STING ENERGY DRINK (2011) -------------------------------------------------

Submitted By:
Farhan Abid Ghulam Shabbir MBA (Marketing) 1632-109004 1632-109007

------------------------------Approved by:

_____________________ Dean Faculty of Marketing

_____________________ Project Supervisor

Inner Title




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Description Certificates Acknowledgements Dedication Executive Summary Introduction To Energy Drink Ingredients Of Energy Drink Effects Attempts To Ban History Caffeinated Alcoholic Energy Drinks Anti-Energy Drinks Hidden Risks Introduction To Pepsi Company Overview A Brief Pepsi History Mission Vision Objective Strategies Policies PepsiCo Values & Philosophy Marketing Product Positioning Of PepsiCo Pepsi-Cola Marketing Mix Pepsi-Cola Brands Pepsi-Cola in Pakistan Unique Selling Proposition(USP) Of Pepsi Promotion Strategy Of PepsiCo In Pakistan Segmentation Of Pepsi in Pakistan Place(Distribution)Strategy Of PepsiCo In Pakistan SWOT Analysis Of PepsiCo In Pakistan TOWS Analysis Of PepsiCo In Pakistan PEST Analysis Of PepsiCo

Chapter No. 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Chapter No. 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 Chapter No.3 3.1 3.2 3.3 3.4 3.5 3.6 3.7

Page No. vii-ix x xi xii 13-14 15-18 19-20 21 22-24 25-26 27 27-28 29-30 31-32 33-40 41 41 42 43 44 45-46 47-51 52 53-56 57-69 60-62 63 64 65 66 67-71 72-75 76-77

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Serial Chapter No.4 4.1 4.2 4.3 Chapter No.5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Chapter No.6 Chapter No.7 7.1 7.2 7.3 7.4 Chapter No.8 Description Sting Energy Drink Ingredients Advertising Campaigns Pepsi Sting Big Change In Price Pakistan’s Energy Drinks Market Red Bull Booster Ozo Powerful Speed Sting Other Energy Drinks Comparison Chart Research Methodology Suggestions Energy Drinks Should Not Be Mixed With Alcohol Energy Drinks Should Not Be Consumed During Exercise Energy Drinks Should Not Be Consumed By Children Energy Drinks Should Not Be Consumed By Pregnant Woman Conclusion & Recommendations Bibliography & Reference Questionnaire The End Page No. 78-80 81 82 83 84-85 86 87 88 89 90 91 92 92 93-94 95-96 97 98 99 100 101-103 104-105 106-107 108

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Certified that the research work contained in this project titled

“A Project on Pepsi Co. Sting Energy Drink” has been carried out
and completed by Mr. Farhan Abid and Mr.Ghulam Shabbir, Roll no. 1632-109004, 1632-109007 under my supervision during their Master of Business Administration.

______________________ Date: _______________ Research Coordinator

_________________ Dean Faculty of Marketing PIMSAT Institute of Higher Education Pakistan

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Certified that the quantum and quality of the research work contained in the project titled “A Project on Pepsi Co. Sting Energy Drink” is adequate for the award of degree of Master of Business Administration.

Internal Examiner Signature: ________________ Name: ___________________ ____________________ Date: ____________________ _____________________

External Examiner Signature: ________________ Name: Date:

Dean of Faculty Signature: ________________ Name: ___________________
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Date: ____________________


I, Farhan Abid and Ghulam Shabbir, Roll no. 1632-109004, 1632109007, Student’s of Master of Business Administration during the session 2011, hereby declare that the matter printed in the dissertation titled “A Project On Pepsi Co. Sting Energy Drink” is our own work and has not been printed, published and submitted as research work in any form in any university, research institute etc, in Pakistan or abroad.

Dated: ___________________

__________________ (Signature of Deponent1)

Dated: ___________________

__________________ (Signature of Deponent2)

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Submission Form for Project

Student’s Name1 Father’s/Guardian’s Name Student’s Name2 Father’s/Guardian’s Name Student’s E-Mail Address1 Student’s E-Mail Address2 Student’s Mobile Number1 Student’s Mobile Number2 Student’s Registration Number1 Student’s Registration Number2 Date of Submission Project Topic Selected

We declare that the attached project is all our own work. We agree that we shall be bound by the regulations of the PIMSAT Institute of Higher Education.

Signature1 __________________________

Date: _________________

Signature2 __________________________ 9 | Page

Date: _________________


A task undertaken without offering prayers to almighty and talking blessings from the elders is not a good beginning. Likewise the work completed without acknowledging the assistance to those who were always by our sides to make our efforts fruitful in the task left incomplete. Firstly, we would like to thank ‘God’ for his cordial and merciful blessings which have enabled us to complete this project. This project is an outcome of effort, guidance and channelization of our teachers and parents. We wish to extend our deepest regards and obligation to Sir Bilal Sarwar who has guided us in this project and helped us in all possible ways to collect and analyze all the data. We are obliged and grateful to our Professor Mr. Amjad Shazad for his help and guidance in completing the project. Last but not the least, our special gratitude goes to our friends and classmates who indirectly assisted us in the successful completion of this project. Thank you all for teaching us endlessly how to become a better person, friend and student.

