Marketing Strategy Of Pepsi.pdf

A DISSERTATION REPORT ON

“MARKETING STRATEGY OF PEPSICO ®”

SUBMITTED BY SPARSH RAJ (BBA VITH SEMESTER) ENROLLMENT NO. - G162350192

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF BBA PROGRAMME FROM (HNBGU)

INTERNAL GUIDE MR. SACHIN NAUTIYAL (ASST. PROFESSOR)

SGRRITS, PATEL NAGAR, DEHRADUN - 248001 (UTTARAKHAND) BATCH (2016-2019)

DECLARATION OF CANDIDATE

I hereby declare that this report entitled, “MARKETING STRATEGY OF PEPSICO ®” is made and submitted by me to Shri Guru Ram Rai Institute of Technology &

Science in partial fulfillment of requirement for the degree of Bachelor of Business Administration under the supervise and guidance of Mr. Sachin Nautiyal

I further declare that this report entitled, “MARKETING STRATEGY OF PEPSICO ®” is my own original research work and has been submitted to the Institute/University for the award of professional degree.

Sparsh Raj Date: -

(BBA VIth SEM)

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CERTIFICATE BY INTERNAL GUIDE

This to certify that Mr. Sparsh Raj has completed and submitted his dissertation report on “MARKETING STRATEGY OF PEPSICO ®” under my guidance and supervision. He was in constant touch with me. I wish him success in his entire future endeavor.

Date: -

Mr. Sachin Nautiyal (Faculty of Management) SGRRITS, DEHRADUN

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ACKNOWLEDGEMENT

At the very outset, I would like to acknowledge with immense gratitude the support and guidance of some people without whom the project could not have been completed. Also, thanks to them, from whom I learnt a lot more additional things than that just restricted to my project. I am thankful to “PEPSICO ®” for providing me with the wonderful opportunity and allowing me to take this study. Also, I would like to thank the faculty guide of my college Mr. Sachin Nautiyal who guided me in my project. I would also like to thank and the Human resource department for allowing us to do the training.

Last but not the least I would like to thank my parents who have always showed their full faith in me, and are the biggest source of my encouragement and guidance.

Sparsh Raj (B.B.A VIth SEM)

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TABLE OF CONTENTS S. No.

1.

ITEM DECLARATION OF CANDIDATE

PAGE NO. 1

2.

CERTIFICATE BY INTERNAL GUIDE

2

3.

ACKNOWLEDGEMENT

3

4.

OBJECTIVE OF THE STUDY

5

5.

ABSTRACT

6

6.

MARKETING STRATEGIES ADOPTED BY PEPSI

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7.

COMPANY OVERVIEW

8

8.

RESEARCH METHODOLOGY

14

9.

SOFT DRINK MARKET IN INDIA

15

10.

BUYER DECISION PROCESS

15

11.

PEST ANALYSIS

18

12.

SWOT ANALYSIS

21

13.

ANSOFF MATRIX

25

14.

PORTER’S FIVE FORCE MODEL

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15.

STP ANALYSIS

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16.

FOUR P ANALYSIS

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17.

THE COLA WARS

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18.

CONCLUSION

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19.

RECOMMENDATION

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20.

BIBLIOGRAPHY

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OBJECTIVE OF THE STUDY

1. The main purpose of this study is determining the different strategies that are adopted by the companies. 2. The strategies will be evaluated to see which is the best amongst them and which are most effective. 3. Acceptability of Pepsi products by the consumers and marketers. 4. Identifying the competitors and positioning Pepsi in comparison to them. 5. To find out marketing strategy of Pepsi. 6.

To analyze the SWOT analysis of Pepsi.

7 To know about customer value of Pepsi. 8. To know about customer perception towards Pepsi brand image 9. To know about customer satisfaction 10. Impact of market strategy on customer

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ABSTRACT I have decided to present our marketing term paper on PepsiCo after studying its marketing strategies. I worked on PepsiCo’s product range of beverages and focused on Pepsi Cola as the subject of our analysis. I have chosen Pepsi for many reasons. It is one of the biggest FMCG brands not only in India but also globally. Indeed, Pepsi Cola is one of the fastest paced FMCG products worldwide. Pepsi posed an exciting opportunity to study a brand that is automatically associated with youth and energy. I worked on Pepsi in order to understand the various aspects of its marketing strategy that has made it the Number 1 Cola drink in India. Our team focused on its strategies viz. Coca Cola especially in the city of New Delhi. I have also researched extensively on Pepsi’s distribution network and have made suggestions as to how it can further improve its reach among users in the future.

