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STUDY OF DISTRIBUTION CHANNEL STRATEGY

OF PEPSICO FOR THE POSITIONING OF THE

PRODUCT IN VARANASIA DISSERTATION REPORT

MANGALMAY INSTITUTE OF MANAGEMENT & TECHNOLOGY

GREATER NOIDA,

MBA BATCH- 2009-2011

SUBMITTEDTO: - SUBMITTED BY:-

NEERAJ KUMAR SINGH ANIL KUMAR MISHRA
http://en.wikipedia.org/wiki/File:Pepsico_logo.svg

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(CUSTOMER EXECUTIVE)

DECLARATION

I hereby declare that the project entitled STUDY OF

DISTRIBUTION CHANNEL STRATEGY OF THE PEPSICO FOR

THE POSITIONING OF THE PRODUCT was done by me under

the guidance of Miss JAYA JAIN, faculty MANGALMAY

INSTITUTE OF MANAGEMENT & TECHNOLOGY,GREATER

NOIDA,, in partial fulfillment of the requirement for the award of the

degree of Post Graduate Program in Master Of Business

Administration.

I assure that the work is original and has not been submitted earlier

to this Institute or to any other institution.

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ANIL KUMAR MISHRA

ACKNOWLEDGEMENT

There is always a sense of gratitude one expresses to others for thehelpful and needy service they render during all phases of life. I have

completed this Project with the help of different personalities. I wish

to express my gratitude towards all of them.

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I am highly indebted to NEERAJ SINGH (Customer Executive) for providing

me an opportunity to work for the dissertation on wonderful topic STUDY OF

DISTRIBUTION CHANNEL STRATEGY OF PEPSICO FOR THE

POSITIONING OF THE PRODUCT

Lastly I would like to thank my parents and friends for their constant

support during the duration of my Dissertation.

Table of Content

Research Title 1

Declaration 2

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Acknowledgement 3

Literature Review 1-2

Objective 3

Summary about the company 4-20

Marketing overview of PepsiCo in India 21-31

Sales and Distribution network of PepsiCo 31-34

Sales and Marketing Hierarchy of PepsiCo 35-40

Five forces effecting the environment 41-43

Research Methodology 44-63

Limitation 64

SWOT Analysis 65-67

Observations 68

Findings 69

Recommendations 70-71

Conclusion 72

Bibliography 73

Questionnaire 74-75

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LITERATURE REVIEW

PepsiCo is one of the oldest, largest and most successful beverage and

snack food companies in the world. PepsiCo was founded by Caleb

Bradham in 1902 in USA. Today PepsiCo and its affiliates operate in

more than 140 countries in the world and generate revenues in excess

of $ 40 Billion. In its pursuit of never ending growth and expansion,PepsiCo entered India in 1989 in a joint venture with Punjab

Government. However, PepsiCo India very soon started its beverage

operations in collaboration with the R K Jaipuria group.

Soon after entering the beverage segment PepsiCo Established its

dominance in the market owing to its expertise in sales, marketing,

operations and local collaboration. PepsiCo maintained its marketdominance for many more years to come. However, this advantage

slipped and PepsiCo had to concede the market leadership to Coca

Cola India. Several actors were responsible for this development. But,

the most important are;

Distribution channel is having an important role in positioning of the

product because we know that distribution channel is tool by which

we can make reach our product to the final consumers

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Discontinuation of slums in the distribution network by PepsiCo.

This move by PepsiCo adversely affected its position of a market

leader because while PepsiCo discontinued the use of Slums in its

distribution network, Coke continued it and within one year, it was

able to snatch considerable market share from PepsiCo.

Acquisition of well-established and favored brands like Thumps Up

and Limca by Coca Cola India. These two brands still constitute a

bulk of sales for Coca Cola India.

To explore the reasons behind these developments this study will

analyze the marketing initiatives and policies of PepsiCo India indetail with particular focus on its partner relationship management.

The above-mentioned objectives can be achieved by carrying a proper

and planned research involving different types and methods. The data

collected for laid the foundations for the study and gave a platform

for the analysis and findings which lead to the fulfillment of the

objectives.

The data collected for research is primary and secondary. Primary

data is collected by observation, interviews and questionnaires. The

data collection and analysis paves way for the recommendation ad

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conclusion of the study that reveals some important findings

regarding the strategy and corporate structure and strategy of

PepsiCo India.

OBJECTIVE OF PROJECT

1. To know distribution channel Strategy of PepsiCo.

1. To know the importance of Distribution channel strategy in

Positioning of the product.

Sub Objective:

1. To know the PepsiCo planning towards the distribution channel

strategy.

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1. How strong relationship PepsiCo has with the distributors and

retailers.

1. Perception of consumer towards the PepsiCo product.

1. Perception of retailers towards the distribution channel of the

PepsiCo.

Summary about the company

Type :Public (NYSE: PEP)
http://en.wikipedia.org/wiki/File:Pepsico_logo.svg

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Founded :Chicago, Illinois, U.S. (1965)

Headquarters : Purchase, New York, U.S.

Area served :Worldwide

Key people :Indra Krishnamurthy Nooyi (Chairwoman), (President) & (CEO)

Industry :Food Non-alcoholic beverage

Products :Pepsi

Diet Pepsi

Mountain Dew

Sierra Mist

StarbucksFrappuccino

LiptIcedTea

7up

Izze

Tropicana Products

Copella

Naked Juice

Gatorade

PropelFitnessWater

Quaker Oats

Lay's

Doritos

Cheetos

Fritos

RoldGold

Ruffles

Tostitos

Slice

Nimbooz

Revenue :USD 43.251 Billion (2010)

Operatingincome :USD 6.935 Billion (2010)

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Net income :USD 5.142 Billion (2010)

Total assets :USD 35.994 Billion (2010)

Total equity :USD 12.106 Billion (2010)

Employees :185,000 (2010)

Divisions : PepsiCo Americas (PepsiCo Americas Food, PepsiCo Americas

Beverages), PepsiCo International

Website :PepsiCo.com

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History of the company

It was first introduced in North Carolina in 1898 by Caleb Braham

who made a pharmacy which sold the drink which was known back

then as "Brad's Drink", and was later named Pepsi Cola possibly due

the digestive enzyme pepsin and kola nuts used in the recipe. Braham

sought to create a fountain drink that was delicious and would aid in

digestion and boost energy.

In 1903, Braham moved the bottling of Pepsi-Cola from his drugstore

into 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 1926, Pepsi received its first logo

redesign since the original design of 1905. In 1929, the logo was

changed again. In 1929, automobile race pioneer Barney Oldfield

endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing,invigorating, a fine bracer before a race".

In 1931, the Pepsi-Cola Company went bankrupt during the Great

Depression- 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. Megargel bought the Pepsi

trademark.

Eight years later, the company went bankrupt again.Pepsi's assets were then purchased by Charles Guth; the President of

Loft Inc. Loft was a candy manufacturer with retail stores that

contained soda fountains. He sought to replace Coca-Cola at his

stores' fountains after Coke refused to give him a discount on syrup.

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Guth then had Loft's chemists reformulate the Pepsi-Cola syrup

formula.

During the Great Depression, Pepsi gained popularity following the

introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents,

sales were slow, but when the price was slashed to five cents, sales

increased substantially. With a radio advertising campaign featuring

the jingle "Pepsi cola hits the spot Twelve full ounces, that's a lot /

Twice as much for a nickel, too Pepsi-Cola is the drink for you,"

arranged in such a way that the jingle never ends. Pepsi encouraged

price-watching consumers to switch, obliquely referring to the Coca-

Cola standard of six ounces per bottle for the price of five cents (anickel), instead of the 12 ounces Pepsi sold at the same price. Coming

at a time of economic crisis, the campaign succeeded in boosting

Pepsi's status. In 1936 alone 500,000,000 bottles of Pepsi were

consumed. From 1936 to 1938, Pepsi-Cola's profits doubled.