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To Our Dearest and most respected Parents.
Whose efforts and prayers are great source of strength to us in every noble venture? Their love inspired us to the higher idea of life.

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Executive Summary
We select this topic because there is currently no project is done on that topic. And now a days the energy drinks are played a vital role in our daily life so that why we want to take a look on its all aspects. As we all know that beverages are going become a necessity of our life. So in this concern we must have to know the benefits and the disadvantages of these drinks which we like to be consume on daily basis. The Main purpose of this project is to create awareness about energy drinks and its side effects. The other purpose of this project is to tell readers about the Pepsi cola Co. and its new launching of Sting Energy Drink in Pakistan’s market. Some suggestions are includes in this project to create proper awareness of the circumstances when you don’t have to consume the energy drinks. There is also some recommendations are includes in this project to improve the sale of the Sting energy drink.

Chapter No.1

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Introduction to Energy Drink
Energy drinks are soft drinks advertised as boosting energy. These drinks usually do not emphasize energy derived from the sugars they contain, but rather through a choice of stimulants, vitamins, and herbal supplements the manufacturer has combined. Energy drinks are canned or bottled beverages sold in convenience stores, grocery stores, and bars and nightclubs (in mixed drinks). Most energy drinks are carbonated drinks that contain large amounts of caffeine and sugar with additional ingredients, such as B vitamins, amino acids (e.g. taurine), and herbal stimulants such as guarana. Energy drinks are marketed primarily to people between the ages of 18 and 30 as a stimulant, which is why energy drinks have names that convey strength, power, and speed, and sexuality.

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Nowadays, energy drinks have become common choice of beverages. Sugar and caffeine are the two major ingredients in energy drinks. Ingredients in the energy drinks are legal ingredients which are added to give an instant energy boost. What are these energy drinks made of? How can you get charged up right away after drinking these energy drinks? These drinks are commonly known as soft drinks. Let us discuss the energy drink ingredients. Generally, energy drinks include methylxanthines (including caffeine), vitamin B and herbs. Other common ingredients are guarana, acai, and taurine, plus various forms of ginseng, maltodextrin, carbonated water, inositol, carnitine, creatine, glucuronolactone and ginkgo biloba. Some contain high levels of sugar, and many brands also offer artificially-sweetened 'diet' versions. The central ingredient in most energy drinks is caffeine, the same stimulant found in coffee or tea, often in the form of guarana or yerba mate.

Most of the energy drinks contain caffeine as a main ingredient. The medical name of caffeine is trimethylxanthine. Caffeine stimulates the nervous system and increases the heart rate. It also acts as a mild diuretic (increases urine production in the body). Caffeine stimulates the human brain and is an addictive ingredient in energy drinks.

Taurine is an amino acid which increases the effect of caffeine. Taurine is also an effective cardiac stimulator. This amino acid is naturally secreted by the human body which regulates the heart rate, muscle contractions and energy levels of the body.

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Guarana is a major source of caffeine and is a climbing plant. The seeds of the fruits of Guarana has three times more caffeine than that contained in the coffee beans. This energy drink ingredient increases the metabolic rate of the human body and helps in reducing weight.

Ginseng is a herb which increases the energy levels in the human body. It has anti-fatigue components that help to reduce stress. Ginseng is said to stimulate the nervous system to increase the overall stamina of the body and increase the secretion of hormones in the body. There are some adverse side-effects of Ginseng on the human body. These effects are headache and diarrhea which are likely to happen if Ginseng is consumed along with caffeine.

Ginkgo Biloba
Ginkgo Biloba comes from a rare tree and is an anti-depressant. This energy drink ingredient increases concentration and blood circulation in the body. However, if this ingredient is consumed when you are already on anti-depressant medicines, it has major side-effects on the body. These side effects include diarrhea, palpitation and headache.

Inositol is a classified member of the Vitamin B complex and is said to increase the immunity of the body. Antioxidants are the scavengers of free radicals and Vitamin C is an effective antioxidant.

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Sugars are the source of glucose for the human body and is the major ingredient in energy drinks. Carbohydrates is an essential requirement of the human body which helps maintain the body functions. Glucose is used up by the body to perform digestion, breathing and in exercises, like, cycling, walking and swimming. This energy drink ingredient is harmful for the people suffering from diabetes.

Acai Berry
Acai berry is another energy drink ingredient which is a rich source of antioxidants. The Acai Berry palm trees are usually seen in South America. They are one of the ingredients of the energy drinks.

This is an ingredient in the many energy drinks and in products which are specially made for body building.

Anti-oxidants are things that help your body gracefully recover from the damage of free radicals. Vitamin C is an anti-oxidant, so claiming that your energy drink has a lot of antioxidants is like saying you’re buying really expensive orange juice. But they’re good, they help fend off illness and prevent cellular damage. Vitamins C and E, Vitamin A (aka retinol, beta-carotene), and selenium are all anti-oxidants.

