Anuradha, Gagan, Himanshu, Prafulla, Ritika, Satyam, Tarun, Vibhu A.K.A Group 6

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Pepsi CoEntered in India in 1989 Entered in India in 1989 Country's largest selling Country's largest selling soft drinks company soft drinks company The group has: The group has:

• An expansive beverageAn expansive beverage Snack food & exports Snack food & exports businessbusiness• 43 bottling plants in India43 bottling plants in India

Brands include:Brands include:•Pepsi; Cola,Diet Pepsi; Cola,Diet •7Up7Up•MirindaMirinda•Mountain DewMountain Dew•Slice fruit drinkSlice fruit drink•TropicanaTropicana•AquafinaAquafina

Introduction contd’Provides direct employment to 4,000 people

and indirect employment to 60,000 people including suppliers and distributors.

Invested more than U.S.$700 million since the company was established in the country

PepsiCo’s foods company, Frito-Lay manufactures:

Lay’s Potato Chips Cheetos extruded snacks Uncle Chipps Kurkure Lehar brands

ORGANIZATIONAL STRUCTURE

Customer Executives

Assistant Sales and Development Manager

Territory Development Manager

Unit Manager

Marketing Development Manager

Sales Trainees

Marketing Development Coordinator

DISTRIBUTionChannels: ‘Channels are independent

organizations involved in the process of making a product or service available for use or consumption’. There are different intermediaries in channels that facilitate the availability of goods to the consumer.

Coverage: Two things come under market coverage. Market Reach-can be termed as accessibility Market Penetration-can be termed as Frequency

SALES AND DISTRIBUTION NETWORK OF PEPSICO INDIA

COMPANYCOMPANY

COBOCOBO FOBOFOBO

WAREHOUSEWAREHOUSE

C & FC & F DISTRIBUTORDISTRIBUTOR

WHOLESALERWHOLESALER SLUMSSLUMS RETAILERRETAILER

RETAILERRETAILER CUSTOMERCUSTOMER

CUSTOMERCUSTOMER

SALESMENSALESMEN SALESMENSALESMEN

SALES AND DISTRIBUTION NETWORK contd’COBO: These are Company owned bottling operations

operating directly under the Company. Out of 32 bottling plants, PepsiCo owns 15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the franchisee-bottling operations for PepsiCo India

Warehouses: These are Company or franchisee owned warehouses spread over various locations that cover the respective territories and come under the purview of their respective Area or Territory Offices.

C & F Centers: These are the biggest centers in the distribution network and receive proper assistance from the Company (either COBO or FOBO).

SALES AND DISTRIBUTION NETWORK contd’Distributors: These are small, compared to C & F

centers. Wholesalers: These are smaller than C & F centers

and Distributor points and get the stock directly from the Company or Franchisee.

Slums: They are generally smaller than the Wholesalers are.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi as they are the only point of contact with the customers.

Distribution Channel in China

IntroductionFounded by: Michael Dell (CEO) in

1984Revenue $57.4 billion (2007)Net income $2.6 billion (2007)Employees 90400Operate in 34 countries.Slogan: “Uniquely You”

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Business Model of DELLDell Business Model with three elegantly simple, but

ultimately powerful concepts:Direct Selling---- absent intermediaries, from the

manufacturer to a final customerCustomizationDell’s response to the Internet revolution

The Direct Model• “Configure to order” approach to manufacturing

delivering individual PC’s• Computer literate sales persons were employed• Each system was assembled according to the

preference of customers• To maintain quality level at par inventory was reduced

and PC’s were produced as per the orders received • Dell decided to reduce inventory with information,

suppliers were given the access to the company’s internal data

• The internet proved to be a boon for the model and to Dell

• Transactions were facilitated directly through their websites

Comparison of Dell Vs Traditional Business Model

DELL’s Distribution MODEL

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DELL’s VALUE WEB MODEL

Component Suppliers

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DELL’s VALUE WEB MODEL

CMs/OEMS

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DELL’s VALUE WEB MODEL

Distributors

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Benefits to company by such distribution

CASH: Dell maintains a negative cash conversion cycle means the payment receive for product before it has to pay for material.

