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Project

On

Strategic Marketing Management

Presented To: Sir Imran Qureshi

Presented By: SlinkyCity

Class: MBA-4 (1 year)

Group Members: Jamil Ahmed 4553Shakir Mehmood 4552

INTERNATIONAL ISLAMIC UNIVERSITY

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ISLAMABAD

DEDICATION

Our beloved teachers & parents, whose blessings

And concentration bring us to this stage

And who trample their inclination and longing

For up holding our studies

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ACKNOWLEDGEMENT

ll the praises and thanks are to ALLAH the most beneficent, ever merciful and kind of day of judgment. We offer our humblest thanks to our parents and special praise to the HOLY PROPHET MUHAMMAD (PBUH) whose moral and spiritual teaching a forever source of

guidance and knowledge for humanity as a whole enlightened. I flourished out thoughts toward achieving high ideas of life.

AI feel out first and foremost duty to express my grateful appreciation and thanks to my teacher Sir Imran Qureshi. His illustrious advice, keen interest, encouragement and constructive criticism were the real source of inspiration during the completion of the project

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Table of Content

Introduction 7Mission and Vision 10SWOT ANALYSIS 12TOWS MATRIX 16Five Forces analysis 20CONSUMER ANALYSIS 24BCG Matrix 26Marketing Ratios 31Customer’s Buying Behavior 32Market Prospective of Competition 40Aims and Objectives of Company 43Strategic focus in terms of competition 43Consumer Profiling Based on Shopping Habits 45GE Strategies 49Scorpio Technique 52

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PepsiCoPepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American multinational corporation headquartered in

Purchase, NY with interests in manufacturing and marketing a wide variety of carbonated and non-carbonated

beverages, as well as salty, sweet and cereal-based snacks, and other foods. Their main product, Pepsi Cola, sells

over 100 trillion cans a year.[citation needed] Besides the Pepsi brands, the company owns the brands Quaker Oats,

Gatorade, Frito-Lay, SoBe, Naked, Tropicana, Copella, Mountain Dew, Mirinda and 7 Up (outside the USA).

Type Public (NYSE: PEP) Industry Food

Non-alcoholic beverage Founded New Bern N.C, U.S. (1890) Founder(s) Caleb Bradham, Donald M. Kendall and Herman W. Lay Headquarters Purchase, New York, U.S. Area served Worldwide Key people Indra Nooyi

(Chairperson and CEO)Products Pepsi Diet Pepsi

Mountain DewAMP EnergyAquafinaSierra MistSoBeStarbucks FrappuccinoLipton Iced Tea7upMirindaIzzeTropicana ProductsCopellaNaked JuiceGatoradePropel Fitness WaterQuaker Oats CompanyLay'sDoritos

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CheetosKurkureFritosRold GoldRufflesTostitosSlice

Revenue ▲ US$44.3 billion

Operating income ▲ US$7.3 billion

Net income ▲ US$6.24 billion

Total assets ▲ US$39.8 Billion (FY 2009)[2]

Total equity ▲ US$16.8 Billion (FY 2009)[2] Employees 203,000 (2010) Divisions PepsiCo Americas (PepsiCo Ameri Food, PepsiCo Americas Beverages), PepsiCo

International Website PepsiCo.com

Pepsi InternationalPepsi is a carbonated soft drink produced and manufactured by PepsiCo. The drink was first made in the 1890s

by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There

have been many Pepsi variants produced over the years since 1898.

Type Cola Manufacturer PepsiCo. Country of origin United States Introduced 1898 (as Brad's Drink)

June 16, 1903 (as Pepsi-Cola)1961 (as Pepsi)

Related products Coca-ColaFantaDr Pepper7 UpIrn Bru

Indra Nooyi- CEO of PepsiCo

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Cola TurkaBig Cola

Website http://pepsi.com/

Board of Directors

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Our Mission and Vision

"To be the world's premier consumer products company focussed on convenience food 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."

Our Vision"To build Pakistan leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people."

PepsiCo Sustainability Vision

"PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today"

Tomorrow better than Today

To be the world's best beverage company. Being the best means providing outstanding

quality, service, cleanliness and value, so that their every customer is contented and

happy with their products.

To increase the value of their shareholder’s investment through sales growth, cost

control and wise investment of resources.

