2. A project report
ON
Analysis of Sales and Distribution
Strategies of “PepsiCo (Tropicana)”
Submitted To:
Submitted By:
Ms. Megha Mathur Aakristhi Mishra(301)
Arpita chakraborty(308)
Lalita chauhan(316)
Pragya bharadwaj(326)
Sahil Khanna(331)
Sudhanshu Gupta(344)
Anish Grover
Jitin
Group-3
3. Executive summary
This project aims to explore and understand sales and distribution strategies PepsiCo
India (Tropicana).
PepsiCo is a global food and beverage leader with net revenues of more than $65
billion and a product portfolio that includes 22 brands that generate more than $1 billion
each in annual retail sales. Its main businesses – Quaker, Tropicana, Gatorade, Frito-
Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved
throughout the world.
PepsiCo entered India in 1989 and in a short period, has grown into one of the largest
food and beverage businesses in the country. PepsiCo growth in India has been guided
by its global vision of “Performance with Purpose”.
It aims to nourish consumers with a range of products that deliver great taste,
convenience and affordability, from simple treats to healthy offerings such as food-
Cheetos, Kurkure,, Lay’s,Lehar NamkeenQuaker Oats,Uncle Chipps and beverages-
7UP,AquafinaDuke's,Gatorade,Mirinda,Mountain Dew,Nimbooz,Pepsi,SliceTropicana
The objective of the project was to understand sales strategies , positioning,
contingency plans and distribution strategy for pepsico. For this purpose our team
spoke to Mr. Kanishk Shukla (CE premium business) and Mr. Abhishek Aggarwal
(Customer executive premium team) of PepsiCo. India.
The Sales and distribution strategies covered in the project are for Delhi NCR
distibution centers.
The project explains the process of product movement from distributor to the consumer.
It elaborately explains the prime sales strategies of Tropicana – Modern, On premise
trade/instutitional trade and traditional trade.
It also touches upon the distribution of Himalaya and lipton beverages , with which
PepsiCo has an alliance.
4. 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
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.
Performance with Purpose
At PepsiCo, we're committed to achieving business and financial success while leaving
a positive imprint on society - delivering what we call Performance with Purpose.
Our approach to superior financial performance is straightforward - drive shareholder
value. By addressing social and environmental issues, we also deliver on our purpose
agenda, which consists of human, environmental, and talent sustainability.
5. POSITIONING
Considering the positioning of Tropicana in specific, it is basically a premium health
product of PepsiCo. Sharpening its focus on making healthy breakfast options widely
available for consumers, PepsiCo has launched a fruit juice brand Tropicana. Tropicana
continues to select the best fruit to manufacture high-quality juices and original
products, pioneer innovative processes and explore new markets for its products.
The growing lifestyle trend of "Rushed Breakfast", nutrition often tends to get
compromised. Therefore Tropicana aims to position itself as a critical constituent of the
Breakfast Menu. It reinforces the wonders of a warm, nutritious and fulfilling breakfast.
This serious everyday issue is tackled in an entertaining and engaging manner. Its
campaign aims to educate consumers about the effect of cutting short breakfast &
how Tropicana with its 9 Fruit nutrients can add back nutrition to one’s breakfast.
Also the himalyan and lipton beverages which are in alliance with pepsico prefers to
play upon the themes of being natural and pure in an artificial world, the brands seeks
to be the perfect beverage of choice among wellness seekers. They enjoy an
aspirational equity among consumers.
6. Sales Strategy:
A sales strategy is a plan by a business or individual on how to go about selling
products and services and increasing profits. Sales strategies are typically developed by
a company’s administration, along with its sales, marketing and advertising managers.
1. Modern Trade:
This deals with big players reliance and big bazaar, more , etc. PepsiCo provide
flexibility in order timing and amount to these giant customers as consignment size is
large. This segment is given more priority as compared to other two.
2. On premise trade /institutional trade :
This business vertical includes:
1. Taj properties.
2. Oberioes
3. PVR
4. Airport Terminal 3 (they made a deal of 250 corers for 10 yrs )
5 KFC/ pizza hut (central supply )
6. Railways.
MARKET
MODERN TRADE
INSTITUTIONAL
TRADE
TRADITIONAL TRADE
7. 3. Traditional trade :
This includes the provision stores , local ice-cream parlors , grocery stores,
“mom n pops” stores
There is individual team for each segment , which operate separately for there
respective segment .
Market Credit – for retail business vertical there no option of market credit ,
payment has to be made then and there as the bill is received .
Both modern and institutional vertical enjoys the facility of market credit . in modern
vertical the payment can be made within a month of receiving the bill , whereas
institutional vertical receives a payment time of 3-4 months.
Discount offered:
As far as traditional trade is concerned no deep discount is offered . whereas modern
and institutional vertical receive considerable amounts of discounts starting 25%-45%
and sometime even upto 50%.
