PRINCIPLES OF

MARKETING

COURSE INSTRUCTOR: MISS SHEHLA SOHAIL

Group Members

Muhammad Fahad Ali Mirza Waqar Liaqat Hannad Ahmad Muhammad Shakeel

A Case Study on PepsiCo

OriginPepsi was first introduced as "Brad's Drink" in New Bern, North Carolina, United States, in 1898 by Caleb Bradham, who made it at his home where the drink was sold. It was later labeled Pepsi Cola, named after the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy.

Co-operate profile of Pepsi Co

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $60 billion and over 285,000 employees.

History• Born in the Carolinas in 1898, Pepsi-Cola has a

long and rich history. The drink is the invention of Caleb Bradham, a pharmacist and drugstore owner in New Bern, North Carolina.

• In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and applied to the U.S. Patent Office for a trademark. At first, he mixed the syrup himself and sold it exclusively through soda fountains. But soon Caleb recognized that a greater opportunity existed to bottle Pepsi so that people could drink it anywhere.

Introduction• Pepsi is a carbonated soft drink that is produced

and manufactured by PepsiCo. Created and developed in 1898 and introduced as "Brad's Drink", it was later renamed as Pepsi-Cola on June 16, 1903, then to Pepsi in 1961.

• Pepsi Cola is one of the largest soft drinks industries which operate in Australia. The main products of the company comprises of different soft drinks brand including Pepsi, Pepsi Light, Pepsi Max, 7UP, Diet 7UP, Caffeine Free Pepsi Light, Mountain Dew

Company’s Vision & Mission

• "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today.“ (Vision)

• The company’s mission is “To be the world’s premier consumer Products Company focused on convenient foods and beverages.”

Rise

• During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. With a radio advertising campaign featuring the jingle "Pepsi-Cola hits the spot / Twelve full ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you", arranged in such a way that the jingle never ends.

Trademark of Pepsi Co• The original trademark application for Pepsi-Cola

was filed on September 23, 1902 with registration approved on June 16, 1903. In the application's statement, Caleb Bradham describes the trademark as an "arbitrary hyphenated word "PEPSI-COLA", and indicated that the mark was in continuous use for his business since August 1, 1901.

Rivalry with Coke• According to Consumer Reports, in the 1970s, the

rivalry continued to heat up the market.

• Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge". These tests suggested that more consumers preferred the taste of Pepsi (which is believed to have more lemon oil, and less orange oil, and uses vanillin rather than vanilla) to Coke.

• This became known as the "Cola Wars".

Continued…• In 1985, The Coca-Cola Company, amid much

publicity, changed its formula. The theory has been advanced that New Coke, as the reformulated drink came to be known, was invented specifically in response to the Pepsi Challenge. However, a consumer backlash led to Coca-Cola quickly reintroducing the original formula as Coke "Classic".

• Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world. However, exceptions include Oman; India; Saudi Arabia; Pakistan

Adoption of Marketing by PepsiCo

• Celebrity• Radio• Classic Motion Pictures• Special Songs• First Female Salesperson• Pepsiman

Waqar Liaqat

SWOT Analysis

Strengths

• PepsiCo Dominates Through Their Three Brands And Industries

• Frito-Lay Alone Is World Leader• Product Expansions• Annual Sales Are Increasing Constantly

Weaknesses• Coca Cola Dominates The Carbonated Cola Drinks

In Market• Increase In Prices of Raw Materials Especially of

Fuel And Cooking oil• PepsiCo Will Need To Satisfy Their Taste And Price

Preferences To Retain Customer• Compromise Through Cost Savings

Opportunities• The Company has strong brand names • The Company has a good reputation among

customers • PepsiCo’s Direct Store Distribution Provides Them

Tremendous Business Control• The Way PepsiCo Displays It’s Products In Super

Markets, Provides Selling Opportunities• PepsiCo could gain Great opportunities with its

better franchise relations. • Long term international expansion can also be

used as an advantage

Threats

• There is the possibility of arrival of new technologies

• There has been the removal of international trade barriers

• PepsiCo Will Have to Change it’s taste because awareness on obesity and heart Related diseases is increasing day by day and people are towards healthy products

Hannad

Ahmad

Conduct PEST analysis of Pepsi Co?

• Political Factors:• PepsiCo products are subject to various federal laws.• Land acquisition for new factories.• Govt. focusing on stricter water pollution norms.• Raw Material prices

Continued…

• Economical Factors:• New opportunities in other countries.• Fuel prices.• Availability of Labour.• Have a global Prospect.

Continued…• Social Factors:• Impact on youngsters.• Solid waste management program.• Partnership with farmers.• Replenishing water.

Continued…• Technological Factors:• State of Arts plant.• Latest Designs.• Induction of cans and plastic bottles.• Operates in almost all the countries.

What were the marketting stretegies used by Pepsi Co?

