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A Project Report Submitted in partial fulfillment for

The Award Of
(Batch 2013-15)





Introduction to the Study
Objective of the study
Scope of the study
Purpose of the study
Need for the study
Limitation of the study
Literature review
Summary about the company Bibliography
History of the company
PepsiCo in India
Marketing strategy of Pepsi
Slogans of Pepsi
Marketing overview of PepsiCo India
Value creation and delivery sequence
Generic value chain
Sales and distribution network of PepsiCo India
Five forces effecting the environment
Data analysis from retailers &distributors perspective
SWOT analysis



9046 Of Vishwa Vishwani School of Business, has undergone the Project
from____________ to ________________at our organization to fulfill the
requirements for the award of degree of PGDM. He worked on_____________
project during this period under the supervision of__________________. During
his/her tenure with us we found him/her sincere and hard working. We wish
him/her a great success in the future.


Project In-charge at
(Name of In-charge)


With the completion of this thesis, I am grateful to many people who have helped
me with their effort: knowledge, time, financial support, energy, encouragement
and prayer.
I would like to express my special thanks to Asst. Prof. C.S. PATTNAIK, my
advisor, for his valuable advice, kind patience and wonderful guidance. His
insightful knowledge and precious experience lead me to the completion of this
I would like to expresses my gratitude to other faculty members of Marketing
department, Vishwa Vishwani School Of Business for providing academic inputs,
guidance & encouragement throughout this period.
Finally, I thank so much to my parents and my elder sister for their financial
assistance, love, encouragement, and prayer to complete this thesis paper and
PGDM degree.



Objective Of The Study
Scope Of The Study
Benefits Of The Study
Purpose Of The Study
Limitation Of The Study


The project was carried due to the criteria of the University for the Completion of
Post-Graduation Diploma of Management.

The main objective of this in-plant training was to get an exposure to the working
environment in an organization. This was an opportunity for me to relate concepts
learned by me to the practical application in the organization.

This in-plant training help me in interacting with many retailers and know their views
which helped me to improve my practical knowledge.

Pepsi company has pumped in Rs. 300 crores ($ 95 million) as fresh capital and has
recently received permission from the foreign investment board in Rs.300 crores ($95
million) more. The investment phase will continue and could add unto Rs.700 crores over
the next three years. The figure is not cast in stone if volume exceeds according to
expectation. They will increase capital expenditure.

Apart from these things there is an expression which cannot verify easily that is Pepsi has
made qualitative gains. The foremost is its image from being perennially seen as a losing
company its now got the image of being a winner. This major turnaround is not small
achievement considering that since it was established in 1989 taking the hard ship route
prior to liberalization and weighed down by export commitments. Pepsi has won more
battles than it has lost.
In April 1993 Voltas and Punjab Argos stakes were bought over converting Pepsi foods
from a three way joint venture to be a fully owned subsidiary week bottlers who did not
have the financial capacities were given massive support in the form in interest free loans
to upgrade their operating capacity . But the strategy which has proved to be winner was

the position, Pepsi decided to take in Company Owned Bottling Operation (COBO). For
this another subsidiary PepsiCo. India holding was set up as an investment vehicle,
capitalized 95 million dollar. Within a year 1994 Pepsi has bought over 5 bottlers
including dukes in Mumbai, which was running in Maharashtra which has been bought
over from Voltas high speed imported lines with a speed of 600 bottles per minute was
installed in Delhi. Pepsi has a strong franchisee in the Jaipurias of Pearl drinks. Pepsi is
setting up a new plant at Jaipur.


The following are the objectives and purpose of the study-

1) To know the performance level of the existing distribution channel.

2) To study the Problems related to the existing channel.
3) To know factors influencing the effectiveness of channels of distribution.
4) To suggest measures of improvement in the performance.


The main scope of this study is to ascertain the effectiveness of channel of

distribution and various methods to increase the sales volume of the concern.

The study is confined to the retailers in Ameerpet, Hyderabad.


To know if the existing distribution channel is capable of meeting the increased

demand for the Pepsi Products in Ameerpet, Hyderabad.


The study will confront me the following:
Companys Effectiveness of distribution channel
Satisfaction level of the customers and retailers.
Customer Interest Level on Pepsi Products


The following are the limitations for the study.


Shortage of time factor was one of the biggest constraints.


Due to the time constraint the study is restricted only to the retailers of


The coverage of the objective of the study is limited to the extent of the


All the observation and recommendation will be made on the feedback obtained
from survey.


