric acid in colas; citric acidand sodium citrate in Mountain Dew, Slice and Diet Pepsi.We also put a freshness date on every can and bottle. Soft drinks may losesome flavor over time so our freshness date tells consumers when theproduct 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 isessentially no fat in any Pepsi-Cola a product. The main ingredients found in 29
  30. 30. Pepsi-Cola products include carbonated water, carbohydrates, sugar, sodium,potassium and caffeine. For a complete breakdown by ingredients byproduct, see our product information for Pepsi, Diet Pepsi, Mountain Dew,Slice and Aquafina.Ascorbic AcidAnother name for Ascorbic Acid is Vitamin C the Ascorbic Acid used in ourcarbonated soft drinks functions as an antioxidant to protect the flavors,color, and taste. In some beverages we also add it to provide the nutritivevalue found in Vitamin C.AspartameAspartame is a sugar substitute used in our diet beverages and many otherfood products. Aspartame is made of the same building blocks as protein, soit is considered a "nutritive sweetener," but the very small amounts used indiet drinks contribute no calories.Blue1Blue 1 is a FDA-approved food coloring used in a variety of products suchas jellies, condiments, puddings, and beverages.Brominated Vegetable Oil (BVO)Brominated vegetable oil has been used by the soft drink industry since1931. It is a widely used food additive that has been extensively tested andapproved by the U.S. Food & Drug Administration.Brominated vegetable oil is derived from soybean oil that has been modifiedin order to keep the flavoring oils well blended.Caffeine 30
  31. 31. Caffeine provides a characteristic flavor to soft drinks. Caffeine is naturallyfound in coffee, tea and chocolate. For comparison, an 8-oz. cup of brewedcoffee 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 coffeetherefore contains three to four times as much caffeine found in a caffeinatedcolon.There is no caffeine in Caffeine Free Pepsi, Caffeine Free Diet Pepsi,Aquafina, Slice, Mountain Dew or Mirinda.CaramelCaramel is a flavoring that is added to some of our beverages.Citric AcidCitric Acid can be found in citrus fruits such as lemons and oranges. Citricacid is used to bring out the flavor of other ingredients and imparts a tang ortartness to beverages. Citric acid is not Vitamin C. the same fruits that havecitric acid often have Vitamin C but the technical name for Vitamin C isascorbic acid.Gum ArabicGum Arabic is a purified natural vegetable gum obtained from the acaciatree and is used in keeping our carbonated beverages well blended.High Fructose Corn SyrupHigh Fructose Corn Syrup (HFCS) is a sugar derived from corn andprovides sweetness and taste to our beverages.HFCS has the same sweetness as table sugar (sucrose) and has almost theidentical composition of fructose and glucose.Natural Flavorings 31
  32. 32. Natural Flavorings are flavoring ingredients that are the essences or extractsderived 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, whichare considered part of our secret formula. The term natural flavor is definedby the food and drug administration and all of our natural flavorings meetthis definition.Phosphoric AcidA small amount of phosphoric acid is added to our soft drinks. However, itis greatly diluted and is fully approved by the U.S. Food and DrugAdministration 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 widelydistributed in the food supply, including fish, milk, meat, eggs and cerealgrains.PotassiumPotassium in Pepsi-Cola products may come from water or as part of certainingredients. For example, potassium may be combined with benzoic acid,which helps prevent spoilage and flavor changes. Potassium is an electrolytethat helps meet the mineral needs of active people.QuillaiaQuillaia Extract is a purified extract derived from the bark of the Quillaiatree. It is carefully selected based on its characteristics. It is cooked, filteredand pasteurized. It is FDA-approved, non-hazardous. Quillaia is found insome of our frozen drinks.Red 40Red 40 is a FDA-approved food coloring used in beverages. 32
