Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
The research article ‘To study the efficacy of current scheme and high volume management study, recommend
on ways of improvement and Pack wise marginal contribution analysis of high volume outlets’ is carried out
for Pepsi Co, Coimbatore. The study focuses on the management of HVO and Schemes and marginal
contribution analysis. The study is done in Coimbatore region. Pepsi Co finds it difficult to survive in the
Bottled water Category because of the high discount offered to the Outlets which is a cost to the Company
and the high discount offered to the Outlets by the Competitors. At present the company’s main objective is to
reduce the discount cost so as to enhance the Net Marginal Contribution. Company is also looking forward
to remove the High Volume Outlets from the HVO list whose sales volume is not giving justice to the HVO
status given. Data has been obtained both from the Primary source and Secondary Source for this report.
Primary Data has been obtained from the various officials of Pepsi Co and Secondary Data has been
obtained from various internal documents of Pepsi Co. Limitation of this report is that the findings of the
report is based on the data available from 01/01/2008 that has been projected for the whole year. In the
Coimbatore Territory Aquafina is showing a negative net marginal contribution whereas in contrast CSD
category is showing a positive net marginal contribution in both the territories. The Best solution to remove
the net marginal contribution of Aquafina is either by increasing the price of Aquafina or by reducing the
discount given to this outlets by the cross promotion pack mix.
Need for the Study than approved by studying the Cost per The company faces problems with pending
Case for different pack mix given to the claims as claim processing is consuming
A
t present Pepsi Co is struggling distributors. more time. Even though the company has
in their Bottled Water Category approved new format for claim sheet, many
Aquafina and Carbonated Soft Company is also looking forward to remove distributors are not following this. Once this
Drinks category in Coimbatore because of the High Volume Outlets from the HVO list has been strictly implemented, the claim
the high discount given to the Outlets. Pepsi whose sales volume is not giving justice to processing can be made more easy and less
Co’s Carbonated Soft Drinks Category is the HVO status given. Customer Executives time consuming.
doing well in its category compared to and Territory Development Managers of the
Aquafina. Pepsi Co finds it difficult to Coimbatore Territory are suffering a lot Objectives of the Study
survive in the Bottled water Category because of the vagueness and the non clarity
because of the high discount offered to the of the Claims Top Sheet and insufficiency of l To identify the distributors showing a
Outlets which is a cost to the Company and the uniform Supporting documents that is hike in cost per case (CPC) or crossing
high discount offered to the Outlets by the submitted by the distributors. Customer the break even for High Volume Outlets
Competitors. At present the company’s main Executives and Territory Development in Coimbatore. (Separately for Aquafina
objective is to reduce the discount cost so Managers are not able to make any and Carbonated Soft Drinks).
as to enhance the Net Marginal Contribution. meaningful decisions or take corrective l To analyze the discounts being offered
The project is to study the present discount actions on the basis of Claims submitted by to various High Volume Outlets in
strategy of the company and find out those the distributors. Coimbatore Territory. (Separately for
distributors who are availing more discount
COIMBATORE TERRITORY
S.NO DISTRIBUTOR NAME CPC-Actual CPC-Break even CPC Differ CPC-Actual CPC-Break even CPC Differ
1 DANUSH MARKETING 31.17 28 -3.17
2 SRI VIGNESH AGENCY 29.5 27 -2.5
3 CEEDEES ENTERPRISE 29.72 28 -1.72
4 ABISRIYA MARKETING 36.13 28 -8.13
5 JENE AGENCIES 29 28 -1
6 SRI BALAJI AGENCIES 31.55 30 -1.55
7 BALAJI TRADERS 28.33 27 -1.33
8 ANJANEYA AGENCIES 29.86 29 -0.86
9 KRISHANT AGENCIES 29.24 28 -1.24
10 MPR AGENCIES
11 PREETHI AGENCIES
12 RATHINAM AGENCIES
13 JENE AGENCIES
14 SRI PADIYAN AGENCIES
TOTAL 27.66 24 -3.66 29.89 29 -0.89
COIMBATORE TERRITORY
S.NO DISTRIBUTOR NAME CPC-Actual CPC-Break even CPC Differ CPC-Actual CPC-Break even CPC Differ
1 DANUSH MARKETING
2 SRI VIGNESH AGENCY
3 CEEDEES ENTERPRISE 49.12 46 -3.12 27.12 5 -22.12