Glucuronolactone (DGL) occurs naturally in the human body as glucose is broken down by the liver. All connective tissue contains this compound. DGL is believed to aid in detoxification, freeing hormones and other chemicals, and the biosynthesis of vitamin C. It is placed in energy drinks because it is believed to help with glycogen depletion by preventing other substances from depleting glycogen supplies in the muscles.

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Yerba Mate
This substance is derived from leaves of a shrub in the Holly family. It is a natural source of caffeine, but some believe that the form of caffeine in Yerba Mate’ doesn’t produce the negative side affects like the caffeine in coffee and guarana.

Milk Thistle
This ingredient mainly found in Rockstar and a few other drinks is used as a liver detoxifying agent. It is placed in energy drinks not really for any energy enhancing properties but as a counter agent to mixing energy drinks with alcohol as milk thistle is supposed to help with hangovers and detoxing the liver from alcohol. However, studies show that the amount put in energy drinks would be of hardly any benefit to consumers.

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A variety of physiological and psychological effects have been attributed to energy drinks and their ingredients. Two studies reported significant improvements in mental and cognitive performances as well as increased subjective alertness. Excess consumption of energy drinks may induce mild to moderate euphoria primarily caused by stimulant properties of caffeine and may also induce agitation, anxiety, irritability and insomnia. During repeated cycling tests in young healthy adults an energy drink significantly increased upper body muscle endurance. It has been suggested that reversal of caffeine withdrawal is a major component of the effects of caffeine on mood and performance. Restorative properties were shown by a combination of caffeine and the sugar glucose in an energy drink, and some degree of synergy between the cognition-modulating effects of glucose and caffeine was also suggested. In one experiment, a glucose-based energy drink (containing caffeine, taurine and glucuronolactone) was given to eleven tired participants being tested in a driving simulator. Lane drifting and reaction times were measured for two hours post-treatment and showed significant improvement. Two articles concluded that the improved information processing and other effects could not be explained in terms of the restoration of plasma caffeine levels to normal following caffeine withdrawal. Caution is warranted even for healthy adults who choose to consume energy beverages. Consumption of a single energy beverage will not lead to excessive caffeine intake; however, consumption of two or more beverages in a single day, can. Other stimulants such as ginseng are often added to energy beverages and may enhance the effects of caffeine, and ingredients such as guarana themselves contain caffeine. Adverse effects associated with caffeine consumption in amounts greater than 400 mg include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms (arrhythmia), and stomach upset. 19 | P a g e

Consumption also has been known to cause pupil dilation when taken with certain antidepressants or SSRIs . Energy drinks do not provide electrolytes, and have a higher likelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from the body to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If the body is dehydrated by 1%, performance is decreased by up to 10%. In the US, energy drinks have been linked with reports of nausea, abnormal heart rhythms and emergency room visits. The drinks may cause seizures due to the "crash" following the energy high that occurs after consumption. Caffeine dosage is not required to be on the product label for food in the United States, unlike drugs, but some advocates are urging the FDA to change this practice.

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Attempts to Ban

The popular energy drink Red Bull was banned in France after the death of eighteen-yearold Irish athlete Ross Cooney, who died as a result of playing a basketball game after consuming four cans of the drink. This ban was challenged in the European Court of Justice in 2004. The French Scientific Committee (J.D. Birkel) concluded that Red Bull has excessive amounts of caffeine. Denmark also banned Red Bull for a while, although the ban has recently been revoked. Britain investigated the drink, but only issued a warning against its use by pregnant women and children. In 2009, a school in Hove, England requested that local shops do not sell energy drinks to students. Headteacher Malvina Sanders added that "This was a preventative measure, as all research shows that consuming high-energy drinks can have a detrimental impact on the ability of young people to concentrate in class." The school has negotiated for their local branch of Tesco to display posters asking students not to ask for the products. As of August 2010, Sir Harris Robert has started a movement to ban the distribution of "ënergy" drinks in the UK. He stated,"This should be an illegal substance due to high concentrations of stimulants which if taken in high of doses has serious side effects, especially on our youth. You must think about the children and addictions to such products." New Mexico Military Institute, a military high school and junior college located in Roswell, New Mexico, does not allow sales of energy drinks at the campus "Cadet Store" after an incident of a young Cadet drinking too many drinks in one period and having to be hospitalized.

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In Japan, the energy drink dates at least as far back as the early 1960s, with the release of the Lipovitan. Most such products in Japan bear little resemblance to soft drinks, and are sold instead in small brown glass medicine bottles or cans styled to resemble such containers. These "genki drinks", which are also produced in Japan, are marketed primarily to the salaryman set. In UK, Lucozade Energy was originally introduced in 1929 as a hospital drink for "aiding the recovery;" in the early 1980s, it was promoted as an energy drink for "replenishing lost energy." The first drink marketed as being designed to improve the performance of athletes and sports stars arrived in the sixties. It was invented for the football team at the University of Florida, known as the Gators — hence its name, Gatorade. Designed to aid hydration and lengthen performance levels, it claimed that its ingredients were formulated for just such things. However, Gatorade is safer than many energy drinks and is known more as a sports drink. In 1985, Jolt Cola was introduced in the United States. Its marketing strategy centered on the drink's caffeine content, billing it as a means to promote wakefulness. The initial slogan was, "All the sugar and twice the caffeine." In 1995, PepsiCo launched Josta, the first energy drink introduced by a major US beverage company (one that had interests outside just energy drinks), but Pepsi discontinued the product in 1999. In Europe, energy drinks were pioneered by the S. Spitz Company and a product named Power Horse, before the business savvy of Dietrich Mateschitz, an Austrian entrepreneur, ensured his Red Bull product became far better known, and a worldwide best seller. 22 | P a g e