PepsiCo is one of the oldest, largest and most successful beverage and snack food companies in
the world. PepsiCo was founded by Caleb Bradham in 1902 in USA. Today PepsiCo and its
affiliates operate in more than 140 countries in the world and generate revenues in excess of $ 40
Billion. In its pursuit of never ending growth and expansion, PepsiCo entered India in 1989 in a
joint venture with Punjab Government. However, PepsiCo India very soon started its beverage
operations in collaboration with the R K Jaipuria group.
Soon after entering the beverage segment PepsiCo Established its dominance in the market
owing to its expertise in sales, marketing, operations and local collaboration. PepsiCo maintained
its market dominance for many more years to come. However, this advantage slipped and
PepsiCo had to concede the market leadership to Coca Cola India. Several actors were
responsible for this development. But, the most important are;

Distribution channel is having an important role in positioning of the product because we know
that distribution channel is tool by which we can make reach our product to the final consumers

Discontinuation of slums in the distribution network by PepsiCo. This move by PepsiCo

adversely affected its position of a market leader because while PepsiCo discontinued the use of
Slums in its distribution network, Coke continued it and within one year, it was able to snatch
considerable market share from PepsiCo.

Acquisition of well-established and favored brands like Thumps Up and Limca by Coca Cola
India. These two brands still constitute a bulk of sales for Coca Cola India.

To explore the reasons behind these developments this study will analyze the marketing
initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship

The above-mentioned objectives can be achieved by carrying a proper and planned research
involving different types and methods. The data collected for laid the foundations for the study
and gave a platform for the analysis and findings which lead to the fulfillment of the objectives.

The data collected for research is primary and secondary. Primary data is collected by
observation, interviews and questionnaires. The data collection and analysis paves way for the
recommendation ad conclusion of the study that reveals some important findings regarding the
strategy and corporate structure and strategy of PepsiCo India.


Area served
Key people

Operating income
Net income
Total assets
Total equity

: Public (NYSE: PEP)

: Chicago, Illinois, U.S. (1965)
: Purchase, New York, U.S.
: Worldwide
: Indra Krishnamurthy Nooyi (Chairwoman), (President) & (CEO)
: Food Non-alcoholic beverage
Diet Pepsi
Mountain Dew
Sierra Mist
Tropicana Products
Naked Juice
Quaker Oats
: USD 43.251 Billion (2008)
: USD 6.935 Billion (2008)
: USD 5.142 Billion (2008)
: USD 35.994 Billion (2008)
: USD 12.106 Billion (2008)
: 185,000 (2008)
: PepsiCo Americas (PepsiCo Americas Food, PepsiCo Americas
Beverages), PepsiCo International


It was first introduced in North Carolina in 1898 by Caleb Braham who made a pharmacy
which sold the drink which was known back then as "Brad's Drink", and was later named
Pepsi Cola possibly due the digestive enzyme pepsin and kola nuts used in the recipe. Braham
sought to create a fountain drink that was delicious and would aid in digestion and boost energy.
In 1903, Braham moved the bottling of Pepsi-Cola from his drugstore into 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 1926, Pepsi received its first logo redesign
since the original design of 1905. In 1929, the logo was changed again. In 1929, automobile race
pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing,
invigorating, a fine bracer before a race".
In 1931, the Pepsi-Cola Company went bankrupt during the Great Depression- in large part
due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of
World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years
later, the company went bankrupt again. Pepsi's assets were then 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.
During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five
cents, sales increased substantially. With a radio advertising campaign featuring the jingle "Pepsi
cola hits the spot Twelve full ounces, that's a lot / Twice as much for a nickel, too Pepsi-Cola is
the drink for you," arranged in such a way that the jingle never ends. Pepsi encouraged pricewatching consumers to switch, obliquely referring to the Coca-Cola standard of six ounces per
bottle for the price of five cents (a nickel), instead of the 12 ounces Pepsi sold at the same price.
Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status.

1940s advertisement specifically targeting African Americans.

Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had
initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt
Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v.
Loft, then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a
loss for Guth.

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab governmentowned 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
In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in
New Delhi, said aerated waters produced by soft drinks manufacturers in India, including
multinational giants PepsiCo and The Coca-Cola Company, contained toxins, including lindane,
DDT, malathion and chlorpyrifos pesticides that can contribute to cancer, a breakdown of the
immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Mirinda,
Fanta, Thums Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink
products had 36 times the level of pesticide residues permitted under European Union
regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found
no such residues. However, this was the European standard for water, not for other drinks. No
law bans the presence of pesticides in drinks in India.
The Coca-Cola Company and PepsiCo angrily denied allegations that their products
manufactured in India contained toxin levels far above the norms permitted in the developed
world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a
government-appointed committee, is now trying to develop the world's first pesticides standards
for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough
to detect minute traces of pesticides in complex drinks. On December 7, 2004, India's Supreme

Court ruled that both PepsiCo and competitor The Coca-Cola Company must label all cans and
bottles of the respective soft drinks with a consumer warning after tests showed unacceptable
levels of residual pesticides.
Both companies continue to maintain that their products meet all international safety standards
without yet implementing the Supreme Court ruling. As of 2005, The Coca-Cola Company and
PepsiCo together hold 95% market share of soft-drink sales in India. PepsiCo has also been
accused by the Puthussery panchayat in the Palakkad district in Kerala, India, of practicing
"water piracy" due to its role in exploitation of ground water resources resulting in scarcity of
drinking water for the panchayat's residents, who have been pressuring the government to close
down the PepsiCo unit in the village.
In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high
levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that
their drinks are safe for consumption and have published newspaper advertisements that say
pesticide levels in their products are less than those in other foods such as tea, fruit and dairy
products. In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft
drinks, was banned by the state government in 2006, but this was reversed by the Kerala High
Court merely a month later. Five other Indian states have announced partial bans on the drinks in
schools, colleges and hospitals.