  33. 33. SodiumAll of our products are "low sodium" and contains less than 110 mg pereight-fluid-ounce serving. A number of beverages have less than 35-mgsodium per serving, so they are considered "very low sodium" products.SugarRegular soft drinks and sports drinks are sweetened with sugar. There aremany types of sugar available today. In soft drinks and sports drinks, thesugar is primarily high fructose corn syrup, which comes from corn.Total CarbohydratesTotal carbohydrates include the sugars and any carbohydrate-like parts ofingredients, such as organic acids. Although diet drinks may have no sugar,they may contain more than half a gram of carbohydrate. Yellow5Yellow 5 is a FDA-approved food coloring. Used since 1916, it is found in avariety of products such as skim milk, yogurt and macaroni and cheese. 33
  34. 34. FOOD INDUSTRYThe last decade has been a period of dynamic growth for non-alcoholicdrinks and has witnessed completely new segment of the food market inIndia taking shape. Food market at stake in India is enormous. The foodchain and the forces acting on the food chain are changing rapidly, and in agenerally positive manner.Indias sheer size and diversity are enough to make it an attractive market fornearly every major food, beverage and agribusiness company. A KSATechnopak 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 withPepsi Foods, it decided to venture into food sector, which is second largestbusiness for Pepsi all over the world. Fast food is the most happening thingacross the world. The group became the first franchisee for Yum RestaurantsInternational formerly PepsiCo Restaurants (India) Private Limited in India.It has exclusive franchise rights for Northern & Eastern India. Out of 56operational Pizza Hut restaurants in the country 27 restaurants are ownedand 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 thefood industry. Ice creams and frozen desserts are convenience products,which are ideally suited to the emerging lifestyles and eating trends ofUrban India. 34
  35. 35. The RKJ group has its presence in the Ice Cream segment since 1991, whenit 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 andideas to build brand preferences and awareness and it is one of the mostimportant tools which a company uses to direct persuasive communicationto directive buyers in public or to educated people to avoid hard drink and soon.The basic objective of advertising is sales promotion sales promotionexpenditure have been increasing as a percent of budget expenditureannually and the growth is likely to continue in future. Our celebrities signedby the PepsiCo are as follows: For PepsiCo.Celebrities:- • Amitabh Bachchan • Sharukh Khan • Saif Ali Khan • Fardeen Khan • Kareena Kapoor • Preeti Zinta • Priyanka Chopara • Kajol • Rani Mukharjee • Ranbeer Kapoor 35
  36. 36. Cricketers:- • Sachin Tendulkar • Saurav Ganguly • Yuvraj Singh • Harbhajan Singh • Rahul Dravid • Zaheer Khan • Mohammad Kaif • MS Dhoni (Captain Team India)Tennis Stars:- • Leander Paes • Mahesh BhupatiFootball Players:- • Cyrus Broacha • Bhaichung Bhatia 36
  37. 37. 37
  38. 38. KEY ELEMENTS OF THE TRADE1. JO DIKHTA HAI WAI 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. 38
  39. 39. Products Availability of PepsiSl. Products 20 250 300 330 500 600 1000 1200 2000No. 0 ml. ml. ml. ml. ml. ml. ml. ml. ml1. Pepsi  -  - -  - - 2. Pepsi diet - - - -  - - - -3. Pepsi Gold - - - - -  - - -4. Mirinda  -  - -  - - 5. Mirinda  - - - - - - - - Lime6. M. Sorbet - - - - -  - - -7. 7Up  -  - -  - - 8. M. Dew  - - - -  - - 9. Pepsi Can - - -  - - - - -10. 7Up Can - - -  - - - - -11. Mirinda - - -  - - - - - Can12. M. Dew - - -  - - - - - Can13. Diet Can - - -  - - - - -14. Slice -  - -  - -  -15. Aquafina - - - - - -  - -16. Tropicana  - - - - -  - -17. Everest - -  - -  - - - Lehar 39