Objectives

The objectives that the pepsi company wishes to achieve are that it wants to remain and continue to be

the best or number one beverage company in Pakistan. As pepsi is already the numberone beverage

company in Pakistan but it has to maintain its position power and status to in order to achieve their

target market.

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Pepsi’s Brand

Pepsi’s brand is basically is basically “ME” branded. They use the temperament of “ME”. In

contrast to Coke they believe on individual struggle.

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SWOT ANALYSIS OF PEPSI

STRENTH

1. Company Image:

It also is a reputable org. and is well known all over the world. Perception of producing a high quality product.

2. Quality Conscious:

They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo.

3. Good Relation with Franchise:

Throughout its history it has a good relation with franchisers working in different areas of the world where they have the production facilities.

4. Production Capacity:

It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia.

5. Market Share:

It has a highest market share i.e. 62% in Pakistan and leading a far step head from its competitors.

6. Large No. of diversity businesses:

This is also its main strength as it ahs diversity in many businesses such as

i. Pepsi beverages

ii. Pepsi foods

iii. Pepsi Restaurants.

7. High Tech Culture:

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The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database an they use computers as business tools for analysis and quick decision making.

8. Sponsorships:

They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programs like music etc.

Management Experienced, broad base of interests and knowledge Large size may lead to conflicting interests

Product Line Unique, tastes good, competitive price, and convenient New one calorie products have no existing customer base, generic brands can make similar drinks – cheaper

WEAKNESS

1. Decline in taste:

During the last years, it was published in Financial post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months.

2. Political Franchises:

Such as in Pakistan, Hamayun Ahkhtar is its franchisee who has a strong political support from a political party which is in opposition. In; their era in government less taxes are imposed on them but relation increases as they come in opposition. So the selection is not appropriate as this thing is harmful to their image as well as the strategies.

3. Short term Approach:

They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as “nothing official about it”.

4. Weak Distribution:

They lack behind in catering the rural areas and just concentrating in the urban areas.

5. Low consumer knowledge:

Unable to maximize local consumer knowledge.

6. Lack of soft drink:

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Lack of soft drink “know-how” as a result of diversified business units and generalist managers

Marketing Diverse & global awareness May lose focus, may not be segmented enough Research& Development Continuous efforts to research trends and reinforce creativity.

May concentrate too much on existing products, intrapreneuralship may not be welcomed.

OPPORTUNITIES

1. Increase Population:

As almost in all over the world growth rate is increasing which in turn increases the demand of products and necessities and especially in Asia the market is growing at a faster rate as compare to other continents. So they have to attract new entrants.

2. Changing social trend:

As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product.

3. Diversification:

They may enter in garments business in order to promote their brand mane, by making sports cloths fro players which represent their name by wearing their clothes.

4. Distribution of snack foods:

Opportunity to distribute Pepsi snack foods in the future.

Competitive Distinctive name, product and packaging in with regards to its markets. Not entirely patentable, constant attack by competitors.

THREATS

1. Imitators:

They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product.

2. Government Regulation:

They face problem if government employ taxes on them which force them to raise the price of their product.

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3. Corporation’s shortage problem:

Again this is also a serious threat from it suppliers as if supplier is unhappy with the company.

He may reduce the supply and exploit the company. This action will surely affect the production process.

4. Non-carbonated substitutes:

Non-carbonated substitutes, such as juices and tea brands are maintaining a strong foothold in the market.

5. Political instability:

The big threat to Pepsi in Pakistan is Political instability and civil unrest.

6. Threat of labor strikes:

External threat of labor strikes and power outages in Pakistan.Economic Consumer income is moderate, more tend to eat out, convenience is important to consumers. Very elastic demand, almost pure competition.Legal/ Regulatory Opportunity to win hearts through social responsibility Opposite is also possibleSWOT MATRIX (TOWS MATRIX)

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What is a SWOT Matrix (TOWS Matrix)?

The SWOT Matrix illustrates how management can match the opportunity by facing your institution with its own strength and weekness to yield four sets of possible strategic alternatives. The SWOT Matrix framework lends itself to brainstorming to create alternative strategies that you might not otherwise consider.

How to Perform a SWOT Matrix (TOWS Matrix)?

A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.

To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is shown below:

SWOT / TOWS Matrix

Strengths

Weaknesses

Opportunities

S-O strategies

W-O strategies

Threats

S-T strategies

W-T strategies

Basically four main strategies are proposed:

S-O strategies pursue opportunities that are a good fit to the companies’ strengths. These strategies are based on institutional strengths to take advantage of market opportunities.

