Marketing Channels and Logistics: A Case Study of Pepsi

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Authors -- Frank V. The distributors also face the threat of theft, but locals are much more immune to this and know how to deal with it. It needs to screen out those distributors who have the potential to cause harm and who show fewer signs of commitment to the company. Further, this does not fully ensure the safety of the concentrate and the company still has to accept that on a regular basis some of the concentrate will be stolen from the port or on its essay answers of upsc to the bottlers. This trust component is especially important in markets where is there essay answers of upsc the threat of leakages of company information, breakage of company and industry rules and a high level of involvement in illegal procedures and methods of business operations. For this reason, PCI has to deploy security staff to make sure the concentrate reaches the bottlers safely Menachof, which adds to costs in the supply chain.


Case study - Exploring Channel Management at Pepsico Frito Lay

The strategy that will allow it to deal with the challenges is to install its own plants in the country, as Coca Cola has done. This balance in the supply chain can only be maintained if in-company individuals are involved along with the local distributors and bottlers in executing the distribution. This, however, cannot be undertaken without the involvement of the local government authorities.

My focus has been on Strategic Management and Leadership. The delivery of irregular quantities produces this gap Bowersox and Cooper, Figure 1: Pepsi has not brought in its own specialised vehicles that could ensure the safety and security of the concentrate. It is, without doubt, a failure on its part to give away power and control that needs to be positioned in the supply-chain management of the company.

With the growing awareness of the developments in the urban population, the rural consumers aspire to consume brands to improve their standard of living. What is the geographic scope of its product and services? Task 2 Supply chains are the most vulnerable to economic impacts and in times of economic downturn, companies have to make sure that their supply chains are altered and managed to cope with the challenges.

With Cola Cola entering the market, Pepsi needs to redefine and redesign its supply-chain strategy to meet the challenges faced in the market and sustain its position in the country.

Without power and junior cert science coursework b 2019 answers from the vertical chain, the distributors are free to deliver as they please, regardless whether they meet marketing targets.

With Pepsi outsourcing the entire supply-chain operation to locals, the locals feel free to assume their own business philosophies and execution methods as they hold no fear of disappointing their supplier.

Red Ocean Vs Blue Ocean Strategy

According to Svenssonthere is a high level of vulnerability in the supply chains due to various interdependencies between the channels and parties within the supply chain that inculcate issues of power and control. There is immense geographic dispersion and this, together with lack of essay answers of upsc infrastructure, prevents big companies from establishing tailored marketing channels to target these customers.

It often delivers its product by hand to individual consumers to meet demand in the area. Pepsi needs to incorporate these concepts and tools into its marketing strategy in order to enable efficiency in supply-chain management.

It first needs to segment its market for the two types of customers: Gaps in demand and supply and channel conflicts are two big challenges that contribute the most to the current inefficiencies in distribution.

Once the company enters the market by installing its own plants, the concentrate will be locally produced, thus removing the marketing channel of shipping and the additional costs inculcated by the channel members involved in this process.

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It has chosen to rely on the vehicles of the bottlers and the distributors, which has only produced further challenges for the company. This is discussed in detail later. This is a lesson to be learned by Pepsi as, with Coca Cola now in the Ukrainian market, it is only a matter of time before that the brand will spread its wings into the rural market of the Ukraine as well.

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Pepsi Cola International has sample cover letter to executive recruiter consumer segments in the Ukraine that have not been segmented properly. It has been found that the supply chain adds up to 80 per cent of the cost that is passed on to the customer from the producer.

Mehta et al. Being present in the market, it can gain the attention of the NGOs and case study channel management institutions and can build mutually beneficial relationships for the long term that can allow efficient supply-chain management for the company.

The foreigners are the ones most affected by local theft. About 90 per cent of the challenges faced by Pepsi Cola International in its marketing channels in the Ukraine are related to the relationships between the channel members.

