u04a1 Professional Challenge-Distribution Channels Analysis

Pepsico would like gatorade to have a perceived image

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purchase display. PepsiCo would like Gatorade to have a perceived image as a healthy alternative to carbonated soft drinks and as well as a thirst quenching drink to accompany any physical endurance activity. Gatorade as value proposition is a high performance sports drink that will hydrate your body and rejuvenate your electrolytes (Packaged Design, 2007). PepsiCo does not provide any warranty or guarantees on their Gatorade products, but offers a scientific validated blend of carbohydrates (6% carbohydrate blend, 14 grams per 8 0z) and key electrolytes (including the proper amount of sodium at 110 mg at 80z) to replace fluids and provide energy to working muscles (The Gatorade Company Fact Sheet). Looking further down the distribution channel however, we find that supermarkets and convenience stores that carry Gatorade will fully refund a consumer of their Gatorade purchase if something is wrong with the bottle or the drink itself, as long as it is accompanied with a receipt. If a purchased Gatorade is returned and a refund has been issued to a consumer, the retailer will then send the product back to PepsiCo in order for them to receive a refund as well. In order to have an image that is appropriate with all cultures and in all countries around the world, PepsiCo benefits from having a diverse workforce and diverse supplier force which allows them to
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meet a variety of consumer needs. Gatorade is currently available in 80 different countries and has more than 50 flavors available (The Gatorade Company Fact Sheet). Gatorade is a thirst quenching beverage that is designed for athletes. There are 30 different flavors of Gatorade available in the United States and over 50 available internationally (The Gatorade Company Fact Sheet). Although Gatorade has many different flavors the basic formula is the same in each of them. Gatorade is made up of three main ingredients: electrolytes, carbohydrates, and flavor (Gatorade Thirst Quencher, 2007). The fluid osmolality has been adjusted for optimal absorption into the bloodstream, this helps with quenching thirst faster. In a growing global market it becomes harder for a company to gain a sustainable competitive advantage. Parity observed in the sport drink industry relative to product, price, and promotion increase the importance of distribution for these firms (Carpenter et al, 2007). PepsiCo has developed and monitored various distribution channels in order to serve customer needs. These channels include direct store delivery (DSD), warehouse distribution, vending, and food service systems (PepsiCo, 2006). PepsiCo manufactures flavor concentrates at their own production plants to ensure quality control of their product (PepsiCo, 2006). This syrup is then delivered to independent bottlers. Packaging and other materials including labels, caps, and carbon dioxide are outsourced to other companies and are delivered to the bottlers alongside the syrup. Samples of all of these materials are shipped to the manufacturing plant to ensure sanitation and proper packing of materials (PepsiCo, 2006). Once
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  • Winter '13
  • DR.Chang
  • Gatorade

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