A Study On The Distribution Channel Of Frito 5p5d26

A Study on the Distribution Channels of Frito lay with reference to Guwahati (Rural) and perform a SWOT analysis on it.

A Report Submitted in Completion of two months Summer Internship Programme in Frito-lay, Guwahati .

Institutional guide:

Organisational guide

Sanjib Raj , Assistant Professor

Mr. Hitesh Das

Assam Institute Of Management

Sales officer, Frito Lay, Guwahati(rural)

Submitted by: Nipul Sarma, 40/D/2011.

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Contents

Particulars

1. 2. 3. 4.

Page no.

Preface………………………………………………………………….. Acknowledgement……………………………………………………… Declaration…………………………………………………………….... Abbreviations……………………………………………………………

……………………………………………………… 5. Chapter 1-Executive summary……………… Chapter 2- Introduction. 2.1-PepsiCo India……………………………… 2.1-Mission and Vision………………………………… 2.2-Frito-lay India……………………………………… 2.3-Frito-lay Guwahati………………………………… 2.4-Product line and depth…………………………… 2.5-Competitors of Frito lay…………………………………… 2.6-Organisational hierarchy of Frito lay Guwahati………… 2.7-Distribution chart of Frito-lay, Guwahati………………………. 2.8-Selling and Distribution system of Frito-lay, Guwahati……….. 2.9Strategies of Frito-lay…………………………………………… 2.10 Schemes and discount during SIP 7.Chapter 3 – About the SIP…………………………………… 3.1-A brief about the SIP……………………………… 3.2-Findings and Recommendation during SIP……… 3.3--Subject and objective…………………………………………. 3.4-Scope of the Study…………………………………………….. 3.5-Limitation………………………………………………………

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8.

Chapter 4- Research methodology 4.1-Research Methodology and Approach…………………………. 4.2-Sampling plan……………………………………………………

10. Chapter 5-Analysis from the market survey……………………………… 5.1-Retailer perception on different attributes and service……….. 5.2-Consumer perception on different attributes of ……….. 5.3-SWOT analysis………………………………………………… …………………… .

Findings from market survey…

12. Chapter 6-Recommendation and conclusion…………………………….. 6.1-Recommendation …………………………………………… 6.2-Conclusion…………………………………………………….. 13. Chapter 8-Annexure…………………………………………………………………. 8.1 Biblography………………………………………………………………… 8.2 Questionnaire……………………………………………………………….. 8.3 Weekly report...................................

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PREFACE Projects are an important part of any formal education to get a practical exposure as well as implementation of the subjects studied. In a professional course like PGDBM, the students are equipped with strong theoretical knowledge about the business operations and the time-tested methods of running a successful business. To make this theoretical knowledge stronger, the students are assigned certain projects in various organizations to get an idea of the practical knowledge of the market.

I was assigned to do a project work in PEPSICO India (Frito Lay division).The topic of my study was “A study on the distribution channel of Frito lay in Guwahati(rural) market and perform SWOT analysis for it”. The Project started from 2nd May 2012 and ended on 2012 30th June.

Best efforts were been put to accomplish the task in the stipulated period of two months. As a part of this project I have conducted an extensive study on the retailers to understand their views about the distribution channel(rural) of Frito lay and also some of its core competitors i.e.

ITC

Bingo,

Parle

and

Perfetti

Stop

Not

and

some

local

brands

like

ZING,KAYKICKS,DIAMOND etc.

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ACKNOWLEDGEMENT

This report is the result of the contribution, guidance and co-operation received from number of people. This report cannot be claimed as individual effort. This is to acknowledge all people who have offered their help and in preparing this report. I am greatly indebted to Mr.Gautam Sarmah, Sales officer (Frito-lay, Nagaon) for selecting me as a summer trainee. My sincere thanks and gratitude to Mr. Hitesh Das, Sales officer Guwahati (RURAL) for giving his valuable advice and showing me the right path throughout my work and helping me in completing the project. My sincere thanks to Mr.Sanjiv Raj (Institutional guide) and Mr. N.N Sharma, for giving me their valuable advice throughout the project. Finally I would like to extend many thanks to my parents and my friends for their moral and suggestions during the project work.

Nipul Kr.Sarma

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Declaration

I hereby declare that the enclosed project is done on the basis of real market study and the data is extracted through primary research work and no part of it has been extracted from any other published research or journal except those specified in bibliography.

Nipul Kr.Sarma. Page | 6

CHAPTER 1:

EXECUTIVE SUMMARY

Project Title: A study on the distribution channel of Frito Lay with reference to Guwahati market(rural)and to perform a SWOT analysis for it. Organization: - PepsiCo India Holdings Private Limited (Frito-lay Division). Organizational Guide: - Mr.Hitesh Das. Institutional Guide: - Mr.Sanjib Raj. Duration of the project:- 2nd May-30th June 2012.

RESEARCH OBJECTIVES: 1. To understand the present scenario of the services provided by Frito Lay to the retailers in the rural market of guwahati. 2. To identify the strengths and weaknesses of the distribution channels in Guwahati (rural). 3. To evaluate the satisfaction level of the retailers regarding the margin provided by Frito Lay. 4. To map the competition in the market with respect to the services provided by the other brands in the rural market. 5. To suggest some measures if possible to the distribution channels to improve further.

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RESEARCH METHODOLOGY:The type of Research used in this project is a Descriptive cross-sectional study including mostly the primary data, observation, and methods of interviews conducted to the Retailers. The sampling technique used is probabilistic cluster sampling as it is easier and cost effective. The data have been collected through questionnaires and depth interviews. Statistical tools such as Pie chart and bar diagram have been used to analyze the data.

FINDINGS:1)The average time taken to start the distribution process is around 10:30-11 am,and due to this, time taken to reach the designated market is quite late as most rural area retailers close down around 1pm,hence hampering the sales. 2)In some areas,the racks given for display are not anti rodents,so retailers suffer losses as chipps are destroyed by rodents causing financial losses. 3)At many times it is seen that retailers are unable to buy products as the date of visit and delivery to a particular market is not fixed by the agents of the sub-stockists and RRSA,so they ask for credit facilities which is not given by the sub –stockist,hence reducing sales. 4)At times it is informed that when a retailer is out of stock,they on their own visit the substockist but the response time taken by the sub-stockist is not satisfactory,hence wastage of time by the retailer and they tend to ask for if any other sub-stockist available or not which sometimes lead to cross market supply.

