Submitted To:

Prof. RJ Maslamani

Submitted By:

Sakshi gupta

Sakshi Pandey

Sarthak Bhandari

Sahil Guleria

Saptarishi Bagchi

Sanyam Jain

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“

Chapter 1

Introduction

“Pepsi is one of the world's most iconic and recognized consumer brands globally.
Today, the Pepsi portfolio includes three products - Pepsi, Diet Pepsi and Pepsi
MAX — that each generates more than $1 billion in annual retail sales.” “

Distribution Channel is the chain of organizations or middle people through which a

decent or administration goes until the point that it achieves the end shopper. A
dispersion channel can incorporate wholesalers, retailers, merchants and even the
web. Channels are broken into immediate and backhanded structures, with an
“immediate” channel enabling the purchaser to purchase the great from the producer
and a “circuitous” channel enabling the shopper to purchase the great from a
distributor. Coordinate channels are viewed as “shorter” than “circuitous” ones.

The Distribution Channel

Dispersion is likewise an imperative part of Logistics and Supply chain

administration. Circulation in inventory network administration alludes to the
dissemination of a decent starting with one business then onto the next. It can be
processing plant to provider, provider to retailer, or retailer to end client. It is
characterized as a chain of go-betweens; each passing the item down the affix to the
following association, before it at last achieves the shopper or end-client. This

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procedure is known as the 'dissemination chain' or the 'channel.' Each of the
components in these chains will have their own particular needs, which the maker
must consider, alongside those of the exceedingly critical end-client.

Channels

A number of alternate 'channels' of distribution may be available:

▪ Distributor, who sells to retailers,

▪ Retailer (also called dealer or reseller), who sells to end customers

▪ Advertisement typically used for consumption goods

Distribution channels may not be limited to physical items Alice from maker to
shopper in specific divisions, since both immediate and circuitous channels might be
utilized. Inns, for instance, may offer their administrations (ordinarily rooms)
straightforwardly or through movement specialists, visit administrators, aircrafts,
vacationer sheets, unified reservation frameworks, and so on procedure of exchange
the items or administrations from Producer to Customer or end client.

There have additionally been a few advancements in the circulation of

administrations. For instance, there has been an expansion in diversifying and in
rental administrations - the last offering anything from TVs through instruments.
There has likewise been some confirmation of administration joining, with
administrations connecting together, especially in the movement and tourism areas.
For instance, interfaces now exist between aircrafts, inns and auto rental
administrations. Furthermore, there has been a huge increment in retail outlets for
the administration part. Outlets, for example, bequest organizations and building
society workplaces are swarming out conventional food merchants from significant
shopping territories.”

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 Chapter-2

“Industry profile

Barbara Murray (2006c) explained the soft drink industry by stating, “For years the
story in the nonalcoholic sector centered on the power struggle between…Coke and
Pepsi. But as the pop fight has topped out, the industry's giants have begun relying
on new product flavours…and looking to noncarbonated beverages for growth.” In
order to fully understand the soft drink industry, the following should be considered:
the dominant economic factors, five competitive sources, industry trends, and the
industry’s key factors. Based on the analyses of the industry, specific
recommendations for competitors can then be created.”
Soda pop Industry, the generation, showcasing, and conveyance of non-alcoholic,
and for the most part carbonated, seasoned, and sweetened, water-based
refreshments. The historical backdrop of soda pops in the United States delineates
vital business advancements, for example, item improvement, diversifying, and mass
advertising, and additionally the development of buyer tastes and social patterns.

Numerous Europeans since a long time ago trusted normal mineral waters held
restorative characteristics and favoured them as contrasting options to regularly
contaminated basic drinking water. By 1772, British scientific expert Joseph Priestley
imagined a way to artificially carbonate water, and the business assembling of fake
mineral waters started with Jacob Schweppes' organizations in Geneva in the 1780s
and London in the 1790s. The primary known U.S. producer of pop water, as it was
then known, was Yale University scientist Benjamin Silliman in 1807, however
Joseph Hawkins of Baltimore secured the principal U.S. patent for the hardware to
create the drink two years after the fact. By the 1820s, drug stores across the nation
gave the drink as a solution for different illnesses, particularly stomach related. “

Despite the fact that the beverages would keep on being sold partially for their
helpful esteem, clients progressively devoured them for refreshment, particularly
after the 1830s, when sugar and flavourings were first included. Pop wellsprings

