Pepsi summer training project

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ANALYSIS OF

TROPICANAS

COMPETITVE PROFILE

IN THE

PACKAGED

FRUIT JUICE SEGMENT

Submitted by-

Abhishek agarwal


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m.b.a. (amity

university)

CONTENTS

PEPSICO PROFILE 5

COMPANY ANALYSIS & PORTERS DIAMOND MODEL 7

PORTERS FIVE FORCES MODEL & VALUE CHAIN 9

THE BCG MATRIX 13

SWOT ANALYSIS OF TROPICANA 14

CORE COMPETENCY OF PEPSICO 16

KEY FACTORS FOR SUCCESS 17

PACKAGED FRUIT JUICE MARKET IN INDIA 18

TROPICANA HISTORY 21

BOTTLENECKS IN THE JUICE INDUSTRY 30

ANALYSIS OF THE PACKAGED FRUIT JUICE MARKET 33

CONCLUSION 53

BIBLIOGRAPHY 54

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ACKNOWLEDGEMENT

It has been a great pleasure to work with an esteemed world class organization like PEPSICO.

I am especially grateful to MR.AMIT SRIVASTAVA, who gave me an opportunity to work

with him and his team as well as for their constant support & guidance.

I would also like to thank MR.AMOL SHARMA & MR.SANJAY KUMAR for their

suggestions they provided me during my entire summer internship during June-July (2007).

Its been a tremendous pleasure to work under the guidance of my Faculty Mentor PROF. (MS)

EKTA RASTOGI. I would take this wonderful opportunity to dedicate her, my project which

without her consistent academic guidance & inspiration would never have been possible.

I would like to take the unique opportunity to express my gratitude to the Director General of the

Amity University, Lucknow Campus Major Gen. K.K OHRI, AVSM (Retd), MR.MUKUL

GUPTA, Director, Corporate Resource Centre, (CRC) for providing me a unique opportunity to

enhance my core competence in the dynamic discipline of my core interest and passion in

finance.

Finally, I would like to express my sincere gratitude to my family and friends for their

cooperation & motivation.

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PepsiCo is one of the most successful beverage and snack food business in the world. The

company consists of: Frito Lay Co, Pepsi-Cola Co and Tropicana Products and a variety of

other products.

BRIEF HISTORY OF PEPSICO:

PepsiCo was funded in 1965 by Donald M. Kendall, Pepsi-Cola president and Herman W. Lay,

President of Frito-Lay.

Pepsi Cola beverage business was founded at turn of the century by Caleb Bradham, a New

Bern N.C druggist, who formulated Pepsi Cola. Pepsi Cola Company now produces and markets

nearly 200 refreshment beverages to retail, restaurants and food service customers in more then

190 countries and territories around the world and generates revenue of over 18 billion dollars.

The soft drink industry customer base is probably the widest and has deepest base in a world that

is flooded with so many categories. According to Beverage Digest, the customer base for soft

drinks is a whopping 95% of regular users in the United States. This represents a large field of

potential customers for Pepsi Cola.

Pepsi could just use the majority fallacy to market their product. Pepsi prefers to segment itself

as the beverage choice of the New Generation, Generation Next or just as the Pepsi

Generation. These terms adopted in Pepsis advertising campaigns are referring to the markets

that marketers refer to as Generation X.

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The Generation X consumer is profiled to be between the ages of 18 to 29. They have high

expectations in life and are very mobile and active. They adopt a lifestyle of living for today and

are not worried about long term goals. Pepsi has a main emphasis on this segment and also have

a focus on the 12-18 year old market. Pepsi believes that if they can get this market to adopt their

product, then they could establish a loyal customer for life.

Pepsi Cola is situated in an industry that is dominated by two competitors, Coca-Cola and of

course themselves. Although, Pepsi and Coke basically go after consumers who purchase soft

drink beverages, Coca-Cola targets its products at the head of household. This is evident in many

of the ad campaigns such as Always Coca - Cola which refers to the traditional beverage

heritage of its product. They also reinforce this in the name Coca-Cola Classic which is

inferring to the older consumer which reflects an image of value, reliability, and old time values.

Pepsi customers buy nearly five billion gallons of soft drinks per year. Pepsi customers buy their

products because of taste, price, packaging, promotional factors and of a wide variety of brands.

Pepsi customers also buy their products due to the high accessibility of Pepsi brands. Pepsi

products are distributed to many outlets. For example, supermarkets where Pepsi buys large shelf

area and display areas so the customer can find them easier, Convenience stores, gas stations,

delis, restaurants, movie theaters and almost and other conceivable spot.

