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International School of Business & Media Nande, Pune

A Project Report On Marketing Strategy of PepsiCo Defining New Strategy to Revive Market Share
Submitted to:

Prof: Sanjay Kumar

Marketing Management - I
Submitted by: Prateek Singh Parihar (Section B)

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Acknowledgement
It is not possible to prepare a project report without the assistance & encouragement of other people. This one is certainly no exception
On the every outset of this report, we would like to extend our sincere & heartfelt obligation towards all the personages who have helped us in this endeavor. Without their active guidance, help, cooperation & encouragement, we would not have made headway in the project. We are extremely thankful and pay our gratitude to our faculty Prof: Sanjay Kumar for his valuable guidance and support on completion of this project in its presently. We extend our gratitude to ISB&M for giving us this opportunity. We also acknowledge with a deep sense of reverence, our gratitude towards our parents and members of family. Who has supported us morally as well as economically. As last but not the least gratitude goes to all of our friends who directly or indirectly helped us to complete this project report. Any omission in this brief acknowledgement does not mean lack of gratitude. Thanking you, Team Pepsi

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Table of Contents
Marketing Mix of Pepsi Cola ....................................................................................................................... 10 Product:................................................................................................................................................... 10 Beverages ................................................................................................................................................ 10 7UP .......................................................................................................................................................... 10 Brand History .......................................................................................................................................... 10 Brand Advantage..................................................................................................................................... 11 Did You Know? ........................................................................................................................................ 11 However, there are numerous other myths explaining the name: ........................................................ 11 Quick Brand Facts ................................................................................................................................... 12 Aquafina .................................................................................................................................................. 12 Brand History .......................................................................................................................................... 12 Brand Advantage..................................................................................................................................... 12 Duke's...................................................................................................................................................... 13 Dukes Legacy .......................................................................................................................................... 13 Dukes Refreshing Mumbai!! ............................................................................................................... 13 Brand Facts.............................................................................................................................................. 13 Gatorade ................................................................................................................................................. 14 Brand Advantage..................................................................................................................................... 14 What is Gatorade? .................................................................................................................................. 14 Did You Know? ........................................................................................................................................ 14 Quick Brand Facts ................................................................................................................................... 14 Mirinda .................................................................................................................................................... 15 2012 Brand Campaign ............................................................................................................................. 15 Brand History .......................................................................................................................................... 15 Quick Brand Facts ................................................................................................................................... 15 Mountain Dew ........................................................................................................................................ 16 Brand History .......................................................................................................................................... 16 Brand Advantage..................................................................................................................................... 16 Did You Know? ........................................................................................................................................ 16 Darr Ke Aage Jeet Hai ............................................................................................................................ 16 Quick Brand Facts ................................................................................................................................... 16

Page 4 of 134 Nimbooz .................................................................................................................................................. 17 Brand History .......................................................................................................................................... 17 Locally Relevant Taste ............................................................................................................................. 17 Convenience and Great Value ................................................................................................................ 17 Accessibility ............................................................................................................................................. 17 Hygienic ................................................................................................................................................... 17 Quick Brand Facts ................................................................................................................................... 17 Pepsi ........................................................................................................................................................ 18 Brand History .......................................................................................................................................... 18 Brand Advantage..................................................................................................................................... 18 Quick Brand Facts ................................................................................................................................... 19 Brand History .......................................................................................................................................... 19 Brand Advantage..................................................................................................................................... 19 Quick Brand Facts ................................................................................................................................... 20 Brand History .......................................................................................................................................... 20 Brand Advantage..................................................................................................................................... 20 Quick Brand Facts ................................................................................................................................... 21 Price: ....................................................................................................................................................... 21 PRICES OF DIFFERENT BOTTLES .............................................................................................................. 22 Place (Distribution): ................................................................................................................................ 23 Promotion Strategy ................................................................................................................................. 24 Brand Identity ......................................................................................................................................... 24 PepsiCos Campaign ................................................................................................................................ 25 Pepsi ........................................................................................................................................................ 25 7 UP ......................................................................................................................................................... 25 Mountain Dew ........................................................................................................................................ 26 DISTRIBUTION STRATEGY - PEPSI ................................................................................................................ 27 Company (PepsiCo) ..................................................................................................................... 28

Pepsico Distribution Channel .................................................................................................................. 29 FACTORS FOR CHANNEL DESIGN ............................................................................................................ 29 CHANNEL MEMBERS AND ROLES............................................................................................................ 30 GENERIC CHANNEL OUTPUTS ................................................................................................................. 31

Page 5 of 134 Marketing Research .................................................................................................................................... 32 THERE ARE TWO TYPE OF DATA- ............................................................................................................ 32 1. Primary data collection:- ................................................................................................................. 32 Questionaire ( Retailers ) ............................................................................................................................ 33 Questionaire ( Customers ) ......................................................................................................................... 35 Sampling Plan: .................................................................................................................................... 36 Sampling plan consists of:- ................................................................................................................. 36 DATA ANALYSIS ........................................................................................................................................... 37 ANALYSIS OF DATA....................................................................................................................... 37 Interpretation : ..................................................................................................................................... 38 Types of Outlet ................................................................................................................................... 38 Creates Sales Per Day ......................................................................................................................... 40 Brand Value Proposition ............................................................................................................................. 45 Main business.......................................................................................................................................... 45 Product offered by PepsiCo .................................................................................................................... 45 History .................................................................................................................................................... 45 BRAND VALUE PROPOSITION ......................................................................................................... 46 Emotional benefits can help anchor your brand to success... ................................................................ 46 So, what are emotional benefits? ............................................................................................................ 46 Emotional benefits can help anchor your brand to success... ................................................................ 47 How Do I Decide Which Emotional Benefit To Reinforce? .................................................................. 48 FUNCTIONAL BENEFITS ................................................................................................................... 48 Brand History .......................................................................................................................................... 49 Brand Advantage .................................................................................................................................... 50 Brand History .......................................................................................................................................... 51 Brand Advantage .................................................................................................................................... 51 Brand History .......................................................................................................................................... 52 Brand Advantage .................................................................................................................................... 52 Brand History .......................................................................................................................................... 53 About the Brand ...................................................................................................................................... 53 Brand Promise......................................................................................................................................... 53 Brand Advantage .................................................................................................................................... 53

Page 6 of 134 Tropicana ................................................................................................................................................ 54 Brand History .......................................................................................................................................... 54 Brand Advantage .................................................................................................................................... 55 Mountain Dew ........................................................................................................................................ 55 Brand History .......................................................................................................................................... 55 Brand Advantage .................................................................................................................................... 55 Gatorade .................................................................................................................................................. 56 Brand History .......................................................................................................................................... 56 Brand History .......................................................................................................................................... 56 What is their value proposition? ............................................................................................................. 60 CUSTOMER RELATIONSHIP MANAGEMENT ............................................................................................... 63 What is CRM (customer relationship management)? ............................................................................. 63 According to one industry view, CRM consists of: ................................................................................ 63 CRM IN PEPSICO ................................................................................................................................. 64 PepsiCo Drinks Up My SAP................................................................................................................... 65 MISSION ................................................................................................................................................ 68 SEGMENTATION- TARGETING- POSITIONING of PepsiCo ........................................................................... 70 Segmentation, Targeting, Positioning: .................................................................................................... 71 Which segment(s) to target? ................................................................................................................... 72 Positioning .............................................................................................................................................. 72 Position along many dimensions......................................................................................................... 72 Pepsico Market Segmentation................................................................................................................. 74 Soft Drink ......................................................................................................................................... 74 Concentrated Marketing...................................................................................................................... 76 Niche Marketing ................................................................................................................................. 76 Bases of Segmentation: ........................................................................................................................... 77 Demographic ....................................................................................................................................... 77 Demographic ....................................................................................................................................... 78 Market Targeting .................................................................................................................................... 79 Market Positioning .................................................................................................................................. 79 PepsiCo targeting mass marketing, will cater to different segments of consumers ............................ 80 CHEAPER PRICE POINTS ................................................................................................................... 82

Page 7 of 134 Company overview and market analysis for Pepsico ............................................................................. 82 Macro Environment: ............................................................................................................................... 83 Social: ..................................................................................................................................................... 84 Technological:..................................................................................................................................... 84 Micro Environment: ............................................................................................................................ 85 Competitive Analysis: ......................................................................................................................... 85 Geo-demographic:............................................................................................................................... 85 Psycho-graphic segmentation: ............................................................................................................ 85 Target Markets: ................................................................................................................................... 86 Positioning: ......................................................................................................................................... 86 Marketing Mix: ....................................................................................................................................... 86 Product: ............................................................................................................................................... 86 Place: ................................................................................................................................................... 87 Promotion:........................................................................................................................................... 88 Push Strategies: ................................................................................................................................... 88 Pull Strategies: .................................................................................................................................... 88 Recommendation: ............................................................................................................................... 89 What is the market segmentation for Pepsi? ........................................................................................... 90 Segmentation of Pepsi......................................................................................................................... 90 Target Market for Pepsi .......................................................................................................................... 91 Who is Pepsi cola's target market? ...................................................................................................... 92 Who is the specific target audience of pepsi cola? ............................................................................. 92 What is target market? ........................................................................................................................ 92 Purchasing behavior of the average Pepsi drinker: ................................................................................. 92 STUDY OF DISTRIBUTION CHANNEL STRATEGY OF PEPSICO FOR THE POSITIONING OF THE PRODUCT ..................................................................................................................................... 93 Objectives: .......................................................................................................................................... 94 The Pepsi Challenge: Brand Positioning against the Brand Category Leader ........................................ 96 The Pepsi Challenge ........................................................................................................................... 96 Taste Tests: Brand Position in Brand Marketing ................................................................................ 96 PepsiCo India Launches Pepsi Atom ................................................................................................... 97 - Stronger, Fizzier Cola with a Sharp Hit............................................................................................ 97

Page 8 of 134 - Biggest India centric beverage innovation from PepsiCo................................................................. 97 - Ropes in Sushant Singh Rajput as the Brand Ambassador ............................................................... 97 Market Segmentation Of Pepsi At An International Level: .................................................................... 98 The Emergence of a Global Company .................................................................................................... 98 Observations throughout History ............................................................................................................ 99 Core Competencies ........................................................................................................................... 100 STRATEGY USED BY PEPSI ............................................................................................................ 100 Marketing and Customer Responsiveness ........................................................................................ 100 Branding Equity ................................................................................................................................ 101 Reducing Costs ................................................................................................................................. 101 Cyclical Corporate Strategy .............................................................................................................. 102 Key Factors for Success ........................................................................................................................ 103 General Influences ............................................................................................................................ 103 Political Environment ....................................................................................................................... 103 Economic Environment..................................................................................................................... 104 Socio-cultural Environment .............................................................................................................. 104 Technological Environment .............................................................................................................. 104 Pepsis Corporate and Business-level Strategies .................................................................................. 104 Responding to Conflicting Demands: The Environmental Challenge .............................................. 104 Business-level Strategy ..................................................................................................................... 105 PepsiCo Beverage Industry ................................................................................................................... 105 Customer needs, Responsiveness and Product Differentiation of Pepsi-Cola .................................. 105 Distinctive Competencies ................................................................................................................. 105 Customer Group ................................................................................................................................ 106 Corporate-level Strategy ................................................................................................................... 106 PepsiCo Bottling Group Strategy ...................................................................................................... 107 PESTLE ANALYSIS BY PEPSICO ................................................................................................................... 110 Political: ................................................................................................................................................ 110 Economic: ............................................................................................................................................. 110 Social: ................................................................................................................................................... 111 Technological:....................................................................................................................................... 111 Legal: .................................................................................................................................................... 111

Page 9 of 134 Environmental:...................................................................................................................................... 112 Competition Analysis ................................................................................................................................ 118 Competitors of Pepsi ............................................................................................................................. 118 Globally: ........................................................................................................................................... 118 Indian Market: ................................................................................................................................... 118 Problems to be addressed: ................................................................................................................... 119 The president's departure and underwhelming market share numbers were just two of the crushing blows. .............................................................................................................................................. 119 Why did Manu Anand really leave Pepsi? ........................................................................................ 119 A new twist: ...................................................................................................................................... 119 Pepsi & Coca cola: ............................................................................................................................ 120 Take away: ........................................................................................................................................ 121 The strong, direct rival/competitor, The Coca Cola:............................................................................. 122 How Pepsi Went From Coke's Greatest Rival To An Also-Ran In The Cola Wars? ....................... 123 Take away: ........................................................................................................................................ 124 Differentiating two giants: .................................................................................................................... 125 Portfolio Diversification ................................................................................................................... 125 Better For You Products: ................................................................................................................ 125 Coca-Colas Leadership: ................................................................................................................... 126 Takeaway: ......................................................................................................................................... 126 SWOT Analysis: ................................................................................................................................... 128 Strengths: .......................................................................................................................................... 128 Weakness: ......................................................................................................................................... 129 Opportunities: ................................................................................................................................... 129 Threats: ............................................................................................................................................. 130 Product Development:....................................................................................................................... 133 Market Development: ....................................................................................................................... 133 Diversification: ................................................................................................................................. 133 PepsiCo rush to woo price-wary buyers: .......................................................................................... 134

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Marketing Mix of Pepsi Cola

In 1965 Herman W. Lay of the Frito-Lay Company and Donald Kendall of Pepsi-Cola formed PepsiCo. In 1986 operations were combined under PepsiCo Worldwide Foods and PepsiCo Worldwide Beverages. In 2001 PepsiCo merged with Quaker Oats to form a $25 billion company. PepsiCo restructured in 2007 dividing the company into three units food in the US, Drinks concentrated in the US and Food and Drinks marketed abroad.

Product:
The main product of Pepsi Cola Company is Pepsi and its sub brands are Dew, Miranda, 7up, Pepsi Max. It also diversified into Lays. Providing their consumers with easy-to-use, convenient and innovative containers are one of their top priorities. Package introductions they have made over the years include the industry's first 1 liter bottle; Regular, Disposable; Can. Pepsi Co. was the first company to respond to consumer preference with lightweight, recyclable, plastic bottles. These bottles are made of polyethylene terephthalate or "PET plastic," which is a form of polyester used to make strong, lightweight, shatter-resistant bottles.

Beverages
PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain Dew, in addition to low-calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drink Gatorade and fruit juices such as Tropicana and Tropicana 100%.

7UP Brand History

7UP, the refreshing clear drink with a natural lemon and lime flavour was created in 1929. 7UP was launched in India in 1990 and its international mascot Fido Dido was used for advertising in 1992 to position the brand as a cool drink for youngsters. Fido became an instant hit with his trendy look, laid-back attitude and unconventional take on life. During the brands early years in

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India, 7UP gained market leader status in the lemon lime category by being one of the first to be nationally distributed besides being marketed as a healthier alternative to other soft drinks.

Brand Advantage
For the past two years, 7UPs ambition as a brand has been to capture and own the lemon refreshment territory within the clear lime category. Lemon has proven to be a clea r and relevant differentiator for the brand. Further, the emotional connect with the idea of upliftment through refreshment has led to an impressive payoff for the brand. After establishing itself as The Lemon Drink in January 2009, 7UP has continued to build on the theme of mood upliftment with its new tagline Mood Ko Do Lemon Ka Lift.

Did You Know?

There are many theories for the origin of the 7UP name. According to Professor Gary Yu (UCSB) and researchers for the popular Uncle Johns Bathroom Reader the name is derived from the atomic mass of Lithium, 7, which was originally one of the key ingredients of the drink (lithium citrate).

However, there are numerous other myths explaining the name:

Its creator named the soft drink after winning at a casino with three rolls of 7 and the letter U. The drink was formulated with seven flavours plus the bubbles from the drinks carbonation (the bubbles go up). The original bottle contained seven ounces; its creator came up with the name while playing dice. 7UP was the seventh large commercial lemonade brand that tasted the same. Before the formula changed in 2006, a can of 7UP included seven ingredients.

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The Up in the drinks name might refer to the original inclusion of lithium citrate, when it was marketed as a patent medicine to cure hangovers. The name 7UP was a reference to the Esoteric concept of the Seven Planes, made famous by the Internet series The Arrivals. The name came from the seventh-inning stretch 7UP in baseball tradition.

Quick Brand Facts

7UP was created in 1929 7UP was launched in India in 1990

Aquafina Brand History

Aquafina was first launched in the US in 1994. With its unique purification system and great taste, Aquafina soon became the bestselling brand in the country. In India, Aquafinas journey began with its launch in Bombay in 1999 and it was rolled out nationally by 2000. On the strength of its brand appeal and distribution, Aquafina has become one of Indias leading brands of bottled water in a relatively short span of time.

Brand Advantage
Aquafina goes through a five step state-of-the-art purification process to give consumers pure water and perfect taste. Aquafina has been built through refreshing and sharp advertising. The What a Body campaign has helped the brand to drive premium, modern and youthful imagery in an otherwise undifferentiated category.

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Bottled across India in 19 plants, Aquafina is available across more than half a million outlets. Catering to diverse consumer needs and occasions, it is available in various pack sizes like 300ml, 500ml, 1 ltr and 2 ltr bottles and in bulk water jars of 25 ltrs. Aquafina is the face of PepsiCos water conservation initiatives and builds awareness about Pepsicos efforts to replenish and restore the water table through its pack labels.

Duke's Dukes Legacy

Founded in 1889 by Dinshwaji Pandole, Dukes is a brand that is seeped in Mumbais rich history. It was in many ways the countrys first aerated soft drink and a pioneer on many fronts. Many a generations have grown up enjoying the refreshing taste of Dukes. Thus when PepsiCo India brought this brand in 1994, it also inherited Dukes rich Mumbai legacy. While the Lemonade flavour has refreshed the consumers ever since, in September 2011 some more flavours of Dukes , the delicious Raspberry and the sugary sweet Ice-cream soda were relaunched. And with it was launched Dukes Masala Soda, with its strong local flavour that has the consumers wanting for more..

Dukes Refreshing Mumbai!!

Just a year into its re-launch Dukes is being loved by all Mumbaikars. While the old drink is for nostalgia, the young are attracted to the unique flavours that Dukes offers. Be it morning, after meal or in the evening breeze Dukes flavours refresh you every time. As Dukes consumers say Dukes is an Anytime Drink!!! The sweet Raspberry loved by the Parsi community in Mumbai is getting many new connoisseurs. The Mumbai Masala Soda appeals to all with a very unique Indian taste. Whats more the new party mixers launched under the Dukes name have taken the young in city by storm. No party is complete without the Classic Mojito or theExotic Blue Lagoon!!!

Brand Facts
Founded in 1889 by Dinshwaji Pandole a Parsi gentleman

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Bought by PepsiCo in 1994 Relaunched in 2011

Gatorade Brand Advantage What is Gatorade?

Gatorade is an optimal mix of water, carbohydrates and essential mineral salts that get absorbed instantly to rehydrate, replenish and refuel like no other beverage can. Gatorade is unlike any other Beverage or Energy Drink! Gatorade quickly restores what the body loses through sweat. Its scientific formulation instantly helps the body restore essential minerals, salts, water and energy lost through action and exercise. Gatorade thus helps one to stay Stronger for Longer. It contains less than h alf of the sugar that is normally found in energy drinks or soft drinks and even juices.

Did You Know?

Water helps, Gatorade transforms. Gatorade is meant for consumption in active, sporty, hot and sweaty conditions. Gatorade is scientifically formulated and athletically proven to quench thirst.

Quick Brand Facts

Worlds No. 1 Sports Drink Launched in India in 2004 Available in 3 flavours

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Mirinda 2012 Brand Campaign

Mirinda has always stood for great bold taste that unleashes uninhibited fun. Taking the promise forward, Mirinda launched two new exciting flavors- Orange Mango and Orange Masala which appeal to the Indian palette. While Orange Mango is the perfect mix of the sweet candy taste of mango flavor and the tanginess of original Mirinda Orange; Orange Masala tickles the taste buds with a hint of fruit masala flavor added to Mirinda Orange. The launch was supported by a robust 360-degree campaign including outdoor, online and a consumer engagement programme to bring alive the taste experience.