W-O strategies overcome weaknesses to pursue opportunities. These strategies are based on overcoming institutional weaknesses to take advantage of market opportunities.

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S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. These strategies are based on institutional strengths to avoid market threats.

W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. These strategies are based on overcoming/minimizing institutional weaknesses to avoid market threats.

TOWS MATRIX OF PEPSI

We have discussed SWOT analysis of Pepsi-Co in our previous topic now here we are going to discuss the TOWS Matrix of Pepsi-Co, keeping in mind its SWOT analysis. Following is the detailed analysis of Pepsi-Cola TOWS matrix:

‘WT’ ANALYSIS

One weakness that Pepsi posses is that it has very strong taste it really feels that something highly toxic going inside the body, where as the same product of the coke is not much strong.

They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product. During the last years, it was published in financial post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months. If they soon pay no attention towards that this will create a big problem for them.

Large size may lead to conflicting interests.

New one calorie products have no existing customer base; generic brands can make similar drinks – cheaper. It is also big threat for any company people may like or dislike new launching product.

Such as in Pakistan, Hamayun Ahkhtar is its franchisee who has a strong political support from a political party which is in opposition. In; their era in government less taxes are imposed on them but relation increases as they come in opposition. So the selection is not appropriate as this thing is harmful to their image as well as the strategies. So this may become a big threat for the Pepsi.

‘WO’ ANALYSIS

They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as “nothing official about it”. If they don’t focus on sudden changing’s in their advertising then they can convert this weakness into opportunity.

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They lack behind in catering the rural areas and just concentrating in the urban areas. They should try to increase their distributions and also focus on capturing rural areas; this will become a big opportunity for them.

The other big weakness on Pepsi is that they don’t pay any attention towards garments. They may enter in garments business in order to promote their brand name, by making sports cloths fro players which represent their name by wearing their clothes. That must increase the customer and income of the Pepsi.

High expenses may have trouble balancing cash-flows of such a large operation. The staff may show dishonesty. They should try to pay much attention towards their cash flow, and audit there statements on regular basis.

‘ST’ ANALYSIS

In many countries Pepsi had more expensive products than Coke; such a high price may limit a lower income family from buying a Pepsi product, therefore which is a big threat for Pepsi that may Pepsi have to face in the future.

In foreign countries Pepsi have many branches with different flavors as compare to Pakistan, which has only 2 or 3 Pepsi products. Non-carbonated substitutes, such as juices and tea brands are maintaining a strong foothold in the market. Pepsi has a big threat from COKE, which are its main competitor from about 100 years.

Pepsi is a foreign company therefore they have a big threat every time on them of Political instability and civil unrest.

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced.

Continuous efforts to research trends an reinforce creativity, if they fail in their efforts then there is a big threat for the company. The competitors may get benefit by their plans.

‘SO’ ANALYSIS

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency and that will become such a big opportunity for Pepsi.

It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia. Established network of 45 distributors each supplying 1,100 retailers.

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High per capita soft drink consumption – average of 22 servings compared to 5 for Pakistan. At will become such a big opportunity. Due to large production the product of Pepsi is always available in the market and that will become useful to attract taste lovers customers.

Large No. of diversity businesses is also its main strength as it ahs diversity in many businesses such as Pepsi beverages, Pepsi foods, Pepsi Restaurants, and due to large number of diversity they can capture more customer, therefore it will become such a big opportunity for Pepsi.

Pepsi is also a reputable organization, and is well known all over the world. Perception of producing a high quality product and strength can become a big opportunity for Pepsi if they use it in well arranged manner, such as advertising more and also by conducting concerts to attract more customers.

They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo, if they show test reports on label of there products this will also attract customers.

They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programmed like music etc. this will become such a big opportunity to build such a large number of customers. So we can say that it is one of the big strength that may become a big opportunity for Pepsi.

Pepsi-cola are to keep advertising as much as possible, and keep coming up with diversified range of products so as to penetrate more and more in the industry. Keep their business to franchise system only so as to save as much taxes as possible and use the saved money on advertisements.