In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind
tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of
participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great
advantage of the campaign with television commercials reporting the test results to the public.
In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise
Muck, to coincide with the United States bicentennial celebration.

Pepsi logo (1973-87). In 1987, the font was modified slightly to a more rounded version
which was used until 1991.
In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the
strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine
promotion marketing."
In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included
more than thirty different backgrounds on each can, introducing a new background every three
weeks. One of their background designs includes a string of repetitive numbers 73774. This is a
numerical expression from a telephone keypad of the word "Pepsi."

Pepsis logo (2003-09. Currently using with Pepsi Wild Cherry and Pepsi ONE)
In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a
minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of
their can and bottle designs. Due to the timing of the new logo release, some have criticized the
logo change, as the new logo looked strikingly similar to the logo used for Barack Obama's
successful presidential campaign, implicating a bias towards the President. Also in 4th quarter of
2008 Pepsi teamed up with Google/Youtube to produce the first daily entertainment show on
Youtube. This daily show deals with pop culture, internet viral videos, and celebrity gossip.
Poptub is refreshed daily from Pepsi.
Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring Home the Cup," contest for
Canada's biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or
essays) for a chance at winning a party in their hometown with The Stanley Cup and Mark
In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new
installment of the campaign asks for team involvement and an advocate to submit content on
behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by
Mark Messier.
Pepsi has official sponsorship deals with three of the four major North American professional
sports leagues: the National Football League, National Hockey League and Major League
Baseball. Pepsi also sponsors Major League Soccer.
Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team are just
one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test
and ODI test match clothing.


1939-1950: "Twice as Much for a Nickel"

1950: "More Bounce to the Ounce"

1950-1957: "Any Weather is Pepsi Weather"

1957-1958: "Say Pepsi, Please"

1958-1961: "Be Sociable, Have a Pepsi"

1961-1963: "Now It's Pepsi for Those Who Think Young"

1963-1967: "Come Alive, You're in the Pepsi Generation".

1967-1969: "(Taste that beats the others cold) Pepsi Pours It On".

1969-1975: "You've Got a Lot to Live, and Pepsi's Got a Lot to Give"

1975-1977: "Have a Pepsi Day"

1977-1980: "Join the Pepsi People (Feeling Free)"

1980-1981: "Catch That Pepsi Spirit" David Lucas composer

1981-1983: "Pepsi's got your taste for life"

1983-1984: "Pepsi Now! Take the Challenge!"

1984-1991: "Pepsi. The Choice of a New Generation" (commercial with Michael

Jackson, featuring Pepsi version of Billie Jean)

1986-1987: "We've Got The Taste" (commercial with Tina Turner)

1987-1990: "Pepsi's Cool" (commercial with Michael Jackson, featuring Pepsi version
of Bad)

1990-1991: "You got the right one Baby UH HUH" ( sung by Ray Charles for Diet
Pepsi )

1991-1992: "Gotta Have It"/"Chill Out"

1992-1993: "Be Young, Have Fun, Drink Pepsi"

1993-1994: "Right Now Van song for the Crystal Pepsi advertisement.

1994-1995: "Double Dutch Bus" Pepsi song sung by Brad Bentz.

1995: "Nothing Else is a Pepsi"

1995-1996: "Drink Pepsi. Get Stuff." Pepsi Stuff campaign

1996-1997: "Pepsi: Theres nothing official about it" (During the Wills World Cup
(cricket) held in India/Pakistan/Sri Lanka)

1997-1998: "Generation Next" - with the Spice Girls.

1998-1999: "It's the cola" (100th anniversary commercial)

1999-2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola" (commercial with
Britney Spears/commercial with Mary J. Blige)

2000-2003: "Aazadi dil ki" (Hindi - meaning "Freedom of the Heart")(India)

2003: "It's the Cola"/"Dare for More" (Pepsi Commercial)

2003-2005: "Yeh Pyas Hai Badi" (Hindi meaning "This thirst is too much")(India)

2005-2006: "An ice cold Pepsi. It's better than sex!" (Larry Sypolt)

2006-2007: "Why You Doggin' Me"/"Taste the one that's forever young" Commercial
featuring Mary J. Blige

2007-2008: "More Happy"/"Taste the once that's forever young" (Michael Alexander)

2008: "Yeh hai Youngistaan Meri Jaan!" (Hindi)(Urdu - meaning "This is the Young
era my dear" (India and Pakistan)

2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake)

2008: "epsi is #1" v commercial (Luke Rosin)

2008: "Pepsify karo gai!" Commercial (Urdu (Hindi - meaning "Wanna Pepsify!")
(Pakistan) (Featuring. Adnan Sami and Annie)

2008-2009: "Something for Everyone."

