Project Report On Pepsi Company

Submitted in Partial Fulfillment of the Requirements ofBachelor of Business Administration

ofGuru Govind Singh Indraprastha University

Submitted by : Mohit Nair Submitted to : Mrs. Reshma 00721401709 Semester - 3

Jagannath International Management SchoolVasant Kunj, New Delhi – 70

S.N Topic Pa

1

o ge No.

1. Preface 4

2. Acknowledgement 5

3. Synopsis 6

4. Introduction 7

5. Theoretical perspectivea. Exampleb. Ingredients of soft drinksc. Objectived. Executive Summarye. Industry Analysisf. Company Analysisg. Goals and objectivesh. Estimated Worldwide Sales in Billion Dollarsi. Market Segmentationj. Marketting Mixk. Product Classificationl. Product Differentiationm. Product Mix and Product Line Analysisn. Priceo. Setting the Pricep. Distribution q. Promotionr. Previous Campaignss. Sales promotionst. Selecting Mediau. Suggestionsv. Plan for Next 1 yearw. Product x. Pricey. Promotionz. Action Plan and Implementationaa. Placebb. Strategy on the basis of competitorcc. Geographicsdd. Physcographicsee. Interestsff. Behavioural

91415212122222324252627282829293031313233333434353535363737373838

6. Methodologya. Survey Findings 39

7. Analysisa. Competitor Analysis 44

2

b. The Competitionc. Coke vs Pepsid. Climate Key Trendse. Changed brand Positioningf. Types of Packs Available

4445464747

8. Findingsa. Comparison Of Pricesb. Perception of Coke and Pepsi Beverages

4950

9. S.W.O.T a. Strengthb. Weaknessc. Oppurtunitiesd. Threat

51525354

10. Conclusions 55

11. Bibliography 56

Preface

3

Marketing plays pivotal role in today’s business scenario in consumer product

Company, when there is such a high competition in the market.

The emphasis in the project is providing the study and an insight into Indian FMCG

Business Scenario of Pepsi Co. The Summer Project is designed to provide

participation of BBA program as on the job experience. This has given a chance to try

and apply the academic knowledge and gain insight into corporate culture. This helps in

developing decision-making abilities and emphasizes on active participation by the

student.

We undertook our Project in Varun Beverages, a leading Bottler and Marketing partner

of the Pepsi Foods. During the training, we had worked on the project “Distribution

strategy of PEPSI in Sahibabad.”

We gained valuable experience & knowledge during the survey. The Project consists of

our findings after data analysis & then SWOT analysis & conclusions were drawn and

finally recommendations were put forward.

4

Acknowledgement

ANY ATTEMPT AT ANY LEVEL CANNOT BE SATISFACTORILY COMPLETED WITHOUT THE SUPPORT AND GUIDANCE OF LEARNED PEOPLE. I WOULD LIKE TO EXPRESS MY IMMENSE GRATITUDE TO Ms. Manisha Gupta FOR HER CONSTANT SUPPORT AND MOTIVATION THAT HAS ENCOURAGED ME TO COME UP WITH THIS PROJECT.

I AM ALSO THANKFUL TO ALL OTHER MEMBERS NITIN, DAMINI, RAJESHWAR, ARVIN, SAUMYA WHO HAVE RENDERED THEIR WHOLE HEARTED SUPPORT AT ALL TIMES FOR THE SUCCESSFUL COMPLETION OF THIS PROJECT 

Mohit Nair

Synopsis

5

PepsiCo is a world leader in convenient foods and beverages, with revenues of about

$27 billion and over 143,000 employees. The company consists of the snack business of

Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages

and Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North

America and Gatorade/Tropicana North America) and Quaker Foods North America.

PepsiCo International includes the snack businesses of Frito-Lay International and

beverage businesses of PepsiCo Beverages International. PepsiCo brands are available

in nearly 200 countries and territories.

Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively

young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay.

Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company,

including Gatorade, in 2001.

Pepsi-Cola Company - Pepsi-Cola (formulated in 1898), Diet Pepsi (1964) and

Mountain Dew (Introduced by Tip Corporation in 1948).

 

Frito-Lay, Inc. - Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's

brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese flavored

snacks (1948), Ruffles brand potato chips (1958) and Rolled Gold brand pretzels

(acquired 1961)

Pepsi co is the world leader in the food chain business. It consists of many companies

amongst which the prominent one is Pepsi cola, frito lay, Pepsi food international, pizza

hut, and KFC and taco bell. The group is presently into three most profitable businesses

namely, beverages, snack foods and restaurants. It has scores of big brand available in

nearly 150 countries across the globe.

The beverages segment primarily market Pepsi diet, mountain dew and other brands

6

worldwide and 7UP outside the U.S. market. They are positioned in close competition

with Coca-Cola inc. of USA. A point to be noted is that coca cola get 80% of its profit

from international operation while same figure of Pepsi co. stand at 6%, the segment is

also in the bottling plants and distribution facilities.

The restaurant segment primarily consists of the operations of the worldwide pizza hut,

Taco Bell and KFC.

Long time no.2 player in the cola wars, Pepsi co. is widening the play field, over the last

years; the company has invested more than $2billion in its worldwide operations.

When Coca-Cola changed its formula in 1985, Pepsi stepped up its competition with its

long time archival claiming victory in the cola wars. Coke and Pepsi expanded their

rivalry to tea in 1991 when Pepsi formed a venture with #1 Lipton in response to coke’s

announced venture with nestle (Nestea) it has won over 30% of the ready to drink tea

market,a part of the so called "new age” beverages segment.

The beverage industry has witness the phenomenal growth over the last few years

necessitating capacity increase and builds up of commensurate infrastructure to meet

the businessgrowth, which is accordingly matched.

PepsiCo’s success is the result of superior products, high standards of performance,

distinctive competitive strategies and the high integrity of our people.

