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1.1 INTRODUCTION TO THE COMPANY( PEPSICO)
PepsiCo Inc. is an American multinational food and beverage corporation headquartered
in Purchase, New York, United States, with interests in the manufacturing, marketing and
distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since
expanded from its namesake product Pepsi to a broader range of food and beverage brands, the
largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in
2001which added the Gatorade brand to its portfolio.
As of January 2012, 22 of PepsiCo's product lines generated retail sales of more than $1 billion
each, and the company's products were distributed across more than 200 countries, resulting in
annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food &beverage business in the world. Within North America, PepsiCo is ranked (by net revenue) as the
largest food and beverage business.
Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the
company employed approximately 297,000 people worldwide as of 2011. The company's
beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in
certain regions. PepsiCo is a SIC 2080 (beverage) company.
COMPANY PROFILE
Type : Public (NYSE: PEP)
Founded : Chicago, Illinois, U.S. (1965)
Headquarters : Purchase, New York, U.S.
Area served : Worldwide
Key people : Indra Krishnamurthy Nooyi(Chairwoman, President & CEO )
Industry : Food Non-alcoholic beverage
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History
The recipe for Pepsi (the soft drink), was first developed in the 1880s by a pharmacist and
industrialist from New Bern, North Carolina, named Caleb Bradham who called it "Pepsi-
Cola" in 1898. As the cola developed in popularity, he created the Pepsi-Cola Company in 1902and registered a patent for his recipe in 1903.The Pepsi-Cola Company was first incorporated in
the state of Delaware in 1919.The company went bankrupt in 1931 and on June 8 of that year the
trademark and syrup recipe was bought by Charles Guth who owned a syrup manufacturing
business in Baltimore, Maryland. Guth was also the president of Loft, Incorporated, a leading
candy manufacturer and used the company's labs and chemists to reformulate the syrup. He
further contracted to stock the soda in Loft's large chain of candy shops and restaurants, which
were known for their soda fountains, used Loft resources to promote Pepsi, and moved the soda
company to a location close by Loft's own facilities in New York City. In 1935 the shareholders
of Loft sued Guth for his 91% stake of PepsiCo in the landmark Guth v. Loft Inc.. Loft won the
suit and on May 29, 1941 formally absorbed Pepsi into Loft, which was then rebranded as Pepsi
Cola Company that same year. (Loft restaurants and candy stores were spun off at this time.) In
the early 1960s the company product line expanded with the creation of Diet Pepsi and purchase
of Mountain Dew.
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the
company it is known as at present. At the time of its foundation, PepsiCo was incorporated in the
state of Delaware and headquartered in Manhattan, New York. The company's headquarters were
relocated to its still-current location of Purchase, New York in 1970,and in 1986 PepsiCo was
reincorporated in the state of North Carolina.
PepsiCo was the first company to stamp expiration dates, starting in March 1994.
Acquisitions and divestmentsBetween the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses
outside of its core focus of packaged food and beverage brands; however it exited these non-core
business lines largely in 1997, selling some, and spinning off others into a new company
named Tricon Global Restaurants, which later became known as Yum! Brands, Inc.PepsiCo also
previously owned several other brands that it later sold so it could focus on its primary snack
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food and beverage lines, according to investment analysts reporting on the divestments in
1997. Brands formerly owned by PepsiCo include: Pizza Hut, Taco Bell,KFC,,Hot 'n Now, East
Side Mario's, D'Angelo Sandwich Shops,Chevys Fresh Mex, California Pizza
Kitchen,Stolichnaya (via licensed agreement), Wilson Sporting Goods and North American Van
Lines.
The divestments concluding in 1997 were followed by multiple large-scale acquisitions, as
PepsiCo began to extend its operations beyond soft drinks and snack foods into other lines of
foods and beverages. PepsiCo purchased theorange juice company Tropicana Products in
1998, and merged with Quaker Oats Company in 2001, adding with it the Gatorade sports drink
line and other Quaker Oats brands such as Chewy Granola Bars and Aunt Jemima, among others.