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PepsiCo’s Five Forces analysis

Food and beverage industries are saturated which means that the barriers to entry are low. There are usually only two ways to compete in these industries. One is by being low cost and the other is by being high quality. This makes profit margins incredibly thin. So naturally when barriers to entry are low there will be a lot of competitors. I would also say that substitutes would also be high around the board for food and beverage industry. When there are lots of competitors customers can easily switch to another product. however if one product is superior and maybe even a little addictive then customers may demand that product and their power will be less. Suppliers in food and beverage is a dime a dozen. This is because they are supplying commodities, very general unspecialized goods that can be found locally and internationally very easily. So switching suppliers is very easy. However if the ingredient in one of the industries was rare bohemian shrimp that could only be found in the baltic sea which was monopolized by a single company then suddenly the supplier has much more power.

Something else to consider is complements, Michael Porter allegedly added this force years later. Something like Cheetos and Pepsi go well together, when someone buys cheetos they buy pepsi. Things like this can give a specific product in an industry a competitive edge over the competition. Especially when the industry can only compete on price and quality rather than differentiation.

Competitors lotsSubstitutes tonsBarriers to entry Easy to enter, hard to competeCustomer power strongSupplier power low

New Entrants

Suppliers

Industry Competition

Substitutes

Customers

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CONSUMER ANALYSIS

CONSUMER BUYING PROCESS

MARKETING STIMULI

PRODUCT: bottles,juices,lays etc

PRICE: Competitive pricing for its products.

PLACE: Franchises are placed in all major cities.

PROMOTION: Focus on promotion of its products and meals regularly.

P: Political factors in country e.g. pressure groups.

E: Economic infrastructure

S: Socio cultural impact

T: use of technology in developing innovative products and process.

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CONSUMER PSYCHOLOGY

Perception: How consumer perceive the products offered by Pepsi

Learning: what its customers learn from previous experience or by the experience of other customers.

Motivation: It means how customers are motivated. From time to time Pepsi changes it motivational slogans for customers.

Characteristic such as cultural, social, psychological and physiological plays a vital role in this regard.

BUYING DECISION PROCESS

Problem recognition

In this case process starts when a consumer feel the hunger and want some kind of fast food.

Information search

Old users will skip this step, where as new users will search about what products are offered by which fast food chain.

Evaluation of alternatives

Consumer then evaluate the alternatives may be on basis of price or quality or availability.

Purchase decision

Finally he will decide and make a purchase decision.

RESULT

PURCHASE DECISION

Product choice

Consumer will choose product.

Dealer choice.

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Purchase timings

Means at which time consumer will go to purchase morning evening ,depend upon the time he feel hunger.

Purchase amount

It is also a key factor in choosing the product if consumer having few money he will mostly go for the happy menu.

BCG Matrix of PepsiBeverages

11261−1096110961 =2.66%

2008 2009 Growth RateCoke 5465

11261 =48.53

532410961 =48.57

5465−53245324 =2.64

Pepsi 489311261 =43.45

480510961 =43.83

4893−48054805 =1.83

Amrat 90311261 =8.01

83210961 =7.59

903−832832 =8.53

Relative Market share2008 2009 2008 2009

Coke/ Pepsi

48 . 5743 . 83 =1.10

48 . 5343 . 45 =1.11

Coke/Amrat 48 . 538 . 01

=6.05

48 . 577 .59

=6.39Pepsi/ Coke

43 . 4548 . 53 =0.89

43 . 8348 . 57 =0.90

Amrat/Coke 7 .5948 . 57=0.15

8 . 0148 . 53=0.16

Growth Ratescoke

2.64% Pepsi1.83%

Amrat 8.53%

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Water

18729−1791417914 =4.54%

2008 2009 Growth RateAquafina 563

17914 =3.14

49018729 =2.61

490−563563 =-12.9

nestle 1376917914 =76.85

1475618729 =78.78

14756−1376713767=7.18

Kinley 319417914 =17.82

309918729 =16.54

3099−31943194 =-2.97

Abe-hyat 39017914 =2.17

38418729 =2.05

384−390390 =-1.53

Relative Market share2008 2009 2008 2009

Nestle/kinley 76 . 8517 . 82 =4.31

78 .7816 . 54 =4.76

Nestle/Abe-hyat 76 . 852. 17 =35.41

78 .782. 05

=38.42Kinley/Nestle 17 . 82

76 . 85 =0.23

16 . 5478 .78 =0.20

Abe-hyat / Nestle 2. 1776 . 85 =0.02

2. 0578 .78 =0.02

aquafina0.04 0.03

Growth RatesAquafina

-12.95% Nestle7.18%

kinley -2.97%Abehyat

-1.53%

Juices(Tropican)

