pepsi

SUMMER TRAINING PROJECT REPORT ON DISTRIBUTION STRATEGY OF PEPSI VARUN BEVERAGES LTD

PEPSI BACHELOR OF BUSINESS ADMINISTRATION Submitted By : Mr. AVINASH CHAUHAN Roll No. : 9389556 Enrollment No. : M0531951 Under The Guidance: Internal Guide: - Mr. A.K. Yadav External Guide: - Mr. Manoj Rawat

INSTITUTE OF MANAGEMENT EDUCATION SAHIBABAD , GHAZIABAD

178, MAIN G.T. ROAD SAHIBABAD, GHAZIABAD (U.P.)

CERTIFICATE

This is to certify that the project titled “DISTRIBUTION STRATEGY OF PEPSI VARUN BEVERAGES LTD.” is a bonafied work carried out by Mr. Avinash Chauhan in partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration from Institute of Management Education, C.C.S. University under the guidance and direction.

Internal Guide: Mr. A.K. Yadav

External Examiner Mr. Manoj Rawat

Dean: Manoranjan S. Ram

Department Coordinator

TABLE OF CONTENTS 1.

.

INTRODUCTION :-

COMPANY PROFILE-IN U.S. • • • • •

2.

DISTRIBUTION NETWORK • • •

3.

COMPANY PROFILE-IN INDIA BUSINESS SEGMENT BEVERAGE INDUSTRY FOOD INDUSTRY ADVERTISEMENT AND ADD CONCEPT

NETWORK DESIGN DISTRIBUTION STRATEGIES DISTRIBUTION CHANNELS OBJECTIVE OF THE STUDY

4. RESARCH METHODOLOGY 5. DATA ANALYSIS  MARKET FINDINGS  ROUTEWISE  QUESTIONNAIREWISE 6. SWOT ANALYSIS 7. CONCLUSION 8. LIMITATIONS 9. RECOMMENDATIONS/SUGGESTIONS 10. BIBLIOGRAPHY 11. ANNEXURE • QUESTIONNAIRE • EVERY DEALER SURVEY (EDS)

LOGO OF THE PEPSI BRAND

EXECUTIVE SUMMARY “Analyzing the Distribution Strategy of PEPSI in “ SAHIBABAD ” Channels of distribution are an important aspect of marketing strategy. Channels chosen for the company’s products effect every other marketing decision. On 10th JULY I start my project under the guidance of Mr. Manoj Rawat /Md.Imran (C.E.)Sahibabad. I have been allocated the area for survey in Sahibabad. Number of Retailers Covered:- 640 Market Area Of Sahibabad :1.MOHAN NAGAR 2.RAJENDRA NAGAR 3.LAJPAT NAGAR 4.BORDER 5.VAISHALI-1 6.VAISHALI-2 7.VASUNDHARA 8.SURYA NAGAR 9.SHALIMAR GARDEN 10.INDRAPURAM 11.KAUSHAMBI 12.BHOPURA 13.SHAHEED NAGAR 14.MAHARAJPUR 15.JHANDAPUR

PREFACE Marketing plays pivotal role in today’s business scenario in consumer product Company, when there is such a high competition in the market. The emphasis in the project is providing the study and an insight into Indian FMCG Business Scenario. The Summer Project is designed to provide participation of MBA program as on the job experience. This has given a chance to try and apply the academic knowledge and gain insight into corporate culture. This helps in developing decision-making abilities and emphasizes on active participation by the student. We undertook our Project in Varun Beverages, a leading Bottler and Marketing partner of the Pepsi Foods. During the training, we had worked on the project “Distribution strategy of PEPSI in Sahibabad.” We gained valuable experience & knowledge during the survey. The Project consists of our findings after data analysis & then SWOT analysis & conclusions were drawn and finally recommendations were put forward.

ACKNOWLEDGEMENT I express our thanks to Varun Beverages Ltd for granting me the permission to work with the esteem organization. I am also thankful to Mr. Manoj Rawat / Md.Imran(C.E.), Varun Beverage Ltd. who guided and helped us in all possible ways they could, at every stage of the project. My humble thanks are due to all our professors for guiding me during the two months training as my training mentor. I would also like to thank all the Executives, distributors & staff of Sahibabad area who provided us all the relevant information and their kind support, on the basis of which this report has been prepared. Lastly I would like to pay our special regards to my parents for their encouragement and full support for completion of this project work.

