Marketing Strategy-pepsi FINAL PROJECT
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Transcript of Marketing Strategy-pepsi FINAL PROJECT
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
1. The main purpose of this study is determine the different strategies
that are adopted by the companies.
2. The strategies will be evaluated to see which is the best amongst them
and which are most effective.
3. Acceptability of Pepsi products by the consumers and marketers.
4. Identifying the competitors and positioning Pepsi in comparison
to them.
5. To find out marketing strategy of Pepsi.
6. 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 RESEARCH2. 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 AwarenessLarge number of distributors (100+ in Delhi)Wide product offering High accessibilityLarge advertising budgetWise investments
Weakness
Powerful FranchiseeInferior in fountain soft drink division
Opportunity
Per caps 8 oz in India vis a vis 868 oz in USALarge untapped rural populationSeasonalityCUTTING DOWN COSTS
Threats
ControversiesLow brand loyaltyCheaper and large number of substitutesRisk 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 NewCurrent New
ProductProduct Product
Market PenetrationMarket Penetration
– No Change in
Product
– No Change in
Market Potential
Product DevelopmentProduct Development
– Product modification
with or without a new brand
name
– No change in Market
Potential
Market DevelopmentMarket Development
– No Change in
Product
Product DiversificationProduct Diversification
– Product modification
with or without a new brand
– Change in
Market Potential
name
– 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.
PORTERS FIVE FORCE MODEL
Barriers to Entry High capital investment required Strong distribution network of
existing players Strong Brands existing Economies of Scale
Threat of Substitutes Switching Cost to substitute is
very low Price – performance Trade off
of substitutes Brand loyalty does not exist
Bargaining power of Suppliers No substitute for critical
Inputs Switching cost from one
supplier to other is high Supplier integrating forward
for higher prices and margins
Bargaining power of Buyers Availability of many
brands Price sensitivity Buyer Information Product differentiation
Rivalry among existing firms Exit barrier Industry Growth Industry Concentration Diversity of rivals Price competition Product differences
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
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:
SUPERMARKETS
EATERIESHOSPITALS
GROCERIES
EUCATIONALINSTTUTES
OFFICES
HOTELS
MOVIE HALLS
MALLS
ROADSIDESHOPS
PLACE
For distribution purpose pepsi uses 2 level distribution channel which
contain two intermediaries between the bottling factory and the final
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
MANUFACTURER
DISTRIBUTOR
RETAILER
CONSUMER
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