1940s advertisement specifically targeting African Americans.

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Pepsi's success under Guth came while the Loft Candy business was

faltering. Since he had initially used Loft's finances and facilities to

establish the new Pepsi success, the near-bankrupt Loft Company

sued Guth for possession of the Pepsi-Cola company. A long legal

battle, Guth v. Loft, then ensued, with the case reaching the Delaware

Supreme Court and ultimately ending in a loss for Guth.

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Pepsico in India

PepsiCo gained entry to India in 1988 by creating a joint venture with

the Punjab government-owned Punjab Agro Industrial Corporation

(PAIC) and Voltas India Limited. This joint venture marketed and

sold Lehar Pepsi until 1991, when the use of foreign brands wasallowed; PepsiCo bought out its partners and ended the joint venture

in 1994. Others claim that firstly Pepsi was banned from import in

India, in 1970, for having refused to release the list of its ingredients

and in 1993, the ban was lifted, with Pepsi arriving on the market

shortly afterwards. These controversies are a reminder of "India's

sometimes acrimonious relationship with huge multinational

companies." Indeed, some argue that PepsiCo and The Coca-Cola

Company have "been major targets in part because they are well-

known foreign companies that draw plenty of attention."

In 2003, the Centre for Science and Environment (CSE), a non-

governmental organization in New Delhi, said aerated waters

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produced by soft drinks manufacturers in India, including

multinational giants PepsiCo and The Coca-Cola Company, contained

toxins, including lindane, DDT, malathion and chlorpyrifos

pesticides that can contribute to cancer, a breakdown of the immune

system and cause birth defects. Tested products included Coke, Pepsi,7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE found that

the Indian-produced Pepsi's soft drink products had 36 times the level

of pesticide residues permitted under European Union regulations;

Coca Cola's 30 times. CSE said it had tested the same products in the

US and found no such residues. However, this was the European

standard for water, not for other drinks. No law bans the presence of

pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that

their products manufactured in India contained toxin levels far above

the norms permitted in the developed world. But an Indian

parliamentary committee, in 2004, backed up CSE's findings and a

government-appointed committee, is now trying to develop the

world's first pesticides standards for soft drinks. Coke and PepsiCo

opposed the move, arguing that lab tests aren't reliable enough to

detect minute traces of pesticides in complex drinks. On December 7,

2004, India's Supreme Court ruled that both PepsiCo and competitor

The Coca-Cola Company must label all cans and bottles of the

respective soft drinks with a consumer warning after tests showed

unacceptable levels of residual pesticides.

Both companies continue to maintain that their products meet all

international safety standards without yet implementing the Supreme

Court ruling. As of 2005, The Coca-Cola Company and PepsiCo

together hold 95% market share of soft-drink sales in India. PepsiCo

has also been accused by the Puthussery panchayat in the Palakkad

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district in Kerala, India, of practicing "water piracy" due to its role in

exploitation of ground water resources resulting in scarcity of

drinking water for the panchayat's residents, who have been

pressuring the government to close down the PepsiCo unit in the

village.

In 2006, the CSE again found that soda drinks, including both Pepsi

and Coca-Cola, had high levels of pesticides in their drinks. Both

PepsiCo and The Coca-Cola Company maintain that their drinks are

safe for consumption and have published newspaper advertisements

that say pesticide levels in their products are less than those in other

foods such as tea, fruit and dairy products. In the Indian state ofKerala, sale and production of Pepsi-Cola, along with other soft

drinks, was banned by the state government in 2006, but this was

reversed by the Kerala High Court merely a month later. Five other

Indian states have announced partial bans on the drinks in schools,

colleges and hospitals.

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Marketing Strategy of Pepsi

In 1975, Pepsi introduced the Pepsi Challenge marketing campaign

where PepsiCo set up a blind tasting between Pepsi-Cola and rival

Coca-Cola. During these blind taste tests the majority of participants

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picked Pepsi as the better tasting of the two soft drinks. PepsiCo took

great advantage of the campaign with television commercials

reporting the test results to the public.

In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female

Pepsi salesperson, Denise Muck, to coincide with the United States

bicentennial celebration.

Pepsi logo (1973-87). In 1987, the font was modified slightly to a

more rounded version which was used until 1991.

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing

strategy. By 2002, the strategy was cited by Promo Magazine as one

of 16 "Ageless Wonders" that "helped redefine promotion

marketing."

In 2007, PepsiCo redesigned their cans for the fourteenth time, and

for the first time, included more than thirty different backgrounds on

each can, introducing a new background every three weeks. One of

their background designs includes a string of repetitive numbers

73774. This is a numerical expression from a telephone keypad of the

word "Pepsi."

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Pepsis logo (2003-09. Currently using with Pepsi Wild Cherry and

Pepsi ONE)

In late 2008, Pepsi overhauled their entire brand, simultaneously

introducing a new logo and a minimalist label design. The redesign

was comparable to Coca-Cola's earlier simplification of their can and

bottle designs. Due to the timing of the new logo release, some have

criticised the logo change, as the new logo looked strikingly similar

to the logo used for Barack Obama's successful presidential campaign,

implicating a bias towards the President.Also in 4th quarter of 2008

Pepsi teamed up with Google/Youtube to produce the first daily

entertainment show on Youtube. This daily show deals with popculture, internet viral videos, and celebrity gossip. Poptub is

refreshed daily from Pepsi.

Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring Home the

Cup," contest for Canada's biggest hockey fans. Hockey fans were

asked to submit content (videos, pictures or essays) for a chance at

winning a party in their hometown with The Stanley Cup and MarkMessier.

In 2009, "Bring Home the Cup," changed to "TeamUp and Bring

Home the Cup." The new installment of the campaign asks for team

involvement and an advocate to submit content on behalf of their

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team for the chance to have the Stanley Cup delivered to the team's

hometown by Mark Messier.

Pepsi has official sponsorship deals with three of the four major North

American professional sports leagues: the National Football League,

National Hockey League and Major League Baseball. Pepsi also

sponsors Major League Soccer.

Pepsi also has sponsership deals in international cricket teams. The

Pakistan cricket team are just one of the teams that the brand

sponsers. The team wears the Pepsi logo on the front of their test and

ODI test match clothing.

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Slogans of Pepsi

1. 1939-1950: "Twice as Much for a Nickel"

2. 1950: "More Bounce to the Ounce"

3. 1950-1957: "Any Weather is Pepsi Weather"

4. 1957-1958: "Say Pepsi, Please"

5. 1958-1961: "Be Sociable, Have a Pepsi"

6. 1961-1963: "Now It's Pepsi for Those Who Think Young"

7. 1963-1967: "Come Alive, You're in the Pepsi Generation".

8. 1967-1969: "(Taste that beats the others cold) Pepsi Pours It

On".

9. 1969-1975: "You've Got a Lot to Live, and Pepsi's Got a Lot to

Give"

10. 1977-1980: "Join the Pepsi People (Feeling Free)"

11. 1980-1981: "Catch That Pepsi Spirit" David Lucas composer

12. 1981-1983: "Pepsi's got your taste for life"

13. 1983-1984: "Pepsi Now! Take the Challenge!"

14. 1984-1991: "Pepsi. The Choice of a New Generation"

(commercial with Michael Jackson, featuring Pepsi version of

Billie Jean)

15. 1986-1987: "We've Got The Taste" (commercial with Tina

Turner)

16. 1987-1990: "Pepsi's Cool" (commercial with Michael Jackson,

featuring Pepsi version of Bad)

17. 1990-1991: "You got the right one Baby UH HUH" ( sung by

Ray Charles for Diet Pepsi )

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18. 1991-1992: "Gotta Have It"/"Chill Out"

19. 1992-1993: "Be Young, Have Fun, Drink Pepsi"

20. 1993-1994: "Right Now Van song for the Crystal Pepsi

advertisement.