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RECOMMENDATIONS:1)The Super-stockist should open as early as possible and availability of auto vans should be confirmed first and all paper works should be done at early or if possible at evening ,so that market hitting time is around 9am-9:30am,hence increasing visits and deliveries. 2)Anti rodents racks should be given if possible so that retailers don’t incorporate losses caused by rodents and the existing damaged racks should be changed or repaired properly.

3)Incorporation of uniforms is very essential to the RSAs as they are the faces of Fritolay in the market 4)The RSA s with the agents of their respective Sub- stockist should prepare a journey plan and inform the retailers about this plan so that the retailers also know when they will be visited and hence are prepared for it in advance,so problem of credit may be solved.

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CHAPTER 2

Introduction 1.1PepsiCo India 1.2Mission, vision and values. 1.3 Frito-Lay India 1.4 Frito-Lay in Guwahati 1.5 Product line and depth of Frito-lay 1.6 Product Highlight 1.6 Competitors of Frito-lay 1.7 Organizational hierarchy of Frito-Lay in North east

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CHAPTER 2: 2: CHAPTER

INTRODUCTION INTRODUCTION

2.1 PepsiCo India Holdings Private limited.

PepsiCo entered India in 1989 and in a short period of time. It has grown up into the largest and one of the fastest growing food & beverage business in the country. PepsiCo India growth has been guided by PepsiCo global vision of “Performance with Purpose”. This means that while business maximize shareholder value, they have a responsibility to all the stakeholders including the communities in which they operate, the consumers they serve and the environment whose resources they used .The largest US multinational investors in the country investing with an investment of over $1 billion. PepsiCo India provides direct and indirect employment to over 1,50,000 people across the country. It’s beverage and snack food business is ed by 36 beverage bottling plants, (13 company and 23 franchisee owned) and three food plants. PepsiCo has pioneered and established a model of partnership with farmers and now working with over 22,000 happy farmers across ten states. Foods: PepsiCo foods division Frito-Lay is the leader in the branded salty snack market. All its products are free of trans-fat. It manufactures Lay’s potato chips, Cheetos extruded snacks, Uncle Chips and traditional snacks under the Kurkure and Lehar brands. The company’s high-fibre breakfast cereal, Quaker Oats and low-fat and roasted snack options like Aliva increase the number of healthy choices available to consumers.

Beverages: PepsiCo India expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Nimbus, Mirinda, Slice and Mountain Dew, in addition to low-calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drink Gatorade and fruit juices such as Tropicana and Tropicana Twister.

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1.2 Mission, vision and Value.

Mission PepsiCo mission is to be the world's premier consumer products Company focused on convenient foods and beverages. And seek to produce financial rewards to investors even as by providing opportunities for growth and enrichment to their employees, business partners and the communities in which they operate. They always strive for honesty, fairness and integrity. Vision PepsiCo's responsibility is to continually improve all aspects of the world in which they operate – environmental, social, economic – creating a better tomorrow than today. Our vision is to put into action through programmes and a focus on environmental stewardship, activities to benefit society and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Values & Philosophy PepsiCo values and philosophy are a reflection of the socially and environmentally responsible company they aspire to be. They are the foundation for every business decision. Guiding Principles We must always strive to……………… Care for customers, consumers and the world we live in Sell only products we can proud of Speak with truth and candor balance short term and long term Win with diversity and inclusion respect others and succeed together Page | 12

2.3 FRITO-LAY INDIA Lay's is the brand name for a number of potato chip varieties as well as the name of the company that founded the chip brand in 1938. Lay's chips are marketed as a division of Frito Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels.

Product line of FRITO-LAY INDIA In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee and, in 1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food Company," renaming it "H.W. Lay & Company." Lay criss-crossed the Southern United States selling the product from the trunk of his car. In 1942, Lay introduced the first continuous potato processor, resulting in the first large-scale production of the product. The business shortened its name to "the Lay's Company" in 1944 and became the first Snack food manufacturer to purchase television commercials, with Bert Lahr as a celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the chips' first slogan along with "de-Lay-sious" As the popular commercials aired during the 1950s, Lay's went national in its marketing and was soon supplying product throughout the United States. In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-Lay Inc., a snack food giant with combined sales of over $127 million annually, the largest of any manufacturer. In 1965, Frito-Lay merged with the Pepsi Cola Company to form PepsiCo, Inc. and a barbecue version of the chips appeared on grocery shelves.

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Shortly thereafter, the company introduced the "Wavy Lays" products to grocery shelve. In the mid to late 1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece," named after a popular sauce, and introduced a lower calorie baked version and a variety that was completely fat-free (Lay's WOW chips containing the fat substitute olestra). In the 2000s, the company began introducing a variety of additional flavour variations.

2.4 FRITO-LAY IN GUWAHATI Frito Lay Division, a part of PepsiCo India Holdings Pvt. Ltd., came to Guwahati in the year 1994 and initially it had only one distributor named NOVA which was located in the area of Rajgarh. It became very hard to cover all the area due to the increase in demand of Frito Lay products in the market. Currently, it has six distributors situated all over Guwahati. The entire supply of North-east is initiated by the C&F agents from the Depot located at Chansari, Guwahati which has the India’s largest godown of Frito Lay products. Since starting, the sales of Frito lay products in Guwahati is showing a upward trend. The Guwahati(rural) market is currently supervised by one sales officer headed by the Area Sales Managers who is finally headed by the Zonal Manager. The products of Frito Lay available in the Guwahati(rural)mainly observed by me are – Lehar , Lays, Uncle Chips, Cheetos, Kurkure.But Frito-lay has products like Aliva and Quaker Oats which are not so demand in rural market.

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2.5 Product mix of Frito lay.

