Pepsi distribution system
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Pepsi Cola International is a leading global soft drink company, established in 1898 and currently holding a 21% share of the worldwide carbonated soft drink market. In Pakistan, it has achieved a 76% market share, significantly outperforming competitors like Coca-Cola and 7UP, with successful distribution handled by Shamim & Company across a significant geographical area. The document also outlines financial data including sales, expenses, and assets, indicating a healthy profit and extensive distribution infrastructure.
Pepsi distribution system
- 1. Pepsi Cola International Multinational company, which operates almost all over the world Introduced by Caleb Bradham as “ Brad’s Drink” in New Bern, North Carolina in 1898 It is a symbol of hygiene, quality and service, all over the world
- 2. Its main concern is to expand its market share from 72% to 100% It is the second largest soft drink business in the world with 21% share of the carbonated soft drink market worldwide 29% in United States
- 3. Pepsi Pakistan It has proved itself to be the No.1 soft drink in Pakistan In 1971, first plant of Pepsi was constructed in Multan, and from there after it is going higher and higher It faced competition with 7up , lemon and lime drinks and introduced “ Teem” to compete It successfully, after some years, took over 7up, and this enhanced Pepsi profits & Market shares
- 4. Products of PEPSI: Pepsi Diet Pepsi Mountain Dew 7up Mirinda Slice Aquafina Pepsi Max Lays chips
- 5. Market share& Growth Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan Total annual sale of soft drink in Pakistan 120 million cases Pepsi annual sales in Pakistan 75 million Market share of Pepsi 76%
- 6. Market Share IncludingAmratCola, MaccaColaetc 8% Local Beverages AtNationalLevel 16% Coke Market Share InMultanaswellas NationalLevel 76% Pepsi Market Share
- 7. Competitors Close Competitor Pepsi and Coke are close competitors. It means that both have direct competition in the market, their products are close substitutes for one another
- 8. Distant competitors Pepsi cola and Nestle juice are distant competitors of one another. It means that their products satisfy the same want but they are in indirect competition with one another
- 9. Strong Vs Weak Coca Cola and Pepsi are strong competitors. Pepsi, Gormet and Amrat cola are weak competitors. Pepsi is the market leader and Gormet, Amrat Cola are the follower
- 10. Strong Points Company has a very established name and a good reputation Demand of Pepsi is more than its competitors Pepsi has large market share than its competitors Pepsi has a very vast distribution channel and it is easily available everywhere
- 11. Introduction to Shamim & company It distribute products in whole of the southern Punjab, a territory that covers almost 150,000Sq.k.m. Shamim & Co cater a population of near twenty million people through more then 22000 outlets Shamim & Co were declared “Bottler of the Year” in the region for outstanding performance
- 12. Distribution Model of Pepsi Direct Distribution system Indirect Distribution System
- 13. Direct Distribution system Pepsi uses its direct distribution system to deliver supplies with PIZZA HUT KFC
- 15. Sales Model& Channels Shamim & Co uses “SPOT SELLING MODEL”. Order bookers make use of a software named as “Sales & Distribution Pro”(SDP)
- 16. Process of order booking Order Bookers Retailers Get Order Update the Software Bottles Delivered
- 17. Our Research work We gather information from different personnel’s namely current & x employees of Shamim& Co like “Mr. Hassan Numan ,“Mr. Mudassir(Former Marketing Executive)”
- 18. We visited “2” distributions operating under Pepsi in different geographical regions which are as follows: There are overall nine (19) distributors of Pepsi to cover area of Multan. The distributor we visited first is “AWAN TRADERS”. It mainly serves the 30% of total Multan with the carriage of 15 vehicles The area of Muzaffar Garh city is covered by total of 4 Distributors & the distribution we visited is “Superior Traders” which was operated by Mr. Malik Zulfiqar along with his son Naveed Ahmad Gujjar
- 20. Setting up Distribution Infrastructure & Human Resource Requirements No of employees Job Description 1 Individual Accountant 2 Individuals Storage 1 Individual Helper 6 Individuals 3 per loader vehicle
- 21. If each vehicle has the route of 150 shops per day & if the area comprises of 300 shops than 2 vans are required The vehicles can be Mazda or Shehzor Whose potential or loading capacities are given below: 1) Mazda It can load the stock of 366 cases per day. 1 case=24 bottles of 250ml 2) Shehzor It has the capacity to carry 255 cases of 250 ml bottle
- 22. Warehousing The only requirement is that it should be completely shaded & for distribution which will cover almost 300 Shops as in our case the warehouse of 10 Marla=2725 Sq. Feet’s Is enough.
- 23. Assets Asset Name Amount No of Units Assets Emp Regular 250 5000 1250000 Emp Litre 400 1000 400000 Shahzore 747573 Master 500003 Security Pepsi 50000 50000 Body Master 90000 90000 Body Shahzore 42000 42000 Security Shezan 15000 15000 Market Credit 1061244 1061244 Stock Value 841662 841662 Cash in Hand 390954 390954 Bike 65000 65000 Initial Investment 5453436
- 24. Net Sales & CGS: SKU Price @ 6000ml units sold (6000ml) Net Sales cost @ 6000ml CGS Regular 330.015 9853 3251637.795 304.003 2995341.559 Liter 390.035 973 379504.055 354.96 345376.08 Pet 2.25 490.341 360 176522.76 467.91 168447.6 Pet 1.5 400 3413 1365200 385.01 1314039.13 Pet 0.500 366.81 333 122147.73 349 116217 Pet 0.300 287.63 27 7766.01 268.64 7253.28 Slice 2.4 230 2 460 213 426 Water 1.5 175 66 11550 170 11220 Shezan 300 291 87300 250 72750 Tetra 250 15 3750 235 3525 Total 5034595.64
- 25. P&L: Initial Investment 5453436 Net Sales 5405838.35 CGS 5034595.65 Gross Profit 371242.7 Expenses Daily Office 19640 Builty 87100 Labour 1000 Transaction with S & Co 4789 IT 5900 Electricity 5600 Vehicle 8980 Petrol 1875 Warehouse rent 20000 Salaries 100000 Diesel Expenses (Shipment) 21562 Diesel Expenses (Sales) 25875 Depreciation: Empty (0.91% per month) 15000 Vehicles (0.34% per month) 4860 Total Expense 322181 Net Profit 49061.7 ROI Net Profit/Initial Investment 0.90% ROIC (for Year) 10.80%