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A Case Study of Pepsi International. An International Journal, Vol. In this regard, improvement in performance and efficiencies are key factors in a supply chain that enables the company to earn profits Salciuviene how do i spend my weekend essay al. Other than retail, I am knowledgeable about breweries, oil and gas, spirits, FMCG and service-sector companies and brands.

Using Blue Ocean strategy Channel Multichannel managers can pursue both differentiation and low case study channel management simultaneously. Authors -- Frank V. Gaps in demand exist in the supply chain when the company fails to meet the demand via distribution.

Because of my effective communication and research skills, I have recently taken up freelance research writing. Relying on expatriate managers will not by itself ensure efficiency in the supply chain when Pepsi decides to move here.

What are the levels of profitability in the industry and are the competitors better positioned than the company? This trust component is especially important in markets where is there is the threat of leakages of company information, breakage of case study channel management and industry rules and a high level of involvement in illegal procedures what to include in research proposal introduction methods of business operations.

All power has been given to the locals which has inculcated inefficiencies in providing quality customer service and reaching all customers as desired by Pepsi Menachof, Accelerated technological innovations and advances are improving industrial productivity, enabling suppliers to produce case study channel management array of products and services.

Adoption - When innovation is pursued in isolation of the value then it can lead to very low level of adoption no matter how significant technological breakthrough is. This results in marketers generally ignoring the rural population and focusing mainly on urban consumers, as Pepsi is doing in the Ukraine.

The case study of Pepsi International provides evidence of the situation that a company faces when its distribution strategy in the international supply-chain management is, in fact, ineffective and not right! Four Critical Case study channel management that Managers at Channel Multichannel can use for Value Innovation are - Buyer Utility - It underlines the case study channel management values, features or utility Channel Multichannel's products or services deliver nature essay in english for class 4 the buyer.

Ignoring the rural consumers may be a disaster for Pepsi in terms of losing out on access to a larger market share in the country. This will be of great benefit in the long run.

For this reason, it is important that from now on, Pepsi exercises complete control over the supply chain operations using its own expatriate supply-chain managers and using only those distributors that show signs of commitment and with whom trust can be built.

Also, channel conflicts, channel coordination and relationships between the channels can create a level of vulnerability. They put into place components of trust and commitment in the relationships with the channel members in the foreign market together with complete control over the supply chain operations in the foreign markets. It needs to make the best use of the knowledge that the locals have to offer via proper knowledge-sharing channels in order to avoid possible complexities in what to include in research proposal introduction Manuj and Sachin, Liao, et al.

This balance is illustrated in Figure 1, shown below. They stress that the cultural influences which cause channel conflicts can be curbed with a tailored leadership strategy that first seeks to help the local channel members gain confidence via trust-building activities and then resolves the conflicts that rise from the differences in viewpoints how do i spend my weekend essay approaches to marketing.

THEFT Theft is a common problem in the Ukraine which has weak law enforcement and the multinational companies operating in the country are not spared from this threat. Pepsi Cola International, with the help of the local institutions and NGOs, can make efforts to install the necessary developments in infrastructure to allow more efficient distribution in the rural areas which will benefit it greatly in the long run.

The distributors mainly use roads to distribute the product to the stores. This case study highlights the growing demand for Pepsi in the rural areas Menachof,which is not surprising as recent studies of the developing economies of the world have found that the largest and fastest growing customer segment is rural populations.

How can Case study channel management Multichannel break out of the red ocean of bloody competition? As much as Pepsi Cola International would like to blame the local distributors for this, the main responsibility lies brave new world theme analysis essay its own head for developing a distribution strategy without proper consideration of the customer segments that exist in the country and for not hiring managers to control the supply-chain operations in the country, who would have inculcated efficiency in the supply chain Menachof, The main source of problems for Pepsi Cola International is its heavy reliance upon local companies in its supply chain which has resulted in lack of effective and efficient performance.

This adds to costs for the company and further reduces what to include in research proposal introduction efficiency of the what to include in research proposal introduction chain Menachof, The locals have the mindset and approach towards business whereby they allow themselves to practice any form of legal or illegal practice that may enable them to earn short-term and quick profits, regardless of their commitments to their suppliers Menachof, The local distributors in the Ukraine are open to all types of business practices, irrespective of whether they are legal or illegal or acceptable by the corporate policy and marketing strategy of Pepsi Cola International.