Uncle chipps

Lay's

Kurkure

Cheetos

Plain Salted

American Style

Masala Munch

Masala Balls

spicy treat

Spanish Tomato

Chilli Chat

Tango loops

chatpata masala

Classic Salted

Yummy Cheese

cheese balls

papdi chaat

Magic Masala

Aliva

Oats

Natural Oats

cheese puff

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ORGANIZATIONAL HIERARCHY OF FRITO LAY DIVISION

SALES OFFICER

AREA SALES MANAGER

ZONAL MANAGER

REGIONAL MANAGER OR V.P OF THE REGION

SALES DIRECTOR

BUSINESS UNIT GENERAL MANAGER

COUNTRY HEAD

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2.6 ABBREVIATIONS USED R.S.A.

Route service agent/ Route sales agent.

R.R.S.A.

Roaming route sales agent.

F.S.C.O.

Frito-Lay star club outlet

G.R .

General Store

P.A.N.

Pan Shop

B.A.K.

Bakery

N.C.D.

New Centre Development (railway stations, parks, cinema halls etc.)

O.T.H.

Others

F.S.C.O .Gold-

FSC outlet having two racks, Oats and Aliva biscuit.

F.S.C.O. Silver

FSC outlet having only one rack, Oats and Aliva biscuit.

T.T.

Traditional Trade (going to the retailers and delivering the product)

M.T.

Modern Trade (shopping malls)

W.S. BEAT

Whole Sale. Beat is the area of distribution to be covered by a particular R.S.A.

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Flavour

Weight (gm)

Retail price (Rs)

Plain salted

22

4.25

Consumer price (Rs) 5

30

9

10

70

18

20

22

4.25

5

30

9

10

70

18

20

22

4.25

5

30

9

10

70

18

20

22

4.25

5

30

9

10

70

18

20

Spicy treat

Chatpata masala

Papdi chaat

LAY’S

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Flavour

Weight (gm)

American style cream and onion

Spanish tomato tango

Classic salted

Magic masala

22

Retail price (Rs) 4.50

Consumer price (Rs) 5

30

9

10

70

18

20

22

4.50

5

30

9

10

70

18

20

22

4.50

5

30

9

10

70

18

20

22

4.50

5

30

9

10

70

18

20

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CHEETOS

Flavouur

Retail price (Rs)

Consumer price (Rs)

Masala balls

4.50

5

9

10

18

20

4.50

5

9

10

18

20

4.50

5

9

10

18

20

4.50

5

9

10

18

20

Tango loops

Cheese balls

Cheese puffs

KURKURE

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Flavour

Weight (gm)

Retail price (Rs)

Masala munch

25

4.50

Consumer price (Rs) 5

9

10

18

20

4.50

5

9

10

18

20

4.50

5

9

10

18

20

Chilli chat

Yummy cheese

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ALIVA

Flavour

Weight (gm)

Retail price (Rs)

Consumer price (Rs)

Multigrain waves

50

13.50

15

Milk minis

50

13.50

15

Crispi thinz

45

13.50

15

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QUAKER OATS

SKU Natural Oats

200 gm

Retail price (Rs) 27

Consumer price (Rs) 30

400 gm

49.50

55

550 gm

84

89

1 kg

143.1

159

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CORE COMPETITORS OF FRITO-LAY IN GUWAHATI RURALMARKET. People are now more concerned about the quality of the product and its price. Frito-Lay provides good quality product and fine packaging and as such it has captured a large market share. Now big brands like ITC Ltd., Parle Agro and Perfetti are giving a tough competition to Frito Lay. Moreover, a few local players (popcorn, zing,diamond,krazzykure etc) are dominating the market through high profit margin and credit facility specially in rural market. 1. 2. 3. 4. 5.

ITC BINGO Zing Diamond Parle fultoss Krazy kure

DISTRIBUTION SYSTEM OF FRITO-LAY IN GUWAHATI: The main factory of Frito Lay Division is located at Pune, India where the products are manufactured. From the factory, the products are sent to the depot in Chansari, Guwahati. The depot is looked after by the C&F agents called the Tirupati &Associates Pvt. Ltd whose primary job is to execute the whole process. The depot in Chansari has the country’s largest godown with an area of about 45,000 sq.ft. It is responsible of supplying Frito Lay products to the entire north-eastern states. The stock of goods is sent via railway and highway through big trucks to the depot. . The C&F agents supply goods to the other states via roadways. According to the requirement of the distributors sends draft to the CNF and then after receiving the draft the CNF sends the required amount of products to the distributors. Within Guwahati Metro Distributors purchases the highest amount of Frito Lay products. The CNF makes the payment in monthly basis to the company. There are mainly three type’s distributors in Frito Lay which are as follows: 1. Wholesale Distributor: - It looks after the wholesale market within a specific geographical area allotted by the company. Page | 24

2. Traditional Trade Distributor:

It looks after the retail market of a particular

geographical region. 3. Super Stockiest: These are those distributors which supply products to retail outlets and also to sub distributors. The sub distributors cannot order or get the delivery from CNF; the super stockiest give them the supply. These super stockiest also operate within a specific geographical area allotted by the company. In some cases the super stockiest may supply to wholesale outlets but it is in rare occasions. In Guwahati Jagiroad,Sualkushi,Mirza,Chaygaon,Changsari,Baihata chariali etc. The Roaming Route Service delivers the consignment to those sub distributors. AREA STUDIED FOR THE PROJECT

Guwahati (Rural)

9th mile,sonapur ,khetri,jagiroa d

mirja,vijayanag ar

saraighat,iitg,changsari,bai hata chariali

sualkuchi,singi mari,kalitakuc hi

DISTRIBUTION NETWORK OF FRITO LAY IN GUWAHATI AND RURAL Page | 25

COMPANY FACTORY

C&F

DISTRIBUTOR (TT)

DISTRIBUTOR (WS)

WHOLESALER

DISTRIBUTOR (SS)

SUB DISTRIBUTOR/ SUBSTOCKIST

RETAILER

CONSUMER

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DISTRIBUTION PRACTICES OF FRITO-LAY IN GUWAHATI RURAL. The distribution practices follow the two processes of delivery1. Ready stock 2. Pre sale Ready stock: The goods are delivered without any prior booking from the outlets. The vehicle is stuffed with as much as goods possible and the product is supplied on the basis of ready order. The van man himself is the merchandiser who is accompanied by the RSA. It is mandatory in case of Ready Stock to cover 25 outlets per day, whatever may be the sales volume. Many a times some of the products or a particular product flavour gets finished before all the outlets of a particular beat gets completely covered. This results in the dissatisfaction of those retailers.

