6/25/2015

Submitted to:

Mr. Tauqir Ahmad Ghauri

Submitted by:

Muhammad Saim

26

BBA 8th morning

Department of Management Sciences

Pepsi Co. Sales Management project of Pepsi

Table of Contents

Contents Page no.Executive Summary 3Introduction 4Vision 6Mission 6Sales Management 7Sales Call (Steps) 9Territory Development 10Sales Budgeting & Target Setting 12

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Executive SummaryThe drink Pepsi was first introduced as "Brad's Drink" in New Bern, North

Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold. It was renamed Pepsi Cola in 1898, named after the digestive enzyme pepsin and kola nuts used in the recipe. The original recipe also included sugar and vanilla. In 1931, Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful, and soon Pepsi's assets were purchased by Charles Guth. Pepsi wants to deliver with purpose to the target audience.

Sales Management is the implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets, and sales force management through development and implementation of sales performance, monitoring, and evaluation methods, and analysis of associated behavioral patterns and costs. Pepsi is using traditional supply chain strategy to deliver the products. Pepsi consider 3 main potential channels for sales (Traditional trade, Modern Trade and On Premises). Pepsi develop “Eagle Eye” to handle the sales issues; manage the orders, their delivery, Target setting and Route schedule to reduce the sales expenses. Steps of Sales call are here:

1. Preparation2. Time & Territory setting3. Meet the Retailer4. Check the Situation of Supplies and Assets (Refrigerator)5. Make sure the Brand can be Displays properly6. Order Suggestion7. Order Taking8. Follow up9. Order Delivery10.Payments

Pepsi is using Territories to Get Intensive Coverage, reduce turnover rate, Performance Evaluation, and to manage expenses. Pepsi design their territory on Geographical, Workload and Sales Potential. Pepsi is using Breakdown method for territory design. With this Strategy, Pepsi distributed the target to all of its employees. Order Taker use Hopscotch Pattern and Cloverleaf Pattern used by Vehicle for Delivery. Methods of sales forecasting are here:

Qualitative methods are: General Economic Conditions Industry sales Jury of Expenditures Delphi Technique

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Sales Force Composite

Quantitative methods are: Time series Analysis Regression Analysis Determining the factors that affect the sales

Pepsi is using the mix of Historic Method and Market Potential Method. Sales target set by GM in Pepsi. Next target of every sales person is 22% more of his previous target. Pepsi is using Percentage of sales method, bidding method and Competitive based Sales Budgeting strategy.

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IntroductionHistory of Pepsi

The drink Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold. It was renamed Pepsi Cola in 1898, named after the digestive enzyme pepsin and kola nuts used in the recipe. The original recipe also included sugar and vanilla. Bradham sought to create a fountain drink that was appealing and would aid in digestion and boost energy.

In 1903, Bradham moved the bottling of Pepsi Cola from his drugstore to a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi Cola, describing it as "A bully drink...refreshing, invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was then used over the next two decades. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again.

In 1931, at the depth of the Great Depression, the Pepsi Cola Company entered bankruptcy – in large part due to financial losses incurred by speculating on the wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful, and soon Pepsi's assets were purchased by Charles Guth, the President of Loft, Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca Cola at his stores' fountains after Coke refused to give him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi Cola syrup formula. On three separate occasions between 1922 and 1933, The Coca Cola Company was offered the opportunity to purchase the Pepsi Cola Company, and it declined on each occasion.

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VisionAt PepsiCo, we're committed to achieving business and

financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose.

MissionAs one of the largest food and beverage companies in the world, our mission

is to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome

breakfasts to healthy and fun daytime snacks and beverages to evening treats. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term,

sustainable growth.

GUIDING PRINCIPLES: Care for our customers, our consumers and the world we live in Sell only products we can be proud of Speak with truth and candor Win with diversity and inclusion Balance short-term and long-term Respect others and succeed together

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Sales ManagementSales management is a business discipline which is focused on the

practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business.

Why Sales Management is necessary? Increase sales revenue and profitability Decrease variability of revenue due to inaccurate forecasting Increase sales productivity (revenue per salesperson) Increase customer satisfaction and loyalty Increase salesperson motivation

Pepsi is using traditional supply chain strategy to deliver the products to the end consumers. Pepsi is only monitoring and somewhat support the sales activities but not 100% dependent on their own sales team.

Pepsi consider 3 main potential channels for sales. These are:1. Traditional Trade (Road Side/ Street corner vendors)2. Modern Stores/ Large General Stores (Smart Shop, Utility Stores, Metro,

Hyper star)3. On Premises (Hotel/Restaurants, Campus Canteens, Food chains, Airports)

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Sales through Indirect channels:As previously mentioned, Pepsi mostly rely on indirect channels for sales.