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Marketing Strategies Adopted By Pepsi

➢ Extremely high visibility: enormous resources allocated for advertising ➢ Positioned as a product or the youth: targets “Generation Next” ➢ Unlike global trends, half of the distribution of Pepsi in India done by Company Owned Bottling Operations (COBOs) ➢ Very low brand loyalty among consumers, so sales depend on timely product availability ➢ Recent entry into rural markets

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COMPANY OVERVIEW PepsiCo, Inc., established in 1965 through the merger of Pepsi-Cola and Frito-Lay is a world leader in convenient foods and beverages. The company consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. PepsiCo brands are available in nearly 200 countries and territories. Its success is the result of superior products, high standards of performance, distinctive competitive strategies and the high level of integrity of its employees. PepsiCo offers product choices to meet a broad variety of needs and preference from fun-foryou items to product choices that contribute to healthier lifestyles. The company's principal businesses include: ➢

Frito-Lay snacks

➢

Pepsi-Cola beverages

➢

Gatorade sports drinks

➢

Tropicana juices

➢

Quaker Foods

PepsiCo’s 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.”

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The company has two major divisions that are operational in India. The first division is the traditional Beverages Division. The second division, and the subject matter of this report, is the Snack Food Division.

The Beverages Division: The company has 37 bottling plants in India, and one company-owned concentrate plant. Pepsi keeps its concentrate formula, a secret. The main products are: ➢ Pepsi Cola

➢ Diet Pepsi

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➢ 7 Up

➢ Mirinda

➢ Mountain Dew

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➢ Slice

➢ Tropicana Juices

➢ Aquafina

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PepsiCo International Pepsi-Cola began selling its products outside the United States and Canada in the mid-1930s, opening in the United Kingdom in 1936. Operations grew rapidly beginning in the 1950s. Today, PepsiCo beverages are available in nearly 200 countries and territories. Some of the major brands include Pepsi, Mountain Dew, Aquafina, Gatorade and Tropicana. In addition to brands marketed in the United States, PepsiCo International brands include Mirinda, Seven-Up, Aquafina, Gatorade, Tropicana and many local brands.

PepsiCo’s Sustainable Advantage Three major sustainable advantages give PepsiCo a competitive edge as they operate in the global marketplace, (1) Big, muscular brands (2) Proven ability to innovate and create differentiated products (3) Powerful go-to-market systems Their extraordinarily talented and dedicated workforce optimizes these advantages and creates magic in the market place. Investing in innovation fuels the brands and this in turn drives top-line growth. Dollars from that top-line growth are strategically reinvested back into new products and other innovation, along with cost-savings projects. Thus, the cycle continues.

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RESEARCH METHODOLOGY

1. 2.

TOOLS OF RESEARCH RESOURCE OF DATA

➢ A Research Methodology defines the purpose of the research, how it proceeds, how to measure progress and what constitute success with respect to the objectives determined for carrying out the research study. The appropriate research design formulated is detailed below. ➢ Exploratory research: this kind of research has the primary objective of development of insights into the problem. It studies the main area where the problem lies and also tries to evaluate some appropriate courses of action. ➢ The research methodology for the present study has been adopted to reflect these realties and help reach the logical conclusion in an objective and scientific manner. The present study contemplated an exploratory research

NATURE OF DATA

SECONDARY DATA Secondary data that is already available and published .it could be internal and external source of data. Internal source: which originates from the specific field or area where research is carried out e.g. publish broachers, official reports etc.

EXTERNAL SOURCES This originates outside the field of study like books, periodicals, journals, newspapers and the Internet.

DATA COLLECTION Secondary data has been used which is collected through articles, reports, journals, magazines, newspapers reports prepared by research scholars, universities and internet

