A THESIS ON

( ANALYSIS OF

MARKETING STRATEGIES-PEPSICO)

By
(Rolika seth)
Enroll no.: 10/FMS/MBA/059

Submitted in partial fulfillment of MBA program at

Faculty of Management Studies,
MRIU, Faridaba
 A THESIS ON

( ANALYSIS OF

MARKETING STRATEGIES-PEPSICO)

By
(Rolika seth)
(MBA IV SEM)

A report submitted in partial fulfillment of

the requirements of
 THE MBA PROGRAM
at Faculty of Management Studies,
MRIU, Faridabad.

TABLE OF CONTENTS
S.No. ITEM

1. ACKNOWLEDGEMENT

2. CERTIFICATE

3. EXECUTIVE SUMMARY

4. OBJECTIVE

5. COMPANY OVERVIEW

6. RESEARCH METHODOLOGY

7. SOFT DRINK MARKET IN INDIA

8. BUYER DECISION PROCESS

9. PEST ANALYSIS

10. SWOT ANALYSIS

11. ANSOFF MATRIX

12. PORTER’S FIVE FORCE MODEL

13. STP ANALYSIS

14. FOUR P ANALYSIS

15. THE COLA WARS

18. CONCLUSION AND RECOMMENDATION

19. BIBLIOGRAPHY

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and
supported me during the writing of this project.
My deepest thanks to Assistant Professor, Mr. Gautum Nagi the Guide
of the project for guiding and correcting various documents of mine with
attention and care. She has taken pain to go through the project and made
necessary correction as and when needed.
I express our thanks to the Director Dr. Chavi Sharma, FACULTY OF
MANAGEMENT STUDIES, FARIDABAD for extending her support.
My deep sense of gratitude to all who provided support and guidance.
Thanks and appreciation to the helpful people for their support.
I would also like to thank my Institution and my faculty members without
whom this project would have been a distant reality. I also extend my
heartfelt thanks to my family and well wishers.

ROLIKA SETH
CERTIFICATE
 OBJECTIVE

The main purpose of this study is determine the different strategies that
are adopted by the companies.

The strategies will be evaluated to see which is the best amongst them
and which are most effective.

1. Acceptability of Pepsi products by the consumers and marketers.

2. Identifying the competitors and positioning Pepsi in comparison

to them.

3. To find out marketing strategy of Pepsi.

4. To analyze the SWOT analysis of Pepsi.

7 To know about customer value of Pepsi.

8. To know about customer perception towards Pepsi brand image

9. To know about customer satisfaction

10. Impact of market strategy on customer

 ABSTRACT

I have decided to present our marketing term paper on PepsiCo after

studying its marketing strategies. I worked on PepsiCo’s product range of

beverages and focused on Pepsi Cola as the subject of our analysis.

I have chosen Pepsi for many reasons. It is one of the biggest FMCG

brands not only in India but also globally. Indeed, Pepsi Cola is one of

the fastest paced FMCG products worldwide. Pepsi posed an exciting

opportunity to study a brand that is automatically associated with youth

and energy.

I worked on Pepsi in order to understand the various aspects of its

marketing strategy that has made it the Number 1 Cola drink in India.

Our team focused on its strategies viz. Coca Cola especially in the city of

New Delhi. I have also researched extensively on Pepsi’s distribution

network and have made suggestions as to how it can further improve its

reach among users in the future.

 Marketing strategies adopted by Pepsi

• Extremely high visibility: enormous resources allocated for

advertising

• Positioned as a product or the youth: targets “Generation Next”

• Unlike global trends, half of the distribution of Pepsi in India done

by Company Owned Bottling Operations (COBOs)

• Very low brand loyalty among consumers, so sales depend on

timely product availability

• Recent entry into rural markets

 COMPANY OVERVIEW

PepsiCo, Inc., established in 1965 through the merger of Pepsi-Cola and

Frito-Lay is a world leader in convenient foods and beverages. The

company consists of Frito-Lay North America, PepsiCo Beverages North

America, PepsiCo International and Quaker Foods North America.

PepsiCo brands are available in nearly 200 countries and territories. Its

success is the result of superior products, high standards of performance,

distinctive competitive strategies and the high level of integrity of its

employees.

PepsiCo offers product choices to meet a broad variety of needs and

preference from fun-for-you items to product choices that contribute to

healthier lifestyles. The company's principal businesses include:

• Frito-Lay snacks

• Pepsi-Cola beverages

• Gatorade sports drinks

• Tropicana juices

• Quaker Foods
PepsiCo’s mission is “To be the world's premier consumer products

company focused on convenient foods and beverages. We seek to

produce healthy financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business

partners and the communities in which we operate. And in everything we

do, we strive for honesty, fairness and integrity.”

