Pepsi Final (Y)
-
Upload
swetayogesh -
Category
Documents
-
view
124 -
download
3
Transcript of Pepsi Final (Y)
63
CHAPTER -1
Executive Summary
63
EXECUTIVE SUMMARY
INTRODUCTION OF THE PROJECT
I did my project in Lumbini Beverages Private Limited Hajipur. In my project I
learned how the sales promotion activities are run in the market and it affects sale.
The study is concerned with distribution and sales promotion of multiple channels
of coke asking the retailers about their problem has given a true picture of current
position of PEPSI.
PROJECT TITLE
“EFFECTIVE DISTRIBUTION AND SALES PROMOTION”
REASON OF SELECTING THIS PROJECT AND COMPANY
The reason for selecting project is to gain more knowledge in the field of
marketing.
LOCATION
63
LUMBINI BEVERAGES PRIVATE LIMITTED, HAJIPUR
DURATION OF THE PROJECT
The duration of the project was from 5th June to 30th July 2009.
How I carry out this project?
In my project I learned how the sale promotion activities are run in the
market and it affects sale. The study is concerned with distribution and sales
promotion of multiple channel of coke asking the retailers about their problem has
given a true picture of current position of PEPSI.
There are around 1000 retailers of soft drinks in PATNA, so a sample size of 600
sufficed the need of a balanced study. I was given certain area to visit and I
interviewed the retailer to fill the questionnaire Primary data has been collected for
the purpose. Latest information was required about the market collecting secondary
data would have satisfied the objective.
Primary data was collected through survey method by the help of structured
interview and filling schedule design. When ever secondary data was required, it
was made available with the help of various business magazines, the economic
times and the Website of PEPSI Company.
I visited various outlets and checked which type of displays are present there and
according to this place the displays at suitable place.
During my project I found that
Retailers are satisfied with PEPSI racks and its various schemes.
63
Demand of PEPSI is more than COCA COLA.
COCA COLA distribution is better than PEPSI.
Retailers are not satisfied with the services of distributor.
CHAPTER -2
Objective & Scope
63
THE TITLE OF THE PROJECT
The Title of the Project is “EFFECTIVE DISTRIBUTION AND SALES
PROMOTION” in PEPSI company.
Primary Objective:-
1 To know the distribution method adopted by the organization.
2 To know about the stock position of PEPSI brand and its competitors at
different outlets.
3 To know per day sale of PEPSI brand and its competitors in crates.
63
4 To know the percentage share of PEPSI cooling equipments.
5 To know how many outlets are covered with glow sign board of PEPSI.
6 To know the market share of PEPSI products.
Secondary Objective:-
1 To create loyalty of the customer for PEPSI brand.
2 To increase the sale of the PEPSI product.
INTRODUCTION OF THE STUDY
The world economy has undergone a radial transformation in the last two decades
geographical and cultural distance have shrunk significantly with the improvement
in the production , transportation and communication. These advances have
permitted companies to widen substantially both these markets and their supplier
sources. And thus the role of marketing becomes wide.
“Marketing thinking starts with the human needs and wants”
Apart from basic necessities of air, water, shelter and clothing, every person has
strong desire for recreation and entertainment. They have strong preference for
63
particular brand of basic and services. Marketing serves as the link between the
society’s needs and its pattern of industrial response.
Beverage industry is one of the fast growing industries in India. We can divide
beverages into two sections i.e. Alcoholic and Non-alcoholic. The non-alcoholic
drinks are soft drinks that can be further classified Cola, Lemon, Orange and
Mango Segment.
In present scenario has become a complex task mere survival in contemporary cut
throat competition has become a challenge today. Marketing activities are designed
to plan, price, promote and distribute need satisfying products and services to the
existing and potential customers. In other words we can say that marketing is all
about delivering the goods and services to the society for the consumption and
satisfaction but only at a profit.
As far as the soft drink market is concerned, it is facing the cut throat competition
because of the availability of a large number of indirect as well as direct
competitors. Single company offers the soft drinks to the market in different taste
and flavors. In this industry entire range of flavors are produced by other
competitors also. More often than not it becomes impossible to differentiate
between the same flavors of two different brands, when served in plane container.
Besides, both corresponding brands have the price range also. All these factors
together make the situation complicated.
63
IMPORTANCE OF THE STUDY
The training in the organization is very important for a student who is
undergoing with such course. This course is not the answer to all the problems,
which arises in the practical fields. There is no certain formula for any
particular problems, but the aim of this study is to develop the ability of
decision making. A right decision at right time itself helps an organization to
run smoothly.
This training in an organization gives an idea how decisions are taken tact fully
when any problem comes to an executive. So the way of problem solving, right
decision making and knowledge of different type of marketing activities give
much importance to the study. Though only in two months it was not possible
to understand it so deeply but an overall idea could develop.
63
CHAPTER -3
Company Profile
63
ORGANISATIONAL PROFILE OF LUMBINI BEVERAGES PVT. LTD.
In the year 1995, Lumbini Beverages Pvt. Ltd. was formed into a business
company with legal status. The company is situated at Industrial area Hajipur,
District Vaishali in the state of Bihar; a state notified category ‘A’ backward area
at a distance of about 25 kilometers from Patna, the capital city of Bihar. The steel
city Beverages Ltd. Situated in Jamshedpur steel city comes next to Pepsi in
bottling process. In the year 1995, as park franchise, Lumbini Beverages Ltd. with
reference to which the study is being conducted was started. It is a Public Ltd.
Company with registered office situated at p-214 scheme VIM, Calcutta-700054.
In 1998, the company started its operation by producing only 300 ml. bottles and
the other sizes products are also being produced afterwards.
The market of north and central part of Bihar is covered by this company. The
products distribution is being carried out through a network of 257 distributors
under the guidance of Pepsi food Ltd. The territory covered by the company is
about 300 km of radius from the location of the plant and is being equally expected
to develop the market within the area allotted territory by the Pepsi Foods Ltd.
The Lumbini Beverages Limited is situated at an area of 10 acres. Limited
beverages capacity of production is 1200 bottles per minute and annual capacity of
98 million bottles (4 million crates) . The present capacity is 1000-1200 bottles per
minute.