In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its
products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this acquisition
was completed, resulting in the formation of a newwholly owned subsidiary of PepsiCo,Pepsi
Beverages Company. In February 2011, the company made its largest international acquisition
by purchasing a two-thirds (majority) stake in Wimm-Bill-Dann Foods, a Russian food company
that produces milk, yogurt, fruit juices, and dairy products. When it acquired the remaining 23%
stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest food and
beverage company in Russia.
Competition
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. As a result 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
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year, slightly more than 60 percent of PepsiCo's beverage sales came from its primary non-
carbonated brands, namely Gatorade and Tropicana.
PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food
market, accounting for approximately 39 percent of U.S. snack food sales in 2009. One ofPepsiCo'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.
PRODUCTS AND BRAND
PepsiCos product mix as of 2009 (based on worldwide net revenue) consists of 63 percent
foods, and 37 percent beverages. On a worldwide basis, the companys 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.
PACKAGING AND RECYCLING
Environmental advocates have raised concern over the environmental impacts surrounding the
disposal of PepsiCos bottled beverage products in particular, as bottle recycling rates for the
companys products in 2009 averaged 34 percent within the U.S. The company has employed
efforts to minimize these environmental impacts via packaging developments combined with
recycling initiatives. In 2010, PepsiCo announced a goal to create partnerships that prompt an
increase the beverage container recycling rate in the U.S. to 50 percent by 2018.
One strategy enacted to reach this goal has been the placement of interactive recycling kiosks
called Dream Machines in supermarkets, convenience stores and gas stations, with the intent
of increasing access to recycling receptacles. The use ofresin to manufacture its plastic bottles
http://en.wikipedia.org/wiki/Supermarketshttp://en.wikipedia.org/wiki/Convenience_storeshttp://en.wikipedia.org/wiki/Gas_stationshttp://en.wikipedia.org/wiki/Resinhttp://en.wikipedia.org/wiki/Convenience_storeshttp://en.wikipedia.org/wiki/Gas_stationshttp://en.wikipedia.org/wiki/Resinhttp://en.wikipedia.org/wiki/Supermarkets -
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has resulted in reduced packaging weight, which in turn reduces the volume offossil
fuels required to transport certain PepsiCo products. The weight of Aquafina bottles was reduced
nearly 40 percent, to 15 grams, with a packaging redesign in 2009. Also in that year, PepsiCo
brand Naked Juice began production and distribution of the first 100 percent post-consumer
recycled plastic bottle.
Headquarters
The PepsiCo headquarters are located in Purchase, New York. It was one of the last architectural
works by Edward Durell Stone. It consists of seven three story buildings. Each building is
connected to its neighbor through a corner. The property includes the Donald M. Kendall
Sculpture Gardens with 45 contemporary sculptures open to the public. Works include those
ofAlexander Calder, Henry Moore, and Auguste Rodin. Westchester Magazine stated "The
buildings square blocks rise from the ground into low, inverted ziggurats, with each of the three
floors having strips of dark windows; patterned pre-cast concrete panels add texture to the
exterior surfaces." In 2010 the magazine ranked the building as one of the ten most beautiful
buildings in Westchester County.
At one time PepsiCo had its headquarters in 500 Park Avenue in Midtown Manhattan, New York
City.[ In 1956 Pepsico paid $2 million for the original building. PepsiCo built the new 500 Park
Avenue in 1960 In 1966, Mayor of New York City John Lindsay started a private campaign to
convince PepsiCo to remain in New York City. Six months later, the company announced that it
was moving to 112 acres (45 ha) of the Blind Brook Polo Club in Westchester County. After
PepsiCo left the Manhattan building, it became known as the Olivetti Building.