Introduction

7

Management has forgotten, or never realized, the ability of the marketing function to help drive organizational change and leading to profit maximization through the small ideas that lead to the greatest profitable change of the century. Small, Quick, and simple logic that creates the Magic and lead the companies for a super power ups. Ideas have always played the most imperative role in making up the strength for the industry and getting it to the highest level as possible. Some ideas builds up making profit but side by side do not consider the effect in the quality of their products but the great marketing ideas are those which goes hand by hand with no effect in the quality but makes up profit.

Growing and sustaining your business doesn’t have to be rocket science. Nor should it be expensive or difficult. There are many simple, low-cost ideas, tips and resources that can positively impact your marketing and aid in increasing sales and profits.There are lots of ways to influence sales, and that’s all “marketing” is, placing your product or service in front of potential customers’ decision-making processes, and enticing them to purchase.

If marketing is about finding the right people to persuade, how do you know who wants or needs your product or service and will actually buy it?It’s actually all about perception, the perception of the customer and the most innovative ideas, the greatest products, or a superior service succeed only when you market within the context of people’s perceptions.

You market to your customers within the context of their wants, needs, problems solved, or situation improved.

Theoritical perspective

8

Modern age is full of competition. Today only way of success is your continuous efforts towards the growing market needs and in satisfying them. It is the marketer job to know what the market speaks i.e. the ever changing needs of the customer through market research & adopt them fruitfully. It is must for all the companies to make policies according to the customers and the govt. Today to succeed for any organization has to target its customer needs, to create a culture in the organization i.e. market conscious & responsive to customer needs.

Soft drinks industry has become big business in India in recent years.

The soft drink business under went major change with the entry of PEPSI and re-entry of COCA-COLA in India in the late 80s when Parley with brands like Thumsup, Limca & Gold spot was a clear leader. Coca-Cola took up the product line of parley in 1993-94; today both brands are the Indians favorite soft drinks

Pepsi Beverages includes 4 product lines Pepsi, 7up, Mirinda, Mountain Dew. These four product line cover the majority of the market areas. These product lines are available in different lengths and different depths to meet the demands of each type of customers.

The table containing each product line and its length, depth and the product mix is given.

Pepsi has length of 4 which includes Pepsi Regular, Pepsi Max, Pepsi Diet and Pepsi Twist. Pepsi Regular has depth of 5 and is available in 250 ml bottle, 330 ml can, 500 ml bottle, 1.5 liter bottle and 2.25 liter bottle. Pepsi Max is available in 330 ml can, 500 ml bottle and 1.5 liter bottle, having a depth of 3. Pepsi Diet is available in 250 ml bottle, 330 ml can and 1.5 liter bottle, having a depth of 3. Pepsi twist is available in 330 ml can, 500 ml bottle and 1.5 liter bottle.

9

Second product line is 7up. It is available in two varieties, 7up regular and 7up diet. 7up regular is available in 250 ml bottle, 330 ml can, 500 ml bottle, 1.5 liter bottle and 2.25 liter bottle, having depth of 5. 7up diet is available in 250 ml bottle, 330 ml can and 1.5 liter bottle, having depth of 3.

Third product line is Mirinda; it is also available in two varieties, Mirinda Orange and Mirinda Apple. Mirinda Orange is available in 250 ml bottle, 330 ml can, 500 ml bottle and 1.5 liter bottle, has depth of 4. Mirinda Apple is available in 330 ml can and 1.5 liter bottle, having depth of 2.

Fourth product line is Mountain Dew. It is available in 250 ml bottle, 330 ml can, 500 ml bottle, 1.5 liter bottle, having depth of 4.

Pepsi beverages have high consistency due to the similar type of products. They have high consistency because their product line includes only beverages of different types. They have targeted different markets with their wide range of products including from smaller ones to the large ones. Its marketing implication can be its easily availability to all customers and provide the product in different sizes so that every type of customer can use the product. Distributing in majority of areas so that it is available every where. Advertisement should be made to encourage the people to use the product and make the product their need.

Pepsi Regular , 7up Regular , Pepsi Diet and Mirinda Orange

10

Pepsi Max

Mountain Dew

11

7up Regular and 7up Diet in 500 ml and 1.5 liter bottle

Marketing Plan is a basic concept which is required to make a product successful. It consists of company’s strategy based on industry and targeted customers trends to make that product successful. Marketing plan analysis is done because companies want to distinguish the relevancy of their marketing plan in current scenario. This analysis comprises of industry analysis, company analysis, product analysis, competitor analysis and products 4Ps. As part of our academic work we have to analysis a product’s marketing plan and we choose Pepsi Co. because it’s in soft drink industry in which every youth is interested.

Mountain Dew A Product of PEPSI CO

Pepsi Co. has grown a staggering 74.1% over the last five years.

Pepsi Co. has a 6.3% market share

Recently become the #4 soft drink in world.

Pepsi Co. is the first non-cola to reach to 1 billion gallon mark in one year.

12

How Pepsi Co. have been a great example on how to maximize profit by just a simple click of mind and idea : -

13

Mountain Dew Grip Pack(2010) Mountain Dew Normal

The above two diagrams shows the Pepsi Co. normal pack and the Pepsi Co. grip pack out of which the grip pack is the latest of all. Ever imagine what margin of profit would the company have gained by modifying this thing and presenting it in the market, most of the people wont notice it that whats the difference, its just another style but have you ever noticed that in grip pack the quantity is less comparatively to the old one but its an attraction and so no one has a problem with it.

INGREDIENTS OF SOFT DRINK :

14

We only use the finest ingredients to make Pepsi-Cola products. To guarantee our

consumers consistent quality, each ingredient must pass our high standards, rigorous

quality control tests and strict bottling procedures.