21. 1994-1995: "Double Dutch Bus" Pepsi song sung by Brad Bentz.22. 1995: "Nothing Else is a Pepsi"

23. 1995-1996: "Drink Pepsi. Get Stuff." Pepsi Stuff campaign

24. 1996-1997: "Pepsi: Theres nothing official about it" (During

the Wills World Cup (cricket) held in India/Pakistan/Sri

Lanka)

25. 1997-1998: "Generation Next" - with the Spice Girls.

26. 1998-1999: "It's the cola" (100th anniversary commercial)

27. 1999-2000: "For Those Who Think Young"/"The Joy of Pepsi-

Cola" (commercial with Britney Spears/commercial with Mary

J. Blige)

28. 2000-2003: "Aazadi dil ki" (Hindi - meaning "Freedom of the

Heart")(India)

29. 2003: "It's the Cola"/"Dare for More" (Pepsi Commercial)30. 2003-2005: "Yeh Pyas Hai Badi" (Hindi meaning "This thirst is too

much")(India)

31. 2005-2006: "An ice cold Pepsi. It's better than sex!" (Larry

Sypolt)

32. 2006-2007: "Why You Doggin' Me"/"Taste the one that's

forever young" Commercial featuring Mary J. Blige

33. 2007-2008: "More Happy"/"Taste the once that's forever

young" (Michael Alexander)

34. 2008: "Yeh hai Youngistaan Meri Jaan!" (Hindi)(Urdu -

meaning "This is the Young era my dear" (India and Pakistan)

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35. 2008: "Pepsi Stuff" Super Bowl Commercial (Justin

Timberlake)

36. 2008: "epsi is #1" v commercial (Luke Rosin)

37. 2008: "Pepsify karo gai!" Commercial (Urdu (Hindi - meaning

"Wanna Pepsify!") (Pakistan) (Featuring. Adnan Sami andAnnie)

38. 2008-2009: "Something for Everyone."

39. 2009-present: "Refresh Everything" and (during many

commercials) "Every Generation Refreshes The World"

Pepsi Input Processing Output Model

Input

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Supply

1. Manage supply ingredients to ensure availability to produce

products.

2. Maintain purified water supply for quality and availability to

produce products.

Manufacturing

1. Ensure best technology is available to produce products and mix

ingredients.

2. Ensure quick storage and inventory processes to maintain

freshness and quality.

Sales

1. Determine demand by past sales and future marketing.

2. Adjust quantities produced in real time to meet appropriatedemand.

Output

Supply

1. Determine inventory of ingredients to order new supplies.

2. Maintain purified water supply so ensure continuance of

production.

Manufacturing

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1. Ensure proper packaging to ensure quality and freshness in

products.

2. Maintain quick local distribution to ensure freshness and

quality products.

Sales

1. Keep positive distribution levels to all sales outlets to maintain

positive sales.

2. Meet any new demand or competition with products and

consumer needs.

EVERY DELAR SURVEY {EDS}

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OF SRI LUXMI SUB-DISTRIBUTER OF PEPSICO

SUB LOCALITY LOCALITY PCI VISI CCX VISI VEHICLE PCI VEHICLE CCX TOTAL SALE

Near D.A.V Ausanganj Yes Yes 6 5 90

Near D.A.V Ausanganj Yes No 6 No 40


Digia Chauraha Ausanganj P No 6 No 30

Digia Chauraha Ausanganj Yes Yes 6 5 10

Digia Chauraha Jaitpura P Yes 6 5 10

Digia Chauraha Jaitpura No Yes 2 2 10

Digia Chauraha Jaitpura Yes Yes 3 3 40

Digia Chauraha Jaitpura No Yes 3 3 10

Thana Jaitpura Jaitpura Yes Yes 3 3 10

Thana Jaitpura Jaitpura P Yes 3 3 10

Thana Jaitpura Jaitpura No Yes 3 3 20

Thana Jaitpura Jaitpura P Yes 3 3 10

Thana Jaitpura Jaitpura P No 3 3 5

Nagkua, Jaitpura Jaitpura Yes No 3 3 5

Nagkua, Jaitpura Jaitpura Yes No None 3 20

Kajipura Badi Bazar Yes No 4 No 40



Bismila Katra Badi Bazar Yes No 3 No 50

Badi Bajar Badi Bazar Yes No 3 No 120

Chavi Mahal Chavi Mahal Yes Yes 4 No 30

Chavi Mahal Chavi Mahal Yes Yes 4 No 40

Cotton Mil Gate Cotton Mil Gate Yes No 4 No 60

Cotton Mil Gate Cotton Mil Gate P No 4 No 40


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Pepsis Mission

The mission of Pepsi is to be the world's premier consumer Products

Company focused on convenient foods and beverages. We seek to

produce healthy 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

Near D.A.V Ausanganj Yes No 3 5 48

Near D.A.V Ausanganj No Yes 3 5 20

Near D.A.V Ausanganj No P 3 2 5

Near D.A.V Ausanganj Yes Yes 3 3 60

Digia Chauraha Ausanganj Yes P 4 3 10

Behind Masjid Rajapura IB No 1 \4 1 \4 30

Behind Masjid Ausanganj Yes No 1 \4 No 10

Near D.A.V Ausanganj Yes No 5 5 60




Digia Chauraha Ausanganj P No 5 No 16

Digia Chauraha Ausanganj Yes No 5 No 56

Basti IswarGangi P No 5 No 16



Basti IswarGangi Yes No 5 No 28

Basti IswarGangi P P 5 No 30


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everything we do, we strive for honesty, fairness and integrity. Pepsi

has grown faster than both the S&P 500 and their industry group over

the past four years. 2003 alone was a strong year. Their overall

volume grew by 5%. Division net revenue grew by 8%. Division

operating profit grew by 10%. Total return to shareholders was 12%.Earnings per share grew by 22%. They have six of the fifteen largest-

selling brands in U.S Supermarkets. And, around the world, sixteen of

their brands sell more than one billion dollars each at retail.

Pepsi is also very concerned about the environment and has a separate

set of goals. Our goal is to have the least possible impact on the

environment and so far we have been very successful. For example, in1992 Pepsi-Cola replaced its can holders with plastic ring connectors.

Using a break-apart concept, these rings snap when cans are removed

from the connectors, greatly reducing the risk of entanglement for

wildlife. In addition, photo-degradable additives break down these

connectors into small particles when they are exposed to sunlight,

further reducing the likelihood of any negative environmental impact.

In 1995, Pepsi was one of only 20 companies honored by the U.S.

Environmental Protection Agency (EPA). EPA Administrator Carol

Browner called the efforts of Pepsi to reduce solid waste "a notable

achievement."

A third goal of Pepsi is to achieve a diverse workforce. Pepsi knows

that understanding different cultures is a major advantage. They view

diversity as a key to their future. They see that offering a workplace

where diversity is valued helps them build the top-quality workforce

so crucial to their success by enabling them to attract and retain great

people from a wide spectrum of backgrounds. Their CEO offers this

quote, PepsiCo has long been dedicated to instilling the broadest

possible base of diversity within our own company and among the

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companies who serve us, and is a strong advocate of diversity within

our communities. This intense dedication to diversity has led to

many awards that include being named a top 50 company for diversity

by

DiversityInc. Fortune magazine ranked Pepsi number nine for best

companies for minorities.

Business Views

These are the three different views to explain Pepsi in terms of

relevance, accuracy, timeliness, exclusiveness, and accessibility.

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MARKETING VIEW-: The marketing view is the backbone of

business dimension in case study of Pepsi. In order to make a firm

successful in the marketplace this view must penetrate all the other

views together. Introducing new ways to approach the market or

launching a new product needs good understanding of the targetpopulation, which is done through the marketing view. It forecasts

and plans the different components in the business dimension that are

going to affect the future of the company. Through the marketing

view Pepsi tries to reach to its existing as well as future customers. A

competent market strategy is very important in todays competitive

market; especially for a multinational company like, Pepsi. Narrowing

down its different products towards different type of population, for

example, Sprite among buyers for various products within the

company. Advertising is a very vital part in the marketing view

because it brings the consumers and Pepsi together which determines

the demand.

