Marketing Channels and Logistics. Pepsi Cola in Ukraine Essay

Marketing Channels and Logistics. Pepsi Cola in Ukraine - Essay Example Also at the time when the case was written Coca Cola had setup their own plant in the area and since Pepsi only had bottling plants in the area they felt threatened by their entry as earlier they had the full control of the soft drink market. The case discusses the internal and the external factors that are affecting the supply and the distribution of the Pepsi in the country of Ukraine. TASK 1 There were many problems that existed there, the problems will be discussed one by one and later the four major ones will be given. Ukraine is a very poor country, with loads of issues of their own; the people are living in utter discomfort and have hardly any money for spending on luxurious goods and even many a times they do not even possess enough to be able to afford any other goods that are counted as a necessity. There have been a lot of skirmishes amongst the people themselves who are all fighting for limited resources. In countries like Ukraine it is a norm that people fight with each other for the limited resources that exist and hence there are a lot of issues. The economic situation of Ukraine is really very bad, there is increased terrorism in the whole country and nothing is safe. The economic conditions are real worse here. There is a lot of privatization that is going on and people feel that it would turn out to be a harbinger of a positive change in the whole society; people will start having enough disposable income to spend on luxurious goods and other luxurious items. The people generally are very poor and struggling to even meet their basic needs. A cold drink beverage is a luxury, in areas where purchasing pure water is out of reach for many. The economic condition of the place is really poor. The inflation is quite high in the area. This has reduced the purchasing power of the people living there. Inflation has caused the prices of daily consumer goods to increase as well. As mentioned in the case, it is clearly mentioned that the absence of any pro per supply chain has caused the Pepsi to cost far more than it would actually had there been a proper channel. The marketing channel is responsible for making sure that the produced goods reach the consumer without increasing the cost. The greatest disadvantage that Pepsi had in this regard was that they did not have a proper marketing channel, there were no campaigns and the transportation of the Pepsi was never done officially. This lack of proper transportation failed to create an everlasting image in the minds of the locals. They will stop associating it with some kind of an international brand and end up thinking of it as a local brand. Even they had to change the packaging of the whole thing as people had actually started considering it a local brand. There was a serious mishap in the understanding of the perception of the people. The promotion, placing, pricing were all at a loss here, as people got it through, at a minimum, three to four middlemen, this made the prices go up as each man wanted to earn profit. This is one very discouraging factor that was there in Ukraine. Placement of the product was also very faulty and there was no other way for Pepsi to do it until unless they started their own freight services. The logistics issue was so great that there was no proper transportation, the use of trucks was also not a good option as people weren’t learned enough to differentiate between the kind of truck that is