DISTRIBUTION CHANNEL

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
ISOTONIC SPORTS DRINKS Gatorade

JUICE BASED DRINKS Tropicana 100%, Tropicana Nectars,

Tropicana Twisters and Slice
LOCAL BRANDS Lehar Evervess Soda and Dukes
Lemonade
PEPSI BOTTLERS

WAREHOUSES

RETAILERS
DISTRIBUTORS

WHOLESALER
WAREHOUSES

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.
• Terms And Responsibilities
Price Policy:
Distributors: 3 to 5 % is the profit margin
Retailers: 10 % to 16 % is the profit margin
Territorial Rights: Distributors are given territorial
rights and are not allowed to work beyond their
territories.
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.
 MARKETING SYSTEMS
HORIZONTAL VERTICAL
MARKETING SYSTEM MARKETING SYSTEM

Pepsi – Lipton
Pepsi - Bottler
Alliance
 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 Manages buffer for 10 days and
uses TALLY and EXCEL software
SS drinks Private Limited -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 other’s territory without
company’s knowledge.
– Retailers accountable to the authorized
distributors
EVALUATION
 Contd…
• KEY PARAMETERS
Total lines sold per day
Average of SKU per order
Penetration %
No. of SKU sales
Outlet booking order
Completed sales
 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

By:
Akhil Gupta (91064)
Ambreen Fatma (91066)
Subhrajit Dutt (91112)