Avinash Chauhan

INTRODUCTION Modern age is full of competition. Today only way of success is your continuous efforts towards the growing market needs and in satisfying them. It is the marketer job to know what the market speaks i.e. the ever changing needs of the customer through market research & adopt them fruitfully. It is must for all the companies to make policies according to the customers and the govt. Today to succeed for any organization has to target its customer needs, to create a culture in the organization i.e. market conscious & responsive to customer needs. Soft drinks industry has become big business in India in recent years. The soft drink business under went major change with the entry of PEPSI and re-entry of COCA-COLA in India in the late 80s when Parley with brands like Thumsup, Limca & Gold spot was a clear leader. Coca-Cola took up the product line of parley in 1993-94; today both brands are the Indians favorite soft drinks

COMPANY PROFILE-PEPSI CO. (US) PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. The company consists of the snack business of Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages and Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North America and Gatorade/Tropicana North America) and Quaker Foods North America. PepsiCo International includes the snack businesses of FritoLay International and beverage businesses of PepsiCo Beverages International. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001. Pepsi-Cola Company - Pepsi-Cola (formulated in 1898), Diet Pepsi (1964) and Mountain Dew (Introduced by Tip Corporation in 1948). Frito-Lay, Inc. - Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese flavored snacks (1948), Ruffles brand potato chips (1958) and Rolled Gold brand pretzels (acquired 1961)

Pepsi co is the world leader in the food chain business. It consists of many companies amongst which the prominent one is Pepsi cola, frito lay, Pepsi food international, pizza hut, and KFC and taco bell. The group is presently into three most profitable businesses namely, beverages, snack foods and restaurants. It has scores of big brand available in nearly 150

countries

across

the

globe.

The beverages segment primarily market Pepsi diet, mountain dew and other brands worldwide and 7UP outside the U.S. market. They are positioned in close competition with Coca-Cola inc. of USA. A point to be noted is that coca cola get 80% of its profit from international operation while same figure of Pepsi co. stand at 6%, the segment is also in the bottling plants and distribution facilities.

The restaurant segment primarily consists of the operations of the worldwide pizza hut, Taco Bell and KFC.

Long time no.2 player in the cola wars, Pepsi co. is widening the play field, over the last years; the company has invested more than $2billion in its

worldwide

operations.

When Coca-Cola changed its formula in 1985, Pepsi stepped up its competition with its long time archival claiming victory in the cola wars. Coke and Pepsi expanded their rivalry to tea in 1991 when Pepsi formed a venture with #1 Lipton in response to coke’s announced venture with

nestle (Nestea) it has won over 30% of the ready to drink tea market, a part

of

the

so

called

"new

age”

beverages

segment.

The beverage industry has witness the phenomenal growth over the last few years necessitating capacity increase and builds up of commensurate infrastructure to meet the businessgrowth, which is accordingly matched. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people.

COMPANY PROFILE-JAIPURIA GROUP: IN INDIA With a Legacy of decades in the industrial arena, the Jaipuria Group of Companies now stands at the one thousand five hundred Crore marks. The group boasts of its several world-class business arenas like those of Textiles, Bottling, education, and information technology, Food Chain and Retailing, apart from numerous other business segments JAIPURIA GROUP is a Rs.1500 Crore, family controlled, reputed business house with over a century of operations in diversified fields. The group as on today can boast of expertise and leadership in the fields of food and beverages, textiles and real estate development with varied interests in a wide range

of

products

and

services.

The Jaipuria Group under the leadership of the three brothers SK Jaipuria, RK Jaipuria and CK Jaipuria has today become one of the leading business houses of the country. The following are the major areas of operations of the Jaipuria Group: Food and Beverages Textiles Information Technology Real Estate Education

It can be said with absolute certainty that the RKJ Group has carved out a special niche for itself. Our services touch different aspects of commercial and civilian domains like those of Bottling, Food Chain and Education. Headed by Mr. R. K. Jaipuria, the group as on today can lay claim to expertise and leadership in the fields of education, food and beverages. The business of the company was started in 1991 with a tie-up with Pepsi Foods Limited to manufacture and market Pepsi brand of beverages in geographically pre-defined territories in which brand and technical support was provided by the Principals viz., Pepsi Foods Limited. The manufacturing facilities were restricted at Agra Plant only.

Varun Beverages Ltd. is the flagship company of the group. The group also became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India. It has total 27 Pizza Hut Restaurants under its company. We diversified into education by opening our first school in Gurgaon under management of Delhi Public School Society. The schools of the group are run under a Registered Trust namely Champa Devi Jaipuria Charitable Trust. Companies are medium sized, professionally managed, unlisted and closely held between Indian Promoters and foreign collaborators.

The group added another feather to its cap when the prestigious PepsiCo “International Bottler of the Year” award was presented to Mr. R. K. Jaipuria for the year 1998 at a glittering award ceremony at PepsiCo’s centennial year celebrations at Hawaii, USA. The award was presented by Mr. Donald M. Kendall, founder of PepsiCo Inc. in the presence of Mr. George Bush, the 41st President of USA, Mr. Roger A. Enrico, Chairman of the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President of

Pepsi

Cola

Company.

Vision of the Company: Being the best in everything we touch and handle. Mission of the Company: Continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making economic value additions in all corporate functions. MAIN CREDENTIALS 1. VARUN BEVERAGES LIMITED received" GOLD STANDARD AWARD" for the production and quality control for the year 1996-97. 2. Jaipuria group was adjudged “Best Bottler “out of more than 2000 bottles all over the world for the year 1996-97.

