Distribution-Pepsi

Levels of Distribution &

Margins
Manufacture
rs

CFAs

2%

Distributors

14%-18%

SubAgency(for
Rural only)

18
%

Retailers

15
%

Trade Margins/Discounts
General
Trade

Modern
Trade

Internet

There is a margin of 15%

There is a margin of 25%
PepsiCo. doesnt sell via internet.

The retailers get a per case discount of Rs. 15 for a case

Discounts
of 600 ml soft drinks.
For a case of 2 litre soft drinks, they get a discount of
Discounts
Rs. 20.

Franchising
The soft drink business in this case is run entirely by the
Franchise franchisees who buy the concentrate from the company.
es
After buying the concentrate, the franchisee produces the
Productio soft drinks and handles all the distribution for the cold drinks
n
across the designated areas.
RKJ group has in total 18 bottling plants in India and Nepal
Example and is responsible for producing and marketing 44% of Pepsi
s
requirement in India.

CSDs

Franchisees directly handle CSDs giving a discount of 15%22% on MRP.

Service organizations
Business Development Managers handle
relationships with service organizations
that exclusively keep PepsiCo beverages.
Some groups having such deals are Pizza Hut
Le Meridian
PVR
EverGreen
Maurya Sherton hotels

Impacts
Franchisees feel that modern retail has not had much impact on the
distribution of beverages, they are given a margin of 25% since they buy in
Modern bulk.

Retail

Internet

EBO vs
MBO

As no soft drinks are being sold through Internet, this has had no impact on
the distribution.

Pepsi does not have exclusive brand outlets. Its soft drinks are generally sold
in retail stores that generally keep other soft drinks also

Franchisee who acts as the distributor has a conflict with PepsiCo regarding
the margin that he gets from the business
Some retailers have a conflict that the company is giving more discounts and
Conflicts promotional material to some of the retailers while they get very little
promotional assistance

Promotional Support
This fridge is given to the retailers
based on the sales they generate
and also to counter competitors
moves if the retailer is located on a
desired location.
If a store is selling only Coca-Cola
products, the distributors lure the
shop by providing these Visi Coolers
which are sponsored by Pepsi.
Apart from this, PepsiCo also gives
display boards to retailers with their
name on it and Pepsis logo in big
fonts. Also, umbrellas, painting and
banners are provided to the
retailers free of cost.