INTRODUCTION
Introduction
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The channel of distribution may be defined as the path through which the goods and
and services are transferred from vendor to the customer and payment for those product
that travel from vendor to the customer. A channel of distribution can be as short as a direct
transaction between the customer to the vendor, or may include several interconnected
intermediaries along the way such as the wholesalers, retailers, distributors and the
agents. Each intermediary receives the item at one pricing point and moves it to the
next higher pricing point until it reaches to the final buyer. For example coffee doesnt
reaches the customer before first going through a channel involving the farmer,
In other terms the distribution function of marketing is comparable to the place component
of the marketing mix in that both centre on getting the goods from producers to the
customer. A channel of distribution in marketing refers to the path or the route which
goods and services to get from place of production or manufacture to the final user.
generally there are two type of channel of distribution which are as follows:
connect it with lumber Manufacturer who makes woods for building and furniture.
the furniture maker and sells it to the retail stores, who sells it to the final user.
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A Theoretical Framework on channel of distribution
The main objective of marketing process is to distribute the product to the actual user.
and sale promotion activities. On the other hand distribution of goods and services through
the channels of distribution. These two functions play a vital role in success or failure of
The companies generally use the channel of distribution and the intermediary to pass
the goods and services to the ultimate users. Nowadays no company and the producers
sell goods and services directly to the customer, there are lot of intermediary involved
of goods, from the point of production to the point of consumption. It is the way products
and services get to the end-user, the consumer; also known as a distribution channel
Distribution is the process of making a product or service available for use or consumption
by a consumer or business user, using direct means, or using indirect means with
intermediaries. The other three parts of the marketing mix are product, pricing, and
promotion.
2) Channel 2: Manufacturer........Retailer.Consumer
3) Channel 3: Manufacturer..WholesalerRetailerConsumer
4) Channel 4: Manufacturer.Agent..Wholesaler..Retailer...Consumer.
The company contacts the customer directly through salespersons, mail, telephone, and
internet and market sales. The products are directly being sold to customers by the
manufacturer.
2) Manufacturer.Retailer....Consumer: Retailers
have grown in size. Growth in retailers size means it has become economic for manufacturer
to supply directly to retailers than other agents or wholesalers.
4) ManufacturerAgentWholesaler.RetailerConsumer: A company
uses this channel when it enters the foreign markets. It does not have enough sales, so in
order to increase the sales the company uses intermediateries. Companies want to sell larger
numbers of customers, and hence are increasingly using multiple channels to distribute their
products.
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Channel Dynamics
1) Conventional Distribution System :-
A channel consists of one or more independent wholesaler and retailer. Each is a
separate business seeking to maximize its own profit even if its goal reduces profit for
a system as a whole. It includes the manufacturer, retailer, Producer and the consumer.
Here the relationship between the channel members is limited to buying and selling
from one and another. Each member tries to seek its own benefit.
In the past, many companies sold to a single market through a single channel. A multi
market channel occurs when a company uses two or more marketing channel in their
business operations. In other words it also may be defined as an ability to interact with
potential customer on various platforms, it may be print advertisement, a retail
location, a website, a promotional event.
Retailing
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Retailing may be defined as all activities in which goods or services may be directly
sold to the customer for personal non-business use. A retailer or retail store is any
business enterprise whose sales volume comes primarily from retailing.
Retailers are the last but not the least in marketing channel through whom the
eventual transfer of ownership of goods take place. The use of retailers boils down to
their superior efficiency in making goods widely available and accessible to target
market. In most of the cases retailers perform the important functions mention under:
1) Information
2) Promotion
3) Negotiation
4) Ordering
5) Financing
6) Risk taking
7) Physical Evidence
8) Payment
9) Title
2) Departmental Store:
They sell several product line with each operated as separate department managed by
specialist buyers and merchandisers.
3) Supermarket:
They are relatively large, low cost, low margin, high volume, self service operations
designed to serve total needs for goods, laundries and household maintenance
product.
4) Convenience Store:
These are relatively small store located near residential areas, open long hours, seven
days a week and carrying an united lines of high turnover convenience products at
slightly high price.
