Pepsi Marketing From Pakistan

7/28/2019 Pepsi Marketing From Pakistan

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PEPSICO

Group AssignmentMARKETING MANAGEMENT


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PRESENTED BY:Boo Siew Yong

Leong Shyh Woei

Basil Dass

Rosalie Wong

Lee Chai Hong

Jonathan Leong

Marketing Management Group

Assignment : PEPSI CO

-

Performance with Purpose


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PERFORMANCE WITH PURPOSE

PepsiCo believes that its performance isfundamentally connected to its agenda of

purpose, which represents the commitmentto give back to communities as the companygrows.
http://en.wikipedia.org/wiki/File:Pepsicup.jpg


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Marketing Management Assignments

INTRODUCTION : Company Profile and Values ANALYSIS :

1. SWOT

2. PEST3. BCG and 5 Forces

4. Product Life cycle

5. Intensive and Integrative Growth Strategies

6. Market Segmentation

7. 4Ps

RECOMMENDATIONS


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Pepsico Vision

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."


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To be the world's premier consumer productscompany focused on convenient foods and

beverages.

Seek to produce financial rewards to investors Provide opportunities for growth and

enrichment to our employees, our business

partners and the communities in which weoperate.

Strive for honesty, fairness and integrity

PepsiCo Mission


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HISTORY OF PEPSI COLA

In 1893 Caleb Bradham, a young pharmacist from

New Bern, North Carolina, begins experimenting

with many different soft drinks. In 1898, one of

Caleb's formulations, known as "Brad's Drink" a

combination of carbonated water, sugar, vanilla,

rare oils and cola nuts, is renamed "Pepsi-Cola".

On August 28, 1898, Pepsi-Cola received its firstlogo.


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In 1902, he applied for a trademark with the U.S.

Patent Office, Washington D.C., and formed the first

Pepsi-Cola Company. 1905, Pepsi-Cola's first bottlingfranchises were established in Charlotte and Durham,

North Carolina. In 1906, Pepsi gets another logo

change, the third in eight years. The modified script

logo is created with the slogan, "The Original PureFood Drink". In 1920, Pepsi theme line speaks to the

consumer with "Drink Pepsi-Cola, it will satisfy you". In

1923, Pepsi-Cola Company was declared bankrupt

and its assets were sold to a North Carolina concern,

Craven Holding Corporation, for $30,000.


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FORMATION OF PEPSI COLA CORPORATION

Roy C. Megargel, a Wall Street broker, bought

the Pepsi trademark, business and good will

from Craven Holding Corporation for $35,000,

forming the Pepsi-Cola Corporation. In 1928,after five continuous losing years, Megargel

reorganized his company as the National

Pepsi-Cola Company. In 1931, U.S. DistrictCourt for Eastern District Virginia declared the

National Pepsi-Cola Company bankrupt, the

second bankruptcy in Pepsi-Cola history.


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REFORMULATION OF PEPSI COLAS SYRUP FORMULA

The Loft candy company acquired the National Pepsi-Cola

Company. Charles G. Guth, president of Loft, commandedthe reformulation of Pepsi-Cola syrup formula. 1934 was a

landmark year for Pepsi-Cola. The drink was a hit and to

attract even more sales, the company began selling its 12-

ounce drink for five cents (the same cost as six ounces ofcompetitive colas). The 12-ounce bottle debuted, where it

was an instant success. The cost savings proved

irresistible to Depression-worn Americans and sales

skyrocket nationally. In 1941, The New York StockExchange traded Pepsi's stock for the first time. In 1964,

Diet Pepsi, America's first national diet soft drink, debuted.

Pepsi-Cola acquired Mountain Dew from the Tip

Corporation in 1964.


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FORMATION OF PEPSI COLA INCORPORATION

In 1965, Expansion outside the soft drink industry began. Frito-

Lay of Dallas, Texas, and Pepsi-Cola merged, forming PepsiCo,

Inc. Pepsi Cola Company operates in beverages industry. Pepsi

Cola international is well reputed multinational company which is

doing its business in almost every country of the world. The

company is registered in New York stock exchange U.S.A. to

make a better control over the business the company has giventhe manufacturing rights to different companies. Now these

companies are producing the products on the behalf of the

company by using companys trademark. To maintain their

goodwill in the market the company has a strict policy of grantingmanufacturing rights. Pepsi Cola have standardized products all

over the world (e.g. same in size, shape and quality). The

franchises have to follow all the standards given by the company.