  40. 40. Products Availability of Coke:-Sl. Products 200 250 300 330 600 1000 1200 1500No. ml. ml. ml. ml. ml. ml. ml. ml.1. Coco-cola  -  -  - - 2. Thumps-Up  -  -  - - 3. Sprite  -  -  - - 4. Fanta  -  -  - - 5. Limca  -  -  - - 6. Maaza -  - -  -  -7. Coca-cola Can - - -  - - - -8. Thumps Up - - -  - - - - Can9. Sprite Can - - -  - - - -10. Fanta Can - - -  - - - -11. Cole Diet - - -  - - - -12. Kinely Soda - -  -  - - - 40
  41. 41. 13. Kinely - - - - -  - -14. Fruit Juice NA - - - - NA - - Pepsi Products’ Price (in Rs.) List for Retailers Sl. Products 200 250 300 330 500 600 100 120 2000 No. ml. ml. ml. ml. ml. ml. 0 0 ml. ml. ml. 1. Pepsi 166 - 216 - 560 - - - 500 2. Pepsi diet - - - - - 560 - - - 3. Pepsi Gold - - - - - - - - - 4. Mirinda 166 - 214 - 560 - - - 530 5. Mirinda 216 - - - - - - - - Lime 6. M. Sorbet - - - - - -- - - 7. 7Up 216 - 214 - - 560 - - 530 8. M. Dew - - - - 454 - - - 454 Can 9. Pepsi Can - - - - - - - - - 10. 7Up Can - - - - - - - - - 11. Mirinda - - - - - - - - - Can 12. M. Dew - - - - - - - - - Can 13. Diet Can - - - - - - - - - 14. Slice - 214 - - 560 - - - - 15. Aquafina - - - - - - 105 - - 16. Tropicana - - - - - - - - - 41
  42. 42. 17. Everest - - - - - - - - - LeharPepsi Products’ Price (in Rs.) List for Retailers Sl. Products 200 250 300 330 500 600 100 120 2000 No. ml. ml. ml. ml. ml. ml. 0 0 ml. ml. ml. 1. Pepsi 168 - 214 - - 560 - - 500 2. Pepsi diet - - - - - 560 - - - 3. Pepsi Gold - - - - - - - - - 4. Mirinda 168 - 214 - - 560 - - 530 5. Mirinda 168 - - - - - - - - Lime 6. M. Sorbet - - - - - - - - - 7. 7Up 165 - 214 - - 560 - - 530 8. M. Dew - - - - 454 - - - - Can 9. Pepsi Can - - - - - - - - - 10. 7Up Can - - - - - - - - - 11. Mirinda - - - - - - - - - Can 12. M. Dew - - - - - - - - - Can 13. Diet Can - - - - - - - - - 14. Slice - 214 - - 444 - - 550 - 15. Aquafina - - - - - - 105 - - 16. Tropicana - - - - - - - - - TYPE OF PACKS AVAILABLE :- 42
  43. 43. QUANTITY MRP/PCs RATES200ml (24b/s per crate) 10/- 168/-300ml (24b/s per crate) 12/- 168/-600ml (24b/s per peti) 27/- 216/-2-liter (9b/s per peti) 59/- 500/-200ml (24b/s per crate) slice 10/- 166/-1000ml (12b/s per crate) slice 40/- 430/-200ml (24PCspercrate) tetra slice 10/- 168/-500ml (24b/spercrate) diet Pepsi 20/- 560/-330ml (24PCs) diet Pepsi cane 25/- 454/-330ml (24PCs) Pepsi cane 20/- 454/-500ml (24PCs) pepsi café-chino 20/- 430/-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/- 43
  44. 44. Aquafina-2liter (12b/s per peti) 199/-A price generally depends upon the company. PRICING OF EMPTIESQUANTITY PRICE200ml Rs.165 per crate300ml Rs.214 per crateThe Shell Cost Rs 100/- eachEmpty bottle Rs 6/- eachPROMOTION: - 44
  45. 45. The promotion budget is set by the Head Office and thereby is distributedamong the different bottler’s all over the country on the basis of there pastperformances & requirements. Distribution Network in Greater Noida PEPSI FOODS LTD (Parent Co.) Greater Noida VARUN BEVERAGE LTD (Bottling Plant) Greater NoidaDistributors Distributors C&F Distributors Fat Dealer (2) Fat Dealers (4) FatDealers (2)Retailers Retailers Retailers Retailers CONSUMERSSlogans 45
  46. 46.  1939–1950: "Twice as Much for a Nickel" 1950: "More Bounce to the Ounce" 1950–1957: "Any Weather is Pepsi Weather" 1957–1958: "Say Pepsi, Please" 1958–1960: "Dont be a Tramp, Buy a Can" Zane 1961–1964: "Now Its Pepsi for Those Who Think Young" (jingle sung by Joanie Sommers) 1964–1967: "Come Alive, Youre in the Pepsi Generation" (jingle sung by Joanie Sommers) 1967–1969: "(Taste that beats the others cold) Pepsi Pours It On". 