Assessment item 4 Report - Essay Example

Pepsi was able to maintain such big reputation in international markets because of their innovative distribution strategies. This paper briefly analyses the distribution strategies of Pepsi in international markets. Distribution strategies of Pepsi Pepsi has concentrated in developing a wide range of distribution channels like, supermarkets/retail stores, fountain/restaurant, convenience stores, vending machines etc for marketing their products. Their product distribution philosophies or objectives were based on; making available all or most of the products in its portfolio within a distance easily reachable by consumers.

Pepsi has realized that the beverage market is highly competitive and the customers may not take many efforts in locating the products. Most of the customers who like to purchase a soft drink will select the drink which is easily accessible to them. They will never travel long distances to purchase a soft drink even if they like a particular drink very much. Pepsi knows better about the above consumer psychology and they structured their distribution channels in such a way to meet the customers at their doorsteps rather than asking the customers to travel lengthy distances in search of Pepsi products.

In order to meet the above objective of shortening the distance between the customers and Pepsi products, “PepsiCo had developed various distribution models to offer its products and services to customers including the Direct Store Delivery (DSD), Broker Warehouse Distribution (BWD) and Vending & Food Service (V&FS) systems etc” (PepsiCo's Distribution and Logistics Operations, n. d). Advanced logic systems were also incorporated to the distribution channels in order to ensure hassle free transport of Pepsi products across the world.

Moreover, in order to serve the customers more effectively and efficiently, Pepsi has made agreements with the local bottling companies. Direct channels, retailer channels, wholesaler channels, agent or broker channels, dual channel or multiple channels etc are some of the common channels opted by product manufacturers to distribute their products. The distribution channels is selected based on the nature of the product, type of customers, market size, the producer’s level of control, the size of the producing company, the size of the retailers etc (The Retail Distribution Channel, n. d, p.36).

PepsiCo is one of the largest companies in the world and they can opt for any type of distribution channels because of their immense financial capabilities. Pepsi has made use of different distribution channels based on the geographical characteristics and the cultural and economical aspects of the country in which they operate. For example, in countries like America and Middle East, Pepsi vending machines are available large in number whereas in countries like India instead of vending machines,