Pepsi Vs.

Coke: An analysis
Hi, The use of soft drinks has risen manifold in the recent years, from your favorite actor to your beloved cricketer, you can see them all sporting and endorsing a soft-drink. Though we know that soft-drinks are not that good for health, still most of us take soft-drinks without any fuss. When we are talking of soft-drinks, how can not Pepsi and Coke be reminded of; Pepsi and Coca Cola are two international soft-drink giants which control most of the soft-drinks beverage business in the world. Pepsi has the following brands under its umbrella: Pepsi, Diet - Pepsi, Pepsi Max, Kurkure, Tropicana, Gatorade, Mountain Dew, Slice, Quaker, Aliva, Aquafina, Nimbooz, 7Up, Lays, Uncle Chips etc. Coke on the other hand has the following brands: Coca Cola, Coke light, Diet - coke, Kinley water, Kinley Soda, Scheweppes, Minute Maid, Maaza, Limca, Fanta, Sprite, Thums Up, Mountain Dew etc.

Pepsi and Coke command over 95% of the soft-drink market in India. However Coke continues to outsell Pepsi most areas of the world but in India and Pakistan and some other other countries, PepsiCo fares far better than coke. Still, both the companies are highly profitable in their Indian business.

PepsiCo is the second-largest beverage business in the world after Coca Cola Ltd. More than 45 percent of the revenue of PepsiCo comes from outside the United States, with approximately 30

percent coming from emerging and developing markets. Coke has around 43% US beverage market share, PepsiCo has the figure at around 31%, Cadbury Scheweppes has a share of around 18%. The article lays stress on the Marketing ideology of Pepsi and Coke specially in Indian markets.

Lets first have a brief look at the history of introduction of Coke and Pepsi in India: Coke was the leading Indian soft-drink brand in 1977 when a government regulation to share the Coke's secret formula forced Coca Cola to exit India. Coke re-entered India in 1993 after the policies were relaxed a bit. Coke acquired local Indian brands like Thums Up, Limca, Maaza, Citra and Gold Spot and made a strong come back into the Indian Markets. PepsiCo entered India in 1989 with a joint venture with Parle Agro and Voltas India Ltd. In 1995, Coke had 52 % of the Indian soft-drink market share and Pepsi had around 42% market share. Since then Pepsi has had a really strong growth in India and has comprehensively pushed aside Coke sales in India. In much of India, the Pepsi brand has become synonymous with cold beverages. Coke uses a portfolio of drinks to counter that advantage. Pepsi has had a strong Marketing campaign targeting mainly Youngsters which has worked wonders for Pepsi. Pepsi has had alliances with most of the popular actors, it has been the Official Sponsor of Indian cricket team for a long time now. Pepsi's 'Change The Game' ad campaign in the 2011 Cricket World Cup was a mega success and boosted the Sales a lot. Coke also had some successful ad campaigns in the likes of 'Thanda matlab Coca Cola' and Coke - 'Open Happiness', the latest Coke ad is 'Burr Burr' ad series. A number of Pepsi and Coke challenges wherein participants with a blindfold are asked to taste Coke and Pepsi in plain cups and rate the better of the two, have been organized by these companies time and again. Coke had also introduced a Loyalty Points Awards program.

Coke Marketing usually focuses on: Coca Cola - Redefining Itself, Rejuvenation, Refreshment, Health and Nutrition, Replenishment Pepsi advertising focuses on: Slandering Coke, Youth, Market Segment One of the ad's by Pepsi mocking Coke. The ad was later banned.

Pepsi's Distribution: 1) Exclusive contracts with franchise bottlers and independent distributors and retailers like Walmart.

2) Agreements with its competitors like Unilever with Lipton, Starbucks for Frappuccino. Coke's distribution: 1) Independent bottlers with exclusive contracts. 2) Coca- cola enterprises. Moreover, PepsiCo has a number of products in the Food segment like potato chips, Quaker oatmeal etc. as opposed to Coke which deals mainly in the Beverages, this provides PepsiCo more range and thus a deeper penetration into the Markets. A SWOT analysis of Coke and Pepsi helps in determining the strategies best suited for enhanced future growth for Pepsi and Coke respectively. SWOT Analysis:

Strengths Coke: High profile Global Brand Presence, Four of the top five leading brands, Broad-based bottling strategy, 47% of total volume Sales in carbonates Pepsi: High profile global brand presence, world's 2nd best-selling soft-drink brand, constant product innovation, aggressive marketing strategies using famous celebs, a broad portfolio of products Weaknesses Coke: Carbonates market is in decline, over-complexity of relationship with bottlers, the existing distribution system is not so efficient for non-carbonates Pepsi: Carbonate market is in decline, Pepsi only targets young people