Mateschitz developed Red Bull based on the Thai drink Krating Daeng, itself based on Lipovitan. Red Bull is the dominant brand in the US after its introduction in 1997, with a market share of approximately 47%. In New Zealand and Australia the current leading energy drinks product in those markets V was introduced by Frucor Beverages Frucor. By the year 2001, the US energy drink market had grown to nearly 8 million per year in retail sales. Over the next 5 years, it grew an average of over 50% per year, totaling over $3 billion in 2005. Diet energy drinks are growing at nearly twice that rate within the category, as are 16-ounce sized energy drinks. The energy drink market became a $5.4 billion dollar market in 2007, and both Goldman Sachs and Mintel predict that it will hit $10 billion by 2010. Major companies' such as Pepsi, Coca-Cola, Molson, and Labatt have tried to match smaller companies' innovative and different approach, with marginal success. Energy drinks are typically attractive to young people. Approximately 65% percent of its drinkers are between the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008 statewide Patient Poll conducted by the Pennsylvania Medical Society’s Institute for Good Medicine found that: 20 percent of respondents ages 21–30 had used energy drinks in high school or college to stay awake longer to study or write a paper; 70 percent of respondents knew someone who had used an energy drink to stay awake longer to study or work. Energy drinks are also popular as drink mixers. In 2001 Coca-Cola marketed two Powerade brand energy drinks in bullet-shaped, screwtop aluminum bottle cans produced by Exal Corporation of Youngstown,Ohio. Powerade, the same as Gatorade, is better known as a sports drink and is safer than many energy drinks. In 2002 CCL Container and Mistic Brands, Inc., part of the Snapple Beverage Group, worked together on the national launch of Mistic RĒ, which used a recyclable aluminum bottle. Since its introduction, many energy drinks are now packaged in the aluminum bottles or bottle cans.

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In 2004, Balance Bar founder Richard Lamb came out of retirement to form a company to distribute FRS, an drink with the antioxidant quercetin as its key ingredient. Capri Sun targeted 16-25 year-olds with its Island Refreshers line, graduating from a foil pouch design to a bottlecan or aluminum bottle. In the UK, Coca-Cola has marketed a direct Red Bull competitor, 'Sprite 3G', in a similar 250 mL can and has also launched 'Relentless', a juice-based energy drink in 500 mL cans. UK supermarkets have launched their own brands of energy drinks at lower prices than the major soft drink manufacturers. These are mostly produced by Canadian beverage maker Cott. Tesco supermarkets sell 'Kx"'(used to be known as 'Kick') in 250 mL cans and 1 L bottles, Sainsbury's sell 'Blue Bolt' in similar packaging, Asda sell 'Blue Charge' in similar packaging and Morrison's sell 'Source' in 250 mL cans. Cott sells a variety of other branded energy drinks to independent retailers in various containers. Since 2002 there has been a growing trend for packaging energy drink in bigger cans. Since in many countries, including the US and Canada, there is a limitation on the maximum caffeine per serving in energy drinks, this allows manufacturers to include a greater amount of caffeine by including multiple servings per container. Popular brands such as Redbull and Monster have increased the amount of ounces per can. Conversely, the emergence of energy shots has gone the opposite way with much smaller packaging. In 2007 energy drink powders and effervescent tablets were introduced, in the form of a tablet or powder that can be added to water to create an energy drink. These can offer a more portable option to cans and shots. As of 2009, the industry has moved towards the use of natural stimulants and reduced sugar. For example, in May 2010 FRS introduced two flavors sweetened with stevia.

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Caffeinated Alcoholic Energy Drinks

Energy drinks such as Red Bull are often used as mixers with alcoholic beverages producing mixed drinks such as Vodka Red Bull which are similar to but stronger than rum and coke with respect to the amount of caffeine they contain. They are also sold in a wide variety of formulations such as Four Loko and Joose which combine caffeine and alcohol. Fruit flavored caffeinated energy drinks in flavors such as watermelon, lemonade and cranberry-lemonade are cheap with a fruity taste. Packaged in 24 ounce cans, they are wildly popular with young people. Four Loko, a product of Phusion Projects, was originally promoted through young employees who were hired to introduce the product to their peer group. Through separate mechanisms, energy drinks act as stimulants, and alcohol as depressants. Energy drinks can lessen some of the subjective effects of alcohol intoxication like dizziness and headache. However, they may be unable to counteract some of the psychomotor impairments of alcohol intoxication. Consequently, the mix can be particularly hazardous as energy drinks can mask the influence of alcohol and a person may misinterpret their actual level of intoxication. In fact, people who drink mixers are more likely than non-mixers to drink more alcohol, and are also more likely to suffer alcohol-related consequences such as assault, injury or being an intoxicated driver, even after adjusting for the number of drinks. Although people decide to drink energy drinks with alcohol with the intent of counteracting alcohol intoxication, another large majority do so to hide the taste of alcohol. Researchers at the Human Performance Laboratory have suggested people refrain from mixing such powerful stimulants with alcohol, they believe it might cause cardiopulmonary or cardiovascular failures. As of November 10, 2010 caffeinated alcoholic energy drinks had been banned in Washington and Michigan in the United States. The bans followed a widely publicized incident which resulted in hospitalization in the Fall of 2010 of college students who had consumed several cans of a brand of caffeinated alcoholic beverage. Utah, which has state controlled liquor retail outlets, after studying them, never permitted the sale of caffeinated alcoholic energy drinks. 25 | P a g e