5) Discount Store: These sell standard merchandise at lower prices at lower margin and
higher volumes.
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CHAPTER
8
Profile of the Company
PepsiCo, Inc was incorporated on 13th November 1986, is a global food and beverage
company. Here the company operates in six levels. Many of the PepsiCo brand names are
over 100 years old. PepsiCo is a merger of Pepsi-Cola and Frito-lay, and later on Tropicana,
Quaker oats and Gatorade was being acquired. PepsiCo is the world leader in the food chain
business. PepsiCo entered in India in 1989 and has grown to become the countrys largest
selling beverage and Food Company. PepsiCo nourishes consumers with a range of products
from treats to healthy eats that deliver joy as well as nutrition. PepsiCo generally has a wide
range in beverage which are as follows Pepsi, 7Up, Mirinda and Mountain Dew and also
includes Diet Pepsi which generally has low calories and nutritional beverages like Gatorade,
Tropicana and many more.
Type: Public
27%
40%
33%
Mission:-
As one of the largest food and beverage companies in the world, its mission is to Provide
consumers around the world with delicious, affordable, convenient and complementary foods
and beverages from wholesome breakfast to healthy and fun daytime snacks and beverage to
evening treats. The company is committed in investing in our people, our company and
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communities where we operate to help position of the company for long term sustainable
growth.
Vision:-
At PepsiCo we are committed to achieving business and financial success while leaving a
positive imprint on society delivering what we call Performance with purpose. In practice,
performance with purpose means providing a wide range of foods and beverages from treats
to healthy eat; finding innovative ways to minimize our impact on environment and reducing
the operating cost; providing a safe workplace for our employees globally; and respecting,
supporting and investing in local communities where we operate.
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CHAPTER 3
OBJECTIVES
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Objectives of the Study
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CHAPTER 4
METHODOLOGY
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Methodology
Meaning of Research:
Research may be defined as organized enquiry designed and carryout to provide information
of solving a problem.
In other words research may be defined as logical and systematical application of the
fundamentals of science and scientific technique which provides precise tools, specific
procedures, and technical to the general and overall question of the study, rather than
philosophical means for getting and ordering the data prior to their logic and manipulation.
Research is a systematic activity to gain truth. So we can also say that research is a systematic
effort to gain new knowledge
Research comprises; creative work undertaken on a systematic basis in order to increase the
stock of knowledge, including knowledge of humans, culture and society, and the use of this
stock of knowledge to devise new applications. It is used to establish or confirm facts,
reaffirm the results of previous work, solve new or existing problems or develop new
theories. A research project may also be an expansion on past work in the field
Research Design:
Research Design may be defined as the plan, structure and strategy of investigation conceived
so as to obtain answers to research question and control of variance. The plan is the outline of
research scheme, on which the research is to work. The structure of research is more specific
and detailed outline, and the strategy show the how the research will be carried out and
specify the methods to be used in the collection of analysis of data. In other terms Research
design may be defined as the arrangement of the conditions for collection and analysis of data
in a manner that aims to combine relevance to the purpose with economy in the produce.
The research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby, ensuring you will effectively
address the research problem; it constitutes the blueprint for the collection, measurement, and
analysis of data
Generally there are three types of Research Design which are as follows:-
1) Exploratory Design: Exploratory means to explore hidden things, which are not
clearly visible. Exploratory research is a kind of research conducts for a problem that
has not been defined. They are also called as formulative research studies. It helps to
determine best research design, Data collection and method selection of subject
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2) Descriptive Research: Descriptive Research generally means design to describe
Something; for example the characteristic of users of a given product, the degree of
which product use varies with income, age, sex or other characteristic; or making the
number who saw the specific television commercial.
3) Casual/Experimental Research: It seeks to find out the cause and effect relationship of
the phenomenon under the study.