1969–1975: "Youve Got a Lot to Live, and Pepsis Got a Lot to Give" 1975–1977: "Buy a can 50p" (United Kingdom) 1977–1980: "Join the Pepsi People (Feeling Free)" 1980–1981: "Catch That Pepsi Spirit" (David Lucas, composer) 1981–1983: "Pepsis got your taste for life" 1983: "Its cheaper than Coke!" 1983–1984: "Pepsi Now! Take the Challenge!" 1984–1991: "Pepsi. The Choice of a New Generation" (commercial with Michael Jackson and The Jacksons, featuring the Pepsi version of "Billie Jean", "Bad" and "Black or White". "Black of White"s was promoting the Dangerous World Tour.) 1984–1988: "Diet Pepsi. The Choice of a New Generation" 1988–1989: "Diet Pepsi. The Taste Thats Generations Ahead" 1989–1990: "Diet Pepsi. The Right One" 1989–1992: "Diet Pepsi. The Taste That Beats Diet Coke" 1986–1987: "Weve Got the Taste" (commercial with Tina Turner) 1987–1990: "Pepsis Cool" (commercial with Michael Jackson, featuring Pepsi version of Bad) 1990–1991: "You got the right one Baby UH HUH" (sung by Ray Charles for Diet Pepsi) 1990–1991: "Yehi hai right choice Baby UH HUH" (Urdu, Hindi – meaning "This is the right choice Baby UH HUH") (Pakistan), (India) 1991–1992: "Gotta Have It"/"Chill Out" 1992:"The Choice Is Yours" 46
  47. 47.  1992–1993: "Be Young, Have Fun, Drink Pepsi" 1993–1994: "Right Now" (Van Halen song for the Crystal Pepsi advertisement) 1994–1995: "Double Dutch Bus" (Pepsi song sung by Brad Bentz) 1995: "Nothing Else is a Pepsi" 1995–1996: "Drink Pepsi. Get Stuff." (Pepsi Stuff campaign) 1996:"Change The Script" 1996–1997: "Pepsi: Theres nothing official about it" (During the Wills World Cup (cricket) held in India/Pakistan/Sri Lanka) 1997–1998: "Generation Next" (with the Spice Girls) 1998–1999: "Its the cola" (100th anniversary commercial) 1999–2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola" (commercial with Britney Spears/commercial with Mary J. Blige) 1999–2006: "Yeh Dil Maange More!" (Hindi – meaning "This heart asks for more") (India) 2002: "Change the World" (Japan) 2003: "Its the Cola"/"Dare for More" (Pepsi Commercial) 2006–2007: "Why You Doggin Me"/"Taste the one thats forever young" (Mary J. Blige) 2007–2008: "More Happy"/"Taste the once thats forever young" (Michael Alexander) 2000–present: "Pepsi ye pyaas heh badi" ((Urdu), ((Hindi)) meaning "There is a lot of thirst" (Pakistan)) ((India)) 2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake) 2008: "Pepsi is #1" TV commercial (Luke Rosin) 2008–present: "Something For Everyone" 2009–present: "Refresh Everything"/"Every Generation Refreshes the World" 2009–present: "Yeh hai youngistaan meri jaan" (Hindi – meaning "This is our young country my baby") 2009–present: "My Pepsi My Way"(Pakistan) (India) 2009–present: "Refresca tu Mundo" (Spanish – meaning "Refresh your world") (Spanish Spoken countries in Latin America) 2009: "Joy It Forward" (Canada) 2010–present: "Every Pepsi Refreshes The World" 47
  48. 48.  2010–present "Pepsi. Sarap Magbago." (Philippines – meaning "Its nice to change") 2010–2011 "Badal Do Zamana" (Urdu – meaning "Change The World" by CALL)(Pakistan) 2010–2011 "Love!" (Japan, for Pepsi Nex) 2010–present: "Pode ser bom, pode ser muito bom, pode ser Pepsi" (Can be good, can be very good, can be Pepsi) – Brazil and Portugal 2011–present: "Change the game" (India, Bangladesh & Pakistan for the 2011 Cricket World Cup) 2011–present "Dunya Hai Dil Walon Ki" (Pakistan-meaning World is For Lovers by Ali Zafar) 2011–present "Ici, cest Pepsi" (Québec-meaning Here, its pepsi) 2011–present "Go next!" (Japan, for Pepsi Next) 2011–present "Summer Time is Pepsi Time" 2011–present "Born in the Carolinas" 2012: "Where theres Pepsi, theres music" – used for the 2012 Super Bowl commercial featuring Melanie Amaro 2012 "Live For Now" 2012 Pepsi, Now “Change the Game”. 48