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SOFT DRINK MARKET IN INDIA India’s one billion people, growing middle class, and low per capita consumption of soft drinks made it a highly contested prize in the global CSD market in the early twenty-first century. Ten percent of the country’s population lived in urban areas or large cities and drank ten bottles of soda per year while the vast remainder lived in rural areas, villages, and small towns where annual per capita consumption was less than four bottles. Coke and Pepsi dominated the market and together had a consolidated market share above 95%. While soft drinks were once considered products only for the affluent, by 2003 91% of sales were made to the lower, middle and upper middle classes. Soft drink sales in India grew 76% between 1998 and 2012 from 8,670 million bottles to over 10,000 million and were expected to grow at least 10% per year through 2012. In spite of this growth, annual per capita consumption was only 8 8-ounce servings versus 17 in Pakistan, 73 in Thailand, 173 in the Philippines and 800 in the United States. With its large population and low consumption, the rural market represents a significant opportunity for penetration and a critical battleground for market dominance. Experts predict that India’s soft drinks market will continue to grow in the coming years, overcoming the obstacles presented by the difficulty in marketing to such a large and diverse population and the relatively high cost of packaging as a proportion of selling price. In addition, the success of smaller pack sizes in the carbonates sector has provided fresh impetus for low cost packaging, particularly as the major producers look for ways of competing with lower priced local suppliers. The market preference for soft drinks in India is regional based. While cola drinks have their main markets in metro cities and northern states of UP, Punjab, Haryana etc., orange flavored 15

drinks are popular in southern states. Sodas too are sold largely in southern states besides sale through bars. Western markets have a preference towards mango-flavored drinks.

Types Soft drinks are available in glass bottles, aluminum cans and PET bottles for home consumption. Fountains also dispense them in disposable containers. The non-alcoholic soft drink beverage market can be divided into fruit drinks and soft drinks. Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola, lemon and oranges are carbonated drinks while mango drinks come under the non-carbonated category. The market can also be segmented based on the types of products. The brands that fall in the Cola category are Pepsi, Coca-Cola, Thums Up, Diet Coke, Diet Pepsi etc. The non-cola segment can be divided into 4 categories based on the types of flavors available, namely: Orange, Cloudy, Clear and Mango.

THE BUYER DECISION PROCESS Hosts of factors play an important role in a buyer’s decision-making process. This process lets him/her screen the different options available and take a final decision.

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The 4 P’s (Product, Price, Promotion & Place) or the Marketing Mix of a product plays a significant role in this intricate process. The final decision is made based on the marketing inputs and the various psychological inputs. Every product is perceived in a certain way or manner. The consumers’ perception of the product is a vital ingredient and the companies have to ensure that they portray a suitable and strategic image. The psychological factors (Culture, Attitude, Learning & Perception) also play a critical role in the decision-making process, but a company can do little to influence these factors. However, if the suitable market/segment is targeted while positioning the product the company can generate positive response from the marketplace.

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PEST ANALYSIS In order to scan the external macro-environment in which PepsiCo India operates, it is necessary to analyze various factors that not only posed some serious threats but also influenced its effectiveness.

Political Conditions ➢ Although it began its efforts in the mid-1980s, Pepsi was able to make its entry into the Indian cola market in June, 1990. This was because of high excise duties and government encouragement of fruit drinks over carbonated drinks. It was jointly launched by PepsiCo, Punjab Agro Industries Corporation and Voltas. ➢ Pepsi got into trouble when within six months after its launch it caught government’s attention regarding its commitment. Soon after, a show cause notice was issued to the company for prima facie violation of the conditions stipulated in the letter of intent with regards to the production of soft drinks. ➢ Pepsi had a very significant first mover advantage in India. It had obtained the government approval for its downstream ventures prior to the FDI guidelines that made Indian equity holding mandatory. ➢ The government approval that Pepsi acquired had allowed Pepsi to carry out acquisition of assets to expand its business in the country. Pepsi used this clause to buy out 100% stake in some domestic bottling companies including Gujarat Bottling Company, ➢ the former Coke franchisee in Ahmedabad.

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Economic Conditions ➢ The present Indian soft drinks market can be best described as a duopoly – the players being Pepsi and Coca Cola. Therefore, Pepsi has sufficient monopoly power over the consumers. ➢ In India, soft drinks market has a fairly high price elasticity of demand which ensures that producers must strike a balance between prices and sales volume. So, Pepsi has decided to peg prices similar to Coca Cola and try to gain market share and try to gain market share through vigorous promotional activities. ➢ Pepsi was launched in India at the time when the country was trying to open up its economy and was facing serious doldrums. So, at the period of economic instability, Pepsi had to face problems to expand its operations. Social Conditions ➢ Rising income of middle class in India is a positive indicator for growth of products like Pepsi and Coca Cola ➢ Westernized and trendy youth population of India is another big market for Pepsi products ➢ Booming economy, rising purchasing – power of the people and changing mind sets are factors contributing to the expanding demand of the Pepsi products.