http://en.wikipedia.org/wiki/Fossil_fuelshttp://en.wikipedia.org/wiki/Fossil_fuelshttp://en.wikipedia.org/wiki/PET_bottle_recyclinghttp://en.wikipedia.org/wiki/PET_bottle_recyclinghttp://en.wikipedia.org/wiki/Fossil_fuelshttp://en.wikipedia.org/wiki/Fossil_fuelshttp://en.wikipedia.org/wiki/PET_bottle_recyclinghttp://en.wikipedia.org/wiki/PET_bottle_recycling -
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PEPSICO IN INDIA
PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab government-
owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture
marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was allowed; PepsiCo
bought out its partners and ended the joint venture in 1994. Others claim that firstly Pepsi was
banned from import in India, in 1970, for having refused to release the list of its ingredients and
in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These
controversies are a reminder of "India's sometimes acrimonious relationship with huge
multinational companies." Indeed, some argue that PepsiCo and The Coca- Cola Company have
"been major targets in part because they are well-known foreign companies that draw plenty of
attention." PepsiCo has grown to become one of the countrys leading food and beveragecompanies. One of the largest multinational investors in the country, PepsiCo has
established a business which aims to serve the long term dynamic needs of consumers in India.
PepsiCo India and its partners have invested more than U.S. $1 billion since the company was
established in the country. PepsiCo provides direct and indirect employment to 297,000 people
including suppliers and distributors.
PepsiCo India Holdings Pvt. Ltd. operates through its subsidiaries including Pepsi Foods Ltd,
Frito Lay India, and Tropicana Beverages Company. The company, through its subsidiaries
manufactures, bottles, and exports fruit juices and carbonated beverages and packaged snacks
such as Lays, Ruffles, Fritos, and Cheetos. PepsiCo India is based in Gurgaon, India.
PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver
joy as well as nutrition and always, good taste. PepsiCo Indias expansive portfolio
includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to
low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina
drinking water, isotonic sports drinks - Gatorade, Tropicana100% fruit juices, and juice based
drinks Tropicana Nectars, Tropicana Twister, Slice, and the new brand Nimbooz by 7up with
real lemon juice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the
diverse range of brands.
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Mission and Vision
Mission
Our mission is to be the world's premier consumer products company focused on convenient
foods and beverages. We seek to produce financial rewards to investors even as we provide
opportunities for growth and enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do, we strive for honesty, fairness and
integrity.
Vision
PepsiCo's responsibility is to continually improve all aspects of the world in which we operate
environmental, social, economic creating a better tomorrow than today.Our vision is put into
action through programmes and a focus on environmental stewardship, activities to benefit
society and a commitment to build shareholder value by making PepsiCo a truly sustainable
company.
Performance with Purpose
At PepsiCo, we're committed to achieving business and financial success while leaving a positive
imprint on society delivering what we call Performance with Purpose.Our approach to superior
financial performance is straightforward drive shareholder value. By addressing social and
environmental issues, we also deliver on our purpose agenda, which consists of human,
environmental, and talent sustainability.
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1.2 INTRODUCTION TO PORJECT ( STUDY ON DISTRIBUTION
CHANNEL OF PEPSICO WITH SPECIAL REFERNCE :-LAL JI &
SONS)
My field of study will look into upon the following aspects of distribution and selling
strategy and market-research.
The main purpose of trade is to supply goods to the consumers living in far off places. As goods
and services move from producer to consumer they may have to pass through various
individuals. The middlemen are connecting links between producers of goods and consumers.
They perform several functions such as buying, selling, storage, etc. The middlemen constitute
the channels of distribution of goods. Thus, a channel of distribution is the route or pathalong which goods move from producers to ultimate consumers.
Distribution Channel is 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. Channels are broken into direct and indirect forms,
with a "direct" channel allowing the consumer to buy the good from the manufacturer and an
"indirect" channel allowing the consumer to buy the good from a wholesaler. Direct channels are
considered "shorter" than "indirect" ones.
The Distribution Channel
Distribution is also a very important component of Logistics & Supply chain management.
Distribution in supply chain management refers to the distribution of a good from one business
to another. It can be factory to supplier, supplier to retailer, or retailer to end customer. It is
defined as a chain of intermediaries; each passing the product down the chain to the next
organization, before it finally reaches the consumer or end-user. This process is known as the
'distribution chain' or the 'channel.' Each of the elements in these chains will have their own
specific needs, which the producer must take into account, along with those of the all-important
end-user.
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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 restricted to physical products alice from producer to consumer
in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may
sell their services (typically rooms) directly or through travel agents, tour operators, airlines,
tourist boards, centralized reservation systems, etc. process of transfer the products or services
from Producer to Customer or end user.