Brand History
Mirinda is an international soft drink brand from Spain that was launched in India in 1991. The irresistible taste of Mirinda was communicated through our 1996 Mirinda Men campaign, the 2000 Taste Pe Atka, Mirindaaaa campaign and the Taste Aisa Chaye Character Fisla Jaye campaign of 2003. In 2008, the brand decided to up the ante and deliver a brand philosophy that would resonate strongly with consumers. Consequently, Mirinda adopted a bold and vibrant colour, great orangey taste and sparkling bubbles that encouraged one to be more carefree, spontaneous and playful and occasionally give in to an impulse of uninhibited fun. This was conveyed through the Pagalpanti Bhi Zaroori Hai campaign with Asin in 2008. In 2009, Mirinda established orange as the core of the brand with Orange Dikha Toh Mooh Bola Mirindaaaa.

Quick Brand Facts

1991: Mirinda Orange launched in India. 1998: Mirinda Lemon launched in India

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Mountain Dew Brand History

The main formula of Mountain Dew was invented in Virginia. The drink was named and first marketed in Johnson City, Tennessee and Knoxville, Tennessee in 1948. In India, Mountain Dew set the soft drink category ablaze in 2003 with its iconic launch campaign Cheetah Bhi Peeta Hai.

Brand Advantage
It is a soft drink that exhilarates like no other because of its active, high-energy, extreme citrus taste. The idea of daring, challenges, a can do attitude, adventure and exhilaration are deeply entrenched in its brand DNA. The brand has always celebrated the bold, adventurous and rebellious spirit of youth. This is reflected in the high-adrenaline advertising of the brand and its connection to outdoor adventure.

Did You Know? Darr Ke Aage Jeet Hai

In 2007, the brand was re-launched with a completely new, punchier formulation. Communication aimed at forging a strong emotional connect with the audience. Thus began the Darr Ke Aage Jeet Hai campaign, which acknowledged that fear was a very real aspect of the world of adventure and Mountain Dewwanted young people to believe in themselves in their moment of fear. For beyond fear lay victory.

Quick Brand Facts

Mountain Dew was invented in Virginia in 1948. It was launched in India in 2003.

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Nimbooz Brand History

Nimbooz was launched in India on the 28th of February 2009. It is the latest addition to the Pepsi beverages portfolio. Brand Advantage The brand delivers very strongly on certain expectations. These are:

Locally Relevant Taste

Nimbooz is a great tasting product. It has capitalized on the existing familiarity with and high consumption of unpackaged / home-made nimbu pani. It has remained true to its authentic Indian Identity by using the traditional Matka (Earthen Pot) and Squeezer in the manufacturing process.

Convenience and Great Value

The product is available in three convenient formats, 350ml PET, 200ml RGB and 500ml PET at the remarkable price points of Rs 18, Rs 10 and Rs 25 respectively.

Accessibility
Nimbooz is Indias first nationally available packaged Nimbu Pani.

Hygienic
It is just like home-made nimbu pani. You can enjoy its natural and delicious lemony refreshment anywhere you go.

Quick Brand Facts

Indias first nationally available packaged Nimbu Pani. It was launched in India in 2009.

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Pepsi Brand History

Pepsi is a hundred-year-old brand loved by over 200 million people worldwide. The largest single selling soft drink brand in India, Pepsi is ubiquitous on just about every social occasion. Youngistaan loves it. 200 million people worldwide love it. But what has made Pepsi the single largest selling soft drink brand in India is actually a formula concocted a century ago in a faraway continent. 1886, the US. Caleb Bradman, a man with a plan formulated a blockbuster of a digestive drink and decided to call it Brads drink. The potion was to become Pepsi Cola in 1898, and eventually, Pepsi in 1903. Since its inception, Pepsi has always been at the forefront of the beverage industry and has come up with revolutionary concepts such as Diet Pepsi, 2l bottles, recyclable plastic cola bottles and the enviable My Can.

Brand Advantage
Pepsi has become a friend to youth and youth culture. Over generations, youngsters have grown up with Pepsi and have shared an emotional connect with it unlike with any other cola brand. Be it parties, hangouts with friends, or just another day at home, a day is never complete without the fizz of Pepsi! Pepsi has always fuelled youth passions like cricket, Bollywood, music and now football. Youth icons like MS Dhoni, Ranbir Kapoor, Didier Drogba, Virendar Sehwag, Sachin Tendulkar, Priyanka Chopra and Deepika Padukone have endorsed Pepsi since its launch in India. Pepsi Changed the Game during the 2011 cricket world cup by challenging convention, celebrating the unorthodox and by becoming the official sponsor of everything that was unofficial about the sport! Change the Game even as a thought has gained enormous popularity and generated tremendous buzz.

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Taking the same theme forward in 2012, Pepsi changed the game yet again by taking the lead in celebrating the exciting new platform of football. Having brought the biggest international football stars and pitching them against the mighty Indian cricketers in a classic faceoff for Pepsi is something which only a brand like Pepsi can deliver.

Quick Brand Facts

Flagship brand of PepsiCo. 100 year old brand loved by over 200 million people worldwide. An iconic youth brand in India. The single largest selling soft drink brand in India. Slice

Brand History
Slice was launched in India in 1993 as a refreshing mango drink and quickly went on to become a leading player in the category. In 2008, Slice was relaunched with a winning product formulation that made consumers fall in love with its taste. With new pack graphics and clutter-breaking advertising, Slice has built a powerful appeal.

Brand Advantage
With the launch of the Aamsutra campaign in 2008, its winning taste and appealing pack graphics, Slice created a great deal of excitement in its category and celebrated the indulgence in mangoes like no other brand had done before. While other players have portrayed the mango as a simple and innocent fruit, Slice celebrates the sheer indulgence and sensuality involved in consuming a mango. The creative Aamsutra idea communicates the experience of extreme sensuous pleasure through the act of drinking Slice.

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Slice was the first brand ever in the Juice and Juice Drinks category to sign on Bollywood diva Katrina Kaif as the brand ambassador for Slice. In 2009, Slice took the notion of indulgence to a whole new level with the launch of the Slice Pure Pleasure Holidays, giving its consumers a chance to win luxurious all -expenses-paid holidays to dream European destinations like Paris, Vienna, Greece and Venice.

Quick Brand Facts

Slice was launched in India in 1993 Slice Mangola was introduced in 1994 Tropicana

Brand History
Tropicana was founded in Bradenton, Florida, USA, in 1947. It is now enjoyed almost everywhere in the world. Carefully nurtured for over 50 years, Tropicana has matured into one of the most respected beverage brands. Tropicana is the #1 brand in packaged 100% Juice* in the world in 2011 in off-trade volume. It is today available in 63 countries. Since 1998, Tropicana has been owned by PepsiCo, Inc. Tropicana Premium Gold was re-launched as Tropicana 100% in 2008.

Brand Advantage
Tropicana continues to select the best fruit to manufacture high-quality juices and original products, pioneer innovative processes and explore new markets for its products. It is committed to fostering healthy lifestyles by ensuring that its products are naturally nutritious and provide the daily benefits that one needs. In India, Tropicana comes in two categories: 100% Juices (sold as Tropicana 100%) and Juice Beverages (sold as Tropicana).

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Quick Brand Facts

Launched in India in 2004. Available in two categories - 100 percent juice and juice-based drinks.

Price:
Pepsi prices its products similar to those of Coca-Cola in order to keep profits high. Competition in the is based mainly on marketing skill rather than price to help avoid costly price wars and keep profits stable. Since neither of the major manufacturers would win a price war, it is unwritten rule that the companies will follow the pricing structure of the market leader. While this amount to price fixing, there has not been any major government actions to curtail the practice so it should continue in the future. PepsiCos current retail prices range depending on the convenience of the location in which they are located and depending on the size of the soft drink container. Factors responsible for pricing of PepsiCo Expenses related to transportation, ingredients and labor continue to pressure the beverage industry toward price increases. PepsiCos drink pricing strategies may be heavily influenced by its working relationship with Wal-Mart whose low price themes put pressure on PepsiCo to hold down prices. The company strives to cut or maintain current prices by cutting overhead and re-engineering the manufacturing process. PepsiCo is expanding its use of inexpensive and recyclable plastic bottles; nevertheless the company has instituted some price increases in recent years, specifically in its overseas markets such as New Delhi and Duba.

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PRICES OF DIFFERENT BOTTLES

200 ml = Rs 20 400 ml = Rs 40 600 ml = 30 1.5 ltr = Rs 50

500 ml Bottle - Rs. 10 1 lt Bottle - Rs. 20 2 lt Bottle - Rs. 32

500 ml = Rs. 35

200 ml = Rs. 10 350 ml = Rs. 18 500 ml = Rs.30

200 ml = Rs. 14 1.2 lt = Rs. 60

1 lt = Rs. 85 99 (depending on flavours)

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Place (Distribution):
Manufacture -------------- Wholesaler---------------Retailer Manufacturer -------- Company Warehouse-------------- Retailer Distribution is an important aspect of success in the beverage industry. Since the cola companies want to focus on making syrup and marketing, they need to have strong, loyal bottlers. This is especially the case in foreign markets where the cola companies fiercely battle for good bottlers. The building of bottlers through joint ventures and the increased maintenance of current bottler relationship should be the main focus of Pepsis international marketing. Coca-Cola is very methodical in making sure that its bottlers are happy, while Pepsi has been known for neglecting its bottlers. This is one area that Pepsi must improve if it is going to take market share away from Coca-Cola. Product is distributed through PepsiCo distribution centers. The distributor delivers it To the grocery retailers, vending companies, restaurants, and warehouse/club stores. The distribution segments can be broken down into the following: Convenience Stores and Gas Stations: 12% of the market Restaurants: 25% of the market Warehouse/Club Stores: 6% of the market Super Markets and Retail Stores: 57% of the market.

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Promotion Strategy
Pepsi promotes its products in a many ways, but focuses mainly on getting products associated with entertainment icons that appeal to youth. The first major use of this technique was the signing of Pakistan cricket team as celebrities. Two other areas of entertainment that have been used by Pepsi to promote its brands are sports and movies. Sports are a popular source of entertainment throughout the world and is a using it to promote the brand is a main focus of Pepsi. Since sporting events are seen many times by fans, it provides a good opportunity to increase brand recognition. Movie stars are also popular throughout the world and are greatly admired by people, so using them in advertising has a positive effect brand image. Pepsico focuses on

Brand Identity
The first step in understanding Image Advertising is to understand the image being created, i.e. Brand Image. Brand Image is consumers perception of the brand in question. This perception might actually be different from what the brand actually embodies the Brand Identity. Advertising bridges the gap between Brand Image and Brand Image. There are a number of tools available to explore the identity of a brand. One such tool is Kapferers Prism (Exhibit 1). As shown in the exhibit above, there are many facets to a brand. Kapferer identifies six key characteristics that together define the brand: Physique the physical attributes of the brand Personality the personification of the brand Relationship the relationship between the consumer and the brand Culture the core values of the brand Reflection the way consumers want to be perceived when using the brand

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Self-Image the image that consumers have of themselves when associated with the brand A combination of these characteristics can be used to identify what the brand ultimately stands for.

PepsiCos Campaign
The analysis of Pepsi, 7 UP and Mountain Dew from the portfolio of PepsiCo puts forth some interesting aspects about the evolution of these brands. Pepsi was one of the first products to Indian markets after the economic reforms of 1991.

Pepsi
Pepsi began with the Yehi hai Right Choice Baby campaign, which has been one of the most memorable campaigns of the brand, featuring celebrity endorsers such as Shah Rukh Khan among others. The focus, as is clearly evident, is on the product with the youth as its target segment. Yeh Dil Mange More and Yeh Pyaas Hai Badi were some of the later campaigns. Yeh Dil Mange More campaign was again a great success, having balanced the emotional as well as the functional appeal of the product. Featuring Sachin Tendulkar and many other leading stars at that point of time, this was also one of the longest campaigns carried out by Pepsi. The company however failed to maintain the trend and leverage it. Instead of moving on to a complete emotional appeal platform, the company decided on a product based promotion campaign. Though there is still some amount of emotional appeal to its campaigns, the principal focus is on the product - it being a preferred thirst quencher.

7 UP
In its early days, 7 UP inherited the global Fido-Dido campaign for promotion in India as well. However, with changing times and a contextual difference in India, a much more focused campaign was required. This led to the Keep It Coolcampaign, which was targeted primarily at the youth and the teenager segment. Hence the appeal was at a more subtle, emotional level, which was meant to convey a potential lifestyle statement. The recent campaign of BhejaFryessentially leverages on the same emotional appeal where the Keep It Cool campaign has been somewhat tweaked to have a local appeal.

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Mountain Dew
Mountain Dew is the latest entrant in the product portfolio. This product too has the appeal of being the drink of a daredevil or the No Fear personality. The campaigns launched include Do the Dew and Dar Ke Aagey Jeet Hai. The initial campaign was unclear in terms of its appeal and the target segment, as a result of which the brand suffered some jolts in the beginning. However, the latest campaign captures the No Fear or the Macho Man image. In this sense, the brand directly competes with Thums Up from the Coca Cola Stable Some of the ways in which Pepsi attract consumers are: Free Samples ( New product DEW) Discounts ( RAMDAN Offers) In-Store Displays Signs, banners etc. Entertainment Games with free T-shirts, Pepsi points under the cap etc. ..Celebrity endorsement. ..Sports like Cricket sponsoring. ..Online surveys

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DISTRIBUTION STRATEGY - PEPSI

COMPANY COBO FOBO WAREHOUSE C&F DISTRIBUTOR SALESMEN SALESMENWHOLESALER SLUMS RETAILER CUSTOMER

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Company (PepsiCo)

PepsiCo India provides the salt to all the bottling plants in the Country that carry out the bottling operations. COBO: These are Company owned bottling operations operating directly under the Company. Out of 32 bottling plants, PepsiCo owns FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for Pepsi.

Warehouses:

These are Company or franchisee owned warehouses spread over various locations that cover the respective territories and come under the purview of their respective Area or Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where they are sent to the C &

distribution network and receive proper assistance from the Company (either COBO or FOBO). The C & F center is owned by a private player and not by the Company. The vehicles (Delivery Vans) are owned by the Company, and the Salesmen at the C & F points are on the Company Payroll.

Distributors

These are small, compared to C & F centers. Everything at the Distributor point owned and managed by the distributor, even the salespersons are on the Distributors payroll. Wholesalers: These are smaller than C & F centers and Distributor points and get the stock directly from the Company or Franchisee. They get their stock directly from the Company and thus get special rates and extra discounts from the Company.

Slums:

They are generally smaller than the Wholesalers are. However, they get special discounts from the C & F centers and Distributor

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distribution channel of Pepsi as they are the only point of contact with the customers. Retailers get their stock from all the other channel members in the distribution channel.

Pepsico Distribution Channel

ManufacturerSponsoredRetailFranchisee Pepsi Co licenses bottlers in various markets that buy its syrup concentrate. These bottlers then carbonate and bottle thesyrup to sell them to distributors or retailer

FACTORS FOR CHANNEL DESIGN

Customer needs : Assortment of Goods: Pepsi has a wide assortment of goods. In beverages some very famous are Pepsi Mirinda, 7up, Slice etc Aquafina, Lehar Soda also.

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Ubiquitous: Restaurant, Pan shops, Kirana Stores, Confectionaries, Pepsi on wheels, all these are some examples of the fact that the product Pepsis ubiquitous. Number Of Intermediaries Intensive Distribution: Pepsi Co follows an intensive distribution strategy. To support their ubiquitous feature they want to place their product in as many outlets as possible. Increases market coverage Competing against Coca Cola and other local companies. Terms And Responsibilities Price Policy: Distributors: 3 to 5 % is the profit margin Retailers: 10 % to 16 % is the profit margin Territorial Rights: Distributors are given territorial rights and are not allowed to work beyond their territories. Conditions of Sale: Payment done through bank or cash. Option of credit sales remains at the lower part of the chain. Guarantee of damaged goods provided.

CHANNEL MEMBERS AND ROLES

PepsiCo Assigns a territory to the distributor. Assigns sales target acc to region and seasons. Evaluates performance against predefined parameters. Sales incentives Promotional offers. Distributors Wholesalers Retailers

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GENERIC CHANNEL OUTPUTS

Spatial convenience High availability Strong presence Shorter delivery span (time) CHANNEL MANAGEMENT PepsiCo has lot of control over the channel In case of Pepsi to authorized distributor to retail shops (defined territory of distributor) Pepsi assigns a particular territory to the distributor under an agreement. No intervention into others territory without companys knowledge. Retailers accountable to the authorized distributors

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Marketing Research
This research involved a study, which was descriptive as well as explorative in nature, it basically aims at gathering data about how the Pepsi scheme plays in mind of shop keepers as well as consumers.

METHOD OF DATA COLLECTION

THERE ARE TWO TYPE OF DATA1. Primary data 2. Secondary data 1. Primary data collection:-

Primary data can be collected by three methods. (a) Observation (b) experiment (c) Survey
But there, only surveys method of data collection is preferred which is very suitable to reach the researcher motto. Research instrument: Printed Questionnaire was used as the research instrument to collect the required information.

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Questionaire ( Retailers )

Name of the shop/outlet :- _____________________Address/Location :-__________________________ Type of Outlet :a) Convenience Store b) Groceries Shop c) Eateries Q1. Which brand of Soft-drink you deal with ? a) b) c) d) Pepsi Coca-Cola Other Mix

Q2. Which Brand of Soft drink provides you better facility? a) Pepsi b) Coca-Cola c) Both Q3. How many Crates of Pepsi you sell per Day? a) b) c) d) 1 Crate 2 Crates 3 Crates More than 3

Q4.Which group of customers prefer Pepsi more? a) b) c) d) Children Youngsters Adults Senior citizens

Q5. Which companys cooler do you have in your outlet? a) Pepsi

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b) c) d) e)

Coca-Cola Both Own Mixed

Q6.Which medium effects the sales most? a) b) c) d) Television Magazines/Newspaper Display Wall paintings/hoardings

Q7. Do you think that advertising helps in increase the sales volume of Pepsi? a) Yes b) No Q8. What kind of promotional activities effect the sales most? a) Discount Rate b) Free Bottle Scheme c) Other Q9. Any Suggestions to increase for further sales mostly. ____________________________________________________________

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Questionaire ( Customers )
f) g) h) i) j) k) l) m) n) o) p) q) r) s) t) u) v) w) x) Name :- ______________ Occupation :- _____________________ Q1. How often you consume soft drinks? Everyday Once in a week Every 15 days Occasionally Q2.Which Brand you like most ? Pepsi Coca Cola Others Q3. If Pepsi, Why? ____________________________________ Q4. If Coca Cola, Why? _____________________________________ Q5.DO you Switch your Brand if product unavailable? If yes, How often ? ____________________________________ Q6. Any Suggestion for Pepsi ? _______________________________________

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Area of surveys:
The survey was conducted in different location of Pune.

Sampling Plan:
Sampling plan consists of:Sampling unit: The retailer of grocery shop, general store was selected from different place. Sampling size: 10 0utlet. Sampling procedure: Simple random sampling procedure was followed Sampling method: Data were collect by retailer survey. The retailer is directly contacted and interviewed at there retail counter.

(2) Secondary data collection:As secondary data were not available with shopkeepers as
wall as stockiest, so these were collected from Internet, Magazine and newspaper.

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DATA ANALYSIS
ANALYSIS OF DATA DATA ARE COLLECTED FROM DIFFERENT LOCATION: 1:Pashan 2:Sus Road 3: Sai Chowk

Survey Analysis
THE SURVEY ANALYSIS WAS CODUCTED IN DIFFERENT LOCATIONS AND TOTAL SURVEY OF 10 OUTLETS WAS CONDUCTED.

Sr. No. 1 2 3

Sales Only Pepsi Products Only Coca-cola products Mixed Total

No. Of Outlet 2 4 4 10

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No. of Outlet

Only Pepsi Products Only Coca-cola products Mixed

Interpretation : The exclusive stores of Coca-Cola is Comparatively much higher in comparision to the exclusive stores of Pepsi. The market composition of the area under survey can be easily understood by the above graph.