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Technological Conditions ➢ Pepsi has the technology to maintain a highly efficient distribution network which allows it to satisfy the needs of its customers throughout the country. ➢ Pepsi’s own bottling plants gives it an edge over its competitors in terms of quality of the product and control over the product.

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SWOT ANALYSIS

Strengths • •

• • • •

High Brand Awareness Large number of distributors (100+ in Delhi) Wide product offering High accessibility Large advertising budget Wise investments

Opportunity • • • •

Per caps 8 oz in India vis a vis 868 oz in USA Large untapped rural population Seasonality CUTTING DOWN COSTS

Weakness • •

Powerful Franchisee Inferior in fountain soft drink division

Threats • • • •

Controversies Low brand loyalty Cheaper and large number of substitutes Risk of losing market share

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STRENGTHS: ➢ High brand awareness: - Pepsi is the world’s most famous #2 multi-billion-dollar brand and Pepsi is the largest FMCG brand in India. ➢ Large number of distributors: - The company has both franchises owned and company owned operations in India. Pepsi in Delhi alone has more than 100 distributors. Delhi is totally franchise operations whereas Punjab now is totally company owned ➢ Wide product offering: - Pepsi is available in glass bottles, aluminum cans and PET bottles for home consumption. Fountains also dispense them in disposable containers. Also, they provide a large number of flavors. ➢ High accessibility: - Pepsi products are available in shops in the most elite of malls and at the same time in the smallest of shops in the back lanes of the poor localities. ➢ Large advertising budget: - Pepsi has the luxury to spend huge amounts on advertising in 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

➢ Wise investments: - 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.

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WEAKNESSES: ➢ Powerful franchisee: - 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 today’s 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. ➢ Inferior in fountain soft drinks division: -The franchise system has affected fountain sales due to the fact franchisees are not willing to buy expensive fountain equipment mainly because the profit margin is so low and could take years to recoup their investment.

OPPORTUNITY ➢ Per caps in India is 8 oz. vis a vis 868 oz. in USA: - The consumption of Pepsi in India is still regarded as luxury. An orthodox Indian would still prefer a cup of tea or coffee to a bottle of Pepsi. So, in the event Pepsi can manage to change their mindsets it would tap a huge untapped customer base.

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➢ Cutting costs: - since there is tremendous scope for increasing the sales volume, this also signifies potential to reduce costs per bottle and make the product more affordable. ➢ Seasonality: - Pepsi is perceived to be a summer drink and max sales happens in summer months. During winters an average Indian would still prefer a cup of hot tea to Pepsi.

THREATS ➢ Controversies: - Demonstrations across India were organized by the Research Foundation for Science, Technology and Ecology (RFSTE). Activists wanted the firms to leave India because they said their plants depleted ground water the soft drinks giant strenuously denied. Also, the pesticide controversy was a big threat to the company. ➢ Low brand loyalty: - If a consumer walks into a shop and he is offered a coke instead of a Pepsi he would in all likelihood accept it. This basically means that the company needs to be present everywhere every time and that too chilled otherwise it will result in lost sale ➢ Low cost and large number of substitutes: -Traditional Indian families would still prefer a glass of lassi or Nimbu Paani in summers and a cup of tea or coffee in winters as compared to PEPSI ➢ Risk of losing market share: - Coke is a very strong opponent and gives immense competition to the Pepsi so there is a constant threat of losing market share since both the products are very similar and there is almost no brand loyalty present amongst consumers. 24

ANSOFF MATRIX Below is the Ansoff Matrix which helps us to analyze product-market expansion. PepsiCo India is basically pursuing the Product Development strategy.

Current Product Market Penetration – No Change in Product – No Change in Market Potential

New Product Product Development – Product modification with or without a new brand name – No change in Market Potential

Market Development – No Change in Product – Change in Market Potential

Product Diversification – Product modification with or without a new brand name – Change in Market Potential

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On her second visit to India since she assumed the president and CFO's job in the PepsiCo three years back, Indra Nooyi announced her India strategy on Tuesday that will involve an investment of $300 million to $500 million over the next 3 years to 5 years. The strategy also includes introduction of newer products in the country. About 60 percent of Pepsi's fresh investment would be spent on beverage business to expand the beverage portfolio and provide a range of choices.