63
Lumbini owns its own 500 ml, 600 ml, 1.5 liters and 2litres big bottling plant. It
produces 1200 bottles per hour At present the company produces Pepsi, 7-Up,
Mountain Dew, Mirinda, Teem, Slice, Soda water and Aquafina mineral Water.
Out of the total production the share of Pepsi is about 45% and while that of
Mirinda is about 20% Mountain Dew is about 20% and the rest (7 Up, Aquafina,
and Slice etc. accounts for about 15%).
Since Lumbini Beverages Pvt. Ltd. Is a franchise of Pepsi Foods Ltd. The technical
knowhow required the chief ingredients for manufacturing the Beverages namely
essence will be supplied by Pepsi Co. Again since the Lumbini Beverages Pvt.
Limited is situated in backward area the Government also provides some
incentives available to the unit are as under:
(a) Exemption of sales tax on purchase of raw materials within the state.
(b) Exemption of sales tax on sales on sales of finished goods within the state.
(c) Many other incentives as applicable to such units feeling under the area
declared as most backward area in the state.
The company is headed by Director (Ravi Khilani) who is Direct Accountable to
Chairman cum Managing Director (Charan Khilani) besides this there is a post of
Chief Executive Officer (G.P. Singh) who reports to the Director\Managing
Director. There are besides the Office and Department in units i.e. sales and
marketing, the Production Department Account\ Finance Department,
Administration and Purchase Department and Shipping Department.
The executives are reported by the salesman then they report to the Assistant
Manager who finally reports to the manager. If required, the manager can also
contact directly to these Executives. Similar is the case with other Departments
also; these managers in turn reports to Chief Executive Officer, who reports to
63
Director then to Managing Director. The higher official may also contact directly
to lower level officials for any relevant information if needed.
The board of directors of the company comprising of Mr. Charan Kumar Khilani,
Mr. Sanjay Kumar Khilani, Mr. Manoj Kumar Khilani, Mr. Ravi Khilani and Mr.
S.M. Surana takes overall decision related to any problem. Sometimes any major
decisions are also being taken up in consultation of different heads by board of
directors.
The work force of the company is around 200 among which 70% are permanent
which included managers and higher officers also and the rest are being supplied
buy the local contractors.
The advertisement for different products is being product is being carried out by
the PepsiCo as well as Lumbini Beverages Limited. The all India level
advertisement is being handled by PepsiCo and the local advertisements is being
done through different ad agency namely, Kalpatru, Happy advtrs, Cosmeric
advtor etc.
The total turnover of Lumbini Beverages Pvt. Ltd. is Rs. 30 Crores. The annual
budget 2004-2005 of Lumbini beverages Pvt. Ltd. is around 90Lakhs.
Some sales promotion schemes are also there, like one bottle free on purchase of
each carat, Key-rings, T-shirts, openers, Watches & ISI-cooler etc.
The major equipments of Lumbini Beverages Limited consists of filler, Mojonnier,
Bottle washer, Uncase, Caser, conveying system, refrigeration system, water
treatment plant, plastic bottles production and other auxiliaries which are the other
hand, the auxiliary equipments including utility items are being taken form local
Indian Markets. The local contractors under the supervision of foreign technician
led to the set-up of Pepsi Co .The maintenance is being done by the company itself
through local contractors.
63
Organization structure
DIRECTOR
CEO
PSRMERCHANDISER
MD
HR HOS
TDM MDM BDM
MECE
63
TDM- Treteric development manager.TDM- Treteric development manager.
MDM-Marketing development managerMDM-Marketing development manager
BDM- Business development managerBDM- Business development manager
ADC- Account development co- coordinators ADC- Account development co- coordinators
CE - Chief executiveCE - Chief executive
ME- Merchandising executiveME- Merchandising executive
PSR- Presales representativePSR- Presales representative
RA- Route agentRA- Route agent
MDC- Marketing development co-coordinator MDC- Marketing development co-coordinator
MFM- Merchandising friezing managerMFM- Merchandising friezing manager
63
HISTROY OF PEPSI
Caleb Bradham a New Bern, N.C.druggist, created Pepsi-Cola in the late
1890s. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and
Frito-Lay. Its CEO is STEVE REINEMUND and in India its CEO is INDIRA
NOOI.
The company consists of Frito-lay North America, PepsiCo Beverages North
America, and PepsiCo International and Quaker foods North America. PepsiCo
brands are available in nearly 200 countries and territories.
Many of PepsiCo’s brand names are more than 100-years-old, but the
corporation is relatively young.
Pepsi cola began its product outside the UNITED-STATES and CANADA in
the mid-1930s, opening in the UNITED-KINGDOM in 1936. Operation grew
rapidly beginning in the 1950s. Today PepsiCo beverages are available in more
than 170 countries and territories. Brands include Aquafina, Gatorade and
Tropicana.
In addition to brands marketed in the UNITED STATES, PepsiCo
International brands include Mirinda, seven-up, and many local brands.
PepsiCo offers product choices to meet a broad variety of needs and preferences
–from fun –for you items to product choices that contribute to healthier
lifestyles.
63
PepsiCo’s mission is “To be the world’s premier consumer product company
focused on convenient foods and beverages. Pepsi seek to produce healthy
financial rewards to investors as it provides opportunities for growth and
enrichment to its employees, business partners and the communities in which it
operate. And in everything it do, it strive for honesty, fairness and integrity.”
PepsiCo is a world leader in convenient foods and beverages, with 2008
revenues of more than $35 billion and more than 157,000 employees.
Pepsi plans are on to add 100,000 outlets every year to its current network of
around 600,000 across the country.
GUIDING PRINCIPLES OF PEPSICO
This is how we carryout our commitment. We must always strive to: care for
customers, consumers and the world we live in. We are driven by an intense,
competitive spirit in the marketplace, but we direct spirit toward solutions that
achieve a win for each of our constituents as well as a win for us. Our success
depends on a thorough understanding of our customers, consumers and
communities. Essentially this is a spirit of growing rather than taking.
Sell only products we can be proud of. The test of our standards is that we must be
able to personally endorse our products without reservation and consume them
ourselves, from the purchasing of ingredients to the point where our product reach
the consumer’s hands.