3453−27702770 =24.65%

Relative Market share2008 2009 Growth Rate 2008 2009

Pepsi 5102770 =18.41

6003453 =17.37

600−510510 =17.64

18 . 4181 .51 =0.22

17 . 3782 .62 =0.21

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nestle 22602770 =81.5

28533453 =82.62

2853−22602260 =26.23

81 .5118 . 41 =4.42

82 .6217 . 37 =4.75

Growth RatesPepsi(Tropicana) 17.64% Nestle(juices) 26.23

Industry growth Rate

33443−3164531645 =5.68%

SalesBaverages juices

2008 2009 2008 2009pepsi 4805 4893 pepsi 510 600Coke 5324 5465 Nestle 2260 2853Amratcola 832 903 Total 2770 3453Total 10961 11261

Water2008 2009 All sales are in millions and guessed near to

original dataAquafina 563 490Nestle 13767 14756Kinley 3194 3099Abehyat 390 384Total 17914 384

2008 200931645 33443

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Marketing Ratios of Pepsi

1)

operating profitasset employed

2008=

695935994 =19.3

4)

Production costAvg daily sale

2008=

15941118. 5 =134.52

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2009=

804439848 =20.2

Best performance=2009

2)

operating profitSales revenue

2008=

695943251 =1608

2009=

804443232 =0.186

Best performance=2008

3)

Asset employedAvg daily sale

2008=

35994118. 5 =134.52

2009=

39848118. 43 =127.40

Best performance=2008

2009=

15089118. 43 =127.40

Best performance=2009

5)

Distribution of marketing costAvg daily sale

2008=

158771185 =133.98

2009=

15026118. 43 =126.87

Best performance=2009

6)

Current AssetAvg daily sale

2008=

108061185 =9118

2009=

12571118438 =106.14

Best performance=2008

Customer’s Buying Behavior for PEPSI

Pepsi Co. a world leader in convenient snacks, foods, and beverages is a $35 billion company. Some of the popular brands like Pepsi-Cola, Mountain Dew, Diet Pepsi, Lays, Doritos, Tropicana, Gatorade, and Quaker Oats are owned by the company. The company saw a change of preference in it's consumers in the 1990's apart from this the beverage industry also observed a rise in functional drinks in the mid 2000s. The case focuses on the Pepsi's strategy to address this change in the consumer behaviour.

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It is possible to identify several types of buying decision and hence several types of buying behavior. The most obvious distinction to make is based on the expense, complexity, risk and opportunity cost of the purchase decision.

We would basically be judging the customer loyalty towards a particular brand by having availability as a factor.

For this we have different types of consumer products they are mainly three those are

1. Convenience goods2. Shopping goods3. Specialty goods

Four Types of Buying Behavior

ComplexBuying

BehaviorDissonance-

Reducing BuyingBehavior

Variety-Seeking

BehaviorHabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement

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Pepsi has divided its market in many ways

demographically, geographically, psycho graphically behaviorally

Geographic

Region Asia

Climate Hot and dry

Target area Domestic users, Restaurants, Bars, School and College canteens

Country Pakistan

City All Major city of Pakistan

DemographicAge 14 to 30

Gender Male and Female

Family size no bar

Family lifecycle Unmarried, married

Income 5000+

Education School, College, universities

Occupation For Middle class to Upper Class

Nationality Pakistani

Psychographic Social class Middle Class and Upper Class

Pepsi attempts to capture the youth of today by focusing on their personality, lifestyle and attitude of youth through advertisement

Behavioral

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Occasions Parties, Birthdays, Sports and regular occasions

Benefits Quality and taste

Loyalty status Strong

Readiness stage Aware, Interested.

In case of Pakistan before going into the detail we must need to have a look about the social classes as well because with the income levels and purchasing powers of the people here also causes variations among the types of products.

Pepsi is cheaper for every class peoples because everyone can afford its price so Pepsi is Convenience goods for all. Peoples drink pepsi every day because it is

Convenience good and also children’s take lays mostly. Adults and children play an important role in the buying process. Reasons such as cleanliness, convenience, family outings and celebration of special occasions are considered important in buying fast foods.

In this step we will also the social factors as well while making decisions about customers’ behaviors.

