Marketing Plan of PEPSI

MARKETING REPORT

Submitted By:

Name: MUHAMMAD HAMMAD

(L1F10MBAM2123)

ALI ISHAQ (L1F10MBAM2122)

BILAL AHMAD (L1F10MBAM2112)

RABIA YOUSAF (L1F10MBAM0128)

HAREEMA AFZAL (L1F10MBAM2118)

MEHWISH KHAN (L1F10MBAM )

Section: G

Subject: INTRODUCTION TO MARKETING

Submission Date: JANUARY 19,2011

Submitted To: PROF.SHAHZAD ALAM

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Marketing Plan of PEPSI

Contents
Strong Vs Weak
Executive Summary
Company Description
Mission Vision
Goals & Objectives
Core Business Area
SWOT Analysis
Industry Analysis
Marketing Mix
Target Market
Market Strategy
Marketing Environment
Points of Difference
Conclusion
Pepsi Organizational Chart/Department

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Strong Vs Weak
Pepsi and Coca Cola are strong competitors. In Pakistan Pepsi is the market leader and
Coca Cola is its competitor. But globally Coca Cola is pioneer and Pepsi is follower. The
Pepsi makes defense strategies so that it can maintain its position in the market. While

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Coca Cola is a challenger and it makes attack strategies so that it can become the
market

EXECUTIVE SUMMARY

The purpose of this marketing plan is to develop an understanding about how

PEPSI is marketed and distributed in the market (Product, Price, Promotion and
Distribution). In this project different analysis are performed such as, Company
image, mission statement, goals & objectives, core business areas, SWOT
Analysis, Industry Analysis, Marketing Program, target markets, Marketing
Strategy, Marketing Environment, Point of Differences& Positioning At the end it
was discussed that what are the core marketing strategies that make PEPSI the
more powerful brand.

COMPANY HISTORY

Pepsi Cola International is world-well-known soft drinks brand. It is a very well

organized multinational company, which operates in almost all over the world.
They produce, one of best-carbonated drinks in the world. Pepsi is a symbol of
hygiene, quality and service, all over the world. Pepsi is producing Cola for more
than 100 years, and it has dominated the world market for a long time. Its head
office is in New York.

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Initially Pepsi was used as cough syrup in America, and sold in pharmacy. But
the taste of that syrup was liked by the people and then added water and
carbonation and with the passage of time it is used as a regular drink and now it
is world largest soft drink brand. In beverage sector pioneer is Coca cola and
Pepsi is follower. In 1909 more than 24 American States gave license to Pepsi
for sale. Pepsi Cola was first introduced in 6.5 ounce bottle. Pepsi was first
registered in 1932.

In 1932 Pepsi Cola was introduced a big bottle of 12 ounce. In 1950, the Pepsi
Cola formula was slightly changed and the sweetness and calories in Pepsi Cola
were decreased. In 1957, the bottle was changed to new attractive bottle and the
product line was also increased by introduction of two more products that were
Teem and Marinda.

Today Pepsi Cola is available to more than 100 million of consumers which
includes Asia as well as Europe & Africa.

PEPSI in Pakistan

In Pakistan Pepsi distribution is indirect. Nationwide Pepsi has 67% of market

share in Lahore Pepsi is always at par as compare to coke. In December, 54%
share is captured by Pepsi, 49% by coke and remaining 1% by other brands.

The market in Pakistan is surely conquered by Pepsi. It has proved itself to be

the No.1 soft drink in Pakistan. In 1971, first plant of Pepsi was constructed in
Multan, and from there after Pepsi is going higher and higher.

Pepsi's greatest competitor is Coca Cola. Coca Cola is an international

recognized brand. Coke’s basic strength is its brand name and Coke’s strategy is
not to change the brand name and logos which are in the consumers mind. But
Pepsi thinks that change is must and if a product is continuously consumed then
its utility starts decreasing. Pepsi with its aggressive marketing planning and
quick diversification in creating and promoting new ideas and product packaging,

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is successfully maintaining is No.1 position in Pakistan. Last year Pepsi

introduced Fruit Drink SLICE and Energy Drink STING.

