Transcript Place/Distribution Strategy

Target Market
Who does PepsiCo
market
Mountain Dew to?
Who first bought Mountain
Dew?
• It was originally marketed as “zero proof
moonshine”
• Until 1973, it had pictures of hillbillies on
the bottles
Who buys it now?
• 12-30 year old demographic group
• Extreme Sports Fans/Athletes
• Outdoor activists
• Video Game Culture
Why would one need MD?
• Physiological needs- Need for drink
• Social needs- Need for status
• Personal needs- Fun and relaxation
What influences one to
drink MD?
• Extreme Sports Athletes
• Video Gamers
• Celebrities
Product Strategy Plan
Features/Benefits
• Fourth Best Selling Soft Drink in the United States
• 2.7 Billion Dollar Industry
• By far the biggest contributor to Pepsico's gains in recent
years.
• 10 percent of Pepsico's worldwide carbonated-beverage
volume
• Bright yellow green soft drink
• Caffeinated
• Sweet Limon Lime Flavor
• Citrus Flavored
• Has Orange Juice for a tangy but smooth taste
• Energy Booster- 55 mg per 12 ounce per can
Product Line
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Mountain Dew
Diet Mountain Dew
Mountain Dew Code Red
Mountain Dew Live Wire
Mountain Dew Baja Blast
Mountain Dew Amp Energy
Packaging
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12 Ounce Cans
20 Ounce Bottles
1 Liter Bottles
2 Liter Bottles
12 Ounce Glass Bottles
12 Ounce Aluminum Bottles
Competitive Situation
• Mountain Dew- Holds about 85% of the
heavy citrus market
• Mello Yellow- Holds a distant second at
11%
• Sundrop- Only about 3%
• Royal Crown Cola’s Kick- Only at 1%
Differentiation
• Offers a variety flavors
• More popular
• More commercials
• Offered at more places
• Well known company backs it up
Place/Distribution
Strategy
How does PepsiCo get
Mountain Dew to consumers?
Bottling Plant to Distributor
• When inventory gets low at PepsiAmericas,
in Sedalia, electronically orders more
Mountain Dew
• P-A receives about 85% of it’s products
from a Kansas City bottling plant
• P-A receives the other 15% from a St. Louis
bottler
What does Pepsi Americas do?
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Gets Mountain Dew to retailers
Builds displays, coolers, and shelves
Places vending machines
Discusses delivery and placement with
retailers
Mountain Dew channels of
distribution
Who purchases Mountain Dew from
Pepsi Americas , to sell to consumers?
Mass Merchandisers
and
Supermarkets
• Largest purchasers of Mountain Dew
• Stores include: Wal-mart, Sam’s Club, Target,
and K-mart
• Merchandiser and P-A work together
• P-A’s account mgr. will visit store 3-4 times
per week
• Deliveries occur about 4 times a week
C&G
Convenience & Gas
• Stores include: Casey’s, BP, Shell, and
Conoco
• Trucks deliver based on previous sales
volumes
• Merchandiser and P-A work together
Food Service
• Stores include: Rib Crib, Applebee’s, Taco
Bell, and Arby’s
• Trucks deliver based on previous sales
volumes
• P-A and store mgr. discuss selection
Full service
Vending Machines
• Placed in public places or in/near businesses
• Business gets check at the end of each
quarter
• P-A maintains, stocks, and collects money
from vending machines
• Highest Gross Margin of all channels
Other Channels
• These include: schools, golf courses, offices,
and hospitals
• Trucks deliver based on previous sales
volumes
Advertising
• National Commercials
-Chuck Norris Commercial
• Website
-Graphics
-Games-capture the cube
-Pro Athlete Profiles and facts
-Commercials
Advertising
• Billboards
• Magazines
• Giveaways(X-box, cars, games etc.)
• Partner with Halo and introduce a limited
edition “Game Fuel” flavor
Promotion
12 limited edition bottled designed by
various artists www.greenlabelart.com
DEWmocracy.com
The Next Dew is Up to You
• Consumers help create a new flavor
Sponsors
• X Games
• Dew Action Sports Tour
• Mountain Dew Vertical Challenge
• NASCAR
Price Strategy
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Pepsico Line
Ingredients
Economy
Competition
Price over time
Pepsico Line
• Same price strategy for the entire Pepsico line
– Pepsi
– Diet Pepsi
– Mug Root Beer
Ingredients
• Demand of sugar
– If price of sugar increase then price of Mountain
Dew will increase
• Has to be able to adjust to the price inflations
of ingredients used
Economy
• Have to be able to adjust to the economy
• Gas Prices
– Gas prices increase
– Cost of distribution increases
– Therefore cost of product will increase
Competition
• Close competitor
– Mellow Yellow, Coke Brand
• Have to be able to compete with Coke brand
– Keep prices at a low cost
– Have a high demand
Price Over Time
• 1985 2-liter
– $0.89
• 2005 2-liter
– $1.09
• 20% increase over 20 years
• Shows price strategy reacts to economy over
time
– Keeps a high demand