BUSINESS SEGMENTS

The RKJ Group is divided into three-business segments- Beverage, Food and Education. It has a leading market position in each of its three business segments. Our balanced portfolio produced a solid business performance. Products and services, which look to the future, ensure that we will be well placed in growth markets. Cream Velley

BEVERAGE INDUSTRY Indian Beverages industry’s size is Rs. 8000 Crores and it is dominated by two player’s viz. Pepsi & Coke only. This high profile industry has lot of potential for growth as per capita consumption in India is 8 bottles a year as compared to 20 bottles in Sri Lanka, 14 in Pakistan, while 12 bottles a person in Nepal. The RKJ group is India's leading supplier of retailer brand Carbonated and Non-Carbonated soft drinks, with beverage manufacturing facilities in India and Nepal. Its experience in the beverage industry dates back to the sixties when it had the first franchise at Agra. The group manufactures and markets carbonated and Non-Carbonated Soft Drinks and Mineral Water under Pepsi brand. The various flavors and sub-brands are Pepsi, Mirinda Orange, Mirinda Lemon, Mountain Dew, and 7UP, Slice Mango, Evervess Soda and Aquafina.

It has the license to supply beverages in the territories of Western U.P., part of M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts of Maharashtra, 9 districts of Karnataka and whole of Nepal. The group has in total 18 bottling plants in India & Nepal and is responsible for producing and marketing 44% of Pepsi requirement in India. In order to later to this increasing demand, new bottling plants are being set up at alwer, kosi, Jodhpur, Kathmandu and goa to produce400-600

bottles per minute, which would mainly cater to northern markets of India. And in future, they will also be used to manufacture fruits mincebased

soft

drinks

like

slice

and

mangola.

INGREDIENTS OF SOFT DRINK: We only use the finest ingredients to make Pepsi-Cola products. To guarantee our consumers consistent quality, each ingredient must pass our high standards, rigorous quality control tests and strict bottling procedures. Pepsi-Cola products contain natural flavors, including extracts of the kola nut ND flavor oils derived from natural sources such as citrus and other fruits. Caramel (made from corn sugar) adds color and flavor to our colas. Other ingredients add a refreshing taste: phosphoric acid in colas; citric acid and sodium citrate in Mountain Dew, Slice and Diet Pepsi. We also put a freshness date on every can and bottle. Soft drinks may lose some flavor over time so our freshness date tells consumers when the product is freshest and best tasting. Every can and bottle of Pepsi-Cola products has a Nutrition Facts panel, which shows the number of calories and other nutrients per serving. There is essentially no fat in any Pepsi-Cola a product. The main ingredients found in Pepsi-Cola products include carbonated water, carbohydrates, sugar, sodium, potassium and caffeine. For a complete breakdown by ingredients by product, see our product information for Pepsi, Diet Pepsi, Mountain Dew, Slice and Aquafina.

Ascorbic Acid Another name for Ascorbic Acid is Vitamin C the Ascorbic Acid used in our carbonated soft drinks functions as an antioxidant to protect the flavors, color, and taste. In some beverages we also add it to provide the nutritive value found in Vitamin C. Aspartame Aspartame is a sugar substitute used in our diet beverages and many other food products. Aspartame is made of the same building blocks as protein, so it is considered a "nutritive sweetener," but the very small amounts used in diet drinks contribute no calories. Blue1 Blue 1 is a FDA-approved food coloring used in a variety of products such as jellies, condiments, puddings, and beverages. Brominated Vegetable Oil (BVO) Brominated vegetable oil has been used by the soft drink industry since 1931. It is a widely used food additive that has been extensively tested and approved by the U.S. Food & Drug Administration. Brominated vegetable oil is derived from soybean oil that has been modified in order to keep the flavoring oils well blended.

Caffeine Caffeine provides a characteristic flavor to soft drinks. Caffeine is naturally found in coffee, tea and chocolate. For comparison, an 8-oz. cup of brewed coffee can have from 85-120 mg of caffeine on average, while an 8-oz. serving of Pepsi contains about 25 mg of caffeine. An 8-oz. cup of coffee therefore contains three to four times as much caffeine found in a caffeinated colon. There is no caffeine in Caffeine Free Pepsi, Caffeine Free Diet Pepsi, Aquafina, Slice, Mountain Dew or Mirinda. Caramel Caramel is a flavoring that is added to some of our beverages. Citric Acid Citric Acid can be found in citrus fruits such as lemons and oranges. Citric acid is used to bring out the flavor of other ingredients and imparts a tang or tartness to beverages. Citric acid is not Vitamin C. the same fruits that have citric acid often have Vitamin C but the technical name for Vitamin C is ascorbic acid. Gum Arabic Gum Arabic is a purified natural vegetable gum obtained from the acacia tree and is used in keeping our carbonated beverages well blended.