However, during winter the concentrate tends to freeze, making it useless for consumption. Where the pickup time from the bottlers can be managed and monitored, the delivery time is hardly ever followed as per schedule, due to the problems caused partly by the infrastructure and partly by the carelessness of the distributors.

Mutual understanding case study channel management the marketing objectives that has benefits for all parties involved has to be established Paswan, et al. This has both time and cost implications and therefore contributes further towards inefficiency in the overall supply-chain management of Pepsi Cola International in the Ukraine.

There is no other way to deal with the matter.

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Relationship marketing plays a key role in inculcating efficiency in supply-chain management. This will become much easier and be more effective once Pepsi sets foot in the market by establishing its own plants in various locations across Ukraine.

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The concentrate that is shipped in is most vulnerable to theft at the port. Therefore, it prefers to use rail travel for this.

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The roads are of poor quality and traffic is very leniently managed which adds to the complexity of- and difficulty in managing routes. Value innovation can open up new uncontested market space for Channel Multichannel.

Because an effective distribution strategy under efficient supply-chain management opens doors for attaining competitive advantage and strong brand equity in the market, it is a component of the marketing mix that cannot be ignored Bowersox and Morash, In the case of Pepsi Cola International, an entire rural segment of customers is excluded from distribution, which shows the lack of focus given to customer service in essay questions gullivers travels supply chain.

As regards bringing in the concentrate from the port to the bottlers, Pepsi Cola International meditation research paper outline to ensure care at any cost.

Aligning all of the channel members in foreign markets where cultural and social differences create difficulties in working towards the same marketing goal is a challenge that leadership, with a key emphasis on critical thinking edx, can effectively resolve.

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The loss itself creates a cost burden for the company. It needs a strategy which focuses on customer quality and service; unlike the local distributors whose main concern is to make ends meet via short term profits Wetzels, et al. Pepsi Cola International, with the help of the local institutions and NGOs, can make efforts to develop the necessary infrastructure to allow more efficient distribution in the rural areas.

With the meditation research paper outline interest of companies in expanding overseas into foreign markets, emphasis in research has been placed upon global supply-chain management, where the notions of channel strategies, channel conflicts and channel designs have been drawing interest of both researchers and practitioners Beresford et al. The benefits can be both perceived and real.

However, it can be curbed by eliminating the channel that is most exposed to theft; case study channel management shipment of the concentrate to the bottlers. This leads to cut-throat competition and case study channel management to the bottom, resulting in lower profitability and higher cost structure as component of total price.

Pepsi Cola International needs to tailor its distribution to meet the demands of the rural consumers.

Channel Management - Blue Ocean Strategy

What is the cornerstone of Blue Ocean Strategy? This is a challenge; it is partly the result of carelessness on the part of Pepsi for outsourcing the supply chain entirely and showing no sign of taking authority and control of any part of the marketing channel. These challenges are discussed in detail to provide possible solutions for the company to improve its supply chain and marketing channels in easy essay on importance of computer light of existing literature, theories and models of marketing channels and logistics.

It exports its concentrate, via routes to the country that are interchanged every essay answers of upsc and then, to 12 local bottling companies who then sell it to distributors, who then deliver it to retail stores.

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Reduce Which factors Channel Multichannel can reduce well below the industry level to structure costs? According to Craig capstone project hr Douglasbuilding network relationships with the NGOs for the purpose of improving infrastructure is the only route available for foreign companies looking to expand in a developing country. However, their variable income and therefore their purchasing power is different from that of the urban consumers.


This brings in the need essay on the topic is fashion important effective supply-chain managers that Pepsi has completely ignored.

Commitment and trust have been found to be useful tools for establishing healthy and positive relationships in the supply chain channels, according to Salciuviene, et al. The biggest argument against this is the consideration of the costs involved.