A Report on Streamiling of Hub and Spoke Distrbution Through Trade Promotion

A REPORT

ON

STREAMILING OF HUB AND SPOKE DISTRBUTION THROUGH TRADE PROMOTION

By

MOHAMMED SAROSH MOHIYUDDIN

PEPSI FOODS PRIVATE LTD.

A REPORT

ON

STREAMILING OF HUB AND SPOKE DISTRBUTION THROUGH TRADE PROMOTION

By

MOHAMMED SAROSH MOHIYUDDIN

06BS1827

A report submitted in partial fulfillment of

the requirements of MBA Program of

ICFAI Business School

Distribution List:

1. Pepsi Foods Pvt Ltd.

2. ICFAI Business School

TABLE OF CONTENTS

Particulars Page No:

1. Abstract 4

2. Introduction 5

Trade sales promotion

3. Scheme details 7

4. Costing 8

5. Roll out 9

6. PET bottle scheme 10

7. Reference 10

Abstract:

In a competitive market, where the competition has a major share, it becomes important for the company to generate loyalty among the outlets for its own products and also to increase its presence among the outlets who stock solely the competitor’s products. The main period for sales of beverages is from the beginning of March to the end of May. This is the period during which the retailers are willing to stock fast moving products such as beverages. Therefore the retailers can be targeted to stock the company products by a sales promotion program. The program will also function as a vehicle for market penetration.

In order to increase the sales revenue and market share, the Hyderabad Unit of Pepsi rolled out a special scheme for the retailers called ‘Galiyon Ka Badshah’. The scheme targets the outlets that come under the Hub and spoke distribution system. About 22 areas in Secunderabad under 17 sub distributors are being targeted. Initially about 300 outlets were identified by the spokes (sub distributors) and also by the QSM by market survey and from EDS (each dealer survey) database. By the end the enrollment period, a total of 464 shops had taken up the scheme.

The trade sales promotion consists of three elements, i.e visibility, volume and gifts. The outlets are given a specific target to be achieved during the scheme period to receive gifts. The outlets are offered collaterals like displays which increases the visibility. After enrollment, the sales are tracked by a tracking card kept at the outlet.

Another scheme is being offered to the enrolled outlets from 12th to 30th April. This is to promote the sales of PET bottle range of Pepsi products. It offers a discount to the spokes as well as the outlets.

Introduction

Trade Sales Promotions

Promotion Decisions, certain promotions can help “push” a product through the channel by encouraging channel members to purchase and also promote the product to their customers. For instance, a trade promotion aimed at retailers may encourage retailers to stock more than the competitor’s products. With thousands of products competing for limited shelf space, spending on trade promotion is nearly equal that spent on consumer promotions.

Many sales promotions aimed at building relationships with channel partners follow similar designs as those directed to consumers including promotional pricing, contests and free product. In addition to these, several other promotional approaches are specifically