High Fructose Corn Syrup High Fructose Corn Syrup (HFCS) is a sugar derived from corn and provides sweetness and taste to our beverages. HFCS has the same sweetness as table sugar (sucrose) and has almost the identical composition of fructose and glucose. Natural Flavorings Natural Flavorings are flavoring ingredients that are the essences or extracts derived from natural plant sources. Natural Flavorings are what gives a product its distinctive flavor and taste. Pepsi products are the only products with these distinct flavor blends, which are considered part of our secret formula. The term natural flavor is defined by the food and drug administration and all of our natural flavorings meet this definition. Phosphoric Acid A small amount of phosphoric acid is added to our soft drinks. However, it is greatly diluted and is fully approved by the U.S. Food and Drug Administration for use in soft drinks. Phosphoric acid provides tartness, essential to a well-rounded flavor. Phosphorus, like calcium, is an essential mineral in bone. It is widely distributed in the food supply, including fish, milk, meat, eggs and cereal grains. Potassium

Potassium in Pepsi-Cola products may come from water or as part of certain ingredients. For example, potassium may be combined with benzoic acid, which helps prevent spoilage and flavor changes. Potassium is an electrolyte that helps meet the mineral needs of active people. Quillaia Quillaia Extract is a purified extract derived from the bark of the Quillaia tree. It is carefully selected based on its characteristics. It is cooked, filtered and pasteurized. It is FDA-approved, non-hazardous. Quillaia is found in some of our frozen drinks. Red 40 Red 40 is a FDA-approved food coloring used in beverages. Sodium All of our products are "low sodium" and contains less than 110 mg per eight-fluid-ounce serving. A number of beverages have less than 35-mg sodium per serving, so they are considered "very low sodium" products.

Sugar Regular soft drinks and sports drinks are sweetened with sugar. There are many types of sugar available today. In soft drinks and sports drinks, the sugar is primarily high fructose corn syrup, which comes from corn.

Total Carbohydrates Total carbohydrates include the sugars and any carbohydrate-like parts of ingredients, such as organic acids. Although diet drinks may have no sugar, they may contain more than half a gram of carbohydrate.

Yellow5 Yellow 5 is a FDA-approved food coloring. Used since 1916, it is found in a variety of products such as skim milk, yogurt and macaroni and cheese.

FOOD INDUSTRY The last decade has been a period of dynamic growth for non-alcoholic drinks and has witnessed completely new segment of the food market in India taking shape. Food market at stake in India is enormous. The food chain and the forces acting on the food chain are changing rapidly, and in a

generally

positive

manner.

India's sheer size and diversity are enough to make it an attractive market for nearly every major food, beverage and agribusiness company. A KSA Technopak study indicates that the fast food industry in India will be worth $1.27 billion by year 2005. To capitalize on the RKJ group’s significantly important relationship with Pepsi Foods, it decided to venture into food sector, which is second largest business for Pepsi all over the world. Fast food is the most happening thing across the world.

The group became the first franchisee for Yum Restaurants International formerly PepsiCo Restaurants (India) Private Limited in India. It has exclusive franchise rights for Northern & Eastern India. Out of 56 operational Pizza Hut restaurants in the country 27 restaurants are owned and run by its company. All these restaurants are making good profits & are dominating the market. The name of business entity is Devyani International Private Limited. ICE CREAMS UNDER “CANDIA” BRAND

The India ice creams and frozen desserts market forms part of the food industry. Ice creams and frozen desserts are convenience products, which are ideally suited to the emerging lifestyles and eating trends of Urban India. The RKJ group has its presence in the Ice Cream segment since 1991, when it started manufacturing and marketing Ice Cream under the brand name of “Gaylord” in the state of U.P. During 1996 it sold its brand to Brooke Bond and started supplying Ice Cream to Hindustan Lever as their Ice Cream souring plant. After working for 10 years in this field, during 2003 it has launched its own brand in technical and marketing collaboration with Candia of France.

Advertisement and Add Concept:Advertisements are cost effective means to communicate messages and ideas to build brand preferences and awareness and it is one of the most important tools which a company uses to direct persuasive communication to directive buyers in public or to educated people to avoid hard drink and so on.

The basic objective of advertising is sales promotion sales promotion expenditure have been increasing as a percent of budget expenditure annually and the growth is likely to continue in future. Our celebrities signed by the PepsiCo are as follows:

For PepsiCo. Cricketers:•

Sachin Tendulka

• Rahul Dravid • Mohd. Kaif. • Yuvraj singh • Harbhajan singh. • Sourav Ganguly. • Zaheer Khan • Ajit Agarkar Cine Stars

• Kareena Kapoor • Shahrukh • Kajol • Adnan Sami • Fardeen Khan • Amitabh Bachhan • Govinda • Rani Mukherjee. Tennis Stars :• Leander Paes • Mahesh Bhupati Football Players • Cyrus Broacha • Bhaichung Bhutia

KEY ELEMENTS OF THE TRADE 1.

JO DIKHTA HAI WHO BIKTA HAI: - This is a company slogan, it is to increase the visibility of the product, the company stresses more on increasing the number of outlets than on the volumes of sales. That is the reason of the company providing visibility courses to the shopkeepers.

2.

A BOTTLE THAT IS CHILLED IS SOLD: - In the industry it is considered that a bottle is chilled or putting in cooling compartment is sold. That is the reason the policy providing triage’s come up because according to the contract the shopkeeper has to keep only & only Pepsi’s products in the visicooler.