Research Methodology
The process used to collect information and data for the purpose of making business
decisions. The methodology may include publication research, interviews, surveys and other
research technique, and could include both present and historical information. In other term
research methodology may be defined as a way to find out the result of a given problem on a
specific matter or problem that is also referred as research problem. In Methodology,
researcher uses different criteria for solving/searching the given research problem. Different
sources use different type of methods for solving the problem. If we think about the word
Methodology, it is the way of searching or solving the research problem that sufficient
information resources may not be available (e.g. the topic is too narrow, and needs to be
expanded or changed). Sometimes what you learn may not support the thesis with which you
began.
One can also define research as a scientific and systematic search for pertinent information on
a specific topic. In fact, research is an art of scientific investigation. Methodology is the
systematic, theoretical analysis of the methods applied to a field of study. It comprises the
theoretical analysis of the body of methods and principles associated with a branch of
knowledge. Typically, it encompasses concepts such as theoretical model, phases and
quantitative or qualitative technique.
Research comprises; creative work undertaken on a systematic basis in order to increase the
stock of knowledge, including knowledge of humans, culture and society, and the use of this
stock of knowledge to devise new applications. It is used to establish or confirm facts,
reaffirm the results of previous work, solve new or existing problems or develop new
theories. A research project may also be an expansion on past work in the field
Data Collection
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Data collection is the process of gathering and measuring information on targeted variables in
an established systematic way, which then enables one to answer relevant questions and
evaluate outcomes. The data collection component of research is common to all fields of
study including physical and social sciences, humanities and business. While methods vary
by discipline, the emphasis on ensuring accurate and honest collection remains the same. The
goal for all data collection is to capture quality evidence that then translates to rich data
analysis and allows the building of a convincing and credible answer to questions that have
been posed.
Data collection is the process of gathering and measuring information on variables of interest,
in an established systematic fashion that enables one to answer stated research questions, test
hypotheses, and evaluate outcomes.
Primary Data:
Primary data are information collected by a researcher specifically for research
assignment. In other words, primary data are information that a company must gather
because no one has compiled and published the information in a forum accessible to
the public. Companies generally take the time and allocate the resources required to
gather primary data only when a question, issue or problem presents itself that is
sufficiently important or unique that it warrants the expenditure necessary to gather
the primary data.
Primary data are original in nature and directly related to the issue or problem and
current data. Primary data are the data which the researcher collects through various
methods like interviews, surveys, questionnaires etc.
Secondary Data:
Secondary data are the data collected by a party not related to the research study but
collected these data for some other purpose and at different time in the past. If the
researcher uses these data then these become secondary data for the current users.
These may be available in written, typed or in electronic forms.
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Sample Size:
Sample size may be defined as the number of observation to be included in a sample. So in
my analysis and interpretation the number of respondents I have taken a sample size of 50,
and the area covered was Brahmpuri and nearby area.
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CHAPTER 5
LIMITATIONS OF STUDY
18
Following are the limitations of the study:
The Distribution Channel may vary over a period of time in accordance with the
changes in market condition.
Disclosure of the Distribution network is hard due to its internalized nature.
The retailers didnt give proper response.
The nature of the retailers was not supportive.
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CHAPTER 5
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Q.1 Does PepsiCo have good distributions channel?
Analysis: From the above table it can be observed that 28% of the respondant believe that
PepsiCo has good distribution channel and 48% of the respondent strongly agree that
PepsiCo has a good distribution system. While 16% of the respondent believe that Pepsico
dosent have good distribution channel.
16%
8%
48%
28%
Interpretation: The data shows that company have good distribution channel but should focus
more on their distribution channel and try to convert customer in strongly agree
respondent by providing them better services and schemes.
Q.2 Does Distribution channel has an important role in positioning of the product?
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Serial Number Particulars No. of Respondents Percentage
1 Strongly Agree 15 30
2 Agree 22 44
3 Cant Say 03 06
4 Disagree 10 20
Total 50 100
Analysis: From above table it can be observed that 44% of the respondent agrees that
Distribution channel plays an important role in building the positioning of the company and
30% strongly supports and agrees that distribution Channel plays an important role in
positioning of the product, while 20% doesnt agree with the statement while 6% chooses that
they cant say.