The products will no longer be delivered to Oklahoma after December 3, 2010 and delivery to retailers has been suspended in New York. On November 17, 2010, the US Food and Drug Administration warned four companies, Charge Beverages Corp., New Century Brewing Co., Phusion Projects, and United Brands Company Inc, that the caffeine added to their malt alcoholic beverages is an “unsafe food additive” and said that further action, including seizure of their products, may occur under federal law. In a press release, the FDA states "there is evidence that the combinations of caffeine and alcohol in these products pose a public health concern.” They also state that concerns have been raised that caffeine can mask some of the sensory cues individuals might normally rely on to determine their level of intoxication. Warning letters were issued to each of the four companies requiring them to provide to the FDA in writing within 15 days of the specific steps the firms will be taking. Manufacturers have argued that drinking a caffeinated alcoholic energy drink is indistinguishable from drinking a couple of glasses of wine followed by a couple of cups of coffee, a typical dinner behavior.

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Anti-Energy Drinks

Several beverages have been marketed in the 2000s as "anti-energy", "chill out", or "relaxation" drinks, including Slow Cow, Drank, Mary Jane's Relaxing Soda, Chill, Malava Kava, V.i.B. (meaning "vacation in a bottle"), and Jones Gaba.

Hidden Risk

In November of 2010, the University of Texas Medical School at Houston reported that energy drinks contain more caffeine than a strong cup of coffee, and that the caffeine combined with other ingredients (sometimes not reported correctly on labels) such as guarana, amino acid taurine, other herbs, vitamins and minerals may interact. Energy drinks consumed with alcohol may affect heart rates, blood pressure and even mental states. The caffeine content of energy drinks range from 70-200 mg per 16-oz serving whereas a 16-oz cup of coffee can contain 80-300 mg. Norway and France have banned Red Bull. Water or lower-octane sports drinks which contain electrolytes, some minerals and carbohydrate are better choice to reduce the possibility of dehydration and increased of blood pressure. Health experts say caffeine suspends the effects of alcohol, allowing people to continue drinking long after they normally would have stopped. In 2008, Anheuser-Busch agreed to take caffeine out of energy drinks that contain alcohol, after 11 state attorneys general charged the brewer was marketing them to underage drinkers. This action is also followed by MillerCoors at the same year.

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Going back to 2001, BPOM (Indonesian FDA) ordered the producer of Kratingdaeng and Kratingdaeng S (brands/affiliates of Red Bull) and Galin Bugar and the impoter of M 150 energy drinks to witdraw the products due to each bottle of drink contained 80 milligrams of caffeine, far exceeding the acceptable 50 mg per bottle/can stated on the label. Producer of Kratingdaeng insisting its over-the-counter products meet regulations and refused to apologize, arguing that its products met acceptable standards. But several days after, the company apologized to consumers and promised to intensify the company's quality control system to avoid a similar incident from happening again. Finally, two million bottles of Kratingdaeng and Kratingdaeng S are withdrawn. Many people believe that it is due to competition among energy drink manufacturers to boost their energy drinks as superior ones. One of former vice chairman of the Indonesian Consumer Foundation (YLKI), urged BPOM to establish a firmer policy to prevent companies from deceiving consumers.

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Chapter No.2

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Soft drinks, more popularly known as sodas, are not exactly referred to as items of necessity. People can live without sodas. In fact, people might be safer if they don't drink soft drinks so much. And yet, soft drinks somehow make it to the top of the list of items most bought by the average consumer. Why is this, exactly? Well, for one thing, sodas are delicious. They stand between liquor and juice. Those who are too young to drink beer but think fruit juice is too juvenile can order sodas. Those too old and are putting their health at risk by drinking hard drinks can enjoy soft drinks and no one would think any less of them. In short, sodas have a mass appeal. They carry an image with them; an image of a person with a comfortable lifestyle. This essay will take a look at the company Pepsi Cola. For a better understanding of the subject company, this paper will delve into a brief history of the Pepsi Company's growth over the years and the effects of competition on Pepsi's strategies in the international and domestic market. This essay will attempt to discuss the effectiveness of Pepsi's marketing strategies and its results.