PORTERS FIVE FORCE MODEL

Barriers to Entry • • • •

Bargaining power of Suppliers • • •

No substitute for critical Inputs Switching cost from one supplier to other is high Supplier integrating forward for higher prices and margins

High capital investment required Strong distribution network of existing players Strong Brands existing Economies of Scale

Rivalry among existing firms • • • • • •

Exit barrier Industry Growth Industry Concentration Diversity of rivals Price competition Product differences

Bargaining power of Buyers • • • •

Availability of many brands Price sensitivity Buyer Information Product differentiation

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Barriers to entry: The soft drinks industry requires a huge investment if one aspires to gain a considerable market share. The investment would require huge sums of money to setup manufacturing plants, bottling plants and as we know a massive advertising budget. As an example Parle, which was the market leader at one point, did not have the ability to invest large sums of money in a small period of time and was eventually bought over by Pepsi rival, Coca-Cola. Pepsi in India owns most of its bottling plants – COBOs. Pepsi has about 15 COBOs and plans to expand further. Pepsi has over the years invested about 600 crores and plans new investments of another 400 crores. That is the scale of operations in the Cola industry, making it very difficult for any new players to enter the market. Another factor that makes entry difficult is the presence of Coca Cola. The two cola giants among themselves control most of the market, leaving no room for anyone else. The gestation period, due to the huge initial investments, is pretty long. Pepsi, which started operations in India in 1989, broke even in 1997.

Bargaining Power of Suppliers: There are around 100 franchise owned bottling operations.

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Bargaining Power of Buyers: Buyers by and large do not have much power in the cola market. The number of buyers is too large for them to exert any influence or control over pricing or any other decisions. Even though there are very low switching costs the buyers do not wield much power. The presence of a large competitor, however keeps the price level in check.

Rivalry: ➢ The rivalry between coke and Pepsi is too well documented. It has stretched from the start of the latter company till date. It has been witnessed in every continent, country every market and yes the courts. There are a number of factors other than the obvious one – similar product. These are enlisted below ➢ High fixed costs – this forces the two companies to produce near capacity. This high level of production leads to a fight over the market share. ➢ Perishable product – the companies need to sell their high quantities of produce rather quickly. ➢ Low switching costs – the switching cost for a customer is pretty low, since substitutes are similarly priced.

➢ Low product differentiation – other than a select few loyal customers, most customers do not find any difference between coke and Pepsi.

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Threat to substitutes: Pepsi cola as a product has a number of substitutes and is under constant threat of losing its market share. The low product differentiation between its biggest competitor does not help. Another factor is the pricing which is the pretty much the same for most of its substitutes. There are other threats from outside the industry too. The age-old Nimbu Paani and lassi will always pose a threat to any manufactured beverage. Even if these are not sold in the market place on as large a scale, these are substitutes prepared in most consumers’ homes for their consumption.

STP – SEGMENTATION, TARGETING, POSITIONING SEGMENTATION Geographic The region of interest of Pepsi Co. India is the whole of India with special focus on “Generation Next”

Demographic Age – Anybody of age between 12 – 29 yrs. Income – Anybody with Rs 9 in their pocket Occupation – Basically students and other youngsters Social Class – Middle class, Upper middle, Lower Upper and Upper uppers.

Psychographic Personality – It is perceived to be a modern “generation next” drink and one associates this drink with youngsters.

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Behavioral Benefits – Style, Price (economical), quenches thirst User status – Regular drinkers of soft drinks Buyer – Anybody who has Rs 9 in his pocket but basically youngsters

Age wise consumption pattern 100% 80% 60% 40% 20% 0% <20 yrs

20 - 35 yrs

35 - 50 yrs

>50 yrs

TARGETING

Pepsi is worldwide associated with the urban youth. Pepsi prefers to segment itself as the beverage choice of the “ New Generation”, Generation Next, or just as the “Pepsi 30

Generation”. These terms adopted in Pepsi’s 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. Thus, Pepsi’s main emphasis is on this segment They also have a focus on the 12 to 18-yearold market. Pepsi believes if they can get this market to adopt their product then they could establish a loyal customer for life

POSITIONING 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

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Pepsi has always spoken to the youth consistently, single mindedly and innovatively, and that is a position that they have never vacated Slogans like ‘Yeh Dil Maange More’, ‘Yehi hai right choice baby’, ‘Yeh Pyaas Hai Badi’ or now ‘Oye Bubbly’, are made with the intent to attract the youth .The idea is to look for catchy phrases that the youth would catch on to and then make it part of their lives. Pepsi has had so many lines that have become consumer currency; Bubbly was also intended to be likewise.

