CONTENTS

S.N o 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12 13. TOPIC EXECUTIVE SUMMARY INTRODUCTION OF PEPSICO MARKETING MIX OF PEPSICO PRODUCT PRODUCT LEVEL PRICE PLACE PROMOTION STP BASIS OF SEGMENTATION,MARKET TARGETTING MARKET POSITIONING CUSTOMER CENTRIC ORGANIZATION CUSTOMER MARKET POTENTIAL PAGE NO 1 2 3 4 5 6 7 8 9 10 11 12 13

EXECUTIVE SUMMARY
This report provides an analysis and evaluation of the customer orientation. Marketing Strategy of PepsiCo. Methods of analysis include Market Segmentation, Market Targeting, Market Positioning, as well as the Marketing Mix of PepsiCo. The research draws attention to the Market Segmentation of PepsiCo. While the soft drink industry has probably the widest and deepest customer base in the world,it is not far behind when it comes to snack-based foods and Restaurant business.
1

In addition, PepsiCo also focusses on another market, which includes Teenagers that are between the 12 to 18 years old. PepsiCo believes that if they can get this market to adopt their product, they could establish a loyal customer in a long run. Despite being a strong competitor against Coca Cola, PepsiCo has become the largest selling soft drink in the world and is liked by people of all ages. A recent survey has shown that about 90% of the world population prefers Pepsi when asked the question of which soft drinks do they prefer. Its recently launched product Quaker Oats is taking the lead among its competitors when it comes to breakfast creals.

INTRODUCTION
PEPSICO Inc. is an American multinational corporation, which is listed in the FORTUNE 500 COMPANIES LIST, headquartered in Purchase, New York which deals in manufacturing and marketing a wide variety of beverages and snack-based foods. Today, it is one of the largest consumer products company in the world, with annual revenues over $30billion and employees in excess of 4, 80,000.

PepsiCo Inc was previously called Pepsi-Cola. Pepsi-cola began business globally in 1934 with Canada as its first host country. The foundation of PepsiCo was laid in the year 1965, when Pepsi-Cola merged with Frito-Lay. This paved the way for the company to enhance its market potential, thereby setting the steps for growth in the years ahead. PepsiCo brands are available in nearly 200 countries across the globe. It is the 2nd largest manufacturer of soft drinks in the world.

PEPSICO INDIA
PepsiCo entered India in 1989.The company has built an expansive beverage, snack food and exports business and to support its operations, it has developed 43 bottling plants in India, of which 15 are company owned and 28 are franchisee owned. PepsiCo India primarily encompasses 3 Divisions:

BEVERAGES RESTAURANTS PEPSI, MOUNTAIN DEW, 7UP HUT, KFC AQUAFINA, LIPTON ICED-TEA

SNACK FOOD LAYS, CHEETOS, RUFFLES PIZZA

Each of these divisions functions as a distinct Strategic Business Unit, and are governed by a separate management.

TIME FOR THE CEOs PROFILE

Born in Chennai, Indra Krishnamurthy Nooyi, did her post graduate diploma from IIM Calcutta in 1976.As a start to her career, she joined Johnson& Johnson, followed by Boston Consulting Group in 1980. It was in 1994, she joined PepsiCo, and later, was named President and Chief Financial Officer in 2001.Its been over a decade now, she has been a prominent figure in the restructuring of PepsiCo. Under Nooyis presidency, PepsiCo acquired Tropicana in 1998, merged with Quaker Oats along with Gatorade. In 2007, she was elected the new CEO of the company. According to Business week magazine, the fortunes of PepsiCo met tremendous boost.

MARKETING MIX OF PEPSICO

Marketing Mix may be defined as the set of marketing tools that a firm uses to pursue its marketing objectives.
3

Marketing mix decisions must be taken judiciously as they have significant bearing on organizational decision making and its profitability. There are basically 4 core Ps in marketing mix attached with FMCG Industries: PRODUCT PRICE PLACE PROMOTION Apart from these , there are 3 more tools which take the form of extended marketing mix, and come into Services sector : PHYSICAL EVIDENCE PEOPLE PROCESS

4 CORE Ps OF MARKETING

PRODUCT
It is anything that can be offered to the market that can satisfy customer needs and wants. It can take 2 forms: tangible and intangible.
4

Product element has various dimensions:

Product variety Product Quality Brand name Packaging and Size

PRODUCT MIX may be defined as the group of products that a company offers to the market. PRODUCT MIX OF PEPSICO
BEVERAG ES SNACK BASED FOODS LAYS RUFFLES CHEETOS FRITOS CORN CHIPS TOSTITOS QUAKER OATS DORITOS RESTAURAN TS

PEPSI MOUNTAIN DEW 7UP LIPTON ICED TEA MIRINDA GATORADE ENERGY DRINK TROPICANA JUICE

PIZZA HUT KFC TACO BELL LONG JOHN SILVERS

PRODUCT WIDTH: no of product lines offered. PepsiCo offers 3 product lines. Beverages Snack based foods Restaurants PRODUCT LENGTH: no of items in a product mix. PepsiCo offers over 35 products. PRODUCT DEPTH: no of variants of a product in a product line. For eg: Pepsi comes in quantities of 250ml/500ml/1000ml/2500ml packs. So Pepsi has depth of 4. PRODUCT CONSISTENCY: how closely related are the various product lines. PepsiCo products are consistent in terms of distribution channels, while inconsistent in terms of product differentiation for buyers.