Pre sale: In this process, the RSA takes the order from the outlets prior before the delivery is made. The scheme is communicated to the retailer about when the delivery will be madeon basis of order order. The goods are supplied on the day according to the prior booking. The delivery is done by 2 people- a van man and sub –stockist and the goods must reach retail outlets in that particular day.

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STRATEGIES FOLLOWED BY FRITO-LAY, GUWAHATI(RURAL)

a) EVERY OUTLET IS FRITO-LAY’S VALUEABLE CUSTOMER Frito-Lay considers every outlet as its important customer irrespective of the outlet being small or big. The primary objective is to make Frito-Lay’s products available in every outlet of Guwahat(RURAL). This strategy will help in dominating 100% chips market share of Guwahati(RURAL)inspite of challenges from local players. b) PUSH AND PULL STRATEGY Frito-Lay pushes new products in the market with schemes and discount in the market. They apply promotional activities to pull up the products to a good position in the market. c) DISPLAY OF ITEMS Frito Lay gives strong emphasis on the visibility of the products in the outlets. It is believed that the more visibile a product is, the more it is sold. Therefore Frito Lay very often implements scheme related to the display of items which have been very successful. Proper merchandising of the products is done along with the delivery to ensure effective display to attract more customers. Frito Lay follows the saying,” Jo Dikhta hai who Bikta Hai”.

d) UNDERSTAND THE CUSTOMER EXPECTATIONS Frito-lay main focus is on knowing customers’ expectations. They always try to know about the likes and dislikes of the customers and try to fulfil their expectations with their level best.

e)POTENTIAL SUB STOCKIEST Page | 28

Frito-lay emphasizes more on the number of outlets covered everyday and focuses more in servicing maximum number of outlets rather than concentrating on the sales volume. It is utmost important for the company to reach each and every retailer in every nook and corner of the city. Providing service to a larger number of retailers and thus reaching a greater section of people is the basic aim of Frito-lay in of selling and for this they are always looking for potential sub stockists so to penetrate more in the rural market. f) REPLACEMENT OF THE DAMAGES: Frito-lay follows another strategy of replacing the damaged items of the product. Although, the packaging of Frito-lay product is of superior quality, yet due to various reasons, sometimes the packets are found to be torn or damaged. Also, the company replaces those items whose date of expiry is close at hand which is around 4 months from date of manufacturing. However, the packets damaged by rodent are not replaced. It is an important strategy as it helps the retailers to recover the money invested in the damaged items and as such the losses of the retailer are decreased.

g) ADDITIONAL SERVICES: Frito-lay provides additional services to the retailers in the form of Racks and Hangers. The racks are of several types depending on the design and capacity to keep the products. The outlets whose sales are very high are generally provided with large racks whereas, the shops with low sales are provided with hangers or small racks . However, most of the retailers prefer to keep the ANTIRODENT racks. The ANTI-RODENT racks are however not available in the market . And this is creating problem of most of the retailers is that their products are damaged by the rodents and as such they have to incur a huge loss. Taking this issue into consideration, the ANTI-RODENT racks are again in consideration by the company to provide a safer storage for the products. However, the disadvantage of

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these racks is that they are closed racks and that their visibility is less than the other racks.

h) SCHEMES AND DISCOUNT Frito-lay introduces time to time schemes and discount to attract the retailers. Such schemes and discount helps the company in entering new outlets and increasing sales volume of existing outlets too. Attractive and profitable schemes are generally produced to retain the loyalty and trust of the retailers on the company. It motivates the retailers to sell more of the products as their expectation level rises. Its success brings high profit for the company as well as to the distributors, wholesalers as well as the retailers.

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SWOT Analysis of Frito-Lay Strength:  Frito-Lay enjoys a strong brand image and reputation in the snacks market.  Frito-Lay products have good demand in the local markets including rural market.  It has a variety of product lines from chipps as well as snacks. Weakness:  Lack of information about the local customers’taste preferences in the Indian rural market.  Inability to deliver the products in proper quantity to meet the demand in the local market.  Lack of a proper journey plan of the base level employees

Opportunities:  Frito lay can set up distribution channels in the rural market of Assam with proper focus on big retailers as well as retailers selling high quantities of other brands.  Frito lay can set up some potential sub stockiest in rural market having good hold over outlets of those areas thus increasing sales and market share.

Threat : 

Many big brands like ITC,perfetti,Parle are also entering the market with quality products and different schemes and policies for the retailers and distributers thus causing threat to frito-lay market share.



Many local brands like Zing,Diamond,krazzykure etc are also entering the rural market by providing greater profit margin to the retailers and distributers and also with credit facilities in some cases hence reducing the market share of fritolay.

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CHAPTER: 3

ABOUT THE PROJECT.

3.1 A BRIEF DESCRIPTION ABOUT THE PROJECT. The project is all about the distribution channels, how they work in the rural markets of Guwahati. It tries to explore all the aspects relating to the distribution channels and their working strategies. The study is based on the availability of Frito Lay products in rural market and studies the factors influencing the buying behaviour of the retail outlets of the Frito Lay products from its distributors. Initially I was assigned to work with Metro trading Agency (super stickiest) and was asked to check the availability of the various competing brands in the rural outlets. It has been seen that there are a number of local brands which are making a mark in the minds of the retailers by giving them better schemes and profit margin in comparison to Frito Lay. The brands like Diamond, Zing, Krazy kure, Parle Fultoss and other local brands are entering the markets strongly and to a certain extent they are being able to generate a considerable demand for their products. I was given the opportunity to visit most of the rural markets of Guwahati and study the present scenario of the services availed by the distributors of Frito Lay and also those of other competing brands.

