PEPSICO SALES AND

DISTRIBUTION

A project report

ON

Analysis of Sales and Distribution

Strategies of “PepsiCo (Tropicana)”

Submitted To:

Submitted By:

Ms. Megha Mathur Aakristhi Mishra(301)

Arpita chakraborty(308)

Lalita chauhan(316)

Pragya bharadwaj(326)

Sahil Khanna(331)

Sudhanshu Gupta(344)

Anish Grover

Jitin

Group-3

Executive summary

This project aims to explore and understand sales and distribution strategies PepsiCo

India (Tropicana).

PepsiCo is a global food and beverage leader with net revenues of more than $65

billion and a product portfolio that includes 22 brands that generate more than $1 billion

each in annual retail sales. Its main businesses – Quaker, Tropicana, Gatorade, Frito-

Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved

throughout the world.

PepsiCo entered India in 1989 and in a short period, has grown into one of the largest

food and beverage businesses in the country. PepsiCo growth in India has been guided

by its global vision of “Performance with Purpose”.

It aims to nourish consumers with a range of products that deliver great taste, convenience and affordability, from simple treats to healthy offerings such as food- Cheetos, Kurkure,, Lay’s,Lehar NamkeenQuaker Oats,Uncle Chipps and beverages-7UP,AquafinaDuke's,Gatorade,Mirinda,Mountain Dew,Nimbooz,Pepsi,SliceTropicana

The objective of the project was to understand sales strategies , positioning,

contingency plans and distribution strategy for pepsico. For this purpose our team

spoke to Mr. Kanishk Shukla (CE premium business) and Mr. Abhishek Aggarwal

(Customer executive premium team) of PepsiCo. India.

The Sales and distribution strategies covered in the project are for Delhi NCR

distibution centers.

The project explains the process of product movement from distributor to the consumer.

It elaborately explains the prime sales strategies of Tropicana – Modern, On premise

trade/instutitional trade and traditional trade.

It also touches upon the distribution of Himalaya and lipton beverages , with which

PepsiCo has an alliance.

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 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

Our vision is put into action through programs 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.

POSITIONING

Considering the positioning of Tropicana in specific, it is basically a premium health

product of PepsiCo. Sharpening its focus on making healthy breakfast options widely

available for consumers, PepsiCo has launched a fruit juice brand Tropicana. Tropicana

continues to select the best fruit to manufacture high-quality juices and original

products, pioneer innovative processes and explore new markets for its products.

The growing lifestyle trend of "Rushed Breakfast", nutrition often tends to get

compromised. Therefore Tropicana aims to position itself as a critical constituent of the

Breakfast Menu. It reinforces the wonders of a warm, nutritious and fulfilling breakfast.

This serious everyday issue is tackled in an entertaining and engaging manner. Its

campaign aims to educate consumers about the effect of cutting short breakfast &

how Tropicana with its 9 Fruit nutrients can add back nutrition to one’s breakfast.

Also the himalyan and lipton beverages which are in alliance with pepsico prefers to

play upon the themes of being natural and pure in an artificial world, the brands seeks

to be the perfect beverage of choice among wellness seekers. They enjoy an

aspirational equity among consumers.

Sales Strategy:

A sales strategy is a plan by a business or individual on how to go about selling

products and services and increasing profits. Sales strategies are typically developed by

a company’s administration, along with its sales, marketing and advertising managers.

1. Modern Trade:

This deals with big players reliance and big bazaar, more , etc. PepsiCo provide

flexibility in order timing and amount to these giant customers as consignment size is

large. This segment is given more priority as compared to other two.

2. On premise trade /institutional trade :

This business vertical includes:

1. Taj properties.

2. Oberioes

3. PVR

4. Airport Terminal 3 (they made a deal of 250 corers for 10 yrs )

5 KFC/ pizza hut (central supply )

6. Railways.

MARKET

MODERN TRADE

INSTITUTIONAL TRADE

TRADITIONAL TRADE

3. Traditional trade : This includes the provision stores , local ice-cream parlors , grocery stores,

“mom n pops” stores

There is individual team for each segment , which operate separately for there

respective segment .

Market Credit – for retail business vertical there no option of market credit ,

payment has to be made then and there as the bill is received .

Both modern and institutional vertical enjoys the facility of market credit . in modern

vertical the payment can be made within a month of receiving the bill , whereas

institutional vertical receives a payment time of 3-4 months.

Discount offered:

As far as traditional trade is concerned no deep discount is offered . whereas modern

and institutional vertical receive considerable amounts of discounts starting 25%-45%

and sometime even upto 50%.

Distribution credit:

In order to maintain a good relationship with the vertical and promote sales , the

company ensures that each distributor receives a healthy return on investment of

atleast 24% . In case a distributor is unable do that the company offers to bear some

part of their expenses

To motivate and encourage the distributors the company give incentive like plasma

T.V , refrigerator , foreign trips etc

The sales turnover of Tropicana and Himalayan beverage for Delhi/NCR is about Rs 8-

10 cr per month .