There have also been some innovations in the distribution of services. For example, there has
been an increase in franchising and in rental services - the latter offering anything from
televisions through tools. There has also been some evidence of service integration, with services
linking together, particularly in the travel and tourism sectors. For example, links now exist
between airlines, hotels and car rental services. In addition, there has been a significant increase
in retail outlets for the service sector. Outlets such as estate agencies and building society offices
are crowding out traditional grocers from major shopping areas.
The main purpose of trade is to supply goods to the consumers living in far off places. As goods
and services move from producer to consumer they may have to pass through various
individuals. The middlemen are connecting links between producers of goods and consumers.
They perform several functions such as buying, selling, storage, etc. The middlemen constitute
the channels of distribution of goods. Thus, a channel of distribution is the route or path
along which goods move from producers to ultimate consumers.
The route taken by goods as they move from producer to consumer is known as Channel of
Distribution. From the above diagram it can be found that there is just one direct channel
i.e. from producer to the consumer.
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There are many indirect channels like:
(1) PRODUCER DISTRIBUTOR RETAILER CONSUMER
(2) PRODUCER CONSUMER
(3) PRODUCER DISTRIBUTOR CONSUMER
(1) PRODUCER DISTRIBUTOR STOCKIST
CONSUMER RETAILER
The route normally used by FMCG companies especially by the soft drink companies is the
second one i.e. (ii). In this case the wholesaler is usually called distributor.
If the producer is producing goods on a large scale, it may not be possible for him to sell goods
directly to consumers. As such, he sells goods through middlemen. These middlemen may be
wholesalers or retailer s. A wholesaler is a person who buys goods in large quantities from
producers; where as a retailer is one who buys goods from wholesalers and producers and
sells to ultimate consumer s as per their requirement. The involvement of various middlemen in
the process of distribution constitute the indirect channel of distribution. Let us look into
some of the important indirect channels of distribution.
DISTRIBUTOR
Distributors are one of the important middlemen in the channel of distribution who deals with the
goods in bulk quantity. They buy goods in bulk from the producers and sell them in relatively
smaller quantities to the retailers. In some cases they also sell goods directly to the consumers if
the quantity to be purchased is more. They usually deal with a limited variety of items and also in
a specific line of product, like iron and steel, textiles, paper, electrical appliances, etc. Let us know
about the characteristics of distributors.
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CHARACTERISTICS OF DISTRIBUTOR
The followings are the characteristics of distributors:
I. Distributors buy goods directly from producers or manufacturers.
II. Distributors buy goods in large quantities and sells in relatively smaller
quantities.
III. They sell different varieties of a particular line of product. For example,
a distributor who deals with Lays, lehar, quaker, Tropicana and soft
drinks of different variety etc.
IV. They may employ a number of agents or workers for distribution of
products.
V. Distributors need large amount of capital to be invested in his business.
VI. They generally provide credit facility to retailers.
VII. He also provides financial assistance to the producers or
manufacturers.
FUNCTIONS OF DISTRIBUTORS
Let us now know what the functions of distributors are.
(a) Collection of goods: A distributor collects goods from manufacturers or producers in large
quantities.
(b) Storage of goods: A distributor collects the goods and stores them safely in
warehouses, till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold
storage.
(c) Distribution: A distributor sells goods to different retailers. In this way, he also performs
the function of distribution.
(d) Financing: The distributor provides financial support to producers and manufacturers by
sending money in advance to them. He also sells goods to the retailer on credit. Thus, at both ends
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the distributor acts as a financier.
(e) Risk taking: The distributor buys finished goods from the producer and keeps them in the
warehouses till they are sold. Therefore, he assumes the risks arising out of changes in demand,
rise in pr ice, spoilage or destruction of goods.
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 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 products required in the operation is
Refrigerator. PepsiCo does not manufacture the 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. This will be explained
later under the section of Place, in the 4 Ps segment.The target customer 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 food (from the snack food division i.e. Frito Lay).
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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. This will be explained in detail in the strategic marketing segment.
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,
select the appropriate the target market, and develop the offerings 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.