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3.2 SUBJECT, OBJECTIVES, SCOPE & LIMITATION OF THE PROJECT

SUBJECT: A Study on the Distribution Channels of Frito lay with reference to Guwahati (Rural) and perform a SWOT analysis on it.

OBJECTIVES: 1. To understand the present scenario of the services provided by Frito Lay to the retailers in the rural market of guwahati. 2. To identify the strengths and weaknesses of the distribution channels in Guwahati (rural). 3. To evaluate the satisfaction level of the retailers regarding the margin provided by Frito Lay. 4. To map the competition in the market with respect to the services provided by the other brands in the rural market. 5. To suggest some measures if possible to the distribution channels to improve further. SCOPES: 1. To learn about the strategies applied by other brands 2. To study whether the potential sub stockiest will help in raising the market share of Frito Lay in the rural markets. 3. To know about the difference in the mindsets of the retailers and consumers of urban and rural markets. 4.

To know about the future scope of Frito Lay with respect to the competition provided by the local players.

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LIMITATIONS:

 While approaching the respondents mainly the retailers for collecting data, most of them were reluctant and as were initially hesitated to give any information.  The authenticity of the data given by the respondent was not guaranteed as the seriousness of the respondents while filling up the questionnaires was not known.  The study was limited only to selected parts of the Guwahati(rural)area .  Time Constraint for the project to be completed. 

Non-cooperative approach and rude behaviour of the respondents. A number of retailers did not respond positively at all.

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CHAPTER: 4: RESEARCH METHODOLOGY.

4.1. RESEARCH PLAN The type of research used in the project is Descriptive cross-sectional study that included primary data,observations and conducting interviews with the retailers.Primary data is collected through questionnaires while statistical tools like Pie chart and bar diagram are used to analyse the data.The research is Cross-sectional as collection of information from sample size is only once.

4.2. SOURCES OF DATA Primary data For the research the primary data is collected mainly through questionnaire and personal interviews.The collection of primary data is quite time consuming as well as a costly affair

Secondary data: The secondary data were collected from internet, mainly from some marketing research agency’s website. (Mentioned in the Bibliography)

SAMPLING PLAN Sample design is a definite plan of obtaining some items from the whole population. The sample design used in this project is Simple random sampling and judgemental sampling. These sampling techniques are used Sampling has been used for the sake of convenience of data and to minimize the wastage of time. Sampling Unit: Retail outlets. Page | 35

Sample size: 50 retail outlets Sampling procedure: Observation, questionnaire, personal interaction and secondary data

4.5. RESEARCH APPROACH AND RESEARCH INSTRUMENT 1)Questionnaire: A set of Questionnaire were designed to understand retailers’ views on the distribution channel of Frito Lay 2)Personal interview:Interaction with the retailers was done to know about their views on the distribution channel of Frito lay in the guwahati (rural) market.

4.6 ANALYSIS TECHNIQUE: The data are analyzed with the help of Microsoft Excel and has been presented with the help of graphical method like Pie charts, Bar-diagram and tables to interpret the information attained from them.

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CHAPTER: 5

ANALYSIS AND INTERPRETATIONS.

5.1. Awareness among the retailers about all the Frito Lay products. Opinion

Respondents

Percentage (%)

Yes

37

74

No

13

26

TOTAL

50

100

respondents 26%

yes 74%

no

Interpretation: From the above pie diagram it is seen that around 74% of the respondents are totally aware of all the products of Frito Lay while around 26% respondents are not much aware about all the products especially Aliva and Quaker oats.

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5.2. Opinion about the varieties of Frito lay products stored by the retailers. Opinion

Respondents

Percentage (%)

LAYS,UNCLE CHIPPS,KURKURE

33

66

CHEETOS

10

20

ALIVA

5

10

OATS

2

4

TOTAL

50

100

70

66

60 50 40 30 20 20 10 10

4

0 LAYS,UNCLE CHIPPS,KURKURE

CHEETOS

ALIVA

OATS

percentage

Interpretation: from the above histogram we have seen that around 66% of the respondents store Lays, Uncle chipps and kurkure as a whole while around 20% store cheetos with only 10% storing aliva and 4% storing oats.

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5.3. Opinion of the respondents about importance of various promotional schemes by Frito Lay. Opinion

Respondents

Percentage (%)

racks and hangers provided

12

24

more profit margin

6

12

credit policy

18

36

discounts on bulk purchase

14

28

50

100

importance of promotional schemes 40 35 Axis Title

30 25 20 15

percentage

10 5 0 racks and hangers provided

more profit credit policy margin

discounts on bulk purchase

Axis Title

Interpretation:From the above histogram it is seen that24% among retailers prefer racks and hangers are important promotional schemes,while 12% feels more profit margin more important,36% feels credit policies while 28% feels discount on bulk purchases as more important promotional schemes.

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5.4. Opinion of the respondents on the promotional schemes of other brands. Opinion

Bingo

zing

diamond

parle fultoss

racks and hangers provided

16

0

0

12

more profit margin

0

46

50

2

credit policy

23

0

0

0

discounts on bulk purchase

11

4

0

0

neutral about it

0

0

0

36

TOTAL

50

50

50

50

Chart Title 50 40 30

racks and hangers provided more profit margin

20

credit policy 10

discounts on bulk purchase neutral about it

0 bingo

zing

diamond

parle fultoss

Interpretation:From the above chart it is seen that out of 50 respondants,16 respondents like racks and hangers of BINGO,while 23 like credit policy,while 11 like discount policies on bulk purchase.In case of ZING 46 respondents like their profit margin scheme while 4 like their discount on bulk purchase scheme.While in case of DIAMOND 50 respondants like their profit margin schemes.While in case of PARLE FULLTOSS,12 like their hanger and rack schemes,while 38 are neutral about it as its availibily is less in the market.