63
Speak with truth and candor. We speak up, telling the whole pictures, not just what
is convenient to achieving individual goals. In addition to being clear, honest and
accurate, we take responsibility to ensure our communications are understood.
Balance short term and long term. We make decisions that hold both short-term
risks and benefits in balance over time. Without this balance, we cannot achieve
the goal of sustainable growth.
Win with diversity and inclusion. We leverage a work environment that embraces
people with diverse traits and different ways of thinking. This leads to innovation,
the ability to identify new market opportunities, all of which help develop new
products and drives our ability to sustain our commitments to growth through
empowered people.
Respect others and succeed together. This company is built on individual
excellence and personal accountability, but no one can achieve our goals by acting
alone. We need great people who also have the capability to working together,
whether in structured teams or informal collaboration. Mutual success is absolutely
dependent on treating everyone who touches the business with respect, inside and
outside the company world-class performance.
63
PEPSI-THE INDIAN EXPERIENCE
Pepsi entered the Indian soft drink market in 1988 and began its production in May
1990 and soon it was giving the local contenders the run for their memory in the
soft drinks market. It came out with dazzling marketing innovation that rocket the
Cola market live selling the product through functional Pepsi outlets. Its
advertisement agency was “Hindustan Thomson Association (HTA)”.
Pepsi good is one of the largest and best foreign investments in India. Pepsi has
distributed exclusive franchises in India to bottle its products. At present it has 40
bottling lines in the country. Pepsi owns 16 units and the rest are owned by
franchises. The two salient features of the consumers market in India are generally
prevailing, low purchasing capacity of consumer and the fact that urban consumer
responding about 30% of the total population account for nearly 70% of the
consumers of the consumer expenditure. The government of India has considered
the soft drinks industry as non-essential. As a result of the excise duty levied by the
government on bottled-soft drink is very high.
The soft drinks industries in India has an annual sales exceeding more than Rs. 300
crores and most of the bottling companies have been coursing well. The exit of
Coca cola from India has accelerated the growth of several Indian companies have
grown and expanded their activities by placing more and more of their soft drinks
in the market and by moving refrigeration by supplying ICE-BOX and VISI
COOLER and one fridge to their retailers.
63
SWOT ANALYSIS
STRENGTH:-
PEPSI Beverages Company is world’s most famous soft drink giant.
PEPSI Beverages use fully automatic machines and technology for the
product and bottling of soft drink.
It has a very strong distribution network and well built market and currently
holds almost all the parts of the state.
COCA-COLA has only one lime flavor where its competitor PEPSI has 7UP
and MOUNTAIN DEW.
WEAKNESS:-
Promotional activity in rural market is not up to the mark as compared to the
urban market.
More emphasis is given to the big dealer.
Services towards VISI COOLER is not satisfactory
63
OPPORTUNITY:-
It should give more incentives to the dealers in the rural areas. Where there
is a huge market potential.
It should adopt automatic and computerized quality control system for its
product.
More lucrative schemes to be launched regularly, especially during off-
season. So as to attract more and more customers.
Apart from sponsoring films, cricket and music, it should also sponsor to
different fashion shows, quizzes and debates in schools and debates in
schools and colleges.
The consumption rate is higher in Bihar.
THREATES:-
In rural market, PEPSI may have got stiff competition from new local brand
“FRESH-UP”.
Pepsi is spending more and more in advertisement to increase its sale.
Baba RAMDEV’s preach cause a huge fall in sales volume.
63
CHAPTER -4
Theoretical Background
63
This chapter has touched through some of the concept of market research,
consumer behavior and channel of distribution in relation to PEPSI. This chapter
will tell you how the project has been gone through to achieve its ultimate aim
‘increased sales’.
Introduction
Marketing needs a framework that begins and ends with the customer; marketing
tools by themselves do not achieve marketing objectives. There is an intermediate
step between the deployment of marketing tools and achievements of marketing
objectives. A marketing network consists of the company and its supporting
stakeholders (customers, suppliers, distributors, retailers, ad-agencies and other)
the operating principle is simple: build an effective network of relationships with
key stakeholders and profit will follow.
A set of marketing tools, the firm uses to pursue its marketing objectives are called
marketing-mix. These tools can be classified into four groups which are called the
4 P’s of marketing.
(1)PRODUCT
(2)PRICE
(3)PLACE
(4)PROMOTION
63
Soft drink is a FMCG product which has a wide and scattered market. Thus in order to
succeed companies needs to breakdown their marketing activities into sub-parts to
effectively meet the customer needs.
The entire marketing in this case is divided into three parts:-
Route marketing
Home marketing
At work marketing
ROUTE MARKETING:-
Outlets coming under this market cater to the needs of those customers who are
engaged in shopping, eating out in restaurants, going to and from work, in
amusement centre etc. in simpler words this marketing is what we call the bazaar.
HOME MARKETING:-
Outlets coming under this market cater to the needs of those customers who buy
soft drink predominantly for home consumption either by the glass bottles, pet
bottles.
The shops targeted under this category are those which are located inside
residential complex or are located nearer to the residential areas. These shops
predominantly sale pet bottles.
63
AT WORK MARKETING:-
Outlets coming under this market cater to the needs lf those customers who are
working in offices, factories etc. i.e. the outlets targeted are the canteens mainly.
SALES PROMOTIONAL ACTIVITY
Sales promotion a very ingredients in the marketing companies consists of a
collection of incentive tools, mostly short term, designed to stimulate quicker or
grater purchase of particular product or services by customers.
Promotional activities play a key role in the entire marketing effort being carried
out by LUMBINI BEVERAGA which is in sync with those of PEPSI CO. INDIA.
These promotional activities generate more sales as well as create a good image of
the Product in the mind of customers. .