  49. 49. DISTRIBUTION STRATEGIESA Company can choose any of the following distribution types: -• Exclusive Distribution• Selective Distribution• Intensive Distribution“PEPSI” HAS ADOPTED THE INTENSIVE DISTRIBUTIONSTRATEGY.INTENSIVE DISTRIBUTION:A Strategy of intensive distribution is characterized by placing the goods orservices in as many outlets as possible. When the consumer requires a greatdeal of location convenience, it is important to offer greater intensity ofDistribution. This strategy is generally used for convenience items such asTobacco, gasoline, and soap, snack foods & bubblegum.Manufactures are constantly tempted to move from exclusive or selectivedistribution to more intensive distribution to increase their coverage andsales and you could find Pepsi in nursing homes, confectionery shops,departmental stores; you name it & Pepsi is available there. 49
  50. 50. DISTRIBUTION CHANNEL REDIFINEDPepsi has redefined distribution to strengthen their competitive advantage inthe emerging consumer and market scenario. Their earlier focus was to drivewide availability and enable easy access to their brands for consumers. Nowthey seek to go well beyond this distribution paradigm. Their new approachis more holistic touching consumers in multiple ways at the point ofpurchase and more importantly, creating opportunities for customers toreceive brand message and experience our brands.They are proactively addressing these emerging trends by approachingdistribution and channels in a much broader way. They are shifting emphasisfrom mere reach or availability expansion to touching consumers with a 3-way convergence- of product availability, brand communication and higherlevel of brand experience.They are thus going beyond delivering products and creating greaterengagement and interaction around the purchasing experience. Product Availability Point Of Purchase Brand Brand Communication ExperiencePepsi’s reinvention of distribution is built on an understanding of emergingconsumer trends, the retail environment and the growth drivers of ourbrands. 50
  51. 51. Pepsi’s distribution system is a key external resource. Normally it has takenyears to build and cannot be easily changed. It ranks in importance with keyinternal resources such as manufacturing, research, engineering and fieldsales personals. It represents significant corporate commitment to setpolicies and practices that constitute the basic fabric on which is woven anextensive set of long run relationship. 51
  52. 52. CHANNEL 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 fromsupplier of the raw material to the end customer. The physical flow of Pepsifrom its manufacturing unit at Kosi (Varun Beverages) to various retailers inSahibabad is as follows- 52
  53. 53. PRODUCT & PACK PROFILEPRODUCT: -Carbonated Soft Drinks (CSD) or Soft Drinks as they are popularly knownare one of the largest FMCG market in the whole world with the total annualsales around $40 billion. This product is generally available in four kinds ofpacking.• Glass Bottles• Pet Bottles• Cans• Fountain rimFLAVORS: -• Cola• Orange• Clear Lemon• Cloudy Lemon• Berry• Ginger• Mango SliceOut of these products the 70% of the sales of the company come from theCola brand, which is the market leader in the most part of the country ofthese kinds of packaging in which the product is available make them 80%of the sales come from these bottles. The businesses of returnable bottles arevery cumbersome and make the market very complex and demanding. 53
  54. 54. Facilities Provided By The Customer To The Retailer1. VISI COOLER• 65 Liter• 110 Liter• 120 Liter• 165 Liter• 200 Liter• 210 Liter• 220 Liter• 300 Liter• 320 Liter• 330 Liter• 500 LiterAccording 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 54
  55. 55. 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. 55