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COMPANYANALYSIS

EXTERNAL ANALYSIS (PEST):

Pepsi is situated in an environment that is ever changing and

dynamic. Pepsi must be concerned of changing taste of the

consumer and be able to respond to it immediately. They also need to be

financially strong to keep up with a powerhouse like Coca-Cola and be able to strike back in the

long running cola war. The main consumer group for Pepsi is teenagers. They started with the

scholarship program. Then, the idea expanded and musical education program was initiated. It

was supported because it was fun and educating at the same time.

Pepsi must also be able to respond to different cultures in the international environment. Pepsi

has also to deal with such environmental issues like the supply of raw materials to produce their

products. PepsiCo and moreover Pepsi is subject to the lifestyle changes, because it is based on

the advertising campaigns carried on by people with a special lifestyle.

PepsiCo is subjected to new techniques of manufacturing for their three business sectors, snack

food, juices and soft drinks. Therefore, it has to pay attention to the new distribution techniques

and have to fix their attention in the competence developed to know about the new products.

As for the changes, in Pepsi, the franchisee system is currently being dismantled and being

replaced with one bottling unit across North America. This restructuring will allow Pepsi to act

as one unit and eliminate competition with private labels and uncooperative franchisee bottlers.

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Secondly, Pepsi is starting to make strides in developing foreign markets. Pepsi is beginning to

pull out of some Coke dominated markets and beginning to sell up in coming foreign markets

where Coke is not dominating, like India and China.

PORTERS DIAMOND MODEL (Competitive Advantage):

Pepsi has a competitive advantage over Coke because of the image it portrays. Pepsi promotes

itself as the choice of the New Generation. Pepsi gets this advantage by implementing such

large marketing projects like Project Globe. This marketing plan, in which Pepsi spent 637

million dollars over five years, is, to introduce the new rich deep blue coloring of its packaging.

The rich deep blue colorrepresents eternal youthfulness and openness. Marketing plans like

these has made Pepsi one of the coolest brands recognized among teens in the top five and the

only beverage product in this category.

Another competitive advantage that Pepsi has is in their product is Mountain Dew. Mountain

Dew has grown a staggering 74.1% over the last five years. It has a 6.3% market share and has

recently become the #4 soft drink in America.

Pepsi also has an advantage as an innovator in their field. They will be the first soft drink

makers to introduce a new one-calorie soda called Pepsi-One with, just approved by the FDA,

Ace-K. This new sweetener is slated to be a break through for diet soda in which it limits the

after taste associated with diet soda and brings a more cola taste to the product.

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PORTERS FIVE FORCES MODEL:

The three different markets of PepsiCo: the soft drink market, the snacks market and the chilled

orange juice market are being treated as the same industry.

Threat of entry: Established brands with a lot of experience in the market have a good

channel of distribution. The brands deliver the products directly to the supermarket; this

means that it is necessary for a big company structure (lorries, warehouses, producing

plants, etc.) to arrive at retailers and supermarkets which require a big investment of

money.

Suppliers: Suppliers well look that at first sight, suppliers are not a problem because its

easy to find potatoes, corn and oil suppliers. The problem here is the possibility of

variability of prices in the raw materials caused by a bad year of harvesting or there is

another petrol crisis.

Buyers: Considering that buyers are the final consumers, in these markets, the consumers

get used to one kind of taste and they have these products for the importance of the brand.

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Substitutes: In these three markets, its quite difficult to find substitutes. More than

substitutes, fashion, trends and consumers tastes are gaining more importance. Suddenly,

people have stopped orange juice for breakfast and started taking more milk or coffee in

mornings. Its quite difficult to find a substitute for these products because normally, the

people get used to one kind of taste of cola and then it is very difficult to try to adapt the

public to a new cola.

Competitive Rivalry: These three markets are full of rivalry. First, there is the Cola

market where Coca-Cola owns an incredible 51% market share followed far away by

Pepsi with a 21% market share. It is very difficult to penetrate in this market.

Then, there is the Snack market where Lays has 40% market share, the second most

important brand is Procter &Gamble (P&G), in this market the shares are more

distributed, but still being two majors competitors that have most of the market.

The last is the orange Juice market which may be the most open market where there is a

lot of competence and there is no major brand that holds over the market.

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PORTERS VALUE CHAIN - INTERNAL ANALYSIS

PRIMARY ACTIVITIES:

Inbound logistics: Because the company is in a competitive environment, it is not

possible to recover the increasing costs with a higher pricing of the final products. For

this reason, PepsiCo has a special way to purchase the raw materials. They use futures

contracts for covering different fluctuations in the raw material market. (primarily oil,

corn, fuel, etc.)

Operations: In Orange juice products, they only use non-concentrate orange juice, for it

creates a very tasty and healthy product completely natural. Pepsi just creates the liquid

that is sold to the bottlers, then these bottlers can the liquid and then are sold to the

customers.