The company has two major divisions that are operational in India. The

first division is the traditional Beverages Division. The second division,

and the subject matter of this report, is the Snack Food Division.

The Beverages Division

The company has 37 bottling plants in India, and one company-owned

concentrate plant. Pepsi keeps its concentrate formula, a secret. The main

products are:-

Pepsi Cola
 Diet Pepsi

7 Up

Mirinda

Mountain Dew

Slice

Tropicana Juices

Aquafina
Leher Everess Soda, Dukes Lemonade and Mangola

There is a subdivision of the Beverages division which is under the name

of Tropicana Products, Inc., parent company headquartered in Bradenton,

Florida, and is a division of PepsiCo. In India, the company is

headquartered in Gurgaon, Haryana.

Keeping with the core Pepsi thrust toward youth, Tropicana is dedicated

to producing pure premium juices essential for an active and youthful

lifestyle. The juices of the commonly available fruits produced, packaged

and marketed by Tropicana contain naturally occurring components to

promote good health.

With a 50-plus year history of consistent growth Tropicana today stands

as the world’s only global citrus juice business!

 PepsiCo International

Pepsi-Cola began selling its products outside the United States and

Canada in the mid-1930s, opening in the United Kingdom in 1936.

Operations grew rapidly beginning in the 1950s. Today, PepsiCo

beverages are available in nearly 200 countries and territories. Some of

the major brands include Pepsi, Mountain Dew, Aquafina, Gatorade and

Tropicana.

In addition to brands marketed in the United States, PepsiCo International

brands include Mirinda, Seven-Up, Aquafina, Gatorade, Tropicana and

many local brands.

PepsiCo’s Sustainable Advantage

Three major sustainable advantages give PepsiCo a competitive edge as

they operate in the global marketplace,

(1) Big, muscular brands

(2) Proven ability to innovate and create differentiated products

(3) Powerful go-to-market systems

Their extraordinarily talented and dedicated workforce optimizes these

advantages and creates magic in the market place. Investing in innovation

fuels the brands and this in turn drives top-line growth. Dollars from that
top-line growth are strategically reinvested back into new products and

other innovation, along with cost-savings projects. Thus, the cycle

continues.
 RESEARCH METHODOLOGY

1. TOOLS OF RESEARCH
2. RESOURCE OF DATA
 A Research Methodology defines the purpose of the research, how
it proceeds, how to measure progress and what constitute success with
respect to the objectives determined for carrying out the research study.

The appropriate research design formulated is detailed below.

 Exploratory research: this kind of research has the primary

objective of development of insights into the problem. It studies the main
area where the problem lies and also tries to evaluate some appropriate
courses of action.

 The research methodology for the present study has been adopted to
reflect these realties and help reach the logical conclusion in an objective
and scientific manner.

The present study contemplated an exploratory research

NATURE OF DATA
SECONDARY DATA

Secondary data that is already available and published .it could be

internal and external source of data. Internal source: which originates
from the specific field or area where research is carried out e.g. publish
broachers, official reports etc.

EXTERNAL SOURCES

This originates outside the field of study like books, periodicals,

journals, newspapers and the Internet.

DATA COLLECTION

Secondary data has been used which is collected through articles,

reports, journals, magazines, newspapers reports prepared by research
scholars, universities and internet

SOFT DRINK MARKET IN INDIA

India’s one billion people, growing middle class, and low per capita

consumption of soft drinks made it a highly contested prize in the global

CSD market in the early twenty-first century. Ten percent of the

country’s population lived in urban areas or large cities and drank ten

bottles of soda per year while the vast remainder lived in rural areas,

villages, and small towns where annual per capita consumption was less

than four bottles. Coke and Pepsi dominated the market and together had

a consolidated market share above 95%. While soft drinks were once

considered products only for the affluent, by 2003 91% of sales were

made to the lower, middle and upper middle classes. Soft drink sales in

India grew 76% between

1998 and 2012 from 8,670 million bottles to over 10,000 million and

were expected to grow at least 10% per year through 2012. In spite of this

growth, annual per capita consumption was only 8 8-ounce servings

versus 17 in Pakistan, 73 in Thailand, 173 in the Philippines and 800 in

the United States.

With its large population and low consumption, the rural market

represents a significant opportunity for penetration and a critical

battleground for market dominance.

Experts predict that India’s soft drinks market will continue to grow in

the coming years, overcoming the obstacles presented by the difficulty in

marketing to such a large and diverse population and the relatively high

cost of packaging as a proportion of selling price.