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Pepsi was one of several other brands that got their start in the late 1800s. A North Carolina pharmacist named Caleb Bradham invented "Brad's Drink" in 1893, which was later renamed Pepsi-Cola. Pepsi's early growth was less significant than that of Coke's, and its real strength as a competitor to Coke began after Alfred Steele became CEO in 1950, a time when Pepsi was nearly bankrupt. Steele was expected to liquidate the Pepsi-Cola Co. Instead, he made it his goal to "beat Coke" (2003). Pepsi Cola has taken part of that appeal and has used it in several different marketing strategies. Pepsi was born after Coca Cola, or Coke. It began in North Carolina, invented by a pharmacist named . It came out for public use on August 28, 1898. It had the reputation for being a food drink; Bradham was a pharmacist and he claimed that his concoction aided digestion. This claim, in a way, was already a marketing strategy, because during those times, people were always buying medicinal aids for digestion. Pepsi spread to Canada in 1906, and the year after that, it was registered in Mexico. By 1908, Pepsi had upgraded their transportation delivery services from horse-drawn carts to automobiles. Pepsi seemed to be becoming successful in such a short time. But there is still a problem. By the time Pepsi Cola came out, Coke had already made its mark among the public and the newcomer Pepsi found it hard to find a consumer base. Pepsi has four main objectives: A) Remain one of the top companies in terms of global production of soft drinks. Being on top of its industry enables Pepsi to command the respect and confidence of its clients. Thus, the company is able to expand its operations through the acquisition of other brewing firms. B) Gain more profit per hectoliter than other international soft drink companies. The raw materials that are being laid down in the recipes used in Pepsi are able to meet high quality standards. As a result, the company is able to earn more profit as against other soft drink companies. C) Build the best brand portfolio, with Pepsi as the international brand of flagship; and D) Maintaining its independence. Being an independent company allows Pepsi to continue its tradition of excellence in both its products and services by setting new trends and 31 | P a g e

standards. Background of Australia In Australia, it can be said that the country has a strong political system. Moreover, the economic status of the country is also considered as strong since it allows foreign investments to enter the market. Australia is considered to have the strongest economic status in their region. In 2005, it has been regarde...

A Brief Pepsi History
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Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the invention of Caleb Bradham (left), a pharmacist and drugstore owner in New Bern, North Carolina. The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a young pharmacist named Caleb Bradham began experimenting with combinations of spices, juices, and syrups trying to create a refreshing new drink to serve his customers. He succeeded beyond all expectations because he invented the beverage known around the world as Pepsi-Cola. Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it into a gathering place. He did so by concocting his own special beverage, a soft drink. His creation, a unique mixture of kola nut extract, vanilla and rareoils, became so popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow, convincing him that he should form a company to market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and applied to the U.S. Patent Office for a trademark. At first, he mixed the syrup himself and sold it exclusively through soda fountains. But soon Caleb recognized that a greater opportunity existed to bottle Pepsi so that people could drink it anywhere. The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially registered with the U.S. Patent Office. That year, Caleb sold 7,968 gallons of syrup, using the theme line "Exhilarating, Invigorating, Aids Digestion." He also began awarding franchises to bottle Pepsi to independent investors, whose number grew from just two in 1905, in the cities of Charlotte and Durham, North Carolina, to 15 the following year, and 40 by 1907. By the end of 1910, there were Pepsi-Cola franchises in 24 states. Pepsi-Cola's first bottling line resulted from some less-than-sophisticated engineering in the back room of Caleb's pharmacy. Building a strong franchise system was one of Caleb's 33 | P a g e

greatest achievements. Local Pepsi-Cola bottlers, entrepreneurial in spirit and dedicated to the product's success, provided a sturdy foundation. They were the cornerstone of the Pepsi-Cola enterprise. By 1907, the new company was selling more than 100,000 gallons of syrup per year. Growth was phenomenal, and in 1909 Caleb erected a headquarters so spectacular that the town of New Bern pictured it on a postcard. Famous racing car driver Barney Oldfield endorsed Pepsi in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race." The previous year, Pepsi had been one of the first companies in the United States to switch from horse-drawn transport to motor vehicles, and Caleb's business expertise captured widespread attention. He was even mentioned as a possible candidate for Governor. A 1913 editorial in the Greensboro Patriot praised him for his "keen and energetic business sense." Pepsi-Cola enjoyed 17 unbroken years of success. Caleb now promoted Pepsi sales with the slogan, "Drink Pepsi-Cola. It will satisfy you." Then cameWorld War I, and the cost of doing business increased drastically. Sugar prices see sawed between record highs and disastrous lows, and so did the price of producing PepsiCola. Caleb was forced into a series of business gambles just to survive, until finally, after three exhausting years, his luck ran out and he was bankrupted. By 1921, only two plants remained open. It wasn't until a successful candy manufacturer, Charles G. Guth, appeared on the scene that the future of Pepsi-Cola was assured. Guth was president of Loft Incorporated, a large chain of candy stores and soda fountains along the eastern seaboard. He saw Pepsi-Cola as an opportunity to discontinue an unsatisfactory business relationship with the Coca-Cola Company, and at the same time to add an attractive drawing card to Loft's soda fountains. He was right. After five owners and 15 unprofitable years, PepsiCola was once again a thriving national brand.