DATA ANALYSIS & FINDINGS

Types of Outlet

Sr. No. 1 2 3

Sales Convenience store Grocery Store Eaters Total

No. Of Outlet 5 3 2 10

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No. of Outlet

Convenience store Grocery Store Eaters

Interpretation :The maximum number of Outlets in the region surveyed is of convenienc eshops which includes kirana shops, departmental stores etc. it is followed by Groceries and then by eateries. The most striking features is that there is a great lag between the numbers of different kinds of outlets.

Market Share
Product Pepsi Coca-Cola Others Total % Share 34.1 56.7 9.2 100

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% Share

Pepsi Coca-Cola Others

Interpretation :There is dominancy of Coca-Cola in the soft drinks market. Pepsi is its chief competitor.

Creates Sales Per Day

Sales Per Day One Crate Two Crate

% Share 11 12

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Three Crate

19

Media

Percentage

More than three crate Total

58 100

% Share

One Crate Two Crate Three Crate More than three crate

Interpretation :Huge amount of retailers sale 1 crate per day and goes on decreasing with increasing number of crates sales per day, which is clearly depicted by above graph.

Sales Effecting Media

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Television

60

Newspaper/Magazines 10 Display Board Hoardings Total 20 10 100

Media

Television Newspaper/Magazines Display Board Hoardings

INTERPRETATION :A NUMBER OF RETAILERS AGREED THAT TELEVISIONIS AN EFFECTIVE TOOL FOR ADVERTISEMENT OF THE PRODUCTS FOLLCWED BY DISPLAY BOARDS ETC. AS IS CLEARLY DEPICTED BY ABOVE GRAPH.

CONCLUSION
EVERY THING IN THIS WORLD IS MADE TO UTILIZE PROPERLY BUT IT SHOULD BE REACH AT THEPROPER PERSON OR TO THE PROPER UTILIZED AREAS. OTHERWISE THE VALUE ADDED TO THOSE THINGH BECAME IN VEIN.

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THUS MARKETING ROLE PLAYS A VERY IMPORTANT ROLE IN ACHIEVING THEOBJECTIVE OF A COMPANY. UNDOUBTLY, VALUE UTILITY IS CREATED BY THE MANUFACTURE OF PRODUCT OR SERVICE BUT TIME AND PLACE UTILITIES ARECREATED BY MARKETING ROLE. ACCORDING TO DRUCKER, BOTH THE MARKETAND THE DISTRIBUTION CHANNELS ARE OFTEN MORE CRUCIAL THAN THEPRODUCT. THEY ARE PRIMARY: THE PRODUCT IS SECONDRY. IN AN ECONOMYLIKE THAT OF INDIA, WHERE MARGINAL SHORTAGES CAN LEAD TODISPROPORTATION DISTRIBUTION IN PRICES, A DEPENDABLE AND EFFICIENT DISTRIBUTION SYSTEM IS VERY MUCH ESSENTIAL.THE DISTRIBUTION SYSTEM CREATES A VALUE ADDED TO ALL MOST ALL PRODUCTS. ALL FROM THE ABOVE STUDY NOT WITHSTANDING ITS RESTRUCTING EFFORTS PEPSI IS STILL FAR AWAY WITH ITS GREAT COMPETITOR LIKE COCA-COLA.

FINDING
THE MOST POPULAR FLAVOURIN THE MARKET IS COCA-COLA. COCA-COAL IS MARKET LEADER AND PEPSI IS THE MARKET CHALLENGER IN THE WHOLE MARKET WHERE I HAVE SURVEYED. FROM THE PEPSICO PRODUCTS PEPSI AND THE COCA-COLA PRODUCTS THUMS UP IS THE HIGHEST SELLING IN THE MARKET. IN SOME AREAS LIKE PASHAN THE SUPPLY OF COCA-COLA IS BETTER THAN PEPSI. IN THE CASE OF MINERAL KINLEY IS SELLING MORE THAN AQUAFINA. I HAVE FOUND THAT A RETAILER GIVES MORE PREFENCE TO THE PEPSICO PRODUCTS LIKE PEPSI, MOUNTAIN DEW, SLICE, MIRINDA, TROPICANA, 7UP. THE NEW PRODUCT OF PEPSI, MINUTE MAID HAS A AVERAGE IN THE SURVEYED CITY.

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THE COMPANY HAS INTRODUCED A 1.25 LTR PACK FOR THE LOWER CLASS FAMILY. IN THE CASE OF THE SCHEME PEPSI IS PROVIDING MORE SCHEMES THAN THE COCA-COLA. DISTRIBUTORS HAVE NOT MAINTAINED PROPER STOCK SO THAT RETAILERS DO NOT GET ALL THE PRODUCTS BY WHICH SALE, DISCOUNTING & TRADE SCHEMES ARE EFFECTED.

Suggestions 1. As the most of the dealers have complaints that the salesman does not tell them about
schemes. For this before launching any scheme company should advertise it by distributing pamphlets to the dealers mentioning the period of the scheme & time-to-time proper check is required. 2. Exclusive outlets are loosing because of irresponsible salesmen and their improper behavior. 3. A healthy relationship should be developed by the companys executives with the dealers. 4. Company should develop policy, so that the soft drinks are made available at all the outlets during the peak seasons & not let the opportunity pass by. 5. Company Should make fridge available at maximum outlets, so the chilled soft drinks could be provided to the customers, because in the soft drink market brand loyalty fails if chilled soft drink is not made available to the customers in spite the customer goes in for any other brand, which is chilled. 6. New policy of the company should be introduced before the competitors launch those policies. 7. Hoardings should be display in the inner part of urban areas has more growth potential in terms of sales.

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Brand Value Proposition

PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generates more than $1 billion each in annual retail sales.

Main business
(i) Quaker, (ii) Tropicana, (iii) Gatorade, (iv) Frito-Lay and (v) Pepsi-Cola make hundreds of enjoyable foods and beverages that are loved throughout the world.

Product offered by PepsiCo

It recognized the need to understand and respect local cultures, rituals, patterns and intake gaps when developing delicious-tasting convenient and affordable products for consumers in that market. Examples of products adapted to local tastes include: India A grain-based product called Kurkure, a tea-time snack called Aliva and a high-

nutrition snack made from lentils called Masala Munch; Mexico A quesadilla-shaped and -flavored tortilla chip called Fritos Dobladitas; Russia Locally relevant flavors of Lay's potato chips, such as crab and mushroom; China Blueberry and cucumber varieties of Lay's chips/Congee.

History
PepsiCo, Inc. was established through the merger of Pepsi-Cola and Frito-Lay. Pepsi-Cola was created in the late 1890s by Caleb Bradham, a New Bern, N.C. pharmacist. Frito-Lay, Inc. was formed by the 1961 merger of the Frito Company, founded by Elmer Doolin in 1932, and the H. W. Lay Company, founded by Herman W. Lay, also in 1932. Herman Lay, former chairman and

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CEO of Frito-Lay, was chairman of the board of directors of the new company; Donald M. Kendall, former president and CEO of Pepsi-Cola, was president and chief executive officer. The new company reports sales of $510 million and has 19,000 employees. Major products of the new companies are: Pepsi-Cola Company: Pepsi-Cola (formulated in 1898), Diet Pepsi (1964) and Mountain Dew (introduced by Tip Corporation in 1948). Frito-Lay, Inc.: Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese flavoured snacks (1948), Ruffles brand potato chips (1958) and Rold Gold brand pretzels (acquired 1961). To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

BRAND VALUE PROPOSITION

The functional, emotional, and self-expressive benefits delivered by the brand that combined provide value to the customer.

Emotional benefits can help anchor your brand to success...

Emotional benefits and emotional branding have become hot topics over the past few years. A lot of research has been conducted and the association of emotion in marketing promotions has been shown to have a significant impact on peoples purchasing decisions.

So, what are emotional benefits?

Emotional benefits are the positive emotions the consumer experiences because they use a particular product or service or brand.In other words, emotional benefits support the consumers self-esteem. "I use product Z, therefore I am a creative person". "I use service X, therefore I am a

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relaxed person". "I drive brand Y, therefore I am an innovative person". These are all statements that evoke emotional benefits in the consumer and help drive their purchasing decision because of the emotional association they make with the product or brand. Just about every business, product, and service can be associated with an emotional benefit. Emotions Drive Purchasing Decisions! People buy products because of how the brand or features make the person feel about themselves. Most consumers want to believe that they make purchasing decisions based on logic and price, but most purchasing decisions are driven by emotion and how the consumer will feel as a result of their purchase. How Do I Decide Which Emotional Benefit To Reinforce? When trying to link emotions to your brand for your custom magnets, you must first answer the following questions: What matters most to my target market? What will my product or service do for them? Keep asking what's great about your brand or product or service until you get down to the specific emotional benefit. By linking emotion to your marketing promotions, you greatly reinforce your marketing message and the positive association that brand has with the consumer. Why do you think brands like Pepsi, Gatorade, and Nike spend millions of advertising dollars on famous athletes, entertainers, and singers? Because people can link feeling good with these famous people and that helps them associate those feelings with their products.

Emotional benefits can help anchor your brand to success...

Emotional benefits and emotional branding have become hot topics over the past few years. A lot of research has been conducted and the association of emotion in marketing promotions has been shown to have a significant impact on peoples purchasing decisions. So, what are emotional benefits? Emotional benefits are the positive emotions the consumer experiences because they use a particular product or service or brand.

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In other words, emotional benefits support the consumers self-esteem. "I use product Z, therefore I am a creative person". "I use service X, therefore I am a relaxed person". "I drive brand Y, therefore I am an innovative person". These are all statements that evoke emotional benefits in the consumer and help drive their purchasing decision because of the emotional association they make with the product or brand. Just about every business, product, and service can be associated with an emotional benefit. Emotions Drive Purchasing Decisions! People buy products because of how the brand or features make the person feel about themselves. Most consumers want to believe that they make purchasing decisions based on logic and price, but most purchasing decisions are driven by emotion and how the consumer will feel as a result of their purchase.

How Do I Decide Which Emotional Benefit To Reinforce?

When trying to link emotions to your brand for your custom magnets, you must first answer the following questions: What matters most to my target market? What will my product or service do for them? Keep asking what's great about your brand or product or service until you get down to the specific emotional benefit. By linking emotion to your marketing promotions, you greatly reinforce your marketing message and the positive association that brand has with the consumer. Why do you think brands like Pepsi and Gatorade spend millions of advertising dollars on famous athletes, entertainers, and singers? Because people can link feeling good with these famous people and that helps them associate those feelings with their products.

FUNCTIONAL BENEFITS
PepsiCo has been experimenting with ingredients from unpeeled heat-treated green bananas and plantains to serve as everything from a gluten substitute to a sugar replacer in products from oatmeal to smoothies, crackers, bars and cookies, a recent patent application reveals. Difference between Brands Emotional Benefits and Self-expressive Benefits

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There is a big difference between feeling rugged when wearing Levis jeans and expressing the strong, rugged side of you by wearing them. The differences between the two can be important. Brands essentially deal with different kinds of benefits. An identity that is based on intangible associations or brand personalities provides the brand with more strategic scope and gives you more liberty to extend the brand. On the other hand, a brand that relies on the superior performance of a key attribute will eventually get beaten by competition, because the attribute is a fixed target for competitors. The result can be a loss of differentiation, or worse an inferior position on an attribute that is associated with the brand. PepsiCo uses Facebook to link the information that they post on their website to their Facebook Profile. This partnership strengthens PepsiCos ability to get women involved and to be inspired by powerful women who act as role models. In February 2010, Pepsi We Inspire was awarded the NAACP award for its leadership in promoting multicultural images and role models in the media. Product details Leher

Brand History
Lehar was launched in 1996, with innovative small packs and traditional flavours. The brand positioned itself by emphasizing its irresistible taste and using modern imagery. Lehar was re-launched in 2006 and positioned itself using the plank Taste zyaada kyunki oil taza. It promised to deliver good taste through the use of fresh oil in the manufacturing process.

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Brand Advantage
With the tag line The Joy of Sharing- Khao Khilao Khushiyan Badhao., the brand promises to deliver irresistible namkeens to consumers. Lehar : 'Quality in Every Bite' Lehar - Nutritional Facts & Ingredient Details Lehar Dal Mixture Lehar Masala Puffs Lehar Bikaneri Bhujia (Large) Lehar Chatpata Mix Lehar Iron Chusti Lehar Khatta Meetha Lehar Moong Dal Lehar Navratan Mix Lehar Ribbon Pakoda Lehar Shahi Mix Lehar South Masala Mix Lehar Tangy Starz Lehar Tomato Twist Lehar Masala Pori Mix Lehar Aloo Bhujia Lehar Bikaneri Bhujia (Small) Lehar Chatpateet Chatka Lehar Karare Peanuts Lehar Matar Masti Lehar Murukku Bites Lehar Ratlami Sev Lehar Salted Wafers Lehar Simply Salted Lehar Spicy Masala Lehar Tasty Tomato

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Slice

Brand History
Slice was launched in India in 1993 as a refreshing mango drink and quickly went on to become a leading player in the category. In 2008, Slice was relaunched with a winning product formulation that made consumers fall in love with its taste. With new pack graphics and clutter-breaking advertising, Slice has built a powerful appeal.

Brand Advantage
With the launch of the Aamsutra campaign in 2008, its winning taste and appealing pack graphics, Slice created a great deal of excitement in its category and celebrated the indulgence in mangoes like no other brand had done before. While other players have portrayed the mango as a simple and innocent fruit, Slice celebrates the sheer indulgence and sensuality involved in consuming a mango. The creative Aamsutra idea communicates the experience of extreme sensuous pleasure through the act of drinking Slice. Slice was the first brand ever in the Juice and Juice Drinks category to sign on Bollywood diva Katrina Kaif as the brand ambassador for Slice. In 2009, Slice took the notion of indulgence to a whole new level with the launch of the Slice Pure Pleasure Holidays, giving its consumers a chance to win luxurious all -expenses-paid holidays to dream European destinations like Paris, Vienna, Greece and Venice. Slice - Nutritional Facts & Ingredient Details Slice

Juice Drink NUTRITIONAL INFORMATION (Approx.)

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Per 100ml Energy kcal 73 18.1 17.3

Carbohydrate g Sugars* Protein g Fat Pepsi g g 0 0

Brand History
Pepsi is a hundred-year-old brand loved by over 200 million people worldwide. The largest single selling soft drink brand in India, Pepsi is ubiquitous on just about every social occasion. Youngistaan loves it. 200 million people worldwide love it. But what has made Pepsi the

single largest selling soft drink brand in India is actually a formula concocted a century ago in a faraway continent. 1886, the US. Caleb Bradman, a man with a plan formulated a blockbuster of a digestive drink and decided to call it Brads drink. The potion was to become Pepsi Cola in 1898, and eventually, Pepsi in 1903.

Brand Advantage
Pepsi has become a friend to youth and youth culture. Over generations, youngsters have grown up with Pepsi and have shared an emotional connect with it unlike with any other cola brand. Be it parties, hangouts with friends, or just another day at home, a day is never complete without the fizz of Pepsi! Pepsi has always fuelled youth passions like cricket, Bollywood, music and now football.

Youth icons like MS Dhoni, Ranbir Kapoor, Didier Drogba, Virendar Sehwag, Sachin Tendulkar, Priyanka Chopra and Deepika Padukone have endorsed Pepsi since its launch in India.

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Pepsi Changed the Game during the 2011 cricket world cup by challenging convention, the official sponsor of everything that was

celebrating the unorthodox and by becoming

unofficial about the sport! Change the Game even as a thought has gained enormous popularity and generated tremendous buzz. Kurkure

Brand History
Launched in 1999, this perfect namkeen snack, developed entirely in India, has come to be identified with fun and lovable human quirks. It developed an even stronger identity through associations with celebrities like Juhi Chawla (2003) and Kareena Kapoor (2008), well-known Indian actors.

About the Brand Brand Promise

Kurkure is a crunchy new-age namkeen snack brand which symbolizes light-hearted fun. Embodying the spirit of India, Kurkure has found a home in millions of hearts and minds and enjoys the position of a strong Lovemark brand in India. Juhis vibrant and fun-loving personality complements and embodies the essence of Kurkure. Over the years, Kurkure has journeyed effortlessly from being a snack with a twist to becoming an integral part of Indias teatime menu and an embodiment of endearing human imperfections or tedhapan.

Brand Advantage
Made with trusted kitchen ingredients: 100% vegetarian All the raw materials used in Kurkure comply with the Prevention of Food Adulteration

Act and rules that govern the manufacture, distribution and sale of Kurkure. items. All Kurkure ingredients are used daily in households for the preparation of various edible

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Innovations Kurkure has constantly re-invented itself to sustain its relevance to Indian culture and the Indian ethos. Not only does Kurkure provide an inimitable taste and superior quality, it has also brought fame and happiness to many through its Chai-time-achievers face on pack initiative. Quality Standards Kurkure is made in automated plants at three locations Channo (Punjab), Kolkata and Pune. These plants are audited and certified by various external agencies. The certifications include: 1. 2. HACCP (Hazard Analysis and Critical Control Point). Certification by TQCSI (Australia), which confirms that products are manufactured in a

food safety environment and the manufacturing process has adequate controls to track products. 3. American Institute of Baking (USA), one of the best auditing bodies for confirming

process and product safety. 4. Our Plants are ISO 14000 certified, which confirms that the manufacturing process

ensures environmental safety. 5. Our plants are also certified to ensure that the safety of products, processes, environment

and people is maintained at a very high level. This certification is issued by OHSAS 18001 (Occupational Health and Safety Assessment Series), USA.

Tropicana Brand History

Tropicana was founded in Bradenton, Florida, USA, in 1947. It is now enjoyed almost everywhere in the world. Carefully nurtured for over 50 years, Tropicana has matured into one of the most respected beverage brands. Tropicana is the #1 brand in packaged 100% Juice* in the world in 2011 in off-trade volume. It is today available in 63 countries. Since 1998, Tropicana

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has been owned by PepsiCo, Inc. Tropicana Premium Gold was re-launched as Tropicana 100% in 2008.

Brand Advantage
Tropicana continues to healthy lifestyles by ensuring that its products are naturally nutritious and provide the daily benefits that one needs. In India, Tropicana comes in two categories: 100% Juices (sold as Tropicana 100%) and Juice Beverages (sold as Tropicana). select the best fruit to manufacture high-quality juices and original products, pioneer innovative processes and explore new markets for its products. It is committed to fostering

Mountain Dew Brand History

The main formula of Mountain Dew was invented in Virginia. The drink was named and first marketed in Johnson City, Tennessee and Knoxville, Tennessee in 1948. In India, Mountain Dew set the soft drink category ablaze in 2003 with its iconic launch campaign Cheetah Bhi Peeta Hai.