  56. 56. RESARCH METHODOLOGYResearch in common refers to a search of knowledge. One can also defineresearch as a scientific & systematic search for pertinent information of aspecific 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 decidingResearch plan for gathering effective information related to this researchproject. The research consists of following steps, which are discussedsubsequently.Research Design:Descriptive Research: In my market survey descriptive research process wascarried 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 Ghaziabad & forsecondary data I went through Books, Journals & Internet. The informationcollected is relevant, correct & unbiased.Research Design:I followed survey technique for collecting the data. In market surveyresearch approach. Here, I carried out information from retailers havecarefully selected the instrument & methods of surveying like I have chosenpersonal contact methods because of higher response rate & meaningfulresponses this helped me to get the general feedback in Pepsi, etc.Reach Instrument:The research instrument used was EDS form. In which market informationdetail of each outlet should be filled in EDS form. For this I have visited 56
  57. 57. each & every outlet & check all the brands & packs of Pepsi are available ornot or which one is available in comparison with Coke & filled it in EDSforms. In my research process I have used closed ended & open-endedquestionnaire where respondents could answer in their own manner.Through this I was able to extract information from the respondents aboutPepsi’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 Greater Noida.Sampling Size: I have surveyed about each & every outlet of the areaspecified to me so size would reach upto 700 retailers.Elementary Retailers:The geographical limit is the area of Greater Noida.Contact Method:In my research process, I have collected information through personalinterview process with the help of EDS. Form given by the companybecause it is the most reliable & accurate method for collecting primary data.Through this, the analysis of body language & facial expressions can bemade.Methods of data interpretation:In this market study I have used pie chart for data analysis & interpretationbecause pie chart is the easiest & comprehensive medium for presentation ofdata.Sampling unit is a single retailer’s outlet which may be:-provision store,stationery shop, eatery &kiosk.The universe studied is the sum of the retailers in the Greater Noida area. 57
  58. 58. DATA ANALYSIS FROM RETAILERS &DISTRIBUTORS PERSPECTIVE:Frequencies PepsiCo having good distrbution channel Strongly agree Agree Cant Say Strongly Disagree 6.67% Dis Agree 3.67% 18.67% 7.0% 64.0%If we see the chart then we find that out of 100% respondent 64% are agreethat PepsiCo have good distribution channel and only 18.67% are stronglyagree, the data shows that company should focus on their distribution 58
  59. 59. channel and try to convert customer in strongly agree respondent byproviding them better services and schemes. Distribution channel is importent in positioning of product Strongly agree Agree Cant Say Strongly Disagree 1.0% Dis Agree 18.0% 41.33% 38.33% 59
  60. 60. If we see the chart then we find that out of 100% respondent 41.33%respondent are strongly agree that distribution channel have an importantrole in positioning of the product and 38.33% are agree and rest are disagree,it shows that our objective is fulfilled by this research and we can say that ifwe have to promote our product then we should have strong distributionchannel. V.C. coolors provided by the company yes No 29.67% 70.33% 60
  61. 61. If we see the chart then we find that out of 100% respondent, 70.33% aresaying that they are getting V.C. coolers but 29.67 % are saying that they arenot getting, it means company is not focusing on all retailers that majorconcerns for the organization. PepsiCo relationship with the retailers/distributors Strongly agree Agree Cant Say Strongly Disagree 4.67% Dis Agree 10.0% 27.33% 3.67% 54.33% 61