When Pepsi was introduced in Pakistan, it faced competition with 7up, lemon and
lime drinks, which was established during 1968, in Multan. Pepsi introduced its
lemon and lime, "Teem" to compete with 7up. It successfully after some years,
Pepsi took over 7 UP, and this enhanced Pepsi's profits and market share. In
Pakistan, Pepsi with 7 UP enjoys 70% of the market share where as the coke
just has 20% market shares. In 1992 PEPSI introduced a new product named
Mountain Dew. In Pakistan Mountain Dew’s overall sale is more than Coca
Cola’s overall sale. It has a monopoly in citrus flavor and still in growth. In the
year 2005 PEPSI introduced a new and different product named AQUAFINA.

Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These
bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers,
produce, distribute and help in promoting the brand. If according to franchise, in
Sindh and Balochistan Pepsi market share is almost 76 77 %, coke is about 12-
13 %.

PEPSI in Lahore

Pepsi production was started in Lahore in 1976 by Ex- Governor Saddiq Husain
Qureshi. In 1988, Pepsi plant was buyout by RIAZ BOTTLERS. After 1988, Riaz
Bottlers are producing Pepsi Cola International's products under "Franchising".
The Pepsi Cola International provides all specifications and Riaz Bottlers follow
them. In Pakistan Pepsi distribution is indirect, but in Lahore Riaz Bottlers is the
direct distributor of Pepsi. As far as Riaz bottler concern it is in direct, because
having own vehicles and reaches wholesale and retailers directly. In Lahore and
Kasoor, Riaz bottlers are 100% direct. Riaz bottlers have 8 ware houses, 4 in
Lahore and 4 in Kasoor, and 240 vehicles serves product in market. Riaz bottlers
have 18000 outlets on Lahore and Kasoor.

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MISSION/ VISION

Business mission of Pepsi, in Pakistan, is to be the best and biggest seller of

carbonated soft drinks.

We are working for providing a high quality refresher product to passionate

crowd. We have a refined plant by which we manufacture the product according
to the health standards. We have a number of brands loyal and have full
attraction for the quality conscious people to consume our product. We have
triggered ourselves towards growth and high profitability. We are coping with the
technological advancement by installing the new machinery by which we makes
a frequent flow of our supply to the customer.

GOALS & OBJECTIVES

• The company main objective is to achieve the highest level of quality and
their all strategies are related with this objective. The company is quite
successful in achieving this objective, as they are known for their quality in
the market.
• Company's second main objective is product development. Along with the
product Quality Company largely emphasizes on the development of the
product.
• Company's third objective is to increase their revenues from international
operations.
• At the corporate level, Pepsi has centralized and formal structure. All the
policy matters related to different businesses and regions are made at the
upper level and guidelines are received from the parent office in USA, the

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routine and local level decisions are made by subsidiary itself, like the
distribution network, marketing etc.
• Pepsi has a policy of setting sales targets for each region. They have also
the targets for earning certain level of revenues from each region.
• Plans related to their objectives and policies are as follows:
• To accomplish their goal of achieving highest quality product. They use
their technical expert terms to visit the different plants and collect samples
to send them Tokyo for lab testing, every month. Now, they are planning
for further tightening the quality standards by forcing the franchisers to use
different new techniques for total quality management. So, those highest
quality standards could be achieved. They invite different experts of
franchisers from different countries to participate in short courses related
to quality at different area head quarters.
• To accomplish their goal of new product development, they are spending
huge amounts of money on R&D.
• For achieving their third goal of increasing international revenues, they are
planning to expand their international operations. Especially, they are
targeting to those underdeveloped countries, which have high GDP and
per capita income.

CORE BUSINESS AREAS

Pepsi is dealing with too many products all over the world. But in Pakistan it is
dealing only with beverages. The packages dealing with are as follows:

1. PEPSI
2. MIRINDA

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3. 7 UP
4. PEPSI Diet
5. 7 UP Zero
6. Mountain Dew
7. Aqua Fina water
8. Slice Mango Juice
9. Sting Energy Drink

Each and every brand has its own percentage in the business of PEPSI
International. The brand picture of different brands of PEPSI is as follows:

Brand Picture 2009

Brand picture 2009

5% Pepsi

1% Mirinda
16%
Teem

Pepsi Diet
0%
55% 7up

16% 7up Diet

Mountain Dew
7%

Picture 2010
BRAND PICTURE 2010 Pepsi

Mirinda

Teem
16%
Pepsi Diet
1%
7up
45%
16%
7up Diet
1% Page 9 of 24 Mountain Dew
12%
9%
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If we compare the brand picture for last two years we will reach to the conclusion
that Percentage of mountain dew was increased in year 2010 than year 2009.
This means that now Mountain dew is the stronger brand after PEPSI.