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One oddity of the time, for a number of years, all of Pepsi-Cola's sales were actually administered from a Baltimore building apparently owned by Coca-Cola, and named for its president. Within two years, Pepsi would earn $1 million for its new owner. With the resurgence came new confidence, a rarity in those days because the nation was in the early stages of a severe economic decline that came to be known as the Great Depression. 1898 Caleb Bradham, a New Bern, North Carolina, pharmacist, renames "Brad's Drink," a carbonated soft drink he created to serve his drugstore's fountain customers. The new name, Pepsi-Cola, is derived from two of the principal ingredients, pepsin and kola nuts. It is first used on August 28.

1902 Bradham applies to the U.S. Patent Office for a trademark for the Pepsi-Cola name. 1903 In keeping with its origin as a pharmacist's concoction, Bradham's advertising praises his drink as "Exhilarating, invigorating, aids digestion." 1905 A new logo appears, the first change from the original created in 1898. 1906 The logo is redesigned and a new slogan added: "The original pure food drink." The trademark is registered in Canada. 1907 The Pepsi trademark is registered in Mexico. 1909 Automobile racing pioneer Barney Oldfield becomes Pepsi's first celebrity endorser when he appears in newspaper ads describing Pepsi-Cola as "A bully drink...refreshing, invigorating, a fine bracer before a race." The theme "Delicious and Healthful" appears, and will be used intermittently over the next two decades. 1920 Pepsi appeals to consumers with, "Drink Pepsi-Cola. It will satisfy you." 1932 The trademark is registered in Argentina. 35 | P a g e

1934 Pepsi begins selling a 12-ounce bottle for five cents, the same price charged by its competitors for six ounces. 1938 The trademark is registered in the Soviet Union. 1939 A newspaper cartoon strip, "Pepsi & Pete," introduces the theme "Twice as Much for a Nickel" to increase consumer awareness of Pepsi's value advantage. 1940 Pepsi makes advertising history with the first advertising jingle ever broadcast nationwide. "Nickel, Nickel" will eventually become a hit record and will be translated into 55 languages. A new, more modern logo is adopted. 1941 In support of America's war effort, Pepsi changes the color of its bottle crowns to red, white and blue. A Pepsi canteen in Times Square, New York, operates throughout the war, enabling more than a million families to record messages for armed services personnel overseas. 1943 The "Twice as Much" advertising strategy expands to include the theme, "Bigger Drink, Better Taste." 1949 "Why take less when Pepsi's best?" is added to "Twice as Much" advertising. 1950 "More Bounce to the Ounce" becomes Pepsi's new theme as changing soft drink economics force Pepsi to raise prices to competitive levels. The logo is again updated. 1953 Americans become more weight conscious, and a new strategy based on Pepsi's lower caloric content is implemented with "The Light Refreshment" campaign. 1954 "The Light Refreshment" evolves to incorporate "Refreshing Without Filling." 1958 Pepsi struggles to enhance its brand image. Sometimes referred to as "the kitchen cola," as a consequence of its long-time positioning as a bargain brand, Pepsi now identifies itself with young, fashionable consumers with the "Be Sociable, Have a Pepsi" theme. A distinctive "swirl" bottle replaces Pepsi's earlier straight-sided bottle. 1959 Soviet Premier Nikita Khrushchev and U.S. Vice-President Richard Nixon meet in the soon-to-be-famous "kitchen debate" at an international trade fair. The meeting, over Pepsi, is photo-captioned in the U.S. as "Khrushchev Gets Sociable." 1961 Pepsi further refines its target audience, recognizing the increasing importance of the younger, post-war generation. "Now it's Pepsi, for Those who think Young"

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defines youth as a state of mind as much as a chronological age, maintaining the brand's appeal to all market segments. 1963 In one of the most significant demographic events in commercial history, the post-war baby boom emerges as a social and marketplace phenomenon. Pepsi recognizes the change, and positions Pepsi as the brand belonging to the new generation-The Pepsi Generation. "Come alive! You're in the Pepsi Generation" makes advertising history. It is the first time a product is identified, not so much by its attributes, as by its consumers' lifestyles and attitudes. 1964 A new product, Diet Pepsi, is introduced into Pepsi-Cola advertising. 1966 Diet Pepsi's first independent campaign, "Girlwatchers," focuses on the cosmetic benefits of the low-calorie cola. The "Girlwatchers" musical theme becomes a Top 40 hit. Advertising for another new product, Mountain Dew, a regional brand acquired in 1964, airs for the first time, built around the instantly recognizable tag line, "Ya-Hoo, Mountain Dew!" 1967 When research indicates that consumers place a premium on Pepsi's superior taste when chilled, "Taste that beats the others cold. Pepsi pours it on" emphasizes Pepsi's product superiority. The campaign, while product-oriented, adheres closely to the energetic, youthful, lifestyle imagery established in the initial Pepsi Generation campaign. 1969 "You've got a lot to live. Pepsi's got a lot to give" marks a shift in Pepsi Generation advertising strategy. Youth and lifestyle are still the campaign's driving forces, but with "Live/Give," a new awareness and a reflection of contemporary events and mood become integral parts of the advertising's texture. 1973 Pepsi Generation advertising continues to evolve. "Join the Pepsi People, Feelin' Free" captures the mood of a nation involved in massive social and political change. It pictures us the way we are-one people, but many personalities. 1975 The Pepsi Challenge, a landmark marketing strategy, convinces millions of consumers that Pepsi's taste is superior. 1976 "Have a Pepsi Day" is the Pepsi Generation's upbeat reflection of an improving national mood. "Puppies," a 30-second snapshot of an encounter between a very small boy and some even smaller dogs, becomes an instant commercial classic. 37 | P a g e