In addition, the success of smaller pack sizes in the carbonates sector has

provided fresh impetus for low cost packaging, particularly as the major

producers look for ways of competing with lower priced local suppliers.

The market preference for soft drinks in India is regional based. While

cola drinks have their main markets in metro cities and northern states of

UP, Punjab, Haryana etc., orange flavored drinks are popular in southern

states. Sodas too are sold largely in southern states besides sale through

bars. Western markets have a preference towards mango-flavored drinks.

Types

Soft drinks are available in glass bottles, aluminum cans and PET bottles

for home consumption. Fountains also dispense them in disposable

containers. The non-alcoholic soft drink beverage market can be divided

into fruit drinks and soft drinks. Soft drinks can be further divided into
carbonated and non-carbonated drinks. Cola, lemon and oranges are

carbonated drinks while mango drinks come under the non-carbonated

category. The market can also be segmented based on the types of

products. The brands that fall in the Cola category are Pepsi, Coca-Cola,

Thums Up, Diet Coke, Diet Pepsi etc. The non-cola segment can be

divided into 4 categories based on the types of flavors available, namely:

Orange, Cloudy, Clear and Mango.

 THE BUYER DECISION PROCESS

Hosts of factors play an important role in a buyer’s decision-making

process. This process lets him/her screen the different options available

and take a final decision.

The 4 P’s (Product, Price, Promotion & Place) or the Marketing Mix of a

product plays a significant role in this intricate process. The final

decision is made based on the marketing inputs and the various

psychological inputs. Every product is perceived in a certain way or

manner. The consumers’ perception of the product is a vital ingredient

and the companies have to ensure that they portray a suitable and

strategic image.
The psychological factors (Culture, Attitude, Learning & Perception) also

play a critical role in the decision making process, but a company can do

little to influence these factors. However, if the suitable market/segment

is targeted while positioning the product the company can generate

positive response from the marketplace.

 PEST ANALYSIS

In order to scan the external macro-environment in which PepsiCo India

operates, it is necessary to analyze various factors that not only posed

some serious threats but also influenced its effectiveness.

Political Conditions

 Although it began its efforts in the mid-1980s, Pepsi was able to make

its entry into the Indian cola market in June, 1990. This was because

of high excise duties and government encouragement of fruit drinks

over carbonated drinks. It was jointly launched by PepsiCo, Punjab

Agro Industries Corporation and Voltas.

 Pepsi got into trouble when within six months after its launch it

caught government’s attention regarding its commitment. Soon after,

a show cause notice was issued to the company for prima facie

violation of the conditions stipulated in the letter of intent with

regards to the production of soft drinks.

 Pepsi had a very significant first mover advantage in India. It had

obtained the government approval for its downstream ventures prior to

the FDI guidelines that made Indian equity holding mandatory.

 The government approval that Pepsi acquired had allowed Pepsi to

carry out acquisition of assets to expand its business in the country.

Pepsi used this clause to buy out 100% stake in some domestic

bottling companies including Gujarat Bottling Company, the former

Coke franchisee in Ahmedabad.

Economic Conditions

 The present Indian soft drinks market can be best described as a

duopoly – the players being Pepsi and Coca Cola. Therefore, Pepsi

has sufficient monopoly power over the consumers.

 In India, soft drinks market has a fairly high price elasticity of demand

which ensures that producers must strike a balance between prices and

sales volume. So Pepsi has decided to peg prices similar to Coca Cola

and try to gain market share and try to gain market share through

vigorous promotional activities.

 Pepsi was launched in India at the time when the country was trying

to open up its economy and was facing serious doldrums. So at the

period of economic instability, Pepsi had to face problems to expand

its operations.
 Social Conditions

 Rising income of middle class in India is a positive indicator for

growth of products like Pepsi and Coca Cola

 Westernized and trendy youth population of India is a another big

market for Pepsi products

 Booming economy , rising purchasing – power of the people and

changing mind sets are factors contributing to the expanding demand

of the pepsi products.

Technological Conditions

 Pepsi has the technology to maintain a highly efficient distribution

network which allows it to satisfy the needs of its customers through

out the country.

 Pepsi’s own bottling plants gives it an edge over its competitors in

terms of quality of the product and control over the product.

 SWOT ANALYSIS

Strengths

High Brand Awareness Weakness

Large number of distributors (100+
in Delhi) Powerful Franchisee
Wide product offering Inferior in fountain soft drink
High accessibility division
Large advertising budget
Wise investments

Opportunity Threats

Per caps 8 oz in India vis a vis 868 Controversies

oz in USA Low brand loyalty
Large untapped rural population Cheaper and large number of
Seasonality substitutes
CUTTING DOWN COSTS Risk of losing market share
STRENGTHS:-

• High brand awareness: - Pepsi is the worlds most famous #2 multi

billion dollar brand and Pepsi is the largest FMCG brand in India.

