Presentation on

distribution
strategy of
PepsiCo

Presented by
Amit Kumar
Swati seth
Kumrendra
Gautam sahu
Zakir khan
Chandan Kumar
 2

Pepsi-cola was
founded in the late
1890’s when a young
pharmacist names
Caleb Bradham
formulated the
drink in the back
of his store and
soon began selling
it his soda shop. It
was called Brad’s
drink.

Pepsi 06/06/11
 3
•On October 1, 2006, former Chief Financial Officer and
President Indra Nooyi replaced Steve Reinemund as chief
executive officer.
•
•Nooyi remains the corporation's president, and became Chairman
of the Board in May 2007.
•
•Mike White is the President of Pepsi-Co International Division.
•
•In December 2005, PepsiCo surpassed Coca-Cola Company in
market value for the first time in 112 years since both companies
began to compete.

Pepsi 06/06/11
 PepsiCo Mission and Vision


Mission
•

 "To be the world's premier consumer Products Company focussed on

convenience food and beverages. We seek to produce healthy 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
•

 "To build India’s leading total beverage company, delighting consumers by

best meeting their everyday beverage needs, and stakeholders, by
delivering performance with purpose, through our talented people."

 PEPSI & ITS INDUSTRIES

 FOOD SEGMENT  BEVERAGE SEGMENT

 Aliva  Pepsi
 Kurkure  Mirinda
 7up
 Frito lays
 Pepsi maxx
 cheetos  Aquafina
 Slice
  Nimbooz
 tropicana




 BEVERAGE PRODUCTS OF PEPSP

1.PEPSI 3.MIRINDA 5.7UP

2.SLICE 4.AQUAFINA MINERAL WATER
 S & D Network of PepsiCo India
COMPANY

COBO FOBO

WAREHOUSE

DISTRIBUTION
C & F

SALESMAN SALESMAN

RETAILER
WHOLESALER SLUM

CUSTOMER
RETAILER

CUSTOMER
 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 43 bottling plants, PepsiCo owns 15.
•

 FOBO: These are Franchise owned bottling operations. R K Jaipuria group

does all the franchisee-bottling operations for PepsiCo India; currently R K
J Group has 28 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.

 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.

Slums: They are generally smaller than the
Wholesalers. However, they get special discounts
from the C & F centers and Distributor points.
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.
•
 Brands

Pepsi-Cola Brands
Frito-Lay Brands
Tropicana Brands
Quaker Brands
Gatorade Brands

 Pepsi Today
12
 4th largest consumer products company in India.
•

 Provides direct and indirect employment to 150,000 people in

India.
•

 Has more than 43 bottling plants including 15 Company & 28

Franchise owned ones.
•

 Launch of Pepsi Max, a sugar-less cola brand with a stronger

taste. (for age group of 25-35 years as per 2nd Aug,2010)
•

 PepsiCo CSR: Reduces Per Unit Energy Use in Beverage Plants

by 16% (10th Aug,2010)
Pepsi
• 06/06/11
CSR:Corporate Social Responsibilty
 Net Revenue (Comparative)

15,000
13,591 13,796 13,219
in Million US$

13,000

11,000

9,000

7,000

5,000
2007 2008 2009

Years
 Pepsi’s innovations, research
16
and development proved
very attractive.

Pepsi 06/06/11
 COMPETITORS
Ø Pepsi is the largest beverage company in India
with 42% market share.

Ø Its biggest competitors is Coca Cola Limited.

Ø In 1994, Coke reduced the prices to Rs. 5 and Pepsi

has to reduce their prices in order to compete.

Ø In doing this, both the companies had to bear huge

losses.
 18

Pepsi 06/06/11
 COMPETITORS

Ø Cock had a loss of 9 million whereas Pepsi the main

sufferer bearing a loss of 14 million.

Ø This price war was reduced when Coca-Cola agreed

not to go on price competition ever again.
 Coke or Pepsi in the Long Run?
20
Pepsi
 Better marketing and advertising
strategies
 More widely accepted
 More market share

Coke
 Government conflicts
 Trailing Pepsi in market share


Pepsi will be fare better in the long run



Pepsi 06/06/11
  Strengths: Swot Analysis
21
• -Its innovations, reputation, brands, market share, strong distribution.
 Weaknesses:
• -Not all PepsiCo products bear the company name.
-Today far away from leader Coca-cola in the international market - demand.
 Opportunities:
• -Focus on most important customer trend - "Convenience".
-There are increasing trend toward healthy foods.
•-Focus more on non-carbonated drinks due to its fast growing part in

industry.
 Threats:
• -Competes with Coca-Cola and Kraft foods and many more.
• -Pepsi is blamed for pesticide residues in their products in one of their
most promising emerging market e.g. in India.
• -People facing obesity problems

Pepsi 06/06/11
 RECOMMENDATIONS

ØPromotion of their products through Effecting Marketing and Advertising

strategies.
ØImproving production efficiencies through optimal outsourcing of production and
integration.
ØProduce a range of Healthy, i.e. Sugar free or diet Alternatives of different
products.
ØThe products should bear the brand name in the advertisements
ØA better & an efficient survey network is to be established in order to penetrate the
market
Ø Company should focus on the consumers taste and preferences and
launch new product according to the consumer taste and need.
 Conclusion
23

Pepsi faced various legal and political hurdles in India

It adapted changes quickly

Created much better image than coke

It targeted youth of the nation

Today holding a market share of upto 42% and the
HEARTS OF INDIAN PEOPLE
•

Pepsi 06/06/11
 24

Pepsi 06/06/11
 k Y o u
Th a n

06/06/11 Pepsi 25