Brand Advantage
It is a soft drink that exhilarates like no other because of its active, high-energy, extreme citrus taste. The idea of daring, challenges, a can do attitude, adventure and exhilaration are deeply entrenched in its brand DNA. The brand has always celebrated the bold, adventurous and rebellious spirit of youth. This is reflected in the high-adrenaline advertising of the brand and its connection to outdoor adventure. Darr Ke Aage Jeet Hai

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In 2007, the brand was re-launched with a completely new, punchier formulation. Communication aimed at forging a strong emotional connect with the audience. Thus began the Darr Ke Aage Jeet Hai campaign

Gatorade Brand History

Gatorade, the Worlds No.1 Sports Drink, was born on the field of sport! Gatorade was launched in India in 2004 and over the years, has become an integral part of the kitbags of many leading sportspersons. Gatorade has been tried and endorsed in India by the top sports stars and professionals, including Sachin Tendulkar, Irfan Pathan, Md. Kaif, S. Sreesanth Ramji Srinivasan and Javagal Srinath. Lay's All PepsiCo India food products and their ingredients are 100% vegetarian

Brand History
Lays, the worlds largest and favourite snack food brand, has steadily established itself as an indispensable part of Indias snacking culture since its launch in 1995. With its irresistible taste, international and Indian flavours and youth-centric imagery, Lays has established itself as a youth brand and continues to grow in the hearts and mind of its consumers. Over the years, Lays has become known for its engaging and innovative promotions and campaigns. The brand known for its No one can eat just one campaign has moved its positioning to Whats the programme? making Lays the main food of every programme! Saif Ali Khan has been the face of the brand for over five years, and has recently been joined by the captain of the Indian cricket team M.S. Dhoni. Both embody the youthful energy and appeal of the brand. In 2008, Lays launched the never-before Fight for Your Flavour allowing consumers to vote for the flavour of their choice. The flavour with the maximum votes would continue in the

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market. The flavours have been selected by the Lays brand ambassadors Saif Ali Khan and M.S. Dhoni with each celebrity rooting for the flavour of their choice. In November 2008, Lays made yet another innovative breakthrough the Chip-n-Sauce pack. This first-to-market pack has been launched for cricket lovers as they settle in their seats to savour the best sporting action of the season. The Lays Chip-n-Sauce large pack comes in two unique flavours Chilli Chinese with a Schezwan Sauce sachet and Chatpata Indian with a Tamarind Sauce sachet inside the pack. In June 2009, Lays launched its new positioning platform: Lays Be a Little Dillogical. The new Dillogical concept makes an instant connect with youth caught between the desire to succeed and the desire to remain engaged with certain moments that offer a deep emotional fulfilment. This friction is like a game between the heart and the head, a struggle between what you want to do and what you have to do. Its all about making things that matter to the heart, happen. The new platform has been launched with a series of ads built around the universal consumer struggle between what the mind asks one to do and what the heart desires. A powerful 360 degree approach supports the new TVC, and has indeed prompted consumers to be a little Dillogical. Cook the slices are cooked to a crispy crunch in edible vegetable oil. Season finally, the chips are topped off with a mouthwatering sprinkle of salt or

seasoning. The potatoes have now become delicious chips and are packed and delivered to a store near you. How the product/service offered by company is different? PepsiCo took a risky move for the 2010 Super Bowl. The company has been running super bowl ads since 1987, but after 23 years PepsiCo decided to sit out on the Super Bowl ads for 2010. The Super Bowl is known as one of the highlights of many companies advertising budgets, and PepsiCo is no different. It was the biggest advertiser during the 2009 Super Bowl and has made

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the Super Bowl into a major part of its marketing strategy. PepsiCo has used its Super Bowl ads to promote new products, often using celebrities such as Britney Spears and Ozzy Osbourne. This year, however, PepsiCo decided to do something innovative and different. It decided to invest in causerelated marketing.The purpose of cause-related marketing is to get the consumer involved in social causes. In the process, it portrays the sponsoring company in a favorable light. Marketing strategies in the past have been focused on conveying a message to consumers, influencing them to purchase their products by appealing to their emotions. Cause-related marketing may do the same thing, but instead of merely getting a product, consumers receive the added incentive of contributing to a social cause when they do business with a certain company. Thus, PepsiCo is taking a twist on the more conventional methods of marketing and advertising by launching a cause-related campaign. In this type of campaign, PepsiCo is getting consumers involved, giving them a platform to have their voices and opinions heard, and propelling positive change. So although Doritos, a PepsiCo snack food under Frito-Lay, did have various ads in Super Bowl XLIV, the companys title brand Pepsi did not. In its place the company launched the Pepsi Refresh Project. The Pepsi Refresh Project is a unique social responsibility initiative because while it donates grants for certain causes, the consumers do the workeven in deciding who is awarded the grants. The entire process happens through social media. Basically, instead of paying the nearly $3 million for a 30-second TV ad, Pepsi has decided to better use its funds to inspire people to get involved in good causes. It dedicated at least $20 million, through the end of 2010, for donations to local organizations and causes proposed by the public. The topic areas are being classified as Health, Arts & Culture, Food & Shelter, The Planet, Neighborhoods, and Education. Consumers can go online to refresheverything.com, post their ideas for causes, and/or vote for those ideas already posted. Every month PepsiCo tallies the votes and donates grant money to those with the most votes. Grant awards are separated into four categories: $5,000, $25,000, $50,000, and $250,000. Recipients who have been awarded funding for their proposed causes include the Kanzius Cancer Research Foundation, Ben-Gil Elementary Boosters, and the Waukee High School Earth Club, among others. The Pepsi Refresh Project challenges people, businesses, and non-profits to look around their

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communities and identify things that they want to change. Many of PepsiCos ads include the question: What do you care about? PepsiCo has been distributing ads around the country with captivating phrases and words, all with the Pepsi logo placed in each letter o. These words capture a positive can do attitude, inspiring consumers to think about what matters and to act on those ideas they care most about. The site is user-friendly and interactive. Other forms of social media that PepsiCo is using include Facebook, Twitter and Hulu. Broadcast networks such as ABC and CBS will also be involved, as well as media partners like AOL, Yahoo!, MTV Networks, and Parade. PepsiCo will also be known as the sponsor of the first long-form series on the online video site Hulu, with its reality show If I Can Dream. Hulu states that its site will be used to strengthen PepsiCos cause-related advertising campaign. It is clear that in addition to its heavy reliance on web ads and public relations, PepsiCo is utilizing the whole spectrum of social media outlets to bring its cause to fruition. In so doing, the company hopes to reach its target market of a younger audience. Although Pepsis decision to skip the Super Bowl is risky, even skeptics admit that it has generated a positive buzz around the company. PepsiCo has been able to differentiate itself in an innovative way, paving the way for new socially responsible and conscious advertising. This is becoming more than just cause-related marketing used to engage customers; it is quickly becoming a movement defining PepsiCo as a leader when it comes to social responsibility and sustainability. On April 22, 2010 (Earth Day) PepsiCo announced its multi-year partnership with Waste Management Inc. in support of the Dream Machine recycling initiative. The Dream Machine initiative recognizes that many plastic cans and bottles are needlessly thrown away each year, particularly by busy consumers on the go. The two partners want to see the U.S. beverage container recycling rate increase from a mere 34 percent to 50 percent by 2018. This will be encouraged with PepsiCos Dream Machine kiosks that act like reverse vending machines. The Dream Machine kiosks are computerized receptacles that give consumers points when they recycle their bottles. The process involves only a few steps. First, the consumer registers on the kiosk. Then he or she scans the can or bottles barcode and puts it in the appropriate chute. The kiosk then issues the user a receipt that contains reward points that can be redeemed for such things as movie tickets, coupons, or other goods. PepsiCo is extending its partnership with Entrepreneurship Bootcamp for Veterans with Disabilities (EBV) to offer

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training in business management to disabled veterans. The kiosks began with fifty installed around Southern California, with a goal to install as many as 3,000 in public areas during 2010. Currently, only about a third of nonalcoholic plastic beverage containers are being recycled each year, and only 12 percent of public spaces have recycling receptacles. The Dream Machines are a way to meet the clear need for greater public access to recycling bins as well as to promote PepsiCos sustainability efforts. PepsiCo is the classic business success story, starting with one mans invention and becoming a multimillion dollar enterprise with operations all across the globe. Yet the company could not avoid becoming involved in major controversies. PepsiCo is moving toward a more balanced stakeholder orientation by identifying those stakeholders that are relevant to the firm and trying to understand and respond to their concerns and needs. The current leadership at PepsiCo understands the importance of stakeholders and the need to develop effective dialogues and other communication to help PepsiCo resolve conflicts. Some issues such as the nutritional concerns over soft drinks and snack foods create a serious dilemma in balancing the concerns of specialinterest groups and the desires of consumers for good tasting food.

What is their value proposition?

Value Proposition: A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. Companies use this statement to target customers who will benefit most from using the company's products, and this helps maintain an economic moat. The ideal value proposition is concise and appeals to the customer's strongest decision-making drivers. Companies pay a high price when customers lose sight of the company's value proposition. How an independent Pepsi within Pepsi is propelling the giants charge into the value snack and beverage market is an example of its value proposition. An amorphous entity called Value Foods Organisation (VFO) has infused a wave of excitement in PepsiCo India Holdings, the apex company of the $66 billion PepsiCo's India business. Among PepsiCo's 6,000 employees,

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some have heard about it; but most have not. Rivals and marketing professionals cannot curb their curiosity. Analysts scratch their heads, unable to grasp the logic. Consultants give you a "value-is-good-in-foods" spiel to avoid sounding ignorant. PepsiCo has kept VFO low-key and its progress under wraps. There are reasons behind VFO's UFO status. The concept has been frozen, but it goes through its share of iterations. It is more than an experiment, but less than a full-blown launch. Its intentions are clear, the portfolio is not. Importantly, PepsiCo is yet to make up its mind whether to call it a success, or wait till the trend crystallises. The entity itself encompasses PepsiCo's burgeoning value snacks and value beverages portfolio. Value snacks include a factory-fresh range of vitamins- and minerals-enriched biscuits and salty snacks priced at Rs 2 and the existing Lehar portfolio of namkeens and chips in the range of Rs 2-55. It offers, in total, 45 stock-keeping units. The value beverages portfolio has a few products launched by NourishCo Beverages PepsiCo's 50:50 joint venture with Tata Global Beverages set up in 2010. Though the venture is still finding its feet, NourishCo already offers four products. That apart, Lehar will widen its portfolio of namkeens such as bhujia, nuts, wafers and puffs in smaller sachets with lower prices to reach out farther. VFO is getting a disproportionate share of chairman Manu Anand's attention. That is because for the first time in PepsiCo's 23-year stay in India, it senses it has hit upon a high-growth engine that could cater to millions not served by its existing products. In the best case scenario, it could be the disruptive force to fuel the growth-starved MNC's emerging-market strategy. Remember, this is Lehar's second coming. First launched in 1996, it was relaunched in 2006. It was a tumultuous 2011 for PepsiCo International, after all. It disappointed analysts and shareholders as net revenue rose 15 per cent, lower than the 34 per cent in 2010. This came with an announcement of 8,700 job cuts, representing 3 per cent of the workforce in February 2012. PepsiCo lost share in the US carbonated beverage market to Coca-Cola from 2008 through 2010. Pepsi vs Coke? What is a Value Proposition?

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Do you ever stop and think about why you purchase one product over another? For example, do you drink Pepsi or Coke? (Oh, the classic debate!) Do you drive a domestic car, say, Ford or a foreign car, say, Nissan? Well, if you actually analyze why you make the purchase, you might realize the factors at play, for example, brand identity, cost, or specific features. In the end, it boils down to the different value proposition that each company creates in their marketing strategy for you, their target market. It is this value proposition that really influences your decision to purchase, consciously or sub-consciously.

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CUSTOMER RELATIONSHIP MANAGEMENT

What is CRM (customer relationship management)?
CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

According to one industry view, CRM consists of:

Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices) Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.

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CRM IN PEPSICO

PepsiCo, Inc. is one of the world's top consumer product companies with many of the world's most important and valuable trademarks. Its Pepsi-Cola Company division is the second largest soft drink business in the world, with a 21 percent share of the carbonated soft drink market worldwide and 29 percent in the United States. Three of its brands--Pepsi-Cola, Mountain Dew, and Diet Pepsi&mdashe among the top ten soft drinks in the U.S. market. The Frito-Lay Company division is by far the world leader in salty snacks, holding a 40 percent market share and an even more staggering 56 percent share of the U.S. market. In the United States, Frito-Lay is nine times the size of its nearest competitor and sells nine of the top ten snack chip brands in the supermarket channel, including Lay's, Doritos, Tostitos, Ruffles, Fritos, and Chee-tos. FritoLay generates more than 60 percent of PepsiCo's net sales and more than two-thirds of the parent company's operating profits. The company's third division, Tropicana Products, Inc., is the world

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leader in juice sales and holds a dominant 41 percent of the U.S. chilled orange juice market. On a worldwide basis, PepsiCo's product portfolio includes 16 brands that generate more than $500 million in sales each year, ten of which generate more than $1 billion annually. Overall, PepsiCo garners about 35 percent of its retail sales outside the United States, with Pepsi-Cola brands marketed in about 160 countries, Frito-Lay in more than 40, and Tropicana in approximately 50. As 2001 began, PepsiCo was on the verge of adding to its food and drink empire the brands of the Quaker Oats Company, which include Gatorade sports drink, Quaker oatmeal, and Cap'n Crunch, Life, and other ready-to-eat cereals.

PepsiCo Drinks Up My SAP

SAP announced on Wednesday that global brand leader PepsiCo has selected my SAP Business Suite as the primary business platform for unifying its operations, standardizing business processes and increasing efficiency across its divisions. The US$27 billion convenience food and beverage company produces Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. SAP spokespeople declined to comment the value of the deal in either dollars or seats. However, John Grozier, SAP's vice-president of CRM product marketing, told CRM Buyer in an interview that PepsiCo selected my SAP tokick off of a major business transformation for the company. "Ultimately thesis an enterprise-wide decision and the specific plans being worked out right now," he said. Then PepsiCo decided this year to forego the customary Super Bowl advertising for its Pepsi line of soft drinks, many industry observers were surprised. But the real shock was what the company pursued instead: a $20 million social media campaign that enabled people to submit and campaign for ideas (proposals to "refresh" their communities), and then empowered the public to vote among the submitted proposals. Twenty million dollars may seem like a lot of five-cent deposits, but the company says participation levels since the campaign's January 2010 launch have been tremendous: * 7,500 submitted ideas; * more than 46 million people have voted for a project;

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* 256 projects received Pepsi Refresh Project grants; and * those projects are estimated to have reached over 200,000 people nationwide. And that's just the snapshot after 9 months, according to Bonin Bough, PepsiCo's global director of digital and social media. In his "preconference" keynote address at the Digital Marketing Association's DMA2010 event, convening here this week, Bough announced the company's intent to expand Pepsi Refresh to Latin America, Europe, and Asia in 2011 and shared some advice on how marketers can make their social media campaigns as fresh as Refresh. Britney Spears, Cindy Crawford and Ozzy Osborne all have appeared in Pepsi Super Bowl ads. But this year, the soft drink brand is breaking tradition, opting for a digital CRM program to drive a two-way discussion with consumers instead of a splashy, Super Bowl spot for its flagship soft drink. The strategy shift means Pepsi will inject $20 million into its cause-related Refresh Project that helps people improve their communities through a variety of projects funded by the marketer. PepsiCo will officially launch a Web site, RefreshEverything.com, on January 13. On it, consumers can list projects that can improve communities, such as feeding the hungry or teaching people to read. Consumers can vote on the site beginning February 1 on projects they think should receive a share of the money. They will be asked to contribute their e-mail addresses for e-mail alerts on the project. However, Nicole Bradley, spokesperson for PepsiCo, tells DMNews the primary goal is to create a two-way dialogue with loyal and prospective customers, rather than build an e-mail database for marketing. "The Super Bowl broadcast can be an amazing stage for broadcasters, and [PepsiCo subsidiary] Frito Lay will be there in a big way," she says. "But our beverage brands' marketing strategy in 2010 [is] less about a singular event and more about a movement. We are always looking to further develop our two-way conversation with consumers."

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The CRM campaign asks consumers to suggest ways that Pepsi can get involved in social causes. Bradley added that the company has made no decision on marketing for the 2011 Super Bowl and beyond. With the effort, PepsiCo is taking its marketing initiatives to where its target audience is already spending much of its time, says Tracy Tuten, associate professor of marketing at East Carolina University. "Pepsi has always positioned itself as being about the youth market of America, and young people now are inundated with social media," she says. "They are also increasingly involved in sustainability and the greater good and all of those issues. "Pepsi is making a big statement that they want to be about all of those things that their target [audience] is about." Tuten adds that Pepsi's e-mail address collection could also be used to create a standalone social networking community. The move marks the first time in 23 years that the NFL's championship game will not have an ad promoting Pepsi. PepsiCo spent $33 million advertising Pepsi, Gatorade and Cheetos during 2009's Super Bowl XLIII, according to an Associated Press report. TNS Media Intelligence, which measures advertising spending, reported that PepsiCo spent $142.8 million on 10 Super Bowl ads from 1999 to 2008 for its brands, ranking the company second only to Anheuser-Busch during that period. The economy is compelling other brands to take a break from Super Bowl advertising. For the second straight year, FedEx will not advertise during the game, during which spots will reportedly cost nearly $3 million. For PepsiCo, the decision to shift some of its marketing spend to a digital engagement project may have come down to measuring marketing effectiveness during the tough economy, says Dean DiBiase, chairman of RebootPartners.com and the former CEO of TNS Media. PepsiCo, Inc. is one of the world's top consumer product companies with many of the world's most important and valuable trademarks. Its Pepsi-Cola Company division is the second largest

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soft drink business in the world, with a 21 percent share of the carbonated soft drink market worldwide and 29 percent in the United States. Three of its brands--Pepsi-Cola, Mountain Dew, and Diet Pepsi & mdashe among the top ten soft drinks in the U.S. market. The Frito-Lay Company division is by far the world leader in salty snacks, holding a 40 percent market share and an even more staggering 56 percent share of the U.S. market. In the United States, Frito-Lay is nine times the size of its nearest competitor and sells nine of the top ten snack chip brands in the supermarket channel, including Lay's, Doritos, Tostitos, Ruffles, Fritos, and Chee-tos. FritoLay generates more than 60 percent of PepsiCo's net sales and more than two-thirds of the parent company's operating profits. The company's third division, Tropicana Products, Inc., is the world leader in juice sales and holds a dominant 41 percent of the U.S. chilled orange juice market. On a worldwide basis, PepsiCo's product portfolio includes 16 brands that generate more than $500 million in sales each year, ten of which generate more than $1 billion annually. Overall, PepsiCo garners about 35 percent of its retail sales outside the United States, with Pepsi-Cola brands marketed in about 160 countries, Frito-Lay in more than 40, and Tropicana in approximately 50. As 2001 began, PepsiCo was on the verge of adding to its food and drink empire the brands of the Quaker Oats Company, which include Gatorade sports drink, Quaker oatmeal, and Cap'n Crunch, Life, and other ready-to-eat cereals.

MISSION
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. Values PepsiCo Inc. reflects their values by their commitments Their committed to Sustained Growth Empowered people Responsibility and Trust PepsiCo Inc. commitment is to deliver sustained growth, through empowered people, acting with responsibility and trust. Strategies Strategies Realignment of their organization into three new business units; PepsiCo America Foods Includes all of their Latin American food and snack business. PepsiCo America Beverages

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Includes all of our Latin American beverage business PepsiCo International Includes all PepsiCo business in the United Kingdom, Europe, Asia, Middle East and Africa. Financial Objectives Increase our investment in developing markets, make selective investments to continue growing our global snacks business and accelerate our global R&D initiatives to help secure our future innovation pipeline. Produce $1.2 billion in pre-tax savings over the next three years (Productivity for Growth Initiative) Investing to drive additional growth in key developing markets across the world in both Snacks and Beverages. Targeted marketplace investments tofurther secure our competitive position in developed Snack markets.

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SEGMENTATION- TARGETING- POSITIONING of PepsiCo

Segmentation: grouping consumers by some criteria Targeting: choosing which group(s) to sell to Positioning: select the marketing mix most appropriate for the target segment(s).

Segmentation
Grouping consumers by some criteria, such thatthose within a group will respond similarly to a marketingaction and those in a different group will respond differently.

Entire Market

Segment 1" Segment 2"

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Segmentation

All dog owners

Dogs are servents

Dogs are servents

Potential Segmentation Variables:

Sex, age, race, income, educational level, marital status, number of children, introvert / extrovert, zipcode, usage history.

Segmentation, Targeting, Positioning:

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Which segment(s) to target?

