Name: Rahul Kumar (2008 -2010)

Title: STUDY OF DISTRIBUTION CHANNEL STRATEGY OF PEPSICO FOR THE POSITIONING OF THE PRODUCT

 

Executive Summary

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 market dominance 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

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 in detail 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 conclusion of the study that reveals some important findings regarding the strategy and corporate structure and strategy of PepsiCo India.

Objectives:

  • TO know distribution channel Strategy of PepsiCo.
  • To know the importance of Distribution channel strategy in Positioning of the product.

Sub Objective:

  • TO know the PepsiCo planning towards the distribution channel strategy.
  • How strong relationship PepsiCo has with the distributors and retailers.
  • Perception of consumer towards the PepsiCo product.
  • Perception of retailers towards the distribution channel of the PepsiCo.

Recommendations:

This is one of the most important and most difficult part of the study.  I arrived at certain recommendations for PepsiCo India after the analysis of the data. Some of the important recommendations are as follows

  • 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.
  • As already mentioned V.C. coolers are a major reason of dissatisfaction among retailers. The periodical maintenance check of V.C. coolers is done at three months. This should be done at an interval of 45 days or 60 days instead of the current practice of 90 days
  • Company should adopt aggressive marketing strategy that it could reach each and every place.
  • 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 should provide visi cooler to every retailer. Because who is having visi cooler of which company they are promoting the same brand to the consumer.
  • Company should more focus on youth of the country because youths more prefer the soft drinks.
  • Company should focus on the consumers taste and preferences and launch new product according to the consumer taste and need.
  • Company should focus on the better services and schemes are providing to the retailers /distributors or not if not then why.
  • Company should maintaining good relationship with the distributors as well as retailers.

In order to respond effectively to changing market trends and challenges, soft drink companies must support their improvement efforts with industry-specific solutions. Company should focus on their distribution channel because it is blood of the company because if product will not reach the market then there is no need of their production as well as company should focus on better services /schemes which can be provide to the retailers as well as distributors.

Limitations:

  • 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 the recommendation and conclusion part.
  • 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.
  • It may happen that what question we ask from the retailers/distributors, they may not give tact full answer.
  • Retailers and distributors had less time to give answer of our questionnaire and may be that answer is not fact full.
  • The area of concern was limited due to that research may not give fact full result.
  • Respondent was not giving the answer of our questions.
  • We were not able to give our full time in research work because of college time and study as well as busy in interview for campus placement.
  • The area of survey was Delhi/NCR, Utter Pradesh etc. and it was concentrated on urban area only.

The psychological condition varies from place to place because in many places outlet owner was not supportive.

Conclusion:

After analyzing all the aspects of the data available and giving some important recommendations a suitable conclusion which should be derived for this study. However, before starting the conclusion part, the objective of the research must be kept in mind so that we can arrive at a befitting conclusion for the research problem.

The primary objective of this research was to know distribution channel Strategy of PepsiCo and to know the importance of Distribution channel strategy in Positioning of the product.

The data collected provided a sound base for understanding the overall organizational set up of PepsiCo in India. By analyzing the data and the literature review, following conclusion was inferred:

 

  • The Sales and Distribution Network of Pepsi is very strong and almost flawless.
  • PepsiCo India had the first mover advantage when it entered the market and it capitalized on that advantage to grab the market.
  • Franchisee based operations combined with the Company’s operations add strength to the overall presence of the Company in the market.
  • Franchisee takes care of its operations and PepsiCo does not interfere in its operations. The Franchisees are required to report to the Company at specific time intervals.
  • The Advertising Campaigns are conceived, implemented by the PepsiCo and Franchisee has no say in that.
  • It is very important to develop good relationship with the retailers by providing them better services and schemes.
  • Maintaining the good relationship with the distributors are very important for the company because they are the main part of the distribution channel.

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The above article was extracted from dissertations in Marketing, Finance, Human Resources, Strategy, Information Systems by the students from Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

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