From the 1930s through the late 1950s, "Pepsi-Cola Hits the Spot" was the most commonly used slogan in the days of old radio, classic motion pictures, and later television. Its jingle (conceived in the days when Pepsi cost only five cents) was used in many different forms with different lyrics. With the rise of radio, Pepsi utilized the services of a young, up-and-coming actress named Polly Bergen to promote products, oftentimes lending her singing talents to the classic "...Hits The Spot" jingle.

Continued…• Film actress Joan Crawford, after marrying then

Pepsi-Cola President Alfred N. Steele became a spokesperson for Pepsi, appearing in commercials, television specials and televised beauty pageants on behalf of the company. Crawford also had images of the soft drink placed prominently in several of her later films.

Continued…• In 1975, Pepsi introduced the Pepsi Challenge

marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public.

Continued…• In 2007, PepsiCo redesigned its cans for the

fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of its background designs includes a string of repetitive numbers, "73774". This is a numerical expression from a telephone keypad of the word "Pepsi".

Continued…• Pepsi has official sponsorship deals with three of

the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. It also has the naming rights to the Pepsi Center, an indoor sports facility in Denver, Colorado.

• Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing.

Continued…• In May 2011, the week before Memorial Day, Pepsi

launched a limited edition flavor called "Memorial Day Pepsi", with blueberry and cherry flavors added to the cola.

• In March 2012, Pepsi introduced Pepsi Next, a cola with half the calories of regular Pepsi.

How Pepsi Co used “Pepsiman” for its promotion? Moreover what are the different slogans and brands of Pepsi Co?

• Pepsiman:• Pepsiman is an official Pepsi mascot from Pepsi's Japanese

corporate branch. The design of the Pepsiman character is attributed to Canadian comic book artist Travis Charest created sometime around the mid-1990s. Pepsiman took on three different outfits; each one representing the current style of the Pepsi can in distribution. Twelve commercials were created featuring the character. His role in the advertisements is to appear with Pepsi to thirsty people or people craving soda.

Continued…• In 1996, Sega-AM2 released the Sega Saturn

version of its arcade fighting game Fighting Vipers. In this game Pepsiman was included as a special character, with his specialty listed as being the ability to "quench one's thirst".

Different Slogans of Pepsi• 2012 "Live For Now“• 2012 "Where there's Pepsi, there's music”• 2011 "Dunya Hai Dil Walon Ki”• 2011 "Change the game" (India,

Bangladesh & Pakistan for the 2011 Cricket World Cup)

• 2010 – 2011 "Badal Do Zamana" • 2009 "Yeh hai youngistaan meri jaan" • 2008 "Something For Everyone"

Muhammad

Shakeel

Marketing Mix

Product• Beverage Products – Diet Pepsi, Gatorade,

Mountain Dew, Thirst Quencher, Tropicana, Aquafina Bottled Water, Sierra Mist.

• Savory Food Snacks – Fritos Corn chips, cheetos, Lays, Tostitos, Sting, Doritos.

• Other Food Products – breakfast cereals, cakes and cake mixes.

• PepsiCo recently created Baked Snacks North America Business Unit to meet consumer’s interest in more nutritious snacks and foods.

Price• Expenses related to transportation, ingredients and labor

continue to pressure the beverage industry toward price increases.

• PepsiCo’s drink pricing strategies may be heavily influence by its working relationship with Wal-Mart whose low price themes put pressure on PepsiCo to hold down prices.

• The company strives to cut or maintain current prices by cutting overhead and reengineering the manufacturing process.

• PepsiCo is expanding its use of inexpensive and recyclable plastic bottles; nevertheless the company has instituted some price increases in recent years, specifically in its overseas markets such as New Delhi and Duba.

Place• PepsiCo is primarily a US based co. with

approximately 52% of its revenues located in the states.

• PepsiCo is in the midst of making a $1,000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales.

• In addition the company plans on major capital initiatives in Brazil and Mexico.

• The company is also acquiring Russia’s leading Juice Company, Lebedyansky, and V Water located in the UK.

Promotion• Indra K. Nooyi is the President of PepsiCo in addition to the company’s

CFO• Recently the board of Directors elected Steven S Reinemund

chairman of the board and chief executive officer.• PepsiCo fosters a corporate culture that values employees and

emphasized diversity in the workplace.• PepsiCo is named to the ‘Best Companies for Multi Cultural Women’

list by Working Mother magazine.• PepsiCo is recognized at two events for its dedication to Talent

Sustainability and dedication to Asian American employees-2009 Best companies for Asian Pacific Americans from Asian Entrepreneur, Top 10 Companies for Asian Americans from AMBA.

• PepsiCo has won the ‘Workplace Excellence’ Award at Out & Equal Workplace National Summit.

• PepsiCo is listed in the top 20 ‘Ideal Employer MBA Ranking’ in Fortune magazine.

Conclusion• PepsiCo is a truly dominant company with three

mega industries and brands famous and embraced all over the world. With its strategies of diversification and synergy, it is able to expand its product portfolio through hybrid distribution systems with a lesser cost. But all companies fall prey to their large sizes and PepsiCo must be able to continue to steer their company in a single direction, while being supported by all of its companies and not just a single driving company like Frito-Lay