COST:

1. Dell’s direct sales and build-to-order model has achieved superior performance in the PC industry in terms of inventory turnover, reduced overhead, cash conversion, and return on investment

2. Bypassing the reseller channel that causes further cost reduction to company.

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Cont…CRM: Direct customer relationship is the key to Dell’s

business model, and provides distinct advantages over the indirect sales model.

DEMAND FORECAST: Dell additional advantages over indirect PC vendors who must try to forecast demand and ship products based on those forecasts.

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Benefits to customer by such distribution Tailored offerings from Dell in terms of add-on products

and services.Very customizable systems at an affordable rate, since

Dell manufacturing builds specifically for each customer.

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With 290 subsidiaries, more than 100 distributors off-group and 42 plants, all spread out in about 130 countries, L’Oreal is the leader of the cosmetic industry. The group has begun its internationalization in 1912 by following three steps:• First landing• Go native• Globalization

“first landing” - first, commercialization of

professional shampoos to hair-dressers

via distributors in near Europe (Spain,

Italy, Great Britain, Germany and

Poland) and in the Americas.

“go native“ - second, local firms are taken

over for example in the USA (Redken

1993, Maybelline 1996 etc.), in

Argentina (Miss Ylang 2000)

“globalization” - third, subsidiaries

(production, research and development)

are directly created (Greenfield

investment) without any first passage

via distribution. It is the case in Asia

(Japan and Hong Kong)

The way L'Oréal is organized

L'Oréal's national branches are

primarily sales-based. The company

develops and upgrades its products at

laboratories in Paris (France), the

United States and Asia. Production

takes place at factories spread

throughout the world. Its sales

orientation is reflected in the

organizational structure of the

company, which largely parallels the

channels of distribution.

There are three of these:

specialist outlets

hair salons

retail

Kinds of Distribution ChannelSpecialist Outlet : Luxury items such as Ralph Lauren,

Giorgio Armani and Paloma Picasso perfumes and pharmaceutical products are sold exclusively through specialist outlets such as perfumeries, duty-free shops and pharmacies.

Hair Salons : The second sales channel encompasses hair and beauty salons and the like. These not only use L'Oréal products themselves, but also sell them to their clientele.

Retail : But by far the largest channel is retail: the supermarkets, department stores and chemists where most of the public buy their cosmetic and beauty products. This channel of distribution accounts for more than half of total turnover (1998: 55.9 per cent), and the Consumer Division which supplies it is therefore the largest within L'Oréal.

L’OREAL Distribution system in JapanStarted operations in 1963.

Market haircut products for professional hairdressers.

In 1976, the group began to distribute mass – consumer

products under the L’Oreal Paris brand.

Nihon L’Oreal K.K., a subsidiary created in 1996 which

handles all the Group’s cosmetics in Japan.

Expansion into overseas markets--particularly Japan--was

aided greatly by the company's new alliance with the Swiss

foods giant Nestlé, to whom Eugène Schueller's daughter,

Madame Liliane Bettencourt, sold nearly half of her L'Oréal

stock in 1974.

Characteristics of L’Oreal Paris Vs. L’Oreal Japan

L’Oreal Paris

Number 1 brand in the world.

Core brand in L’Oreal group.

Best market share in each

category.

Hair color, styling, skin care

& make – up.

12 research centers in the

world.

2500 researchers

450 patent right in a year.

Characteristics of L’Oreal Paris Vs. L’Oreal Japan

L’Oreal Japan

Tie up with Sue Uemura

The most popular cosmetic

brand in Japan.

The third creative stronghold

First: Paris, Second: New York

Important for Asia market

China, Taiwan, Korea, Thailand

etc.