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SETUP OF PEPSI COLA

The head office is situated in New York (USA)

with units operating in different regions of the

world. These are called Business Units and

Pakistan is in MENAPak (Middle East, NorthAmerica and Pakistan). The head office of

MENAPak is situated in Dubai (UAE). The local

head offices for each country are situated in therespective capitals.


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PepsiCo Values & Philosophy

Our Values & Philosophy are a reflection

of the socially and environmentally

responsible company we aspire to be.They are the foundation for every

business decision we make.

Performance with Purpose


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We understand that companies succeed when societysucceeds, and whats good for the world is good for

business. Performance with Purpose ensures that this

powerful idea is woven into everything we do at PepsiCo.But equally important, it is proving to be a driver of financialperformance for their shareholders today and into thefuture. We continue to strike the balance between the shortterm and the long term through investments inacquisitions, research and development and emergingmarkets.

Summary of Operations

Year 2010 2009

Total net revenue $57,838 $43,232 34% 33%

Core division operating profit(b) $10,626 $ 8,647 23% 23%

Core total operating profit(c) $ 9,773 $ 7,856 24%

Core earnings per share

attributable to PepsiCo(d) $ 4.13 $ 3.71 12% 12%


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SWOT MEN- Strength

It has a very strong Top management people with fullyexperienced as their leadership- Strong corporate strategies

Has full capacity to train the young and their work force to be

well equipped

Relationship with the local community is an added advantage ,as they look into the development for their people as stated intheir mission

Human Sustainability promise to encourage people to live ahealthier life


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SWOT MONEY - Strength

Net revenue grew 33% , 57.9 billion on year 2010

Core division operating profit rose 23%

Operating cash flow up 23%

Annual dividend was raised 7%

8 billion was returned to share holder through shareholder repurchases and dividend

Core EPS grew 12% on a constant currency basis


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Invest more in research and development for moreaffordable and nutritional products

Reduction the use of water by recycling purificationsystem, reuse 75% of water used in production

Incorporate use 10% of polyethylene (rPET) in soft drinkcontainers.

Acquired many popular brand name product.

Offered extensive variety of product lines.

Different flavours were created tailor to the country theyare sold in.

Towards product reformulation reduce salt, eliminatetrans fat which diminish calories

SWOT MATERIAL- Strength


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2nd in the world as leading distributor ofcarbonated drink

Has the lead of more than 200 countries with

a work force of more than 294000 workers Has established its brand also by social service

for example the Haiti issue , India , Africa

The largest player in the macro snack category Strong marketing strategies ex using famous

celebrity eg Tiger Wood

SWOT MARKET-Strength


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Supply chain inefficiencies that affect retailers

were solved too slow paced

Market share was low in the soft drink

industry and continued to decline

Expansion to new areas was slow

Lower sales of non carbonated beverages

outside of North America

SWOT - Weakness


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The acquisition of anchor bottlers in N America

and Europe, enable them to drive growth ,

dynamic future ,more integrated supply chain.

With the use of more healthy supplements andhealth concern , Pepsico can look into more

supplement food (Shaklee ).

With the use of recycle water , Pepsico can startplanning its operations in African the contigent

SWOT - Opportunities


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Demand for products was high as they were wellrecognized

Consumers are leaning towards healthier foods

Expand further into the international market, theopportunity for growth in developed countries isgreater as per capita for consumption in thesnacking industry.

Consistent growth

Further research in innovations to make better-for-you snacks, and to produce sweeteners thatwould lower the calories content in drinks

SWOT - Opportunities


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Declining interest in some products such as thecarbonated beverages as the public is towardshealthier choices

New products constantly released that competedirectly with Pepsi product

Many of these products offer same benefit butlower price

Constant competition with Coca cola and otherbrands pose a threat to their sales and marketshare

SWOT - Threat


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PepsiCo

PESTPolitical

PepsiCo trying to get into underdeveloped market

They have to considered on government taxation policy, environmental

law regulations for both side.