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FOUR P ANALYSIS PRODUCT: WIDTH: The Pepsi beverage division has the following product lines – 1. Soft Drinks 2. Juices (Tropicana) 3. Mineral Water

LENGTH: Soft Drink

Juices

Mineral Water

Pepsi

Tropicana

Aquafina

Diet Pepsi

Gatorade

Mirinda

7 Up

Mountain Dew

DEPTH: We will focus on the soft drink section here. The Pepsi cola comes in various sizes ranging from 300ml, 500 ml and 2 liters. In addition, Pepsi Cola is also available in 330ml cans.

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CONSISTENCY: The different products in the soft drink section are all closely related. They share the same distribution channel and are supplied in the same manner. They also have a similar production process and the end users are by and large homogenous. Pepsi cola has a light, crisp and refreshing taste. It is the perfect drink for the modern “Generation Next” people. The product comes in 300ml glass bottles,500 ml pet bottles and in 2 liters. The product targets the upwardly mobile with its trendy design and is a premium product from the house of Pepsi. It has a shelf life of 6 months.

PRICE: Pepsi’s pricing strategy is largely formulated by keeping its rivals, Coca-Cola, pricing strategy in mind. The reverse is also true. Both the products are not differentiable and are near perfect substitutes. Another important factor here is that the sales are volume driven; hence price needs to be kept at an appropriate level. Listed below are the prices of the variants 1. 300 ml is for Rs 9. 2. 500 ml is for Rs 18 3. 2 liters is for Rs 43 4. 330 ml can for Rs 20

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PROMOTION:

The soft drinks market in the country relies heavily on promotion to sell its products. The presence of close competition makes it necessary for both Pepsi and Coca-Cola to hard sell their products. The leading products offered by both the companies are very similar. The companies try aggressively to build loyalties for their respective brands by playing on emotions and aspirations of its consumers. They have roped in cricket players and film stars to attract and create interest in their products. Pepsi especially has been advertising using a number of cricketers to associate Pepsi Cola with their success. A Pepsi spokesperson says promotions have worked very well for the company and have helped reinforce the brand personality. The `Pepsi Cool Maal’ scheme in June-July 1998 targeted at school children met with a phenomenal response because the premia comprised items that school kids needed and ``yet had a lot of attitude''. The previous year, the company ran a `Pepsi Stuff' promotion that offered young people a range of offers, both free and discounted, on cinema tickets, apparel, music and so on.

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TV Ads – Pepsi has been bombarding the Indian customers with a periodical onslaught of creative advertisements aimed at the youth of the country. Early on, Pepsi identified three broad platforms cricket, movies and music. It has roped in the biggest stars from the film industry and the cricketing fraternity. People endorsing Pepsi include Bollywood superstars Amitabh Bachchan & Shah Rukh Khan with a host of other actors. Fardeen Khan, Saif Ali Khan, Priety Zinta, Kareena Kapoor among the more popular ones.

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It has roped in most of the members of the national cricket team. From Superstar Sachin Tendulkar to Rahul Dravid, Sorav Ganguly, Yuvraj Singh, Mohammed Kaif etc. Pepsi started hiring cricket stars very early and set a trend in the market. It also brought international music stars like Michael Jackson, Ricky Martin, Deep Purple and Def Leppard among others to the country. Pepsi began advertising early with its very effective ‘A-Ha’ campaign. A-Ha created a new idiom. The tag line which was built into a song brought instant attention the product. Having Remo Fernades sing “yehi hai right choice baby…a-ha” caught the attention of the youth. Then came Akshay Kumar with the “I wanna be mast” campaign. Pepsi chose its ambassadors in a manner which ensured curiosity and then lasting interest in the youth of the country. Pepsi has over the years come up with catchy slogans like Generation Next, Yeh Dil Maange More, The choice of a new generation etc.