PRODUCT VIEW-: The product view of Pepsi reflects the launch of

new products every six months. As seen among these globally

operating beverage companies, Pepsi and Coke, in order to stay

competent in the market they invent new products to

attract more customers and please the existing ones. If Pepsi does not

try hard in experimenting new products they know someone elsecould steal the market with similar ideas. If there is no product, there

is no business. Therefore, in order to dominant the market globally as

well as in the U.S., Pepsi comes with different flavors or even changes

the looks of bottles. Pepsi has wide variety of beverages like soft

drinks, juices, water, and energy drinks. This company started with

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just plain soda and since then has been trying to add more products to

its existing line. If you look according to the accessibility view you

can also see those vending machines everywhere for your

conveniences.

LOGISTIC VIEW-: The logistic view is a very important part of the

globally

operating companies. For Pepsi, to have bottling plants in all the

countries they sell the products is necessary. By doing this, there

exists a well-established connection between the suppliers, producers,

distributors and consumers. Pepsi Companys organization is dividedinto four areas covering Asia, Africa, Europe and America. These four

subdivisions are further narrowed among the countries in these

continents. The inter- organization structure of the company has

different divisions. The manufacturing plant makes and bottles the

product, the distributors deliver to the suppliers, and the suppliers

sell it to the retailers and finally to the consumers. These supply

chains in different countries are controlled by one main headquarter.

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In the Market

1.

2.

3.

Above figure shows the market share of the beverages players.

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First figure shows that thums up has the largest market share in top

five soft drink players. And limca got the fifth rank. Pepsi is on the 3rd

rank with 13.2% market share.

Second figure shows the market share covered by beverage players. In

the market coke is on 1strank with the 38% of market share and Pepsi

has 21.4% market share.

Third figure shows the battle between the product of different brand

but same flavor. In this war of soft drink in between Pepsi and thums

up thums up has won this war by 15.7% of market share, Pepsi has

only 13.2% of market share in cola market.

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PEPSICO INDIA WITH RKJ GROUP:

Vision

Being the best in everything we touch and handle.

Mission

Continuously excel to achieve and maintain leadership position in the

chosen businesses; and delight all stakeholders by making economic

value additions in all corporate functions.

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

out a special niche for itself. Our services touch different aspects of

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commercial and civilian domains like those of Bottling,Food Chainand

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

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

beverages.

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

Pepsi Foods Limited to manufacture and market Pepsi brand of

beverages in geographically pre-defined territories in which brand

and technical support was provided by the Principals viz., Pepsi Foods

Limited. The manufacturing facilities were restricted at Agra Plant

only.

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

also became the first franchisee for Yum Restaurants International

[formerly PepsiCo Restaurants (India) Private Limited] in India. It

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

total 46 Pizza Hut Restaurants & 1 KFC Restaurant under its

company.

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

PepsiCos centennial year celebrations at Hawaii, USA. The award was

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

presence of Mr. George Bush, the 41st President of USA, Mr. Roger

A. Enrico, Chairman of the Board & C.E.O., PepsiCo Inc. and Mr.

Craig Weatherup, President of Pepsi Cola Company.

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Strategic Divisions:

PepsiCo India consists of different divisions that include Beverage

division, Snack food division and the Restaurant division (Yum

Restaurants India Pvt. Ltd.). These divisions work as separate SBUs

and have their separate management.

PepsiCo India divided its beverage division into different operating

divisions. The heads of these divisions report directly to the CEO.

The heads of these divisions are in charge of their respective areas

and are accountable for the proper functioning of all the regions. The

FOBOs also report to the regional heads apart from the COBOs.

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MARKETING OVERVIEW OF PEPSICO INDIA

Marketing Environment:

Marketing environment is the overall environment in which a

Company operates. This consists of the Task Environment and the

Broad Environment.

Task Environment

Task Environment includes the immediate players involved in

producing, distributing and promoting the offering. The main players

are the company, suppliers, distributors, dealers and the target

customers. Suppliers include the material and service suppliers such

as marketing research agencies, advertising agencies, banking and

insurance companies, transportation companies, and

telecommunications companies. The dealers and distributors include

agents, brokers, manufacturer representatives and others who

facilitate finding and selling to customers.

The suppliers for PepsiCo India include the bottle suppliers for the

soft drinks. These include the Pet bottles and the Glass bottles. One

of the most vital products required in the operation is Refrigerator.

PepsiCo does not manufacture the refrigerators, instead they are

supplied by different vendors who get time bound contracts from the

company.

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The distributors and dealers are part of the sales and distribution

network. This will be explained later under the section of Place, in

the 4 Ps segment.

The target customer for PepsiCo is primarily the youth. But, because

of increasing competition from Coke PepsiCo has expanded its target

customer base which now includes people who are prospects for

beverages beyond the CSD category. PepsiCo has started targeting

this segment by offering products in the Non- CSD category, these

include fruit based non-carbonated drinks, juice based drinks, energy

drinks, sports drinks, snack food (from the snack food division i.e.

Frito Lay).

Broad Environment:

This contains forces that can have a major impact on the players in

the task environment. This includes six components: demographic

environment, economic environment, physical environment,

technological environment, political legal environment, and socio

cultural environment. Companies need to pay close attention to the

trends and developments in these environments and make timely

adjustments to their marketing strategies in order survive and

succeed in the market. This will be explained in detail in the strategicmarketing segment.

Value Delivery Process:

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The value delivery process consists of the value creation and delivery

sequence. This is done in three phases. The first phase, choosing the

value, represents the homework done by the marketing department

before the product exists. Marketing is required to segment the

market, select the appropriate the target market, and develop theofferings value proposition. This is known as Segmentation,

Targeting and Positioning and is the essence of strategic marketing.

Once the business unit has chosen the value, the second phase is

providing the value. Marketers need to determine specific product

features, prices and distribution.

The task in the third phase is communicating the value by utilizing

the sales force, sales promotion, advertising, and other

communication tools to announce and promote the product. Each of

these value phases has different cost implications.

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Value Creation and Delivery Sequence

Customer

Segmentation

Market

Selection /

Focus

Value

Positioning

Choose the Value (Strategic Marketing)

Provide the Value (Tactical Marketing)

Product

Developm

ent

Service

Developm

ent

PricingSourcing /

Making

Distributio

n /

Servicing

Communicate the Value (Tactical Marketing)

Sales Force Sales

Promotion

Advertising

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Generic Value Chain:

The generic value chain is a tool to identify ways to create value for

the customer. This model proposes that every firm is a synthesis of

activities performed to design, produce market, deliver and support

its product. In order to be more precise only the primary activities in

the value chain of PepsiCo India are analyzed.

Primary Activities:

Inbound Logistics This involves bringing and procuring raw

materials for the business. For the carbonated drinks industry onlytwo raw materials are required, they are water and the concentrated

salt that is used to produce the final product. For this purpose water

is extracted from the ground and the concentrated salt is provided by

PepsiCo India to all the plants in the country.

Inbound

Logistics

Operations Outbound

Logistics

Marketing

and Sales

Service

Procurement

Technology Development

Human Resource Management

Firm Infrastructure

Mar in

Support

Activities

Primary Activities

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Operations Operations primarily includes all the bottling plants.

Currently there are 32 bottling planting in India that operate for

PepsiCo. Of the 32 plants, 15 are owned by PepsiCo and the rest 17

are (FOBO), owned by R K Jaipuria Group.

Outbound Logistics The Outbound logistics of Pepsi can be

divided into three stages. First the finished product from the bottling

plants is sent to the depot or the territorial office, from where it is

sent to the C & F centers and the Distributor Points according to

their demand. From the C & F centers and Distributor Points the

product is sent out for sale in the market to the retailers.