SWOT ANALYSIS

STRENGTHS

1. Company Image

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

2. Quality Conscious

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

3. Good Relations with Franchise

Throughout its history it has a good relation with franchisers working in

different areas of the world where they have the production facilities.

4. Production Capacity

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It has the production capacity i.e. 60,000 Bottles per hour for 250 ml & 21000
bottles per hour for PET packages is not only in Pakistan

5. Market Share

It has a highest market share i.e. 60% in Pakistan and leading a far step head
from its competitors.

6. Large number of diversifies businesses

This is also its main strength as it has diversified in many businesses such as:

Pepsi beverages

Pepsi foods

Pepsi restaurants

7. Hi Tech Culture

The whole culture and business-operating environment at Pepsi Cola - West

Asia has quick access to a centralized database and they use computers as
business tools for analysis and quick decision-making.

8. Sponsorships

They mainly use celebrities in their advertising campaign like Imran Khan,
Wasim Akram, Waqar Younas etc. Because people make icons, and they follow
their icons. Also sponsor social activities programmes like music etc.

9- Variation in product Range

There is much product variation in PEPSI in form of different packages as

well as brands. Old like 7 Up much while children like PEPSI & younger like
M. Dew much as compared to Pepsi.

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WEAKNESSES

1. Declines in Taste

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

2. Image as a Franchiser

Such as in Pakistan, Hamayun Akhtar is its franchisee that has a strong

political support from a political party, which is in opposition. In their era in
government less tax is imposed on them but retaliation increases as they come
in opposition. So the selection is not appropriate as this thing surely harmful to
their image as well as the strategies. Also some people treat it as a local industry
as compared to coke because it is the franchise of PEPSI international.

3. Short Term Approach

They have a lack of emphasis on this in their advertising such as currently

when they losses the offer for official drink in the 1996 Cricket World Cup they
started a campaign in which they highlight the factor such as "nothing official
about it.

4. Weak Distribution

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

OPPORTUNITIES

1. Increasing Population

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

2. Changing Social Trend

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

3. Diversification

They may enter in garments business in order to promote their brand name,
by making sports clothes for players that represent their name by wearing their
clothes. As well as they have the opportunity to move towards juices and chips.

THREATS

1. Government Regulation

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

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2. Raw Material Supply

Again this is also a serious threat from it supplier as if supplier is unhappy with
the company. He may reduce the supply and exploit the company. This action
will surely affect the production process.

INDUSTRY ANALYSIS

Competitor’s Analysis

People views about beverages are now changed. In the past there was only two
main bottlers were doing business in beverages Coka Cola & PEPSI.

Now there are following strong brands in market.

1. PEPSI
2. Coca Cola
3. Gourmet Cola
4. RC Cola
5. Shandy Cola
6. Amrat Cola
7. Macca Cola.

The picture for competitor’s analysis is as follows.

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Competitor’s package detain in given below.

PEPSI PRODUCTS COKE Products

PEPSI Coca Cola
PEPSI DIET Coke Diet
TEEM
7 UP Sprite
7 UP DIET Sprite Zero
MARINDA Fanta
M-DEW Minute Made Pulpy Orange
AQUAFINA

STING ENERGY DRINK

SLICE MANGO JUICE

If we look at above table we will reach on the conclusion that PEPSI has
introduced more products in market as compared to COKE.

Coke is the biggest and heavy competitor of PEPSI in Worldwide as well as in

Pakistan. But if we see market both companies have almost same market share.
Coke’s main focus is at Restaurants, Colleges, Cinema Halls etc. But in market

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most of the market is dominant by PEPSI. Coke gives heavy discounts to its
customers. That’s why more public places prefer to market Coke. If we analyze
the Prices, both of them have same process.

Marketing Mix

Marketing Mix is the set of marketing tools that the firm uses
to follow its marketing objectives. Marketing mix has a
classification for these marketing tools. These marketing are
classified and called as the Four Ps i.e. Product, Price, Place
and Promotion.

Product

Product variation

PEPSI has much product deviation in case of brands and packages. This leads it
to different age person as well as different income level people.

Product Range

PEPSI has a vast product range varying from 250ml to 2250m. Decision about
above packages is in progress.

For CSD’s product range varies from 250 ml to 2250 ml

For Aqua Fina product range varies from 300ml to 1500ml.