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Pepsi also associates itself with cricket which is by far the most popular activity, sport, mode of entertainment in the country. It even launched a new brand by the name of ‘Pepsi Blue” during the last cricket world cup to cash on the fact that the color of the players’ uniform is blue. In an earlier episode of the same event where Pepsi had lost out to rival Coca-Cola in gaining the official sponsorship, Pepsi came out with an aggressive and creative campaign, where it positioned itself as the “unofficial drink” as opposed to coke’s strategy. It signed up a number of national as well as international stars, mouthing the tag line “nothing official about it”. The company has also time and again sponsored a number of cricket tournaments. It recently came up with the ‘Toss ka Boss’ contest which saw fans join the two captains on the field for the coin toss. Pepsi also came out with a series of ads poking fun at rival Coke and its brand ambassadors. This was done with a fair degree of success as it had everybody from the road side vendor to the BBC correspondents talk about it. Another recent campaign which created controversy was the ‘OYE BUBBLY’ campaign. It used a voice over which bore similarity to the voice of Coke’s brand ambassador Virender Sehwag. Pepsi has created quite a stir with the ‘OYE BUBBLY’ campaign. It shot a music video with Amitabh Bacchan, Sachin Tendulkar and other players from the cricket team. It released an audio cassette and CD with the song on it. This campaign in particular has been very successful thanks to the catchy tune and ads featuring Shah Rukh Khan.

Internet – Pepsi signed up with Yahoo! India and launched a Pepsi zone on yahoo http://www.pepsizone.yahoo.co.in. The zone was aimed at the younger lot of the net surfers. A number of features like contests, chat rooms, games, download etc. attracted net users

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PLACE: How does bottle of PEPSI reach you… To bring the product to the consumer by proper distribution management to:

SUPER MARKETS HOSPITALS EATERIES ROAD SIDE SHOPS

HOTELS

PLACE MALLS OFFICES

MOVIE HALLS

EUCATIONAL INSTTUTES GROCERIES

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For distribution purpose Pepsi uses 2 level distribution channel which contain two intermediaries between the bottling factory and the final consumer.

MANUFACTURER

DISTRIBUTOR

RETAILER

CONSUMER

The Company does its selling by using company owned distributors or franchisee owned distributors. Worldwide Pepsi relies on franchisee but in India it uses both companies owned and franchise owned operations. Pepsi uses two methodologies for distribution in India 1. Company owned distributors 2. Franchise owned

FRANCHISEE OWNED: This is like outsourcing wherein the company out sources its distributing related work to another party. Company has less control owner the distributor. All the investments like vehicles, Employees’ salaries etc. are made by the distributor who in return gets a margin (around 18-20%). Advantages of using this scheme is that the fixed investments and other 40

distribution related expenses of the company are less. The disadvantages are that the company has lesser control over the distribution process. This method is followed in Delhi.

COMPANY OWNED: Here the company owns all the vehicles, the employees are on company roles. The advantages of such a process is that the company has direct control over the entire distribution process, it also gives the company higher flexibility. The disadvantages of such a process are that it involves huge investments. This method is followed in Punjab. Pepsi is currently available with the other Pepsi products at: ➢ Convenience Stores ➢ Restaurants ➢ Grocers ➢ Entertainment Centers ➢ Offices and Institutions ➢ Eateries ➢ Educational Institutions ➢ Hotels

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THE COLA WARS: No two companies could be more alike, or more different! Both have been selling products to quench thirst for over a hundred years and both are now global brands. Their products moved through the world’s most pervasive networks.

Distribution: Pepsi has taken the more capital-intensive route of owning and running its own bottling factories alongside those of its franchisees whereas Coke operates only through FOBOs (Franchise Owned Bottling Operations). Pepsi in India has a more organized streamlined channel of distribution whereas Coca Cola is unorganized in its distribution channel. Pepsi has over a hundred distributors (both companies owned and franchise owned) in Delhi alone whereas Coke has much fewer distributors and relies more heavily on wholesalers directly for their sales and distribution. Brand Synchronization: Despite being a global brand, Pepsi has built its success on meeting the Indian consumers’ needs. It has synchronized the brand with localized events and traditions. For example, in Delhi, it linked its brand with Holi, offering sachets of color with Pepsi Cola. In Chennai, it offered free bottles with orders of Idlis.

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Whereas Coke, instead of creating a bond with its customers through small events, it chose to associate itself with national and international mega events like the Cricket World Cup, 1996 and the Olympics, 1996.

Diversification: PepsiCo has increasingly diversified into snacks and restaurants while Coca Cola has focused only on soft drinks. PepsiCo snack operation is in Frito-Lay and its restaurant business includes Pizza Hut, Taco Bell and KFC. All of Coke’s profits come from beverages whereas PepsiCo depends on drinks for 41% of its income.

QUALITY The first reason is of quality, obviously in this competitive age and an intelligent consumer in front of you no company can afford to ignore the vital issue of quality.

