PEPSI COLA PAKISTAN:

FRANCHISING &PRODUCT LINE

MANAGEMENT

GROUP MEMBERS OF PREDATORS:

SAUMIL TRIVEDI
AMAN HEGDE
RAHUL PAREKH
RUTVIJ RAJPUT
PEPSICO INC.
 Pepsi Cola International owned by Pepsico
Inc.
 Three markets:

1. Soft drinks-Pepsi Cola Company and

Pepsi Cola International
2. Snack Foods- Frito Lay Inc. and Pepsico
Foods International
3. Restaurants- Pizza Hut, Taco Bell, and KFC
7-UP International
 PepsiCo bought 7-UP’s international
division for $246 million.

 7-UP was a leading producer in

lemon-lime category.

 Represented 15% of international soft

drink
 Foreign volume boosted by almost
20%.

 In 2008, PepsiCo's U.S. market share

is 30.8 percent, while The Coca-Cola
Company's is 42.7 percent.
Competitive Analysis
 Main competitor was Coca-Cola
Company, both in United States and
abroad.
 In 1990, Coca Cola claimed 46% of
international soft drink market.
 Diversified from soft drink business
into food-related lines as Frito Lay.
 PEPSI COCA-COLA

International & Domestic Soft Drink $6.5 billion $10 billion

Revenues

International & Domestic Soft Drink $767 million $1.4 billion

Operating Profit

International & Domestic Soft Drink 29% 8%

Growth 1989-1990

Percent of Revenue derived from 16% 55%

International Soft Drink Sales

Percent of Operating Profit derived from 4% 80%

International Soft Drink Sales
Pepsi cola in Pakistan

 Irfan Mustafa joined 1990 as CEO of Pepsi

cola

 In West Asia division pepsi enter with 3

countries: Pakistan, Bangladesh, Sri lanka

 PCI divided into five functional departments-

franchising, marketing, bottlers, sales
operation and finance
Market in Pakistan
 Pepsi’s marketing divide in two stages:
 first stage: PCI manufactured and sold it to
bottlers
 second stage: bottlers add carbonated
water and sweetener quantities and sold to
retail store and other outlet
• Retail price was PKR 4 per individual
consumption bottle i.e 25ml
• PKR 12 for 1 liter bottle
Cont..
• Market was divide into 2 segment on
premise and take home

• Soft drink market grew between 1988 and

1990

• PCI market share was 58% in 1990 from

33%
 Products
 There are 3 flavors : cola, orange and lemon lime

 Like 7 up, slice, mountain dew, mirinda, tropicana.

 Lays, quaker are also products of Pepsi

Distribution
 Approximately 54000 retail outlet sold soft drinks

 But the brand loyalty was not there and PCI has
to visit retailers

 Rural area’s road condition was bad and the

competitor can cover the market

 So PCI started giving branded refrigerator to

retail outlet to increase loyalty
Advertising and promotion
 PCI referred advertising as theme i.e long term
brand building and promotion as scheme by
discount pricing, coupons, reward program for
retailer
 It’s main objective was to achieve volume growth
and make a big brand
 Media were television and newspaper for
advertising while magazine and poster for
promotion
 Promotion like local event, incentives to sales
force, social work
Social work
 Student scholarship

 Health program

 Arranging student visit to bottler plant

 Fundraising charity
 Television was most effective media for PCI
products

 Lahore, Islamabad, Karachi, Peshawar,

Quetta where tv station located

 Which reach upto 75 percent of pakistani

population because they were main urban
areas
Bottlers

 Contract: to produce, bottle & sell

 Independent entities
 Included in decision making
 Powerful & affluent
 Cross- Franchising and ban
 Bottlers association & retail price
 Quality
Priorities identified

 Supervising remaining acquisition and

managing resulting integration

 Determining role of each brand in

portfolio

 Expansion of Cloudy Teem

Acquiring 7-Up Bottlers

 Objective: To gain more control &

coordination among bottlers
 Capacity expansion
 Bottlers were excited
 PCI concern: Increase in power of
bottlers
 7-Up bottlers concern: Fear of facing
negligence
Cloudy Teem

 Concept based on local drink

 Idea was to move Clear Team
consumers to Cloudy Team or 7-Up
 Six bottlers were not convinced to
replace Clear Teem being a strong
brand
 Introduction of Cloudy Teem planned
Brand portfolio [Approx]
[Sales contribution since acquisition of 7-Up]
Marketing Plan

 Rural area:
 68% population, low literacy & disposable
income
 Relied on less expensive radio and point-
of-sale campaign
 Promote Teem the local brand
 Urban area:
 Media spend yielded higher returns
 Promote 7-Up
Conclusion

 Tremendous future in Pakistan

 Consumers want:
 Convenient location
 Right package
 Way to exploit opportunities:
 Implementation of effective and
comprehensive marketing strategy
 Including brand portfolio and bottlers