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SALES AND DISTRIBUTION NETWORK OF PEPSICO INDIA
COMPANY
COBO FOBO
WAREHOUSE
C & F DISTRIBUTOR
WHOLESALER SLUMS RETAILER
RETAILER CUSTOMER
CUSTOMER
SALESMEN SALESMEN
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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.
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 thefranchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for
Pepsi.
Warehouses: These are Company or franchisee 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 centers and Distributor Points.
C & F Centers: These are the biggest centers in the distribution network and receive proper
assistance from the Company (either COBO or FOBO). The C & F center 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 centers. 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 centers 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.
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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.
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.
SALES AND MARKETING HIERARCHY OF PEPSICO INDIA
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MUM Marketing Unit Manager: In charge of specific zones (e.g. north, south, east, west)
and report to the corporate office.
UM - Unit Manager: In charge of day to day operations and supervision of all the functions
within the organizations including operations, logistics, sales and distribution, marketing. The
Unit Manager reports to the MUM.
TDM - Territory Development Manager:TDM is the in charge of the sales and distribution
network of a particular territory within a zone. Responsible for the daily, monthly and annual
MUM
UM
TDM MDM
MDCADC
CE ME
UM
SALESPERSONS MARKETING
ASSISTANTS
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sales within the territory decides the daily schemes for products and incentives for salespersons.
He is also responsible for cost effectiveness, profit generation and profit maximization within the
territory.
MDM - Marketing Development Manager: MDM is responsible for all the marketing
activities and their effectiveness within a territory. Decides the format and time frame of the
marketing and promotional activities and the incentives given to the retailers.
ADC - Area Development Coordinator: Reports to the TDM, and is in charge of a C & F
center and the distributor point in the area. He is directly responsible for any issues in the area
and is supposed to ensure the smooth functioning of the entire sales and distribution network in
the area. 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.
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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 Vicioolers. They report to the CE.
Marketing Assistant: Reports to the ME and is responsible for the distribution and usage of the
displays and boards in the area. Also has to check whether retailers are following the guidelines
of the company regarding promotional displays, other displays and displays in the Vigicoolers.
They report to the ME.
Pepsi is one of the most well known brands in the world today available in over 160 countries.
The company has an extremely positive outlook for India. "Outside North America two of our
largest and fastest growing businesses are in India and China, which include more than a third of
the worlds population." (PepsiCos annual report, 1999)
This reflects that India holds a central position in Pepsis corporate strategy. India is a key
market for Pepsico, and at the same time the company has added value to Indian agriculture and
industry. PepsiCo entered India in 1989 and is concentrating in three focus areas Soft drink
concentrate, snack foods and vegetable and food processing.
Faced with the existing policy framework at the time, the company entered the Indian market
through a joint venture with Voltas and Punjab Agro Industries. With the introduction of the
liberalisation policies since 1991, Pepsi took complete control of its operations. The government
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has approved more than US$ 400 million worth of investments of which over US$ 330 million
have already flown in.
One of PepsiCos key strategies was to develop a completely local management team. Pepsi has
15 company owned factories while their Indian bottling partners own 28. The company has set
up 8 greenfield sites in backward regions of different states. PepsiCo intends to expand its
operations and is planning an investment of approximately US$ 500 million in the next three
years.
Sustainable Competitive Advantage:
Competitive advantage is a companys ability to perform in one or more ways that its
competitors cannot or will not match. When a company is able to maintain that advantage a long
period of time that gives it an edge over its competitors then, this advantage is termed as
sustainable competitive advantage. Any competitive advantage must be seen by customers as a
customer advantage. Then only that competitive advantage can be transformed into a sustainable
competitive advantage.
Three major competitive advantages give PepsiCo India a competitive edge in the market place.
They are:
Big Muscular Brands built through better market positioning and heavy investment in
advertising and promotions;
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Proven ability to innovate and create differentiated products through superior operating
base;
Powerful go to market system built with the help of superior relationship base and an
impeccable sales and distribution network.
Making it all work are the extraordinarily talented and dedicated people who are an integral partof PepsiCo India.
Communicating with the Customer:
Marketing Communication is the means by which firms attempt to inform,
pursued and remind consumers directly and indirectly about the products
and brands they sell. Marketing Communication is the central instrument of
making brand equity. Marketing Communication consists of six major modes
of communications called the marketing communication mix.
