1.

0 Introduction
Company Background

 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 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.
(Partnership, n.d.)

 Pepsi Goal

PepsiCo goal is their efforts are directed toward creating a healthier relationship
between people and food while continuing to grow the business. Through the 2025 Agenda,
they are making progress on their goals, which aim to deliver change across their company,
value chain, industry and the world.

 Product (Performance with Purpose )

They will continue to refine their food and beverage choices to meet changing consumer
needs by reducing added sugars, saturated fat and salt, and by developing a broader portfolio
of product choices, reaching more underserved communities and consumers. View each of their
2025 goals below and learn more knowledge and skill to achieve its goals. For example, they
provide at least 2/3 of their global beverage portfolio volume will have 100 Calories or fewer
from added sugars per 12-oz. serving. They also try to increase positive nutrition like whole
grains, fruits and vegetables, dairy, protein and hydration by expanding our portfolio containing
one or more of these ingredients.
 Pepsi’s beverage, food and snack products compete primarily on the basis of brand
recognition and loyalty, taste, price, value, quality, product variety, innovation, distribution,
advertising, marketing and promotional activity, packaging, convenience, service and the
ability to anticipate and effectively respond to consumer preferences and trends, including
increased consumer focus on health and wellness and the continued acceleration of e-
commerce and other methods of distributing and purchasing products. Success in this
competitive environment is dependent on effective promotion of existing products, effective
introduction of new products and reformulations of existing products, the effectiveness of
Pepsi’s advertising campaigns, marketing programs, product packaging, pricing, increased
efficiency in production techniques, new vending and dispensing equipment and brand and
trademark development and protection. They believe that the strength of brands, innovation
and marketing, coupled with the quality of products and flexibility of distribution network,
allows them to compete effectively.

2.0 Issue, Challenge and Problem of Pepsi Company

PepsiCo beverage, food and snack products are in highly competitive categories and markets
and compete against products of international beverage, food and snack companies that, like us, operate
in multiple geographies, as well as regional, local and private label manufacturers, economy brands and
other competitors. In many countries in which our products are sold, including the United States, The
Coca-Cola Company is their primary beverage competitor. In 1970s, Pepsi’s rising sales began to
challenge those of the market leader, Coca-Cola and the “cola wars” begin. Coke’s rand invest 70 billion
to their branding strategy, thus, they achieved top Inter-brand in the best global brands. Their brand
team found a compelling way to differentiate Pepsi from Coke, convertible result from blind taste tests.
The result shows people preferred the taste of Pepsi to Coca-Cola into an award-winning advertising
campaign.

Many of Pepsi’s food and snack products hold significant leadership positions in the food and
snack industry in the United States and worldwide. In 2017, Pepsi and Coca-Cola Company represented
approximately 23% and 20%, respectively, of the U.S. liquid refreshment beverage category by
estimated retail sales in measured channels, according to Information Resources, Inc. However, The
Coca-Cola Company has significant carbonated soft drink (CSD) share advantage in many markets
outside the United States. It’s been a long time since PepsiCo just sold Pepsi and Coca-Cola just
sold Coke. Both companies now sell juice, water, sports drinks and iced coffee. And in many
of these categories, Pepsi is winning. But when it comes to regular old cola, Coke is still king
in the market. In the last decade, Coke’s market share has risen from 17.3% to 17.8%, while
Pepsi’s has dropped from 10.3% to 8.4%, according to beverage digest, a trade publication.
 People are turning away from sugary drinks and empty calories. Evolving tastes and
sugar taxes have encouraged brands like Coke and Pepsi to invest in healthier alternatives. The
first challenge of Pepsi was a decrease in soda consumption in US. In2009, American
consumed 46 gallons of carbonated soft drinks. Since peaking 2004, volume sold had declined
for 6 straight year, cola drinker’s switched soda to iced teas, juices and water. Both companies
have diversified their product line-ups, but the stakes in cola are higher for Coke. PepsiCo
merged with Frito-Lay and now owns Quaker Oats, Tostitos and other food brands. Coca-Cola
is still a beverage company.

The American Beverage association pledged to reduce beverage calories in the market
place, their company’s member offer lower calorie beverage and smaller portion sizes. PepsiCo
and the Coca-Cola Company stop sold their full calorie sweetened drinks in US at the schools
in 2006. These s because American adults and children were overweight or obese. Thus, the
President Obama initiated anti-obesity initiative that required soda manufacturers to put calorie
content on the front of containers. Groups lobbied lawmakers to sponsor soda taxes to reduce
consumption and pay for health cost. PepsiCo losing its focus on the core soda and snack
business, thus, their stock prices was suffering declined too due to PepsiCo more enhance
health and wellness of society group.

The other issue about PepsiCo's are its Super Bowl, is that much of the marketing for brand

Pepsi is expected to focus on a "Pepsi Refresh Project." Pepsi has plans to pledge at least $20 million

for projects consumers create to "refresh" their communities. PepsiCo Company is concerned that

putting a lot of ad dollars behind the brand in the Super Bowl where CBS has been seeking between

$2.5 million and $3 million for a 30-second spot would not be in keeping with a marketing message

that portrays Pepsi as socially responsible. Instead, other competitor, Gatorade brand may get more

time during the big game. Following a year marked by declining sales and market share, even

PepsiCo using a massive of marketing effort such as the sports-drink is poised for another

overhaul in 2010. Executive of Gatorade changes in marketing, advertising and product

offerings, even as they have insisted that this year's restaging efforts are on target for sport

drink.
References
Partnership, P. a. (n.d.). PepsiCo and Partnership . Retrieved from http://www.pepsico.com/