2009-present: "Refresh Everything" and (during many commercials) "Every

Generation Refreshes The World"


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).

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.


Choose the Value (Strategic Marketing)


Selection /


Provide the Value (Tactical Marketing)

on /





Communicate the Value (Tactical Marketing)

Sales Force




Firm Infrastructure

Human Resource Management

Technology Development




and Sales


Primary Activities

The generic value chain is a tool to identify ways to create value for the customer. This model
proposes that every firm is a synthesis of activities performed to design, produce market, deliver
and support its product. In order to be more precise only the primary activities in the value chain
of PepsiCo India are analyzed.

Primary Activities:
Inbound Logistics This involves bringing and procuring raw materials for the business. For
the carbonated drinks industry only two raw materials are required, they are water and the
concentrated salt that is used to produce the final product. For this purpose water is extracted
from the ground and the concentrated salt is provided by PepsiCo India to all the plants in the

Operations Operations primarily includes all the bottling plants. Currently there are 32
bottling planting in India that operate for PepsiCo. Of the 32 plants, 15 are owned by PepsiCo
and the rest 17 are (FOBO), owned by R K Jaipuria Group.

Outbound Logistics The Outbound logistics of Pepsi can be divided into three stages. First
the finished product from the bottling plants is sent to the depot or the territorial office, from
where it is sent to the C & F centers and the Distributor Points according to their demand. From
the C & F centers and Distributor Points the product is sent out for sale in the market to the

Marketing and Sales The sales and distribution network of Pepsi is very strong and
comprises of different layers and a dedicated sales force. This is one of the important factors for
the success of Pepsi. To keep the company abreast with competition and to provide support to its
channel partners and to increase the sales, PepsiCo puts lot of effort in its marketing activities.
This includes maintaining excellent relations with its channel partners, making huge investments
in Advertising, signing of Megastars as its brand ambassadors, sponsoring various events,
launching promotional for any launch or re launch of a product.

Service In this industry after sales service is generally not required. The only exception being
leak or burst bottles. In that case, the shopkeeper gets replacement for plastic bottles from the
salesmen instantly, while the replacement for glass bottles is provided between 25th and 30th of
every month. They are required to collect all the damaged glass bottles and give to the respective
salesperson who gives them the replacement within the next few days after getting it approved
from the CE or ADC.

Marketing Mix / 4 Ps:

Marketing Mix has been defined as the set of marketing tools that a firm uses to pursue its
marketing objectives. These tools are classified into four broad groups, namely, Product, Price,
Place and Promotion.

Marketing mix decisions should be made to influence trade channels as well as final consumers.
A firm can alter any of the four Ps accordingly, including changes in the product and
distribution channel as well.

The four Ps represent the sellers view of the marketing tools available for influencing buyers.
Whereas, from a buyers point of view, each marketing tool is designed to deliver a customer
specific benefits according to his or her requirements.

Marketing Mix

Target Market

Marketing Variables: The Four P Components of the Marketing Mix




Prod. Variety
Brand Name

Figure 4ps:

List Price
Payment period
Credit Payments

Sales Promotion
Sales Force
Pubic Relations
Direct Marketing


Product: Pepsi offers different variety of products ranging from carbonated to Non-Carbonated
Soft Drinks. These include
Pepsi Cola,Mirinda ( Lemon and Orange ),7 Up,Dew,Slice ,Tropicana,Aquafina (Mineral
These Products come in different size 200 ml, 300 ml, 600 ml, 1200 ml, 2 lt. there are nearly
42 SKUs which are monitored and regulated on daily basis.

Product Quality:
This is one of the most important aspects that any Co. needs to address. Specially in the case of
Pepsi this is even more important because of the controversies and claims regarding the CSE
report on Pesticides in Pepsi. Therefore pepsi has to maintain stringent quality norms and
standards and norms. Pepsi does that by following one quality standard worldwide and according
to the official website of pepsi, the Co. maintains that :
At every level of Pepsi-Cola Company, we take great care to ensure that the highest standards
are met in everything we do. In our products, packaging, marketing and advertising, we strive for
excellence because our consumers expect and deserve nothing less. We promise to work toward
continuous improvement in all areas of our organization.
At every step of our manufacturing and bottling process, strict quality controls are followed to
ensure that Pepsi-Cola products meet the same high standards of quality that consumers have
come to expect and value from us. We also follow strict quality control procedures during the
manufacturing and filling of our packages. Each bottle and can undergoes a thorough inspection
and testing process. Containers are then rinsed and quickly filled through a high-speed, state-ofthe-art process that helps prevent any foreign material from entering the product. Additional
quality control measures help to ensure the integrity of Pepsi-Cola products throughout the
distribution process, from warehouse to store shelf.