3.

A BOTTLE LOSS TO COKE IS A GAIN TO PEPSI: - The competition is so strong between the two companies i.e. fighting is on for each bottle that is to be sold in the market. Competitive bidding goes on for each & every prestigious outlet in their region. Monopolizing entries & fat foods joint s is their first priority.

4.

EMPTY kA HI KHEL HAI: - [Empty plays an important role]: - As discussed earlier the distribution points keeps on putting up distribution schemes for retailers i.e. like two bottles of solution free

with the purchase of every one carat of solution. Now these schemes have timed well keeping minding the environmental conditions & schemes provided by the other company. These schemes are of twenty-four hours duration. If a scheme is launched & there is no empty in the market for refill, the whole effort goes in vain that is the reason is said ki sub empty ka khel hai.

TYPES OF PACKS AVAILABLES QUANTITY RATES

MRP/PCs

200ml (24b/s per crate)

7/-

146/-

300ml (24b/s per crate)

9/-

192/-

600ml (24b/s per peti)

20/-

444/-

2-liter (9b/s per peti)

45/-

369/-

250ml (24b/s per crate) slice

-

192/-

1000ml (12b/s per crate) slice

40/-

450/-

200ml (24PCspercrate) tetra slice

10/-

220/-

500ml (24b/spercrate) diet pepsi

20/-

376/-

330ml ( 24PCs ) diet pepsi cane

25/-

120/-

330ml (24PCs) pepsi cane

20/-

456/-

500ml (24PCs) pepsi café-chino

20/-

444/-

SODA: Lehar Soda 300ml (24PCs per crate)

6/-

120/-

Lehar Soda 600ml (24b/s per peti)

10/-

216/-

WATER: Aquafina-1liter (12b/s per peti)

103/-

Aquafina-2liter (12b/s per peti)

199/-

A price generally depends upon the company.

PRICING OF EMPTIES QUANTITY

PRICE

200ml crate

Rs.244

per

300ml crate

Rs.244

per

The Shell Cost Rs 100/- each Empty bottle Rs 6/- each

ORGANIZATION STRUCTURE VARUN BEVERAGES LTD. CHAIRMAN (Mr. RAVI JAIPURIA)

MARKET UNIT MANAGER (Mr. KAPIL AGGARWAL)

UNIT MANAGER (Mr. SANJEEV AGGARWAL)

GENERAL MGR. MANAGER (Markt. Deptt.) PRODUCTION MGR. ORDINATOR

TERRITORY DEV.

AREA DEV. CoQUALITY CONTROL

MANAGER MARKETING EXECUTIVE EXECUTIVE SHIPPING MGR. SALESMAN TRANSPORT MGR.

CUSTOMER

DISTRIBUTION NETWORK Total market of Sahibabad is divided into, 1 C&F Agent & 8 distributors take care of Sahibabad. Market and Sahibabad is having a market share of 48% of the total Sahibabad .

PROMOTION: The promotion budget is set by the Head Office and thereby is distributed among the different bottler’s all over the country on the basis of there past performances & requirements.

Distribution Network in Sahibabad PEPSI FOODS LTD (Parent Co.) Sahibabad VARUN BEVERAGE LTD (Bottling Plant)

Sahibabad

Distributors

Distributors

Fat Dealer (2)

Retailers

Retailers

C&F Distributors

Fat Dealers (4)

Retailers

CONSUMERS

Fat Dealers (2)

Retailers

DISTRIBUTION STRATEGIES A Company can choose any of the following distribution types: • Exclusive Distribution • Selective Distribution • Intensive Distribution “PEPSI” HAS STRATEGY.

ADOPTED

THE

INTENSIVE

DISTRIBUTION

INTENSIVE DISTRIBUTION: A Strategy of intensive distribution is characterized by placing the goods or services in as many outlets as possible. When the consumer requires a great deal of location convenience, it is important to offer greater intensity of Distribution. This strategy is generally used for convenience items such as Tobacco, gasoline, and soap, snack foods & bubblegum. Manufactures are constantly tempted to move from exclusive or selective distribution to more intensive distribution to increase their coverage and sales and you could find Pepsi in nursing homes, confectionery shops, departmental stores; you name it & Pepsi is available there.

DISTRIBUTION CHANNEL REDIFINED Pepsi has redefined distribution to strengthen their competitive advantage in the emerging consumer and market scenario. Their earlier focus was to drive wide availability and enable easy access to their brands for consumers. Now they seek to go well beyond this distribution paradigm. Their new approach is more holistic touching consumers in multiple ways at the point of purchase and more importantly, creating opportunities for customers to receive brand message and experience our brands. They are proactively addressing these emerging trends by approaching distribution and channels in a much broader way. They are shifting emphasis from mere reach or availability expansion to touching consumers with a 3- way convergence- of product availability, brand communication and higher level of brand experience. They are thus going beyond delivering products and creating greater engagement and interaction around the purchasing experience.