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5.5. Rankings given by the respondents about the various brands according to consumer preference.

brands

respondents

Percentage (%)

frito lay

22

44

bingo

17

34

zing

7

14

diamond

4

8

parle fultoss

0

0

others

0

0

TOTAL

50

100

Ranking by customer preference frito lay

bingo

zing

diamond

parle fultoss

others

44 34

14 8 0 frito lay

bingo

zing

diamond

parle fultoss

0 others

Interpretation:From the above histogram it is seen that customer preference for Frito lay products is about 44%,while for ITC Bingo its about 34%.and that of Zing is about 14% and that of Diamond is about 8% whereas that of other products is not known due to their irregular availability in the market.

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5.6. Opinion about the satisfaction level of the respondents on the frequency of visit by the RSA. Opinion

respondents

Percentage (%)

not at all satisfied

0

0

partially satisfied

6

12

Neutral

7

14

Satisfied

33

66

highly satisfied

4

8

50

100

35

33%

30 25 20 15 10 5

6%

respondents

7%

0% 4%

0 not at all satisfied

partially satisfied

neutral

satisfied

highly satisfied

Interpretation:It is seen from the above bar that around 12% retailers are satisfied by the frequency of visit of RSAs while 14% are neutral about it.66% are satisfied about it while around 4% are seen as highly satisfied.

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5.7. Opinion about the satisfaction level of the respondents on the approach of the RSAs. Opinion

respondents

Percentage (%)

0 18 3 24 5 50

0 36 6 48 10 100

not at all satisfied partially satisfied Neutral Satisfied highly satisfied TOTAL

opinion about the approach of RSA percentage 60 48%

50 40

36%

30 20 10%

6%

10 0% 0 not at all satisfied partially satisfied

neutral

satisfied

highly satisfied

Interpretation: From the above diagram it can be observed that about 36% of respondents are partially satisfied with the approach of the RSA, while 6% are neutral,48% are satisfied, and about 10%are satisfied highly by their approach.

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5.8. Rating on frito lay in of margin provided. ratings

respondents

Percentage (%)

0 0 0 13 23 14 0 50

0 0 0 26 46 28 0 100

1 (very high) 2 3 4 5 6 7 (very less) TOTAL

respondents 25 20 15 respondents

10 5 0 1 (very high)

2

3

4

5

6

7 (very less)

Interpretation:It can be seen that on the basis of margin provided by Frito lay on basis of ranking around 26% find that it is near very good while 46% and 28% respondents mindset inclines towards rating of 7i.e very less.

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5.9. opinion on whether Frito lay provides good margin based on its quality and demand. Opinion

respondents

Percentage (%)

strongly disagree

0

0

Disagree

4

8

neither agree nor disagree

14

28

Agree

28

56

strongly agree

4

8

50

100

Chart Title

strongly disagree 0%

strongly disagree agree 8% 8%

neither agree nor disagree 28% agree 56%

Interpretation:it is seen that on the basis of margin provided by Fritolay on its quality and demand 8% stongly agree to it ,while 56% agree to it,while 28% neither agree nor disagree to it and around 8%disagree to it.

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5.10. Rating on all the brands in of margin provided. Opinion

Frito lay

Bingo

parle fultoss

zing,diamond

very good

0

0

0

27

Good

31

27

17

18

moderately good

16

23

33

5

low margin

3

0

0

0

0

0

0

50

50

50

too low margin 50

TOTAL

Chart Title very good

good

moderately good

low margin

too low margin

33

31 27

27 23 18

17

16

5

3 0 Frito lay

0

0 0 Bingo

0

0 0

parle fultoss

0 0 zing,diamond

Interpretation:while on the basis of margin provided by all brands available,around 27 respondents feel that Zing,Diamond provide very good margin,while around 3 respondents feel that Fritolay provides low marhin that could be increased.

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5.11. Rating of all brands in of their frequency of visit. Ratings

respondents

Percentage

1 (high)

0

0

2

0

0

3

14

28

4

15

30

5

11

22

6

7

14

3

6

50

100

7 (low)

7 (low)

6

6

14

5

22

4

30

3

28

2

0

1 (high)

0 0

5

10

15

20

25

30

35

percentage

Interpretation:While rating on the basis of frequency of visit for all brands as a whole,around 28% and 30% feels that frequency of visit is near to good and average,while 22% and 14% feels it near low while 6% feels it to be very low.

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5.12. Rating of all brands in of approach by sales agents. ratings

Respondents

Percentage

1 (high)

3 13 21 11 2 0 0 50

6 26 42 22 4 0 0 100

2 3 4 5 6 7 (low)

percentage 45 40 35 30 25 20 15 10 5 0 1 (high)

2

3

4

5

6

7 (low)

percentage

Interpretation: On the basis of approach by the sales persons,6% feels approach is very good,while around 26% and 42% feels the approavh is near to good,while around 22% and 4% feels that could be improved.

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SWOT Analysis of Frito-Lay Disribution channel(Rural) Strength:  Frito-Lay enjoys a strong brand image and reputation in the snacks market.  Frito-Lay products have good demand in the local markets including rural market.  It has a variety of product lines from chips as well as snacks.  Good approach by the RSAs towards retailers and sub-stockiest.  Racks and Hangers are provided to retailers to display the products. Weakness:  Lack of information about the local customers’ taste preferences in the Indian rural market.  Inability to deliver the products in proper quantity and time to meet the demand in the local market.  Lack of a proper journey plan of the base level employees.  No credit policies for the retailers and average margin provided.

Opportunities:  Frito lay can set up distribution channels in the rural market of Assam with proper focus on big retailers as well as retailers selling high quantities of other brands.  Frito lay can set up some potential sub stockiest in rural market having good hold over outlets of those areas thus increasing sales and market share.

Threat : 

Many big brands like ITC, perfetti, Parle are also entering the market with quality products and different schemes and policies for the retailers and distributers thus causing threat to Frito-lay market share.



Many local brands like Zing, Diamond, krazzykure etc are also entering the rural market by providing greater profit margin to the retailers and distributers and also with credit facilities in some cases hence reducing the market share of Frito-Lay.

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CHAPTER 6:

FINDINGS AND SUGGESTIONS

FINDINGS FROM MARKET SURVEY: 1. The average time required per shop for delivery of the items is quite high for which the RSAs have to work for a longer period of time. Due to this the market leaving time is very late.

