In therecent past, Pepsi Company has seen a decline in demand for itscarbonated drinks due to nutrition selection. Regarding this problem,the company conducted research on viable solutions, and the mostoptimal resolution was to partially or entirely shift to productionof non-sweetened drinks. The firm is expected to build a strongsystem of distribution channels that will enable it to satisfactorilymake its new products available to the diverse customer segment base.The main passages include customer warehouses, third-party channels,and e-marketing among others. These distribution networks will beemployed depending on the client attributes, product characteristicsand trade policies (Bailey, 2014). Each of these avenues has theirbenefits and challenges.
Customerwarehouses are the most appropriate channels to reach consumers sincethey are the cheapest distribution networks and are ideal forperishable and less friable goods. They will enable the customers toobtain products at a very low price because they eliminate aconsiderable number of intermediaries between PepsiCo and the market.However, this channel focuses on dealing with products that havelittle turnover and are not bought impulsively.
Sometimes,it is not possible for PepsiCo to reach its entire market on its own.In that case, the company will take advantage of third-partydistributors. One advantage with vending distributors is that theywill aid the company with advertising its products. Nonetheless,third-parties may be disadvantageous in cases where they overchargeconsumers without the company`s consent which might scare awaycustomers.
Over thepast years, digital marketing has been greatly employed to advertiseand sell products mainly over the internet. It is the fastest andeasiest way to reach a vast geographical region and over a shortduration of time. Sales personnel will be able to track clients fromfirst interaction and throughout the entire process of merchandisingusing this medium. Communication between the buyer and the companyhas been made easy through e-marketing, and the client can getimmediate updates regarding the delivery system or any expecteddelays. However, this method is only limited to customers who haveaccess to the internet.
Bailey, S.(2014). PepsiCo’sthree-channel distribution network – Market Realist.Marketrealist.com. Retrieved17 October 2016, fromhttp://marketrealist.com/2014/12/pepsicos-three-channel-distribution-network/