PRICE Why doing analysis 15% consumers complained about the price but from the general tendency, it was seen that when a consumer felt thirsty and was in a company of friends, price took a back seat and the consumers opted for their favorite brand.

SYSTEM The distribution system of the company is very efficient. In fact, every day t he trips are made why the mini trucks, three wheelers caring crates are replaced at the retail outlets according to the demand.

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LOCAL ADVERTISEMENT The company has created brand awareness among the consumer through constant advertising. The retail outlets in the various part of the city display various advertising themes, bill-boards are painted with eyes catching advertisements, moreover, the mini trucks caring the crates of soft drink are beautifully painted with various brands and a part from the local newspaper carry the advertising captions periodically.

REDDRESSING CONSUMER COMPLAINTS; the company has established a system that keeps track of consumer complaints. It has well set-up network which contacts retailers, consumers, records and their views about the products, the quality, availability of soft drink in time, price etc.

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CONCLUSION After completion of the project and the analysis of the study I came to conclude that after launching the promotion there was drastic percentage jump in sales initially but gradually the percentage jump decreased and there isn’t much impact on sales. After doing analysis of Pepsi I came to conclude that people are very much aware about the promotions especially the kids and people pr efer more of Pepsi and Pepsi is very popular in India. Thus, I conclude that the industries have pampered consumers by giving discounts and free bias and hence consumers now a days don't buy a product until and unless they are given some discounts. So, the industries should not over do the promotions. Critics argue that promotions simply prepone the purchase and don't add any incremental value to it. The sales may pick up during the offer, but there is a loss of sale in the following month, which means the people who buy the goods in July simply preponed their purchase due to the offer". Also, over promoted products often leave customers asking for more. Thus, promotions have actually spoilt the habits of consumers. Thus, promotion is a very attractive means to keep the consumers glued to its product but then the industry shouldn't overdo it. The effect of promotions is for a short period of time.

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RECOMMENDATIONS 1. PepsiCo should Promote their all products like Alivio, Gatorade and Quaker Oats 2. PepsiCo should promote their product in Rural area also as Coca-Cola

is doing.

3. PepsiCo should expand the Brand Image of Pepsi (People are only correlating it with youth- Youngistan) 4. As Coca- Cola shows its logo at the end of every advertisement of its each product/Brands, so Pepsi should also show its logo in its each Brands advertisement 5. PepsiCo also should go equally to other medium of advertisement like pepper, hording and internet. 6. PepsiCo should also continuous participate in Sporting events. 7. PepsiCo can take part in IPL also 8. PepsiCo should also focus on Green marketing like other 9. Companies doing like- Idea, Aircel etc. 10. PepsiCo mostly Brand ambassador came from Bollywood so they should focus on Sporting celebrity like from cricket, football and hockey 11. People are not that much aware about some products of PepsiCo so they should focus on it. 12. The regular user of Pepsi is very low. So, Pepsi have to convert those customers which are aware about Pepsi but not using it regularly, so try to make them brand loyal 13. Buying priority of most customers is refreshment so they should try to convert them in brand preference. 14. They should more target on Child and Sports men 15. They should show Quality and Trust base in their advertisement. 16. PepsiCo should focus on their brand ambassador they are changing it continues so they should take care of it

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SUGGESTIONS  Company should emphasis on selling per bottles for 200ml & 300ml at a lower difference price; it is portable and convenient to carry.  Consumer preference change according to availability; therefore, the company should provide their brands at maximum outlets at possible.  Company should take care of cleanliness of the bottles rusted crown and maintain the quality of the product especially at the time of packaging.  Company should get the schemes printed on the labels of the bo ttles/products as well as on the free items provided with soft drink so that consumer gets aware about the schemes and not cheated by the retailers  Company should inform each and every outlet about the schemes before time or on time and check them. Weather they are providing them to consumer in the proper manner.  Company should conduct survey quarterly to see whether consumers are satisfied with the product and services.  Schemes have large impact on consumer preference therefore a company should launch different and attractive promotional schemes frequent ly.  Company should encourage to the consumers to purchase more and softer drinks so as to develop the taste and sales.

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BIBLIOGRAPHY  Food & Drink Weekly  Annual Report - Pepsi  A&M  BUSINESS WORLD  INDIA TODAY  NEWS PAPERS  INTERNET  www.pepsico.com  www.agencyfaqs.com

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