Outbound logistics: PepsiCo use the system direct store distribution. This implies

that PepsiCo products are delivered to the retailer and are put forward directly on to the

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shelves. It provides a great business control to PepsiCo and reduces work for the retailers

which give it a competitive advantage over most of their competitors.

Marketing and sales: This is a very powerful tool that PepsiCo use. Service that makes

PepsiCo value is the direct store distribution.

SUPPORT ACTIVITIES:

Procurement: Here, PepsiCo uses economies of scale. Also, the raw materials are

bought in future contract to prevent higher costs in the future because of high prices of

the raw materials.

Technology development: More than technology development, customer preference is

important. For knowing the customers preferences and wants, it is necessary to study the

customers behavior. For e.g. Tropicana Twister shelf-stable juice products had a very

important volume growth because the PepsiCo relaunched the brand in 1.75 plastic

bottles instead of smaller glass bottles. This provides to the customers, more value and

convenience.

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Human resources management benefits: Highly competitive compensation, bonus

opportunities at many levels, eligibility for stock options for almost all positions.

THE BCG MATRIX:

T

ROPICANA

PEPSI

FRITO-LAY

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Frito-Lays Inc is a Cash Cow for PepsiCo. It generates more cash than it needs to maintain its

share market. Frito-Lays is the leader of its market and has its principal competitor very far in the

market share. PepsiCo should maintain this product in the same way and invest its profits in

companys other products.

Tropicana is a question mark for PepsiCo. It is due to new acquisition, and although it is a

product leader in its market, PepsiCo has to invest in Tropicana for achieving a bigger market

share and to increase the international market share.

Pepsi is very difficult to be placed because, in spite of the fact that it generates more cash than it

needs to maintain its share market, it is not the leader of its market. It can neither be considered

as a star product because of the same reason and then it probably could be placed in the middle

of the matrix.

SWOT ANALYSIS:

STRENGTHS

A financially strong company with Frito-Lays as a very strong brand, which is a world

leader in the snack chip industry having a 40% market share.

Promotional programmes which makes them world-wide leader in marketing.

Focused only on young population.

Diversification, which brings ineconomies of scale and other large financial advantages.

Competitive prices, as the production line is very well developed and the products are

cheap and accessibleto everyone.

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Flexibility to adjust to new trends.

The Research of the taste.

Comprehensive system of rewarding and educating its employees.

Enough growth momentum for short term.

Industry leading company in terms of ROE.

Diversified product portfolio.

Strong sales on convenient stores.

WEAKNESSES:

Pepsi may be one of the weaknesses, since the share it has is 21% which is much below

than that of the Coca-Cola Company, with a 51% share.

No Promotion for the Other PepsiCo Products

Approaching the New Markets

Lack of long term strategy

Low payout ratio

Weak international distribution channel

Weak sales on fountain.

OPPORTUNITIES:

New markets where the competence is not established yet.e.g. In china.

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NFL Sponsorship Rights (largest football league) which would enable PepsiCo to have a

great coverage at all games, enabling them to target the young and hip market.

Still low soft drinks consumption in developing countries.

Strategic alliance for international distribution with other beverage company.

THREATS:

Size of Company

The increasing size of the company demands a varied marketing program. This in turn

requires investment in capital and energy.

Market Threats

PepsiCo Beverages now has to compete in an aggressive market. No longer is Coca-Cola

the only rival. Cott, Schweppes and Kraft are emerging as strong competitors.

Increased buying power & volume of retailers.

Decreasing soft drinks demand from the young age.

Less brand loyalty in non-CSD beverage market.

CORE COMPETENCIES:

For Pepsi, efficiency, innovation in marketing techniques & customer responsiveness are the

core competencies. Using less input in the value chain of its primary activities, Pepsi is able to be

more efficient and to attain a lower cost structure.

Moreover, PepsiCo built its competitive advantage mainly by achieving greater economies of

scale in the sectors of communication, distribution and bottling thus reducing production costs.

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Marketing and Customer Responsiveness:

Extensive advertising campaigns are used to target young people.

Furthermore, Pepsi keep the consumers perception waiting by acquiring Mountain Dew, and

creating Pepsi blue. Improving the quality of the companys product offering is consistent with

achieving customer responsiveness as in developing new products with features that existing

products lack.

Branding Equity:

Comparisons are made between PepsiCo brands, competitive brands, and other global brands by

company over time which is used to focus managerial attention on how PepsiCo brands and

marketing programs are performing towards their competitors. This is a successful method of

understanding the consumer behaviour and also to project the caring Pepsi-Cola image.

KEY FACTORS FOR SUCCESS:

When Pepsi-Cola was created, the management was looking for the recipe for

success that would also be matched with the creation of a unique name and logo.

Thus, the whole cola war story was the driving force of every change Pepsi implemented in its

business strategy.

The creators of Pepsi decided to use the same colors and lettering as Coke, simultaneously

promoting and expanding the same product.