• Large number of distributors: - The company has both franchise

owned and company owned operations in India. Pepsi in Delhi alone

has more than 100 distributors. Delhi is totally franchise operations

whereas Punjab now is totally company owned

• Wide product offering: - Pepsi is available in glass bottles, aluminum

cans and PET bottles for home consumption. Fountains also dispense

them in disposable containers. Also they provide a large number of

flavors.

• High accessibility: - Pepsi products are available in shops in the most

elite of malls and at the same time in the smallest of shops in the back

lanes of the poor localities.

• Large advertising budget: - Pepsi has the luxury to spend huge

amounts on advertising in a year. This enormous ad budget allows

Pepsi to reinforce their products with reminder advertising and

promotions. This large budget also allows Pepsi to introduce new

 products and very quickly make the consumer become aware of their

new products

• Wise investments: - . Pepsi also has had the good fortune of making

very wise investments. Some of the best investments have been in

their acquiring several large fast food restaurants. They have also

made wise investments in snack food companies like Frito Lay, which

at present time is the largest snack company in the world.

WEAKNESSES:-

• Powerful franchisee : - Ironically, the one strength that has been

credited for most of its success in the past has now become a

weakness for Pepsi. This former strength is the franchise system.

The franchise system in Pepsi Corporate view has become a

liability. Pepsi in today’s market must be able to act as one instead

of several separate units. The franchise system has become a

hurdle to Pepsi because many of these franchises have become

very strong and will not be dictated by PepsiCo on how to handle

their operations. Some of these franchises are unwilling to support

certain Pepsi products and at times produce their own private label

products that are in direct competition with Pepsi products.

 Secondly the franchisees are not willing to make capital

expenditures to keep up with Coca-Cola who is a firm believer in

reinvesting into their infrastructure.

• Inferior in fountain soft drinks division:-The franchise system has

affected fountain sales due to the fact franchisees are not willing to

by expensive fountain equipment mainly because the profit margin

is so low and could take years to recoup their investment.

OPPORTUNITY

• Per caps in India is 8 oz. vis a vis 868 oz. in USA : - The

consumption of Pepsi in India is still regarded as luxury. An

orthodox Indian would still prefer a cup of tea or coffee to a

bottle of Pepsi. So in the event Pepsi can manage to change

their mindsets it would tap a huge untapped customer base.

• Cutting costs: - since there is tremendous scope for increasing

the sales volume, this also signifies potential to reduce costs per

bottle and make the product more affordable.

• Seasonality: - Pepsi is perceived to be a summer drink and max

sales happens in summer months. During winters an average

Indian would still prefer a cup of hot tea to Pepsi.

THREATS

• Controversies:- Demonstrations across India were organized by the

Research Foundation for Science, Technology and Ecology

(RFSTE). Activists wanted the firms to leave India because they

said their plants depleted ground water the soft drinks giant

strenuously denied. Also, the pesticide controversy was a big threat

to the company.

• Low brand loyalty: - If a consumer walks into a shop and he is

offered a coke instead of a Pepsi he would in all likelihood accept

it. This basically means that the company needs to be present

everywhere every time and that too chilled otherwise it will result

in lost sale

• Low cost and large number of substitutes:-Traditional Indian

families would still prefer a glass of lassi or nimbu pani in

summers and a cup of tea or coffee in winters as compared to

PEPSI

• Risk of losing market share:- Coke is a very strong opponent and

gives immense competition to the Pepsi so there is a constant

threat of loosing market share since both the products are very
 similar and there is almost no brand loyalty present amongst

consumers

ANSOFF MATRIX

Below is the Ansoff Matrix which helps us to analyse product-market

expansion. PepsiCo India is basically pursuing the Product Development

strategy.

Current New

Product Product

Market Penetration Product Development

– No Change in – Product modification

Product with or without a new brand

name
– No Change in

Market Potential – No change in Market

Potential

Market Development Product Diversification

– No Change in – Product modification

Product with or without a new brand

name
– Change in
 Market Potential – Change in Market

Potential

On her second visit to India since she assumed the president and CFO's

job in the PepsiCo three years back, Indra Nooyi announced her India

strategy on Tuesday that will involve an investments of $300 million to

$500 million over the next 3 years to 5 years. The strategy also includes

introduction of newer products in the country. About 60 percent of

Pepsi's fresh investment would be spent on beverage business to expand

the beverage portfolio and provide a range of choices.