For Upper Class:

We will put Pepsi into habitual buying behavior quadrant because this class doesn’t usually think much about drinking Pepsi because the involvement in terms of resources low they put very few time to think about drinking Pepsi. They drink Pepsi on may be daily basis or on alternate days.

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For Middle Class:

We will put Pepsi into habitual buying behavior quadrant because this class doesn’t usually think much about drinking Pepsi because the involvement in terms of resources low they put very few time to think about drinking Pepsi. They drink Pepsi on may be daily basis or on alternate days.

For Lower Class:

Pepsi customers are mostly young group between the age of 14-30 and also targeted at school, colleges, universities, homes, restaurants, hotel and stores.

pepsiCo's target market can be people of all ages because of their wide range of products: they include gatorade, lays, tropicana, and quacker, and their products are classified under many catagories. Their target market is very diverse.

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C0mpetitive stance: Major competitor is Coca-Cola and subway: Coca-Cola has strong competitive stance in the market when we talk about the capabilities competencies, they have very good brand image along with the strong supply side with the latest technology.

Price level is almost same for Coca-Cola and Pepsi but Subway charge more prices then these two

Pepsi prices its products similar to those of Coca-Cola in order to keep profits high.

ANALYSIS OF COMPETITION

Comparative assessment

Rating scale 1 = very weak

10 =very strongProducts coca cola Amrat Pepsi subwaysProduct design 8 7 8 6

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Product quality 9 8 8 8Product performance 8 8 9 5Breath of product line 7 8 8 7Depth of product line 7 7 8 7Advertising 7 5 8 4Image and reputation 8 6 8 8Price 8 8 9 8

Selling and distributionSales force calibr 8 7 8 7Sales force experience/knowledge 8 7 9 7Geographical coverage 9 7 8 5Home delivery 8 7 9 7ServiceCustomer service level 7 7 8 7Performance against promise 8 7 8 8

COMPARISON OF PRICES

PEPSICO PRODUCTS

PRICE(RS) COMPETITORS PRODUCTS PRICE(RS)

Pepsi 250ml 14 Coke 250ml 14

Pepsi 500ml 28/30 Coke 500ml 28/30

Pepsi 1 liter 30 Coke 1 liter 30

Pepsi 1.5 liter 55 Coke 1.5 liter 55

Pepsi jumbo 70 Coke jumbo 70

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Coke vs. Pepsi: Battle of the Brands

Coca Cola has a larger market share compare to Pepsi. Pepsi is losing out, that is the reason why they created a diversified portfolio of brands such as Ocean Spray, Mountain Dew, Tropicana and others.

Brand recognition:

Brand recognition of Pepsi & Subway is as good as coca cola is in the international market but it also varies from country to country but in Pakistan coca cola is the stronger among the three. Hence it also leads somehow to pure oligopoly.

Distribution network, Promotion and Public relations, Financial stability, Technological skills

All the above factors of competitors are strong in nature, and all these also lead towards the category of pure competition.

Strategic Focus:

Here strategic focus of the competitors of the Pepsi does vary from it. Pepsi long term strategy is to capture as much market and also increase the market growth as it can in the coming years in order to enhance the number of its customers but the strategic focus of the coca cola is mainly to increase the market growth.

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Market Prospective of Competition

Coke is the market challenger while Pepsi is the market leader However other international and local brands which includes imported energy drinks, syrups, juices and Pakola whole family which contributes to just 12% of the total beverage industry. We can easily measure the impact of changing in the strategy of KFC on others e.g. Mc Donald’s & Subway. Pepsi have to struggled hard because it comes in the follower in the market we did not include subway as the competitor of these both because it lies in the different category.

Market perspective of Competition:

A pure oligopoly, in which a few firms produce broadly the same commodity

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Their best outcome is to cooperate and agree to restrict output to the monopoly quantity, where price is greater than margical cost, and profit is maximized. A great example of a duopoly is Coca-Cola and Pepsi Co.

Pepsi is in pure oligopoly

Identifying and evaluating competitors’ strengths and weaknesses

The keys to Pepsi reaching its goals are to concentrate its resources on growing its current businesses and acquiring related companies to broaden its product line. An ongoing battle for market share has existed for over 75 years. Company has tried a number of strategies to gain a sustainable competitive advantage. These strategies included:• Introducing new soft drink products• Diversification• Aggressive advertising campaignsPepsi must identify and implement the strategy best suited to gain the competitive advantage in the soft drink industry on a world-wide basis.