DISTRIBUTION STRATEGY

Objective

TO know distribution channel Strategy of PepsiCo.

How strong relationship PepsiCo has with the distributors and retailers.

Perception of retailers towards the distribution channel of the PepsiCo

Go to market

Distribution flow

Manufacturing unit

Pune(Baramati)

Distributor

NOIDA/Gr. NOIDA

Distributor

DELHI/GURGAON

Distributor

GHAZIABAD/ FARIDABAD

Carrier forwading agent

Delhi,Gurgaon

Distributor Customer Consumer

Strategy

They follow two distributional strategy, based on the market segment they

focus on.

For retail

They have a team to work on it

Each team have a route agents

Role of route agents

Same day

In the morning they report to the respective distributor office

Per day fixed market is provided to them (assigned a particular market)

They visit each shop in the router and book the order.

Report back of the distributor office in the end of the day.

Market

Tradional trade/retail

trade

Modern trade/ on premises trade

Role of delivery agent

Next day

After the noting is done by the route agent, there work is to deliver the orders.

According to the quantity the vehicle goes to each particular shop to complete the

process.

Modern trade and modern trade/ on premises trade

No route agent

They have daily reporters also called as PSR (daily reporters)

Role of PSR’S

Go to any of the route, to get the orders.

In case of emergency they are preferred 1st.

Margin for distributors

Same for all, but different for the product.

Trade margin is necessary and fixed

Conclusion

The primary objective of this research was to know distribution channel Strategy of

PepsiCo and to know the importance of Distribution channel strategy in Positioning of

the product.

The data collected provided a sound base for understanding the overall organizational

set up of PepsiCo in India. By analyzing the data and the literature review, following

conclusion was inferred:

The Sales and Distribution Network of Pepsi is very strong and almost flawless.

PepsiCo India had the first mover advantage when it entered the market and it

capitalized on that advantage to grab the market.

Franchisee based operations combined with the Company’s operations add strength to

the overall presence of the Company in the market.

Franchisee takes care of its operations and PepsiCo does not interfere in its operations.

The Franchisees are required to report to the Company at specific time intervals.

The Advertising Campaigns are conceived, implemented by the PepsiCo and

Franchisee has no say in that.

It is very important to develop good relationship with the retailers by providing them

better services and schemes.

Maintaining the good relationship with the distributors are very important for the

company because they are the main part of the distribution channel.

CONCLUSION

Pepsico Tropicana is maintaining it’s sales and distribution channels quite well. They

have divided their sales frame in three divisions that is modern, on premises trade, and

traditional trading ,their sales and distribution channels are well defined and targeted. In

modern vertical they target mainly retail outlets like reliance,big bazar,more .They have

signed a deal of rupees 250 cr with airport terminal 3.In the on premises sales or

institutional sales trade they cover PVR,Pizza Hut,KFC and airport terminal 3, schools,

colleges, institutes and university and traditional trading involves shops, local vendors

and shops. The discounting schemes are different in different verticals, which is

remarkable.

Distribution system is well structured with root agent for coordinating in a particular

region’s agent.

Planning agent takes care of modern vertical. They follow PSR that is ready to supply

on very short notices, they are using the concept of JIT that just in time very well.

PSR and DR(daily reporter) maintain the stock with suppliers of 10-15 days. The

concept of root base quantity acts as a contingency plan.

They work on the concept of prepaid payments of deals that is to maintain liquidity and

account balance. All the payments have to be made before supply of products,

leverages can be given only in complex and emergency situation to the distributors.

The best part of Pepsico Tropicana is, they take care of their distributors profit or rate of

return, if the distributor is not earning a healthy profit of 24 to 25 percent, Pepsico

Tropicana gives that particular distributor special allowances and help him to bring his

ROE to a better and healthy rate, they help their distributors by providing leverages etc.

In Delhi-NCR they have 40-45 distribution centres to cover entire Delhi-NCR area.

So in short pepsico is maintaining it’s sales and distribution channels and sales verticals

very efficiently and maintaining it’s status of one of the most trusted soft drink brand in

the world.

Contingency plan

A contingency plan is a plan devised for an outcome other than in the usual

(expected) plan.

Pepsi Tropicana being a perishable beverage has risk of getting spoiled and therefore it

is very important to have good contingency plan, pepsico Tropicana has the same.

Pepsi co Tropicana ensures that minimum base quantity base is ordered by

the distributors each time an order is placed so that there is no shortage in stock

It also encourages distributors to maintain stock of products for 10-15 days in

advance in case of an emergency.

It exchanges upto 1% the products of the distributors in case of a defect. For eg.

The pulp of the Tropicana juice sometimes remains left in the pack.