Product Availability

Point Of Purchase

Brand Communication

Brand Experience

Pepsi’s reinvention of distribution is built on an understanding of emerging consumer trends, the retail environment and the growth drivers of our brands. Pepsi’s distribution system is a key external resource. Normally it has taken years to build and cannot be easily changed. It ranks in importance with key internal resources such as manufacturing, research, engineering and field sales personals. It represents significant corporate commitment to set policies and practices that constitute the basic fabric on which is woven an extensive set of long run relationship.

CHANNEL FUNCTION AND FLOWS

Marketing channel perform the following functions• To gather the information about potential and current customers, and competitors. • To reach agreements on Price • To list orders with manufacturers. • They provide the successive storage and movement of physical products. It can be defined as backward and forward integration i.e. starting from supplier of the raw material to the end customer. The physical flow of Pepsi from its manufacturing unit at Kosi (Varun Beverages) to various retailers in Sahibabad is as follows-

PRODUCT & PACK PROFILE PRODUCT: Carbonated Soft Drinks (CSD) or Soft Drinks as they are popularly known are one of the largest FMCG market in the whole world with the total annual sales around $40 billion. This product is generally available in four kinds of packing. • Glass Bottles •

Pet Bottles

• Cans • Fountain rim FLAVORS: • Cola • Orange • Clear Lemon • Cloudy Lemon • Berry • Ginger • Mango Slice Out of these products the 70% of the sales of the company come from the Cola brand, which is the market leader in the most part of the country of these kinds of packaging in which the product is available make them 80% of the sales come from these bottles. The businesses of returnable bottles are very cumbersome and make the market very complex and demanding.

FACILITIES PROVIDED BY THE COMPANY TO THE RETAILER 1. VISI COOLER • 65 Liter • 110 Liter • 120 Liter • 165 Liter • 200 Liter • 210 Liter • 220 Liter • 300 Liter • 320 Liter • 330 Liter • 500 Liter According to outlet nature, volume & investment of the outlet. 2. SCHEMES OF VOLUME PURCHASE • Cash discount • Card discount (sampling)

3. DISPLAY MATERIAL • Stickers • Banners • G.S. Boards • D.P.S. Boards • Racks • Counters • Umbrellas

K.S. TRADERS PROFILE Address: - K.S. Traders Loni Road Mohan Nagar Sahibabad year of establishment: - 1981 Owner of: -Mr. SUNIL SINGHAL Depot Executive: - Mr.Manoj Rawat / Md.Imran Accounts Dept.: - Mr. Jitendra Number of Route: - 15 Minimum Floor Stock: - 10000 Mr. SUNIL SINGHAL has established K.S. Traders, which is carrying, and forwarding agent in Sahibabad.

OBJECTIVE OF THE STUDY • To find out the problems faced by the channels of distribution. • To increase penetration in the market. • To find out availability of Pepsi & Coke in the outlets. • To see the distribution gap by which the product is selling.

RESARCH METHODOLOGY Research in common refers to a search of knowledge. One can also define research as a scientific & systematic search for pertinent information of a specific topic. It is the pursuit of truth with the help of study observation, comparison & experiment.

DEVELOPING RESARCH PLAN: After deciding the objective of marketing research the next step is deciding Resach plan for gathering effective information related to this research project. The research consists of following steps, which are discussed subsequently. Research Design: Descriptive Research: In my market survey descriptive research process was carried out to describe the market characteristics, consumer profiles, distribution strategies, and market potential. Data Source: During project study I use both primary as well as secondary data source. For primary data collection I visited various retailers in Sahibabad & for secondary data I went through Books, Journals & Internet. The information collected is relevant, correct & unbiased.

Research Design: I followed survey technique for collecting the data. In market survey research approach. Here, I carried out information from retailers have carefully selected the instrument & methods of surveying like I have chosen personal contact methods because of higher response rate & meaningful responses this helped me to get the general feedback in Pepsi, etc.

Reach Instrument: The research instrument used was EDS form. In which market information detail of each outlet should be filled in EDS form. For this I have visited each & every outlet & check all the brands & packs of Pepsi are available or not or which one is available in comparison with Coke & filled it in EDS forms. In my research process I have used closed ended & open-ended questionnaire where respondents could answer in their own manner. Through this I was able to extract information from the respondents about Pepsi’s products & the competitors. Sampling Plan: In designing the sampling plan following points were considered: Sampling Unit: It includes who is to be a surveyed retailer of Sahibabad.

Sampling Size: I have surveyed about each & every outlet of the area specified to me so size would reach upto 350 retailers. Elementary Retailers. The geographical limit is the area of Sahibabad. Contact Method: In my research process, I have collected information through personal interview process with the help of EDS. Form given by the company because it is the most reliable & accurate method for collecting primary data. Through this, the analysis of body language & facial expressions can be made. Methods of data interpretation: In this market study I have used pie chart for data analysis & interpretation because pie chart is the easiest & comprehensive medium for presentation of data. Sampling

unit is a single retailers outlet which may be:-provision

store,stationery shop,eatery &kiosk. The universe studied is the sum of the retailers in the sahibabad area.