Brand Name:
This is the most important thing any Co. in this Business needs to do if it wants to remain and
succeed in the Business. Pepsi has successfully done that for so many years. Pepsi has targeted
the youth and has invested heavily in advertising and building a brand image (by launching
several campaigns and roping in mega stars such as Shahrukh, Sachin, Ganguly, Dravid etc.) that
attracts to the youth and this is one of the main reason for the success of Pepsi.

Packaging and Size : The products are available in packaging and sizes. This is done to
facilitate the use according to the requirements of the Customer. Different packaging also affects
the usage pattern of the product in various markets. e. g. sale of 2 lt. bottles is high in areas in
which middle and high income group customers stay. But the sale of 200 and 300 ml bottles is
high in areas where people in the lower income group bracket stay. The sale of 600 ml bottles is
high in areas where students etc. stay. Different packaging is also provided for different products
like Tetra Packs, Pet Bottles and Glass Bottles (in 200 and 300 ml).

Services, Warranties, Returns : There are no warranties and services (post sales)
provided for these products but there is provision of returns in case there is any problem with the
product, e.g. leak or burst bottle, half-filled bottle etc. The pet or plastic bottles are returned the
same day and a replacement is provided for the same but in the case of glass bottles the retailer
has to collect all the burst bottles and return it to the salesman around 25th of every month to get
a replacement.

List Price: The Price of each product is fixed and there is no discrepancy. Salesmen are not
authorized to make any change, alteration or give discounts unless authorized by the Company.
Discounts: Discounts are provided to Wholesalers and Slums but there is no discount for
retailers. The discounts are negotiated directly with the Company and the C&F or the Distributor
point is not involved in the price negotiation.

Allowances: Allowances are given to salesmen on achieving their daily targets. This target is
given to every Salesman every day before he goes on his designated route. The Depot In charge
(Sr. C E / C E) gives the target to every salesman in consultation with the TDM.
Payment period and Credit terms: No credit is provided. The payment procedure is not
flexible as the retailers are required to make on the spot payments. At times, they defer the
payment and in that case, the Salesman either shows a shortage or pays the rest of the amount by
himself. The wholesalers are also required to make in advance but at times they also defer the
payment and make the payment at a later date.

Channels: Channels are independent organizations involved in the process of making a product
or service available for use or consumption. There are different intermediaries in channels that
facilitate the availability of goods to the consumer.
Coverage: Two things come under market coverage. These are Market Reach and Market
Market Reach can be termed as accessibility and Market Penetration can be termed as

Sales Promotion: This is the most frequently used form of promotion which is used to increase
the sale of the selected product. These promotions are used from time to time depending upon
the sale of the products. If the sale of any particular product declines or shows a declining trend
then a suitable Sales Promotion Campaign is launched to increase the sale of that product.
Advertising: Advertising is done by PepsiCo. COBO (Company owned Bottling Operations)
and FOBO (Franchisee owned Bottling Operations) have no say in the advertising campaigns

and their planning. The advertising account of Pepsi is handled by JWT (J Walter Thomson) in
association with the Corporate office of PepsiCo India.
Sales Force: There is a dedicated sales force at every C&F and Distributor point. Every
Salesman is assigned a specific route that he has to cover every day. The Salesman has to take
care of all the Shops on the designated route and address and inform (to the Sr. CE / CE) about
any issue any retailer has on the route. The Salesmen are also assigned the task of providing all
the information to the retailers regarding the daily schemes and the details of all the promotion
schemes launched from time to time. These include informing the retailer about the promotional
scheme, registration for the scheme, terms and conditions of the scheme etc. The Salesman is
also assigned the task of registering maximum possible outlets on his assigned route.

Public Relations: This is one important aspects related to the success of PepsiCo in India.
Pepsi believes in maintaining good and healthy relations with all its Channel partners and every
other person in the value chain. This has helped Pepsi in maintaining an extremely competitive
position in the market in spite of the continuous onslaught from Coca Cola.
















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 the
franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for

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.

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.


Bargaining Power of
1. Supplier Concentration
2. Importance of Volume
to Supplier
3. Differenciation of
4. Impact of Inputs on
of Differentiation
5. Switching Cost of
in the Industry
6. Presence of Substitute
7. Threat of Forward
8.Cost Relative to Total
Purchase in Industry

Threat of New
1. Cost Advantage.
2. Proprietary
3. Access to Inputs.
4. Government Policy.
5. Economies of Scale.
6. Capital
7. Brand Identity.
8. Switching Cost.
9. Distrbution Access.


Threat of
1. Switching Costs.
2. Buyer inclination to
3. Price performance
trade off of

Bargaining Power of
1. Bargaining
2. Buyer Volume.
3. Buyer Information.
4. Brand Identity.
5. Price Sensitivity.
6. Treat of Backward
7. Product
8. Buyer Concentration
Vs Industry.
9. Substitutes Available.
10. Buyers Incentive.

Degree of Rivalry
1. Exit Barriers
2. Industry
3. Fixed costs / Value
4. Industry Growth.
5. Overcapacity.
6. Product difference.
7. Switching Costs.
8. Brand Identity.
9. Diversity of Rivals.
10. Corporate Stakes.