 Threat of Substitutes
• Switching Cost to substitute is
very low
• Price – performance Trade off
of substitutes
• Brand loyalty does not exist

PORTERS FIVE FORCE MODEL

Barriers to Entry
• High capital investment required
• Strong distribution network of
existing players
• Strong Brands existing
• Economies of Scale

Bargaining power of Rivalry among existing firms

Suppliers • Exit barrier Bargaining power of
• No substitute for critical • Industry Growth Buyers
Inputs • Industry Concentration • Availability of many
• Switching cost from one • Diversity of rivals brands
supplier to other is high • Price competition • Price sensitivity
• Supplier integrating forward • Product differences • Buyer Information
for higher prices and margins
Barriers to entry:

The soft drinks industry requires a huge investment if one aspires to gain

a considerable market share. The investment would require huge sums of

money to setup manufacturing plants, bottling plants and as we know a

massive advertising budget.

As an example Parle, which was the market leader at one point, did not

have the ability to invest large sums of money in a small period of time

and was eventually bought over by -Pepsi rival, coca-cola.

Pepsi in India owns most of its bottling plants – COBOs. Pepsi has about

15 COBOs and plans to expand further. Pepsi has over the years invested

about 600 crores and plans new investments of another 400 crores.

That is the scale of operations in the cola industry, making it very

difficult for any new players to enter the market. Another factor that

makes entry difficult is the presence of Coca Cola. The two cola giants

among themselves control most of the market, leaving no room for

anyone else.

The gestation period, due to the huge initial investments, is pretty long.

Pepsi, which started operations in India in 1989, broke even in 1997.

Bargaining Power of Suppliers:

There are around 100 franchise owned bottling operations.

Bargaining Power of Buyers:

Buyers by and large do not have much power in the cola market. The

number of buyers is too large for them to exert any influence or control

over pricing or any other decisions. Even though there are very low

switching costs the buyers do not wield much power.

The presence of a large competitor, however keeps the price level in

check.

Rivalry:

The rivalry between coke and Pepsi is too well documented. It has

stretched from the start of the latter company till date. It has been

witnessed in every continent, country every market and yes the courts.

There are a number of factors other than the obvious one – similar

product. These are enlisted below

• High fixed costs – this forces the two companies to produce near

capacity. This high level of production leads to a fight over the

market share.
 • Perishable product – the companies need to sell their high

quantities of produce rather quickly.

• Low switching costs – the switching cost for a customer is pretty

low, since substitutes are similarly priced.

• Low product differentiation – other than a select few loyal

customers, most customers do not find any difference between

coke and Pepsi.

Threat to substitutes:

Pepsi cola as a product has a number of substitutes and is under constant

threat of losing its market share. The low product differentiation between

its biggest competitor does not help. Another factor is the pricing which

is the pretty much the same for most of its substitutes. There are other

threats from outside the industry too. The age-old nimbu paani and lassi

will always pose a threat to any manufactured beverage. Even if these are

not sold in the market place on as large a scale, these are substitutes

prepared in most consumers’ homes for their consumption.

 STP – SEGMENTATION, TARGETING, POSITIONING

SEGMENTATION
Geographic
The region of interest of Pepsi Co. India is the whole of India with
special focus on “Generation Next”
Demographic
Age – Anybody of age between 12 – 29 yrs.
Income – Anybody with Rs 9 in their pocket
Occupation – Basically students and other youngsters
Social Class – Middle class, Upper middle, Lower Upper and Upper
uppers.
Psychographic
Personality – It is perceived to be a modern “generation next” drink and
one associates this drink with youngsters.
Behavioral
Benefits – Style, Price ( economical), quenches thirst
User status – Regular drinkers of soft drinks
Buyer – Anybody who has Rs 9 in his pocket but basically youngsters
Age wise consumption pattern
 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
<20 yrs 20 - 35 35 - 50 >50 yrs
yrs yrs

TARGETING

Pepsi is worldwide associated with the urban youth. , 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 Pepsi’s advertising campaigns are referring to the markets that

marketers refer to as Generation X. 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 not worrying about long term goals. Thus Pepsi’s main

emphasis is on this segment They also have a focus on the 12 to 18 year

old market. Pepsi believes if they can get this market to adopt their

product then they could establish a loyal customer for life

POSITIONING

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, 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 coloring represents eternal youthfulness

and openness

Pepsi has always spoken to the youth consistently, single mindedly and

innovatively, and that is a position that they have never vacatedSlogans

like ‘Yeh dil maange more’, ‘Yehi hai right choice baby’, ‘Yeh pyaas hai

badi’ or now ‘Oye Bubbly’, are made with the intent to attract the

youth .The idea is to look for catchy phrases that the youth would catch

on to and then make it part of their lives. Pepsi has had so many lines that

have become consumer currency; Bubbly was also intended to be

likewise.
 FOUR P ANALYSIS

PRODUCT:

WIDTH:

The Pepsi beverage division has the following product lines –

1. Soft Drinks

2. Juices ( Tropicana)

3. Mineral Water

LENGTH:

Soft Drink Juices Mineral Water

Pepsi Tropicana Aquafina

Diet Pepsi Gatorade Mirinda

7 Up Mountain Dew

DEPTH:
We will focus on the soft drink section here. The Pepsi cola comes in

various sizes ranging from 300ml, 500 ml and 2 litres. In addition Pepsi

Cola is also available in 330ml cans.

CONSISTENCY:

The different products in the soft drink section are all closely related.

They share the same distribution channel and are supplied in the same

manner. They also have a similar production process and the end users

are by and large homogenous.

Pepsi cola has a light, crisp and refreshing taste. It is the perfect drink for

the modern “Generation Next” people. The product comes in 300ml glass

bottles,500 ml pet bottles and in 2 liters. The product targets the

upwardly mobile with its trendy design and is a premium product from

the house of Pepsi. It has a shelf life of 6 months.

PRICE:

Pepsi’s pricing strategy is largely formulated by keeping its rivals, Coca-

Cola, pricing strategy in mind. The reverse is also true. Both the products

are not differentiable and are near perfect substitutes. Another important

factor here is that the sales are volume driven; hence price needs to be

kept at an appropriate level. Listed below are the prices of the variants -
 1. 300 ml is for Rs 9.

2. 500 ml is for Rs 18

3. 2 litre is for Rs 43

4. 330 ml can for Rs 20

PROMOTION:

The soft drinks market in the country relies heavily on promotion to sell

its products. The presence of close competition makes it necessary for

both Pepsi and Coca-Cola to hard sell their products. The leading

products offered by both the companies are very similar. The companies

try aggressively to build loyalties for their respective brands by playing

on emotions and aspirations of its consumers. They have roped in cricket

players and film stars to attract and create interest in their products. Pepsi

especially has been advertising using a number of cricketers to associate

Pepsi Cola with their success.

A Pepsi spokesperson says promotions have worked very well for the

company and have helped reinforce the brand personality.

The `Pepsi Cool Maal’ scheme in June-July 1998 targeted at school

children met with a phenomenal response because the premia comprised

items that school kids needed and ``yet had a lot of attitude''. The

previous year, the company ran a `Pepsi Stuff' promotion that offered

young people a range of offers, both free and discounted, on cinema

tickets, apparel, music and so on.

TV Ads – Pepsi has been bombarding the Indian customers with a

periodical onslaught of creative advertisements aimed at the youth of the

country. Early on, Pepsi identified three broad platforms cricket, movies

and music. It has roped in the biggest stars from the film industry and the

cricketing fraternity. People endorsing Pepsi include bollywood

superstars Amitabh Bacchan & Shah Rukh Khan with a host of other

actors. Fardeen Khan, Saif Ali Khan, Priety Zinta, Kareena Kapoor

among the more popular ones.

It has roped in most of the members of the national cricket team. From

Superstar Sachin Tendulkar to Rahul Dravid, Sorav Ganguly, Yuvraj

Singh, Mohammed Kaif etc. Pepsi started hiring cricket stars very early

and set a trend in the market. It also brought international music stars like

Michael Jackson, Ricky Martin, Deep Purple and Def Leppard among

others to the country.

Pepsi began advertising early with its very effective ‘A-Ha’ campaign. A-

Ha created a new idiom. The tag line which was built into a song brought

instant attention the product. Having Remo Fernades sing “yehi hai right

choice baby…a-ha” caught the attention of the youth. Then came Akshay

Kumar with the “I wanna be mast” campaign. Pepsi chose its

ambassadors in a manner which ensured curiosity and then lasting

interest in the youth of the country. Pepsi has over the years come up

with catchy slogans like Generation Next, Yeh Dil Maange More, The

choice of a new generation etc.

Pepsi also associates itself with cricket which is by far the most popular

activity, sport, mode of entertainment in the country. It even launched a

new brand by the name of ‘Pepsi Blue” during the last cricket world cup

to cash on the fact that the color of the players’ uniform is blue.. In an

earlier episode of the same event where Pepsi had lost out to rival Coca-
Cola in gaining the official sponsorship, Pepsi came out with an

aggressive and creative campaign, where it positioned itself as the

“unofficial drink” as opposed to coke’s strategy. It signed up a number of

national as well as international stars, mouthing the tag line “nothing

official about it”. The company has also time and again sponsored a

number of cricket tournaments. It recently came up with the ‘Toss ka

Boss’ contest which saw fans join the two captains on the field for the

coin toss.