Marketing and SalesThe sales and distribution network of Pepsi

is very strong and comprises of different layers and a dedicated sales

force. This is one of the important factors for the success of Pepsi. To

keep the company abreast with competition and to provide support to

its channel partners and to increase the sales, PepsiCo puts lot of

effort in its marketing activities. This includes maintaining excellent

relations with its channel partners, making huge investments in

Advertising, signing of Megastars as its brand ambassadors,

sponsoring various events, launching promotional for any launch or re

launch of a product.

ServiceIn this industry after sales service is generally not required.

The only exception being leak or burst bottles. In that case, the

shopkeeper gets replacement for plastic bottles from the salesmen

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instantly, while the replacement for glass bottles is provided between

25th and 30th of every month. They are required to collect all the

damaged glass bottles and give to the respective salesperson who

gives them the replacement within the next few days after getting it

approved from the CE or ADC.

Marketing Mix / 4 Ps:

Marketing Mix has been defined as the set of marketing tools that a

firm uses to pursue its marketing objectives. These tools are classified

into four broad groups, namely, Product, Price, Place and Promotion.

Marketing mix decisions should be made to influence trade channels

as well as final consumers. A firm can alter any of the four Ps

accordingly, including changes in the product and distribution

channel as well.

The four Ps represent the sellers view of the marketing tools

available for influencing buyers. Whereas, from a buyers point of

view, each marketing tool is designed to deliver a customer specific

benefits according to his or her requirements.

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Marketing Mix

Target Market

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Figure 4ps:

Product: Pepsi offers different variety of products ranging from

carbonated to Non Carbonated Soft Drinks. These include

Pepsi Cola,Mirinda ( Lemon and Orange ),7 Up,Dew,Slice

,Tropicana,Aquafina (Mineral Water)

Product

Prod. VarietyQualityDesign

Features

Brand NamePackaging

SizesServices

WarrantiesReturns

Marketing Variables: The Four P Components of the Marketing Mix

Product

Prod. Variety

Quality

Design

Features

Brand Name

Price

List Price

Discounts

Allowances

Payment period

Place

Channels

Coverage

Assortments

Locations

Inventor

Promotion

Sales Promotion

Advertising

Sales Force

Pubic Relations

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These Products come in different size 200 ml, 300 ml, 600 ml, 1200

ml, 2 lt. there are nearly 42 SKUs which are monitored and regulated

on daily basis.

Product Quality:

This is one of the most important aspects that any Co. needs to

address. Specially in the case of Pepsi this is even more important

because of the controversies and claims regarding the CSE report on

Pesticides in Pepsi. Therefore pepsi has to maintain stringent quality

norms and standards and norms. Pepsi does that by following one

quality standard worldwide and according to the official website of

pepsi, the Co. maintains that :

At every level of Pepsi-Cola Company, we take great care to ensure

that the highest standards are met in everything we do. In our

products, packaging, marketing and advertising, we strive for

excellence because our consumers expect and deserve nothing less.

We promise to work toward continuous improvement in all areas of

our organization.

At every step of our manufacturing and bottling process, strict

quality controls are followed to ensure that Pepsi-Cola products meet

the same high standards of quality that consumers have come to

expect and value from us. We also follow strict quality control

procedures during the manufacturing and filling of our packages.

Each bottle and can undergoes a thorough inspection and testing

process. Containers are then rinsed and quickly filled through a high-

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speed, state-of-the-art process that helps prevent any foreign material

from entering the product. Additional quality control measures help

to ensure the integrity of Pepsi-Cola products throughout the

distribution process, from warehouse to store shelf.

Brand Name:

This is the most important thing any Co. in this Business needs to do

if it wants to remain and succeed in the Business. Pepsi has

successfully done that for so many years. Pepsi has targeted the youth

and has invested heavily in advertising and building a brand image (by

launching several campaigns and roping in mega stars such as

Shahrukh, Sachin, ganguly, Dravid etc.) that attracts to the youth and

this is one of the main reason for the success of Pepsi.

Packaging and Size :The products are available in packaging and

sizes. This is done to facilitate the use according to the requirements

of the Customer. Different packaging also affects the usage pattern of

the product in various markets. e. g. sale of 2 lt. bottles is high in

areas in which middle and high income group customers stay. But the

sale of 200 and 300 ml bottles is high in areas where people in the

lower income group bracket stay. The sale of 600 ml bottles is high in

areas where students etc. stay. Different packaging is also provided

for different products like Tetra Packs, Pet Bottles and Glass Bottles

(in 200 and 300 ml).

Services, Warranties, Returns : There are no warranties and

services (post sales) provided for these products but there is provision

of returns in case there is any problem with the product, e.g. leak or

burst bottle, half filled bottle etc. The pet or plastic bottles are

returned the same day and a replacement is provided for the same but

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in the case of glass bottles the retailer has to collect all the burst

bottles and return it to the salesman around 25thof every month to

get a replacement.

Price:

List Price: The Price of each product is fixed and there is no

discrepancy. Salesmen are not authorized to make any change,

alteration or give discounts unless authorized by the Company.

Discounts: Discounts are provided to Wholesalers and Slums but

there is no discount for retailers. The discounts are negotiated

directly with the Company and the C&F or the Distributor point isnot involved in the price negotiation.

Allowances: Allowances are given to salesmen on achieving their daily

targets. This target is given to every Salesman everyday before he

goes on his designated route. The Depot In charge (Sr. C E / C E)

gives the target to every salesman in consultation with the TDM.

Payment period and Credit terms: No credit is provided. The payment

procedure is not flexible as the retailers are required to make on the

spot payments. At times, they defer the payment and in that case, the

Salesman either shows a shortage or pays the rest of the amount by

himself. The wholesalers are also required to make in advance but at

times they also defer the payment and make the payment at a later

date.

Place:

Channels: Channels are independent organizations involved in the

process of making a product or service available for use or

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consumption. There are different intermediaries in channels that

facilitate the availability of goods to the consumer.

Coverage: Two things come under market coverage. These are

Market Reach and Market Penetration.

Market Reach can be termed as accessibility and Market Penetration

can be termed as Frequency.

Promotion:

Sales Promotion: This is the most frequently used form of promotion

which is used to increase the sale of the selected product. These

promotions are used from time to time depending upon the sale of the

products. If the sale of any particular product declines or shows a

declining trend then a suitable Sales Promotion Campaign is launched

to increase the sale of that product.

Advertising: Advertising is done by PepsiCo. COBO (Company owned

Bottling Operations) and FOBO (Franchisee owned Bottling

Operations) have no say in the advertising campaigns and their

planning. The advertising account of Pepsi is handled by JWT (J

Walter Thomson) in association with the Corporate office of PepsiCo

India.

Sales Force: There is a dedicated sales force at every C&F and

Distributor point. Every Salesman is assigned a specific route that he

has to cover every day. The Salesman has to take care of all the Shops

on the designated route and address and inform (to the Sr. CE / CE)

about any issue any retailer has on the route. The Salesmen are also

assigned the task of providing all the information to the retailers

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regarding the daily schemes and the details of all the promotion

schemes launched from time to time. These include informing the

retailer about the promotional scheme, registration for the scheme,

terms and conditions of the scheme etc. The Salesman is also assigned

the task of registering maximum possible outlets on his assignedroute.

Public Relations: This is one important aspects related to the

success of PepsiCo in India. Pepsi believes in maintaining good and

healthy relations with all its Channel partners and every other person

in the value chain. This has helped Pepsi in maintaining an extremely

competitive position in the market in spite of the continuousonslaught from Coca Cola.

SALES AND DISTRIBUTION NETWORK OF

PEPSICO INDIA.

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Initially the focus of the Company remains on reaching all the

markets and then the Company shifts its focus on increasing the

frequency of sales in the respective markets so that the sales and

profitability of the Company can be increased.