:
Strongly Agree Agree Can't Say Disagree
20%
30%
6%
44%
Interpretation: 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. Most of the
retailer and distributer support the statement that means if distributions channel is improved
more it will help in the positioning of the company.
Q.3 Do you get the products of PepsiCo, when you want it?
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Serial Number Particular Percentage
1 Yes 90
2 No 10
Total 100
Yes No
10%
90%
Interpretation: As per our survey 90% People get PepsiCo product, when they want, It means
the distribution of the PepsiCo is very good.
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Q.4How many times a customer visits retailer store to buy PepsiCo product in a week?
Analysis: When we see the table then we find that out of 100%respondent, only 50%
respondent are going 3-5 times for soft drink in a week and 26% respondent are saying that
they are going 2-3 times in a week while 10% of them goes only once in a week and more
there are 14 % of customers who goes more than 5 times in a week.
14% 10%
26%
50%
Interpretation: So we can interpret that more customer preferring beverages this means that
they are being sold at a large amount.
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Q.5Why we prefer this brand?
Analysis:
From the above table we can find that 42% respondent prefer the PepsiCos product due to its
taste while38% of the respondent prefers this product because of its Advertisements while
18% prefers this product because of availability while 2% go for others things.
2%
18%
42%
38%
Interpretation: This proves that a customer prefers to choose the brand; advertisement also
plays a major role in attracting the customer. Most of the respondent likes the product of
PepsiCo because of its taste so PepsiCo should make their product fizzier
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Q.6 Do you get easily your demanded brand in the market?
Analysis: From the above table we find that out of 100%respondent, 80% of the respondent
agree that whatever brand they want or demand is easily available , but 20% respondent are
saying that they are not getting the demanded brand or product.
Yes No
20%
80%
Interpretation: As 80% of respondents believe that they easily get the brand or product when
they need it.
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Q.7Which brand of soft drink do you generally prefer?
Analysis: We can see the chart then we find that out of 100% respondent, 32% respondent
prefers PepsiCo while 40% respondent prefers Coke and rest 28% respondent prefer others
brand.
28%
32%
40%
Interpretation: So this means PepsiCo has to improve on certain factors to beat Coke as to be
the best in the market.
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Q.8Would you replace the product of PepsiCo if you get better deals and schemes from other
brands?
Analysis: From above table it can be observed that 40% of the respondent agree that they can
switch over to another brand if better scheme is provide to them and 30% are strongly agree
to switch over to another brand while 20% cant able to decide but 10% of respondent are
loyal to their company they dont want to switch over to another.
10%
30%
20%
40%
Interpretation: It means that PepsiCo has to focus on their Channels by providing better
services to the customers.
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Q.9 Do you have your logistics system?
Analysis: It is being observed that 70% respondents(distributors) have their own logistics
system while on the other hand 30% of the respondents dont have their own logistics system.
Yes No
30%
70%
Interpretation: Most of the respondents having their own logistics which is good for both the
company and retailers or customers because retailer can easily got the stock by their
distributers and can fulfill the customers wants but if distributers dont have their own
logistics then it takes time to reach the products to the retailer.
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Q .10 Have you being provided by V.C coolers by the company?
Analysis: From above table it can be observed that 60% are saying that they are getting
VC coolers from the company side to keep their product but 40 % are saying that they are not
getting any VC coolers from the company.
Yes No
40%
60%
Interpretation: It means company is not focusing on all retailers that major concerns for the
organization. Most of the retailers having the VC coolers which is given by the company but
some of them dont have because they are smaller retails where sales are very less also some
of the retailers puts different brands into the same VC coolers by which also they loss
their VC coolers .
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Q.11What are your views towards PepsiCos distribution channel?
Interpretation: From the above table it is being observed that 26% of the respondents have
positive views about PepsiCos product, while 26% of the respondents have strongly agreed
and have positive views about PepsiCo, while 14% of the people disagree.
14%
26%
6%
54%
Interpretations: So the company should now focus on the satisfaction of the Retailers and
other distribution channel to improve and capture more market share..
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Q.12 Does Logistic Facility affects the Distribution Channel?