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In the short run, the strategy worked out and allowed Pepsi to take advantage of the Cokes

previous business innovation. However, in the long run, Pepsi would have to build its own

reputation and differentiate itself from its rival.

Basically at that time, Pepsi focussed on achieving lower cost production in its bottling and

distribution units. Therefore, the promotion of their products was put aside by the result of this

strategic choice. The financial crisis commanded important changes with regards to innovation.

From being a follower, Pepsi became the leading innovator.

PACKAGED FRUIT JUICE MARKET IN INDIA:

Total Size:

182 million litres Juice Market, 19mn packaged.

Annual Growth Rate:

40-50%

Major Players:

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Dabur, Pepsi, Leh Berry & Mother Dairy.

Driving Forces:

Product innovation, expanding market and increased consumer preference for healthy foods.

Current Market:

Rs110-crore

Future Projections:

Expected to reach Rs. 170 cr by next year.

The fruit juice/nectar market is projected to grow at a scorching pace of 40 %, whereas a Tetra

Pak study has found that a whopping 86% of the fruit juice market is still lying untapped.

FRUIT JUICE SEGMENT POISED FOR 30% GROWTH:

With people turning more health conscious, the non-carbonated beverage segment has become

one of the fastest growing and most exciting businesses at the moment. Evolving from drinks

containing a hint of herbs or vitamins, beverages have become an important delivery vehicle for

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efficacious amounts of nutritional ingredients. Beverages are unusual products, in that everyone

expects to try new varieties, even from established brands.

While all segments of the beverage market are evolving, the growth seems to be directed more

towards healthy, light and low-calorie drinks in particular organic and fruit juice varieties.

The Rs 500 crore non-carbonated beverage market in the country is composed of fruit drinks,

nectar and juices. While the fruit drink segment is estimated at Rs 250-300 crore (branded and

packaged), the juice market is valued at Rs 150 crore and the nectar is a small category of

about Rs 35-50 crore. And the popular brands vying for a share in the sector are Parle's Frooti,

Godrej's Jumpin, Coca Cola's Maaza, Pepsi's Tropicana and Dabur'sReal, Nestls Milo,

Soy milkfrom ProSoya and branded fruit juices from Surya Foods, etc.

The branded fruit juice market in India is estimated to be worth Rs500 crore organized fruit

beverage market (nectars, drinks and juices combined) and the segment is growing at about 30

per cent per annum. Big players like Dabur, Pepsi, Godrej and Parle Agro are already in the

market and in view of the swift growth in the market. Newcomers like Surya Foods and Agro,

Mother Dairy, Ladakh Foods, Pioma Industries have come into the market with new products

in the recent years. Market share of Daburs real fruit juice is now 60%.

Dabur's Real Fruit juice is the market leader followed by Pepsi's Tropicana. The two major fruit

juice makers in India, Tropicana and Dabur are going all out to tease Indian taste buds with

ethnic flavors. However, Godrej's Jumpin is slowly achieving its space in the fruit juice market.

Godrej Industries Foods Division has introduced fruit juices under the Xs brand, which earlier

only consisted of nectars. Parle Agro's Frooti and N-Joi too are doing well in the market. Delhi

NCR-based Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits, has forayed into the

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juices segment. Mother Dairy has recently launched the Safal brand

of juices. Safal is currently available in orange, mixed fruit, grape and

an orange-apple combination. Ladakh Foods, makers of the Leh Berry

sea buckthorn berry drink, has now launched an apple-peach

combination juice and a mixed fruit variant. Ahmedabad-based Pioma

Industries, makers of the Rasna brand of soft drink concentrates; test marketed a diluted mango

juice in Andhra Pradesh recently. There are now racks filled with fruit juices, nectars and

drinks.The health-drinks business is also witnessing plenty of churn, with the segment growing

at a robust 20-25% in the past few years, compared with less than 8% for carbonated drinks in

the past couple of years. The non-carbonated beverage market is estimated to be worth more than

$250 million (in urban areas). According to a recent ACNielsen study, among fruit juices,

Dabur's Real is the market leader with 60% share, followed by Pepsi's Tropicana (33%). In the

fruit-based drinks category, Coca-Cola's Maaza is the leader, followed by Parle's Frooti and

PepsiCo's Slice.

Fruit juices in the unorganized segment are considered cheaper and fresher by the consumers;

even though they are often unhygienic. Pepsi with its brand Tropicana and Dabur Foods through

Real brand compete in the market. Coca Cola India its only juice brand Maaza is further is

talking to multi-packaging to attract customers. Mother dairy is also in the line to access the

market effectively through Safal brand.The awareness about health and more sophisticated

cocktail culture has driven growth in the packaged fruit juice segment.