Promotion tools used by PEPSI company of its marketing activities are:
1. Point of sale display
2. Incentive to Retailers
3. Sales promotion through sponsoring special events.
4. Sales promotion through various schemes.
5. Advertising.
6. Scratch coupon card
7. Free gift items.
63
Point of sale display: -
As it is mentioned that soft drink are kept in FMCG category so it is very
necessary to make a proper display of its product. General consumer demands the
thing which he looks first. Because in FMCG product consumer is not too much
concern about product. So outlet owners are suggested to keep bottles in stand and
keep it out of the shop. So that customers have an eye contact with product as he
enters the shop. This is particularly true for those brands which have very low
customer loyalty soft drink is one such product in which most of the time buying
decision is made at the spur rand which is readily available and catches the
customer. For this reason Lumbini Beverages invest heavily in this categories by
supplying the shop owners with stands so that they can keep the bottles outside on
those stands so that customer have an eye contact with them as he/she is entering
the shop. Also PEPSI supply the shop with visi-coolers with a glass front so that
cooled bottles can be seen by the customers for making the decision on the flavor
that person is going to buy. Apart from these Lumbini Beverages takes keen in the
other type strategies like painting the walls of the shops with the PEPSI logo and
the shop name. This increases the visibility of the brand among the customer when
he/she enter the shop.
Incentive to Retailers:-
Another method of sales promotion is to give incentive scheme to retailer,
under this promotional method retailers are given a target regarding the
minimum no. of crates that they have to sale in that period, on achieving the
target the dealer is given attractive prizes which ranges from free bottles, gift
items.
63
SPONSORING SPECIAL EVENT:-
PEPSI is sponsoring various events which include cricket matches,
local events like quiz competitors, Parties, local sports, Orchestra, cultural
programmed etc.
Advertising Policy:-
Advertising is considered the most important tool to increase sales. PEPSI uses
various methods to advertise its product; advertising is made through TV channels,
Radio, magazines, Newspaper, Banners etc.
Scratch Coupon Card:-
Scratch card is another type of tool which helps to increase sales. In scratch card
the name of the gift item is printed and a layer is covered that prize name. Outlet
owner are given that card and after scratching whatever they get company
distribute it among them.
PEPSI has distributed scratch card by which outlets owners are facilitated by torch,
600ml pet, 300ml liquid etc.
“MERCHANDISING POLICY”
In today’s fast moving industry and highly competitive market, only
those products are likely to be purchased which are capable of hitting the impulse
of the consumers. The products appeal should be penetrate of consumers mind.
The concerned product should induce to consumers.
PEPSI believes that “JHO DIKHTA HAI WO BIKTA HAI” i.e. any product
which is visible is bound to be sold.
63
Method of merchandising
The following methods are used to increase the visibility of product.
1. Visi-cooler placement
2. Glow Signboard
3. Paintings
4. Crate Stacking
5. Umbrella
6. Banners
Besides the advertisement being carried out by the Pepsi Food Pvt. Ltd. the
Lumbini Beverages uses many media message, copy etc. when required by
them but one single factor which is very important is that the main head line
or slogan must remain the same as used by each Pepsi Food (Soft drink)
company on national level.
The main slogan being used by Pepsi food (soft drink) all over India for its cola
product has been. The choice of a new generation. But past two years, it was
dropped and introduced new slogan, “Yahi Hai Right Choice Baby” and then
“Yeh Dil Mange More”. These characters have been used to advertisement from
1991 to 2003.
1. 1991 Remo Fernandis and Juhi Chawla
2. 1992 Kapil Dev with Growl Buddhist
63
3. 1993 Amir Khan
4. 1994 Md. Azharuddin, Sachin Tendulkar and Kambli
5. 1995 Akshay Kumar.
6. 1996 Md. Azharuddin and Sachin Tendulkar
7. 1997 Rahul Dravid
8. 1998 Shahrukh Khan & Amitabh Bacchan
9. 1999 Govinda & Rani Mukherjee
10. 1999 Sachin Tendulkar & Shahrukh Khan
11. 2000 Ajay Jadeja, Kajol 200 ml
12. 2001 Amitabh Bachchan & Sorav Ganguly
13. 2002 Fardeen Khan, Rahul Khanna
14. 2003 Ganguli, Dravid, Harbhazan, Zahir, Kaif, Shahrukh Khan.
15. 2003 Kareena Kapoor for Pepsi 200 ml.
16. 2005 Sahrukh Khan, for Pepsi 200 ml.
17. 2006 Sahrukh Khan, Kareena Kapoor, Priyanka Chopra
18. 2007 Sahrukh Khan, Kareena Kapoor,
19. 2008 Sahrukh Khan, John Abraham
20. 2009 Mahendra Sing Dhoni Deepika padukone.
63
The other advertisement for its product slice is “Jab Gale Se Jayada Pet Ho
Pyasa” Pepsi is “Oye Babli Hai Babli” and Mirinda Lemon is “Jor Ka Jhatkha
Dhire Se Lage”.
Product Trends and Market Structure
The head of sales & marketing is in change of all the marketing activities i.e. sales
promotion, publicity, advertising, market survey and shipping. Though his main
function is to have a control over the outlets distribution. Sales Executives and
sales supervisor assist the Sales Manager.
It is producing pet bottle of 2 liters & 500 ml. of all flavors of PEPSI.
PEPSI Cola
Mirinda Orange
Mirinda lemon
7 UP
Mountain Dew
SLICE
TROPICANA
Lehar Soda
PRICING POLICIES
The company first has to decide what it wants to accomplish with its particular
product offer. If the company has selected its target market and market positioning
63
carefully, then its marketing mix strategy-including price – will be fairly straight
forward.
DETERMINING DEMAND
Each price that the company might charge will lead to a different level of demand
and will therefore have a different impact on its marketing objectives. The relation
between alternative prices that might be charged in the current time period. In the
normal case, demand and price are inversely related. That is, the higher the price,
the lower the demand, and the lower the price, the higher the demand.
Demands set a selling on the price that the company can charge for its product.
And company costs set the floor. The company wants to charge a price that covers
its cost of producing, distributing, and selling the product, including a fair return of
its effort and risk.
SELECTING A PRICING METHOD
Given the three C’s the customer’s demand schedules, the cost function and
competitors the company is now ready to select a price. Within the range of
possible determined by market demand and costs, competitors costs, prices, and
possible price reaction help the firm establish where to set its price. The Lumbini
Beverages Pvt. Ltd needs to benchmark its costs against its competitor’s costs to
learn whether it is a operating at a cost advantage or disadvantage. The company
also needs to learn the price and quality of competitor’s offers. The firm sends out
comparison shoppers to price and assess competitor’s offers, acquire competitor’s
63
price lists, buy competitor’s equipments and take it apart, and ask buyers how they
perceive the price and quality of each competitor’s offer.