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developed as standard highlights of drugstores by the 1860s and served
refreshments enhanced with ginger, vanilla, natural products, roots, and herbs. In
1874 a Philadelphia store consolidated two mainstream items to influence the
principal known ice-to cream pop. The principal cola drink showed up in 1881. “

In the late 1800s, a few brands rose that were as yet prominent a century later. Drug
specialists testing at nearby pop wellsprings imagined Hires Root Beer in
Philadelphia in 1876, Dr. Pepper in Waco, Texas, in 1885, Coca-Cola in Atlanta,
Georgia, in 1886, and Pepsi-Cola in New Bern, North Carolina, in 1893, among
others. Reflecting two of the white collar class mores of the period—moderation and
feeling overpowered by the pace and weights of present day life—early promoting
touted these beverages as contrasting options to liquor and additionally as
stimulants. Coca-Cola creator John S. Pemberton's first print notice for his creation
read “Tasty! Reviving! Thrilling! Animating!,” while Asa Candler, the inevitable
organizer of the Coca-Cola Company, advanced his item in the years paving the way
to Prohibition as “The Great National Temperance Beverage.” “

The historical backdrop of Coca-Cola uncovers how national markets in soda pop
brands created. To confine the cost of transportation, makers of syrup concentrates
authorized bottlers to blend the item, bundle, and convey it inside a particular region.
Candler thought little of the significance of the packaging side of the business and in
1899 sold the national rights to bottle Coke for a genuinely little total to Benjamin F.
Thomas and Joseph B. Whitehead, who at that point began a national system of
bottlers, making the fundamental diversifying design by which the business is still
run. Candler and his successor after 1923, Robert Woodruff, were forceful and
inventive in showcasing Coke as a main shopper item and social symbol. Coupons
with the expectation of complementary examples and giveaways of things bearing
the drink's name and logo broadcasted the refreshment, and spearheading
endeavors in statistical surveying characterized how best to exploit publicizing and
advancements. Amid World War II, Woodruff opened packaging tasks abroad to
supply U.S. military faculty, and after the war, Coke was ready to enter these global
markets, as a shopper item, as well as an image of “the American Century.” “

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After World War II, the soda business turned into a pioneer in TV promoting, the
utilization of big name supports, appealing mottos, tie-ins with Hollywood motion
pictures, and different types of mass showcasing, especially concentrating on
youthful customers and stressing youth-arranged topics. As wellbeing and wellness
cognizance and ecological mindfulness ended up famous, the industry reacted with
without sugar and low-calorie consume less calories soft drinks, starting in the
1960s, and later, sans caffeine colas and recyclable compartments. “

chapter-3

PRODUCTS AND BRAND

“
PepsiCo’s product mix as of 2009 (based on worldwide net revenue) consists of 63 percent
foods, and 37 percent beverages. On a worldwide basis, the company’s current products lines
include several hundred brands that in 2009 were estimated to have generated approximately
$108 billion in cumulative annual retail sales.

The primary identifier of companies' main brands within the food and beverage industry are
those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this
description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up,
Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max,
Tostitos, Sierra Mist, Fritos, and Walker's. “

Our Mission

“To be the world's premier consumer Products Company focused on convenience food 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

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communities in which we operate. And in everything we do, we strive for honesty, fairness
and integrity.”

Our Vision

“To build India’s leading total beverage company, delighting consumers by best meeting
their everyday beverage needs, and stakeholders, by delivering performance with purpose,
through our talented people.”

OBJECTIVE OF THE STUDY:

The objectives of this project are as follows:”“

▪ To know about PepsiCo., its product line and competitors

▪ To identify sales and distribution channels of PepsiCo.
▪ To study existing sales and distribution strategies of PepsiCo.
▪ To study the relationship of PepsiCo. with its channel partners
▪ To understand perception of channel members and consumers towards PepsiCo.
▪ To identify any existing problems and recommend solutions

LIMITATION OF THE STUDY:”

▪ Biased – The entire study about the company is majorly based on the data gathered
from primary and secondary research done by all group members, so there may be a
chance of biases in the study.
▪ Time – This study has been done in a very short time so it was not possible to delve
equally into all aspects of sales and distribution.