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TROPICANA-HISTORY:

Tropicana was founded in 1947 by Anthony Rossi as a Florida fruit packaging business. The

company entered the concentrate orange juice business in 1949, registering Tropicana as a

trademark. In 1954, Rossi pioneered a pasteurization process for orange juice. He started his own

fruit packing business and shipped jars of sectioned fruit and fresh juice to hotels and restaurants

in refrigerated trucks. For the first time, consumers could enjoy the taste of pure not-from-

concentrate 100% Florida orange juice in a ready-to-serve package. The company went public in

1957, was purchased by Beatrice Foods Co. in 1978, acquired by Kohlberg Kravis & Roberts in

1986 and sold to The Seagram Company Ltd. in 1988. Seagram purchased the Dole global juice

business in 1995. PepsiCo acquired Tropicana, including the Dole juice business, in August

1998. Today, Tropicana is the world's largest marketer and producer of branded juices .The

Tropicana business, which is now profitable, was merged with PepsiCo in 2001; following the

merger of the cola major's three international beverage units - Pepsi-Cola International,

Tropicana International and Gatorade International into one single new company PepsiCo

Beverages International (PBI).

PEPSI UNVEILS SUMMER PLANS FOR TROPICANA:

Tropicana, Pepsi Foods' pure juice brand, for which the soft drinks major, has identified a

consolidated consumer-push summer plan. For Tropicana, the focus for the summer will be

product innovation, distribution, market penetration and outlet expansion.

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In addition, the Tropicana brand's health and nutrition positioning will be reiterated. For

example, one glass of Tropicana juice counts as one of the five portions of fruit and vegetables

that should be eaten everyday as recommended by health and medical experts. Tropicana fruit

juices are fat-free and with no added salts, being high on potassium content to regulate nerve and

muscle function and blood pressure, and that Tropicana juices are a good source of folic acid,

which helps reduce the risk of heart disease.

In addition to the existing Tropicana premium gold variant, the company recently introduced a

second category of juice - Season's Best fortified with vitamins A, C, E and calcium.

The pure juices market, estimated at Rs 100 crore, is split almost entirely between Tropicana

and Dabur India's Real brand, with the latter enjoying a slight edge over Tropicana in terms of

market share.

Pepsi Foods had recently announced a foray into contract farming of citrus fruits such as oranges

and Keanu in Punjab as a first move towards the backward integration for its Tropicana brand

with a long-term view of 100 % localization of orange juice and Pepsi India possibly becoming

the supply hub for other regions.

TROPICANA TOPS ON TASTE, HEALTH & PURITY PARAMETERS

Packaged fruit juices are as much recognized as social drinks now, with dominant consumption

being observed in the company of family and friends.

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The company sources orange juice concentrates from Brazil. Tropicana is available in orange,

apple, grape and cranberry flavours and a cocktail in Ruby-red. They come in Tetrapaks of 1 litre

and pet bottles of 500 ml. Pepsi also markets an energy drinkfor the sports personnel, called

Gatorade and a sugar-free Diet Pepsi. Pepsi, in association with Hindustan Lever Ltd (HLL) is

planning to launch Lipton iced tea in a couple of months. The move is to take on its arch rival

Coca Cola which was successful in its business in tea and coffee, both hot and cold in association

with McDonald's.

According to Financial Express, the market for Packaged Fruit Juices is expected to be around

Rs 350 crore. The market leader is Dabur Real with a share of 57% and Pepsi Tropicana with a

share of 30%.

The awareness and trial levels of packaged juices are higher within the SEC A category, than

among SEC B consumers, the majority of whom rated these as aspirational.

Consumers perceive fruit juices as a grocery purchase, 60 per cent of the respondents consume

fruit juices at home. While 55 % of the respondents consumed 1-litre packs at home, 45%

consumed 200-ml packs.

The Rs 100-crore packaged fruit juice market is estimated to be growing at 25-30 per cent

annually, with Tropicana and Dabur Foods' Real holding 40 per cent market share each.

AN OVERVIEW OF THE JUICE PLAYERS IN INDIA:

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Overall strategy of Dabur Foods is to offer consumers a healthier juice and the widest choice

possible.

Real Activ

The Real fruit juice is targeted towards the housewife and kids and the Real Active juice is

targeted towards the young adults between the age of 24-35. They are very clearly focussed on

the in-home segment and soft drink is more out- of- home impulse purchase.In fact, the

segments for Real as well as Activ are the same. What one needs to do is to capture the target

consumers and lure them to Real, make them Real loyal.

Real Fruit Juice is a packaged, 100 per cent preservative-free fruit juice brand offering

consumers the great taste and wholesome nutrition of freshly squeezed juice in a hygienic and

attractive pack. Dabur Foods is the only juice company in India and among the top 5 companies

in the world to use the latest spin cap tetra pack, cold fill technology and spill-proof double

seal cap for packaging. Real Fruit Juice is India's first and only packaged Fruit Juice brand

to get SGS (Societe Generale de Surveillance) certifications for high safety standards used in

packaging that conform to the stringent HACCP and GMP standards. The brand has also won the

award for'Highest sales growth achieved by a brand' in the non-dairy category.