Once the company is aware of competitor’s prices and offers, it uses them as an
orienting point for its own pricing. If the firm’s offer is similar to a major
competitors offer, then the firm will have to price close to the competitor’s or lose
sales. If the firm’s is inferior, the firm will not be able to charge more than the
competitors. If the firms offer is superior, the firm can charge more than the
competitors.
The firm must be aware, however, that competitor’s might change their prices in
response to the firm’s price. In other words we can say that the Lumbini Beverages
adopt the going rate pricing method. In going rate pricing, the firm pays les
attention to its own costs or demand and bases its price largely on competitor’s
prices.
DISTRIBUTION CHANNEL
Physical distribution is a process of reaching a product to consumer. It consists of
all the activities in the physical transfer of goods from manufacturer to ultimate
consumer distribution are one the 4P’s of marketing mix.
Theoretical Aspects
Main problem of a manufacturer can broadly be divided into two parts. Production
and distribution. After production the next main problem faced by the producer is
63
that distribution because the production is made to satisfy the consumer’s needs.
So it must reach the consumers for whom it is made.
Thus a way through which goods flows from the producer to consumer is called
“Channel of Distribution”.
At first soft drinks is supplied to distributors directly. Retailers cannot take the
delivery directly from the company. They have to take it from their respective or
nearest distributors. The distributors selected on the basis of assurance given by
them regarding minimum sales, which they have mention annually, the selection is
also done on the basis of the financial position and reputation of distributing in the
market . As for the example, in appointing distributor first priority is given to those
who are in cigarette business.
Depending upon the market each distributor, in its initial stage deposit some
security money. This amount varies between five thousand and ten thousand. The
distributor selects the retailers. There is no relation between the company and its
retailers. On the other hand there is no definite and fixed criteria fir the selection
for appointment of retailers from the side of distributors. One likes “Panwala,
cigarette shop” or any other shopkeeper can have the stall for the sale of soft drinks
and they are called retailers or dealers. They have to give assurance to the
concerning distributors for better sales and at the time of taking delivery they have
to deposit the security that is the change for the empty bottle with specified
purchasing price.
The distributors at first have to seek the permission of the sales department for the
number of cases of soft drinks required by them. After getting for the proper
63
authority from the sales department they take the delivery from the shipping
department paying the requisite either in cash or as demand draft. Generally there
is no compulsion on that part of distributors to provide the transportation facilities
to their retailers.
But the distributors of the big cities provide the transportation facilities to their
respective retailers. The distributors and retailers are independent to sell as they
want but are controlled to some extent by the company also as they have to give
some assurance regarding minimum sales. It happens so because they are given
some incentives also. They are fully independent to gear up the market, as they
want. The company does the gearing job itself also and some times it advises them
to the gearing up in a way which is more profitable company or when they charge
high price or when they are engaged in black marketing, loading etc.
The supply of soft drinks, to the distributors depends upon the ups and downs in
sales. But in the initial stages the distributors have to sell up to a minimum target
set by the company or as decided by agreement between the company and
distributors. In the later stages soft drink is supplies as and when demanded by the
distributors.
Types of Channel of Distribution
Channel of distribution for consumer goods
(1)O-Level
63
(2)1-Level
(3)2-Level
(4)3-Level
Channel of distribution in PEPSI Company
“ to make its products available at the right place, at the right time in the market,
at the right price the sales department of the company pays major attention towards
controlling the channel of distribution”
The company right from its beginning stage maintains single type of marketing
channel the nature of channel is as following:-
FACTOR AFFECTING THE CHOICE OF THE DISTRIBUTION CHANNEL
There are number of channel & company is to choose any one of them that
makes best in the marketing strategy followed by the company. The channel
chosen achieve ideal market exposure and should meet the target consumers needs
and preferences. In choosing an ideal channel, the producer always has to struggle
between what is ideal and what is available need not necessarily be ideal because
here are number of factor limit the choices, ideally the lowest cost. Channel may
be considered to be the best but it not always so. The main consideration in
selecting the channel must be satisfaction of customers and therefore, sometimes
relatively high cost channel may proof profitable.
Various factors affect the choice of channel of distribution may be
classified as follows:-
Factor relating to product characteristics:-
63
(1) Purchase Frequency
(2)Weight & Technology of the product
(3)Selling price per unit
(4)Standardized Product
Market factor or consumer factor:-
(1)Consumer of industrial product
(2)Number of purchase
(3)Geographical distribution of customers
(4)Size of orders
Companies or Enterprise factor:-
(1)Financial resources
(2)Size of the company
(3)Product Mix
(4)Attitude of company executive
(5)Marketing policies
Middle consideration:-
(1)Services provided by middleman
(2)Middleman attitude
(3)Availability of middleman
(4)Sale volume potential
(5)Cost of channel usage
Environmental Factors:-
(1)Economical condition
63
(2)Legal restriction
(3)Social & ethical consideration
Thus the above factors influence the channel decision. The producer must consider
these factors before engaging any channel of distribution. It is therefore right to say
that the producer is not always free to enjoy complete freedom in selecting
channels of distribution.
ENVIRONMENT SCANNING
“The process by which organization monitors their relevant environment to
identify opportunities and threats affecting their business are known as
environment scanning”
The external environment in which PEPSI Beverages exist, consist of a
bewildering variety of factors. These factors (may also be termed as influences)
Are events, trends, issues and expectations of different interested group, these
factors are explained below.
Events are important and specific occurrences taking place in different
environment sectors.
Trends are the general tendencies or the courses of action along which
events take place.
Issues are the current concerns that arise in response to events and trends.
63
Expectations are the demands made by interested groups in the light of their
concern for issues.
By monitoring the environment though environment scanning, the PEPSI considers
the impact of the different events, trends, issues, and expectation on its strategic
management process. Since the environment facing organization is complex and its
scanning is absolutely essential, strategists have to deal cautiously with the process
of environment scanning. Information for environment scanning is collected
systematically. Information related to markets and customers, the changes in
legislation and regulation which have a direct impact on an organization’s
activities, government policy statements pertaining to PEPSI business and industry,
and so on, could be collected continuously to monitor changes and take the
relevant factors into account.
