Market of Pepsi

Market

India forms a key market in PepsiCo's global strategy. However, despite a huge market of

a billion people, the soft drink industry, with a per capita consumption of two bottles, was

vastly underdeveloped. Moreover, India was also the only market in the world to have

shown the door to the other soft drink brand in the late1970s.

None other than Philip Kotler mentions in 'Mega marketing', Harvard Business Review,

March-April 1986: "After Coca-Cola was asked to leave India, Pepsi began to lay plans

to enter this huge market. Pepsi worked with an Indian business group to seek

government approval for its entry over the objections of both domestic soft-drink

companies and anti-multinational legislators…Clearly. Pepsi's strategy was to bundle a

set of benefits that would win the support of various interest groups in India. Thus Pepsi's

marketing problem went beyond the normal 4Ps of operating effectively in a market. To

enter India, Pepsi faced a 6P marketing problem, with Politics and Public opinion

constituting the two additional Ps. Winning over the Indian government and the public to

gain admission is a much tougher challenge."

Pepsi played the 6Ps very effectively. It delivered an export/import surplus to the then

foreign exchange starved government by offering to develop agricultural exports from

Punjab. In this way, it was able to offset the cost of importing concentrate into the

country. Parallely, with its trend-setting advertising, innovative on-ground marketing and

intrusive distribution system, Pepsi, today, has brought to its fold a staggering 200

million consumers. Brand Pepsi is the largest single soft drink brand in India. Pepsi is

recognised as 'The' iconic youth brand in this part of the world. After deeply penetrating

cities and large towns, Pepsi is now exploding the rural market.

Launched in 1990, on India's Independence Day, Pepsi brought to India its global legacy

- vibrancy and youthful dynamism. Its launch announced to the youth of India, the

freedom of being what they want to be, freedom of thought, expression and choice

The term soft drink originally applied to carbonated drinks and non-carbonated drinks made from concentrates, although it now commonly refers to almost any cold drink that does not contain alcohol. Beverages like colas, sparkling water, lemonade, and fruit punch are among the most common types of soft drinks, while hot chocolate, tea, coffee, milk and milkshakes do not fall into this classification

Packaging

Soft Drinks such as Diet Pepsi come in a variety of packaging  It should be possible to replace

this fair use image with a freely licensed one. If you can, please do so as soon as is practical.

In the US, soft drinks are often sold in two-liter bottles, one liter plastic bottles, 24 and 20

US fluid ounce bottles and in 12 US fluid ounce cans. They are packaged in a variety of

quantities like six-packs, 12 packs and cases of 24. In Japan, 1.5 liter bottles, 500 mL

bottles and cans are more common. It is also common for fizzy soft drinks to be served as

fountain drinks in which carbonation is added to a concentrate immediately prior to

serving.

Marketing

Soft drinks are commonly sold in stores in bottles and cans. They can also be dispensed

using a soda gun. Sales earn a significant amount of money for the producers and

distributors. Most famous name-brand soft drinks are produced and bottled by local or

regional independent bottling companies. These companies license the name, and are

usually sold the main ingredients, with syrup made by the main manufacturing plants of

the trademark holders.

In the past, most cola-flavoured and other soft drinks were sweetened with ordinary sugar

(sucrose), but to save on production costs in some markets, HFCS (high fructose corn

syrup) is now commonly used as a sweetener.

Competition in the industry among soft drink producers is widely referred to as the cola

wars, a term mainly used to describe the ongoing battle for market supremacy between

Coca-Cola and Pepsi. In the mid-1990s, Pepsi launched its largest attack of the "cola

wars," the giant Pepsi Stuff strategy.

.

History

"Pepsi" logo (used from 1906-1939 in several slightly different variations).

The eighth Pepsi logo, used from 1991. It was phased out from 1996 in some

international markets, and retired worldwide in 1998.

The "Pepsi" logo (used from 2003- present).

Pepsi-Cola was first made in New Bern, North Carolina in the United States in the early

1890s by pharmacist Caleb Bradham. On August 28, 1898 , "Brad's drink" was changed

to "Pepsi-Cola" and later trademarked on June 16, 1903. There are several theories on the

origin of the word "pepsi".