  62. 62. If we see the chart then we find that out of 100% respondent 27.33%respondent are strongly agree that PepsiCo has maintaining goodrelationship with them and 10% are strongly disagree and 54.33 % are agree,it shows that company should thing that how can they maintain betterrelationship with every retailers and distributors. 62
  63. 63. Perception of retailers/distributors towards the pepsiCo Distribution channel Excellent Good Bad Worst 10.67% 5.33% 35.33% 48.67%If we see the chart then we find that out of 100 % respondent only 35.33%are saying that PepsiCo have excellent distribution channel and 10.67% aresaying that PepsiCo have worst distribution and 48.67 % are saying thatPepsiCo have good distribution channel, here area of concern that howcompany can make happy those respondent who are thinking that PepsiCo 63
  64. 64. have worst/bad Distribution channel and how can company develop gooddistribution channel and change the perception of retailers and distributors. "If better scheme is given then replace with coke" yes No 48.67% 51.33%If we see the chart then we find that out of 100% respondent, 51.33%respondent are saying that if they will get better services and scheme thenthey will switch over to another brand like coke and only 48.67% are sayingthat they will not switchover, it show that company should focus that how 64
  65. 65. can be provided better schemes and services to the retailers and distributorsin result they will not switchover to another brand.Cross tabulation: PepsiCo having good distribution channel * PepsiCo relationship withthe retailers/distributors Symmetric Measures As- sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .593 .042 12.706 .000(c)IntervalOrdinal by Spearman .532 .048 10.851 .000(c)Ordinal CorrelationN of Valid Cases 300A. Not assuming the null hypothesis.B. Using the asymptotic standard error assuming the null hypothesis.C.Based on normal approximation. 65
  66. 66. Bar Chart 140 PepsiCo relationship with the retailers/distributors 120 Strongly agree Agree Cant Say 100 Strongly Disagree Dis Agree 80 C n u o t 42.33% 60 40 18.33% 20 8.33% 5.67% 1.33% 1.0% 0.67% 0.67% 0.33% 0 Strongly Agree Cant Say Strongly Dis Agree agree Disagree PepsiCo having good distrbution channelIf we see the table then we find that the relationship with the retailers anddistributors having an important role in maintaining the good distributionchannel because 42.33% respondent are agree to say that we have goodrelation with the PepsiCo and that shows that PepsiCo having gooddistribution channel. PepsiCo relationship with the retailers/distributors * Time taken bythe company to make reach the product at retailers shop 66
  67. 67. Symmetric Measures As sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .710 .027 17.383 .000(c)IntervalOrdinal by Spearman .664 .036 15.334 .000(c)Ordinal CorrelationN of Valid Cases 300a. Not assuming the null hypothesis.b. Using the asymptotic standard error assuming the null hypothesis.c. Based on normal approximation. 67
  68. 68. Bar Chart 100 Time taken by the company to make reach the product at retailers shop 80 One Day 3 Day One Week One Month 60 C n u o t 29.33% 40 24.67% 22.0% 20 8.67% 5.33% 1.67% 1.33% 2.0% 0 0.33% Strongly Agree Cant Say Strongly Dis Agree agree Disagree PepsiCo relationship with the retailers/distributorsIf we see the table then we find that out of 100% respondent 29.33%respondent are saying that we have good relation with the PepsiCo becausethey are providing products at right time .PepsiCo relationship with the retailers/distributors * V.C. coolers providedby the company. 68
  69. 69. Symmetric Measures As sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .592 .046 12.674 .000(c)IntervalOrdinal by Spearman .535 .047 10.927 .000(c)Ordinal CorrelationN of Valid Cases 300a. Not assuming the null hypothesis.b. Using the asymptotic standard error assuming the null hypothesis.c. Based on normal approximation. 69