Distribution credit:
In order to maintain a good relationship with the vertical and promote sales , the
company ensures that each distributor receives a healthy return on investment of
atleast 24% . In case a distributor is unable do that the company offers to bear some
part of their expenses
To motivate and encourage the distributors the company give incentive like plasma
T.V , refrigerator , foreign trips etc
The sales turnover of Tropicana and Himalayan beverage for Delhi/NCR is about Rs 8-
10 cr per month .
8. DISTRIBUTION STRATEGY
Objective
TO know distribution channel Strategy of PepsiCo.
How strong relationship PepsiCo has with the distributors and retailers.
Perception of retailers towards the distribution channel of the PepsiCo
Go to market
Distribution flow
Manufacturing
unit
Pune(Baramati)
Distributor
NOIDA/Gr. NOIDA
Distributor
DELHI/GURGAON
Distributor
GHAZIABAD/
FARIDABAD
Carrier
forwading agent
Delhi,Gurgaon
Distributor Customer Consumer
9. Strategy
They follow two distributional strategy, based on the market segment they
focus on.
For retail
They have a team to work on it
Each team have a route agents
Role of route agents
Same day
In the morning they report to the respective distributor office
Per day fixed market is provided to them (assigned a particular market)
They visit each shop in the router and book the order.
Report back of the distributor office in the end of the day.
Market
Tradional
trade/retail
trade
Modern trade/ on
premises trade
10. Role of delivery agent
Next day
After the noting is done by the route agent, there work is to deliver the orders.
According to the quantity the vehicle goes to each particular shop to complete the
process.
Modern trade and modern trade/ on premises trade
No route agent
They have daily reporters also called as PSR (daily reporters)
Role of PSR’S
Go to any of the route, to get the orders.
In case of emergency they are preferred 1st.
Margin for distributors
Same for all, but different for the product.
Trade margin is necessary and fixed
Conclusion
The primary objective of this research was to know distribution channel Strategy of
PepsiCo and to know the importance of Distribution channel strategy in Positioning of
the product.
The data collected provided a sound base for understanding the overall organizational
set up of PepsiCo in India. By analyzing the data and the literature review, following
conclusion was inferred:
The Sales and Distribution Network of Pepsi is very strong and almost flawless.
PepsiCo India had the first mover advantage when it entered the market and it
capitalized on that advantage to grab the market.
11. Franchisee based operations combined with the Company’s operations add strength to
the overall presence of the Company in the market.
Franchisee takes care of its operations and PepsiCo does not interfere in its operations.
The Franchisees are required to report to the Company at specific time intervals.
The Advertising Campaigns are conceived, implemented by the PepsiCo and
Franchisee has no say in that.
It is very important to develop good relationship with the retailers by providing them
better services and schemes.
Maintaining the good relationship with the distributors are very important for the
company because they are the main part of the distribution channel.
12. CONCLUSION
Pepsico Tropicana is maintaining it’s sales and distribution channels quite well. They
have divided their sales frame in three divisions that is modern, on premises trade, and
traditional trading ,their sales and distribution channels are well defined and targeted. In
modern vertical they target mainly retail outlets like reliance,big bazar,more .They have
signed a deal of rupees 250 cr with airport terminal 3.In the on premises sales or
institutional sales trade they cover PVR,Pizza Hut,KFC and airport terminal 3, schools,
colleges, institutes and university and traditional trading involves shops, local vendors
and shops. The discounting schemes are different in different verticals, which is
remarkable.
Distribution system is well structured with root agent for coordinating in a particular
region’s agent.
Planning agent takes care of modern vertical. They follow PSR that is ready to supply
on very short notices, they are using the concept of JIT that just in time very well.
PSR and DR(daily reporter) maintain the stock with suppliers of 10-15 days. The
concept of root base quantity acts as a contingency plan.
They work on the concept of prepaid payments of deals that is to maintain liquidity and
account balance. All the payments have to be made before supply of products,
leverages can be given only in complex and emergency situation to the distributors.
The best part of Pepsico Tropicana is, they take care of their distributors profit or rate of
return, if the distributor is not earning a healthy profit of 24 to 25 percent, Pepsico
Tropicana gives that particular distributor special allowances and help him to bring his
ROE to a better and healthy rate, they help their distributors by providing leverages etc.
In Delhi-NCR they have 40-45 distribution centres to cover entire Delhi-NCR area.
So in short pepsico is maintaining it’s sales and distribution channels and sales verticals
very efficiently and maintaining it’s status of one of the most trusted soft drink brand in
the world.
13. Contingency plan
A contingency plan is a plan devised for an outcome other than in the usual
(expected) plan.
Pepsi Tropicana being a perishable beverage has risk of getting spoiled and therefore it
is very important to have good contingency plan, pepsico Tropicana has the same.
Pepsi co Tropicana ensures that minimum base quantity base is ordered by
the distributors each time an order is placed so that there is no shortage in stock
It also encourages distributors to maintain stock of products for 10-15 days in
advance in case of an emergency.
It exchanges upto 1% the products of the distributors in case of a defect. For eg.
The pulp of the Tropicana juice sometimes remains left in the pack.