COMPETITION”

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“The Coca-Cola Company has historically been considered PepsiCo’s primary competitor in
the beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in
market value for the first time in 112 years since both companies began to compete. In 2009,
the Coca-Cola Company held a higher market share in carbonated soft drink sales within the
U.S. In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage
market, however, reflecting the differences in product lines between the two
companies. Because of mergers, acquisitions and partnerships pursued by PepsiCo in the
1990s and 2000s, its business has shifted to include a broader product base, including foods,
snacks and beverages. The majority of PepsiCo's revenues no longer come from the
production and sale of carbonated soft drinks. Beverages accounted for less than 50 percent
of its total revenue in 2009. In the same year, slightly more than 60 percent of PepsiCo's
beverage sales came from it primary non-carbonated brands,namely Gatorade and Tropicana.
PepsiCo's Frito-Lay and Quaker Oats brands hold a significant market share of the U.S. snack
food market, accounting for approximately 39 percent of U.S. snack food sales in 2009. One
of PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in
the same year held 11 percent of the U.S. snack market share. “PepsiCo has attained a
leadership position as being the world leader in soft drink bottling, the world largest snack
chip producer, and the world largest franchised system.”

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

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 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 thing
required in operations is a refrigerator. PepsiCo doesn’t manufacture its own
refrigerators; instead they are supplied by different vendors who get time bound
contracts from the company. The distributors and dealers are part of the sales and
distribution network.”

“The target segment 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 foods (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.”

Value Delivery Process:

“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,

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select the appropriate the target market, and develop the offering 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.”

Sales and Marketing Hierarchy of PepsiCo India

PepsiCo provides direct and indirect employment to 150,000 people including suppliers and
distributors.

MUM

UM UM

TDM MDM

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 ADC MDC

CE ME

SALES PERSON MARKETING

ASSISTANT

MUM – Marketing Unit Manager:”

In charge of specific zones (e.g. north, south, east, west) and report to the corporate office.

UM - Unit Manager”“

Responsible for everyday tasks and supervision of the considerable number of capacities
inside the associations including activities, coordination, deals and conveyance, advertising.
The Unit Manager reports to the MUM.”

TDM - Territory Development Manager”

TDM is the responsible for the deals and dispersion system of a specific domain inside a
zone. In charge of the day by day, month to month and yearly deals inside the region choose
the everyday plans for items and motivating forces for salespersons. He is additionally in
charge of effectiveness, profit generation and profit maximization inside the territory.

MDM - Marketing Development Manager

MDM is in charge of all the marketing exercises and their viability inside a region. Chooses
the format and time period of the advertising and promotions and the incentives given to the
retailers.

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ADC - Area Development Coordinator “

Reports to the TDM, and is accountable for a C and F and the distributor point in the region.
He is in charge of any issues in the territory and should guarantee the smooth working of the
whole sales and distribution network in the region. 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 as frequently 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.

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 V.C. coolers. They report to the CE.

Marketing Assistant”

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Reports to the ME and is in charge of the distribution and use of the displays and boards in
the region. Likewise needs to check whether retailers are following the rules of the
organization in regards to promotional displays, other displays and displays in the V.C
coolers.

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Sales and Distribution Objectives

SALES OFFICE FUNCTIONS”

The business office has four principle capacities Finance, Marketing, Sales, and Market
Equipment. Finance keeps up the records of the clients/wholesalers and deals with credit
management and receivables.

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The Unit supports eight such regions, which thusly contains distributors. The wholesalers are
the private organizations who join forces with PepsiCo to guarantee that all retail outlets
under their domain are met with provisions. The Distributor merges the rundown of request
that he would place to the organization. Through the CEs, they guarantee that the anticipated
deals under Annual Operating Plan are met by producing business through wholesalers.

Each wholesaler has a defined zone or domain for which he's in charge of doing the
distribution business. The wholesalers put in the requests for the stock at the PepsiCo's Head
office which thusly, after receipt of instalment advances the same to the bottling plant. The
merchants are relied upon to arrange a specific measure of Primary stock every month which
is known as the terminal's Primary target. “

The little retail outlets are the ones who give the most extreme income and record for approx.
90% of the merchant's income. All things considered, these outlets don't give much income in
terms of sales to the distributors when contrasted with the traditional retail outlets.