Pepsi-Cola products contain natural flavors, including extracts of the kola nut ND

flavor oils derived from natural sources such as citrus and other fruits. Caramel (made

from corn sugar) adds color and flavor to our colas. Other ingredients add a refreshing

taste: phosphoric acid in colas; citric acid and sodium citrate in Mountain Dew, Slice

and Diet Pepsi.

We also put a freshness date on every can and bottle. Soft drinks may lose some flavor

over time so our freshness date tells consumers when the product is freshest and best

tasting.

Every can and bottle of Pepsi-Cola products has a Nutrition Facts panel, which shows

the number of calories and other nutrients per serving. There is essentially no fat in any

Pepsi-Cola a product. The main ingredients found in Pepsi-Cola products include

carbonated water, carbohydrates, sugar, sodium, potassium and caffeine. For a complete

breakdown by ingredients by product, see our product information for Pepsi, Diet Pepsi,

Mountain Dew, Slice and Aquafina.

Ascorbic Acid

Another name for Ascorbic Acid is Vitamin C the Ascorbic Acid used in our

carbonated soft drinks functions as an antioxidant to protect the flavors, color, and taste.

In some beverages we also add it to provide the nutritive value found in Vitamin C.

Aspartame

15

Aspartame is a sugar substitute used in our diet beverages and many other food

products. Aspartame is made of the same building blocks as protein, so it is considered

a "nutritive sweetener," but the very small amounts used in diet drinks contribute no

calories.

Blue1

Blue 1 is a FDA-approved food coloring used in a variety of products such as jellies,

condiments, puddings, and beverages.

Brominated Vegetable Oil (BVO)

Brominated vegetable oil has been used by the soft drink industry since 1931. It is a

widely used food additive that has been extensively tested and approved by the U.S.

Food & Drug Administration.

Brominated vegetable oil is derived from soybean oil that has been modified in order to

keep the flavoring oils well blended.

16

Caffeine

Caffeine provides a characteristic flavor to soft drinks. Caffeine is naturally found in

coffee, tea and chocolate. For comparison, an 8-oz. cup of brewed coffee can have from

85-120 mg of caffeine on average, while an 8-oz. serving of Pepsi contains about 25 mg

of caffeine. An 8-oz. cup of coffee therefore contains three to four times as much

caffeine found in a caffeinated colon.

There is no caffeine in Caffeine Free Pepsi, Caffeine Free Diet Pepsi, Aquafina, Slice,

Mountain Dew or Mirinda.

Caramel

Caramel is a flavoring that is added to some of our beverages.

Citric Acid

Citric Acid can be found in citrus fruits such as lemons and oranges. Citric acid is used

to bring out the flavor of other ingredients and imparts a tang or tartness to beverages.

Citric acid is not Vitamin C. the same fruits that have citric acid often have Vitamin C

but the technical name for Vitamin C is ascorbic acid.

Gum Arabic

Gum Arabic is a purified natural vegetable gum obtained from the acacia tree and is

used in keeping our carbonated beverages well blended.

High Fructose Corn Syrup

17

High Fructose Corn Syrup (HFCS) is a sugar derived from corn and provides sweetness

and taste to our beverages.

HFCS has the same sweetness as table sugar (sucrose) and has almost the identical

composition of fructose and glucose.

Natural Flavorings

Natural Flavorings are flavoring ingredients that are the essences or extracts derived

from natural plant sources.

Natural Flavorings are what gives a product its distinctive flavor and taste. Pepsi

products are the only products with these distinct flavor blends, which are considered

part of our secret formula. The term natural flavor is defined by the food and drug

administration and all of our natural flavorings meet this definition.

Phosphoric Acid

A small amount of phosphoric acid is added to our soft drinks. However, it is greatly

diluted and is fully approved by the U.S. Food and Drug Administration for use in soft

drinks. Phosphoric acid provides tartness, essential to a well-rounded flavor.

Phosphorus, like calcium, is an essential mineral in bone. It is widely distributed in the

food supply, including fish, milk, meat, eggs and cereal grains.

Potassium

Potassium in Pepsi-Cola products may come from water or as part of certain

ingredients. For example, potassium may be combined with benzoic acid, which helps

prevent spoilage and flavor changes. Potassium is an electrolyte that helps meet the

mineral needs of active people.

18

Quillaia

Quillaia Extract is a purified extract derived from the bark of the Quillaia tree. It is

carefully selected based on its characteristics. It is cooked, filtered and pasteurized. It is

FDA-approved, non-hazardous. Quillaia is found in some of our frozen drinks.

Red 40

Red 40 is a FDA-approved food coloring used in beverages.

Sodium

All of our products are "low sodium" and contains less than 110 mg per eight-fluid-

ounce serving. A number of beverages have less than 35-mg sodium per serving, so

they are considered "very low sodium" products.

Sugar

Regular soft drinks and sports drinks are sweetened with sugar. There are many types of

sugar available today. In soft drinks and sports drinks, the sugar is primarily high

fructose corn syrup, which comes from corn.

Total Carbohydrates

19

Total carbohydrates include the sugars and any carbohydrate-like parts of ingredients,

such as organic acids. Although diet drinks may have no sugar, they may contain more

than half a gram of carbohydrate.

Yellow5

Yellow 5 is a FDA-approved food coloring. Used since 1916, it is found in a variety of

products such as skim milk, yogurt and macaroni and cheese.

20

Objective

1. To understand the concept of marketing and marketing strategy and market planning.

2. To understand how key trend affects the product and industry and how consumer buying behaviour affects the product.

3. To understand the concept of market segmentation, market positioning and targeting by using a

The main objective of this report is to understand how and what the strategies are used by PepsiCo to overcome the competitors.