Economic

PepsiCo rely on trucks for transportation

Fuel price fluctuation is one of the important aspect

Economic crisis will also to labor supply and consumers purchasingpower


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PepsiCo

PESTSocial

Population on young consumers

Changes in life style

Social trend and demand

People want to be healthy

Technology

Awareness on new machine launching

Advance technology automation, will effect production efficiency

R & D facilities


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Porter's five forces analysis
http://4.bp.blogspot.com/_RUe4EZEDFco/Sfb3PrAFRLI/AAAAAAAAAmc/fk6hzOvzYhw/s1600-h/Michael+Porter's+Five+Forces.png


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PepsiCo

Porter 5-forcesThreat of new entrance

Low

PepsiCo is well established and have Pepsi Bottling Group

have brand equity, loyal customers

Need huge investment for:

R&D facilities, high tech machinery

Must have:

Lots of market experience in the same industry.

Good distribution channel


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PepsiCo

Porter 5-forcesThreat of Substitude

Not a great deal for PepsiCo

Consumers preference is the taste more than the cost

Not many carbonated drink having the same taste as Pepsi-Colar other

than Coca-ColarLoyal customrs

Bargaining Power of Buyers

Not so significant eventhought low switching cost

Monetary cost is not the issueConsumers preference is the taste

Convenience of the vending machine


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PepsiCo

Porter 5-forcesBargaining Power of Supplier

Low

Many raw material supplier like fruit and other ingredients

PepsiCo partnership with farmers & community group, ensuring quality

supply

For Bottling and metal can, they make use 40% share of PBG.

Only problem may rely on bad harvesting season due to climate change.

Another aspect is on fuel oil crisis.


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PepsiCo

Porter 5-forcesCompetitive Rivalry Within An Industry

Moderate to Strong

Pepsi is not no.1 in Beverage market. Pepsi still need to compete with

Coca-cola.

Pepsi is new in Food market. Pepsi need to compete to big players like

Nestle and Craf.


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Boston Consulting Group Matrix

Product Life Cycle

Sales

Time

1 2 3 4

Intro Growth Maturity Decline


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Product introduced by Pepsi


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1. Intro

Good For Youwhere all the food & beverage are good for

health (oats, fruit juices, nuts, yogurt)2. Growth

Better For You where all the foods & beverages are low fat,

less salt & low calories (Pepsi Diet, Isotonic Drink

3. Maturity

Fun For Youwhere all the core foods & beverage of Pepsi

Co

4. Decline

Fun For You


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Growth Strategy Integrative Growth

Horizontal

Downstream:1. vending Machine

Upstream

Pepsi Co

Backward Integration a) Vertical(Growth opportunities)

b) Horizontal(Merger & acquisition)

Forward Integration

Bottling

Plantation

Partnership with

Starbucks & KFCFoods


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Growth Strategic Intensive Growth


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Product Development

Pepsi was develop a new product like natural

fruits juice and partnership with Starbuck and

Unilever Lipton to produce coffee and tea.

Isotonic Drink and Mineral water


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Market Penetration

Sell Pepsi in current market.

Introduce more A & P in existing market. Ie.

Jay chou in China market.

David Beckham in International market.

Introduce more local favour in the local

market.


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Market Development

Pepsi had expand their business according to

different area and separate into Pepsi

America, Pepsi Euro, Pepsi Asia, Pepsi Middle

East and Pepsi Africa


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Diversification

Pepsi had change from traditional beverage

industry into food industry

Example:

1. Whole Gain

2. Fiber Based Product

3. Vegetable


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ORDER FULFILMENT OF PEPSICO


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Market Segmentation

Geographic Segmentation

Demographic Segmentation

Psychographic Segmentation

Behavioral Segmentation


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Geographic Segmentation

Urban areas

Product based : on different living culture

Taste and preference : ie. herbal tea for China


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Demographic Segmentation

Age : 5 45

Gender : Male / female

Family size : 1 and above

Income: $500 and above

Cycle : hotels, restaurants, cinema, college,

schools and stalls ( young people presence ).


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Psychographic Segmentation

Lifestyle : believers, achievers, fulfilled, newgeneration

Social class : lower to Middle class.

Social trend : Health conscious :1.Diet Pepsi : conscious society, where one

would drink Diet Pepsi to stay slim.

2.Isotonic / Sport drink : Gatorade ( SponsorNicol David / David Beckham)

3. Tropicana series of drinks : for orange drinker.


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Behavioral Segmentation

Loyalty: Strong and associate with brand icon.

Occasions / functions: Birthday celebration,

Sports, Regular occasions, wedding.

Benefits : taste, quality


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What is Marketing Mix??