Pepsi also came out with a series of ads poking fun at rival Coke and its

brand ambassadors. This was done with a fair degree of success as it had

everybody from the road side vendor to the BBC correspondents talk

about it. Another recent campaign which created controversy was the

‘OYE BUBBLY’ campaign. It used a voice over which bore similarity to

the voice of Coke’s brand ambassador Virender Sehwag. Pepsi has

created quite a stir with the ‘OYE BUBBLY’ campaign. It shot a music

video with Amitabh Bacchan, Sachin Tendulkar and other players from

the cricket team. It released an audio cassette and CD with the song on it.

This campaign in particular has been very successful thanks to the catchy

tune and ads featuring Shah Rukh Khan.

Internet – Pepsi signed up with Yahoo! India and launched a Pepsi zone

on yahoo - http://www.pepsizone.yahoo.co.in. The zone was aimed at the

younger lot of the net surfers. A number of features like contests, chat

rooms, games, download etc. attracted net users

 PLACE:

How does bottle of PEPSI reach you…..

To bring the product to the consumer by proper distribution management

to:

SUPER
MARKETS

HOSPITALS
EATERIES

ROAD
SIDE HOTEL
SHOPS S

PLACE
MALLS

OFFICES

MOVIE
HALLS EUCATIONAL
INSTTUTES

GROCERIES
For distribution purpose pepsi uses 2 level distribution channel which

contain two intermediaries between the bottling factory and the final

consumer.

MANUFACTURER

DISTRIBUTOR

RETAILER

CONSUMER

The Company does its selling by using company owned distributors or

franchisee owned distributors. Worldwide Pepsi relies on franchisee but

in India it uses both company owned and franchise owned operations.

Pepsi uses two methodologies for distribution in India

1. Company owned distributors

2. Franchise owned
FRANCHISEE OWNED:- This is like outsourcing wherein the

company out sources its distributing related work to another party.

Company has less control owner the distributor. All the investments like

vehicles, Employees salaries etc are made by the distributor who in return

gets a margin ( around 18-20%).Advantages of using this scheme is that

the fixed investments and other distribution related expenses of the

company are less. The disadvantages are that the company has lesser

control over the distribution process.This method is followed in delhi

COMPANY OWNED:- Here the company owns all the vehicles, the

employees are on company roles. The advantages of suh a process are

that the company has direct control over the entire distribution process, it

also gives the company higher flexibility. The disadvantages of such a

process are that it involves huge investments.This method is followed in

punjab

Pepsi is currently available with the other Pepsi products at:

 Convenience Stores

 Restaurants

 Grocers
  Entertainment Centers

 Offices and Institutions

 Eateries

 Educational Institutions

 Hotels

THE COLA WARS

No two

companies could be more alike, or more different! Both have been selling

products to quench thirst for over a hundred years and both are now

global brands. Their products moved through the world’s most pervasive

networks.

Distribution: Pepsi has taken the more capital intensive route of owning

and running its own bottling factories alongside those of its franchisees

whereas Coke operates only through FOBOs (Franchise Owned Bottling

Operations). Pepsi in India has a more organized streamlined channel of

distribution whereas Coca Cola is unorganized in its distribution channel.

Pepsi has over a hundred distributors (both company owned and

franchise owned) in Delhi alone whereas Coke has much fewer

distributors and relies more heavily on wholesellers directly for their

sales and distribution.

Brand Synchronisation: Despite being a global brand, Pepsi has built its

success on meeting the Indian consumers’ needs. It has synchronized the

brand with localized events and traditions. For example, in Delhi, it

linked its brand with Holi, offering sachets of colour with Pepsi Cola. In

Chennai, it offered free bottles with orders of idlis.

Whereas Coke, instead of creating a bond with its customers through

small events, it chose to associate itself with national and international

mega events like the Cricket World Cup, 1996 and the Olympics, 1996.

Diversification: PepsiCo has increasingly diversified into snacks and

restaurants while Coca Cola has focused only on soft drinks. PepsiCo

snack operation is in Frito-Lay and its restaurant business includes Pizza

Hut, Taco Bell and KFC. All of Coke’s profits come from beverages

whereas PepsiCo depends on drinks for 41% of its income.