PRODUCT LEVEL
5

A product is anything that can be offered to a market for attention, acquisition, or use or something that can satisfy a need or a want .Therefore, a product can be a physical good, a service, a retail store, a person, an organisation, a place or even an idea. Products are the means to an end where in the end is the satisfaction of a customers needs or wants.

Core product: Our intent is to offer snacks, food and drinks that satisfy consumers changing preferences, deliver exceptional taste and offer greater benefits. Increasingly, our product portfolio makes it more enjoyable to lead a healthier life. Were changing because our consumer is changing and because the health of the health of the worlds population demands it.

Basic product: A version of the product containing only those attributes or characteristics absolutely necessary for it to function. At the same level, the marketer has to turn the core benefit into a basic product. It is a goods or services that must be present for the guests to use the core product. (for PepsiCo the basic product is Pepsi cola )

Expected product: A set of attributes or characteristics that customer normally expects and agree to when they avail the services.

Augmented product: It exceeds customer expectations, inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors. Todays competition essentially takes place at the
6

product-augmentation level. (In less developed countries, competition takes place mostly at the expected product level.

PRICE
It is the monetary value/sum for which goods and services are exchanged. PepsiCo is one such company, which insists in keeping the prices at a level, which consumers are ready to pay, and still reaps in the revenues. Price element has the following dimensions: List Price Discounts Allowances Payment period

SETTING THE PRICING POLICY

SELECTING PRICING OBJECTIVE PepsiCos objective was maximum market share and survival, Coca Cola is an intense competitor, of its PEPSI SELECTING THE FINAL PRICE Pepsi always sets its prices in line with Coca Cola, but with different offers, or as a bundled packaging with its DETERMINING DEMAND Since Coca Cola is the closest competitor for Pepsi, demand for Pepsi ESTIMATING COSTS Cost of production is evaluated in terms of its variable and fixed costs.

SELECTING A PRICING METHOD Pepsi came with an innovative strategy a few years ago, by introducing

ANALYSING COMPETITIORS COSTS, PRICES AND OFFERS Coca Colas costs, pricing strategies were evaluated, market price

PLACE
This element deals with the channels of distribution that will be used to make the products available to consumers, for the movement of products from manufacturers to the end users. Generally, PepsiCo India follows the following Distribution Channel :

PEPSICO WAREHOUSE DISTRIBUTOR SALESMAN

WHOLESELL ER RETAILER

RETAILER

CUSTOMER

CUSTOMER

Because, PepsiCo deals in FMCG products, the scale of distribution is very huge. Its products are available in the following sites: Supermarkets General stores Wholesale markets Online shopping websites

PROMOTION
It deals with all those activities directed towards creating awareness about the existing and upcoming products. All those means through which the company communicates the existence of products , in order to retain present customers and attract the new ones. PepsiCo lays utmost emphasis on promotion of it products, so that it reaps in the profit benefits and a competitive market share. It engages into several forms of promotion like: Advertising: any paid form of non-personal presentation of ideas, goods or services is defined as advertising. The best example is of PepsiCos ads on television medium. Celebrity branding: when a celebrity endorses a companys product. PepsiCo has been associated with several celebrities like Aamir Khan, Sachin Tendulkar, Britney Spears etc. Sales promotion Web-marketing: PepsiCo is also involved in promoting its products online,eg; Facebook, Yahoo etc. Banners and billboards Sponsorship and partnership: For eg: playing sponsors for a cricket series, etc.

DEVELOPING AN ADVERTISING PROGRAM

SETTING THE ADVERTISING OBJECTIVE
9

DECIDING ON ADVERTISING BUDGET CHOOSING THE ADVERTISING MESSAGE DECIDING ON MEDIA AND MEASURING EFFECTIVENESS

SEGMENTATION, TARGETING, POSITIONTING OF PEPSICO MARKET SEGMENTATION

As we know that PepsiCo provides varieties of beverages such as carbonated soft drinks, sport drinks, dairy-based drinks, energy drinks fruit flavoured beverage. These products are marketed under brand as Pepsi, Mountain Dew, Gatorade, Lipton, Starbucks, Tropicana, and so on.with these products PepsiCo aims to attract different groups of consumers. There are two levels in which Pepsi segments its market: Demographic and Niche Marketing.

DEMOGRAPHIC:
In focusing on the Pepsi-Cola beverage product, PepsiCo has retained a long History of concentrating on youth as its main target market Generation Next! It has spent billions of dollars in trying to woo the young and nearly young, implying that Coca-Cola is for the older generation. The reason why Pepsi-Cola has fiercely targeted this market is because it is the largest amongst its users. Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. Also, Pepsi continually targets the college market in which they spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities.