Real Marketing has been the leader and the driving force for Dabur. Much of Dabur Foods

youthfulness comes from Real. The money that has been put behind its advertising has created

a perception that has boosted the companys overall image. (Currently, more than two-thirds of

Dabur Foods Rs 12-crore ad budget is spent on Real; the rest goes into Coolers.)

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'Real' was recognized as the 'Fastest growing brand' for 2001-02 in the first ever beverage

industry seminar in India. Real Fruit Juice is a market leader in packaged fruit juice category

commanding more than 55% market share.

TROPICANA:

A juice is one category that Pepsi is pushing hard and is one of its thrust areas. Though the sales

are relatively low, the brand still manages to record a growth rate of around 45% to 50% every

year. Over the next two years, this will become a big category, especially when one adds

Tropicana, and other fruit-based juices like Slice and Mangola.

India is a country where we dont eat too much fruit and dont drink anything out of a pack, since

it is supposed to contain colours and additives. Moreover, Indian consumers prefer to drink sweet

juices and Tropicana orange juice is not sweet but slightly sour. Thus, we had manifold problems

on hand. We decided to carry the taste as the differentiating factor and called it the taste of good

health. The taste of good health isnt necessarily delicious. Go ahead and enjoy it. This worked

wonders, and Tropicana is doing extremely well. This idea suited Indian consumers, who prefer

things fresh. Thus, while carving out the strategy for Tropicana, we had to overcome a lot of

cultural barriers. Nowhere else in the world is Tropicana marketed as the taste of good health.

SAFAL:

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Mother Dairy India Ltd (MDIL) relaunched its Rs 165-crore, fresh and frozen vegetable brand

Safal, with focus on the juice market.

The company has launched packaged fruit juices under its flagship brand, Safal. Starting from

Delhi, the product is scheduled for launched on a nation-wide scale in the months to come. The

company says that having pioneered the marketing of fresh and frozen vegetable products

backed by a modern produce handling and processing facility, Safal is now ready to take on the

packaged fruit juices category.

Mother Dairy has launched packaged fruit juices under the Safal brand. This is nearly 20 years

after it launched its 'Safal' brand of processed encouraging small and medium scale units in

export promotion efforts.

A comprehensive range of services is provided to the overseas buyers. "We inform and advise

them of product availability, price structure, reliable structure, delivery schedules, quality control

status and special information that an overseas buyer may need.

FRESHGOLD FROM SURYA FOODS & AGRO:

Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits have forayed into the juice

segment. It has set up a state-of-the-art manufacturing facility in Noida, Uttar Pradesh, with an

investment of Rs 25 crore. The plant has a capacity of producing 1.5 lakh litres of juice per day.

Branded `Freshgold', the one-litre juice in cartons is available in supermarkets and malls in and

around Delhi for Rs 60.

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LEH BERRY:

Hoping to break even in 4 years, the company commands a market share of approx 10%.

Marketing Strategy of the sea buckthorn juicer, the only juice having a tie up with thedefense

canteens. Unfortunately, harping on medicinal properties is not what lured the consumers. Taste

and thirst-quencher is what they look for in a juice, primarily. Thats why the juice failed

initially.

Ladakh Foods has launched Leh Berry a couple of months ago. The juice will be competing with

established players as Tropicana and Real. Leh Berry believes it has the advantage of a fresh

taste, but its competitive edge may well lie in its positioning. Ladakh Foods is marketing Leh

Berry as a nutrition drink (it prefers not to use the word health, with its bitter, medicinal

associations), based on the chronicled nutritional properties of the seabuckthorn fruit. Ladakh

Foods' target of capturing at least 7 per cent of the market share within a year and 20 per cent by

2006-end is ambitious.

BOTTLENECKS IN THE JUICE INDUSTRY:

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Price: Pricing is one of the major worries. Price is a barrier to this category because

when you give fresh juice, packaging becomes critical. So, what the industry is now

trying to do is to offer different packaging to suit different price points while

simultaneously working on ways to offer better quality and an improved taste.

Packaging: This is an interesting one. The costs need to be controlled to keep the prices

low. Currently, PET bottles are another reason for the high prices. On the other hand,

with the increasing number of health conscious consumers, there is more demand for

better and safer packaging. Health consciousness drives the demand for liquid cartons.

Indians of all ages are becoming health and calorie conscious, showing a preference for

healthy beverages like fruit/vegetable juices that contain no preservatives, no color and

no flavour additives. Moreover, in an effort to differentiate the image of juice drinks

away from carbonates, these products were introduced in liquid cartons.