 CONCLUSION

After completion of the project and the analysis of the study I came

to conclude that after launching the promotion there was drastic

percentage jump in sales initially but gradually the percentage jump

decreased and there isn’t much impact on sales.

After doing analysis of Pepsi I came to conclude that people are

very much aware about the promotions especially the kids and

people prefer more of Pepsi and Pepsi is very popular in India.

Thus I conclude that the industries have pampered consumers by

giving discounts and free bies and hence consumers now a days

don't buy a product until and unless they are given some discounts.

So the industries should not over do the promotions.

Critics argue that promotions simply prepone the purchase and

don't add any incremental value to it. The sales may pick up during

the offer, but there is a loss of sale in the following month, which

means the people who buy the goods in July simply preponed their

purchase due to the offer". Also, over promoted products often

leave customers asking for more. Thus promotions have actually

spoilt the habits of consumers. Thus, promotion is a very attractive

means to keep the consumers glued to its product but then the

industry shouldn't over do it. The effect of promotions is for a shot

period of time.

QUALITY

The first reason is of quality, obviously in this competitive age and

an intelligent consumer in front of you no company can afford to

ignore the vital issue of quality.

PRICE

Why doing analysis 15% consumers complained about the price but

from the general tendency, it was seen that when a consumer felt

thirsty and was in a company of friends, price took a back seat and

the consumers opted for their favorite brand.

SYSTEM

The distribution system of the company is very efficient. In fact

every day the trips are made why the mini trucks, three wheelers

caring crates are replaced at the retail outlets according to the

demand.
LOCAL ADVERTISEMENT

The company has created brand awareness among the consumer

through constant advertising. The retail outlets in the various part

of the city display various advertising themes, bill-boards are

painted with eyes catching advertisements, moreover, the mini

trucks caring the crates of soft drink are beautifully painted with

various brands and a part from the local news paper carry the

advertising captions periodically.

REDDRESSING CONSUMER

COMPLAINTS; the company has established a system that keeps

track of consumer complaints. It has well set-up network which

contacts retailers, consumers, records and their views about the

products, the quality, availability of soft drink in time, price etc.

 RECOMMENDATIONS

1.PepsiCo should Promote their all products like Alvio, Gatorade and
Quaker Oats

2.PepsiCo should promote their product in Rural area also as Coca-cola

is doing.

3.PepsiCo should expand the Brand Image of Pepsi (People are only
correlating it with youth- Youngistan)

4.As Coca- Cola shows its logo at the end of every advertisement of its
each product/Brands, so Pepsi should also show its logo in its each
Brands advertisement

5.PepsiCo also should go equally to other medium of advertisement like

pepper, hording and internet.

6.PepsiCo should also continuous participate in Sporting events.

7.PepsiCo can take part in IPL also

8.PepsiCo should also focus on Green marketing like other

Companies doing like- Idea, Aircel etc.

9.PepsiCo mostly Brand ambassador came from bollywood so they

should focus on Sporting celebrity like from cricket, football and hockey

10. People are not that much aware about some products of PepsiCo so
they should focus on it.

11. The regular user of Pepsi is very low. So Pepsi have to convert those
customer which are aware about Pepsi but not using it regularly, so try to
make them brand loyal

12. Buying priority of most customers is refreshment so they should try

to convert them in brand preference.

13. They should more target on Child and Sports men

14. They should show Quality and Trust base in their advertisement.

15. PepsiCo should focus on their brand ambassador they are changing it
continues so they should take care of it
 SUGGESTIONS

 Company should emphasis on selling per bottles for 200ml &

300ml at a lower difference price; it is portable and convenient

to carry.

 Consumer preference change according to availability, therefore

the company should provide their brands at maximum outlets at

possible.

 Company should take care of cleanliness of the bottles rusted

crown and maintain the quality of the product especially at the

time of packaging.

 Company should get the schemes printed on the labels of the

bottles/products as well as on the free items provided with soft

drink so that consumer gets aware about the schemes and not

cheated by the retailers

 Company should inform each and every outlet about the schemes

before time or on time and check them. Weather they are

providing them to consumer in the proper manner.

 Company should conduct survey quarterly to see weather

consumers are satisfied with the product and services.

 Schemes have large impact on consumer preference therefore a

company should launch different and attractive promotional

schemes frequently.

 Company should encourage to the consumers to purchase more

and softer drinks so as to develop the taste and sales.

BIBLIOGRAPHY

Food & Drink Weekly

♦ Annual Report - Pepsi

♦ A&M

♦ BUSINESS WORLD

♦ INDIA TODAY

♦ NEWS PAPERS

♦ INTERNET

♦ www.pepsico.com

♦ www.agencyfaqs.com

♦ www.domain-b.com