Executive Summary

This report is the marketing plan analysis of Pepsi co. in India. It is a well known food and beverage company worldwide. This report emphasize on how Pepsi Co. establish itself in Indian market and also how it has make a good brand image among its target customer. This report is also analysing Pepsi Co.’s 4Ps which are important to understand when we are analysing product. We also included the competitor’s analysis of Pepsi Co. and analyse them. For all this process we used credible and reliable sources and based on these sources we recommended plan for next one year.

21

Industry Analysis

Non alcoholic market can be divided into soft drink and fruit juice. Some common soft drinks are flavoured water, sweet tea, iced tea, squash, fruit punch and lemonade. Noncarbonated and carbonated is further part of soft drink. Carbonated drinks are cola, oranges, lemon while non carbonated drink mango drinks().

The total size of food industry in India is almost $ 65.6 billion and soft drinks (juices and carbonated beverage) contain $ 1 billion. Indian soft drink market consumption in a year is 284 million crates. Soft drink market is highly seasonal; consumption in during off-season is 15 million crates and in peak season is around 25 million crates per month. In urban area consumption of soft drinks is 75% of whole market. Indian soft drink market is dominated by MNC companies Coca-Cola and PepsiCo().The consumption of Soft drink in India has a share of 46.8% within the non alcoholic drink industry. In 2004 the total market value of soft drink was 307.2 $ billion and expected to grow 367.1 $ billion in 2009.

Company Analysis

The business of PepsiCo is based on its vision of making tomorrow better than today().

In 1989 PepsiCo entered in Indian market and became one of the leading food and beverage companies in India. PepsiCo India and its partners have invested almost 1 billion U.S. dollar to growing their business. Including supplier and distributor it provides more than 1, 50,000 Job for people in India. In India it provide diverse range of brands that includes such-Pepsi, Mirinda, Mountain Dew and 7UP, low calorie product such as Diet Pepsi, Aquafina drinking water and fruit juice based drinks-Slice, Tropicana. There are some local brands Lehar and Mangola. Frito-Lay is market leader in salty snacks market, which is free of trans-fat. It manufactures traditional snacks under Lehar and Kurkure brands. For supporting operations in India it has 43 bottling plants, of which 15 are owned by company and remaining 28 are owned by franchisee().

22

GOALS & OBJECTIVES

CURRENT

Total annual sale of soft drink in Pakistan 120 million

Pepsi annual sales in Pakistan 75 million

Market share of Pepsi 65%

Market share of Pepsi Co. is 22.1% (30% within Company)

Consumption growth 1.7 % per year

TARGET

 Our sales target for the coming year is to increase sales up to 30 million.

Achieve at least 38% of the Share within the company.

Whereas increasing total market share by 2.9% (22.1% to 25%).

23

ESTIMATED WORLDWIDE SALES IN BILLION DOLLARS

24

Market Segmentation

Group of individuals who possess similar needs and choices represent a segment of market(). Pepsi Co. has segmented itself mainly on the basis of demography and lifestyle in a niche market of adventurer and extreme sports. In this niche market most of the consumers are youth. The key features of this market-

Age : Pepsi Co. is targeting the consumer of age 12-28 means youth or teenagers. Cold drinks are very popular among this age group and became a part of lifestyle. In the term of life stage this age group falls in youth or teenage who lives with their parents and are depends on their parents economically. To target this age group Pepsi Co. is making its availability easily to consumer in different volumes().

Lifestyles : They are targeting lifestyles of their consumer and it is reflected in their advertisements. The chief and main consumers of Pepsi Co. are the youth who are ready to take on excitement, extreme sporting and adventure. They are daring, fun loving, confident and energetic(). It is targeting the consumer’s tendency of fearlessness.

Targeting : Pepsi Co. is targeting customers which are generally college students and young executives. Generally customers of youth group are not concerned about price. This is a niche market of adventurer, daring, and extreme sports lover and most of the people falls in this category are young ().

Positioning : Positioning of brand or product is choice of a company to target the market where it can compete and take advantage over competitor (). Positioning statement of Pepsi Co. by PepsiCo is:

Company’s positioning statement itself defining dew’s strategy that this drink will target and made impact among the persons who are adventurer, funny, excited and daring.

Target group

Young, active soft-drink consumers with little time for sleep

25

Benefit

Gives you more energy than rival brands, because it has more caffeine.

Resulting goal facilitation

You can stay alert and keep going even when you haven’t been able to get a good night’s sleep.

Marketing Mix

The term Marketing Mix was originally developed by Neil H. Borden to explain the right combination, in a specific set of situations, of the four foremost factors that are the heart of a product’s marketing plan().

Product: Pepsi Co. is available in different sizes and volumes

• 200ml • 250ml (can) • 300ml • 1.5 lt.

Ingredients: Regular glass bottle contains carbonated water, high fructose, corn syrup, concentrated orange juice and other flavours, citric acid, sodium benzoate, caffeine. Sodium citrate, gum arbic, erythorbic acid, calcium disodium EDTA, brominates vegetable oil and yellow 5. For a regular glass bottle it provides calories (kcal) 110 and caffeine 35mg().

Product Level : There are five type of product level which a marketer need to concentrate on for the success of product().

. Core Benefit: The basic buying reason of that product by customer. The core benefit for Pepsi Co. is to quench their thirst.

. Basic Product : Basic product is the vital features of that product. Basic product for Pepsi Co. is carbonated water with some added flavours.

. Expected Product : Expected product for Pepsi Co. is a soft drink which gives more energy and taste to consumer.

26

. Augmented Product : It is the extra features provided by company to their customer. It is giving more energy and taste to their customer by providing them more caffeine in their offering.

. Potential Product : It is the all possible changes and transformation that a product can undergo in future. Because it is targeting youth it can modified its regular bottle shape into some different and innovative way so youth can attract. It can launch a new designed art form bottle().

