ANALYSIS OF MARKUNIVERSITY BUSINESS SCHOOL,LUDHIANA

offered twice weekly againstsmaller distributors (Spokes)ourney plans on a weekly bhired rickshaws
(cycle operatDISTRIBUBENEFITSThis model has been utilizedrural market. This system allto travel
short distances. Thularge distributors from the coto the smaller distributor once
RETAIL
TING STRATEGY OF COCA COLA AND PEPSICO
payment by demand draft. On their part, the hin adjoining areas. The smaller distributors uasis and
supplied against cash. The smaller did vans) that travelled to villages daily.ION CHANNEL IN RURAL
AREASby soft drink companies like Pepsi and cocaws for larger loads to travel long distances ands
making the mechanism cost effective coca cpany depots twice a week and the distributorsa week.

BOTTLINGPLANTHUBSPOKESR S R E T A I L E R S
R E T A I L E R S
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ubs appointeddertook fixedstributors alsocola to reachsmaller loadsla supplies toin turn supply



ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICOUNIVERSITY
BUSINESS SCHOOL,LUDHIANA36
8.1.2 DISTRIBUTION CHANNEL IN URBAN AREAS
Both the soft drink companys coke and Pepsi adopted a model DSD that is Direct StoreDistribution. In
this company directly supplies its product to the retailers which helps themto save the margin, which they
give to the wholesalers and it also ensures quick availabilityof the product to the retailer. Based on its
experience, PepsiCo and Coca cola haddeveloped various distribution models to offer its products and
services to customers in theUS. Besides Direct Store Delivery (DSD they adopted other system like
Broker WarehouseDistribution (BWD) and Vending & Food service (V&FS) systems.(DIRECT STORE
DISTRIBUTION)DISTRIBUTION CHANNELIN URBAN AREAS
BOTTLINGPLANTRETAILSTORESCONSUMERS


ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICOUNIVERSITY
BUSINESS SCHOOL,LUDHIANA37
8.2 INNOVATION IN DISTRIBUTION SYSTEM
Through their use of the most modern technology in recent years, PepsiCo and its bottlerswere able to
improve their distribution and logistics management operations significantly.To further improve the
market penetration of its products globally, PepsiCo launched twonew distribution methods in the initial
years of the new millennium. These were the chilledDSD system and the hybrid system.
8.2.1 CHILLED DSD SYSTEM
The chilled DSD system was a relatively small distribution method, created for items,which required
continuous refrigeration. This was primarily created for the fruit juicesproduct line as they can spoil
quickly if not given the required condition and care so chilledDSD system ensures that continuous
refrigeration helps in preventing the products fromspoiling.
8.2.2 THE HYBRID SYSTEM
In this system the company makes the collaboration with other company of complementarygood so that
their distribution channel is also used for the sales of its product. As taking thepractical example of the
collaboration of Coca cola and McDonald. Through thiscollaboration the distribution channel of the Coca
cola increases, as at ever McDonald theCoca cola will be there. So increase the distribution channel
through collaboration withother company is know as hybrid system. This system is actually benefited by
the synergycreated by collaboration of two companies.
8.3 INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENT
In order to manage its distribution systems effectively, PepsiCo and Coca cola had put inplace-advanced
logistics systems. They sold beverage concentrate to bottlers, who addedcarbon dioxide, sweetener and
water to make beverages and beverage syrup. Syrup waseither sold directly to the fountain accounts or
was combined with carbonated water forbottling. Bottling companies were (with a few exceptions) owned
and operated by localcompanies in the countries where PepsiCo and Coca cola operated.