COMPANY

COBO FOBO

WAREHOUSE

C & F DISTRIBUTOR

WHOLESALER SLUMS RETAILER

RETAILER CUSTOMER

CUSTOMER

SALESMEN SALESMEN

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Company (PepsiCo): PepsiCo India provides the salt to all the bottling

plants in the Country that carry out the bottling operations.

COBO: These are Company owned bottling operations operating

directly under the Company. Out of 32 bottling plants, PepsiCo owns

15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria

group does all the franchisee-bottling operations for PepsiCo India;

currently R K J Group has 17 bottling plants for Pepsi.

Warehouses: These are Company or franchisee owned warehouses

spread over various locations that cover the respective territories and

come under the purview of their respective Area or Territory Offices.

Stocks are sent from the bottling plants to these warehouses, from

where they are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution

network and receive proper assistance from the Company (either

COBO or FOBO). The C & F center is owned by a private player and

not by the Company. The vehicles (Delivery Vans) are owned by the

Company, and the Salesmen at the C & F points are on the Company

Payroll.

Distributors: These are small, compared to C & F centers.

Everything at the Distributor point owned and managed by the

distributor, even the salespersons are on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor

points and get the stock directly from the Company or Franchisee.

They get their stock directly from the Company and thus get special

rates and extra discounts from the Company.

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Slums: They are generally smaller than the Wholesalers are.

However, they get special discounts from the C & F centers and

Distributor points.

All the different players in the distribution channel namely C & F

centers, Distributor points, Wholesalers and Slums have different

designated markets and are not supposed to operate in the market

designated to any other player.

Retailer: Retailers are the most important chain in the distribution

channel of Pepsi as they are the only point of contact with the

customers. Retailers get their stock from all the other channel

members in the distribution channel.

SALES AND MARKETING HIERARCHY OF

PEPSICO INDIA.

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MUM

UM

TDM MDM

MDCADC

CE ME

UM

SALESPERSONS MARKETING

ASSISTANTS

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MUM Marketing Unit Manager:

In charge of specific zones (e.g. north, south, east, west) and

report to the corporate office.

UM-Unit Manager:

In charge of day to day operations and supervision of all the

functions within the organizations including operations, logistics,

sales and distribution, marketing. The Unit Manager reports to the

MUM.

TDM- Territory Development Manager:

TDM is the in charge of the sales and distribution network of a

particular territory within a zone. Responsible for the daily, monthly

and annual sales within the territory decides the daily schemes forproducts and incentives for salespersons. He is also responsible for

cost effectiveness, profit generation and profit maximization within

the territory.

MDM - Marketing Development Manager:

MDM is responsible for all the marketing activities and their

effectiveness within a territory. Decides the format and time frame of

the marketing and promotional activities and the incentives given to

the retailers.

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ADC - Area Development Coordinator:

Reports to the TDM, and is in charge of a C & F center and the

distributor point in the area. He is directly responsible for any issues

in the area and is supposed to ensure the smooth functioning of the

entire sales and distribution network in the area. ADC is responsible

for timely disposal of any issue faced by the retailers. He decides and

approves the boards, displays and hoardings in the area.

MDC- Marketing Development Coordinator:

Reports to MDM, and is in charge of carrying out all the

marketing activities in the area. He is responsible for the execution

and success of marketing and promotional activities. Coordinates with

the outside agencies for displays, boards, checks conducted in the

market. He is also responsible to keep a check on the expenditure of

the marketing activities in the market.

CE - Customer Executive:

Reports to the ADC and is in charge of the salespersons. He is

required to visit the market and accompany every salesperson asfrequently as possible. He is the first person to get information about

the market / area and is the first contact if the salespersons or

retailers face issue. Responsible for assigning and achieving daily

sales target given to the salespersons.

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ME - Marketing Executive:

Reports to the MDC and is responsible for the daily functioning of the

marketing activities in the including awareness of promotions in the

market and the response in the market

Salesperson:

They are the most important asset for the company as they are

the ones who sell the products, are responsible for acquiring new

customers, and retain the old ones. Their work also includes

informing the retailers about the promotions and any new scheme

launched. They are also required to push for the sale of any new

product launched in the market and make sure that the retailers are

following the company guidelines regarding the launch and the

maintenance of Vicioolers. They report to the CE.

Marketing Assistant:

Reports to the ME and is responsible for the distribution and usage of

the displays and boards in the area. Also has to check whether

retailers are following the guidelines of the company regarding

promotional displays, other displays and displays in the Vigicoolers.

They report to the ME.

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Pepsi is one of the most well known brands in the world today

available in over 160 countries. The company has an extremely

positive outlook for India. "Outside North America two of our largest

and fastest growing businesses are in India and China, which include

more than a third of the worlds population." (PepsiCos annualreport, 1999)

This reflects that India holds a central position in Pepsis corporate

strategy. India is a key market for Pepsico, and at the same time the

company has added value to Indian agriculture and industry. PepsiCo

entered India in 1989 and is concentrating in three focus areas Soft

drink concentrate, snack foods and vegetable and food processing.

Faced with the existing policy framework at the time, the company

entered the Indian market through a joint venture with Voltas and

Punjab Agro Industries. With the introduction of the liberalisation

policies since 1991, Pepsi took complete control of its operations.

The government has approved more than US$ 400 million worth of

investments of which over US$ 330 million have already flown in.

One of PepsiCos key strategies was to develop a completely local

management team. Pepsi has 15 company owned factories while their

Indian bottling partners own 28. The company has set up 8 greenfield

sites in backward regions of different states. PepsiCo intends to

expand its operations and is planning an investment of approximately

US$ 500 million in the next three years.

Sustainable Competitive Advantage:

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Competitive advantage is a companys ability to perform in one or

more ways that its competitors cannot or will not match. When a

company is able to maintain that advantage a long period of time that

gives it an edge over its competitors then, this advantage is termed as

sustainable competitive advantage. Any competitive advantage mustbe seen by customers as a customer advantage. Then only that

competitive advantage can be transformed into a sustainable

competitive advantage.

Three major competitive advantages give PepsiCo India a competitive

edge in the market place. They are:

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1. Big Muscular Brands built through better market positioning

and heavy investment in advertising and promotions;

2. Proven ability to innovate and create differentiated products

through superior operating base;

3. Powerful go to market system built with the help of superior

relationship base and an impeccable sales and distribution

network.

Making it all work are the extraordinarily talented and dedicated

people who are an integral part of PepsiCo India.

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Communicating with the Customer:

Marketing Communication is the means by which firms attempt to

inform, pursued and remind consumers directly and indirectly aboutthe products and brands they sell. Marketing Communication is the

central instrument of making brand equity. Marketing

Communication consists of six major modes of communications called

the marketing communication mix.

1. Advertising.

2. Sales promotion.

3. Events and Experiences.

4. Public Relations and Publicity.

5. Direct Marketing.

6. Personal Selling.

Although PepsiCo uses all the modes in some form or the other, but

this study will examine various aspects of communication with the

internal customers.

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FIVE FORCES EFFECTING THE ENVIROMENT

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Threat of new entrants:

Bargaining Power of

Suppliers

1. Supplier Concentration

2. Importance of Volume

to Supplier

3. Differenciation of

Inputs

4. Impact of Inputs on

Cost

of Differentiation

Bargaining Power of

Buyers

1. Bargaining

Leverage.

2. Buyer Volume.

3. Buyer Information.

4. Brand Identity.

5. Price Sensitivity.

6. Treat of Backward

Integration.

Existing

Rivalry

Among

Threat of Substitutes

1. Switching Costs.

2. Buyer inclination to

Substitute.

3. Price performance

trade off of

Threat of New

Entrants

1. Cost Advantage.

2. Proprietary

Products

3. Access to Inputs.

4. Government Policy.

5. Economies of Scale.

Degree of Rivalry

1. Exit Barriers

2. Industry

Concentration

3. Fixed costs / Value

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Pepsis product differentiation caused by their marketing

strategy has limited the threat of new entrants. Also the heavy start

up costs of manufacturing and packaging plants would be a deterrent.