Threat of new entrants:

Pepsis product differentiation caused by their marketing strategy has limited the threat of new
entrants. Also the heavy startup costs of manufacturing and packaging plants would be a
deterrent. But, the biggest deterrent is brand image and reputation; a new company would be
very hard pressed to take market share away from established players like Pepsi, Coke etc. More
importantly, the access to distribution channels is currently one of the biggest barriers to entry,
and this barrier remains because both Coke and Pepsi maintain very strong relation with their
channel partners.

Bargaining power of buyers:

The level of bargaining power differs among groups of buyers. The bottlers, retailers and
distributors have significantly greater bargaining power than the end consumer does. Large
retailer such as Reliance, Big Bazaar, Subhiksha are able to extract profits from the Company
through incentives such as volume-based purchases, promotions and displays. This is particularly
true for pet bottles. But, this can also be harmful for the retailers and they losing customers if
they refuse to stock a particular brand.

The bargaining power of the consumer is low. They are a fragmented group and no one
individuals purchase accounts for a significant portion of manufacturers profit. Although the
presence of substitutes does serve to increase buyer power for consumers, but a high degree of
brand loyalty mitigates this loyalty. In short, we can say that the end consumer has medium
bargaining power.

Bargaining power of suppliers:

There are very few suppliers for the entire soft drink industry. The end product is comprised of
few ingredients, which are largely commodities. In addition, it is safe to assume that Pepsi
accounts for a large percentage of the suppliers total revenues. Thus, it is important for the
suppliers to contain whatever bargaining power they have. The overall bargaining power of the
suppliers is considered low.

Threat of Substitutes:
There are many substitutes to sweetened carbonated beverages. Specially in India there are
several substitutes that pose a threat to PepsiCo. They are bottled water, juices, energy drinks,
tea, coffee, energy drinks and CSD from its main competitor Coca Cola India. The challenge lies
in increasing brand loyalty within these substitute markets, because the substitute products are,
for the most part, contained with each manufacturers product portfolio. In India the local
beverages like tea and nimbu paani pose a threat to some extent to the established players.
Therefore the threat of substitutes is very high specially because of negligible switching costs.

Existing Rivalry among firms:

There is intense rivalry between Coke and Pepsi. This rivalry leads to a downward pressure on
prices and significant investment in advertising in an attempt to build and maintain brand loyalty.
In a maturing market such as domestic carbonated drinks, the only way to gain market share is to
steal from ones rival. Thus, Coke and Pepsi fight heatedly over prices, suppliers, spokespeople,
retail space and ore importantly, the taste buds of consumers.

To do a complete analysis of the overall environment is not possible due to the huge sample size
of the population therefore before presenting my findings I would like to remind the reader the
limitations or constraints under which the survey was done.



PepsiCo having good distrbution channel

Strongly agree
Can't Say
Strongly Disagree
Dis Agree



If we see the chart then we find that out of 100% respondent 64% are agree that PepsiCo have
good distribution channel and only 18.67% are strongly agree, the data shows that company
should focus on their distribution channel and try to convert customer in strongly agree
respondent by providing them better services and schemes.

rovided by the company


Distribution channel is importent in positioning of product

Strongly agree
Can't Say
Strongly Disagree



Dis Agree




If we see the chart then we find that out of 100% respondent 41.33% respondent are strongly
agree that distribution channel have an important role in positioning of the product and 38.33%
are agree and rest are disagree, it shows that our objective is fulfilled by this research and we can
say that if we have to promote our product then we should have strong distribution channel.

If we see the chart then we find that out of 100% respondent, 70.33% are saying that they are
getting V.C. coolers but 29.67 % are saying that they are not getting, it means company is not
focusing on all retailers that major concerns for the organization.

PepsiCo relationship with the retailers/distributors

Strongly agree
Can't Say
Strongly Disagree

Dis Agree




If we see the chart then we find that out of 100% respondent 27.33% respondent are strongly
agree that PepsiCo has maintaining good relationship with them and 10% are strongly disagree

and 54.33 % are agree, it shows that company should thing that how can they maintain better
relationship with every retailers and distributors.

Perception of retailers/distributors towards the pepsiCo

Distribution channel



If we see the chart then we find that out of 100 % respondent only 35.33% are saying that
PepsiCo have excellent distribution channel and 10.67% are saying that PepsiCo have worst
distribution and 48.67 % are saying that PepsiCo have good distribution channel, here area of
concern that how company can make happy those respondent who are thinking that PepsiCo
have worst/bad Distribution channel and how can company develop good distribution channel
and change the perception of retailers and distributors.

"If better scheme is given then replace with coke"




If we see the chart then we find that out of 100% respondent, 51.33% respondent are saying that
if they will get better services and scheme then they will switch over to another brand like coke
and only 48.67% are saying that they will not switchover, it show that company should focus

that how can be provided better schemes and services to the retailers and distributors in result
they will not switchover to another brand.