Lumbini Beverages conducts special surveys and studies to deal with specific
environment issues from time to time. Such studies may be conducted, for
instance, when Lumbini Beverages has to undertake special projects, evaluate
existing strategies, or devise new strategies. Changes and unforeseen
developments may also be investigated with regard to their impact on the
organization. Lumbini Beverages Pvt. Ltd. information in a processed form,
available from different sources both inside and outside the organization.
63
TOTAL MARKET ENVIRONMENT
To know the total market environment I have done the market survey & dealer
survey.
Market Survey:-
Market survey is one of the most widely used marketing research techniques. Its
purpose is collecting specific data concerning the market that cannot be from the
companies’ internal record or from external published source of data; market
survey may be of various types like census survey etc.
Dealer Survey:-
In order to know the market share of PEPSI among its competitors we conducted a
survey in PATNA. We conducted survey under the guidance of Mr. Arun Kumar
(T.D.M of Lumbini Beverages Pvt. Ltd) and Mr. Samrendra Kumar (Customer
Executive of Lumbini Beverages).
While conducting the survey of the dealers a format provide to me, which has to
fill up by the dealers so that it meets the requirements of the organization. The
dealer survey as mentioned earlier includes a variety of dealers.
I have tried to visit each outlet personally. In order to know the market share of
PEPSI and its competitors. I have conducted a survey in Patna.
Dealer survey as it increases the turnover of the company and also the investment
of the money are increased from varies marketing inputs such as case stock,
63
advertisement, and surveys we can get an idea, in which area investment is
required.
Introduction
Dealer survey method is primary method by which one gets first information with
respect to following factors:-
1. Knowledge of market in terms of :-
a) Number of dealers
b) Location of dealers
c) Type of dealers
d) Market output i.e. case stock , no of glow sign , no of Visi-cooler
From this we know how good we are in the market place and in the areas where we
are lacking it may be found that in some place only the competitor’s brands
available, then by the help of survey we can find out the reason behind non
availability of PEPSI brand in specific area.
The knowledge of case stock will indicate our “case in trade” and that of
competitors. This will indicate our case velocity which will help to plan our bottle
as well as weather our distribution is effective or not. If our case stock is low then
we may decide upon a case stocking campaign.
63
Feedback from the market place regarding servicing of dealers will help us to
improve our servicing in the weaker areas.
Therefore, appropriate marketing strategy can be worked out depending upon the
findings.
2. Distribution Effectiveness :-
From the dealer survey we can find out the number of dealer and the stock and
other details non buyers will also be located. Activation of non buyers can be
done immediately. With the above knowledge one can increase the number of
routes to get increase dealer coverage and hence more effective distribution and
higher sales. Also details of this will help to checkup on the route selling of
sales man so that we can control them by closely monitoring their performance.
3. How to increase distribution effectiveness:
After the above survey, the company can improve the distribution
network.
Immediate activeness of non buyers.
Improve the dealer coverage.
Increase the realignment of routes.
Therefore, “dealer surveys” are important keeping in mind that
distribution forms the major marketing activity in our industry and also
that through these surveys one acquires knowledge of the market.
63
It should be also added here that continuous dealer surveys are required
because of the following reasons.
(a) As our turnover increases we require skills to tackle the problem
and dealer survey help in acquiring first hand as to use the skills
effectively.
(b) With our increased growth, investment of money are increased for
various marketing inputs e.g. case stock, advertisement etc. and by
survey we can get an indication of the areas in investment should be
made to get the maximum benefits.
63
USES OF DEALER SURVEY
1. Market knowledge:-
Dealer survey gives the total profile of the market by knowing.
Location of dealers
The type of dealer
No. of dealers who keep coca-cola and Pepsi and comparing the
stock.
Marketing inputs with respect to:-
a) Advertisement
b) Servicing
Dealer survey as the word indicates is the survey of every dealer of soft drink in
the area. For practical purpose the dealer not only includes the authorized dealer
appointed by the company but it also includes the retailers – big or small grocery,
shops, stationary, restaurant, betel shop , etc. Besides these the various exclusive
stalls and sales of pantry cars are also included in it. In a nutshell, by dealer we
mean those who are dealing with the soft drink in someway or the other in large or
small quantity, directly or indirectly
Thus my study includes all such dealers which include various aspects:-
Route wise no. of dealers-
Crate strength
Per day sale
Chilling aid
Advertising
63
Nature of outlets
Schemes & pay-offs.
While conducting the survey of the dealers a format provide to me, which has to
fill up by the dealers so that it meets the requirements of the organization. The
dealer survey as mentioned earlier includes a variety of dealers.
I have tried to visit each and outlets and personally meet them. In order to know
the market share of PEPSI and its competitors. I have conducted a survey in Patna.
Dealer survey as it increases the turnover of the company and also the investment
of money are increased from various marketing inputs such as case stock,
advertisement, and surveys we can get an idea, in which area investment is
required.
63
REAL CONSUMERS
According to per day selling report of the PEPSI product, we can easily search the
real consumers of the company. It is a FMCG product so general people to high-
class people drink it. As temperature the environment is grow its selling is
automatically increase. We can see that PEPSI product is present everywhere
because of its good distribution channel. In every betel shop to a good restaurant
we can easily get the chilled PEPSI product. PEPSI product has launched its
different flavors to attract the consumers. Company knows what people want to
drink.
PURCHASE METHOD
As we can see that PEPSI product is present everywhere, so every people can buy
it. PEPSI has launch its product in different range for convenient to every class
people. The 200ml and 300ml bottle is available for single person and 600ml and
1500ml pet is available for family pack. The company sales the 200ml and 300 ml
cold drink without bottle but the rest of the item is available with bottle.
63
CHAPTER -5
Product Profile
63
PRODUCT PROFILE
PEPSI
Crystal Pepsi
Pepsi Blue
Pepsi Gold
Pepsi ONE
Pepsi Max
Pepsi Diet
Pepsi Lime
63
MIRINDA
Mirinda Sorbet
Mirinda Orange
MOUNTAIN DEW
7 UP
SLICE
TROPICANA
AQUAFINA
LEHAR SODA
63
Lehar Soda
This is a soda drink. It has no colour and no flavors. It is generally used
with alcohol and used by adults.