Opportunities Coke: Soft drinks volumes in the AsiaPacific region forecast to increase by over 45, Brands like Minute Maid Light and Minute Maid Premium Heart Wise are positioned well with the Healthconcerned market, Use distribution strengths in Eastern Europe and Latin America

Pepsi: Increased consumer concerns with regards to drinking water, growth in healthier beverages, growth in RTD tea and Asian beverages, growth in the functional drinks industry

Threats Coke: Growing health-conscious society, PepsiCo's Gatorade, Aquafina and Tropicana are stronger brands, boycott in the middle-east, earlier protest against Coke in India, negative publicity in western-Europe

Pepsi: Obesity and health concerns, Coke increases Marketing and Innovation spending to $400M globally, relying on North-America only is bad In my conclusion, i would like to point out that Pepsi and Coke have managed some extremely successful brands; with time focus will be more and more on Emerging markets plus there will be a lot of emphasis on healthier beverages and more innovative products. Stress will also be laid on cleaner and more environment friendly practices employed by these companies. Kudos to these exemplary role models! Pepsi & Coke :-)

SWOT Analysis PepsiCo

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Strengths

Branding - One of PepsiCos top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it ranked 26th amongst top 100 global brands. Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lays Potato Chips, Lipton Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist.
The strength of these brands is evident in PepsiCos presence in over 200 countries. The company has the largest market share in the US beverage at 39%, and snack food market at 25%. Such brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annual sales for the company

Diversification - PepsiCos diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCos arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and

cake mixes.This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates. Distribution - The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.

Weaknesses

Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCos total net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. Wal-Marts low price themes put pressure on PepsiCo to hold down prices. Overdependence on US Markets - Despite its international presence, 52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and labor strikes. Large US customers could exploit PepsiCos lack of bargaining power and negatively impact its revenues. Low Productivity - In 2008 PepsiCo had approximately 198,000 employees. Its revenue per employee was $219,439, which was lower that its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees. Image Damage Due to Product Recall - Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.

Opportunities

Broadening of Product Base - PepsiCo is seeking to address one of its potential weaknesses; dependency on US markets by acquiring Russias leading Juice Company, Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles of its consumers. International Expansion - PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales. In addition the company plans on major capital initiatives in Brazil and Mexico. Growing Savory Snack and Bottled Water market in US - PepsiCo is positioned well to capitalize on the growing bottle water market which is projected to be worth over $24 million by 2012. Products such as Aquafina, and Propel are well established products and in a position to ride the upward crest.PepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from

a growing savory snack market which is projected to grow as much as 27% by 2013, representing an increase of $28 million.

Threats

Decline in Carbonated Drink Sales - Soft drink sales are projected to decline by as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feel the impact of the projected decline. Potential Negative Impact of Government Regulations - It is anticipated that government initiatives related to environmental, health and safety may have the potential to negatively impact PepsiCo. For example, manufacturing, marketing, and distribution of food products may be altered as a result of state, federal or local dictates. Preliminary studies on acrylamide seem to suggest that it may cause cancer in laboratory animals when consumed in significant amounts. If the company has to comply with a related regulation and add warning labels or place warnings in certain locations where its products are sold, a negative impact may result for PepsiCo. Intense Competition - The Coca-Cola Company is PepsiCos primary competitors. But others include Nestl, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales. Potential Disruption Due to Labor Unrest - Based upon recent history, PepsiCo may be vulnerable to strikes and other labor disputes. In 2008 a strike in India shut down production for nearly an entire month. This disrupted both manufacturing and distribution.

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43 billion and over 198,000 employees. Take a journey through our past and see the key milestones that define PepsiCo. Read more...
COKE: Strengths: brand recognition (especially internationally) Weaknesses: Primarily known for Coke and not other beverages sold from same company, unsuccesful movement into India Opportunities: Offer new healthier beverages, Jump on board the "green" movement Threats: healthy food movement, large competitors like Pepsi and smaller speciality beverage companies PEPSI: Strengths: one of the leaders in the industry Weaknesses: not diversified offerings Opportunities: Sponsorship, global presence including building facilities in new markets Threats: large and small beverage companies, including bottled water firms

SWOT Analysis of Pepsi Company

Pepsi is the worlds second largest beverage and food company based on net revenue. In North America it is first largest Beverage and Food Company by net revenue. PepsiCo is a multinational Corporation, offering manufacturing, distribution and marketing of soft-drinks, beverages, grain-based snack foods and other products.

PepsiCo has many diversify business units such as soft drinks (Pepsi, Slice, Mountain Dew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks, Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay). In 2009, nineteen product lines of PepsiCo's achieved revenue of greater than $1 billion each, and its products are distributed more than 200 countries, by achieving annual $43.3 billion net revenue. As of 2010 it has more than 285,000 employees globally. Here is the SWOT analysis of PepsiCO.