DATA ANALYSIS MARKET FINDINGS: ROUTWISE

K.S. TRADERS Route: Mohan Nagar Salesman: Manoj Vehicle: Tata-407(8329) Total Outlets: 25 Monopoly Outlets: 5 Key A/C's: 1 Fat Dealer: 1

Route: Rajendra Nagar Salesman: Bhupendra Vehicle: Mahindra Pickup(7743) Total Outlets: 65 Monopoly Outlets: 15 Key A/C's: 1 Fat Dealer: 1

Route: Lajpat Nagar Salesman: Rakesh Sharma Vehicle: mahindra Pickup (9395) Total Outlets: 40 Monopoly Outlets: 8 Key A/C's: 0 Fat Dealer: 0

Route: Border Salesman: Jitenra Vehicle: Tata- 407 (1442) Total Outlets: 40 Monopoly Outlets: 10 Key A/C's: 1 Fat Dealers: 0

Route: Vaishali-1 Salesman:K.K. Sharma Vehicle: Tata-407(7756) Total Outlets: 50 Monopoly Outlets: 10 Key A/C's: 0 Fat Dealers: 0

Route: Vasundhra Salesman: Ram Nivas Vehicle: Tata-407 Total Outlets: 35 Monopoly Outlets: 8 Key A/C's: 0 Fat Dealers: 0

Route:SuryaNagar Salesman: BalRaj Vehicle: Tata-407(7826) Total Outlets: 60 Monopoly Outlets: 11 Key A/C's: 0 Fat Dealers: 0

Route: Jhanda Pur Salesman: Kailash Vehicle: Mahindra Pickup(9390) Total Outlets: 40 Monopoly Outlets: 8 Key A/C's: 1 Fat Dealers: 1

Route: Shalimar Garden Salesman: Sushil Vehicle: Tata- 407 (8328) Total Outlets: 40 Monopoly Outlets:8 Key A/C's: 1 Fat Dealers: 1

Route: Indra Puram Salesman:Praveen Vehicle: Tata-407(7759) Total Outlets: 40 Monopoly Outlets: 15 Key A/C's: 2 Fat Dealers: 1

Route: KauShambi Salesman: Sita Ram Vehicle: Tata-407 (1444) Total Outlets: 40 Monopoly Outlets:17 Key A/C's: 3 Fat Dealers:0

Route:BHOPURA Salesman: KALAM Vehicle: MAHINDRA PICK-UP(4032) Total Outlets: 50 Monopoly Outlets: 10 Key A/C's: 0 Fat Dealer: 1

Route: SAHEED NAGAR Salesman: KULDEEP Vehicle: MAHINDRA PICK-UP (7742) Total Outlets: 50 Monopoly Outlets: 15 Key A/C's: 0 Fat Dealer: 1

Route: VASHALI-II Salesman: NAVEEN Vehicle: TATA (407) Total Outlets: 35 Monopoly Outlets: 10 Key A/C's: 2 Fat Dealer: 1

Route: MAHARAJPUR Salesman: NARESH Vehicle: MAHINDRA PICK-UP(4433) Total Outlets: 30 Monopoly Outlets: 12 Key A/C's: 0 Fat Dealer: 1

Mar

FINDINGS OF DISTRIBUTION NETWORK After visiting nearly 640 outlets I have found there are some common problems of retailers, which are: 1. The problem is of non-availability of Lemon & Dew flavors of Pepsi. 2. Every retailer wants that vehicle should come in the morning so that they will keep the bottles in the fridge as soon as possible. 3. One of the major problems is that most of the chilling equipment is not in good working conditions. Retailers have complained many times but no response is being taken. 4. Majority of retailers is asking about Boards, Openers & Counters. 5. Delay in replacement of burst bottles. 6. Sampling due. 7. Some shopkeepers do not get scheme on time. 8. Some shopkeepers require signage. 9. All the retailers appraised the regular supply of the company’s products. 10.Also at some places Pepsi’s signage is still hanging inspite of no transactions with those outlets.

SWOT ANALYSIS STRENGTH • Pepsi is a well-established co., so it has a good reputation in the market. • Advertising of Pepsi is much more aggressive than Coke. • Backed by huge promotion at national & international level. • Lot of SGA’s provided in the market. . WEAKNESS • Non-fulfillment of commitments on time, made to shopkeepers. • Incompetent salesman who do not give the schemes in the market regularly. • Unavailability of various demanded flavors like Mountain Dew & Mirinda Lemon. • Not proper control over distribution network. OPPURTUNITY • May tie up or liaison with major showrooms, computer centers & restaurant. • Huge publicity of Lemon Miranda /Slice has created a lot of demand. • Company has brand equity in the eyes of customers, so its new products can easily penetrates in the market. • Untapped market.

THREAT • Threat of competitors new brand entry in the market in near future. • Restrictions made by Govt. agencies that soft drinks are harmful & non-nutritive. • Natural juice are now available whose price are less or same as soft drinks.

CONCLUSION 1.