Analysis: It is being observed that 60% of the people agree that Logistic facility affects
channel of distribution, while 10% of the respondents believe that logistic facility affects
distribution system, while 5% of the people disagree about this.
10%
20%
10%
60%
Interpretation: It means that company should focus and improve on better logistics system to
deliver the products and services on time and should maintain good relationship between the
intermediateries.
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CHAPTER 6
33
Results of the study/ Summary of Findings
1. Some retailers are unable to get the services which are provided by the
company.
2. There are some retailers are not happy with services provided by the distributors
and the company.
3. There is a gap between the retailers and the company. Customers prefer the taste
of Thumbs Up more than the PepsiCo s product
4. Company should provide better facility of logistics because without logistics
any company cannot maintain good distribution strategies.
5. Time concern is very important in good distribution channel it means providing
product at retailers door within a time.
6. Distributers are not satisfied with the services like margins product availability,
credit facility.
7. PepsiCo has the best distribution channel in the market.
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CHAPTER 7
CONCLUSION
35
Conclusion
The sales and distribution network of Pepsi is very strong and almost flawless.
PepsiCo, India had the first mover advantage when it entered the Indian market and it
capitalized on that advantage to grab the market. Distributors based operations
combined with the companys operations; add strength to the overall presence of the
company in the market. Distributors take care of its operations and PepsiCo does not
interfere in its operations. The Distributors are required to report to the company
at specific time intervals. The Advertising campaigns are conceived, implemented by
the PepsiCo and Distributor has no say in that.
It is very important to develop a healthy relationship with the retailers by providing
them better services and schemes. Maintaining the healthy relationship with the
distributors is very crucial for the company because they are the main part of the
distribution channel.
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CHAPTER 8
RECOMMENDATION
Recommendations
37
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.
1) Company should focus on the consumers taste and preferences and launch new
product according to the consumer taste and needs.
2) Company should more focus on youth of the country because youths more prefer the
soft drinks.
3) Company should adopt aggressive marketing strategy that it could reach each and
every place.
4) Company should have better logistics facility for making the product at retailers door
at a right time.
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CHAPTER 9
39
The scope of further study is to ascertain the effectiveness of channels of distribution
and various methods to increase the sales volume of the concern, the method include
regular information from the buyers creating a brand position and loyalty in the
market and taking measure, to take the company to another level .So this will not only
help in growth of the company but more market could be segmented.
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CHAPTER 10
REFERENCES
References
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Books:
Kumar Bhupendra, Dusad Archana - Research Methodology in Business
Management. Edition 2013-2014
Philip, Kotler; Marketing Management, Pearson Publication
Akash And Malhotra Research Methodology in Business Management
R.K Goyal, Jain Rita; Business statistics, Ajmera Publication. Edition
2013-2014
Websites:
www.investopedia.com/terms/d/distribution-channel.asp 5 March , 2016
http://www.businessdictionary.com/definition/distribution-channel.html
5 March 2016
http://www.studylecturenotes.com/management-sciences/marketing/104-
distribution-channel-dynamics 6 March, 2016
http://www.businessdictionary.com/definition/retailer.html 7 March, 2016
http://www.fibre2fashion.com/industry-article/4895/retailing-concepts
-introduction?page=1 7 March 2016
http://www.pepsicoindia.co.in/ 7 March, 2016
https://en.wikipedia.org/wiki/PepsiCo 8 March, 2016
http://www.businessdictionary.com/definition/research-methodology.html
9 march 2016
Questionnaire
1) Name:
2) Gender:
A) Male
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B) Female
3) Age : .
7) How many times a customer visits a retail store to buy a PepsiCo product?
A) One
B) Two-Three
C) Three-Five
D) More than Five
11) Would you replace PepsiCos Product if you get better deals and schemes from other
company?
A) Strongly Agree
B) Agree
C) Cant Say
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D) Disagree
13) Have you ever being provided by V.C coolers by the company?
A) Yes
B) No
14) What are your views towards PepsiCos Distribution Channel Systen?
A) Strongly Agree
B) Agree
C) Cant Say
D) Disagree
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