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PEPSI AND ITS 4Ps
http://en.wikipedia.org/wiki/File:Pepsicup.jpg


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Product Mix

Width Of the Product MixDepth

ofthe

Product

Lines

Beverages Foods

Carbonated Orange Mineral

Water

snack nutrition

Pepsi Tropicana Aquafina Lays Potato

chips

Quaker Oats

7-up Cheetos

MountainDew

Aliva
http://en.wikipedia.org/wiki/File:Pepsi_2009.jpg


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PRODUCTS Mix

( foods & beverages )Beverages mix:

1. Carbonated categories:

- Fun for you portfolio ( Pepsi Cola, Diet Pepsi )

2. Non-carbonated

- Better-for-you and Food-for-you portfolio

- ( Tropicana series )


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Carbonated Drinks Categories

Pepsi

Diet Pepsi

Caffeine Free Diet Pepsi

Diet Pepsi Max

Jazz Diet Pepsi

Diet Pepsi Lime

Diet Pepsi Vanilla Pepsi Wild Cherry

Diet Pepsi Wild Cherry

Pepsi ONE

Mountain Dew

Diet Mountain Dew

Mirinda

Slice

Aquafina

Aquafina Alive

Aquafina FlavorSplash

Aquafina Sparkling

Non carbonated Drinks Category
http://en.wikipedia.org/wiki/File:Pepsi_Max_can.jpg


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Non-carbonated Drinks Category

Tropicana Pure Premium juices

Tropicana Twister juice drinks

Tropicana Smoothies

Tropicana Pure Tropics juices

Dole juices (License)

Tropicana 100 juices

Naked Juice


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PRODUCTS Mix

Foods mix:

- Snack foods

- Nutrition food


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Products of Frito Lay

Lay's potato chips

Baked Tostitos tortilla chips

Doritos Nacho Cheese

Flat Earth


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Products of Quaker

Quaker Oats(In 2006)


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Products of Frito

PepsiCos snack food company, is the leader in

the branded salty snack market. It

manufactures :

Lays Potato Chips

Cheetos extruded snacks

Uncle Chipps

Aliva- Tasty Crackers and traditional namkeen snacks under the

Kurkure and Lehar brands


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PRICING DECISIONS PepsiCo Pursues :

Low Price Strategy

Penentration Pricing ( ref : By Emily Fredrix, AP Food Industry Writer

Manufacturing.Net - October 08, 2009 )


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COMPARISON CONTD

Chief Financial Officer Richard Goodman said PepsiCo hasbeen offering more promotions at the end of each month,

when consumers' budgets become more constrained. For

instance, bags of chips may be promoted at two for $5 early in

the month but fall to $2 each by the end of the month. "We want to be able to make sure that at the beginning of the

month or at the end of the month, they're buying our

products,"


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PLACING DECISIONS

CHANNEL MANAGEMENT & LOGISTICS

Service the right pack size at the right

price, in the right place at the right time.


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Direct Distribution

Delivery of post mix cylinders & handling of key accounts: Thekey accounts are different wholesalers, restaurants and hotels

like Pizza Hut, KFC, Metro which serve as a place for key sale.

These are known as national key accounts and are veryimportant in terms of competition.

Export Parties


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Indirect Distribution

Through Base market distributors

Through Outstation distributors

PROMOTION


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PROMOTION

Advertising Strategy of Pepsi

Pepsis target audience : mostly teens andyoung adults and their advertising reflects thisin every possible way.

The company changes its advertising strategyand image to reflect the target's interests.

Pepsi makes sure that the advertisementsreflect to the target audiences interests andnostalgia.

PRODUCT POSITIONING


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PRODUCT POSITIONING Pepsi prefers to position itself as the beverage choice of the

New Generation, Generation Next, or just as the PepsiGeneration.

Pepsis advertising campaigns are referring to the markets

that marketers refer to as Generation X.


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Celebrity Endorsers

Pepsi and its associated beverages have hadvarious celebrity endorsers and continue to

use them.

Tina Turner

Britney Spear

Michael Jackson

Spice Girls

Jeniffer Lopez

Slogans :-

1939: "Twice as Much for a Nickel"
http://en.wikipedia.org/wiki/Celebrityhttp://en.wikipedia.org/wiki/Celebrity


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1939: Twice as Much for a Nickel

1950: "More Bounce to the Ounce"

1950: "Any Weather is Pepsi Weather"

1957: "The Light Refreshment"

1958: "Be Sociable, Have a Pepsi"

1961: "Now It's Pepsi for Those Who Think Young"

1963: "Come Alive, You're in the Pepsi Generation". 1967: "(Taste that beats the others cold) Pepsi Pours It On".