Liquid cartons are being preferred since the packaging allows long shelf life, allows

preservation of the original taste and flavour and also allows the juices to be stored

without refrigeration.

Liquid cartons also make it possible to transport the perishable products across long

distances, and juices of seasonal fruits can be made available to the consumer throughout

the year. Therefore, the growth rate of liquid cartons has been impressive during the

review period, and is expected to grow further in the coming years.

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Excise: Though the future of this industry is luring, the government is planning to levy

8% excise on food products including packaged fruit juice. This would entail revaluation

and resetting the goals and targets for the juice Majors.

Tax structure: Pricing is also the downfall of fruit juice importers. It is difficult to make

inroads into the middle class as it finds the prices prohibitive. Sales tax on imported

products is not uniform across the States. In Tamil Nadu, it is 21 per cent, much lesser in

Andhra Pradesh and Karnataka. So, a one-litre bottle of Berri costs Rs 110 while a

Tropicana is in the Rs 75 range. This obviates any international presence in the market,

wherein the global players dont have an option but to enter through the Franchisee

model.

Forward and backward integration This is one aspect that producers have recently

started tackling and has become imperative as a cost-control measure.

Price: Offering different price points to cater to different sets and tastes of the customers.

For instance, a 125 ml pack of fruit drink Maaza from Coca-Cola India at just Rs 5 and a

500 ml Tropicana blend for Rs 25.

Promotion Health and hygiene would be the linchpin of the campaigns in the future.

The organized players are more hygienic than roadside fruit juices and are a big hit with

yuppies.

Niche markets This is one aspect very particular to the juice market. For this segment,

since the consumers have specific needs from the products, be it Impulse purchases,

health conscious buyers, seasonal purchases, regular servings, nutritional values or

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medicinal prescription, they become more appraised on the specifics and attributes of the

product they are looking for. Down the line, the producer and in turn the marketer needs

to be very clear in terms of the content that he is producing, and selling to the customer,

and consequently, the customer who is ready to buy that.

Specific products for Specific consumers thats the key! . Taste and thirst-quencher

is what they look for in a juice, primarily.

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ANALYSIS

OF

THE

PACKAGED

JUICE

MARKET

QUESTIONAIRE

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NAME OF THE OWNER:

NAME OF THE OUTLET:

ADDRESS:

STREET NAME:

CITY:

PHONE:

PLEASE TICK MARK THE BOXES WHICH YOU THINK ARE ACCORDING TO YOUR

KNOWLEDGE IS CORRECT:

Classification of the outlet:

Convenience/Bakery

Restaurant

Grocery

Others (institution)

Do you sell fruit juices?

YES NOIf yes then, which brand & flavors are sold in your outlet:-

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Brand Flavors

Tropicana

Real

Safal

Gold

Imported

Others

Which flavors generally demanded by the customers for fruit juice?

Flavors Customer Demand Rating

Mango

Mix Fruit

Orange

Apple

Pineapple

Others

Who are the more frequent buyers of these juices:-

CHILDREN YOUTH MID-AGED OLD

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Are the flavors that you sell are available as and when needed?

Yes No

Which packaging of juice is frequently bought by customers?

200 ml 500ml 1 Lt

METHODOLOGY

SAMPLING DESIGN:

SAMPLING PROCEDURE:

Random sampling

SAMPLE SIZE:

110

SAMPLE UNIT:

All retail outlets of Rajajipuram, Alambagh, Lda, Ashiana & Bangla Bazaar.

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SOURCES OF DATA:

Primary data:

From structured questionaire

SECONDARY DATA:

From magazines & internet

OUTLET

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SHARE

ALAMBAGH & ASHIANA-LDA

OUTLET CATEGORY OUTLETS

CONVENIENCE/BAKERY 24

RESTAURANT 4

GROCERY 25

OTHERS 2

TOTAL 55

In Alambagh, Grocery shops have a share of 45.45% whereas Convenience/Bakery shops are having

a share of 43.63%. Some of the shops, mainly convenience/bakery are of high value selling which

have a large variety of items and are having an appealing & pleasing shelf space. So, those shops

need more attention.

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CONVENIENCE/BAKERY 6

RESTAURANT 5

GROCERY 1

OTHERS 1

TOTAL 13

In Ashiana-Lda, Convenience/Bakery shops are having a share of 46.15% & grocery 25%. This is a

very wide market and has a great potential.

RAJAJIPURAM & BANGLA-BAZAAR

OUTLET CATEGORY NO OF OUTLETS

BAKERY/CONVENIENCE 24

RESTAURANT 4

GROCERY 25

OTHERS 2

TOTAL OUTLETS 55

In Rajajipuram, convenience & grocery shops are having the same share i.e., 37.5%. The area is still

developing and is having a great potential .