ORDER PLACEMENT PROCESS

The Customer Executive or the Distributor faxes the request to the COPC. The fax contains
the photocopy of DD or Check. In the event that the prerequisite does not match, the COPC
official builds the amount of the request, after the assent of the distributor.

The request gets processed if the request value is adhering to credit limit. The requests get
discharged based on claims that the distributor profits from the organization.

The merged rundown of requests from the wholesaler is punched into the SAP framework
after the money related certification and glass limits are confirmed and affirmed by the
Finance.

1) PSRs collect the order quantity from the retail outlets

2) Distributor consolidates the requirement and places an order to the Sales Office
3) Sales Office checks credit block & glass block
4) Sales Office consolidates the requirement and intimates to the Factory
5) Production Manager schedules the production
At times retailer himself orders as per his liking to the respective distributor.”

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DISTRIBUTORS “

PepsiCo hosts outsourced its distribution to third parties and has not set up its own
distribution framework like Coke. PepsiCo's holds a tender to choose its wholesalers for
various territories. For turning into the merchant of PepsiCo a few necessities are to be
satisfied.

The Distribution can be given for a time of one year to around 5 years after which the term
can be restored or if the merchant isn't producing great deals then his permit as a distributor
can even be scratched off when the term is finished.

The supplier offers a better margin, to tempt the owners in the channel to push the product
rather than its competitors; or a competition is offered to the distributors' sales personnel, so
that they are tempted to push the product.

The SKUs contains the following - Pet Bottles of the considerable number of variations of
PepsiCo Tins and Cans Tetra packs. The above SKUs are provided to the distributors through
the distribution centers. The warehouse at the plant stocks the accompanying - All Glass
SKUs of PepsiCo, with the exception of Tropicana Twister and Nimboos, pet Bottles of
Aquafina The above SKUs are made at the plant and are provided to the distributors from
here.

The requests set by the merchant against the accessibility of the completed merchandise are
executed from the plant. Harms up to 0.01% of the aggregate stock are acceptable by the
distributor, past which he might guarantee again from the organization.

The transportation involved in secondary logistics starts from the distributor point to the
industrial outlets. The orders placed by the industrial outlets are processed at the distributor
points.

Channels of distribution
Direct store delivery:

Under the existing system PepsiCo delivers products directly to retail stores. The three
channels DSD enables PepsiCo to merchandise with maximum visibility. 1t’s more suitable
for products that are restocked often and are sensitive to promotions and marketing. PepsiCo
employees were required to take new orders from the grocery store and convenience stores
and deliver the previous orders to the stores. The employees were even responsible

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for putting the products on store shelves. 6ach day the employees had to meet a particular
number of customers. Normal practice was to take orders manually. The employees
distributed snacks and drinks directly to thousands of distribution outlets ranging from small
convenience stores* supermarkets to large warehouse outlets like hypermarkets. PepsiCo
ensured that the products reached the stores in time and also arranged them properly on
shelves with this they ensured that products were fresh and delicate items were properly
handled. The products were arranged such that they attracted maximum visibility for
passersby. PepsiCo often used the DSD system to launch new products in pretty quicktime.
Since PepsiCo employees personally interacted with the retail outlet owners they could gauge
market response for a particular product more easily. The retailers were benefited from DSD
system. (This system the retailers did have to incur labor cost required for unloading the truck
sand placing the products on shelves.”
2.Broker warehouse distribution”
PepsiCo employed third party distributors to distribute products to the stores from PepsiCo
warehouses to the retailer’s warehouses and retail outlets. 4sed for less delicate and
perishable product. System was actually effective and even more economical than existing
system. The items in this category include beverages juices and sport juices.
3. Vending and foods services
PepsiCo, sales personnel distributed it products through third-party, and bottling companies.
PepsiCo distributes food and beverage products to restaurants businesses schools and
stadiums through third-party food service and vending distributors and operators.

ISSUE OF WAREHOUSING”

Because of improper framework, on occasion it prompts space imperative making challenges

in bifurcation of SKU. There may even be situations where stocks are set without rooftop
Hygiene and Cleanliness: For delicate things like drinks & juices, the environment must be
kept clean to guarantee that the jugs that the purchaser gets is in a new condition.

As the merchant for Pepsi is chosen by the organization which does exclude individuals
specifically under the control of Pepsi so there are situations where there are delays in the
conveyance to the small retailers.