Positioning
1. Determine what consumers currently think about your product (with respect to competingproducts) 2. Decide what you want consumers to think about your product. 3. Figure out how to reposition. Position along many dimensions 1. Product Attributes (Certs, with Retsin) 2. Product effects (Rembrandt gets teeth 5X whiter) 3. Price ("Budget Gourmet frozen dinners) 4. User (baby shampoo vs. gentle shampoo)

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5. Usage (Coke in the morning) 6. Relation to other products (7 Up is the uncola) 7. Arbitrary ("Weekends are for Michelob")

Heavy

Bitter

Mild

Light

Expensive

Old

Young

Cheap

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Pepsico Market Segmentation

Introduction Pepsi-Cola was founded by a druggist, Caleb Bradham in year 1898 (Overview, 2008). He came from New Bern, North Carolina (Overview, 2008). In year 1965, Pepsi-Cola merged with FritoLay in a new company named PepsiCo (Overview, 2008). Then, PepsiCo merged with Tropicana in year 1998 and also Quaker Oats Company in year 2001 (Overview, 2008). Those mergers have been divided in categories such as food, beverage and snacks. Now, Pepsi Brand is part of a group of beverage brands which consists of carbonated soft drinks, mineral water, ready-todrinkteas and coffees, juices as well as isotonic sport drinks. Marketsegmentation Market segmentation is the process of dividing markets comprising the heterogeneous needs of many consumers into segments comprising the homogeneous needs of smaller groups (Guille M). Segmentation is usually done by demography, geography and socioeconomic variables. The easiest way to segment consumer market is to use demographic variables such as age, gender and education level. Organizations that operate globally usually segment consumer market geographically. Besides, socioeconomic variables are to segment the market regarding the income, social class and also lifestyle.

Soft Drink PepsiCo As we know that PepsiCo provides varieties of beverages such as carbonated soft drinks, sport drinks, dairy-based drinks, energy drinks, fruit flavored beverages, ready-to-drink coffees, readyto-drink tea, mineral water and frozen beverage. Those products are marketed under brand as Pepsi, Mountain Dew, Gatorade, Lipton, Starbucks, Tropicana, and so on.

Why PepsiCo have to produce so many types of products? The reason is relevant to market segmentation. PepsiCo aims to attract different groups of consumers with difference types of products.

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This report provides an analysis and evaluation of the Marketing Strategy of PepsiCo. Methods of analysis include Market Segmentation, Market Targeting, Market Positioning, as well as the Marketing Mix of PepsiCo.

The research draws attention to the Market Segmentation of PepsiCo. While the soft drink industry has probably the widest and deepest customer base in the world, Pepsi did not use the majority fallacy to market their product. Instead, Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are what marketers refer to as Generation X, which are profiled to be between the ages of 18 to 29. In addition, PepsiCo also focus on another market, which includes Teenagers that are between the 12 to 18 years old. Pepsi believes that if they can get this market to adopt their product, they could establish a loyal customer in a long run. Despite being a strong #2 against Coca Cola, Pepsi has become the largest selling soft drink in the world and is liked by people of all ages. A recent survey has shown that about 90% of the world population prefers Pepsi when asked the question of which soft drinks do they prefer. The reason for their linking is because Pepsi is able to give them a higher quality of taste and a large variety of flavors.

PepsiCo is a world leader in convenient snacks, food and beverages with revenues of more than $39 billion and over 185,000employees. The company consists of PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAB) and PepsiCo International (PI). Besides the PepsiCola brands, the company owns the brands Quaker Oats, Gatorade, Frito-Lay, SoBe, Naked, Tropicana, Copella, Mountain Dew, Mirinda and 7up (outside the USA).

PepsiCos products are recognized and are most respected all around the globe. Currently, PepsiCo has divisions which operates in three major US and international businesses: beverages, snack foods, and restaurants. In each of these businesses, PepsiCo has attained a leadership position as being the world leader in soft drink bottling, the world largest snack chip producer, and the world largest franchised and company operated restaurant system. The cooperations increasing success has been based on high standards of performance, marketing strategies, competitiveness, determination, commitment, and the personal and professional integrity of their

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people, products and business practices. PepsiCos overall mission is to increase the value of our shareholders investments through sales growth, investments and financial activities. PepsiCo believes their success depends upon the quality and value of their products by providing a safe, whole some, economically efficient and a healthy environment for their customers; and by providing a fair return to their investors while maintaining the highest standards of integrity.

As we know that PepsiCo provides varieties of beverages such as carbonated soft drinks, sport drinks, dairy-based drinks, energy drinks, fruit flavored beverages, ready-to-drink coffees, readyto-drink tea, mineral water and frozen beverage. These products are marketed under brand as Pepsi, Mountain Dew, Gatorade, Lipton, Starbucks, Tropicana, and so on. With these products, PepsiCo aims to attract different groups of consumers. There are two levels in which Pepsi segments its market: Demographic Niche marketing

Concentrated Marketing Despite the large customer base in the Soft Drink industry, Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are what marketers refer to as Generation X, which are profiled to be between the ages of 18 to 29. In addition, Pepsi shifted its focus to the growing American teenage market in the 1990s by forming exclusive contracts with American schools and developing advertising campaigns such as The Next Generation and the Joy of Pepsi, featuring Britney Spears. Pepsi believes that if they can get thi s market to adopt their product, they could establish a loyal customer in a long run.

Niche Marketing Pepsi focused on varietal differentiation since 1990 by introducing a string of niche products. To increase volume in order to counter flat coca sales, Pepsi introduced Sierra Mist in 2002-2003to

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take the place of 7-up and go head-to-head with Sprite. Pepsi has also tried to boost volume by introducing products that appeal to specific target markets that it currently is not reaching. Pepsi has introduced Code Red and Live Wire, extensions of Mountain Dew, Pepsi One, and Pepsi Blue. Finally, Pepsi is countering declining sales of carbonated drinks through the marketing and distribution of Starbucks ready to drink products, and the acquisition of SOBE and Gatorade. The success of Pepsis Mountain Dew Code Red launched in 2001 was the most successful soft drink innovation in 20 years and has spurred even more niche product introductions for PepsiCo as well as other competitors.

Bases of Segmentation:
Demographic In focusing on the Pepsi-Cola beverage product, PepsiCo has retained a long history of concentrating on youth as its main target market Generation Next! It has spent billions of dollars in trying to woo the young and nearly young, implying that Coca-Cola is for the older generation. The reason why Pepsi-Cola has fiercely targeted this market is because it is the largest amongst its users. Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. Also, Pepsi continually targets the college market in which they spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities (i.e: CSUF) to have sold representation of their product distribution Pepsis use this behaviorist segmentation has been a key to the companys success.

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Demographic In focusing on the Pepsi-Cola beverage product, PepsiCo has retained a long history of concentrating on youth as its main target market Generation Next! It has spent billions of dollars in trying to woo the young and nearly young, implying that Coca-Cola is for the older generation. The reason why Pepsi-Cola has fiercely targeted this market is because it is the largest amongst its users. Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. Also, Pepsi continually targets the college market in which they spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities (i.e: CSUF) to have sold representation of their product distribution. Pepsis use this behaviorist segmentation has been a key to the companys success.

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Market Targeting
Pepsi customers are mostly Teenagers and Young Adults between the ages of 14 to 30. It also targets at Schools, Colleges, Universities, Homes, Restaurants, Hotels, and Stores.

Market Positioning
PepsiCo plans to further create positions that will give products the greatest advantage in their target markets. Pepsi has been positioned based on the process of positioning by direct comparison and have positioned their products to benefit their target market.

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PepsiCo targeting mass marketing, will cater to different segments of consumers Beverage and snacks maker PepsiCo India is gunning for the bottom-of-the-pyramid consumer for the first time in the country, as its chairman, Manu Anand, drives the New York-based $60 billion parent's target to reach the 'next one billion' consumers in the value segment.

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In his first media interaction since he succeeded Sanjeev Chadha in January this year, Anand tells ET that PepsiCo is creating verticals to cater to different segments of consumers, across functions like sales, operations, distribution and marketing. PepsiCo's low-priced products will be aimed at 330 million consumers graduating from the bottom-of-pyramid to the socio-economic B and C classes. The move is in line with global chairman Indra Nooyi's target to generate $30 billion in revenues from 'healthier' products-internally called better-for-you and good-for-you products-by 2020, up from the existing $10 billion. India will be the first country in the PepsiCo system to target the value segment with multiple products. "It's a big transformation for us; we are targeting the next tier of consumers. We are looking at everything differently and doing this in a very structured way. But it's not as if we are underinvesting in our core business; it's more about creating new consumption spaces," says Anand, who has been with PepsiCo for the past 17 years.

VERTICAL

MOVEMENT

NourishCo, PepsiCo's vertical in partnership with Tata Global Beverages, has just rolled out its first product, a lemon-flavoured glucose-based drink, called Gluco Plus, in Maharashtra. It is priced at 5. Lehar Foods, another vertical, is a separate operating entity, which will launch value snacks priced at 5 and lower. Its other two businesses are core aerated drinks and snacks. An innovation vertical has launched biscuits and snacks priced at 2 under the Lehar Iron Chusti brand in Andhra Pradesh initially. This line-up of healthy foods is targeted at women under 'Project Asha', PepsiCo's codename for Nooyi-commissioned plan to develop low-priced nutritional foods for the poor. Anand, back in India after '07 when he was heading the foods division, says what has changed most at the firm in the past four years is its "sheer scale of operations".

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While separate operations, sales and marketing teams have been set up for the verticals, PepsiCo has further split its go-to-market (distribution) model into three divisions. There's a premium arm for distributing Tropicana juices, Gatorade sports drinks and Quaker oats; a mid-rung one for aerated drinks like Pepsi and Slice and snacks like Kurkure and Lays; and a division catering to mass products like Lehar Iron Chusti.

CHEAPER PRICE POINTS

Low-margin products like Iron Chusti will obviously not be profitable in the beginning, but PepsiCo is hoping that the products will achieve scale in about 24 months. Anand says even in PepsiCo's core business of snacks, such as Kurkure and Cheetos, the firm is stepping up focus on 5 and 3 packs. These packs are growing the fastest among PepsiCo's foods arm and contribute 45-50% to the division's foods sales. While in aerated drinks, selling bottles and cartons for 5 amounts to sacrificing profitability, PepsiCo will look at products at 5 through its joint venture with Tata Global Beverages. Three-fourths of PepsiCo consumers are common to foods and beverages. But beverages are more asset intensive while the foods business is more systems-driven. This new strategy comes at a time when food inflation is running high. Anand says he's using all global and local resources to minimise costs, including stepping up conversion efficiencies, using cheaper sources of energy and better commodity procurement.

Company overview and market analysis for Pepsico

PepsiCo Inc. is the worlds second largest soft drink brand and the worlds largest potato chips manufacturer. In this report, we will be analysing PepsiCo Inc.s marketing strategies with regards to its North American market. Where absolutely required, PepsiCos international efforts are mentioned as well as some past advertising feats. I will, however, try to cover as much of PepsiCos recent strategies as possible. Relevant references are cited at the end of the report, following with a number of images in the Appendix. Company Profile:

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In New Bern, North Carolina, USA, Caleb Bradham created a fountain drink, which contained digestive enzymes pepsin and kola nuts. This was then known as Brads drink. Subsequently, it was renamed and marketed as Pepsi-Cola (Soda Museum 2010). The Pepsi-Cola Company, in 1965, merged with Frito-Lay Inc., to become PepsiCo Inc. Pepsi is PepsiCo Inc.s flagship product and signature drink (PepsiCo Inc. 2010). Advertising efforts in the early years of Pepsi-Cola mainly presented itself as a bargain brand compared to rival Coca-Cola. However, since the later part of the 20th Century, PepsiCos marketing strategy is focused towards the young people with taglines such Choice of a New Generation being the spotlight.

Macro Environment:
Political:PepsiCo Inc. is a multinational company. As such, it is exposed to different political

environments. In 2006, The Centre of Science and Environment (CSE) based in India found that soda drinks including Pepsi-Cola had high pesticide content. Following this, the state of Kerala banned the sale and production of Pepsi-Cola, along with other soft-drinks. However, this decision was later reversed by the Kerala High Court. Five other Indian states have partial ban on soft-drinks (BBC 2006 The Hindu 2006). As part of a major public health initiative in the US, sugar-sweetened drinks and syrups would be levied a new tax called the soda tax (Reuters 2010).

Economic:The financial crisis of 2008-2009 has had its effects on the soft drinks sector. During

this period, the soft drinks industry lost over $55 billion (Beverage Digest 2009). Also, the packaged food industry reduced spending on non-essential food items such as snacks. Being a multinational corporation, PepsiCo has to take into account the fluctuations in foreign currency rates. The financial crisis caused the Mexican peso, British pound, the Euro and the Russian ruble to depreciate. As such, PepsiCos net revenue growth was reduced by 5% (Annual Report 2010)

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In the US, interest rates have been abysmally low between zero and 0.25% since December 2008 thereby allowing companies such as PepsiCo to make use of low borrowing rates to invest in operations and new product development (Murchie 2010). Likewise, in the UK, The Bank of England has maintained an all-time low interest rate of 0.5% (BBC 2010). Social: There is a new demand for healthy foods and beverages. As a result, PepsiCo is increasingly investing in developing healthier options to its beverages as well as promoting Heath Foods (Annual Report 2010). In the recent years, PepsiCo has launched Diet Pepsi, Diet Pepsi Max, Caffeine Free Pepsi, Caffeine Free Diet Pepsi, Pepsi Natural and Pepsi One as variants of Pepsi-Cola. PepsiCo has also added a new line of products such as Aquafina Alive, Propel Health Water, Sobe Life Water, Dole Single Serve Juices and many more to meet this growing demand (PepsiCo 2010). PepsiCo has developed a Blue Ribbon Advisory Board, made up of leading health and wellness experts and third-party advisors from across the globe in order to help the corporation face these newly strengthened consumer demands. Furthermore, PepsiCo has recently worked alongside the Clinton Foundation, American Heart Association, and the North American beverage industry in order to set policies regarding placement of the correct products in the correct areas. Technological: PepsiCo Inc. relies heavily on technology to carry on its different operations and perform efficiently. Their technologically advanced distribution system, Direct Store Delivery (DSD), allows them to supply distributors and retailers with fresh stock efficiently (PepsiCo 2010). PepsiCo also has an extremely sound information technology infrastructure. To build and maintain an efficient IT infrastructure is a key asset to the corporations operations and helps improve the communication flow within their massive corporate framework. It also helps them improve the effectiveness of their operations and maintain financial accuracy.

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Micro Environment: Competitive Analysis: The carbonated beverages industry is highly competitive. The companies have to compete against global, regional and local manufactures on various factors including price, quantity, variety and distribution. The prime competitor of PepsiCo Americas Beverages is The Coca-Cola Company. In terms of carbonated soft drinks (CSD) consumption, Coca-Cola has a larger market share in the US as well as in many markets outside North America. Also, in Interbrands Best Global Brands list, Coca-Cola is ranked number 1, while Pepsi is listed much lower at number 23 (Interbrand 2009). However, PepsiCos snack brands hold significant leadership in the snack industry worldwide, with Pepsi commanding 28% of global sales. PepsiCo Inc. also faces stiff competition from other beverage companies like Dr. Pepper Snapple Group, Nestle Corporation and Danone as well as other food companies such as Kraft Foods and Unilever.

Geo-demographic: A multinational corporation has to take additional factors such as geo-demography into consideration. Trends affecting the US might not have an effect on countries such as Japan or Russia. Also, particular ads and marketing strategies are interpreted differently in different countries due to the difference in language and culture. For this reason, PepsiCo Inc. has adapted to the culture, tastes and language of the countries in which they do business. For example, in July 2009, Pepsi started marketing itself as Pecsi in Argentina after reports that its name was incorrectly pronounced by around 25% of the population (AdAge.com 2009). Psycho-graphic segmentation: PepsiCo has different products to suit different needs. It has segmented its beverage department to cope for different psycho-graphic variables such as activities, interests and opinions. For the health-conscious, Pepsi has products such as Diet Pepsi and Diet Caffeine Free Pepsi, while for those engaged in sports, Pepsi has its highly successful Gatorade range of isotonic drinks (PepsiCo 2010). For naturalists, Pepsi has products such as Pepsi Natural and Aquafina Alive. Products such as Pepsi and Pepsi Max are available for the mass market.

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Target Markets: The primary target group of PepsiCo for its Pepsi line of products are people in the age group of 13-34. It also targets people that are athletes and overweight (PepsiCo 2010). Pepsi has a distinctive style of portraying times in their ad campaigns. Their Generation Next campaign suggested that Pepsi is not just a drink for the next generation but that its drinkers are a generation ahead of their counterparts (PepsiCo 2009). Pepsi has products that target the different cultural and regional aspects of a particular country. It has products such as Nimbooz by 7UP in India where it targets the huge demand for country-style lemon drinks (PepsiCo India 2009). While in Mexico, it has Manzanita Sol, an apple-flavoured beverage. Apple is Mexicos second most popular soft drink flavour and Manzanita Sol means little apple sun in Spanish (Bevnet.com 2005).

Positioning: Pepsi has positioned its products strategically against those of The Coca-Cola Company. Although Pepsi is second to Coca-Cola as a recognisable soft drink brand, it leads the markets of non-carbonated beverages and potato chips (Frito Lay). Since the acquisition of Tropicana and Gatorade and manufacturing its own brand of bottled water, Pepsi has earned the number one spot as non-alcoholic beverage company in North America. Pepsi is now heavily inclined to developing healthy food alternatives. This has positioned them strategically in a niche market that is growing fast.

Marketing Mix:
Product: PepsiCo Inc. has four main divisions that manufacture, market and sell a variety of products including snacks and beverages. These divisions are: (PepsiCo 2010) PepsiCo Americas Beverages (PAB) Frito-Lay North America (FLNA) Quaker Foods North America (QFNA)

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PepsiCo International (PI)

PAB sells concentrates and syrups to Pepsi bottlers as well as directly sells finished goods to distributors and retailers. PAB brands include Pepsi, Mountain Dew, Tropicana Fruit Juices, Gatorade isotonic sports beverage, Lipton tea, Sierra Mist, Dole and SoBe (PepsiCo 2010). PAB also has a joint venture with Unilever and Starbucks through which it sells ready to drink tea, coffee and water products. Additional, PAB also licenses and markets the Aquafina brand of bottled water (PepsiCo 2010). FLNA manufactures snack foods which include brands such as Lays potato chips, Doritos tortilla chips, Tostitos tortilla chips, Cheetos cheese flavoured snacks, Fritos corn chips, Ruffles potato chips, SunChips and Smart Food (PepsiCo 2010). QFNA manufactures cereals, rice pasta and other branded products such as Life cereal, Pasta Roni, Aunt Jemima mixes and syrups and Quaker Oats (PepsiCo 2010). PepsiCo International manages the international operations of PAB, FLNA and QFNA. PepsiCo International licenses and markets PepsiCos brands in international markets. It also markets some region-specific brands including, but not limited to, Walkers potato chips, Mirinda, 7UP, Gamesa, Sabritas and Copella apple juices (PepsiCo 2010). PepsiCo Inc.s reputation and popularity gives the company the confidence to introduce new products. Their success depends on product innovation and the effectiveness of their advertising and marketing strategies. Place: Pepsi-Cola is available at almost everywhere. Pepsi has exclusive resale rights with fast food chains such as Pizza Hut, KFC and Taco Bell. It also exclusively sells its products at many supermarkets and malls. Pepsis products are also available at the leading departmental stores, gas stations and retailers. Pepsis vending machines are available at many office complexes and universities. Pepsi is also available at the White House (please check IC account for reference TIME Magazine). Due to its Direct Store Delivery system, Pepsi can get its products in these places and can maintain supply to a sustainable level. FLNA and QFNA products are available in all the leading supermarkets and retailers.