Strengths

In 2009, nineteen product lines of PepsiCo's achieved revenue of greater than $1 billion each, and its products are distributed more than 200 countries, by achieving annual $43.3 billion net revenue. As of 2010 it has more than 285,000 employees globally.

Pepsi is the worlds second largest beverage and food company based on net revenue. In North America it is first largest beverage and food company by net revenue.

PepsiCo is a multinational Corporation, offering manufacturing, distribution and marketing of soft-drinks, beverages, grain-based snack foods and other products.

Diversify business units such as soft drinks (Pepsi, Slice, Mountain Dew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks, Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay).

PepsiCo has adopted the globes most powerful go-to-market systems, serving more than 10 million outlets a week by operating greater than 100,000 different routes, and producing more than $300 million in retail sales per day.

Pepsi has the 25 percent of the worlds soft drinks with more than 70 percent of its revenue coming from North America.

On 14th March 2012, PepsiCo announced that its worldwide "Banner Sun" potato chip portfolio has earned annual retail sales of more than $10 billion; it is the world's number one potato chip brand and biggest largest food brand.

Innovative Marketing: It has leveraged its worldwide brand-building strength to attach with consumers in significant ways and impel the growth globally.

Packaging for products has developed into a sign for quality potato chips all over the globe.

It has most dominant global snack chip division Frito-Lay by having five leading snack chip products.

In world PepsiCo has larger number of restaurants than any other corporation; nowadays it has become one of the biggest consumer products companies in the globe with world recognized brands such as Lays Potato chips, Taco Bell, Pizza Hut, Frito Lay and KFC.

Pepsi continuously focusing on increasing its biggest beverage and food products, it has built some of the globes strongest brands that are loved by consumers throughout the world.

PepsiCo has the policy to recruit the person from all over the globe that it has achieved.

Weaknesses

During the 1970s and 1990s, PepsiCo had unsuccessful acquisition of diversify businesses outer of its primary businesses of packaged food and beverage brands.

In the beverage industry it had losses but and trying to built a new and prevailing beverage company. PepsiCo is continuously fail to grant road-map for being a big global corporation and stir vision

PepsiCo does not have its corporate name on many of its brands.

PepsiCos new launched products such as regular soda and diet products; it appears that they are offered into markets without knowing sufficient regarding their target demographic.

In international market PepsiCo is far behind from Coca-cola and its products demand is highly elastic. It adopted cokes strategy to survive in global market.

Opportunities

Facing sluggish market growth rate in its base grocery business, packaged-food organizations are gradually more spinning to snacks as an opportunity for growth.

Snacking "is a long-term trend and the future of eating," it is projected that growth in snacks market would be reached at the $560 billion.

Big opportunity by exploit on US market, because American consume more snacks during the day, and changing trends in developing markets, for instance growing of modern retail formats and females are entering the workplace.

According to analysts, after adding some value Snack prices can be raised more easily. Players can offer lower and premium priced chips to its portfolio to exploit on more growth in price ranges.

PepsiCo has significant opportunities within global supply chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities our supply chain engages.

It is highly difficult for the new entrants to enter in the soft drink industry because of some factors such as brand image and loyalty, bottling network, advertising expense, retail distribution and fear of retaliation.

World population is expected to grow at 8 billion 2025, and 9.2 billion by 2050. Nearly 99% growth will take place in developing countries.

Focusing on its advertising and differentiation can increase its profits. Bottled water consumption in increasing day by day, 11 percent growth is reported.

Pepsi promotes and support sustainable agriculture not only because it makes good business sense, it purchase million tons of potatoes and fruits.

Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Coke can relatively diversify and offering health conscious products.

Higher growth rate in American nonalcoholic beverage market, with fastest grow rate in fruit beverages.

With innovative marketing beverage and food players can build growth for their brands by highlighting their benefits, for instance healthiness in the cases of caffeine-free drinks, diet and snacks.

Threats

PepsiCo has the big threat from its primary competitor Cock because; coke is the world's largest beverage company, offering consumers almost 500 still and sparkling. Coke has the world's largest beverage distribution network; consuming in more than 200 countries enjoys the Cokes beverages at an average of nearly 1.6 billion servings a day. In 2011, Coca-cola was declared the worlds most valuable brand according to Interbrands best global brand. The Coca-Cola is the world's largest beverage company, offering consumers almost 500 still and sparkling.

Smaller snack players such as General Mills and ConAgra foods would try to get larger market share, can be a big threat for players like PepsiCo.

Pepsi is facing the tough competition from local brands in all over the world such as in Central and South America Kola Real also known as Big Cola in Mexico is giving tough competition to Pepsi etc.

Large numbers of substitutes are available in the market such as water, tea, juices coffee etc.

PepsiCo is facing different regulations and policies set by government in different countries.

Low growth rate in carbonated drinks, which is recorded less than one percent in primary market of Pepsi.

Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Different studies has been conducted and found carbonated drinks harmful if consumed excessively.