Discuss the overall distribution strategy of PepsiCo all over the world for their

products.

A distribution channel is a chain of businesses or intermediaries through which products pass to reach
the final consumer. Distribution channels are extremely important for logistics and supply chain
management which helps to supply goods from one business to another. The distribution channel
consists of wholesalers, retailers, merchants and even the retailer itself. In general, PepsiCo’s
distribution channels also includes various strategies namely retail distribution, online marketing and
franchised partner. Their distribution channel can be divided into 2 categories; Indirect and direct
channel.

The company’s products reach the market through the following three channels:

Direct store delivery: In this framework, PepsiCo delivers their products directly to retail locations
without any mediators. This channel allows retailers to reduce operating costs by avoiding the retailer’s
distribution center. Instead, goods travel directly from the supplier to the retail store, saving time and
money off of the retailer’s bottom line.

Customer Warehouse: The stockroom is known to be less expensive than the distribution channel. It’s
appropriate for products that are less delicate and would not get spoilt easily, have lower turnover, and
are not acquired wisely.

Third-party distributor systems PepsiCo also distributes to restaurants, organizations, schools,

universities etc through third-party distributing merchants and administrators.

The Strategies used in these distribution channels is of 2 types;

Push strategy: Push strategy refers to a technique where incentives are offered to the distributors or
producers in order to push the products through the channel. PepsiCo has uplifted their sales with push
marketing strategy, by creating social media accounts and creating marketing promotions which are
sponsored that come on the target customer’s attention.
Pull Strategy: A pull selling strategy is one that requires high spending on advertising and consumer
promotion to build up consumer demand for a product. As far as pull strategy goes they have advertised
about their products in almost every sites, promotional posters can be found in almost every public
places. In addition to this, PepsiCo gives bulk discounts to attract consumers and also sponsor major
events to gain the attention of new or existing customers.