63
7 UP
Type
Lemon-lime soda
ManufacturerCadburys (U.S.), PepsiCo
(elsewhere)
Country of Origin United States
Introduced 1929
Variants dnL, 7 Up Plus
Related products Dr Pepper, Sprite
63
7 Up is a brand of a lemon-lime flavored non-caffeinated soft drink. The rights to
the brand are held by Cadbury Schweppes Americas Beverages in the United
States, and by PepsiCo in the rest of the world (sublicensed to Britvic in the United
Kingdom and C&C in Ireland).
Mirinda
Mirinda is a brand of soft drink available in fruit varieties including orange,
grapefruit, apple, strawberry, pineapple, banana, and grape flavors. It is part of a
beverage area often referred to as the flavor segment, comprising carbonated and
non-carbonated fruit-flavored beverages. The orange flavor of Mirinda represents
the majority of Mirinda sales worldwide.
63
Mirinda is owned by PepsiCo and is primarily commercialized outside of North
America. It competes with Coca-Cola's Fanta brand and with flavor brands local to
individual countries. As with most soft drinks, Mirinda is available in multiple
formulations depending on the taste of individual markets.
Mountain Dew
Type Citrus soft drink
Manufacturer PepsiCo, Inc.
Country of origin United States
Introduced 1964 (nation-wide)
Variants
Diet Mountain Dew
Caffeine Free Diet Mountain Dew
Caffeine Free Mountain Dew
Mountain Dew Code Red
63
Mountain Dew is a caffeinated, sweet, citrus-flavored soft drink produced by
PepsiCo, Inc. It was invented in Marion, Virginia and first marketed in Knoxville,
Tennessee in 1948, then by the Minges family in Fayetteville, North Carolina and
across the United States in 1964. [1] When removed from its characteristic green
bottle, Mountain Dew is bright yellow-green and semi-opaque.
Slice
Type Flavored soft drink
Manufacturer PepsiCo, Inc.
Country of origin USA
Introduced 1984
Related products Sierra Mist, Sprite, Fanta, Teem
Slice is a line of fruit-flavored soft drinks manufactured by PepsiCo and introduced
in 1984, with the Lemon-Lime and Mandarin Orange flavors
63
AquafinaType Water Beverage
Manufacturer PepsiCo, Inc.
Country of origin United States
Introduced 1994
Aquafina is a popular brand of bottled water. It was first
distributed in Wichita, Kansas in 1994, and was distributed across the United
States , Canada , Turkey and Vietnam by 1997. As of 2003, it had become the
United States' top-selling bottled water brand in measured retail channels.
63
The water is standard tap water but goes through an extensive purification process
that includes charcoal filtration, reverse osmosis and ozonation. Aquafina is sold in
12-ounce, 500-mL (16.9-ounce), 20-ounce, 24-ounce, 1-liter, and 1.5-liter bottles.
Products Quantity New MRP Trade Price
Pepsi 200ml 8 168
Pepsi 300ml 10 214.00
Pepsi 600ml 20 454.00
Pepsi 2L 55 459.00
Pepsi(CAN) 250ml 15 330.00
Pepsi (DIET) 330ml 25 564.00
7up 200ml 8 168.00
7up 300ml 10 214.00
7up 600ml 20 454.00
7up 2 L 55 459.00
7up (can) 250ml 15 330.00
Mirinda 200ml 8 168.00
63
Mirinda 300ml 10 214.00
Mirinda 600ml 20 454.00
Mirinda 2 L 55 459.00
Mirinda (CAN) 250ml 15 330.00
Mountain Dew 200ml 8 168.00
Mountain Dew 600ml 20 454.00
Mountain Dew 2 L 55 459.00
PRICE
SliceSlice 500ml500ml 2222 498.00498.00
SliceSlice 1.2 L1.2 L 4848 532.00532.00
Slice(tetra pack)Slice(tetra pack) 200ml200ml 1212 285.00285.00
SodaSoda 300ml300ml 55 108.00108.00
SodaSoda 600ml600ml 1212 264.00264.00
AquafinaAquafina 1515 144.00 144.00
TropicanaTropicana 200ml200ml 1515 391.00391.00
TropicanaTropicana 1l1l 7070 735.00735.00
63
CHAPTER -6
Research Methodology
63
RESEARCH METHODOLOGY
The methodology used for collecting the data is considered to the primary for any
report.
The research design of this report is exploratory i.e. formulate problem from more
precise investigation. The major emphasis is on the discovering of ideas and
insights. The formulate research design is characterized by great amount of
flexibility. It’s contains is characterized by great amount of provided opportunity
for considering different aspect of a problem undertaken in the study.
1. COLLECTING OF DATA
63
Data was collected on the basis of primary and secondary.
1.1 Primary Data:
The data which is being collected for the first is known as
primary data. In case of the above study the primary source
was retailers.
1.2 Secondary Data :
The data which is already assembled is the secondary data i.e. magazines
websites and organization report.
2. METHODOLOGY OF THE STUDY
2.1 Exploratory:
To find the per day stock and per day sale at different outlets exploratory
research method was adopted. A survey form was prepared and the retailers
were asked to answer them during the course of their interview.
2.2 Schedule Method:
63
Dealer responses were conducted with help of a prepared schedule. Samples are
taken at different location of Patna.
2.3 Documentary Observation:
Books, annual report, Websites, published and unpublished materials.
2.4 Field Observation:
During training period we did extensive survey of the distribution outlets and
consumer to observe the marketing operation perform by the organization
63
FINDINGS
The collected data which were analyzed and came out with the following
conclusion:
1. The numbers of PEPSI outlets is more than the numbers of competitor’s
outlets at Hajipur that results in increase in sale of PEPSI products.
2. In the city like Hajipur, PEPSI products are reaching to every corner where
not a single bottle of PEPSI can be seen.
3. All the areas in Hajipur, almost the dealers are satisfied with the distribution
network of the PEPSI product.
4. Most of the retailers want glow sign and chilling equipments, which they are
asking from long time.