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Promotion: Pepsi-Cola has a strong promotion strategy. They use different marketing communication strategies which include print ads, television ads and billboards, point-of-sale as well as the Internet. PepsiCos marketing strategies include both push and pull promotions. However, their pull promotion strategies are more widely spread. Push Strategies: PepsiCo has several exclusive tie-ups with many fast food chains, supermarkets and malls. PepsiCo also has Point-of-Sale (POS) agreements with leading departmental stores and retailers. PepsiCo also provides incentives to distributors and retailers if they meet or exceed the sales target. Pull Strategies: Throughout its history, The Pepsi-Cola Company has been known to create one of the finest ads. Since it became PepsiCo Inc., Pepsi has focused most of its marketing communication towards the young generation (PepsiCo). Pepsi is well-known for its Generation Next ad campaign as well as some catchy taglines such as the classic Pepsi. Choice of a New Generation sung by Michael Jackson to the recent Refresh Everything and Every Pepsi Refreshes the World. Pepsi is also known to constantly rebrand itself to boost its reputation and trust as a company that keeps up with changing time. In 2009, Pepsi launched a new logo and rebranded most of its products in North America (Reuters 2008). One of the main advertising platforms over the years for Pepsi has been the Super Bowl, the National Football League championship game. Pepsi beverages have been advertising in the Super Bowl since 1987. However, in 2010, Pepsi opted out of advertising on this platform focusing its marketing efforts on the internet instead, ending a 23-year run. Frito Lay, however, continued to advertise in the Super Bowl (NBC News Associated Press 2009). In 2010, Pepsi announced that it would again start advertising in the Super Bowl (Reuters 2010). On an average, advertising on the Super Bowl cost Pepsi $3 million for 30 seconds of airtime in 2009. (NBC News Associated Press 2009).

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Pepsi is known to get its products endorsed by celebrities, some of which have been hugely popular with the people. Pepsis endorsement deal with Michael Jackson was perhaps one of the most expensive and popular deals of its time (Reuters 2009). However, since its overhaul in 2009, Pepsi has been including local people or amateurs in its ads to create a sense of connection with its consumers. For example, for the 2011 Super Bowl, PepsiCo has launched a competition wherein it is giving people a chance to make six 30-second ads for its Doritos chips and Pepsi Max with the winner receiving up to $5million for the best ads (Reuters 2010). Pepsi also has a huge presence on the Internet. In 2008, Google/YouTube teamed up with Embassy Row, a production company run by the creator of Who Wants to be a Millionaire, Michael Davies and Pepsi, to launch a new online video series called the PopTub. This daily show deals with pop culture, internet viral videos and celebrity gossip. PopTub is updated daily by Pepsi (Reuters 2008). PopTub and YouTube provide Pepsi a big online advertising platform. Pepsi even has its own YouTube Channel (YouTube 2010). Social networking is becoming an important aspect of peoples lives. As such, Pepsi has not left this area uncovered. PepsiCo and its subdivisions are present on Facebook and Twitter social networking sites. PepsiCo frequently updates its account on these websites, using them for marketing purposes, announcing new products and offers as well as general gossip (Facebook 2010 Twitter 2010 PepsiCo 2010). Pepsi Refresh Project is a new campaign launched by PepsiCo Inc. in 2009 and will run over the course of 2010 to freshen up the image of its flagship drink, Pepsi. The project invites people to submit their ideas on how to refresh their communities. PepsiCo has promised to give at least $20 million to fund these projects. This new campaign will be used by Pepsi to market its flagship as well as Diet Pepsi and Pepsi Max. This campaign will have a huge social media presence as people would be required to go online to submit their ideas as well as vote on winners (NBC News Associated Press 2009). Recommendation: PepsiCo Inc., as a multinational organisation, strives to be the worlds premier consumer food products company. In order to remain competitive, PepsiCo and its subdivisions need to be aware of the changing trends of the marketplace.

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PepsiCo needs to keep innovating and investing in healthier food options. The Carbonated Soft Drinks (CSD) market is continually declining. In 2008, the US CSD market share declined by 3% (Beverage Digest 2009). Keeping such trends in mind, Pepsi should launched healthier variants of their carbonated beverages and gradually move towards the increasingly more popular non-carbonated beverage sector, such as fruit juices and bottled water. PepsiCo needs to revise its marketing strategy to include the not-so-young group of people in its communication as these people are often left out from its marketing material. Also, by constantly monitoring current and potential customers, as well as reviewing the success of their marketing strategies, PepsiCo would be in a better position to identify changing market trends and develop better products for their target markets. The company, in 2007, had announced a major purchase of renewable energy sources which would help it in reducing its electricity costs as well as help improve its environmental footprint (NBC News Associated Press 2010). PepsiCo needs to keep investing in green resources as this would bring financial benefits in the long term as well as increase its reputation as a Green Company.

What is the market segmentation for Pepsi?

Segmentation of Pepsi
Segmentation Variables

Data

Geographic World region Country Cities Density Climate Demographic Age Gender Family Size 14-30 Male, Female 1-2, 3-4, Above 5 Asia India All major cities of India Urban Hot and Dry

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Family Life Cycle Income Occupation Education Religion

Married, unmarried Rs.10, 000+ Middle class Upper Class School, college, university Major religion of Hindu, Muslim, Christian, Sikh and small percentage of others

Race Nationality Psychographic Social Class Life style

Asian Indian

Middle class, Upper Class Actualizes, Fulfilled, Believers, Archievers, Strivers, Experiences markers and strugglers

Behaviourial Occasions Benefits User status Loyality status Readiness stage Parties, birth days, sports, regular occasions Quality, tasts First time user Strong Aware, interested

I.

Position of Pepsi
Pepsi Nestle Cococola fruito Local drinks Energy drinks Macacola Red Bull Amrat cola cott

Soft drinks JuicesPulpy

Target Market for Pepsi

Target customers are mostly young group between the age of 14 30 yrs and also target at school, college, institutions, universities, home, restaurant, hotel and stores.

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Who is Pepsi cola's target market? PepsiCos 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. Who is the specific target audience of pepsi cola? The target audience of pepsi would probably be people who's age is probably between 10-50 years.

What is target market? It is mainly defined by age, gender, geography, socio-economic grouping, technographic, or any other combination of demographics.

Purchasing behavior of the average Pepsi drinker:

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STUDY OF DISTRIBUTION CHANNEL STRATEGY OF PEPSICO FOR THE POSITIONING OF THE PRODUCT
Soon after entering the beverage segment PepsiCo Established its dominance in the market owing to its expertise in sales, marketing, operations and local collaboration. PepsiCo maintained its market dominance for many more years to come. However, this advantage slipped and

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PepsiCo had to concede the market leadership to Coca Cola India. Several actors were responsible for this development. But, the most important are; Distribution channel is having an important role in positioning of the product because we know that distribution channel is tool by which we can make reach our product to the final consumers Discontinuation of slums in the distribution network by PepsiCo. This move by PepsiCo adversely affected its position of a market leader because while PepsiCo discontinued the use of Slums in its distribution network, Coke continued it and within one year, it was able to snatch considerable market share from PepsiCo. Acquisition of well-established and favored brands like Thumps Up and Limca by Coca Cola India. These two brands still constitute a bulk of sales for Coca Cola India. To explore the reasons behind these developments this study will analyze the marketing initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship management. The above-mentioned objectives can be achieved by carrying a proper and planned research involving different types and methods. The data collected for laid the foundations for the study and gave a platform for the analysis and findings which lead to the fulfillment of the objectives. The data collected for research is primary and secondary. Primary data is collected by observation, interviews and questionnaires. The data collection and analysis paves way for the recommendation ad conclusion of the study that reveals some important findings regarding the strategy and corporate structure and strategy of PepsiCo India. Objectives:

To know distribution channel Strategy of PepsiCo. To know the importance of Distribution channel strategy in Positioning of the product. Sub Objective:

TO know the PepsiCo planning towards the distribution channel strategy. How strong relationship PepsiCo has with the distributors and retailers. Perception of consumer towards the PepsiCo product. Perception of retailers towards the distribution channel of the PepsiCo.

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. After analyzing all the aspects of the data available and giving some important recommendations a suitable conclusion which should be derived for this study. However, before starting the conclusion part, the objective of the research must be kept in mind so that we can arrive at a befitting conclusion for the research problem. The primary objective of this research was to know distribution channel Strategy of PepsiCo and to know the importance of Distribution channel strategy in Positioning of the product. The data collected provided a sound base for understanding the overall organizational set up of PepsiCo in India. By analyzing the data and the literature review, following conclusion was inferred:

The Sales and Distribution Network of Pepsi is very strong and almost flawless. PepsiCo India had the first mover advantage when it entered the market and it capitalized on that advantage to grab the market. Franchisee based operations combined with the Companys operations add strength to the overall presence of the Company in the market. Franchisee takes care of its operations and PepsiCo does not interfere in its operations. The Franchisees are required to report to the Company at specific time intervals. The Advertising Campaigns are conceived, implemented by the PepsiCo and Franchisee has no say in that. It is very important to develop good relationship with the retailers by providing them better services and schemes. Maintaining the good relationship with the distributors are very important for the company because they are the main part of the distribution channel.

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The Pepsi Challenge: Brand Positioning against the Brand Category Leader

Pepsi is taking steps to build its brand. According to a May, 2012 Advertising Age article, Pepsi has fallen from its place as the number 2 soda to become number 3 (behind Coke and Diet Coke), and has seen its market share fall by 0.3% and a sales volume fall of 4.8% last year alone. The Pepsi Challenge One of the steps that Pepsi is taking is the return of its iconic taste test, the Pepsi Challenge. In 1976, Pepsi launched the Pepsi Challenge blind taste test pitting Pepsi against Coke. The brand marketing genius of the taste tests was that, in blind taste tests, consumers were surprised to learn that they preferred Pepsi over Coke. The new Pepsi Challenge is set to launch worldwide in the summer of 2012. According to the Globe and Mail, Pepsi is planning to have 1.5 million Canadians take the Pepsi Challenge. Pepsi will be modernizing the Pepsi Challenge using giant tablets and social media to reveal and share the results. Taste Tests: Brand Position in Brand Marketing The Pepsi Challenge is a good example of a position-driven brand marketing campaign. Positiondriven brand advertising is all about positioning a brand, relative to a leading brand in the brand category. Two keys to brand positioning are: brand awareness (or increasing brand awareness) in a particular brand category, and

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differentiating the brand so customers will remember it. Coke is the current and historic leader of the cola brand category. As a result, Pepsi can reap benefits from positioning itself against Coke, and Pepsi doesnt need to be the hands-down winner in the taste tests to do that. Provided Pepsi enjoys a respectable taste test results, then the new Pepsi Challenge campaign will help build the Pepsi brand. Pepsi will be able to increase awareness of its brand in the cola brand category and use social media to increase the reach of its campaign.

PepsiCo India Launches Pepsi Atom

- Stronger, Fizzier Cola with a Sharp Hit - Biggest India centric beverage innovation from PepsiCo - Ropes in Sushant Singh Rajput as the Brand Ambassador

Pepsi Atom: Piyo Josh Mein Jiyo Hosh Mein

PepsiCo India is driven by its global commitment to sustainable growth, Performance with Purpose, which works on four planks of replenishing water, partnering with farmers, waste to wealth and healthy kids. In 2009, PepsiCo India achieved a significant milestone, by

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becomingthe first business to achieve Positive Water Balance in the beverage world, a fact verified by Deloitte Touch Tohmatsu India Pvt. Ltd.

Market Segmentation Of Pepsi At An International Level:

The history of Pepsi-Cola starts in 1896 in the town of New Bern in North Carolina, USA in a drugstore owned by the pharmacist Caleb Bradham. He came up with many recipes of new drinks to be served at the soda fountain of his drugstore. Brad ham aim was to create a drink both delicious, healthy, aiding digestion and boosting energy. It would be free of impurities and it should not contain any strong narcotics. Eventually one of his drinks became very popular and the customers started to call it Brads drink. This was the beginning of Pepsi-Colas story and later, Brad hams vision was turned into a mission for the future company. In 1905 Pepsi started with bottling franchises and registered its trademark in Canada and Mexico in 1908. At the same time the U.S. government enacted the Pure Food and Drug Act prohibiting substances such as arsenic, barium, uranium, etc. in food and beverages. Consequently, many soft drink manufacturers, including Coca-Cola, had to change their formulas. Pepsi exploited the situation against their main competitor Coca-Cola, by claiming that they already met federal requirements. Distribution was modernized with motor vehicles and started to promote its products using famous public figures like Barney Olfield, an automobile race pioneer who endorsed Pepsi. In the 1920s and 1930s the company experienced financial difficulties and went bankrupt twice in 1923 and 1931. In 1931 the company was sold and Charles G. Guth took over the presidency commanding a reformulation of the syrup recipe. Few years later Walter S. Mack, Jr. was elected president and the company became a modern marketing company by using comic strips and Hollywood movie stars to advertise its products. In 1959 Pepsi entered the former Soviet market in Moscow and acquired Mountain Dew in 1963 making it the second best selling drink ever produced by the company.

The Emergence of a Global Company

In 1965, the company expanded and grew significantly through the merger of Pepsi-Cola, operating in the beverage industry and Frito-Lay in the snack food sector.

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The following year, the newly formed PepsiCo entered the Japanese and Eastern European markets. In 1974 Pepsi opened its first production plant in U.S.S.R. and was the largest soft drink selling brand in American supermarkets. Afterward, PepsiCo substantially diversified its portfolio by acquiring Pizza Hut, Taco Bell and formed PepsiCo Food Service International (PFSI) to focus on overseas development of restaurants. In 1980 PepsiCo signed a joint venture agreement with the Chinese authorities but the project was never developed properly. Then Pepsi became the indisputable number one in the soft drinks industry with revenues of $7,5 billion and more than 137 000 employees. The company was seen as a leader in advertising when they used a space station for promotional events. In 1986 the corporation was reorganized and decentralized by transferring its beverage operations under PepsiCo Worldwide beverages and the snack food sector under PepsiCo World wide Foods. In 1996 Pepsi entered the Internet boom by creating an ambitious worldwide web site surpassing all expectations and was copied in numerous ways. Subsequently, the company converted its bottling sector into a publicly traded company, the Pepsi Bottling Group (PDG). In August 2000 the company was involved in one of the most significant transaction in the beverage and food industry through its merger with Quaker Oats and the addition of top products to its portfolio such as Gatorade beverages. Recently, Pepsi made the headlines by signing a skyrocketing agreement with Britney Spears to promote its new marketing campaign and products.

Observations throughout History

Pepsi-Cola is still second in the carbonated drinks market and remains in the shadow of Coca Cola in terms of market share, perception and image. However, Pepsis insightful marketing techniques (comic strips, television ads etc) prevented a fall of its position in the beverage industry.

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From 1965, by using diversification techniques and brand management, the company was able to increase its volume of sales and get a stronger market position. Nowadays, Pepsis carbonated beverages division clearly remains behind the snack division in terms of profitability and share percentage of operation earnings. Our impression is that the profits of the snack division help create the illusion that the beverage sector is as successful as the management wishes it to be. We observed a definite inferiority complex towards Coke that initiated the main motor in the companys top management philosophy. As Roger Enrico wrote in his book about cola war, Pepsis strategy was heavily focused in gaining a better position in the beverage industry by finding new ways to differentiate from Coke and to take advantage of strategic alliances in the market. Core Competencies A question is raised by acknowledging the above mentioned facts: how to beat your competitor if you cannot offer a better product. For Pepsi, the answer is efficiency, innovation in marketing techniques and customer responsiveness. Using less input in the value chain of its primary activities, Pepsi is able to be more efficient and to attain a lower cost structure. Moreover, PepsiCo built its competitive advantage mainly by achieving greater economies of scale in the sectors of communication, distribution and bottling thus reducing production costs.

STRATEGY USED BY PEPSI

Marketing and Customer Responsiveness The aim of the new marketing strategy developed by Enrico was to sharpen the image of Pepsi. It also contained a specific message directed to young people using extensive advertising campaigns on TV and radio. As an example, Pepsis innovative marketing was showed to the world when in 1996 it first recorded a commercial in space. Furthermore, Pepsi kept the consumers perception waiting by acquiring Mountain Dew, and creating Pepsi blue. Improving the quality of the companys product offering is consistent with achieving customer responsiveness, as is developing new products with features that existing products lack. Pepsi blue was in fact not as successful as hoped, yet the product aided in the overall perception of the brand Pepsi-Cola.

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Branding Equity Brand loyalty is a buyers preference for the products of incumbent company. A company can create brand loyalty through continuous advertising of brand and company names, patent protection of products, product innovation achieve through its research and development programs and emphasis on high product quality and good after-sales services. It is effective influence in the way in which people perceive the product or the company. By creating feelings of warmth, affection and belonging to a product, a firm is able to relate brand to human personalities. People prefer to buy brands as they give them personal means and judgment and they offer a quick and clear guide to a variety of competitive products. In the beginning of the 1990s PepsiCo management decided to create a proprietary model applicable to all major PepsiCo brands, both domestically and globally focusing on crosscategory brand and product specificity. The goal was to have a single definition of brand equity applicable to every product. A second goal was to strike a balance between sensitivity (the ability to detect real equity changes) and stability (the absence of spurious or short-term fluctuations). The marketing and research management of PepsiCo as well as some of its consumers were interviewed to find out the attributes that contributed to a favorable brand-consumer relationship across product categories and make comparisons with key competitors like Coca-Cola in the soft drinks sector. PepsiCo deployed the Equitrak brand equity model to track its major brands on a global scale in 1997, following its success in the USA. By late 1999, PepsiCo had created a brand database consisting of over 6,000 Equitrak brand equity "scores". Reducing Costs One example illustrates how Pepsi is always trying to find new ways of reducing costs and increase efficiency. Service technicians for The Pepsi Bottling Group Inc. (PBG) in the U.S. used to generate 3 million pieces of paper per year while making routine repairs to soda fountains and vending machines. But after a yearlong rollout of wireless handheld computers, that paper mountain has completely disappeared.

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The new system, built around a rugged computer allows PBG to maintain a virtual inventory of parts on each technician's truck that's linked to a database accessible by the company's eight call centers, A dispatcher can quickly determine whether one of 700 Pepsi technicians equipped with the Sidearm has the right kind of part needed for a pending job thus increasing customer responsiveness and effectiveness of after-sales service. Another way of reducing costs was by investing into the new Computer system Generation Net. Following from this was the PepNetSystem which serves both, lower cost and customer responsiveness. This resulted in a more efficient communication system. In order to understand the marketing strategy of one company it is very important to analyse the environment it is operating within. The analysis of the environment has a few very important aspects that clearly illustrate how a company like Pepsi has managed to stay in business for such a long time. To analyse this clearly, a general rule can be applied to PepsiCo. Cyclical Corporate Strategy If we look at the Pepsi-Cola Company from the outside, there has been a certain amount of repetitiveness in its development. By following the trends and focusing on how to lower the price as much as possible, they managed to create a successful company. By investing in the development of the bottling and distribution sector, Pepsi found their balance in the market. Then in 1920s Pepsi-Cola Company failed because they didnt concentrate enough energy on branding. Within a few years Pepsi was declared bankrupt twice. By the end of the 1930s the company was reorganized from inside and the marketing policy drastically changed. Major investment was now directed towards making people more familiar with the product. After acquiring Mountain Dew, new sources of financing and revenue opportunities were needed because the acquisition was not an instant success. Therefore, in 1965 Pepsi merged with Frito Lay. In the 1980s the decreasing sales in the beverage market induced the industry to adjust with more aggressive marketing strategy and new products. In fact, Coke marketed a new cola formula, whereas Pepsi persisted with promotional efforts and improved customer responsiveness to increase sales volume.

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Key Factors for Success

To analyze the external environmental impacts, we have to look at the company as an organism that is constantly interacting with its customers, partners, suppliers and competitors. When PepsiCola was created, the management was looking for the recipe for success that would also be matched with the creation of a unique name and logo. Thus, the whole cola war story was the driving force of every change Pepsi implemented in its business strategy. The creators of Pepsi decided to use the same colors and lettering as Coke, simultaneously promoting and expanding the same product. In the short run, the strategy worked and allowed Pepsi to take advantage of Cokes previous business innovation. However, in the long run, Pepsi would have to build its own reputation and to differentiate itself from its rival. Basically at that time, Pepsi focused on achieving lower cost production in its bottling and distribution units. Therefore, the promotion of their products was put aside by the result of this strategic choice. The financial crisis commanded important changes with regards to innovation. From being a follower, Pepsi became the leading innovator. Pepsi-Cola previous experience revealed that the management did not put much attention on their external reputation. Moreover, as a leading company, Pepsi had to be consistent and convinced about their strategy as opposed to follow the competitors strategy. General Influences In this section, we will focus on four elements: political, economical, socio-cultural and technological environment. Political Environment PepsiCo is a global corporation. For the company that has substantial involvement in the world economy, it is not surprising that PepsiCo has been implicated in many political scandals. In 1991 PepsiCo entered into a joint venture agreement with Myanmar Company that had ties with the junta challenging the government in place in Burma. When the country was being torn apart by internal military conflicts, the scandal erupted and Pepsi was suspected of financing the junta. Subsequently, there was a boycott of all Pepsi products and the situation alerted the international community because of the human rights violations perpetrated by the junta.