NICHE MARKETING:
Pepsi focused on varietal differentiation since 1990 by introducing a string of niche products. To increase volume in order to counter flat coca sales, Pepsi
10

introduced Sierra Mist in 2002-2003 to take the place of 7-up and go head to head with Sprite. Pepsi has also tried to boost volume by introducing products that appeal to specific target markets that it currently is not reaching. Pepsi has introduced Code Red and Live Wire, extensions of Mountain Dew, Pepsi One, and Pepsi Blue. Finally, Pepsi is countering declining sales of carbonated drinks through the marketing and distribution of Starbucks ready to drink products, and the acquisition of SOBE and Gatorade. The success of Pepsis Mountain Dew Code Red launched in 2001 was the most successful soft drink innovation in 20 years and has spurred even more niche product introductions for PepsiCo as well as other competitors.

BASIS OF SEGMENTATION:
Segmentation Variables
Demographic:

Data 14-30+ Male, Female 1-2, 3-4, 5+ Married, Unmarried Middle Class, Upper Class. Actualizes, Fulfilled, Believers, Achievers, Strivers, Experiences makers and Strugglers. Parties, Birthdays, Sports and Regular Occasions. Quality, Taste. First time user. Strong. Aware, Interested.

Age Gender Family Size Family Life Cycle Psychographic: Social Class Lifestyle Behavioural: Occasions Benefits User Status Loyalty Status Readiness Stage

MARKET TARGETING
Pepsi customers are mostly Teenagers and Young Adults between the ages of 14 to 30. It also targets at Schools, Colleges, Universities, Homes, Restaurants, Hotels, and Stores. Despite the large customer base in the Soft Drink industry, Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are what marketers refer to
11

as Generation X, which are profiled to be between the ages of 18 to 29. In addition, Pepsi shifted its focus to the growing American teenage market in the 1990s by forming exclusive contracts with American schools and developing advertising campaigns such as The Next Generation and the Joy of Pepsi, featuring Britney Spears. Pepsi believes that if they can get this market to adopt their product, they could establish a loyal customer in a long run.

MARKET POSITIONING
PepsiCo plans to further create positions that will give products the greatest advantage in their target markets. Pepsi has been positioned based on the process of positioning by direct comparison and have positioned their products to benefit their target market.

12

PEPSICO: A CUSTOMER CENTRIC ORGANIZATION?

Yes, PepsiCo is indeed a customer centric organization. Attaining true customer centricity requires fundamental and innovative thinking, and re-orientation of value proposition. Every company must realign itself w.r.t customer, and not its products and services.

13

Customer centricity is reflected by PepsiCo on the following fronts: Put the customer at the centre, in terms of innovating the existing products, and learn about their experiences PepsiCo has a CEO in Indra Nooyi, whos proved to be a leader, motivator, and role model for millions across the globe. It sets quarterly goals, and themes around the customer, and gets all employees to focus on that. Convert expectations into reality, by studying peoples minds, and creating products of value. In the presence of competition and , now when organization aims at high profits, market share, firms need to become more and more customer centric.

THE ABOVE MENTIONED CORE VALUES IS WHAT EVERY CUSTOMER LOOKS FOR, THEREFORE CUSTOMER ACTIVITIES MUST BE DIRECTED TOWARDS FULFILLING THEM.

POTENTIAL OF CUSTOMER MARKETS Every marketers job is to estimate the market size, so as to understand the customer demand for the products, and also to find out opportunities in the market, which can pav the way for future products/innovation. In general

14

terms, market size is identified on the basis of potential customers in the market. POTENTIAL MARKET: the no of customers who have an interest in buying a product, but eventually dont translate this into final purchase. AVAILABLE MARKET: these are the group of people who have the income, interest and need for purchase of product. TARGET MARKET: it is the part market which the company has decided to focus on, and practise its marketing objectives. MARKET DEMAND It may be defined as the sum total of demand, of all customers taken collectively. It depends upon the availability of the companys products in the target market. MARKET DEMAND OF PEPSICO As of 2009, PepsiCo products contributed retail sales of over $1billion each. It products, which were distributed across 200 countries, generated annual net revenues of $43.3 billion. On this basis, it is said that PepsiCo is 2nd largest Food and Beverage business n the world. MARKET SHARE OF PEPSICO MEANING: It is the total share of a company of the total market. It defines what percent share the company has out of the total market. Coca Cola is considered to be the closest competitor of PepsiCo, in its beverage section. In Dec 2005, Pepsi took the lead for the first time in 112 years. Coca Cola was ahead in field of Beverage, while PepsiCo was also into different sectors of snack-based foods ,and restaurants. PepsiCos Frito-Lay holds a relatively high share in U.S snack-food market, which accounts for approximately 39% sales (2009 report).

BIBLIOGRAPHY
WEBSITES
1.

www.pepsico.in
15

2. 3.

www.wikipedia.com www.google.com

REFERANCE BOOK
PHILLIP KOTLER

16