2. The rains also causes hindrance in the sales as movement is not possible. 3. As a result of the market leaving time being late, sometimes the RSAs could not finish their paper works.

4. It is observed that most of the shops are serviced at evening hours for which the retailers find it difficult to purchase as it is the peak hours of customers and there is heavy rush in the outlets. 5. In case of non mechanized vehicles it takes more time to reach the market and more often there is a delay in the market hitting time. 6. Sometimes due to lack of stock in the godwon the delivery is not made as per order for which the retailers get offended.

7. The RSAs are hardly interested to open new outlets as they prefer to service in the existing outlets. 8. At times it is observed that some retailers are not aware of all the products of Frito Lay. 9. Most of the retailers prefer to purchase Frito Lay product on credit whereas only a few retailer pay in cash. 10. Ready stock requires more time in servicing the outlet then in Pre Sell for which they are not able to cover all the outlets in that specific beat.

FINDINGS FROM QUESTIONNAIRE:

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1) It is seen that around 74% of the respondents are totally aware of all the products of Frito Lay while around 26% respondents are not much aware about all the products especially Aliva and Quaker oats.

2) We have seen that around 66% of the respondents store Lays, Uncle chipps and kurkure as a whole while around 20% store cheetos with only 10% storing aliva and 4% storing oats.

3) It is seen that24% among retailers prefer racks and hangers are important promotional schemes,while 12% feels more profit margin more important,36% feels credit policies while 28% feels discount on bulk purchases as more important promotional schemes.

4) Tt is seen that out of 50 respondants,16 respondents like racks and hangers of BINGO,while 23 like credit policy,while 11 like discount policies on bulk purchase.In case of ZING 46 respondents like their profit margin scheme while 4 like their discount on bulk purchase scheme.While in case of DIAMOND 50 respondants like their profit margin schemes.While in case of PARLE FULLTOSS,12 like their hanger and rack schemes,while 38 are neutral about it as its availibily is less in the market

4)On the basis of approach by the sales persons,6% feels approach is very good,while around 26% and 42% feels the approavh is near to good,while around 22% and 4% feels that could be improved.

5)It is seen that customer preference for Frito lay products is about 44%,while for ITC Bingo its about 34%.and that of Zing is about 14% and that of Diamond is about 8% whereas that of other products is not known due to their irregular availability in the market.

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6)It is seen that around 12% retailers are satisfied by the frequency of visit of RSAs while 14% are neutral about it.66% are satisfied about it while around 4% are seen as highly satisfied. 7) It can be observed that about 36% of respondents are partially satisfied with the approach of the RSA,while 6% are neutral,48% are satisfied,and about 10%are satisfied highly by their approach. 8)It can be seen that on the basis of margin provided by Frito lay on basis of ranking around 26% find that it is near very good while 46% and 28% respondents mindset inclines towards rating of 7i.e very less. 9)It is seen that on the basis of margin provided by Fritolay on its quality and demand 8% stongly agree to it ,while 56% agree to it,while 28% neither agree nor disagree to it and around 8%disagree to it. 10)While on the basis of margin provided by all brands available,around 27 respondents feel that Zing,Diamond provide very good margin,while around 3 respondents feel that Fritolay provides low marhin that could be increased 11)While rating on the basis of frequency of visit for all brands as a whole,around 28% and 30% feels that frequency of visit is near to good and average,while 22% and 14% feels it near low while 6% feels it to be very low 12) On the basis of approach by the sales persons,6% feels approach is very good,while around 26% and 42% feels the approavh is near to good,while around 22% and 4% feels that could be improved.

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CHAPTER 7:

RECOMMENDATIONS AND CONCLUSION.

From the study I have done, it has been seen that there are a lot of issues relating to the distribution channels. Taking into those issues, I would like to make a few recommendations which could probably benefit the company as well as its distributing channels. 1) In most of the cases I have found that there is a great demand of good margins from the retailers. They are very specific about the profit margin and discounts they have been receiving from Frito Lay and the other competing brands. Most of the retailers opine that the margins of the other brands especially local ones are better than those provided by Frito Lay. So I recommend the company to think about the mater and come up with some good margin which will attract the retailers very much. 2) The RSAs helps the retailers in arranging the products at the store but it consumes some time. Training programs for RSA should be given in the form of some practice of arranging the products in less time and also train them in such a way that they learn how to promote a product. Promotions for Aliva and Quaker oats could also be done through the RSAs. 3) Company personnel should keep watch and ensure the availability of all the products in the super-stockiest, so that products could be available during all the seasons, as some retailers complain that products are not available to them in some period of time.

4) In most of the cases it is found that the packets get air leaked too soon. Most of the retailers have asked for more quality packaging as they are not happy with the packaging of currently available products. I want to recommend the company to look after such kind of problems. 5)

In most of the cases it has been noticed that the retail outlets in rural areas do not want to store Quaker Oats. So it is recommended that the company must Page | 54

implement some good quality promotional activities and ments in order to make the product popular among the customers and the consumers. 6) The retailers want attractive racks in their outlets. They opine that the consumers like to buy products from a rack which is good looking. So the company should arrange to deliver more new racks with attractive colours and the brand image to the retailers which will help the company to expand into more retail outlets.Also some retailers prefer anti- rodent racks rather than the regular racks as they suffer financial losses due to rodents,so company should consider attractive as well as anti rodents racks which ensures the retailers of safe storage.

7) The company in order to improve its efficiency in the distribution process should look upon timely delivery of products to the retailers,ensure theta schemes are properly conveyed to the retailers and also if possible look after the profit margin given so that it can cope with its competitors .

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CONCLUSION: In the study done by me, I have come across many problems and prospects of the distribution channels of Frito Lay. The customers of Frito Lay are very much inclined towards the aspects like profit margin, discounts etc. This problem has aroused because of the margins provided by the other local brands. There are some other aspects also, which the company should look through in order to remain healthy in the market of snacks and chips. From my personal experience all throughout these two months, I have recommended on some important aspects of the distribution channels. I hope it will help the organisation to some extent.