The only two discussed within the current PepsiCo website are the following: 1) Caleb

Bradham bought the name "Pep Kola" from a local competitor and changed it to Pepsi-

Cola. 2) "Pepsi-Cola" is an anagram for "Episcopal" - a large church across the street

from Bradham's drugstore. There is a plaque at the site of the original drugstore

documenting this while PepsiCo has refuted this theory.

Another theory is that Caleb Bradham and his customers simply thought the name

sounded good or the fact that the drink had some kind of "pep" in it because it was a

carbonated drink, they gave it the name "Pepsi".

As Pepsi was initially intended to cure stomach pains, many believe Bradham coined the

name Pepsi from either the condition dyspepsia (stomachache or indigestion) or the

possible one-time use of pepsin root as an ingredient (often used to treat upset stomachs).

It was made of carbonated water, sugar, vanilla, rare oils, and kola nuts. Whether the

original recipe included the enzyme pepsin is disputed.[1][2]

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented

warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was

sold in six-ounce bottles and sales increased to 19,848 gallons. In 1905, Pepsi received its

first logo redesign since the original design of 1898. In 1906, the logo was changed again.

In 1909, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads

as "A bully drink...refreshing, invigorating, a fine bracer before a race".

In 1923, Pepsico went bankrupt due to high sugar prices as a result of World War I,

assets were sold and Roy C. Megargel bought the Pepsi trademark.[3]Eight years later, the

company went bankrupt again, resulting in a reformulation of the Pepsi-Cola syrup

formula.

During The Great Depression, Pepsi gained popularity following the introduction in 1934

of a 12-ounce bottle. With twelve ounces a bottle instead of the six ounces Coca-Cola

sold, PepsiCo turned the price difference to its advantage with a slick radio advertising

campaign which was the first use of a jingle in advertising. "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," encouraged price-watching consumers to switch to Pepsi, while obliquely

referring to the Coca-Cola standard of six ounces a bottle for the price of five cents (a

nickel), instead of the twelve ounces Pepsi sold at the same price. Coming at a time of

economic crisis, the campaign succeeded in boosting Pepsi's status. From 1936 to 1938,

PepsiCo's profits doubled.[4]

Introduced in 1964, Diet Pepsi was the United States's first national diet soft drink.

Marketing

In 1975, PepsiCo 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

test results to the public.[5] This is mostly because Pepsi has a higher sugar content than

Coca-Cola as seen in the book, "Big Secrets" by William Poundstone.

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. In 2002,

the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped

redefine promotion marketing."Source: Promo

Magazine, 2002.

Ingredients

The Pepsi-Cola drink contains basic

ingredients found in most other similar drinks

including carbonated water, high fructose corn

syrup, sugar, colorings, phosphoric acid,

caffeine, citric acid and natural flavors. The

caffeine free Pepsi-Cola contains the same

ingredients but no caffeine

Amount 8 fluid ounces

Calories 100

Fat 0 g

Sodium 30 mg

Potassium 10 mg

Carbohydrates 27 g

Sugar 27 g

Protein 0 g

Caffeine 25 mg

Slogans

1963: "Come Alive, You're in the Pepsi Generation".

1969: "You've Got a Lot to Give, Pepsi's Got a Lot to Give".

1973: "Join the Pepsi people feelin' free".

1976: "Have a Pepsi day".

1979: "Catch that Pepsi spirit".

1981: "Pepsi's got the taste of life".

1983: "Pepsi NOW!"

1984: "The Choice of a New Generation".

1991: "Gotta Love It".

1997: "GeneratioNext".

1999: "Ask for More".

2000: "The Joy of Cola".

2003: "It's the Cola".

2003: "Dare for More".

2006: "Feel like Pepsi".

[edit] PepsiCo in India

A woman waking up on a sidewalk in Bijapur, India, under a Pepsi advertisement.

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab

government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited.