But, the biggest deterrent is brand image and reputation; a new

company would be very hard pressed to take market share away fromestablished players like Pepsi, Coke etc. More importantly, the access

to distribution channels is currently one of the biggest barriers to

entry, and this barrier remains because both Coke and Pepsi maintain

very strong relation with their channel partners.

Bargaining power of buyers:

The level of bargaining power differs among groups of buyers.

The bottlers, retailers and distributors have significantly greater

bargaining power than the end consumer does. Large retailer such as

Reliance, Big Bazaar, Subhiksha are able to extract profits from the

Company through incentives such as volume-based purchases,

promotions and displays. This is particularly true for pet bottles. But,

this can also be harmful for the retailers and they losing customers if

they refuse to stock a particular brand.

The bargaining power of the consumer is low. They are a fragmented

group and no one individuals purchase accounts for a significantportion of manufacturers profit. Although the presence of substitutes

does serve to increase buyer power for consumers, but a high degree

of brand loyalty mitigates this loyalty. In short, we can say that the

end consumer has medium bargaining power.

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Bargaining power of suppliers:

There are very few suppliers for the entire soft drink industry.

The end product is comprised of few ingredients, which are largely

commodities. In addition, it is safe to assume that Pepsi accounts for

a large percentage of the suppliers total revenues. Thus, it is

important for the suppliers to contain whatever bargaining power

they have. The overall bargaining power of the suppliers is considered

low.

Threat of Substitutes:

There are many substitutes to sweetened carbonated beverages.

Specially in India there are several substitutes that pose a threat to

PepsiCo. They are bottled water, juices, energy drinks, tea, coffee,

energy drinks and CSD from its main competitor Coca Cola India.

The challenge lies in increasing brand loyalty within these substitute

markets, because the substitute products are, for the most part,

contained with each manufacturers product portfolio. In India the

local beverages like tea and nimbu paani pose a threat to some extent

to the established players. Therefore the threat of substitutes is very

high specially because of negligible switching costs.

Existing Rivalry among firms:

There is intense rivalry between Coke and Pepsi. This rivalry

leads to a downward pressure on prices and significant investment in

advertising in an attempt to build and maintain brand loyalty. In a

maturing market such as domestic carbonated drinks, the only way to

gain market share is to steal from ones rival. Thus, Coke and Pepsi

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fight heatedly over prices, suppliers, spokespeople, retail space and

ore importantly, the taste buds of consumers.

To do a complete analysis of the overall environment is not possible

due to the huge sample size of the population therefore before

presenting my findings I would like to remind the reader the

limitations or constraints under which the survey was done.

This survey may not be fruitful for the entire population of internal

partners of PepsiCo butit will surely be useful for the particular

regions mainly Trans-ganga and East-uttar pradesh.

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RESEARCH METHODOLOGY

.

Research Type : Exploratory Research

Sample

1. Technique : Convenient Sampling

2. Size : 400 Respondent (I meet 400 respondents out of

which 50 were the distributors, 250 retailers and rest of were

the normal consumers.)

1. Description : Distributors, retailers and consumers were

the different part of the varanasi.

2. Instrument : Questionnaire & observations of the

respondent

DATA COLLECTION METHOD

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The data collection mode used to get the desired information from

primary sources & Unstructured Direct Interviews &the instruments

used in the Questionnaire. In this research data was collected through

two different modes, namely-

Primary data collection:

1. Gather information through Questionnaire.

2.Direct interview with Grocery outlet, Convenience store, Eating

and drinking and consumer.

SECONDARY SOURCES:

1. Internet Sites - www.google.com,

www.pepsicoindia.com,

www.wikipedia.com. .

2. Magazines - Business World Management & Economic times.

DATA ANALYSIS FROM RETAILERS &DISTRIBUTORS

PERSPECTIVE:

Frequencies
http://www.google.com/http://www.pepsicoindia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.pepsicoindia.com/http://www.google.com/

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If we see the chart then we find that out of 100% respondent 64% are

agree that PepsiCo have good distribution channel and only 18.67%

are strongly agree, the data shows that company should focus on their

distribution channel and try to convert customer in strongly agree

respondent by providing them better services and schemes.

18.67%

64.0%

7.0%

3.67%

6.67%

Strongly agree

Agree

Can't SayStrongly Disagree

Dis Agree

PepsiCo having good distrbution channel

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If we see the chart then we find that out of 100% respondent 41.33%

respondent are strongly agree that distribution channel have an

important role in positioning of the product and 38.33% are agree andrest are disagree, it shows that our objective is fulfilled by this

research and we can say that if we have to promote our product then

we should have strong distribution channel.

41.33%

38.33%

18.0%

1.0%

Strongly agree

Agree

Can't SayStrongly Disagree

Dis Agree

Distribution channel is importent in positioning of product

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If we see the chart then we find that out of 100% respondent, 70.33%are saying that they are getting V.C. coolers but 29.67 % are saying

that they are not getting, it means company is not focusing on all

retailers that major concerns for the organization.

70.33%

29.67%

yes

No

V.C. coolors provided by the company

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If we see the chart then we find that out of 100% respondent 27.33%

respondent are strongly agree that PepsiCo has maintaining good

relationship with them and 10% are strongly disagree and 54.33 % are

agree, it shows that company should thing that how can they maintain

better relationship with every retailers and distributors.

35.33%

48.67%

5.33%

10.67%

Excellent

Good

Bad

Worst

Perception of retailers/distributors towards the pepsiCoDistribution channel

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If we see the chart then we find that out of 100 % respondent only35.33% are saying that PepsiCo have excellent distribution channel

and 10.67% are saying that PepsiCo have worst distribution and 48.67

% are saying that PepsiCo have good distribution channel, here area

of concern that how company can make happy those respondent who

are thinking that PepsiCo have worst/bad Distribution channel and

how can company develop good distribution channel and change the

perception of retailers and distributors.

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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

then they will switch over to another brand like coke and only

48.67% are saying that they will not switchover, it show that

company should focus that how can be provided better schemes and

services to the retailers and distributors in result they will not

switchover to another brand.

51.33%48.67%

yes

No

"If better scheme is given then replace with coke"

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Cross tabulation:

PepsiCo having good distribution channel * PepsiCo

relationship with the retailers/distributors

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.

Interval by Interval Pearson's R .593 .042 12.706 .000(c)

Ordinal by Ordinal Spearman

Correlation.532 .048 10.851 .000(c)

N of Valid Cases 300

a Not assuming the null hypothesis.

b Using the asymptotic standard error assuming the null hypothesis.

c Based on normal approximation.

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If we see the table then we find that the relationship with the retailers

and distributors having an important role in maintaining the good

distribution channel because 42.33% respondent are agree to say thatwe have good relation with the PepsiCo and that shows that PepsiCo

having good distribution channel.

PepsiCo relationship with the retailers/distributors * Time

taken by the company to make reach the product at retailers shop

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.

Stronglyagree

Agree Can't Say StronglyDisagree

Dis Agree


0

20

40

60

80

100

120

140

Count

8.33%

18.33%

0.67%

42.33%

1.0% 0.67%1.33%

5.67%

0.33%

PepsiCo

relationship with the

retailers/distributors

Strongly agree

AgreeCan't Say

Strongly Disagree

Dis Agree

Bar Chart

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Correlation.664 .036 15.334 .000(c)





If 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

because they are providing products at right time .

Stronglyagree


Dis Agree

PepsiCo relationship with theretailers/distributors

0

20

40

60

80

100

Count

22.0%

24.67%

5.33%

29.33%

2.0%0.33%

1.67%

8.67%

1.33%

Time taken by the

company to make

reach the product at

retailers shop

One Day

3 Day

One Week

One Month

Bar Chart

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PepsiCo relationship with the retailers/distributors * V.C. coolers

provided by the company.

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.