Product Classifications

. Durability and Non Durability : It falls under the category of non durable goods because it is has been used on regular basis by the consumer

. Consumer-Goods Classification : Under this classification it comes under the convenience goods as it is very easily available and requires less search effort.

27

Product Differentiation

Form : It is differentiating itself in market by the size and shape of its 300ml bottle(). This bottle’s neck is thin and long like beak and no other major soft drink is offering this type of shape. This different shape attracts youth who is their target market.

Image Differentiation : It has made a different image in customer mind by its effective advertising. Their advertisements generally consist of extreme sports and Adventure by which it is targeting youth().

Product Mix and Product Line Analysis

. Product Mix: The width of product mix or the number of product line offered by Pepsi in India is 5 and the length of product mix is 14. The depth of Beverage product line where due is situated is 6. These all product lines of Pepsi are consistent and related to each other as they all are drinks or snacks().

. Product Line Analysis: In product line analysis we can classify Pepsi Co. in ‘specialties’ because lower sales with higher promotion.

. Product Depth: Pepsi Co. has no other variant available in market. It is available only in one variant but in different volumes i.e. 200ml, 250ml can, 300ml and 1.5lt bottle so its product depth is 4.

Product Life Cycle: Company changes its marketing plan and strategy as product’s life stage changes so it is important to know that product is in which life cycle. Soft drinks industry is a very old industry in India. It is now saturating and stepping towards maturation stage of product life cycle. Soft drinks are easily available in urban area and it is now getting popular in rural areas also so it is better it to put it in the stage where it is moving from growth to maturation.

28

Price

Market segmentation, positioning and competitor’s pricing strategy plays a major role in defining a product’s pricing strategy.In shaping price of a product a company should analyze the consumer’s buying behaviour to purchase that product on the basis of price(). So company has to think 3 important aspects

• Reference prices: It means what the other brands are charging for the same. It is available at the same price as the others products of the same category are available in market (our market research).

• Price-Quality inferences: Many consumers take price as a quality indicator. Dew is a product of PepsiCo which has an image of good quality at low price in consumer’s mind.

• Price cues: Perception of consumers plays an important role in price setting. In the beverage industry consumers have a perception to give money in round figure so most of the prices in this industry end with the digit of 5 or 0.

Setting the Price

A company has to take some steps before defining the price

1) Selecting the Pricing Objectives: The pricing objective for Pepsi Co. is survival because intense competition in sector as well as to increase market share they are using market penetration pricing strategy().

2) Determining the Demand: The customer which Pepsi Co. are targeting are less price sensitive and also it is a low price product so price do not effect so much to demand. It is in a segment where price is inelastic and change in price doesn’t lead to a big change in demand().

3) Estimating Costs: Before establishing the cost companies have to count its own expenses. Pepsi Co. has several costs in his production and distribution process like intergradient, bottle, packaging, promotion and advertising, carriage etc.

29

4) Analysis of competitor’s price: A company should also take a look over its competitor’s price because it also helps to determine price. Pepsi Co. has the same price as its rivals.

5) Selecting the pricing methods: PepsiCo has selected value pricing method for its cola products because it wants customer loyalty with low price and high quality().

6) Selecting final price: After passing through all this process company decide the prices of product which will reach to customer. (We have already mentioned the prices of different variants of Pepsi Co.) sometimes on different occasions company announces discounts or allowances but Pepsi Co. has no such type of strategy.

Distribution

After company manufacture the product, it has to decide that from how many and which type of channels through product will reach to customer.

Pepsi Co. is PepsiCo’s product and PepsiCo has a huge supply channel network for its entire product. Through these channels it distributes Pepsi Co.. So instead of analyzing supply channels of Pepsi Co. we are analyzing Pepsi’s supply chain management and distribution systems().

Pepsi Co. is available through intensive distribution because it is easily available at everywhere. It has implemented this intensive distribution to supply saturation exposure of the market by using all accessible channels. That’s why Pepsi Co. is available in all parts of rural and urban area at all the miniature and large retails stores, supermarkets, departmental stores.

There can be zero to 5 levels of intermediaries implicated in the intact supply chain before product reaches to the end consumer. This is because India is a big country and PepsiCo don’t actually have an extensive network of sales agents, brokers and additional force which is very important and is perfect for make product approachable to the markets. This work is done by distributors, wholesalers and retailers. The margins reserved by these mediators sort from 2% to 5%. PepsiCo transported its products from 43 manufacturing units which are in separate parts of India via different C&F agents or warehouses to distributors who further sell it to the stockiest who lastly sell it to the retailers. Because beverage industry is highly unstable and vibrant so products should be available in market at all the time. The supply of product primarily depends upon the quantity required by retailers and it can be supplied on the regular basis or after some intervals.

PepsiCo also have a bundled service with Pizza Hut where Pepsi products including Pepsi Co. is available with pizza at special price. It is a zero level channel system. It has tie up with HUL to distribute in rural area because HUL has a very large network in rural areas of India. PepsiCo has provided jobs to 150000 people in India including its distributors.

30

Promotion

Advertising: For advertising different kind of media is being used by Pepsi Co. which is as follows:

Television Radio Internet Newspaper Others

The main product of PepsiCo is Pepsi but they are spending 75% of its advertising budget on Pepsi Co. advertising.

Ads of Pepsi Co.

1. One of the most appealing ad of Pepsi Co. is with tag line “cheetah bhi peetah hai” where it is targeting there target customer by showing a fighting with a leopard for Dew. This ad is suitable which its image of daredevil and fearlessness.

2. Second ad includes one man fighting with long horny animal for the dew can. It also shows hardiness nature and also tells how powerful the drink is with the tag line Do the Dew.

PREVIOUS CAMPAIGNS

PEPSI CO. was able to attract a certain set of customers to buy the product by associating itself with young people who are energetic, fun loving and daring.