They just give materials to the distributers and distributer handle sales activities in his region with the somewhat support of Pepsi Co. Pepsi gives the distribution on the basis of Experience and Investments. Distributors’ handles key accounts itself.

Sales Software:Few months ago, Pepsi has no software especially for sales. Now Pepsi

develop “Eagle Eye” to handle the sales. It deals all the issues; manage the orders, their delivery, Target setting and Route schedule to reduce the sales expenses.

Sales Hierarchy:

Sales Management in territory:First of all order booker take the orders from market. Few days later

Vehicle goes to the territory and delivers the supplies and collects cash. Push and Pull strategies used to increase the sales. ASM goes to the each territory once in a week and report the situation to the Bosses.

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GeneralManagerDevisional SMRegional SMArea SMSales SupervisorOrder bookerSales Person

Sales Call/PresentationSales call has some steps, these steps are standardized by Pepsi and each sales person learns them from trainings and experience. Steps (when go to Retailers) are these:

1. PreparationIn the first, Sales person prepare for go to the market. He analyzes the situation and check documents. He also analyzes the credit situation of Shopkeeper.

2. Time & Territory settingSales person manage his time, select territory and see the territory plan before going to the Market.

3. Meet the RetailerReach to the shop and after greeting he asked about the business condition of Pepsi and other competitor’s brands.

4. Check the Situation of Supplies and Assets (Refrigerator)After meeting with the retailer, Sales Person checks the stock and Assets condition by personally. He also makes sure: Is retailer purchasing proper supplies? He has the competitive brands? Does the refrigerator in the proper condition? Etc.

5. Make sure the Brand can be Displays properlySales person also check the product placement and in-store advertisement.

6. Order SuggestionAfter looking stock condition Order taker suggests him for orders.

7. Order TakingAfter negotiations, Sales person take the order.

8. Follow upAgain Sales person greet with retailer and go to the next shop.

9. Order DeliveryWithin few days order should be delivered as per demand.

10. PaymentsPayment will be made according to the situation. Sometime in the form of immediate cash and some it received in installments.

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Territory DevelopmentTerritory is a designated area in which a salesperson works. For example,

a sales territory may include a neighborhood, a town or even a whole state. Sales territories are assigned to reduce competition between commission-based salespersons working for the same company. Most of the time only one (or a few) salespersons are placed in a territory. Purposes of Sales territory development in Pepsi:

To Get Intensive Coverage To give Extensive Customer Services To foster Enthusiasm in employees and to reduce turnover rate For Performance Evaluation To manage expenses

Now Pepsi has a sales software who handle the all Territory related issues in sales management.

Territory Design:Bases for Territories:

Pepsi design their territory on multiple bases. It includes Geographical, Workload and Sales Potential. Pepsi divided their territories on all given bases to create effectiveness, to reduce the inequality and to increase motivation. Pepsi also evaluate their market position on the sales of each Territory. A chart of Territory design of Pepsi:

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Natio

nalMa

rket

Zones

R

egion

s

Di

stric

ts

Methods for Territory Design:Pepsi is using Breakdown method for territory design. With this Strategy,

Pepsi distributed the target to all of its employees. In the first Pepsi forecast the sales and then divided it on average sales per sales person in each Territory. Formula is here:

Routing:There are multiple routing designs in Pepsi, Routing for Vehicle and

Routing for Sales Person/ Order Booker. Order Taker use Hopscotch Pattern and Cloverleaf Pattern used by Vehicle for Delivery. Vehicle goes to the end shop of Market and then return to the storage point. If load cannot be delivered at once then it came back and delivers supplies after reloading. Fuel expenses reduce due to usage of this pattern.

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Sales Budgeting & Target Setting

Sales Forecasting:Sales forecasts are estimates of your sales for the forecast period. The

sales forecast establishes the level of activity used in all the other forecasts and budgets for the business. It is crucial for target setting and budgeting. It can be drawn from Distributer sales. Pepsi is using both Qualitative and Quantitative technique for forecasting.

Qualitative methods are: General Economic Conditions Industry sales Jury of Expenditures Delphi Technique Sales Force Composite

Quantitative methods are: Time series Analysis Regression Analysis Determining the factors that affect the sales

Target Setting:Pepsi is using the mix of Historic Method and Market Potential Method. That’s why Target of sales person based on sales of previous year. Normally Next target is 22% more of his previous target. Sales target set by GM in Pepsi.

Sales Budgeting:A sales budget is an important first step in structuring an overall budget for

your small business. With an accurate projection of future sales, a small business owner makes well-informed decisions, keeps expenses in line and protects his company from failing. Pepsi is using Percentage of sales method, bidding method and Competitive based Sales Budgeting strategy.

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