Presentation on DISTRIBUTION CHANNEL OF PEPSI

Presented by: Sanghamitra Kalita Sayantani Saha Vinay Guwalani

What is distribution channel?

The chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. A distribution channel can include wholesalers, retailers, distributors and even the internet.

Importance of distribution channel

Types of distribution channel

Channels are broken into : Direct (centralized): with a "direct" channel allowing the consumer to buy the good from the manufacturer Indirect (decentralized): "indirect" channel allows the consumer to buy the good from a retailer.

Direct distribution channel

The producer sells the product directly without involvement of any middle man. The sale can be made door to door through salesman, retail stores and direct mail. Certain industrial and consumer goods such as clothes, shoes, books, hosiery goods, cosmetics, household appliances, electronic goods etc., may be sold through direct contact. Perishable goods such as vegetable and fruits can also be sold directly.

Advantages & disadvantages of direct channel:

Advantage of selling through direct channels It is simple and fast. It is economical. The producer has full control over distribution. Satisfies the desire to reduce dependence on middle men. Cash sales. Disadvantages of selling through direct channels Non-availability of expert services of middle man. Large investment is required. Unsuitable for small producers.

Pepsi: introduction
PepsiCo is a USA based company having its head quarters at New York with the net worth of $30-40 million. The average sales of the company are approx 90 million bottles per month. Within 32 years Pepsi emerged as the biggest competitor for Coca Cola. Pepsi is available in 155 countries.

PEPSI CO.
Entered India in 1989 One of the largest multinational investors Provides direct and indirect employment 1,50,000 people (including suppliers and distributors)
BEVERAGES
Pepsi, 7UP, Mirinda, Mt. Dew and Diet Pepsi

HYDRATING AND NUTRITIONAL Aquafina BEVERAGES Gatorade ISOTONIC SPORTS DRINKS JUICE BASED DRINKS
Tropicana 100%, Tropicana Nectars, Tropicana Twisters and Slice Lehar Evervess Soda and Dukes Lemonade

LOCAL BRANDS

PEPSI

BOTTLERS

WAREHOUSES

DISTRIBUTORS

RETAILERS

WAREHOUSES

WHOLESALER

RETAILERS

RETAILERS

Manufacturer Sponsored Retail Franchisee

Pepsi Co licenses bottlers in various markets that buy its syrup concentrate. These bottlers then carbonate and bottle the syrup to sell them to distributors or retailer

FACTORS FOR CHANNEL DESIGN

Customer Needs
Assortment of Goods: Pepsi has a wide assortment of goods. In beverages some very famous are Pepsi Mirinda, 7up, Slice etc Aquafina, Lehar Soda also. Ubiquitous: Restaurant, Pan shops, Kirana Stores, Confectionaries, Pepsi on wheels, all these are some examples of the fact that the product Pepsi is ubiquitous.

 Number Of Intermediaries
Intensive Distribution: Pepsi Co follows an intensive distribution strategy. To support their ubiquitous feature they want to place their product in as many outlets as possible. Increases market coverage Competing against Coca Cola and other local companies.

CHANNEL MEMBERS AND ROLES

PepsiCo
Assigns a territory to the distributor. Assigns sales target acc to region and seasons. Evaluates performance against predefined parameters. Sales incentives Promotional offers.

Distributors Wholesalers Retailers

INTERMEDIARY STATISTICS
DISTRIBUTORS
Jain distributors - Munirka, New Delhi
SS drinks Private Limited

Manages buffer for 10 days and uses TALLY and EXCEL software -do-

WHOLESALERS
EKTA Wholesalers Private Limited

Manages buffer for 2-3 days and uses EXCEL software

RETAIL
Amit Corner, Katwaria Sarai

Transportation cost , vehicle cost at each stage is borne by each intermediaries

GENERIC CHANNEL OUTPUTS

Spatial convenience
High availability Strong presence

Shorter delivery span (time)

CHANNEL MANAGEMENT
PepsiCo has lot of control over the channel
In case of Pepsi to Authorised distributor to retail shops (defined territory of distributor) Pepsi assigns a particular territory to the distributor under an agreement. No intervention into others territory without companys knowledge. Retailers accountable to the authorized distributors

CONFLICTS
Hybrid Channel in place - Wholesalers do not have a control over retailers Rigidity from franchisees.

SUGGESTIONS
Install Vending machines for direct distribution. Financial support to the franchisees.

THANK YOU