31

The taglines in the commercials such as "DEW NA KYA TO PHIR KYA KIA" , "DO THE DEW" and "DAR KAY AGAY JEET HAI" left a very good impact on this certain set of consumers.

People who inhabits these attributes of outgoing, fun and daring felt itself highly associated with the brand "PEPSI CO.".

Pepsi Co. is a New Product Category and it has recently moved into its growth stage.

It has gained acceptance, the sales have increased more which has results in the increasing production process

Sales Promotion

Pepsi Co. is not using many type of sales promotion because it is in a niche market and customers are loyal. It is using some contests on its website to create awareness about product and the price for right answers is free adventure tour which is also suitable to its positioning.

- Public relations and publicity

It is not using this tool of promotion very much but in recent in the movie mission Istanbul it was one of the partners and got publicity by this.

- Events and Experiences

Events are the important part of its promotion as it is targeting youth. It is organizing many bike racing, mountain riding events where youth participates. It has also organized road shows with Jagran Solutions for consumer awareness in 185 cities of 7 states.

- Word of mouth

This is the important way of promotion where satisfied customers encourage other people who come in his contract. Pepsi Co. is enjoying this tool of promotion because

32

it is youth targeted drink and satisfied youth themselves promote it as a good drink among his friends.

SELECTING MEDIA

With an objective and a budget in place, the advertising campaign needs to focus on developing the message. 

PepsiCo’s main product and major CSD is Pepsi, hence they are spending additional 25% budget on Pepsi advertisement, and 75 % of Pepsi’s advertising budget is being spent on Pepsi Co. advertising

Will be able to support Pepsi Co. to cover all these media:

1. Television2. Radio3. Print Publications4. Internet5. Direct Mail6. Sinage7. Product Placement 8. Mobile Devices 9. Sponsorships

SUGGESTIONS

The marketing world is full of surprises. Who could imagine that Coca Cola would be overtaken by Pepsi? If Coke could be overrun by Pepsi, it would be no wonder that Pepsi might be overtaken by some other beverage. The need then is to combine quality with ingenuity. Along with that, the reputation of the company has to be kept robust.

Today we live in a fast moving world where novelty and newness count a lot. One cannot rest on one’s laurels. Fresh efforts, newness of approach must remain the cardinal principles of a well orchestrated marketing strategy and the campaign must be relentless. A continuous bombardment in advertisement would convince the clients that Pepsi is a part of their lives. In order to live with style, Pepsi Co. ought to be an essential ingredient of one’s life full of adventure and thrill.

33

The Pepsi Co. is at its growth stage and the sales of the product are growing very rapidly. Company is doing a lot of promotional activities to let the product grow in the market. It holds a large share of the market and whenever the sales state still, the company can improve it by different promotional activities.

Marketers of Pepsi Co. can try to improve sales by improving one or more marketing mix elements. They can cut prices to attract new users and competitor’s customers. They can make better distribution strategies to the areas where still it is not available. They can also launch a better advertising campaign or use aggressive sales promotion to improve the sales. A lot more work is required on cannibalization as well.

Plan for the Next 1 year

After doing the whole analysis for Pepsi Co.’s marketing strategies we are now able to give our opinion that what should company do for better results.

Product

As we have already described that what is the Pepsi Co.’s product strategy at the time so now we will only emphasize on the key points they can change in their product.

. There is only one flavour of Pepsi Co. available in Indian market. We will make this existing Pepsi Co. more specifically targeted at these youngsters by including additional features like stylish shape of bottle and design etc.

. We will launch more variant of Pepsi Co. like caffeine free Pepsi Co. for the consumers who are more health conscious, flavoured Pepsi Co. which can be lemon, orange etc. We will also like to launch an energy drink variant of Dew which made of coconut water.

. Pepsi Co.’s differentiation strategy is good at the time and it has made an image in customer’s mind. We will also like to differentiate it on the basis of social awareness issues like pollution, poverty, population, corruption etc. with this strategy we segment market on the basis of psychographic.

34

Price

Pepsi Co. is available at different price range in India. All prices at which it is available are reasonable and less marginable because of intense competition in market. All the soft drinks in Indian market are available at same price range so it can’t hike its price also it can’t cut down prices because already there are less margins. But there are very less discount offer are provided by Pepsi Co. so it can give some discounts on a bundle purchasing like 5rs. Off on the purchase of two 2liter Bottles.

Promotion

There is no brand ambassador for it so we will like to select a brand ambassador to endorse and promote Pepsi Co.. We will like to select Narayanan Karthikeyan as the brand ambassador for it because he is from F1 racing and suitable for the brand image of Pepsi Co.. We will to promote it mostly near colleges and BPO centres because most of the people there are young. In beverage industry personal selling is not applicable. Instead of this we like to sponsor more adventurer program and associate with them. We can also advertise on the social and public issues like pollution and corruption because today’s youth is so sensitive about these issues and he will associate themselves very soon with these advertisements.

ACTION PLAN AND IMPLEMENTATION

First Quarter

TVC Ads in the first quarter

35

Ad shall appear four times a day for 30 sec 4 days a week on Geo TV, and Other channel which have better options.

Two times from 8:00 pm – 9:00 pm

Two times from 10:00 pm – 11:00pm

Radio Ads

Ad will be on air four times a day for 10 sec 4 days a week on FM- Channels (KHI /LHR /ISD)

Ad will be on air 2 times from 8:30 am – 9:00 am

Ad will be on air 2 times from 5:30 pm – 6:00 pm

Place

36

Indian soft drink industry is estimated to grow at 8% per year so it is important to secure good supply throughout country. For this we will apply Pepsi Bottling Group (PBG) in India because it has successfully managed PepsiCo’s distribution in USA. Also we will make some strategic partnership as already with pizza hut. India has a lowest per capita consumption of cola so there are a lot of possibilities to do in rural area.