Correlation.535 .047 10.927 .000(c)





Stronglyagree


Dis Agree


0

20

40

60

80

100

120

140

Count

24.67%

44.33%

0.33% 1.0%2.67%

10.0% 10.0%

V.C. coolors

provided by thecompany

yes

No

Bar Chart

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If 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

PepsiCo because of they are getting visi coolers by the company, it

means visi coolers have an important role in maintaining the good

relationship with the retailers.

PepsiCo relationship with the retailers/distributors * If better

scheme is given then replace with coke"

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.

Interval by Interval Pearson's R -.429 .041 -8.203 .000(c)


Correlation-.479 .045 -9.427 .000(c)





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If we see the table then we find that 24.33% are strongly aree that

they will not switchover to another brand because of better scheme

but 34.67% respondent are strongly agree that if they will get better

services and schemes then they will switch over to another

companys brand, it shows that if company have to ,maintain good

relationship with retailers and distributors then company will be focus

on better services and schemes.

PepsiCo having good distribution channel * logistics facility of the

company

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.


Stronglyagree


Dis Agree


0

20

40

60

80

100

120

Count

3.0%

34.67%

0.67%

8.67%

4.33%

24.33%

19.67%

1.33% 0.33%

"If better scheme is

given then replace

with coke"

yes

No

Bar Chart

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Correlation.230 .047 4.075 .000(c)





If we see the table then we find that out of 100% respondent 53%

respondent are agree to say that better facility of logistics have an

important role in having good distribution channel .

Stronglyagree


Dis Agree


0

50

100

150

Count

5.33%

11.0%13.33%

53.0%

7.0%3.67%

6.67%

logistics facility of

the company

own

company

Bar Chart

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Visi coolers provided by the company * PepsiCo having good

distribution channel

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.



Correlation.443 .052 8.530 .000(c)





yes No


0

50

100

150

Count

16.33%

2.33%

50.67%

13.33%

2.0%5.0%

3.0%0.67%

6.0%

PepsiCo having

good distrbution

channel

Strongly agree

Agree

Can't Say

Strongly Disagree

Dis Agree

Bar Chart

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If we see the table then we find that out of 100 % respondent, 50.67%

are saying that they are agree to say that PepsiCo have good

distribution channel because they are getting visi coolers from the

company, it shows that visi coolers have an important role in having a

good distribution channel.

Visi coolers provided by the company * Perception of

retailers/distributors towards the PepsiCo Distribution channel

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.



Correlation.442 .056 8.509 .000(c)





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If we see the table then we find that out of 100% respondent, 40.33%

respondent are saying that PepsiCo have good distribution channel

because they are getting visi coolers from the company, it shows that

visi coolers are very important for having good distribution channel.

Time taken by the company to make reach the product at retailers

shop * PepsiCo having good distribution channel

Symmetric Measures

yes No


0

25

50

75

100

125

Count

29.33%

6.0%

40.33%

8.33%

0.67%

4.67%

10.67%

Perception of

retailers/distributors

towards the

pepsiCo Distribution

channelExcellent

Good

Bad

Worst

Bar Chart

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Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.



Correlation

.713 .030 17.575 .000(c)





If we see the table then we find that 18.67 % respondent are strongly

agree that PepsiCo good distribution channel because they are

getting product within one day and 35.33% respondent are agree to

say that PepsiCo have good distribution channel if they are getting

product within 3 days,it shows that companys distribution is depends

One Day 3 Day One Week One Month

Time taken by the company to make reach

the product at retailers shop

0

20

40

60

80

100

120

C

ount

18.67%

27.33%

35.33%

1.33%0.67%

6.0%

0.33%0.67% 1.0%

5.0%

1.0%

PepsiCo having

good distrbution

channel

Strongly agree

Agree

Can't Say

Strongly Disagree

Dis Agree

Bar Chart

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on time that how quick company is providing product at door of the

retailers/distributors.

PepsiCo having good distribution channel * Services provided by the

distribution/PepsiCo

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.


Ordinal by Ordinal SpearmanCorrelation

.562 .043 11.727 .000(c)





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If we see the table then we find that 59.0% respondent are agree to

say that PepsiCo have good distribution channel because they are

getting good services and only 18.67% are strongly agree, it shows

that better services and schemes have an important role in maintain

good distribution channel.

Distribution channel is important in positioning of product * How

accurately they fill the order"

Symmetric Measures

ValueAsymp. Approx.

Approx. Sig.

Stronglyagree


Dis Agree


0

50

100

150

200

Count

18.67%

59.0%

3.33%0.67% 1.0%

5.0%

Services provided

by the

distribution/PepsiCo

yes

No

Bar Chart

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Std.

Error(a)

T(b)



Correlation.191 .044 3.365 .001(c)





If we see the table then we find that 41.0% respondent are strongly

agree to say that distribution channel have an important role in

positioning of the product because of only by good distribution

channel they are getting fill their order by 100%.

Stronglyagree


Dis Agree

Distribution channel is importent inpositioning of product

0

25

50

75

100

125

Count

41.0%

17.33% 18.0%

1.0% 1.33%0.33%

21.0%

"How accurately

they fill the order"

100%

50-80%

Bar Chart

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DATA ANALYSIS FROM CONSUMERS PERSPECTIVE:

Frequencies:

If we see the chart then we find that out of 100%respondent, only 55%

respondent are agree to say whatever brand they demanded they are

easily get that but 45% respondent are saying that they are not

getting the demanded brand, it is major concern that why these

respondent are not able to get their demanded brand.

55.0%

45.0%

yes

No

Demanded brand Available in the Market

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Cross Tabulation:

Age of the respondent * Soft drink consumed by the respondent in a week

Symmetric Measures

Value

Asymp.

Std.Error(a)

Approx.T(b) Approx. Sig.



Correlation.322 .103 3.363 .001(c)





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If we see the graph then we find that age group 21-25 is more

potential customer and company should focus on them and provide

them better taste, quality according their preferences.

Brand preferred by the respondent * demanded brand Available in the

Market

Symmetric Measures

Value

Asymp.

Std.

Error(a)

Approx.

T(b) Approx. Sig.

Interval by Interval Pearson's R -.241 .093 -2.455 .016(c)

Ordinal by Ordinal Spearman -.241 .095 -2.455 .016(c)

10-20 21-25 26-35 Above

age of the respondent

0

5

10

15

20

25

30

Count

8.0%

6.0%

1.0%

3.0%

30.0%

5.0%

9.0%

1.0% 1.0%2.0%

10.0%

Soft drink

consumed by the

respondent in a

weekone

two to three

three to five

more than five

Bar Chart

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Correlation





If we see the graph then we find that coke brand is more easily

available than Pepsi it means there is some fault in distribution

channel and company should find that and make available their brand

at every retailers shop.

PepsiCo Coke Others

Brand prefered by the respondent

0

5

10

15

20

25

30

Count

23.0%22.0%

10.0%

29.0%

13.0%

3.0%

Demanded brand

Available in the

Market

yes

No

Bar Chart

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Limitations

1. The limitations faced during the dissertation my research as

lack of availability of first hand data. As the data included is

secondary in nature, authentication of the data is major concern.

The next difficulty was the facts and figures had change due to

change in financial year, thus it could affect therecommendation and conclusion part.

2. There can also be the limitation as the sample size; on the basis

of 400 respondents we can not get the truthful result about the

distribution channel of any organization that major limitation of

my dissertation.

3. It may happen that what question we ask from the

retailers/distributors, they may not give tact full answer.

4. Retailers and distributors had less time to give answer of our

questionnaire and may be that answer is not fact full.

5. The area of concern was limited due to that research may not

give fact full result.

6. Respondent was not giving the answer of our questions.

7. The area of survey was varanasi, Uttar Pradesh etc. and it was

concentrated on urban area only.

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8. The psychological condition varies from place to place because

in many places outlet owner was not supportive.

SWOT ANALYSIS

In order to get clear understanding of the position of Diet Pepsi in

the various markets we did a SWOT analysis from t

pespi

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