Time taken by the company to make reach the product at retailers shop * PepsiCo having
good distribution channel

Bar Chart

PepsiCo having
good distrbution


Strongly agree

Can't Say
Strongly Disagree



Dis Agree







One Day



1.33% 1.0%

3 Day

One Week

0.33% 1.0%

One Month

Time taken by the company to make reach

the product at retailers shop

If we see the table then we find that 18.67 % respondent are strongly agree that PepsiCo good
distribution channel because they are getting product within one day and 35.33% respondent are
agree to say that PepsiCo have good distribution channel if they are getting product within 3

days,it shows that companys distribution is depends on time that how quick company is
providing product at door of the retailers/distributors

Brand preferred by the respondent * demanded brand Available in the Market

Bar Chart

Demanded brand
Available in the

















Brand prefered by the respondent

If we see the graph then we find that coke brand is more easily available than Pepsi it means
there is some fault in distribution channel and company should find that and make available their
brand at every retailers shop



Demanded brand Available in the Market



If we see the chart then we find that out of 100%respondent, only 55% respondent are agree to
say whatever brand they demanded they are easily get that but 45% respondent are saying that
they are not getting the demanded brand, it is major concern that why these respondent are not
able to get their demanded brand.

In order to get clear understanding of the position of Diet Pepsi in the various markets we did a
SWOT analysis from the data obtained from the survey and the various retailer interviews

PACKAGING AND PRICING Pepsi has the advantage of having provided the same kind of
health based carbonated drink the Slim Diet Pepsi Can which in comparison to the Diet coke is a
much more attractive offering because it is slim sleek equally healthy and way cheaper.
DISTRIBUTION As already mentioned Pepsi India has one strongest and most efficient sales
and distribution networks not only in India but also throughout the globe. Also in the particular
market where the survey was done the sales people have developed a network which is powerful
enough to make or break sales for Pepsi in any given quarter
P R One of the most important factors of success of PepsiCo in India is the relationship the
company and its constituents have with the channel partners. The Company officials and even
the employees of FOBO have very good rapport and relations with the Channel partners. Also
the recently introduced retailer benefit schemes such as the gold card membership and other free
gifts and offerings not only motivate the retailers but also helped us create visibility for the Slim
Diet Can range in a profound.
NON-CARBONATED This is one those strengths of Pepsi that often goes unnoticed but plays
a very important role in success of Pepsi in India and even around the globe. The non-carbonated
segment is dominated by Pepsi, Tropicana is the market leader in fruit juices. In the mineral
water segment, Aquafina clearly outsells Kinley without ay fuss.
Bottling Pepsi has the advantage of being in partnership with the largest bottler in India, the R
K Jaipuria Group. RKJ Group controls almost 65% of the bottling operations of PepsiCo in

India. At times this is also seen as a weakness of Pepsi in India attributing to the fact that the
Jaipuria group is so strong that in certain circumstances it can even defy the parent Company.

SECOND MOVER DISADVANTAGE - Diet Pepsi Cola does have the first mover advantage
which Diet Coke has and this may prove to be a major shortcoming also in the Agra Market no
Extensive efforts have been made to popularize it.
BRAND On a comparative scale Diet Coke proves to have a better brand image in customers
mind than. This compels to incur extra expenditure in Advertising, Promotions and Sponsorship.
MCDONALDS This is one of the most important reason why Diet Coke outsells Pepsi
worldwide and specially in the United States. Similarly, in India Diet Pepsi may suffers in sales
because of institutional sales. Now Pepsi is trying very to bridge this gap in the near future.
EXPENDITURE Right from the very beginning Pepsi has hired the biggest and the most
expensive stars in the country as its brand ambassadors and has spend heavily on advertising
which has affected its balance sheet.
Vizicoolers At presently this is one the biggest problems faced by Pepsi. Pepsi is not able to
get refrigerators in India so they have to import it other namely Sri Lanka, Mauritius etc.
Because of this, retailers are facing lot of problems in vigicoolers. They are not able to get new
refrigerators, replacements for old ones, even the repair work takes lot of time because at times
even the spares are not available on time.

Lowest Per Capita Consumption Even after almost decades of presence in the market, there
are growth opportunities for Diet Pepsi in India as here the per capita consumption of carbonated
beverages is one of the lowest in the world.

Health Based: apart from its Juice Based drinks portfolio Pepsi can Use the Slim Diet can to the
maximum by promoting it as a health drink at Cheaper prices.

NGOs NGOs like CSE can seriously hamper the sales and prospects of companies operating
in this industry. This happened during the pesticide controversy involving both coke and Pepsi.
HEALTH Growing health awareness among people and some of ill effects of carbonated
beverages have pursued many people to switch over to non-carbonated beverages that can
seriously hamper the long-term prospects of the entire Industry and not Pepsi.
ENVIRONMENT Environmental concerns are often raised because of the massive amount of
water extracted by the bottling plants resulting in the drop in groundwater level which affects the
local population adversely.
In India PepsiCo adopted the strategy of growth through intensification. In the intensification
strategy, it used market penetration by developing one of the strongest sales and distribution
network in the world and utilizing it to the fullest.