5. In cola segment COCA-COLA is main competitor of PEPSI, in orange
segment MIRINDA is the main competitor of FANTA, in lime segment 7UP
and MOUNTAIN DEW is the main competitor of SPRITE, in juice (mango)
segment SLICE is main competitor of MAAZA.
6. Dealers are asking for the incentives and sales promotional schemes.
7. Some dealers and retailers stops selling PEPSI products because they are not
satisfied with the company, where COCA-COLA fulfill some of their
demand and got the opportunity to make exclusive counter for the soft
drinks.
8. The young generation of people likes most PEPSI, 7UP and M.DEW while
women, children and older people like SLICE and MIRINDA.
63
SUGGESTION
1. Customer’s mind can change the customer’s perception about the product.
2. More improvement is requires in the distribution network in the outskirt and
in the remote areas, because in the peak season like summer the small dealer
are taking goods twice or thrice and in between if the distributors could not
supply them, the competitors will get the opportunities to supply the goods.
3. Salesman should have good interaction with the dealers, which result
Company in increase in sales.
4. Company executives should visit the counter on weekly basis.
5. Executives should take the feedback from the retailers about the service of
the salesman and the distributors.
6. The entire PEPSI product should be displayed at one place so that the
customers can aware about the different brand of PEPSI
7. In the bus stand, railway canteen, highway the CAN and PET Bottles should
be made available every time because the publics are busy there and they
cannot wait
8. Regular visit of technical person is required to solve the problems of Visi-
cooler on the market at the right time.
63
CHAPTER -7
Limitations
63
LIMITATIONS OF THE STUDY
1. I have done my market survey only in Hajipur.
2. Two months is very less to know each and every effect of promotional tool.
3. Frequent occurrence of rain.
4 This project is carried out by a student level project not an expert level.
5. Sometimes the owner did not give the right information about the product.
6. The information collected by me does not give the accurate result, it only
provides some idea.
63
CHAPTER -8
Graphical Presentation
63
ANALYSIS OF QUESTIONAIREANALYSIS OF QUESTIONAIRE
1) Type of out late:-
Number of out late- 291
Type of out late No of out late
Groceries (GR) 119
Convenience shop (CON) 73
Eatery (ET) 99
63
2) Which soft drink do you sell in your store?
a. Pepsi
b. Coca Cola
c. Both
Alternatives Response of Retailer % age
Pepsi 65 22.34%
Coca Cola 85 29.21%
63
Both 140 48.45%
Bar chart of retailer’ response
3) Do you have current GRB (FLD+MTS) stock of in your shop?
a) Pepsi b) Coca cola
b) Both c)Not available
Alternatives Response of Retailer % age
Pepsi (PCI) 62 21.30
Coca cola (CCX) 103 35.40
Both 86 29.55
Not available(N.A) 40 13.75
63
Pie chart of retailer’s response
4) Do you have current PET (FLD+MTS) stock of PCI in your shop?
a) Pepsi
b) Coca cola
c) Both
63
d) Not available
Alternatives Response of Retailer %age
Pepsi (PCI) 67 23.02
Coca cola (CCX) 83 28.52
Both 92 31.62
Not available (N.A) 50 16.84
6) Do you have freeze in store?a) Pepsi b) Coca cola
C) Both d) Own
b) none
63
7) What is your annual sale of GRB from your shop?
a) 0 to300
b) 300 to 600
Alternatives Response of Retailer %age
Pepsi (PCI) 66 22.68
Coca cola (CCX) 111 38.14
Both 54 18.56
None (N.A) 60 20.62
63
c) 600 to 900
d) 900 & above
8) What is your annual sale of PET from your shop?a) 0 to300 b)300 to 600
C) 600 to 900 d) 900 & above
Alternatives Response of Retailer %age
0 to 300 40 13.75
300 to 600 57 19.59
600 to 900 37 12.71
900 to above 33 11.34
No comment(N.C) 124 42.61
63
f) No comment
9) Which brand is preferred the most?
a) Pepsi b) Coca colac) Both
Alternatives Response of Retailer %age
0 to 300 112 38.49
300 to 600 39 13.40
600 to 900 12 4.12
900 to above 3 1.03
No comment(N.C) 125 42.96
63
Alternatives Response of Retailer % age
Pepsi 65 22.34%
Coca Cola 85 29.21%
Both 141 48.45%
10) Do you receive the delivery of Pepsi products in following terms?
a) Daily
63
b) Alternate
c) Weekly
d) No comment
11) Do you receive the delivery of PepsiCo products in time?
Alternatives Response of retailer % age
Daily 105 50.72
Alternate 90 43.48
Weekly 11 5.31
No comment 1 0.48
63
a. Yes
b. No
Alternatives Response of retailer %age
YES 105 50.72
NO 102 49.28
12) Are you satisfied with the Pepsi products?
63
a. Fully satisfied
b. Partially satisfied
c. Not at all
Alternatives Response of Retailer %age
Fully satisfied 195 94.20
Partially satisfied 11 5.31
Not at all 1 0.48
63
CHAPTER -9
Bibliography
63
1. www.pepsico.com
2. www.wikipedia.com
3. www.answer.com
4. Philip Kotler, Marketing Management
5. Ramaswamy
63
CHAPTER -10
Questionnaire
63
QUESTIONNAIRE
1. Do you sale soft drinks?
a) Yes
b) No
{ If answer is B outlet is terminated }
2. What do you think which pack is more demandable?
a) RGB
b) PET
3. Which brand is more demandable?
a) Pepsi
b) Slice
c) Mirinda
d) Mountain Dew
e) 7up
4. Do you have Visi- cooler?
a) Yes
b) No
5. Which type of Promotional tools do you use?
a) Counter sticker
b) Tent card
c) Counter Top
d) Hanging Rack
e) Combo Stand
f) Rack Header
63
6. Do you need to change the quality of display?
a) Yes
b) No
7. Are you satisfied with distribution of PEPSI?
a) Yes
b) No
8. Which company gives you more schemes?
a) PEPSI
b) COCA COLA
9. Are you satisfied with the supply pattern of Pepsi products?
(a)Yes (b) No
10. Which Brand Of soft drink do you sell?
(a)Pepsi (b) Coke (c) Others(d) Mixed
63