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

1975: "Have a Pepsi Day"

1977: "Join the Pepsi People (Feeling Free)"

1980: "Catch That Pepsi Spirit" David Lucas composer

1981: "Pepsi's got your taste for life"

1983: "Pepsi Now! Take the Challenge!"

1984: "The Choice of a New Generation" 1986: "We've Got The Taste" (Commercial with Tina Turner)

1990: "You got the right one Baby UH HUH"

1991: "Gotta Have It"/"Chill Out"

1992: "Be Young, Have Fun, Drink Pepsi"

1995: "Nothing Else is a Pepsi"

1996: "Pepsi:There's nothing official about it" (During the Wills World Cup(Cricket) held in India/Pakistan/Srilanka)

1997: "GeneratioNext"." With The Spice Girls "

1998: "Yeh Dil Mange More"(In Hindi meaning "My heart wants more") 1999: "Ask for More"/"The Joy of Pepsi-Cola" (Commercial with Britney Spears/Commercial with Mary J. Blige)

2003: "It's the Cola"/"Dare for More"

2005: "Wild Thing"/"Ask For More" (With Jennifer Lopez )

2006: "Why You Doggin' Me"/"Taste the one that's forever young" Commercial featuring Mary J. Blige

2007: "More Happy"/"Taste the one that's forever young" (Michael Alexander)
http://en.wikipedia.org/wiki/Pepsi_Generationhttp://en.wikipedia.org/wiki/Tina_Turnerhttp://en.wikipedia.org/wiki/Spice_Girlshttp://en.wikipedia.org/wiki/Britney_Spearshttp://en.wikipedia.org/wiki/Mary_J._Bligehttp://en.wikipedia.org/wiki/Jennifer_Lopezhttp://en.wikipedia.org/wiki/Mary_J._Bligehttp://en.wikipedia.org/wiki/Mary_J._Bligehttp://en.wikipedia.org/wiki/Jennifer_Lopezhttp://en.wikipedia.org/wiki/Mary_J._Bligehttp://en.wikipedia.org/wiki/Britney_Spearshttp://en.wikipedia.org/wiki/Spice_Girlshttp://en.wikipedia.org/wiki/Tina_Turnerhttp://en.wikipedia.org/wiki/Pepsi_Generation


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Publicity

Pepsi-Colas Save the Pepsi Generations

Planet: a PR Strategy to Reinforce the

Environmental Support System

TACTICS

The tactics will highlight the goal of

Save the Pepsi Generations Planetcampaign

which is to redefine, reinforce, and rebuild

Pepsi-Colas commitment in caring the

environment.

Bubbly Campaign


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Bubbly Campaign


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Youngistan

CampaignYeh hai Youngistaan Meri

Jaan


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Recommendations: -

1. Products decisions : add in Soya drink and Ice cream

to increase their product portfolio and sales

revenue

2. Product Decision :Produce a range of Healthy, i.e.Sugar free or diet Alternatives of different brands.

3. Promotion their products through Effecting

Marketing and Advertising strategies.

4. Improving production efficiencies through optimal

outsourcing of production and integration


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Recommendations: -

5. Market Positioning : The company should modify its advertisingstrategy and educate the customers about its age-old existenceand enhance its brand image. This will appeal to the targetcustomers of middle and older age groups apart from the youngergeneration in which PEPSI has a good hold.

6. Placing Strategy: Rural market being a very potential segment needsvery quick and prompt efforts to be taken to capture this highvolume market.

7. Pricing : Soft drink is still considered a treat virtually a luxury, so itpossible company should cut down its price especially of cans.

8. PR: A company may create favorable impression among the youth if

they sponsors small events like college festivals, universityprograms, school functions, fashion shows, quiz programs etc.

CONCLUSION


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CONCLUSION

As a result, market segmentation is important to companies

so that firms can easily enter the market and have apotential growth. If PepsiCo does not target young

population in the beginning, it is hard to occupy the market

and compete with its competitor which is Coca-cola. Pepsi

can continue hire popular celebrities to advertise theirproducts in different market such as David Beckham

attracts sport enthusiast and Jay Chou attracts youths

where this really can boom the sales. Moreover, Pepsi can

come out with as many new innovative products as theycan depend on countries cultures. With this target, Pepsi

can enter many countries market to gain more profits.

Pepsi Marketing From Pakistan

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