Q3: Evaluate the Promotion Mix followed by the firm and suggest suitable modifications.

Ans: Promotion is one of the four major components of Marketing Mix. Promotion is essential for
every goods or service providing firm to thrive in the market. Promotion can further be bifurcated into
three sub-categories:
 Advertising
 Sales Promotion
 Publicity and Public Relations
These three variables together determine the amount of money and resources that need to be
allocated for promotion. The objective of a Promotion Mix is to create awareness about a product,
increase sales, creation of brand equity and positioning etc. Pepsi belongs to the FMCG sector in which
you either perform or perish. Since the FMCG market is one of the most competitive sectors, it is
imperative for Pepsi to keep reinventing their promotion mix so that it remains in the top 2 categories
of soft drinks.

Advertising:
Pepsi began its advertising with the “Yeh hai right choice baby” campaign in India which featured Shah
Rukh Khan because they believed that message delivered by attractive or popular sources can achieve
higher attention and recall. It then started the “Yeh Dill Maange More” trend featuring Sachin
Tendulkar and many other celebrities. This campaign aimed at creating a perception that one can
never get enough of this product and that the consumers would always demand more.

Pepsi then went ahead to position itself as a youth-centric drink associated with everything that is
cool, fashionable and laid-back by using the tagline “Yeh hai Youngistaan, meri jaan”. The Youngistaan
campaign was catchy and connected well with the consumers as it presented Pepsi as the soft drink
for the young or those who aspire to be young, thereby making it a huge success.

Apart from these campaigns, Pepsi has used other methods of advertising such as aerial signage,
creative wall paintings and quirky street arts, billboards, banners etc.

Sales Promotion:
Over the past decade, Pepsi has been known to offer several promotional discounts as well as
discounts on bulk buying. For the consumers, The bigger the container size, the more is the discount
given. For instance, a 2-litre bottle of Pepsi is comparatively cheaper per 100ml than a bottle of 250
ml. For the distributors, the discount is based on the quantity as well as the payment terms. The larger
the quantity or the better the payment terms, the greater is the discount, thereby keeping the
distributor motivated. Discounts are revised and packaging is reinvented always to give the best value
proposition to the consumers in order to increase sales as well as to maintain the brand equity.

As a part of their promotional strategy, Pepsi also provides various scratch cards, lucky draws, tickets
to world cups and holiday packages to its consumers in order to keep them engaged.

Publicity and Public Relations:

Public Relations often has an important role in stimulating the growth of many parity products as well
as sustaining brand equity. These account for the market share dominance of the firms. Moreover,
consistently publicizing and creating buzz about a brand through various events and experiences helps
in creating barriers to entry. Pepsi is the first company to respond to the environmental concerns and
switching to lightweight, recyclable plastic bottles keeping the consumers best interests at heart.

However, Pepsi can improve its promotion mix by creating brand events and then amplifying it on
social media. This will help in engaging as well as strengthening the bonds with the consumers. In
addition to that, Pepsi needs to lower its price for bulk buyers such as Big Bazaar, Reliance fresh, and
fast food chains like McDonald’s, KFC etc. These top retailers and franchisees negotiate with the soft
drink brands on the basis of payment terms and price and sell their products in huge quantities.
Therefore, it would be beneficial for Pepsi to lower its prices in these areas which affect the
operating margin of the brand.