After visiting nearly 350 outlets I found that Pepsi & its Brands is not doing a good job in Sahibabad. It is clear that Pepsi (58%) has lagging Coke (38%) in the soft drink market in Sahibabad region. If we compare it with Signage or display material than Pepsi has an edge over coke.

2.

At this time it is solely depends on the retailer which brand he offers to the consumer? Although the company has been unable to satisfy the retailers. The company must take immediate steps in order to resolve its disputes with these retailers.

3. It was also found that the schemes that are brought up in the market by Pepsi & Coke after every couple of day is not making any net effect on the sale of Cola, whereas one is cannibalizing others market only. 4. It was also seen that Pepsi brand is better sold than coke. But it is Thumsup, which is making the major difference in the market. 5. The sale in agewise section, it was found that 200ml is sold in all the age groups with same frequency but 300ml is sold mostly in 16 to 45yr. of age group where as CAN is sold in hi younger generation only. Finally 2lit. Are used only for family or party purpose. 6. It was also seen that Pepsi brand is lagging the Coke especially in Muslim dominated area, which makes a major difference in the market.

LIMITATIONS • Findings are based on the views expressed by the consumers. So it may suffer from biased prejudices. •

Weather conditions were not favorable.

• Some of the respondents were not co-operative & many seem to be having no interest. • The study has not been intended on a very large scale, have the possibility of errors, which cannot be ruled out. • Time limitations. • Area was specified. • It is extremely difficult to persuade retailer to respond to questionnaire. • The retailer knows us as people from Pepsi there by the responses could have been biased. • I had lack of knowledge about the product of the local market. • The company does not provide any financial assistance. • The time allowed for the project was very short (8 weeks). It was impossible to study deeply in that short period. • There was the staying place hearer to local market.

.

RECOMMENDATIONS:1. PEPSI, the choice of Generation next is not providing the first choice of young generation. A young generation wants something strong in cold drinks & thus prefers Thumsup. Pepsi should come out with some extra strong taste to catch up maximum young generation & to become exactly Generation Next drink. 2. Company should appoint competent & honest salesman so that they could provide schemes to the entire retailer’s & cover their full route. 3. It is often seen that some salesman do not intimate schemes to the retailer & few of the retailers complained about it. So there should be frequent visits of Customer Executives to their respective areas to keep the shopkeepers benefited with various schemes. 4. Delay in starting of supply vans from respective depot should be checked & a proper time register should be maintained. 5. Most of the retailers are complaining about non-fulfillment of commitments regarding their sampling. Company should make sure that the retailers get the sampling on time so that they are satisfied. 6. Most of the retailers are complaining about delay & no replacement of burst bottles. Marketing Management should sort some solutions to this major problem of replacing burst bottles. 7. Half filled bottles should also be checked at the time of issue of goods from the distributor’s godown to the respective routes.

8. Company should try to give some credit facility to the distributors so that they get motivated. 9. Credit facility for retailers should be provided. 10. Proper feedback system should be developed by ensuring regular visits & check randomly at the various outlets.

BIBLIOGRAPHY WEBSITES: •

•

www.pepsi.com •

www.pepsico.com

•

www.jaipuriagroup.com

www.rkjworld.com

BOOKS: • Marketing Management- Radha Swami/ Nam kumari •

Research Methodology-C.R.Kothari

•

Principles of Marketing-P. Kotler & Armstrong

NEWS PAPERS: •

The Times Of India

•

The Economics Times

•

Hindustan Times

•

Business Today (July edition)

LIST OF ANNEXURES • QUESTIONNAIRE Questionnaire related to academic purpose, which is prepared to take feedback from retailers. Name of outlet Address Contact person with phone no. Type of outlet:Glossary,kiosk,provision store,eatery,other. • Present share of your outlet Pepsi Coke • You are interested to sale Pepsi Coke Reason:• Salesman ‘s behaviour • What are demands of various packs of Pepsi Pack Demand in % 200ml 250/300ml 500ml 1000ml 2000ml • Demand of different customer group Group Pepsi Male _____ Female _____ Children _____ •

Do you get the delivery at right time? Yes

No

Are you happy with companies’ distribution channel? Yes No

Coke _____ _____ _____

• Which of the company you feel have better distribution network? Coke Pepsi Others • Do you get the benefits of daily schemes launched by the company? Yes

No

• Do you receive the ordered quantity? Yes

No

• Do you want Salesman to be changed at regular intervals? Yes

No

• Companies’ Officers visit time to time? Yes

No

• Which flavor is more demanded? Pepsi Mirinda-Orange Mirinda-Lime Mountain Dew 7UP Slice • Is company responsive to your complaints? Yes/No • The cooling machine is :Your own / Pepsi’s / Coke’s Is any survey done by other softdrink company? Yes/No •

• Are you satisfied with the brands of Pepsi? • Yes / No • Do you get proper scheme at right time? Yes / No • Does coke offer better then Pepsi/ Yes / No • How many times delivery van comes? Ones in a day In alternate days Once in a week Any other ,please specify • Your recommendations about Pepsi company? • Any suggestion . • EDS (Every Dealer Survey)