Marketing Strategies of Coke:The Company is guided by six strategic priorities and four principles of citizenship. Their strategic priorities outline how they seek to create value as they continue to pursue growth.Their six strategic priorities are:• Accelerated soft drink growth, led by the coca cola• Selectively broaden their family of beverage brand drive to profitable growth• Growth system profitability and capability together with their bottling partners• Serve customers with creativity and consistency to generate growth across all channels• Direct investment to highest potential area across market• Drive efficiency and cost effectiveness every where.

Strengths Weaknesses of CokeManagement More structured/formal hierarchy Slow Decision makingProduct Line Unique, tastes good, competitive price Low on availabilityMarketing Low costs due to outsourcing Low budget for MarketingPersonnel International, diverse positions Possible conflicts due to so many peopleFinance High sales revenue, high sale growth, large capital base. High tax paymentsManufacturing Low costs and liabilities due to self supplying capability Lose control on inventory control and distribution

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Research& Development Continuous efforts to research trends and reinforce creativity. May concentrate too much on existing products,

Evaluating competitive relationships and analyzing how organizations compete

Competition

where two or more firms are trying to achieve the same goals and penetrate the same markets with broadly similar product offers. coca cola, Pepsi and subway lie in this category. They have same goals market growth etc.

Competitor Responses

The selective competitor, who chooses carefully – and often very strategically – how,

where and with what level of aggression they will respond to any competitive move.

Such an approach is generally based not just on a clear understanding of the relative

value of the organization’s markets, but also on the costs of responding and the like-

lihood of the response proving to be cost-effective.

Pepsi is aware of its competition and know very well about its competitors potential moves in the market so, we can say that Pepsi is very much selective in choosing its right competitors and brad image and recognition is very strong.

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Aims and Objectives of Company:

To serve in a friendly and fun environment To be a socially responsible company To provide good returns to its shareholders To provide its customers with food of a high standard, quick service and value for money To be the world's premier consumer products company focused on convenient foods and

beverages. We seek to produce 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. At PepsiCo, we're committed to achieving business and financial success while leaving a

positive imprint on society - delivering what we call Performance with Purpose.

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Strategic focus in terms of competition

The Tiger Competitor

Being a follower in the market Pepsi always expects a tiger response from its competitors which is aggressive in nature. It is obvious that when you are a follower your market leader know that follower want to be a market leader, because it may destroy the market image and market growth of the leader by influencing from different strategies.

IDENTIFYING MARKET SEGMENTS & TARGETS

In vals we differentiate on the basis of motivation and resources because Pepsi lie in the beverages category so we can see the price and quality and these are all follow in the same category

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Consumer Profiling Based on Shopping Habits

Self-indulgent shoppers

These are younger professionals, with no money worries or commitments and a fondness for the exotic and unusual. They are confident, self-assured and eager to experiment with a multiplicity of foods.

Unmarried people fall in this category. In order to get out from tension they go out for shopping. The people goes with friend and shop and eat burgers, etc

Frenzied Copers

Professionals without much time, or mothers juggling a career and family, they spend freely but move quickly. They return to the same supermarkets, especially if they offer crèche facilities and consistent layouts.

These are the people who do not have time to shop and they are single parent family so they go for ready made solutions and go for fast food category.

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TARGETING AND POSITIONING

Positioning is therefore the process of designing an image and value so that customers within the target segment understand what the company or brand stands for in relation to its competitors.

Pepsi had done a lot of efforts in order to come up with one of the strongest brands in the world. It has included all the possible factors that could help making a powerful and strong brand position in the mind of its customers. It has worked over all the factors starting with its product range like Frito-Lay, Tropicana, Aquafina and Quaker. It has also made its performance standards and keeping in view its quality while even franchising its business.. Time to time ads and promotions in papers leaves always a good impression on the customers and everybody can easily knows about the promotions and advertisements. Word of mouth always plays a vital role in order to help your marketing campaign but that also needs your good service and quality of food and Pepsi is good at both and word of mouth helps increasing its customers. Pepsi Pakistan usually uses the print media and local cable channels and TV in order to support their marketing campaign and they are pretty much consistent with their marketing efforts and selection of media.

TYPES OF POSITIONING

Primary and secondary benefits

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Pepsi is in Primary and secondary benefit positioning because first benefit is thirst and secondary is we use bottles for other purposes.