Strategy on the basis of competitor

Coca cola’s market share is greater than PEPSI CO. As we can see that the market share of Pepsi Co. is 6.8% is less than his main competitor sprite 15.6% and ThumsUp is 16.4(AC Nielson). In terms of taste and same kind of product sprite is main competitor of Pepsi Co., but sprites main target is collegians as it is indicated by Sprite ad “Seedhi Baat” USP by coming out with the Ghumo Ghumao Sprite Express TV ads”. ThumsUp is also eating the market share of Pepsi Co. as its ad is also targeting the adventures and young promoted by Akshay Kumar. So seeing the both competitor we will spend more money on advertisement to make it more attract and adventures.

For designing a communication strategy we will use creative strategy. In which we will use transformational appeals as a communication. To defeat both competitors we would like to organize some adventures events and road show.

We are continuing with the same campaign along with adding the new potential segment age 12-29 

Geographic

From a national perspective, Pepsi Co. is consumed more in urban areas than rural areas, probably due to the massive campaign targeted there.

37

Psychographics

Activities :People who are involved in adventurous activities like mountain climbing, car racing, hunting etc are targeted in its promotional advertisements, as the concept behind “Dew” is something thrilling.

Interests

People who are interested in recreational activities.

Opinions : People who want to have fun and thrill in their lives are targeted by the Mountain Dew advertisements, as it inspires the people to try it out, without which life is considered dull and boring.

Behavioral

Usage rate: It is medium probably because of the high level of caffeine it has

38

Methodology

SURVEY FINDINGS

When asked what is the first thing that comes to the mind when we hear the word Pepsi Co. What comes to your mind we got the below answers

In which business you are in?

39

Which soft drink brands you sell? (Tick the appropriate)?

Do you have refrigeration system available (if “No” then proceed to 9)

40

Refrigerators for soft drink provided by the company

Refrigerators for soft drink provided by the company

41

Soft drink users in term of gender

42

Out of thirty (30) days, how many times you face “Out Of Stock” issue?

43

44

Analysis

Competitor Analysis

PepsiCo has a good market share in India but facing tough competition from Coca-Cola Company. Products of Coca Cola Company such as sprite, Coca Cola, Limca and ThumsUp are the competitor of PepsiCo in soft drink market(). The most important drawback of its competitor is their promotion and advertisement. Coca-Cola has less number of brand ambassadors as compare to PepsiCo().

In India with the market share of 16.4% Thums Up is at number 1, sprite with 15.6% at 2nd position followed by Pepsi at 13% according to AC Nielsen data. In India Coca-Cola is leader market share of 57.8% followed by Pepsi with 35.6%. In the portfolio of PepsiCo Pepsi is the only one brand with market share of 13.1% but its rival coca cola has four brands that have more than 10% market share in India. Those are ThumsUp 16.45, Sprite 12.2%, Limca 10.9% and Fanta 10%.

  THE COMPETITION 

The competition of Pepsi Co. consists of all the other CSD’s including the following:

Major competitors like Sprite and Coke etc

Within the company i.e. Pepsi & 7UP e

Other brands e.g. Gourmet Cole, Shandy Cola, Double Cole, Mecca Cola etc

Local products in each country i.e. lemon soda etc

Laal sharbat Substitutes e.g. Jam-e-Shierien and Rooh Afza.

Other substitutes like tea and lassi etc

45

COKE VS PEPSI

46

Climate Key Trends (PEST)

Political factor: The government’s response initially was guarded in nature as well as individuals health. The government has decided certain rule for beverage industry regarding to production and also has decided level of ingredients like sugar, carcinogenic pesticide etc that are used in soft drink. PepsiCo has to follow seriously these rules and set of criteria().

Economical factor: Soft drink is not expensive and it is used by most people. So soft drink industry is not much tilted towards the economic influences. But the raw materials they use in their soft drinks, juices and snacks like sugar, vegetables, fruits and potato may slightly affect the production cost and the profit. The distribution channel and transportation also affect the product cost slightly.

Another factor is the role of government like increase in tax.

Social factor: People today are very trendy, sensitive towards the advertisement. It means people drinking Dew are fashionable and are very trendy. Taking this into account PepsiCo targeted new generation people, and they are able to differentiate between them.

Some people are conscious about caffeine so they might have negative anticipation about soft drinks. Also some people think that soft drinks companies spread pollution in manufacturing process. For this Pepsi has a column in their website mentioning about their social responsibility.

Technological factor: Technology for manufacturing and packaging of a product, transportation of raw material or delivery of a product is changing time to time, and thus it also affects the production cost, transportation cost and unskilled labour. Technology also plays a big role in packaging and designing of a product.

47

CHANGED BRAND POSITIONING

Pepsi Co. used to be positioned as the hillbilly soft drink.

They didn’t change the formula of the drink, they simply changed its packaging and marketing.

Now you can’t keep Mountain dew stocked in any soft drink machine patronized by kids.

Types of Packs AvailableUnit: Rs/eachQUANTITY MRP/PCs

RATES

200ml (24b/s per crate) 7/- 146/- 300ml (24b/s per crate) 9/- 192/-

600ml (24b/s per peti) 20/- 444/-

2-liter (9b/s per peti) 45/- 369/-

250ml (24b/s per crate) slice - 192/-

1000ml (12b/s per crate) slice 40/- 450/-

200ml (24PCspercrate) tetra slice 10/- 220/-

500ml (24b/spercrate) diet pepsi 20/- 376/-

330ml ( 24PCs ) diet pepsi cane 25/- 120/-

330ml (24PCs) pepsi cane 20/- 456/-

500ml (24PCs) pepsi café-chino 20/- 444/-

SODA: -

Lehar Soda 300ml (24PCs per crate) 6/- 120/-

48

Lehar Soda 600ml (24b/s per peti) 10/- 216/-

WATER: -

Aquafina-1liter (12b/s per peti) 103/-

Aquafina-2liter (12b/s per peti) 199/-

Note: Prices are as on June,10.