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BIBLIOGRAPHY Websites Visited: A)www.pepsicoindia.co.in B)www.wikipedia.com Books Referred: a. 1) Philip Kotler, Kevin Lane Kellar, Abraham Koshy and Mithileshwar Jha, Marketing Management (13th Edition). Pearson Education b. Naresh K. Malhotra and Satyabhushan Dash , Marketing Research (Sixth Edition). Pearson Education

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Page | 58

ANNEXTURE 1 Questionnaire Retailer name:........................................................... Location:.................................................................... 1) are you aware of the products of Frito-Lay? a) yes b) no 2)Which Frito-Lay product do you store? a)lays b) uncle chips c)kurkure d)cheetoz e)aliva f)quaker oats 3) which product/brand do you store besides fritolay? a)bingo b)zing c)diamond d)parle fulltoss e)stopnot f)others(specify) 4) Are any promotional schemes run by fritolay? .................................................................................. 5)Are any promotional schemes run by other brands? ...................................................................................

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6)please rank different brands of chips based on customer demands?(1-highest demand,2-moderately high,3-average demand,4-low demand,5-no demand) a) fritolay b) bingo c) stopnot d) parle fulltoss e) others(zing,diamond,krazykure etc) 7) Are you satisfied with the distribution system of Frito-Lay in of frequency of visit? ---Dissatisfied----2------3------4------5-------6--------7(highly satisfied) 8) Are you satisfied with the approach of the sales agent? _1_ dissatisfied----2------3------4------5-------6--------7(highly satisfied) 9) Rate Frito-Lay in of margin provided _1_ dissatisfied----2------3------4------5-------6--------7(highly satisfied 10)Fritolay provide good margin based on its quality and demand 1................2.........................3.......................4.......................5 Strongly

disagree

neutral

agree

strongly agree

Disagree 11) Rate all brands in of margin provided?1-very good,2-moderately good,3-good,4-low margin,5no margin a)fritolay b)ITC c)Perfetti d)Parle fulltoss e)others(zing,diamond)

12)Rate all brands in of frequency of visit? _1_ dissatisfied----2------3------4------5-------6--------7(highly satisfied

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13)Rate all brands in of approach by sales agent? _1_ dissatisfied----2------3------4------5-------6--------7(highly satisfied 14) Do you have any suggestion for Fritolay?

...............................................................................................

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ANNEXURE-2

Weekly Progress report

Name: Nipul Kumar Sarma

Roll No: 40/D/2011

Company: PepsiCo (Frito Lay division) Project Title: A study on the Distribution channel of Frito Lay with reference to Guwahati(rural) marke and to perform a SWOT analysis for it. Faculty Guide: Mr. Sanjib Raj

W ee k 1 W ee k 2 W ee k 3 W ee k 4 W ee k 5 W ee k 6

Company Guide: Mr.Hitesh Das.

Work assigned Sales and Distribution related tasks

Work Done Engaged in the sales job in the 9th mile,jorabat,highway etc area as assigned by the Sales Officer.

Sales and Distribution related tasks

Engaged in the sales job in the mirza,vijayanagar,palashbari area as assigned by the Sales Officer

Sales and Distribution related tasks

Engaged in the sales job in the jagiroad,khetri,highway area as assigned by the sales officer.

Sales and Distribution related tasks

Engaged in the sales job in the changsari,baihata chariali,IIT area as assigned by the Sales Team Leader Engaged in the sales job in sualkushi,bamundi,dadara,kalitakus hi and adjacent areas.

Sales and Distribution related tasks

To Collect data about the current scenario of the distribution channels To Collect data about the current scenario of the distribution channels

W ee k 7 W ee k 8 Date:

Analysis of the collected data

Visited the retailers of 9th mile,khetri,jagiroad etc

REMARKS (If any)

I was able to collect the detailed data as required by the Company

Visited changsari,kalitakushi,baihata,sualkushi, mirza etc to collect data from the retailers.

Analyzed all the data and completed the project

Signature of Student. Page | 62

Name and address of the outlets visited for the survey Sl no

Outlet name

Address

1

K.P, store

Jorabat

2

Amarjyoti store

Jorabat

3

Baba loknath pan shop

Jorabat

4

M.D.store

Jorabat

5

Chandan catering

9th mile

6

Thakuria store

Mirza

7

Dheraj store

Mirza

8

Bitu hiru teleservice

Mirza

9

Sarma store

Roybari

10

Maa store

Bogora

11

Ali store

Bogora

12

Sarma store

Airforce gate

13

Deep pan shop

Raibari

14

Uttam pan shop

Vizayanagar

15

Tarali store

Vizayanagar

16

Prabin pan bhander

Baihata chariali

17

Manashi store

Baihata chariali

18

Maa store

Baihata chariali

19

Kalita food bhander

Baihata chariali

20

Jaymati store

Baihata chariali

21

Hakim ali store

Changsari

22

Tulika store

Chansari

23

g.store

Changsari

24

Bhai bhai store

Changsari

25

Saikia store

Changsari

26

New Ramakrishna store

Khetri

27

Dutta store

Khetri Page | 63

28

Kamini store

Khetri

29

Biki store

Khetri

30

Singha sale point

Khetri

31

Hotel abhiruchi

Topatoli

32

Rubi store

Jagiroad

33

Hotel swagatam

Jagiroad

34

Dipika bhander

Jagiroad

35

Pramila store

Jagiroad

36

Sahid pan bhander

Kalitakushi

37

Saikia restaurant

Kalita kushi

38

Gokul store

Kalita kushi

39

Mehek pan bhander

Kalita kushi

40

Mandeep store

Sualkushi

41

Raju store

Sualkushi

42

Dhan store

Sualkushi(bangsar)

43

Biswajit store

Sualkushi(bangsar)

44

Pushwak store

Sualkushi(bamundi)

45

Barasha store

Sualkushi(bamundi)

46

Nilomoni store

Sualkushi

47

Novelty

Sualkushi

48

Pallab store

Dadara

49

Medhi store

Dadara

50

Bhaiti store

Dadara

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