Collection of order from each and every outlet is not taking place.

I have observed that all outlets are displaying all the brands in display rack.

I have seen that in every outlet visi- cooler is present in prime location.

Distributors visiting outlets in regular basis.

Distributors are taking feedback and writing their complains in a complaint diary

I have observed almost all outlets are working in a better condition.

Market Developer (M.D) is taking care of providing Visi coolers to retailers who are
eligible according to the terms and conditions.

Market Developer (M.D) is checking out the sales of the retailors and he advices
some tips to those retailors whose sales are not up to the mark.

Customers prefer the taste of Thumbs Up more than the PepsiCos product.

Nearly 90% of retailors are feel that PepsiCo is having good distribution strategy.
Majority of retailors agree that role of distribution channel in positioning is high.
Majority of retailors are satisfied with the lead time.
PepsiCo is providing visi coolers to its retailors
PepsiCo is having good relationship with its retailors.
Retailors have a very good perception towards distribution channel of PepsiCo.
Nearly 45% of retailors are going to shift to Coke if chance is given to replace..
There is a communication gap between the retailers and the company.
Distributers are not satisfied with the benefits like margins, product availability and credit
Retailers are not happy with the MDC (Marketing Development Coordinator) of PepsiCo.
Visi cooler have an important role in enhancing the distribution channel and policy.
Time concern is very important in good distribution channel, it means providing product
at retailers door within a time.
Company should provide better facility of logistics because without logistics no company
can maintain good distribution strategies.

This is one of the most important and most difficult part of the study. I arrived at certain
recommendations for PepsiCo India after the analysis of the data. Some of the important
recommendations are as follows

There should be correct feedback from the retailers on the performance of salesmen. This
will help to improve their efficiency and accountability. Moreover, this will also help in
reducing the confusion that the retailers have at times because the salesman does not
explain the schemes properly.

Visi coolers are a major reason of dissatisfaction among some retailers. The periodical
maintenance check of Visi coolers is done at three months. This should be done at an
interval of 45 days or 60 days instead of the current practice of 90 days.

Company should adopt aggressive marketing strategy that it could reach each and every

Company should have better logistics facility for making reach the product at retailers
door at a right time.

Marketing Development Coordinators/ Marketing Executives/ Sales Executives of the

company must focus more for making better relationship with retailers.

Company should provide visi cooler to every retailer. Because who is having visi cooler
of which company they are promoting the same brand to the consumer.

Company should more focus on youth of the country because youths more prefer the soft

Company should focus on the consumers taste and preferences and launch new product
according to the consumer taste and need.

Company should focus on the better services and schemes are providing to the retailers
/distributors or not if not then why.

Company should maintain good relationship with the distributors as well as retailers.

In order to respond effectively to changing market trends and challenges, soft drink companies
must support their improvement efforts with industry-specific solutions. Company should focus
on their distribution channel because it is blood of the company because if product will not reach
the market then there is no need of their production as well as company should focus on better
services /schemes which can be provide to the retailers as well as distributors.

After analyzing all the aspects of the data available and giving some important recommendations
a suitable conclusion which should be derived for this study. However, before starting the
conclusion part, the objective of the research must be kept in mind so that we can arrive at a
befitting conclusion for the research problem.
The primary objective of this research was to know distribution channel Effectiveness of
PepsiCo and to know the importance of Distribution channel strategy in Positioning of the
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

The Sales and Distribution Network of Pepsi is very strong.

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 Companys 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.







Name of Retailer/Distributors _______________________



Phone no


1. PepsiCo have good distributions channel?

a. Strongly agree

b. Agree

c. Cant say

d. strongly disagree

e. Disagree

2. Distribution channel has an important role in positioning of the product?

a. Strongly agree


b. Agree

c. Cant say

d. strongly disagree

e. Disagree

How much time, Company takes to make reach the product at retailer shop?
a. One day

b. 3 day

c. One week

d. One month.

4. You are having logistics facility of company or own?

a. own

b. Company

5. Are you being provided the visi coolers by the company?

a. yes

b. no

6. PepsiCo has good relationship with the distributors/retailers?

a. Strongly agree

b. Agree

c. Cant say

d. strongly disagree

e. Disagree

7. Perception of retailers/distributors towards the PepsiCos Distribution Channel?

a. Excellent

b. good

c. bad

d. worst

8. Are you happy with services provided by the distributors/PepsiCo?

a. yes

b. no

9. Is there any govt. interference?

a. yes

b. no

10. Are you satisfied with distribution policy of the PepsiCo? If chance given to you
replace with coke
a. Yes

b. no

11. Ever missed your order? If yes then what may be main reason?

a. Wrong order

b. sudden change in weather

c. change in schemes

12. How frequently Executive comes to take orders?

a. Daily

b. After 1-2 days

c. once in a week

13.Accuracy of order fills?


b. 100- 80%


d. below 50%