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OF

FLAVOURS


FLAVOURS OUTLETS

MANGO 21

ORANGE 18

MIX-FRUIT 16

APPLE 8

PINEAPPLE 6

LYCHEE/GRAPES/GUAVA

LYCHEE/GRAPES/GUAVA 5

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Mango flavour has the highest share in Alambagh i.e., 28%. Orange & mix-fruit flavours are the

second preference with 24% & 22%.

FLAVOURS OUTLETS

MANGO 5

ORANGE 4

MIX-FRUIT 9

APPLE 6

PINEAPPLE 3


In Ashiana-Lda, mixfruit flavour has the highest share of 32%. Apple flavour has the second

preference of people and has the share of 21%.


FLAVOURS OUTLETS

MANGO 9

ORANGE 6

MIXFRUIT 7

APPLE 4

PINE-APPLE 2


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In Rajajipuram, mango flavour has the highest share of 30%. Mix-fruit and orange flavours are their

second preference having a share of 23% & 20%.

FLAVOURS OUTLETS

MANGO 11

ORANGE 7

MIXFRUIT 10

APPLE 3

PINEAPPLE 2


In Bangla-Bazaar, Mango flavour has the highest share of 31%.Mix-fruit & Orange flavours are the

second preference of the people with 28% & 19%.

AGE-GROUP

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DISTRIBUTION


AGE-GROUP OUTLETS

CHILDREN 11

YOUTH 26

MID-AGED 30

OLD 1

In Alambagh, mid-aged people have the highest share of 44% with youth having a share of 38%.

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AGE-GROUP OUTLET

CHILDREN 4

YOUTH 10

MID-AGED 9

OLD 0

In Bangla-Bazaar, youth is having the highest share of 43.47% with mid-aged people having a share

of 39.13%.

AREAWISE

SHARE

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OF

JUICES


JUICES OUTLETS

TROPICANA 20

REAL (ACTIV, TWIST) 24

GOLD 11

IMPORTED 3

BRITTANIAS TREAT 2

ANIK FRUITONIK

2

NONE 24

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Daburs Real share is the highest with 28% share with Tropicana having a share of 23% which is

comparatively less than Daburs Real.

JUICES OUTLETS

TROPICANA 9


GOLD 5

IMPORTED 0

BRITTANIAS TREAT 2

ANIK FRUITONIK 0

NONE 2

In Ashiana-Lda, Tropicana has the highest share of 36% with Daburs Real having a share of 28%.


JUICE OUTLETS

TROPICANA 6


GOLD 2

IMPORTED 0

BRITTANIAS TREAT 1

ANIK FRUITONIK 1

NONE 4

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In Rajajipuram, Daburs Real is having a share of 33% & Tropicana having a share of 29%.

JUICE OUTLETS

TROPICANA 9


GOLD 2

IMPORTED 0

BRITTANIAS TREAT 0

ANIK FRUITONIK 1

NONE 13

In Bangla-Bazaar, Daburs Real is having a share of 28% which is slightly higher comparatively to

Tropicanas share of 26%.

AREAWISE

ANALYSIS

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OF

PACKAGE MOSTLY

CONSUMED

ALAMABGH & ASHIANA

PACKET SIZE OUTLETS

200 ML 24

500 ML 7

1L 29

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In Alambagh, the packet size mostly consumed is of 1 litre with 200 ml pack being the second

preference.

PACKET SIZE OUTLETS

200 ML 8

500 ML 1

1L 8

In Ashiana-Lda, both the 200 ml pack & 1 litre bottle is mostly preferred each having an equal share

of 47%.


PACKET SIZE OUTLETS

200 ML 12

500 ML 7

1 L 11

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In Rajajipuram, 200 ml package is having the highest share of 40% with 1litre & 500 ml pack having

being the second preference & having a share of 37% & 23%.

PACKET SIZE OUTLETS

200 ML 6

500 ML 4

1 L 9

In Bangla-Bazaar, 1litre pack is having the highest share of 47% with 200 ml & 500 ml pack having

a share of 32% & 21%, being the second preference.

RECOMMENDATION & CONCLUSION

Pepsi, however, being a very large company, has a strong presence in the market but inspite of it,

while doing the survey and collecting the primary data from various sources (markets), it was

found that it suffers from some inefficiencies which need to be looked upon with care and

should be given special attention.

The suggestions are as follows:

i. Starting from the promotional aspect, more catchy advertisement about the various

products of PepsiCo should be there in order to differentiate itself from its competitors.

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www.pepsico.in

www.tropicana.com

Database extracted from:

CMIE database PROWESS
http://www.pepsico.in/http://www.tropicana.com/http://www.pepsico.com/index.cfmhttp://www.pepsico.in/http://www.tropicana.com/

Pepsi summer training project

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Transcript of Pepsi summer training project