4 ABISRIYA MARKETING
5 JENE AGENCIES
6 SRI BALAJI AGENCIES
7 BALAJI TRADERS 32.62 31 -1.62
8 ANJANEYA AGENCIES 48.77 45 -3.77
9 KRISHANT AGENCIES
10 MPR AGENCIES 54.57 50 -4.57
11 PREETHI AGENCIES 50.77 37 -13.77
12 RATHINAM AGENCIES
13 JENE AGENCIES
14 SRI PADIYAN AGENCIES
COIMBATORE TERRITORY
S.NO DISTRIBUTOR NAME CPC-Actual CPC-Break even CPC Differ CPC-Actual CPC-Break even CPC Differ
1 DANUSH MARKETING
2 SRI VIGNESH AGENCY 43.7 39 -4.7
3 CEEDEES ENTERPRISE 48.66 34 -14.66
4 ABISRIYA MARKETING 46.66 39 -7.66
5 JENE AGENCIES
6 SRI BALAJI AGENCIES
7 BALAJI TRADERS
8 ANJANEYA AGENCIES 71.81 19 -52.81
9 KRISHANT AGENCIES 34.84 18 -16.84 31.09 29 -2.09
10 MPR AGENCIES 41.9 38 -3.9
11 PREETHI AGENCIES 31.02 29 -2.02
12 RATHINAM AGENCIES 51.69 36 -15.69 37.7 32 -5.7
13 JENE AGENCIES 75.73 19 -56.73 49.05 35 -14.05
14 SRI PADIYAN AGENCIES 60.86 60 1 37.75 36 -1.75
TOTAL 49.08 25 -24.08 35.56 29 -6.56
HVO-AQUAFINA
Table: 1.2 Distributors showing negative CPC in Coimbatore
COIMBATORE TERRITORY
S.NO DISTRIBUTOR NAME CPC-Actual CPC-Break even CPC Differ CPC-Actual CPC-Break even CPC Differ
1 SRI BALAJI AGENCIES 45.2 28.59 -16.61
2 SREE LAKSHMI &CO 138.12 25.06 -113.06
3 EVEREST SOFT DRINKS 37.83 24.76 -13.07
4 SRI VENKATACHALAPATHI
TRADERS 37.34 31.24 -6.1
5 MPR AGENCIES 39.02 34.45 -4.57
6 PREETHI AGENCIES 31.43 22.67 -8.76
7 KRISHANT AGENCY 37.3 34.51 -2.79
8 SRI PADIYAN AGENCIES 38.91 36.44 -2.47 45.58 37.93 -7.65
9 ABISRIYA MARKETING 39 30.42 -8.58
10 JENE AGENCIES 35.16 33.42 -1.74 37.8 36.14 -1.66
11 ALAGUNATCHIAMMAN
AGENCIES 31.15 28.95 -2.2
12 SOLAI AGENCIES 38.91 35.61 -3.3
13 HAJIYAR&CO 49.11 30.88 -18.23
14 J&J ENTERPRISE 60.27 34.37 -25.9
15 BALAJI TRADERS
Table: 1.3
Chart showing Percentage wise Break up of Discount being Offered to Various Outlets
(Aquafina)
Type of Discount Offered to Outlets No of Outlets offered discount Percentage of Outlets offered discount
Table: 1.5
Channel wise Sales Break Up Of Coimbatore Territory (Aquafina)
Convenience 39 40
Eatery 35 40
Grocery 13 9
Leisure 1 1
Modern Trade 2 1
Transport 1 2
Institution 2 1
Wines 5 5
Table:1.6
Aquafina outlets in Convenience Channel and Eatery Channel given discount over and above the Break Even CPC
Table: 1.9
Outlets showing high discounted CPC of above Rs 45.
5 Medlies Super Market Modern Trade 750 77633.03 38204.25 39428.78 50.939
6 Subiksha Super Market Modern Trade 200 20702.14 10256.4 10445.74 51.282
7 Subiksha Super Market Modern Trade 400 41404.28 20512.8 20891.48 51.282
Strengths Weakness
l Company’s Incremental Net Marginal Contribution Perspective. l Resistance to change by the Retailers
l Increase in Aquafina Sales Volume l Agreement by the retailers with the competitors not to sell Aquafina
l No Drop in distributor Margin. Products.
l No loss to the Retailer as they are not forgoing any discount. l Low feasibility in Aquafina Outlets
Opportunities Threats
l Chance to penetrate into Outlets where Peps Co CSD l Chances that competitors COKE will come up
products are available but Aquafina is not available. with the same strategy and enter the Aquafina Outlets.
l A good chance to penetrate into the Wine shop Channel as
300ml is most sold in these Channel
References
Ackerman, Frank. (1993). “Analyzing the True Costs of Packaging,” Journal of Waste Recycling, vol. 34, no. 4 (April), pp. 68-70.
Ackerman, Frank, Dmitri Cavander, John Stutz, and Brian Zuckerman. (1995). Preliminary Analysis: The Costs and Benefits of Bottle Bills, Draft report to U.S. EPA/Office of Solid Waste and
Emergency Response (Boston, Mass., Tellus Institute, January).
Arora.M.N, Cost and Management Accounting, Vikas Publishing House Pvt, Ltd. Baumol, William (1996), “Predation and the Logic of the Average Variable Cost Test” Journal of Law and
Economics, Pp. 39, 49-72.
Billeria, L. J., AND D. C. HEATH: “Allocation of Shared Costs: A Set of Axioms Yielding a Unique Procedure,” to appear in Mathematics of Operations Research.
Cowling, Keith and Michael Waterson (1976), “Price-Cost Margins and Market Structure”, Economica, Pp.43, 267-274.
Haskel, Jonathan, Christopher Martin and Ian Small (1995), “Price, Marginal Cost and the Business Cycle”, Oxford Bulletin of Economics and Statistics, Pp. 57, 25-41.
Khan YM., Jain P K “ Management Accounting” (2007)The McGraw-Hill Companies., Pp.16.3 -16.56
ROY, RANA,(2002) The fiscal impact of marginal cost pricing, The spectre of deficits or an embarrassment of riches? Abstract for a paper presented at the Imprint seminar in Brussels, May 14-15.