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Fuel Consumption”

At times the distributor in order to reduce the fuel consumption sends single trucks on
multiple routes leading to failure in deliveries on time. Chain distribution system and Hub
and Spoke distribution system is followed by PepsiCo. “

The distributors place the orders for the stock at the PepsiCo's Head office which in turn,
after receipt of payment forwards the same to the bottling plant.

The distributors order a certain amount of Primary stock each month which is known as the
depot's Primary target. In order to achieve the given Primary targets, the distributors have to
place a certain amount of stock in the market every month.

SALES AND DISTRIBUTION NETWORK OF PEPSICO

INDIA.

COMPANY

FOBO

COBO

WAREHOUSE

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 C & F Agents

DISTRIBUTERS

SALESMAN

SALESMAN

WHOLESALER

RETAILER

RETAILER
SLUM
S

CUSTOMER

CUSTOMER TOMER

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 (PepsiCo): PepsiCo India
provides the salt to all the bottling plants in the Country that carry out the bottling operations.

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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 franchise 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 centres and Distributor Points.

C & F Centres: These are the biggest centres in the distribution network and receive proper
assistance from the Company (either COBO or FOBO). The C & F centre 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 centres. 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 centres 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.

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

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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.

Problems Identified:”
1. Discontinuation of slums from their distribution network.
2. Unsatisfied dealers and retailers.
3. Lack of Visibility of product due to lower distribution of Visi Cooler.
4. Lack of integration between bottling plant and company
5. Channel conflict
“

Details of the problems:

1. “Slum Discontinuation:
a. 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.
b. Cessation of ghettos in the conveyance arrange by PepsiCo. This move by
PepsiCo unfavourably influenced its situation of a market pioneer on the
grounds that while PepsiCo ended the utilization of Slums in its distribution
channel, Coke proceeded with it and within one year, it could grab extensive
piece of the pie from PepsiCo. Obtaining of entrenched and supported brands
like Thumbs Up and Limca by Coca Cola India. These two brands still
constitute a majority of offers for Coca Cola India.”

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2. Unsatisfied Dealer and Supply chain members: Unnecessary dumping of products by
the company towards the dealers and suppliers is actually causing resentment amongst
the retailers and wholesalers. This also is making the market getting infiltrated with
spurious products instead. Distributors are not satisfied with the services like margins,
product availability, and credit facility.
3. Terms and Responsibilities:
a. Price Policy: Distributors: 3 to 5 % is the profit margin
b. Retailers: 10 % to 16 % is the profit margin
c. Territorial Rights: Distributors are given territorial rights and are not allowed
to work beyond their territories.
d. Conditions of Sale: Payment done through bank or cash. Option of credit sales
remains at the lower part of the chain. Guarantee of damaged goods provided.
4. Unavailability of the Visi coolers is allowing the competitor to be more reachable to
the customers and late delivery and poor serviceability of these cooler also is causing
distribution channel as there is no point is consuming a cold drink hot.
5. Another big challenge faced by Pepsi is the gap in supply and demand. In the case of
Pepsi Cola International, an entire rural segment of customers is excluded from
distribution, which shows the lack of focus given to customer service in the supply
chain. As much as Pepsi Cola International would like to blame the local distributors
for this, the main responsibility lies on its own head for developing a distribution
strategy without proper consideration of the customer segments that exist in the
country and for not hiring managers to control the supply-chain operations in the
country, who would have inculcated efficiency in the supply chain.
6. Poor channel administration unstructured channel administration forms, for example,
accomplice enrollment, impetus frameworks and limited time systems: Pepsi may
jump at the chance to expand its deals by offering a rebate on its jars. In any case, the
retailer realizes that general pop deals won't go up much when Pepsi is put at a
bargain on the grounds that the buyers who purchased different brands will just
switch, generally. In this manner, the retailer may get a kick out of the chance to
“take” any rebate that Pepsi offers.
7. Absence of coordination between channels accomplices – Affecting Decisions with
respect to stock renewal arrange: The Distributor alongside the Customer Executive
makes gauge of the measure of stock that should be kept up and the Brand-Pack mix
that should be kept up. In light of the Customer Executive's gauge the offering limit of