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Economic Environment The economical segment is the second element to be analyzed. It is indisputable that PepsiCo is one of the worldwide leaders in the snacks and beverage industry. All available information made it clear that PepsiCo is a profitable corporation. The fact that they had some crises means they are apt to change in the modern market. This segment of the company was already explained before and will be discussed in the next chapters as well so we wont elaborate further here. Socio-cultural Environment Turning to the socio-cultural element PepsiCo was always researching new ways to approach its customers. The involvement in the humanitarian actions is necessary for the image of international corporations. The other aspects are much more interesting since they are more recent. As it was already mentioned, the main consumer group for Pepsi is teenagers. It was just a matter of time before the company entered with its policy to market them within the educational system. Some see it as bad thing, whereas some support it. It is a fact that there are good and bad elements, but nevertheless this progress cannot be stopped. Technological Environment Last, but not least, technology. What kind of technology are we talking about? Technology that makes the drink and the one that makes the drinks containers. Externally there is a small problem, which has the potential to develop. The problem is with plastic waste. This is already a huge problem in the U.S. and it is becoming an issue in Europe as well. The fact that plastic packaging is the cheapest and most practical material is not a good enough reason anymore. The larger market is demanding new solutions.

Pepsis Corporate and Business-level Strategies

Responding to Conflicting Demands: The Environmental Challenge Nowadays, globalization is a trend which drives the world towards a converging common market by the force of technology. The result is a new commercial reality - the emergence of global markets for standardized consumer products on a previously unimagined scale in production, distribution, marketing and management. The global corporation operates with resolute constancy - at low relative cost - as if the entire world were a single entity: it sells the same things everywhere.

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Consider the case of Coca-Cola and Pepsi-Cola, which are globally standardized products sold everywhere. Both successfully cross multitudes of national, regional, and ethnic taste buds trained to a variety of deeply ingrained local preferences of taste, flavour, consistency, effervescence, and aftertaste. In many markets, both sell well. Commercially, nothing confirms this as much as the success of Pepsi-Cola in Moscow. Business-level Strategy Business strategy refers to the plan of action that strategic managers adopt to use a companys resources and distinctive competencies in order to gain a competitive advantage over its rivals in a market or industry. To this extent, decisions in relation with business-level strategy should address customers needs and product differentiation, customer group and market segmentation and distinctive competencies.

PepsiCo Beverage Industry

Customer needs, Responsiveness and Product Differentiation of Pepsi-Cola People dont drink large quantities of soft drinks because they have to. Nowadays, they choose more soft drinks because they want to become part of the American way of living and becaus e companies like Pepsi encourage people to do so. PepsiCo do it with print advertising, coupons in newspaper, signs at stadiums and billboards on highways, eye-catching displays in supermarkets and convenience stores, catchy jingles in radio advertisements. In the cola war, television commercials have become increasingly important. Distinctive Competencies As was pointed out in our internal analysis, the Pepsi brand and its differentiation from other brands (i.e. Coke) through effective marketing has been central to its business strategy. The originality and creativity of its marketing matched with a desire to be a strong competitor in every market place made Pepsis business strategy very successful. This is reflected in the marketing costs reported in the 2001 Annual Report. Selling, general, administrative, advertising, promotional programs and other marketing activities costs were $1.7 billion in 2001 and 2000 and $1.6 billion in 1999 compared to Research and development costs of $206 million in 2001, $207 million in 2000 and $187 million in 1999.

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Insightful human resources management have also helped PepsiCo to gain competitive advantage in foreign markets. European and Japanese managers are better trained than Americans to deal with cross-cultural relationships. PepsiCo have realized the need for global understanding and experience among their managers. To this extent, they have instituted screening, selection and training programs geared to identify young managers, early in their careers, for global operations. Customer Group Many examples emerge as we analyse the customer group that Frito-Lay are targeting. For instance, in line with the PepsiCo strategy of market segmentation is the launch of a line of snacks targeted specifically at Hispanics, currently the fastest growing ethnic group in the United States. This product lineup offers distinctive flavors and textures that are both appealing and familiar to Hispanic consumers. Frito-Lay conducted extensive consumer testing in four key markets (Miami, New York, Los Angeles, Houston) to determine the snack flavors and textures with the strongest appeal among Hispanics. The complete line of products will be distributed in key urban markets including several Southwest cities. Perhaps this should also be done for the beverage sector. Their emergence into the developing markets is hindered by the dislike for the Pepsi-cola taste, particularly in Asia. Corporate-level Strategy Corporate strategy is concerned with an organizations basic direction for the future: its purpose, its ambition, its resources and how it interacts with the world in which it operates. This concept refers to the resources of an organization in relation to its external environment, the prime purpose being the value added to what supplies are brought into the organization and then distributed among the stakeholders. The principal concern of corporate strategy is identifying the business areas in which a company should participate in order to maximize its long-run profitability. Interestingly, Coca-Cola at one time pursued a diversification strategy. Coca-Cola once owned Columbia Pictures and a wine-producing business. However, Coca-Cola came to the conclusion that diversification dissipated rather than created value, and, in recent years it divested its diverse business and refocused on a single operation. They have done this because there are clear advantages to concentrating on just one business area.

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However, for Pepsi the story is a quite different. PepsiCo has adopted a policy of diversification by structuring itself into three major divisions: beverages, snack food and restaurants. Although in separate markets, the three operate in the same industry, namely leisure food. It seems that PepsiCo have chosen this approach in order to allow for an overlap between the value chain of its divisions. This is advantageous in that it can be used to bring down costs or even increase customer loyalty across product line. Focus on the leisure-food markets means that PepsiCo is in a position to take advantage of similar activities across business units. Take food production, all restaurants have to produce food from raw materials, as do the snack producers; businesses within PepsiCos portfolio are in a position to create a competitive advantage by realizing greater economies of scale and cross utilization of technologies. Consequently, when two or more business units share resources such as manufacturing facilities, distribution channels, advertising campaigns and R & D costs, each business unit has to invest less in the shared function. Moreover, there are opportunities for competence leveraging through brand names and shared finance. PepsiCo Bottling Group Strategy PBG became an independent, publicly traded company in March 1999. PepsiCo retains an equity interest in PBG of about 40 percent. As an independent entity, PBG benefits from a much sharper definition of its role and is able to execute its business strategy more effectively on a local market level. PepsiCos can focus on what it does best now, which is developing its powerful brands and the world-class marketing programs. PBGs focus is on superior sales execution, customer service, merchandising and operating excellence. PepsiCo provides new product development, advertising, marketing, sales and promotional support to PBG and other Pepsi bottlers. The company manufactures and sells soft drink concentrate syrup to PBG and other Pepsi-Cola bottlers. Afterwards, PDG produce the final product by combining the concentrate syrup with other ingredients to manufacture and package the beverages. In fact, The Pepsi Bottling Group Sales Team works on the front line of a fiercely competitive global battle, dealing with the most important people in their business - the customers. The team

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works with customers, new and existing, to grow the highly profitable beverage business armed with one of the most powerful trademarks in the world. Their sales approach focuses on factbased selling and expert advice - offering "total beverage solutions," not just successful day-today transactions. PBG Sales provides a demanding, fast-paced environment in an intensely competitive industry, where growth equals opportunity. Is their current structure flexible enough to enable them to compete in the emerging markets? They have a structure based on a Global Product-Group Structure, with slight variations. PepsiCo still doesnt market all its products internationally and thus only needs sub -divisions for Frito-Lay and Pepsi-Cola/beverages. This is a definite weakness in Pepsi-Cola. Pepsi-Cola needs to take a strong lead in the international market and it needs to have an international structure that facilitates this. Currently, Pepsi-Cola is marketed in North America through its North American division. Internationally, Pepsi-Cola is marketed through PepsiCo Beverages International along with all other beverages that PepsiCo has acquired. What is needed for Pepsi-Cola to emerge as the popular beverage in the emerging markets is separate subdivisions that concentrate on specific areas, traditions and trends. At present, Pepsi-Cola is being marketed through PepsiCo Beverages International with the help of leading local marketing firms in certain countries that they wish to exploit. PepsiCo has realised that it needs very specific strategies based on the local area. It would be ridiculous to assume that the American marketing of a young, hip Pepsi would come across well in the new markets of the Czech Republic, Hungary, Poland, Slovakia and Russia. Here the use of local marketing firms is paramount to implementing a successful strategy to fit the lifestyles and traditions of those countries.

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PESTLE ANALYSIS BY PEPSICO

PepsiCo is the largest selling beverage the world over, of course after its arch rival Coca Cola. It accounts for a 37% share of the global beverage market, and therefore they need to understand each and every countrys market in order to stay in line with their PESTLE situations. Pepsi is a big brand, currently holds the 23rd place in the Inter-brands report of the Worlds Leading Brands. Their advertisements feature major celebrities and athletes like David Beckham, Robbie Williams, Britney Spears, and Michael Jackson etc. Their market reach is also very diverse, as theyre present in almost every country from the US to New Zealand. Their PESTLE analysis is given below:

Political:
Pepsi is a non-alcoholic beverage and is therefore regulated by the FDA. So, theyre supposed to maintain a firm standard of the laws set out by the FDA with consistency. Also, many different markets across the world have different set of regulations that are either relaxed or are either stringent. There is competitive pricing by Pepsis competitors and that is one factor that Pepsi has to keep in mind at all times. The political scenario also matters greatly as there can be some civil unrest in certain markets or due to inflation the sales of the product can fall. Most importantly, cross border situations are starkly different therefore Pepsi has to stay in line with all those policies and changes so that they can adapt to all those changes accordingly.

Economic:
As the recent economic downturn has plagued the economy, companies had to restructure their sales and marketing campaigns greatly. Also, with diminishing profits they had to undergo downsizing internally and re-think upon how to penetrate the market. Economic conditions have the highest influence on a business, regardless of what trade it is in. Though, in Pepsis favor, the economic downturn that started in 2008 resulted in increased sales of its beverages mainly as

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people were being laid off from jobs, they were spending time with friends and family or at home.

Social:
Social factors greatly impact Pepsi, as its a non-alcoholic beverage it has to remain in line with the strict and stark differences of cultures the world over. Also, Pepsi has to communicate its image as a global brand so that the people can associate it with themselves as something that connects the world together. Usually, the social implications are seen in marketing campaigns for example certain countries have religious festivals, so Pepsi has to keep in line with all those festivals in order to understand the psyche of their market and how they can cash upon the opportunity.

Technological:
With the advent of the new age in technology, companies have completely integrated themselves with all the recent changes that have taken place. To mention a recent trend that has greatly picked up and something that almost every business is turning toward is Social Media. The social media explosion has allowed for increasingly interactive engagement with the consumers with real time results so Pepsi has to stay ahead of all the developments that take place with keeping in view how the youth of today utilizes technology for their benefit and how can Pepsi reach them in order to keep on increasing brand recall and brand engagement.

Legal:
There can be many legal implications upon the beverage industry. I would cite one very famous incident took place in India, where Pepsi was accused of using contaminated water, given a lab test that was done upon the water flowing into the Pepsi factory that was located nearby an industrial estate. A massive recall was issued for the products from shelves and then the product was tested costing the company many billions of dollars upon the tests as India is a very major market.

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Environmental:
These factors can affect Pepsi, but not immensely alter its trade and profit generation as these factors affect agri-businesses much more directly.

Pepsi

Cola

Pepsi Cola beverage business was founded at turn of the century by Caleb Bradham a New Bern N.C druggist who formulated Pepsi Cola. Pepsi Cola Company now produces and markets nearly 200 refreshment beverages to retail, restaurants and food service customers in more then 190 countries and territories around the world and generates revenue of over 18 billion dollars. Although Pepsi holdings over the years have become diverse in such fields as the snack industry and restaurants industry this portfolio will discuss its core business and its highly successful business of beverages. The soft drink industry customer base is probably the widest and deepest base in a world that is flooded with some many categories. According to Beverage Digest the customer base for soft drinks is a whopping 95% of regular users in the United States. This represents a large field of potential customers for Pepsi Cola. Yet although Pepsi could just use the majority fallacy to market there product, Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are referring to the markets that marketers refer to as Generation X. 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. Those Pepsis main emphasis 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. Pepsi Cola is situated in an industry that is dominated by two competitors, Coca-Cola and of course themselves. Although Pepsi and Coke basically go after all consumers who purchase soft drink beverages Coca-Cola targets its products at the head of household. This is evident in many of the ad campaigns such as Always Coca - Cola which refers to the traditional beverage heritige of its product. They also reinforce this in the name Coca-Cola Classic which is inferring to the older consumer. This name reflects an image of value, reliabilty, and old time values. Pepsi Cola

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throughout its 100 years of existence has developed many strengths. One of the strengths that has developed Pepsi into such a large corporation is a strong franchise system. The strong franchise system was the backbone of success along with a great entraupeur spirit. Pepsis franchise system and distributors is credited for bring Pepsi from a 7,968 gallons of soda sold in 1903 to nearly 5 billion gallons in the year of 1997. Pepsi also has the luxury to spend 225 million dollars in advertising 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. 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. Probably high on the list of strengths is Pepsis beverage line up. Pepsi has four soft drinks in the top ten beverages in the world. These brands are Pepsi, Mountain Dew, Diet Pepsi, and Caffeine Free Diet Pepsi. Pepsi also has the #1 tea in the United States, Lipton Tea. Some other strong brands are All Sport, Slice, Tropicana, Starbucks, Aquafina and a license agreement with Ocean Spray juices. Pepsi Cola like any company has weaknesses. 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 todays 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 (Coca Cola at present time does not operate a franchise bottling system). Another weakness that Pepsi is inferior is in the fountain soft drink division. This has always been a problem for Pepsi because of their ownership in fast food restaurants. Coca Cola has for years been in the top locations for fountain beverages because they simply tell the account Pepsi is their competition because of their ownership in Taco Bell, Pizza Hut, KFC, and many others. As mentioned earlier Pepsi has tried to eleiviate this problem by spinning off their interest in fast food restaurants but at present time are still

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guilty by association to many of the large fountain accounts. The franchise system has also effected fountain sales due to the fact franchisees are not willing to by expensive fountain equipment to placed in accounts mainly because the profit margin is so low and could take years to recoup their investment. Pepsi also has a weakness in the international beverage market. Unfortunately for Pepsi they were a Johnny Come Lately into this arena. Pepsi has tried to enter this market by trying to do in three years what took Coke 50 years to do. This area will take years for Pepsi to mature simply due to Cokes dominance in the international market and the strong ties that Coke has developed with these markets and their governments. Pepsi customers buy nearly five billion gallons of soft drinks per year. Pepsi customers buy their products because of taste, price, packaging, promotional factors and of a wide variety of brands. Pepsi customers also buy their products due to the high accessibility of Pepsi brands. Pepsi products are distributed to many outlets. For example, supermarkets where Pepsi buys large shelf area and display areas so the customer can find them easier, Convenience stores, gas stations, delis, restaurants, movie theaters and almost and other conceivable spot. 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. Marketing plans like this made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category. Another competitive advantage that Pepsi has is in their product Mountain Dew. Mountain Dew has grown a staggering 74.1% over the last five years. Mountain Dew has a 6.3% market share and has recently become the #4 soft drink in America. At this current pace Mountain Dew will be come the first non-cola to reach the 1billion gallon mark in one year. Pepsi also has an advantage as an innovator in their field. They will be the first soft drink makers to introduce a new one-calorie soda called Pepsi-One with, just approved by the FDA, Ace-K. This new sweetener is slated to be a break through for diet soda in which it limits the after taste associated with diet soda and brings a more cola taste to the product. Pepsi has always been a strong # 2 against Coke and have become one of the worlds largest companies. As far as market share Pepsi stands strong. Here are just a few vitals of the market: OVERALL MARKET SHARE 1. COCA-COLA 43.9% 2. PEPSI COLA 30.9% 3. CADBURY SCHWEPPES 14.5%

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BREAKDOWN OF MARKET SHARE 1. COCA-COLA CLASSIC 20.6% 2. PEPSI COLA 14.5% 3. DIET COKE 8.5% 4. MOUNTAIN DEW 6.3% 5. SPRITE 6.2% 6. DIET PEPSI 5.9% 7. 7-UP 2.3% 8. CAFFIENE FREE DIET COKE 1.8% 9. CAFFIENE FREE DIET PEPSI 1.0% 10. DR. PEPPER 0.6% FOUNTAIN SALES (FOUNTAIN SALES ARE CREDITED FOR 27% OF SODA SALES) 1. COCA-COLA 65% 2. PEPSI COLA 23% Pepsi is situated in an environment that is ever changing and dynamic. Pepsi must be concerned of changing taste of the consumer and be able to respond to that need immediately or risk losing market share. They also need to be financially strong to keep up with a powerhouse like Coca-Cola and be able to strike back in the long running cola war. Pepsi must also be able to respond to different cultures in the international environment. Pepsi also has to deal with such envionmental issues like the supply of raw materials to produce their products. In fact Pepsi during World War One almost went out of business because of the shortage of sugar. The list could go to include recyclable material that is now become a main concern for both giants, unions, laws from state to state or internationally and many others. As for changes that Pepsi needs to address I believe they are already addressing them. First the franchise system is currently being dismantled and being replace with one bottling unit across North America. Pepsi Chairmen and chief executive Craig Weathrup will run this. North American President will head up the concentrate (fountain) end for Pepsi, Philip Marineau. This restructuring will allow Pepsi to act as one unit and eliminate competition with private labels and uncooperative franchise bottlers. Secondly Pepsi is starting to make strides in developing foreign markets. Pepsi is beginning to pull out of some Coke dominated markets and begin to sell in up and coming foreign markets where Coke is not dominating like India and China. As mentioned earlier the restaurant spin off will also give Pepsi a better chance to get in larger fountain accounts. The one weakness that I think Pepsi is not addressing is the recent turnover in high level management. Pepsi in the last year has seen the head of their marketing department leave and have also lost several international managers. I am presently not sure what the internal conflict is but it must be addressed Pepsi recently demonstrated its commitment to reducing its environmental impacts up and down the value chain with two rapid-fire announcements about new initiatives. The old-school approach to greening is to focus on operations within the proverbial four walls. But Pepsi, like other leaders, is approaching sustainability more holistically, with much greater impact.

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First, on the downstream side, Pepsi looked for ways to raise the recycling rate of beverage containers from a relatively paltry 34% to 50% or higher. Working with GreenOps, a division of Waste Management, Pepsi launched a new program called Dream Machine. These reverse vending machines, now being placed in high-traffic areas such as gas stations and stadiums, take back those often-abandoned and often-un-recycled empty bottles and give users points toward rewards from sponsors or local merchants. But Pepsi has gone beyond those relatively minor incentives to add on a social mission. The program will also help fund Pepsis donation to a group called Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), which trains vets at business schools around the country. Pepsi expects that the combined immediate points and larger mission will drive new, greener customer behaviors and help solve one of the beverage industrys most intractable value chain problems. Second, Pepsi has embarked on a very unusual supply chain effort to reduce the carbon emissions associated with its Tropicana orange juice. After conducting a full life-cycle analysis of the product line, the company was relatively surprised to find that the biggest portion of the carbon footprint was found not in manufacturing, or distribution, but actually back in the agriculture stage primarily the result of the heavily natural-gas dependent process of making fertilizer (see chart). The analysis showed Pepsi execs where the largest impacts were, and thus where theyd get the biggest bang for their buck on carbon reductions. The company started working with suppliers and farmers to find new ways to make and apply fertilizer. For example, instead of using natural gas from as far away as Russia (which then requires shipping heavy fertilizer across the world), Pepsi is using biomass from closer to home. Wood waste and agricultural by-products are two sources, but execs are hopeful they can also use the large number of their own orange rinds left over in manufacturing, which would fully close the loop. The company is also working with scientists on the root chemistry of orange trees, applying fungi and bacteria to increase the uptake of nutrients. All that techno-speak means that the trees

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will need less fertilizer in total, which means less manufacturing and shipping of that fertilizer and, voila, a smaller footprint. A 100-acre test run of these new methods of working with new, low-carbon fertilizer is underway. A few years from now, Pepsi and its suppliers will know whats working and what isnt. But heres the best part: the cost of these changes to consumers and growers will be about zero. And it had to be. Lets face it, this kind of carbon reduction isnt easy to convey to consumers, so the market benefit may be small for now. So the sustainability team needed to find ways to lower the fertilizer footprint without causing any additional cost to suppliers or farmers. How did they do it? By focusing its efforts on the real footprint identified through a solid lifecycle analysis and good data Pepsi found the approach with the highest payback. As sustainability exec Tim Carey put it, Its not unusual to spend tens of millions of dollars removing some carbon from a manufacturing process at returns that can be 10% or lessor we can take 15% of total carbon out in the fertilizer step without costing anything. The impacts of these tests and future rollout will not be small; Pepsi buys a fairly shocking one-third of the Florida orange harvest. And the recycling work could shift millions of bottles out of landfills. Pepsis full value chain view on sustainability is deep green stuff this is how you implement green thinking.