Packaging

All products of PEPSI have very attractive packaging. Recently Pepsi has
changed its logo and it is Pepsi’s 10th biggest change of logo. Because Pepsi
thinks that change is must and consumer needs change and if any product is
continuously consumed then its utility starts decreasing.

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 PRICE

Prices for different packages of Pepsi are as follows:

1. 2250ml CSD--- 80/-

2. 1500ml CSD--- 70/-
3. 500 ml CSD--- 30/-
4. 250 ml CSD---14/-
5. 1500ml Aqua Fina--- 30/-
6. 500 ml Aqua Fina--- 18/-
7. 300 ml Aqua fina--- 15/-

All prices are in rupees.

 PROMOTION

PepsiCo advertised its products through many different ways e.g. printing media,
electronic media, sign boards etc. Through TV, we have seen different
advertisements of its products such as Pepsi or Dew. PepsiCo also advertise its
products by targeting those favorable television programs, like sports especially

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Cricket, talk shows etc. The use of Posters are also used to create awareness of
the Pepsi. Pepsi has been a dominant sponsor of the Pakistan Cricket
Team since the 1990s

PEPSI PROMOTES ITS BUSINESS BY USING FOLLOWING STRATEGIES

1. Advertising

PEPSI has very strong advertising strategies. Pepsi advertises through

print and electronic media. Most of its advertisements focus legend players,
actors or actresses like Imran Khan, Wasim Akram etc. Some of its
advertisement the mainly communicate to special age group. Now Pepsi is
more emphasizing on youth like Muhammad Aamir, Aisam Ul Haq. Because
people make icons and they follow their icons.

2. Incentives to sales persons

PEPSI gave heavy incentives to its sales team for achieving targets. This
motivates employees to work hard and sincerely.

3. Incentives to shop keepers

PEPSI team also gave incentives & rewards to shop keepers on the basis
of their sale. This can be in terms of freezers, sign boards for shops, as well
as in terms of discounts.

4. Publicity at PEPSI outlets

PEPSI do heavy advertisement at its outlets. They put attractive signboards,

Paint at different PEPSI outlets.

5. By making good relations with key accounts

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PEPSI have many key accounts in terms of restaurants and shopping malls.
They have very good relation to its key accounts.

 PLACE

PEPSI has a very vast distributive teams, which main objective is to make PEPSI
available at an arm’s length. Riaz Bottlers is a direct distributor of Pepsi in Lahore
and Kasoor. They have 8 ware houses in Lahore and 4 in Kasoor. From each
and every warehouse Pepsi team do direct distribution to its customers. PEPSI
Lahore is using direct distribution technique for sale and marketing of its product.
and 240 vehicles serves product in market. Riaz bottlers has 18000 outlets on
Lahore and Kasoor.

TARGET MARKETS

Pepsi's market share is increasing 1 or 2 points over the last 8 to 10 years, which
is quite significant. If we take up to last 10 years, it’s almost 12% increase in the
companies share.

1996 was a bad year for Pepsi because the pricing was high. The company
prices when to Rs.8 and as the consumer income has caught up to Rs.8 so
hopefully consumer will now get familiar to this price change.

There will be now more competition and whenever there is competition there
is a lot of market activity, distribution improves, promotion improves and
advertising improves. As in Karachi, at the end of 1996 in Nov., Dec., when Coca
Cola launched its 300 Ml pack Pepsi also launched its 300 ML. This created
competition and prices went down to Rs.3. This increase the market so much,
that Pepsi sales were so high during Nov., Dec., that it has never been whole
year. This shows that Pakistani market has great potential to grow.

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MARKET TARGET

Pepsi customers are teenagers young and adults. It also targets at schools,
colleges, universities, homes, restaurants and stores.

MARKETING STRATEGY

BUSINESS MISSION

Business mission of Pepsi, in Pakistan, is to be the best and biggest seller of

carbonated soft drinks.

OBJECTIVES

To sell maximum amount of cases, to have and try to capture maximum

market share. Pepsi has set their marketing objectives, according to the
resources they possess, and these objectives are quite appropriate, under the
prevailing competitive position and the opportunities.

STRATEGY

Core marketing strategy is to achieve the objectives, to provide consumer the

product he wants. To provide Pepsi at an “arms length", to the consumers. For
this company has allocated sufficient resources.

BUDGETS

Company has allocated sufficient resources to different market segments.