  70. 70. Bar Chart 140 V.C. coolors provided by the company 120 yes No 100 80 C n u o 44.33% t 60 40 24.67% 20 10.0% 10.0% 2.67% 0 0.33% 1.0% Strongly Agree Cant Say Strongly Dis Agree agree Disagree PepsiCo relationship with the retailers/distributorsIf we see the table then we find that out of 100% respondent 44.33%respondent are agree to say that they have good relationship with PepsiCobecause of they are getting visi coolers by the company, it means visicoolers have an important role in maintaining the good relationship with theretailers.PepsiCo relationship with the retailers/distributors * “If better scheme isgiven then replace with coke" 70
  71. 71. Symmetric Measures As- Sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R -.429 .041 -8.203 .000(c)IntervalOrdinal by Spearman -.479 .045 -9.427 .000(c)Ordinal CorrelationN of Valid Cases 300a. Not assuming the null hypothesis.b. Using the asymptotic standard error assuming the null hypothesis.c. Based on normal approximation. 71
  72. 72. Bar Chart 120 "If better scheme is given then replace with coke" yes 100 No 80 60 C n u o t 34.67% 40 24.33% 19.67% 20 8.67% 4.33% 3.0% 0.67% 1.33% 0.33% 0 Strongly Agree Cant Say Strongly Dis Agree agree Disagree PepsiCo relationship with the retailers/distributorsIf we see the table then we find that 24.33% are strongly aree that they willnot switchover to another brand because of better scheme but 34.67%respondent are strongly agree that if they will get better services andschemes then they will switch over to an- other company’s brand, it showsthat if company have to ,maintain good relationship with retailers anddistributors then company will be focus on better services and schemes.PepsiCo having good distribution channel * logistics facility of the company 72
  73. 73. Symmetric Measures As- sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .216 .031 3.815 .000(c)IntervalOrdinal by Spearman .230 .047 4.075 .000(c)Ordinal CorrelationN of Valid Cases 300a Not assuming the null hypothesis.b Using the asymptotic standard error assuming the null hypothesis.c Based on normal approximation. 73
  74. 74. Bar Chart logistics facility of the company 150 own company 100 53.0% C n u o t 50 13.33% 11.0% 7.0% 6.67% 5.33% 3.67% 0 Strongly Agree Cant Say Strongly Dis Agree agree Disagree PepsiCo having good distrbution channelIf we see the table then we find that out of 100% respondent 53% respondentare agree to say that better facility of logistics have an important role inhaving good distribution channel .Visi coolers provided by the company * PepsiCo having good distributionchannel 74
  75. 75. Symmetric Measures As- sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .487 .049 9.632 .000(c)IntervalOrdinal by Spearman .443 .052 8.530 .000(c)Ordinal CorrelationN of Valid Cases 300A, Not assuming the null hypothesis.B Using the asymptotic standard error assuming the null hypothesis.C. Based on normal approximation. 75
  76. 76. Bar Chart PepsiCo having good distrbution 150 channel Strongly agree Agree Cant Say Strongly Disagree Dis Agree 100 C n u o 50.67% t 50 16.33% 13.33% 5.0% 6.0% 2.0% 2.33% 3.0% 0 0.67% yes No V.C. coolors provided by the companyIf we see the table then we find that out of 100 % respondent, 50.67% aresaying that they are agree to say that PepsiCo have good distribution channelbecause they are getting visi coolers from the company, it shows that visicoolers have an important role in having a good distribution channel.Visi coolers provided by the company * Perception of retailers/distributorstowards the PepsiCo Distribution channel 76
  77. 77. Symmetric Measures As- sump. Std. Error Approx Approx. Value (a) . T(b) Sig.Interval by Pearsons R .544 .048 11.184 .000(c)IntervalOrdinal by Spearman .442 .056 8.509 .000(c)Ordinal CorrelationN of Valid Cases 300a. Not assuming the null hypothesis.b. Using the asymptotic standard error assuming the null hypothesis.c. Based on normal approximation. 77