PRICING OF PEPSI BOTTLES

QUANTITY PRICE

200ml Rs.244 per crate

300ml Rs.344 per crate

The Shell Cost Rs 100/- each

Empty bottle Rs 6/- each

Comparison Of Prices

49

PEPSICO PRODUCTS

PRICE(RS) COMPETITORS PRODUCT PRICE(RS)

Pepsi 250ml 14 Coke 250ml 14

Pepsi 500ml 28/30 Coke 500ml 28/30

Pepsi 1 liter 30 Coke 1 liter 30

Pepsi 1.5 liter 55 Coke 1.5 liter 55

Pepsi jumbo 70 Coke jumbo 70

PERCEPTION OF PEPSI & COKE BEVERAGES

50

SWOT Analysis

In this part we are going to analyses the strength, weakness, threats and opportunity of the PepsiCo.

STRENGTHS

51

1. PepsiCo has good brand name, reputation and broader product line in international market.

2. With the revenue of more than 390 $ million PepsiCo is global leader in convenient snacks ()

3. International brand, innovative capabilities, strong distribution network.

4. Pepsi is market leader in making of snacks, sports drink and bottled water.

5. One of major strength of PepsiCo that it has developed into a large, strong organization because of its good franchise system.

6. Strong advertising campaign and marketing policy for promoting brands.

7. Global presence, Sponsorship, Focus on most important customer trend -“satisfaction”.

8. Demand of Pepsi Co. is more than its competitors

9. Company has a very established name and a good reputation.

10. Mountain market share is increasing with great rate than its competitors.

11. As the target customers of Mountain dew is young generation, so Pepsi Co. has more brand loyal customers.

12. Pepsi Co. spends a lot of budget on its advertising.

13. Pepsi Co. has a very vast distribution channel and it is easily available everywhere. The Distribution Channel used is same for Pepsi.

14. the mother brand is so strong, it helped Mountain dew a lot in creating its name in the beverage industry

　

WEAKNESSES

52

1. Pepsi is far away from main competitor Coca-cola in international market.

2. More than 50 percent of sales come from snacks (Frito-lay), it is a big threat if snacks market comedown().

3. Pepsi Co. does not offer any sort of incentive or discount to its retailers.

4. Pepsi Co. target only young customers in their promotions.

5. Crown of the disposable bottle is not good.

6. Demand of disposal bottle is declining.

7. Pepsi Co. tin pack is not available in far off rural areas.

8. Pepsi Co. is not considering many potential outlets like hotels, college canteens etc.

9. The increasing inflation rate in Pakistan may result in an upcoming weakness for Pepsi Co..

10.Secondly, fragmentation in the beverage industry of Pakistan is another weakness.

11.Thirdly, and most importantly, The ever increasing popularity of Pepsi Co. might be a threat to the parent product and cannibalization of market share of own products.

53

OPPORTUNITIES

1. Food is must for everyone so it can be expand internationally.

2. Offer and increase new healthy food and beverage because people are moving towards healthy food.

3. Company may start entering rural areas also.

4. The company may also diversify its business in some other potential business.

5. Increased interest of people in musical groups, cultural shows and sports has provided an opportunity for Pepsi Co. to increase its sales through them.

6. Cola drinks are not good for the health so the awareness level of the people is in creasing which is a big threat to the company.

7. The fastest growing part of industry is noncarbonated drinks.

8.  People are now fed up of ordinary cola’s and citrus segment like Pepsi Co., sprite 3G etc.

THREATS

54

1. Strong competitor in the market like Coca-cola, Cadbury Schweppes, Kraft Foods and small bottling firms.

2. People are moving towards healthy food..

3. The main competitor of the company is the Sprite and Sprite 3G.

4. At the local level, Pepsi Co. has a very strong competition with different type of cola and non cola products.

5. Sprite has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi Co..

6. The biggest threat for Pepsi Co. is the competition threat from Sprite, “Sprite 3G” and a little threat from energy drinks like “Red Bull” etc. Before Sprite 3G, Pepsi Co. enjoyed the monopoly in the citrus segment of CSD’s industry. Now, the competition is very high between the two brands. Secondly, from the Pepsi’s perspective, Pepsi Co. can be a threat for the mother brand. 

7. Stronger built image by COKE in local market in recent years

8. Effective distribution network by competitors

9. Change in consumer preferences and taste

10. Increased costs/ disruption of supply and shortage of raw materials

11. Unfavorable economic conditions due to global financial crises

12. High quantity of caffeine may be taken as negative

13. Internal hit on the sales of parent brand PEPSI

55

Conclusion

After analyzing and describing the whole marketing strategy of Pepsi Co. we can conclude that Pepsi Co. is doing well in market. We want to conclude that practices makes improved but not ideal so we hope that this report will help PepsiCo to improve results. With the best marketing plan a product can’t be successful because outside forces will affect it but with the marketing plan process you can achieve success because then you are also adopting conditions.

Pepsi Co. is a well renowned brand and it has maintained its position well by understanding the client psychology, by ensuring quality, by introducing ingenuity in products, by enlarging its product base, by keeping economic factors in view and by intense and jazzy advertisements.

Whenever and where ever there is a spotlight event, Pepsi Co. must figure in, like the one day international cricket matches between India and Pakistan many other such occasions. The key word for success in the Marketing World is to “remain in the spotlight” and that is what Pepsi Co. should do more.

56

BiblioGraphy

List of published sources consulted during the course of the project :-

1.) www.google.com2.) www.youtube.com3.) www.msn.com4.) www.yahoo.com5.) The Times of India

57