•The Company was founded in 1962 as a single discount store in Rogers by a visionary Sam Walton.•The company had a huge success story in the retail industry and the company internationally came off the ground by opening its first store in Mexico City in the year 1991.•Since then Wal-Mart has extended its international presence in Canada(1994), China(1996), Brazil(1995), Argentina(1995), South Korea(1996) and Germany(1998).•Wal-Mart had a major failure in Korea and Germany.

Company’s situation Analysis for going globalThe company mainly decides as to which country they have

to target, on the basis of the prevailing competitive scenario as well as the economic conditions.

The company has mainly three strategies when they target any country:-

1)Acquiring an existing player.2)Starting a new store on its own.3)Entry by joint ventures.

Wal-Mart’s entry In Canada Marketing strategies the company adopted for its entry in

Canada.Wal-Mart in Canada operated in areas that have high

brand recognition.The company tried to operate in areas where they require

minimum cultural adaptation.Emphasized more on store design as well as customer

service as a mode of being successful.Utilized discount tactics.The company was very much successful and has wiped out

T.Eaton company which was a major player in Canada in retail sector.

Distribution Channel Of Walmart

Wal-Mart in Canada cont….. There existed a wool co chain in Canada comprising of 122 stores. Wal-

Mart has entered the country by acquiring this chain. The company also focused its attention towards energy efficiency, waste

division and supply chain efficiency. The company planned to open 15-20 stores every year as well as each

store has a Mc Donald’s Location. The company operated through Superstores, discount stores and

supercenters in Canada. Canada's Supercentre was opened in Stouffville in Ontario and this

supercentre has almost same features as that of discount stores. Wal-Mart Discount Stores are discount department stores with size

varying from 51,000 square feet to 150,000 square feet, . They carry general merchandise and a selection of food. Many of these stores also have a garden centre, a pharmacy, Tire & Lube Express, optical centre, one-hour photo processing lab, portrait studio, a bank branch, a cell phone store and a fast food outlet (usually McDonald's).

Square one shopping centre is one of the major discount centre of Canada.

Wal-Mart in china 1996 Wal-Mart entered into China through a joint venture

agreement with China International Trust and Investment Corp

Wal-Mart has 66 stores in China, Yet expansion in other countries,

such as

Germany, Japan, and South Korea has been difficult

Wal-Mart is China's number one importer

and sixth largest trading partner, surpassing

even Germany and Britain

More than 70 percent of goods on Wal-Mart’s

shelves come from China.

More than 80 percent of the 6,000 factories of

Wal-Mart's network of suppliers are in China

An important feature of Wal-Mart’s logistics infrastructure is its fast and responsive transportation system.

40 Regional Distribution Centers. Each one is over 1

million square feet in size

Company own more than 3000 trucks whereas most

competitor outsource trucking

Wal-Mart has implemented satellite network system that

allowed information to be shared company’s wide network

of stores , distribution centers and suppliers

Contd….

Inventory management EDI enabled the suppliers to download purchase orders along with

store-to-store sales information relating to their products sold.

Distribution stores is strategically placed so that it could

eventually serve 100-150 Wal-mart stores within a day

P & G, Clorox and Jonson & Jonson are among its 3000 suppliers

To make its distribution process more efficient, Wal-Mart also

made use of a logistics technique called “cross-docking.”

RFID technology to replace bar code tech, reduce the stock-outs

at the stores.

The order management and store replenishment of goods are

entirely executed with the help of computers through the Point-of-

Sales (POS) system.

The Direct Farm Program in China

The Direct Farm Program optimizes the industrial supply chain and food safety standards, and also increases farmers' incomes, according to Wal-Mart (China)

The first initiative was to set up Wal-Mart Fresh Food Distribution Centers to guarantee the freshness and quality of products. Wal-Mart China has set up two small-size distribution centers in Shenzhen and Guangzhou

The second initiative was to equip the fresh food distribution centers with food testing stations to ensure food safety. The first one will be located in Guangzhou

The third initiative was Wal-Mart's sponsorship of training sessions to ensure the sustainability of the program. The company plans to train 200 Wal-Mart trainers this year to instruct farmers

Thank You

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