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What are the advantages of a contractual channel system

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Source: CCMarketing (2012). PepsiAmericas A Bottler Wholesaler in the Pepsi Channel of Distribution. Essential of Marketing. McGraw Hill- Education.

This video explains the channel of distribution used for PepsiCo's soft drink products.

The channel is best described as a vertical marketing system in which the Pepsi-Cola Company manufactures and markets concentrates (or syrups) for its soft drinks to franchised bottlers. Pepsi's franchised bottlers mix the concentrate with carbonated water, bottle the product, and distribute the product to retailers. Pepsi's bottlers act as full-service merchant wholesalers in a contractual channel, providing many services to their retail clients. Bottlers also implement PepsiCo's sales and merchandising plans for the various soft drinks that they bottle and distribute.

After watching the video please, answer the following case questions:

1. From the point of view of PepsiCo, what are the advantages of a contractual channel system over a traditional or administered channel system?

2. Why doesn't PepsiCo acquire the bottler/wholesalers or in some other way take over the wholesale distribution of Pepsi beverage products?

3. How would you describe the job of a salesperson who works for PepsiAmericas, Inc.? What types of activities does this person perform?

Reference no: EM131210424

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