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 the outlet, the sort of channel and the area of the outlet, these choices need to take. For
instance, if an outlet is situated in a bustling region commercial centre, close school or
school or workplaces, and so forth, the deals volume is relied upon to be on the higher
side. Additionally, the divert class in which outlet has a place ought to be utilized as a
part of making gauges the outlet. In the event that the outlet has a place with the
Eatery channel at that point it is relied upon to offer more glass bottles than PET jugs.
On the off chance that it is a Small Grocery in a Private area then more PET
containers are relied upon to offer.”
8. Timely Product Delivery: It is a major issue. As the merchant for Pepsi is chosen by
the organization which does exclude individuals straightforwardly under the control
of Pepsi so there are situations where there are delays in the conveyance to the little
retailers.
9. Integration of bottling plant and company : PepsiCo got diverted from its path of
following an integrated approach of production and delivery with the bottling
company which created huge loss on accounts of sales for the company as many of
the manufactured bottles were not found fit for use by the company . On the other
hand coke followed an integrated approach.

10. “Channel conflict : “

● Goal incompatibility- Aligning bottler incentives with goals of Pepsi: The
channel principal and channel partners have incompatible or misaligned
goals particularly in the area of new product introduction, where the
incentive conflict seems to cause a lot of problems. Pepsi is acquiring
its major bottling groups in an attempt to better control the incentive conflict
between Pepsi and its bottlers and over pricing, new product introduction,
promotion, and quality.
● Communications difficulties - goal incompatibility, perceptual differences
and role incongruities may be caused by communications problems: The
Merchandiser's meeting is unorganized and they are informed without
giving adequate time to reach the meeting therefore the whole process of
transforming the whole information is not 100 percent.
● Issues of profit margin for retailers: Retailers have issues with the margins
that they get on the glass bottles. They are often reluctant to take orders
unless they get good margins and may stock the product of the competitor.

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 Like the MRP of Coke is Rs. 12 while for Pepsi its Rs. 10 for 300 ml bottle
but retailers get better margins on Coke bottles.
● lack of coordination between channel partners – Affecting Decisions
regarding stock
Replenishment order: The Distributor along with the Customer Executive
makes estimate of the amount of stock that needs to be maintained and the
Brand- Pack combination that needs to be maintained. Based on the
Customer Executive’s estimate about the selling capacity of the outlet, the
kind of channel and the location of the outlet, these decisions have to take.
For example, if an outlet is located in a busy area-market place, near school
or college or offices, etc., the sales volume is expected to be on the higher
side. Also the channel category in which outlet belongs should be used in
making estimates about the outlet. If the outlet belongs to the Eatery
channel then it is expected to sell more glass bottles than PET bottles. If it is
a Small Grocery in a residential locality then more PET bottles are expected
to sell.”

Solution and recommendations

RECOMMENDATION

“After analysing and by applying the sales and distribution concepts we can come up with the
following solutions

➢ There should be and correct feedback from the retailers on the performance of
salesmen. This will help improve their efficiency and accountability. Moreover, this
will also help in reducing the confusing that the retailers have at times because the
salesman does not explain the schemes properly.
➢ Company should have better logistics facility for making reach the product at
retailer’s door at a right time.
➢ Marketing Development Coordinators/ Marketing Executives/ Sales Executives of
the company must focus more for making better relationship with retailers.
➢ Company’s major focus should be on customer’s health. Problems related to
formaldehyde contents must be extensively studied and removed.

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 ➢ The gap between supply and demand occurs due to delivery of irregular quantities and
lack of expertise of channel members. An efficient supply chain management should
be used.
➢ Company the follow a strategy which is beneficial for a longer run and thus, should
follow an integrated approach with the bottling company.
➢ Problems similar to naked drinks must be avoided in the future for which company
should focus on the contents of the drinks and try to make it healthier for the
customers.
➢ Overstocking should be removed for which, manufacturers, 3 distribution systems,
bottling plant must work concurrently on a similar platform.
➢ No coordination between the channel partners is leading to a lot of problems in
replenishment of orders which can be resolved by making certain guidelines
according to the locations to which they are serving.
➢ They should continue with the idea of SLUMS in order to penetrate their products in
rural market.
➢ As coke is following a strategy of scrapping Pepsi out from the system by sponsoring
various events with a legal agreement of keeping only coca cola products for a certain
period of time, Pepsi too can come up with some idea like its biggest competition,
Coca Cola.”

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