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PEPSI - KILLING SOFTLY CASE

STUDY

Presented By:-
1. Kartikay Gulani - PGP21079
2. Shagun Gupta - PGP21240
3. Darpan Dixit - PGP21043
4. Neha Garg – PGP21109
5. Amit Choudhary-PGP21018
History
 Originally created and developed in 1893 by CALEB BRADHAM
and was introduced as BRAD'S drink.
 It was renamed as PEPSI-COLA in1898 and was later renamed as
PEPSI
 Its manufacturer is PEPSICO Inc. , which is an
American multinational food, snack, and beverage corporation.
 PEPSICO was formed in 1965 with the merger of the PEPSI-COLA
Company and FRITO-LAY.
 PEPSICO’S net revenue for 2018 was 64.66 Billion US Dollars.
Facts about the Case:
The International Scenario
 Rivalry between Coke and Pepsi ,they both were trying to
beat each other.
 In 1987 Coke & Pepsi had 40.3% & 30.2 % of the U.S market
respectively.
 Even internationally Coke outsells Pepsi
with market share of 10% and 3%
respectively.
The Indian Scenario:
 Cola was the largest selling flavor in market.
 In 1977 a change in government at a center led to the exit of
the Coca Cola.
 The first national cola drink to pop up was Double Seven.
 In 1980 another cola drink, Thumps Up was launched by Parle .
 Thrill by Mc Dowell's in mid eighties and by the late eighties there
was Double cola .
 The Indian soft drink industry was estimated to be 900 crores
 An additional dimension to the Indian soft drinks was fruit drinks.
Pepsi in India:
 In 1985 a proposal with R.P. Goenka group was rejected by the
government.
 The Proposal:
 Export of fruit juice concentrates from Punjab in return for the
import of cola concentrates.
 The deal offered was 3:1 export import ratio.
 Therefore second bid was widened to take in a food processing
division.
 Acceptance of the Pepsi Offer in India in 1990.
 Export import ratio was finally fixed at 5:1.
 Cold drinks sale was fixed at 25% of total sales
Issue 1 : What were the elements of Indian market
environment that Pepsi co. had to tackle?
 Elements of Micro Environment:

 Elements of Macro Environment:


Micro Environment:

 Competitors:- Limca, Thums Ups, Golds Spot, Campa Cola,


Double Cola, Fruit Juice.
 Shareholders/Collaboration: PAIC & VOLTAS.
 Customers: Fresh Indian Market Customers.
 Suppliers:
 Farmers
 Fall in Income from Wheat.
 Fruit cultivation was increasing, but had a major problem
to dispose them.
Macro Environment:
1. Political Environment:
 Development of Economy.
 To Increase Exports.
 High level of intervention by the Government in corporate sector.
 Desire to earn Foreign Exchange.
2. Legal Environment:
 100% FDI was not allowed.
 Import of Cola concentrate was not allowed.
 Foreign brand name could not be used.
3. Economic Environment:
 Cold drink industry was in nascent stage.
 Lower Demand
 Foreign Exchange problem.
 Lack of adequate market for fruits cultivators.
4. Technological Environment:
 Inferior Technology for production of Soft Drinks.
 Requirement of knowledge in agriculture industries.
 Requirements of technology for fruits processing.

5. Social Environment:
 Fear of Impact on diet.
 Fear of Invasion of MNC Culture.
Issue 2:How were these elements managed?
 Competitors:-

 Collaboration/Shareholders:-
 Suppliers:-

 Customers:-
Political:
 Food processing was included in second proposal
 Assurance on meeting export regulations
 Employment -500-direct and 30000-additional were assured
 In the revised deal
 Equity stakes were revised
 PAIC 40% Voltas -24% ,Pepsi-36%
 EXIM ratio fixed at 5:1
 Indulged in political lobbying
 Ensured the active participation of Punjab government.

Legal:
 Compliance with legal requirements fighting out the cases inside as well as
outside.
Economic:-

Social:-
• Gave an Indian touch by naming it as Lehar Pepsi.

Technological:-
• Assured availability of high end technology.
• Established collaborations for development of agriculture.
Issue-3-what is your learning about “managing the
environment”?

 Every business, no matter how big or small, operates within the


marketing environment. Its present and future existence,
profits, image, and positioning depend on its internal and
external environment. The business environment is one of the
most dynamic aspects of the business. In order to operate
and stay in the market for long, one has to understand and
analyze the marketing environment and its components
properly.
 All organizations should continuously appraise their situation
and adjust their strategy to adapt to the environment.
Issue 4: Emerging environment in Indian soft
drinks market?

1. Production:-
• Better and more efficient means of production.
• Introduction of variety of flavours.
• More choices available to the buyers in terms of products, brands
and flavour.

2. Market:-
• Growth in market size.
• Spread of market of Pepsi.
• Probable entry of Pepsi in fruit drinks.
3. Competition:-
• Increase in degree of competition.
• Probable exit of Pure drinks.
• Consolidations of small players.
• Incoming of more foreign players especially Coke.

4. Promotion:-
• Exposures to new forms of strategies and techniques.
• Increase in budgetary allocation to advertisements and sale
promotions.
• More aggressive form of promotion to be observed in the market.
Thank You

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