This joint venture marketed and sold Lehar Pepsi until 1991 when the use of foreign

brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994. [1] Others claim that firstly Pepsi was banned from import in India, in 1970, for having

refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi

arriving on the market shortly afterwards. These controversies are a reminder of "India's

sometimes acrimonious relationship with huge multinational companies." Indeed, some

argue that PepsiCo and The Coca-Cola Company have "been major targets in part

because they are well-known foreign companies that draw plenty of attention." [2]

In 2003, the Centre for Science and Environment (CSE), a non-governmental

organization in New Dehli, said aerated waters produced by soft drinks manufacturers in

India, including multinational giants PepsiCo and The Coca-Cola Company, contained

toxins including lindane, DDT, malathion and chlorpyrifos — pesticides that can

contribute to cancer, a breakdown of the immune system and cause birth defects. Tested

products included Coke, Pepsi, 7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE

found that the Indian-produced Pepsi's soft drink products had 36 times the level of

pesticide residues permitted under European Union regulations; Coca Cola's 30 times. [3]CSE said it had tested the same products in the US and found no such residues.

However, this was the European standard for water, not for other drinks. No law bans the

presence of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their products

manufactured in India contained toxin levels far above the norms permitted in the

developed world. But an Indian parliamentary committee, in 2004, backed up CSE's

findings and a government-appointed committee is now trying to develop the world's first

pesticide standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab

tests aren't reliable enough to detect minute traces of pesticides in complex drinks. On

December 7, 2004, India's Supreme Court ruled that both PepsiCo and competitor The

Coca-Cola Company must label all cans and bottles of the respective soft drinks with a

consumer warning after tests showed unacceptable levels of residual pesticides.[citation needed]

Both companies continue to maintain that their products meet all international safety

standards without yet implementing the Supreme Court ruling.[citation needed] As of 2005, The

Coca-Cola Company and PepsiCo together hold 95% market share of soft-drink sales in

India. [4] PepsiCo has also been alleged to practice "water piracy" due to its role in

exploitation of ground water resources resulting in scarcity of drinking water for the

natives of Puthussery panchayat in the Palakkad distict in Kerala, India. Local residents

have been pressuring the government to close down the PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had

high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company

maintain that their drinks are safe for consumption and have published newpaper

advertisements that say pesticide levels in their products are less than those in other foods

such as tea, fruit and dairy products.[5] In the Indian state of Kerala, sale and production

of Pepsi-Cola, along with other soft drinks, has been banned.[6] Five other Indian states

have announced partial bans on the drinks in schools, colleges and hospitals.[7]

PepsiCo, Inc.

Type Public (NYSE: PEP)

Founded 1965

Headquarters Purchase, New York, USA

Key people Steve Reinemund, ChairmanIndra Nooyi, President & CEO

Industry Food and beverage

Products PepsiGatoradeLay'sDoritosFrappuccino (for Starbucks)

Revenue $32.6 billion USD (2005)

Operating income $5.9 billion USD (2005)

Net income $4.5 billion USD (2005)

Employees 153,000 (2005)

Website www.pepsico.com

Reverse logistics

Reverse logistics is the logistics process of removing new or used products from their

initial point in a supply chain, such as returns from consumers, over stocked inventory, or

outdated merchandise and redistributing them using disposition management rules that

will result in maximized value at the end of the items original useful life. A reverse

logistics operation is considerably different from forward logistics. It must establish

convenient collection points to receive the used goods from the final customer or remove

assets from the supply chain so that more efficient use of inventory / material overall can

be achieved. It requires packaging and storage systems that will ensure that most of the

value still remaining in the used good is not lost due to careless handling. It often requires

the development of a transportation mode that is compatible with existing forward

logistic system. Disposition can include returning assets into inventory pools or

warehouses for storage, returning goods to the original manufacturer for reimbursement,

sell goods on a secondary market, recycling assets, or a combination that will yield

maximum value for the assets in question.

Simply, "reverse logistics" is all activity associated with a product/service after the point

of sale, the ultimate goal to optimize or make more efficient aftermarket activity, thus

saving money. Types of activity common with reverse logistics includes: logistics,

warehousing, repair, refurbishment, recycling, e-waste, after market call center support,

reverse fulfillment, field service and many others.

Let us now consider an example of Reverse Logistics. T-Shirts are often sold at second

sales where those with minor flaws like improper logo print of the manufacturer or

unnoticeable stitching flaws are exhibited to be sold at discounted prices. Now, the

collection of the flawed clothes from the various stores and reselling them at the Second

Sales shop is an example of reverse logistics.