Advertising.
Sales promotion.
Events and Experiences.
Public Relations and Publicity.
Direct Marketing.
Personal Selling.
Although PepsiCo uses all the modes in some form or the other, but this study will examinevarious aspects of communication with the internal customers
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DISTRIBUTION CHANNEL OF PEPSICO PRODUCTS FOR LAL JI &
SONS
MANUFACTURER (CHANNO VILLAGE)
DEPOT (Phaguwala)
DISTRIBUTORS
(JALANDHAR,LUDHIANA, PHAGWARA)
RETAILERS
CONSUMERS
Note: DEPOT at Phaguwala, they directly get their stock from the PepsiCO channo
plant
Strategies for Lal ji & Sons
Criteria for selecting the distributors:
The company looks at the prospects before permitting/Authorizing for distributor. Therefore the
criterias are as follows,
He should have a godown
Vehicles
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Manpower
Deposit for cases/crates at the rate of 200 each
Liquid value
Distributors in JALANDHAR
1. LAL JI & SONS
2. SHAGUN
3. GURU KIRPA
Number of units possessed by distributors
In season - 14 units
In off-season 6 units
* Units refers to the vehicles possessed by the distributors for local logistics
Factors influencing the assignment of areas to distributors salesman
1. An average number of outlets the salesman effectively works on. A salesman can handle
60 outlets on an average effectively in a day
2. Depending on the frequency of a particular route. The distributors follow three types of
frequencies they are:
a) Daily
b) Alternative days
c) Once a week
Note: Once in a week is only followed for the up country areas
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Working of distributors
The distributor first has to maintain the following
The Brand pack separately after unloading the vehicle i.e. the brand order in the
following sequence
- lays
- Tropicana
- Juice
- Water
5 days stock to meet the demand.
The company gives target to the distributors and these distributors with help of sales executives
break the target into
1. Daily
2. Weekly
3. Brand wise
4. Sales wise
Here the distributor focuses on weaker brands and tries to push maximum number of
these weaker units into the mixed cases ordered by the retailers.
The distributor have to maintain a four (4) day stock with them which will become the
reorder level once when the order is placed at the Phaguwala depot the stock comes up
the next day but an important point to note here is unless and until the empty bottles
reach the depot the new stock will not reach the distributor.
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Distributors route Planning :
Distributors identify two routes they are:
Potential route
Non Potential route
Note: For Potential the vehicle goes daily and for non potentials it goes once in a week
The potential routes are those routes in which the distributor gets maximum business as the
number of outlets will be more and therefore the vehicle goes daily to meet the market demand.
Ex: If a distributor has 400 outlets in his area he has to plan accordingly as per his route where in
he has to visit 60 outlets per route.
OPERATIONAL PLANS FOR THE YEAR
Distributors have two plans a year
1. First plan from January 1st to June 15th
2. Second Plan from June 15th to December 31st
FIRST PLAN:
This plan is considered as yielding season where maximum business will be earned. The 70% of
the target needs to be achieved during this season
SECOND PLAN:
Here in this plan there will be minimum business and during this season there will be lot of
promotional activities undertaken.
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The role of distributor in market:
The distributors salesman is trained properly with respect to his behaviour with the retailers. As
soon as the vehicle goes to the outlet it is the duty of the sales person to
1. Greet the retailer and have a look at the cooler/refrigerator and Rack.
2. He has to suggest the retailer about the stock needed.
3. Convince him for purchase.
4. Place the products in the cooler/rack as per brand order.
5. Look at the warm displays.
6. Follow up and handle complaints.
Support from the company to the distributor
The company supports the distributors in terms of incentives during the off season i.e. during the
second plan in order to retain the distributor.
Distribution (Place) Strategies
Product availability where and when customers want them.
Involves all activities from raw materials to finished products
Basic Channels of Distribution.
Distribution Objective
Minimize total distribution costs for a given service output Determine the target segments and the best channels for each segment
Objectives may vary with product characteristics
e.g. perishables, bulky products, non-standard items, products requiring installation &
maintenance.
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