Sufficient resources are provided for product development, advertisements,
promotion and other marketing mix elements. This can be seen by the quality of
ads produced by Pepsi. Pepsi ads are often shown during the most expensive

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time on the prime time during dramas, talk shows, i.e. between 7.00 Pm to 9.00
Pm.

They also sponsor cultural events, musical concerts, cricket matches etc that
involves very high costs. But Pepsi is able to get the desired results out of its
huge investments in promotion, advertisements and product development.

MARKETING ENVIRONMENT

DEMOGRAPHIC

Demographic changes and development poses some threats and

opportunities. Pepsi Cola International keeps close tracks of demographic trends
and development in the market. Increasing migration to cities provides
opportunity for Pepsi to increase its production, adjust its prices, accordingly.
People are now becoming more aware of calories and are more conscious about
their health. Pepsi begin this trend by offering diet version for low calories
conscious consumers. So Pepsi International keeps a very close eye on the
demographic changes, occurring in Pakistan and then plans its marketing
strategies according to these developments.

ECONOMIC

Pepsi is a luxury product. It's not like "Rolls Royce", but it is also not like
"flour". People can drink water too instead of Pepsi. But rising income always
affects the company. When people have more disposable income, Pepsi sells
more.

It is also an desire product. It has no planned purchase. Normally, we do not

go out, especially to drink Pepsi. Very often, we see Pepsi sign board, a khokha,
and decide to buy Pepsi. In Pakistan, Pepsi's' sales were rising, along with other

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things that the company did, like, sales promotion, advertisement and
distribution, which was very effective.

POLITICAL ENVIRONMENT

Developments in political environment also affect company's strategies.

Higher percentage of sales tax and excise duty has been imposed on the
company's product, which affects the selling price, and ultimately the buying. It
affects packaging. Due to current sales structure, manufacturing bigger packs
become unviable.

Current duty structure has affected Pepsi’s take home packages, i.e. 1.5 liter
bottle, 2.25 liter pet and non-returnable packages. 250 ml is the most viable
package under current condition.

CULTURAL ENVIRONMENT

Although Pepsi is an international brand, but it is very closely aligned with

Pakistan cultural environment. Pepsi, in Pakistan is no doubt No.1 beverage
brand. Yet it is also recognized as a "National drink". Pepsi's has related its ads
and promotion, to nationalism, like sponsoring

Dil Dil Pakistan,

Pepsi with Imran Khan,

Pepsi with Wasim and Waqar, etc.

This reflects that Pepsi is a part of Pakistan.

Changes in life style of consumer affect the Company's product. For

example, in a depressed society like in Pakistan, when people go out for picnic,
and during leisure time. They enjoy themselves by cooking themselves, and very

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often take NR Pepsi with them. 80% consumption of Pepsi is, outside
consumption.

As youth is the target segment of Pepsi, so their changing life styles also
provide opportunities for the company to alter its strategies. Young people are
more trendy and fashionable, and their behavior changes from time to time.
Pepsi's slogan

"Choice of a new generation",

Has appealed the Pakistani youth, allot, and the company sales were
increased considerably. Then, they shifted to new slogan, "GENERATION
NEXT" and now one more step ahead with "ASK FOR MORE".

Fast urbanization also provides opportunities to the company. People

migrating to cities, are influenced by the cultural change, and they tend to buy
Pepsi more as people in urban areas are more aware about soft drinks.

POINT OF DIFFERENCES

There is a unique point of difference which differentiates PEPSI from other

products.

They are as follows:

For PEPSI

Dil Hai to Mango Aur

For 7 Up

Style Zara Hatke

For Mountain Dew

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Dew Na Kya To Phir Kya Jya

For Aqua Fina

Fina Nahin to Peena Nahin

Ab Sirf Aqua Fina He Peena

CONCLUSION

PEPSI is the good reputable brands of the world and one of the top brand in
Pakistan. People who are really brand conscious they use this drink.. People
make a use of this brand as many functions as they can. Due to sponsorship to
different cultural events or legends, this brand has a good image to the citizens.
Pepsi is such a brand that it will market it itself nowadays even no extra force is
required. But company is promoted it brand at its maximum by making discounts,
Schemes or in term soft key accounts. After the afghan war and Iraq attack some
political parties make a bad impression at the usage of this brand. But due to that
effects there came no change in its sale. Brand loyal people use the products
due to good taste and quality.

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