Position of pepsiSoft drinks pepsi cocacola local drinks Macca cola

amrat colaJuices pulpy nestle Fruite Energy Drinks Red Bull Cott

Target Market for Pepsi

Pepsi customers are mostly young group between the ages of 14 to 30 and also target at school, collages, universities, homes, restaurant, hotels and stores.

Portfolio Based Strategies

These are four in numbers

Invest

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Hold Harvest Divest

Build & invest We cannot go for hold or divest because we are lying in the strong competitive position where market strength is very high and industry attractiveness is very high and competitive position is also very strong.

MARKET SEGMENTATION

Pepsi has divided its market in many ways demographically, geographically, psycho graphically behaviorally

4 P’s (THE MARKETTING MIX) OF PepsiCo Products

PepsiCo operates in three major US and international businesses. Beverages: Pepsi-Cola

Mountain Dew 7up Mirinda Teem

Snack Foods: Lays Cheetos Kurkure

Other Products: Dole juices and juice drinks Gatorade Aquafina drinking water

PROMOTIONS Spends a huge amount on promotions. Include advertisements sponsorships of sporting events, musical shows

and many more. Build strong brand equity. Spends a huge budget on advertisements also.

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Some of the entertainment celebrities for advertisements used by Pepsi are:

Inzamam-ul-Haq David Beckham Maradona Jeff Gordan Ronaldenio Roberto Carlos

Slogans “Ask For More” “Pepsify Karo Gay”

GE Strategies:

Here we have strong competitive position and high industry attractiveness so we fall in Invest for growth category

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Here we have prospects for sector profitability is average and average enterprise capabilities. So we fall in Custodial Growth.

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Position Based Strategies

Coke is the market challenger while Pepsi is the market leader. These findings are based on the interviews conducted with the managers of the well known super stores in the region of Clifton Karachi. However other international and local brands which includes imported energy drinks, syrups, juices and Pakola whole family which contributes to just 12% of the total beverage industry. We have to compete with its strongest competitor coca cola. So we suggest following strategies:

Our recommendations to Pepsi-cola are to

keep advertising as much as possible, and keep coming up with diversified range of products so as to penetrate more and more in the industry.

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Keep their business to franchise system only so as to save as much taxes as possible and use the saved money on advertisements.

Scorpio Technique

Industry or Market:

When we look at the beverages and Pepsi it is very easy to judge the focus and orientation of Pepsi it is

more likely towards customer and the market. They are less careful about industry. As the customer has

more value for them and they are constantly putting efforts in the market. They know about the

competition and the competitors in the market. Pepsi is very well aware of the pure oligopoly in the

Market.

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MARKET FOCUS

Pepsi has always adopted a market focus approach, come up with need analysis of customers and product analysis than accordingly it design products according to taste of the customers.

POSITIONING AND BRANDING

Pepsi has been successful in positioning its self in the mind of consumers and non consumers as well. Pepsi as a brand is well recognized that’s why the biggest strength of Pepsi lies in its Brand name. In the mind of teen agers it has positioned itself as a cool place to hang out with friends where as for the kids it has positioned fun altogether.

SEGMENTATION AND TARGETING

Pepsi Pakistan has segmented itself, geographically demographically.

GeographicallyCovering almost major cities but has many cities uncovered where there is need to cater customers and has potential of growth.

DemographicallyPepsi has also segmented demographically according to age gender of people.

Hybrid segmentationPepsi use both geographical and demographical segmentation. Across the Pakistan

Targeting

Pepsi customers are mostly young group between the ages of 14 to 30 and also target at school, collages, universities, homes, restaurant, hotels and stores.

CUSTOMER RETENTION

The need of day is to retain the customer. as well as to build more customer .

Customer’s retention is more important for fast food chain network because switching cost is low. so, Pepsi Pakistan should use some strategies for customer retention like

keep coming up with diversified range of products so as to penetrate more and more in the industry

OFFERINGS

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Product New taste or flavor bottle

PricePrices should be made more competitive

PlacePepsi should start operation in uncovered ares.

PromotionPepsi should advertise its products and offering more efficiently and use effective medium like news papers, Hoardings Radios TV, .and should focus on personal selling, also determine the frequency of ads to occupy a position in customers and non customers about its products.

ORGANIZATION PROCESS AND CULTULE

Managers to efficiently review the internal process.

Need finances for sake of product development and market development.