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Competition Analysis
Competitors of Pepsi
Globally: There are many competitors for PepsiCo globally who are/can be threat for PepsiCo in long run, these are the selected few competitors for PepsiCo in the industries it cater to.
Non Alcoholic Beverages:

a) The Coca-Cola Company b) Dr Pepper Snapple Group Inc. c) Mondelez International Inc. d) Hansen Natural Corporation e) National Beverage Corp.
Snack and Food manufacturing:

a) Kraft Foods Inc. b) The Kellogg Company c) ConAgra Foods Inc.

d) Nestl S.A and others.

Indian Market: Indian market is one of the emerging markets and today it stands as a hub for most of the companies to form their bases with very few restrictions in entering into the market. Snack division of PepsiCo, Frito-Lay holds a prominent position in the market being nine times bigger than its near competitor. But still Balaji wafers is still giving it a tough competition in most of the markets. In beverage market, in spite of the presence of many local players in the market, the two legends, i.e, PepsiCo and its mere rival Coca cola are enjoying duopoly in the market fighting among them.

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Problems to be addressed:
The president's departure and underwhelming market share numbers were just two of the crushing blows.
So of todays investigation tells us these are the following reasons:

To understand the declining market share of Pepsi, we will study and analyze the key factors that might lead to the misery for such a giant company. Let us consider the departure of the president and take the learning from his case. Why did Manu Anand really leave Pepsi? When Manu Anand, the India and South Asia president of beverage and snack giant PepsiCo, suddenly quit in June 13 after 19 long years with the company, and cleared his table the very next day of the announcement, there was speculation that the parting of ways had not been amicable. Moreover, the company did not name a replacement for Anand, which is the usual practice. His abrupt departure caused some people to point fingers at Pepsi losing market share in the soft drinks space to its old rival, Coca-Cola. Others attributed his exit to a string of failed product launches, including that of a stronger cola in Pepsi Atom. There was also speculation that Anand paid the price for splurging a hefty Rs 400 crore for the title sponsorship of the Indian Premier League (IPL), nearly double of what the previous sponsors DLF had paid, and topping it up with another RS. 50 Crore to become the broadcast partner for Set Max . Was this decision a disaster because it did not increase market share and the tournament saw a sharp drop in TV ratings after the spot-fixing scandal broke out? A new twist: As the story now unfolds, his exit seems to have nothing to do with the beverage giant's performance during his tenure. Those in the know say that various third-party studies show that IPL has given the company a boost in terms of brand recall and exposure. And the jury is still out on Pepsi Atom which has been launched only in a few markets.

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While both PepsiCo India and Anand aren't saying much, sources say that Anand told the PepsiCo brass just a few days before the formal announcement that he was quitting to join chocolate and confectionery giant Mondelez. With a three-month notice period, which is the rule in the company, PepsiCo would have got enough time to plan a smooth succession. The company in recent years has looked for people internally for its senior Indian management, and it is unlikely this rule would have been changed. However, Anand's decision to join Mondelez, say sources, did not go down well with the bosses as, according to the unwritten rule, top managers are not supposed to join a rival company. It is a rule which many multinationals and even Indian companies follow to the hilt. Mondelez, surely, fits that list because it also makes snacks and has brands like Tang which compete directly with PepsiCo's recently-introduced powdered fruit juice under the Tropicana brand. Considering the fact that he would continue to have access to the company's strategy, he was requested to leave immediately. Insiders say that what really did Anand in was his inability to get Ravi Jaipuria, PepsiCo Indias largest bottler on board with some of the companys long-term plans. This lack of alignment really hurt the company, he said. According to him Jaipuria had in the last few months been taking his grievances directly to Indra Nooyi, Pepsicos global CEO. He cited the companys lack of robust defense to Coca Colas Rs8 per bottle price. That really hurt the company and result in some loss in market share. Nevertheless, Anand's exit has put the spotlight on some of his decisions which have been panned by his critics. One of them has been that he paid too much to be involved with IPL. Independent studies, however, show that the company's association might not be as bad as many make it out to be. Pepsi & Coca cola: The battle for market share between PepsiCo and Coca-Cola is nothing new, with the pendulum shifting in either company's favour from time to time. In 2011, Pepsi gained market share over its rivals; in 2012, it lost marginally; and in the first quarter of this year, it has held on to its

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position. In the second quarter, those tracking the numbers expect Pepsi to maintain-if not gainmarket share. The results are also far from conclusive on the performance of Pepsi Atom. The product was launched as a strong cola to take on Thums Up, the number one carbonated beverage brand in the country. Pepsi spent over 18 months to develop the beverage which has a differentiated and an unconventional taste meant for people who want more fizz in their drink. Those associated with the product say that the response to Pepsi Atom has so far been mixed. In places where returnable bottles are being pushed,consumers are coming back for more. "It has only been five months; the company believes that there is a market for this product. It's a flavor that some will like, some will not. So, one has to give it some time," says a source associated with its distribution.
Sources:Articles/"business - Standard" july 03 2013, firstspot.com/business., Business Insider.com/companies

Take away:
You need to keep your partners close There is no direct impact of the president on the declining share of PepsiCo His decision to sponsor IPL-6, though it did not go well as increasing market share, it wasnt that bad, as media reports say, it gave the company considerable exposure and did a lot of positioning for the company.

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The strong, direct rival/competitor, The Coca Cola:

Source: businesstoday.indiatoday.in/story/a-rough-summer-for-pepsi-in-india

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How Pepsi Went From Coke's Greatest Rival To An Also-Ran In The Cola Wars? Before we get into detailed findings of what competitors are doing, let us enlighten some common factors of PepsiCo global which impacted Pepsi sales in India.
Strengthening the rival: In the 1990s, people found syringes in cans in more than 20 states:

Pepsi and Diet Pepsi had a scare in 1993 when consumers in more than 20 states found syringes in the brand's soda cans. The reports, which quickly hit national news, created a panic among consumers. But it wasn't Pepsi's fault. Authorities eventually found video of a woman in Colorado who had been inserting syringes into cans.

PepsiCo announced that it would devote more of its marketing budget towards the snack business:

PepsiCo's snack business -- aka Frito Lay -- kept the company healthy while the flagship soda business was in decline. But instead of investing more money into Pepsi, the company decided to devote more marketing dollars to Frito Lay, increasing its budget 35 percent. Pepsi's marketing budget was almost halved from 2005 to 2010, as Nooyi tried to grow the healthy foods and snack businesses.

Page 124 of 134 The brand changed its recipe so it wouldn't have to put cancer warnings on its can:

Both Coke and Pepsi changed the way that they made the caramel coloring used in their sodas after a California law mandated that drinks containing a certain level of carcinogens have a warning label.

As the new campaign launched, Pepsi reshuffled its management once again:

Pepsi has a nasty habit of shuffling its managers between different departments and brands. It is a habit that has hurt Pepsi's sales. PepsiCo's Q1 2012 results showed a 2.5 percent decline in drink sales and a 4 percent decline specifically in soda sales. It is impossible to support a brand when no one stays long enough on the business to build knowledge or get the hang of running it.
Sources: www.businessinsider.com/how-pepsi-lost-cola-war-against-coke

Take away: Other factors effected sales, and the company was unable to take corrective actions in time till the mystery of syringes has been uncovered. Diversification is a good indicator, but cutting down core business to concentrate on noncore definitely effects. Change of composition to avoid warning label on the cans/bottles. Shuffling of internal managers

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Differentiating two giants:

PepsiCo has been steadily losing market share to Coca-Cola in the carbonated soft drinks market, but PepsiCos true strength lies in its diversified portfolio which partially shields it from the woes of the CSD category. PepsiCos leadership in some of the fast growing beverage categories such as bottled water, juices and sports drinks further enhances its chances to outperform its rival in the long run. This could play out to its advantage as CSD volumes in developed markets decline and as health concerns around CSD consumption spread to growth markets. While PepsiCo will still want to expand its CSD volumes abroad given the growth potential, its diversification could be a winning formula. Portfolio Diversification The first difference to keep in mind is that Coca-Cola is a beverage focused company and derives more than 70% of its revenues from the sale of sparkling beverages or CSDs. On the other hand, PepsiCo deals in both snacks as well as beverage segments and generates more than half its revenues (~51%) from its snacks business, which according to our estimates contributes more than 60% to the companys value. The biggest challenge facing the beverage industry today is the declining consumption of CSDs in developed markets. CSD consumption is known to bear a high correlation with the prevalence of obesity, diabetes and other health related issues. This is the primary reason behind the consistent decline in CSD volumes seen over the last decade in developed markets. Consumers in the developed markets are not only well-informed, but are also becoming increasingly health conscious which is keeping them away from CSDs. Annual per capita consumption of CSDs has fallen from over 50 gallons in 2005 to just over 42 gallons in 2012. Given Coca-Colas higher dependence on CSDs, this could be a relative advantage for PepsiCo. Better For You Products: PepsiCo outsells Coca-Cola brands in most of the important fast growing beverage categories such as bottled water, juices and sports drinks. Aquafina, Tropicana and Gatorade brands hold leading market shares in all of the three categories, outperforming Coca-Colas Dasani, Minute-Maid and Powerade brands respectively. Demand for products in these categories has been growing rapidly over the past few years, primarily driven by increasing demand for better for you products amid growing health consciousness. PepsiCos

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stronger hold in these beverage categories is another advantage the company holds over CocaCola. Coca-Colas Leadership: While PepsiCo continues to focus on a more diversified portfolio with leading brands in some of the fast growing beverage categories, Coca-Cola has enhanced its global leadership in the CSD category over the years. Across its brands Coca-Cola holds leading shares in both developed as well as the emerging markets of the world. Just two of its brands, Coke and Diet Coke, together command almost 27% of the U.S. CSD market. All its brands together control 42% of the CSD volumes in the U.S. while PepsiCo holds 28% share in the U.S. Moreover, Coca-Cola has also strengthened its grip on emerging markets such as China and India. The company holds more than 15% and 54% of the CSD market in China and India respectively, outperforming PepsiCo in these fast growing markets as well. This should worry PepsiCo since it cannot afford to lose out on the huge growth potential that emerging markets hold for the CSD category by their shear size of consumer base and rising income levels. However, it should also be noted that the world today is far more connected than ever and information takes much less time to reach people globally than just a decade ago so health related CSD woes in developed markets could lead to slower volume growth in the high growth emerging markets well before per capita consumption in these markets reaches anywhere close to its peak in the developed markets. Given PepsiCos more diversified business, we believe it has an edge over Coca-Cola in terms of future cash potential primarily because its diverse snacks segment can still take advantage of consumption growth in emerging markets while carrying less exposure to the vulnerable CSD category. Source:forbes.com/sites/greatspeculations, marketingteacher.com Takeaway: PepsiCos diverse portfolio dives it a competitive advantage over all, but concentrating at the issue at the hand, company is losing control over its core brand i.e., CSD articles.economictimes.indiatimes.com,

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Much better opportunities for the company in the emerging markets of bottled water and non-carbonated, fruit juice markets. Rivals focused portfolio on CSD is a big time threat for PepsiCo.

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SWOT Analysis:
Strengths: 1. Product diversity: PepsiCo has several hundreds of brands, which include: carbonated and noncarbonated drinks, water, savory and whole grain-based snacks. Product diversification strengthens PepsiCo because it doesnt have to rely on few key products or seasonal sales and isnt significantly affected by changes in customer tastes. 2. Distribution: The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services. 3. CSR: The firm recognizes its role in a society and engages in education, recycling, water usage reduction, obesity fighting and other projects through PepsiCo Foundation, thus increasing its brand awareness and customer loyalty. 4. Competency in mergers and acquisitions: The key to PepsiCo business growth is its successful mergers and acquisitions of beverage, bottling and snacks companies. PepsiCo acquired such brands as Gatorade, Tropicana, Doritos, Quaker Oats and many others. 5. Successful marketing and advertising campaigns: More than $2 billion spent on advertising over 2012 resulted in PepsiCos growing market share over its main competitors, including Coca Cola Company, which spent even more on advertising. 6. Complementary product sales: In its annual financial report, PepsiCo revealed one of its studies' results that about 30% of customers who buy its snacks also buy its beverages. PepsiCos decision to diversify its product range is firms competitive advantage too.

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Weakness: 1. Low pricing: PepsiCo usually prices its products lower than its competitors. Low price is associated with low quality and PepsiCo products are usually perceived as ones. 2. Questionable practices: PepsiCo is using and selling tap water but places view of mountains on its water bottle labels, thus deceiving people that it is mountain spring water when it is not. PepsiCo has also been criticized for using water in India with higher than allowed amount of pesticides in it. 3. Weak brand awareness: The Coca Cola Company has the largest share market of beverages in the world and much stronger brand awareness than Pepsi, placing it at competitive disadvantage. 4. Too low net profit margin: PepsiCos net profit margin is 9.7% compared to Coca Colas 18.55% and Nestls 11%. 5. Unplanned/Improper decision Making: Decisions like, media planning, IPL-6 are improperly planned. Opportunities: 1. Growing beverages and snacks consumption in emerging markets: PepsiCo has made large investments in BRIC (Brazil, Russia, India and China) countries to expand its market share as these countries represent the fastest growing food and beverages markets in the world. If PepsiCo is successful it will increase its revenues and global market share significantly. In addition, it will be able to rely less on US market. 2. Increasing demand for healthy food and beverages: Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. PepsiCo has an opportunity to further expand its product range with beverages and snacks that have low amount of sugar and calories. 3. Further expansion through acquisitions:

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So far, PepsiCo has been successful in acquiring other companies and adding new growing brands to its portfolio. 4. Bottled water consumption growth: Consumption of bottled water is expected to grow both in US (PepsiCos largest bottled water market) and the rest of the world. 5. Savory snacks consumption growth: The same opportunity PepsiCo has in growing its revenue selling snacks as this market is also expected to grow. Threats: 1. Changes in consumer tastes: Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. 2. Water scarcity: Water is becoming scarcer around the world and increases in both cost and criticism for PepsiCo over the large amounts of water used for production. 3. Decreasing gross profit margin: PepsiCos gross profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. 4. Legal requirements to disclose negative information on product labels: Some researches show that particular ingredients, consumed in extra large quantities, in some of PepsiCo products could cause cancer. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. 5. Strong dollar: More than 50% of PepsiCos income is from outside US. Due to strong dollar performance against other currencies PepsiCos income should fall. 6. Lot of substitutes:

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Traditional Indian families would still prefer a glass of lassi or nimbu pani in summer and a cup of tea or coffee in winters when compared to Pepsi

Strength
Product diversity Distribution CSR Competency in mergers and acquisitions Successful marketing and advertising campaigns Complementary product sales

Weekness
Low pricing Questionable practices Weak brand awareness Too low net profit margin Unplanned/Improper decision Making

Opportunity
Growing beverages and snacks consumption in emerging markets Increasing demand for healthy food and beverages Further expansion through acquisitions Bottled water consumption growth Savory snacks consumption growth

Threat
Changes in consumer tastes Water scarcity Decreasing gross profit margin Legal requirements to disclose negative information on product labels Strong dollar Lot of substitutes

Ansoffs matrix for PepsiCo:

There are four aspects of Ansoffs Matrix which can be applicable for growth analysis of any company.

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1. 2. 3. 4.

Market Penetration Product Development Market development Diversification

Market Penetration: This is the de facto strategy: change nothing and sell more of the same to existing customers. When a business does not consciously select a growth or diversification strategy, it is doing this". In an existing market is selling of new products much moredifficult than selling old products. It is easier to sell old products to traditional customers then to explore new markets. In this case, a firm can use the market penetration strategy if the company tries to increase the share of its product in the overseas markets, which are already served byemploying several types of tactics:
Product-line stretching: the company adds new products to its existing product line in an

already penetrated market segment with the objective of attracting new and competitors customers from rivals.
Product proliferation: the firm offers many different product types Product improvement: this involves updating and augmenting the existing products, and can

entail the application of the latest technology to improve the products capabilities, improving customer services, etc. The market penetration is the safest strategy of all because it leverages many of the company's existing resources and capabilities. In a growing market environment, simply holding market share is bound to result in growth. There may be chances to increase market share if competitors approach capacity limits. Still, this marketing strategy has limits. As soon as the market reaches a saturation point, some other marketing strategymust be chosen if the company is to continue to grow.

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Product Development: The second growth vector of the Ansoffs matrix shows the product development strategy. It is characterized by offering new products to existing markets. Marketers are well aware of the importance of a positive customer relationship and the goodwill and trust that accompany it. If such a relationship exists, a company is able to present for sale new products more effectively and less expensively to existing customers than to new ones. PepsiCo introduced many new brands/products in the same market for example Pepsi Atom, Pepsi My-Can, Pepsi Blue etc to penetrate more in to the existing markets. Market Development: The third growth vector of the Ansoffs Matrix shows the market development strategy. It is characterized by entering new markets with their existing products. Companys good will in the existing markets is very important to excel or penetrate more in to new markets. PepsiCo has been entering new markets, new countries ever since its beginning promoting and offering its core brand cola. Diversification: The final growth vector of Ansoffs growth matrix is diversification. Where the company diversifies its product offering in to various varieties, new products and enter in to new markets. PepsiCo is famous for its mergers and acquisitions, ever since it has started; it is broadening its horizons by merging famous brands in to it.

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The New Strategy:

As we have understood the strengths, opportunities, weaknesses and mistakes of PepsiCo all together piled up to its downfall. But during the down fall tenure, there are so many important factors that came in to spot light like the branding done for the company during IPL-6, Strengths of the company lies in its diversification and most of all, they operate in a highly competitive market where customers are very price sensitive. Adding up all these, PepsiCo has come up with its new strategy for the next summer. PepsiCo rush to woo price-wary buyers: PepsiCo India are introducing their beverages and snack brands in new economy packs priced at R5 and R6 to woo cost-conscious consumers. For instance, PepsiCo India has introduced two new variants of its snack brand Lay's in mini packs (12.5 gm) at R5. The company is betting big on Lay's economy packs called 'Mini Magic' to drive volumes both in rural and urban markets. On the other hand, Coca -Cola India has introduced its flagship brand Maaza (100 ml pack) at a price point R6 to reach out to rural consumers. On Pepsi's new strategy, Vidur Vyas, marketing director-foods, PepsiCo India, said, ''Our emphasis on R5 price point will enable us to reach out to a larger consumer base and drive more consumption. Our aim is to create consumer connect through engagement campaigns such as our new television campaign." Cashing in on the popularity of the Indian Premier League Twenty20 tournament, PepsiCo has flooded the markets with Lay's mini packs in new flavours. To promote its new launch, PepsiCo has launched a new television campaign featuring MS Dhoni, Gautam Gambhir, Rohit Sharma, Shikhar Dhawan, Ravi Shastri and Billy Bowden.