1979 With the end of the '70s comes the end of a national malaise. Patriotism has been restored by an exuberant celebration of the U.S. bicentennial, and Americans are looking to the future with renewed optimism. "Catch that Pepsi Spirit!" catches the mood and the Pepsi Generation carries it forward into the '80s. 1982 With all the evidence showing that Pepsi's taste is superior, the only question remaining is how to add that message to Pepsi Generation advertising. The answer? "Pepsi's got your Taste for Life!," a triumphant celebration of great times and great taste. 1983 The soft drink market grows more competitive, but for Pepsi drinkers, the battle is won. The time is right and so is their soft drink. It's got to be "Pepsi Now!" 1984 A new generation has emerged-in the United States, around the world and in Pepsi advertising, too. "Pepsi. The Choice of a New Generation" announces the change, and the most popular entertainer of the time, Michael Jackson, stars in the first two commercials of the new campaign. The two spots quickly become "the most eagerly awaited advertising of all time." 1985 Lionel Richie leads a star-studded parade into "New Generation" advertising followed by pop music icons Tina Turner and Gloria Estefan. Sports heroes Joe Montana and Dan Marino are part of it, as are film and television stars Teri Garr and Billy Crystal. Geraldine Ferraro, the first woman nominated to be vice president of the U.S., stars in a Diet Pepsi spot. And the irrepressible Michael J. Fox brings a special talent, style and spirit to a series of Pepsi and Diet Pepsi commercials, including a classic, "Apartment 10G." 1987 After an absence of 27 years, Pepsi returns to Times Square, New York, with a spectacular 850-square foot electronic display billboard declaring Pepsi to be "America's Choice." 1988 Michael Jackson returns to "New Generation" advertising to star in a four-part "episodic" commercial named "Chase." "Chase" airs during the Grammy Awards program and is immediately hailed by the media as "the mostwatched commercial in advertising history." 1989 "The Choice of a New Generation" theme expands to categorize Pepsi users as "A Generation Ahead!" 38 | P a g e

1990 Teen stars Fred Savage and Kirk Cameron join the "New Generation" campaign, and football legend Joe Montana returns in a spot challenging other celebrities to taste test their colas against Pepsi. Music legend Ray Charles stars in a new Diet Pepsi campaign, "You got the right one baby." 1991 "You got the Right one Baby" is modified to "You got the Right one Baby, UhHuh!" The "Uh-Huh Girls" join Ray Charles as back-up singers and a campaign soon to become the most popular advertising in America is on its way. Supermodel Cindy Crawford stars in an award-winning commercial made to introduce Pepsi's updated logo and package graphics. 1992 Celebrities join consumers, declaring that they "Gotta Have It." The interim campaign supplants "Choice of a New Generation" as work proceeds on new Pepsi advertising for the '90s. Mountain Dew growth continues, supported by the antics of an outrageous new Dew Crew whose claim to fame is that, except for the unique great taste of Dew, they've "Been there, Done that, Tried that." 1993 "Be Young, Have fun, Drink Pepsi" advertising starring basketball superstar Shaquille O'Neal is rated as best in U.S. 1994 New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi CEO Craig Weatherup explaining the relationship between freshness and superior taste to consumers. 1995 In a new campaign, the company declares "Nothing else is a Pepsi" and takes top honors in the year's national advertising championship.
• • • • • • • •

1996–1997: "Pepsi: There's nothing official about it" (During the Wills World Cup (cricket) held in India/Pakistan/Sri Lanka) 1997–1998: "Generation Next" (with the Spice Girls) 1998–1999: "It's the cola" (100th anniversary commercial) 1999–2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola" (commercial with Britney Spears/commercial with Mary J. Blige) 1999-2006: "Yeh dil maange more" (Hindi - meaning "This heart asks for more") (India) 2003: "It's the Cola"/"Dare for More" (Pepsi Commercial) 2006–2007: "Why You Doggin' Me"/"Taste the one that's forever young" (Mary J. Blige) 2007–2008: "More Happy"/"Taste the once that's forever young" (Michael Alexander)

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• • • • • • • • • • •

2008–present: "pepsi ye pyaas heh bari" ((urdu) meaning "it killed my thirst" (pakistan)) 2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake) 2008: "Рepsi is #1" Тv commercial (Luke Rosin) 2008–present: "Something For Everyone" 2009–present: "Refresh Everything"/"Every Generation Refreshes the World" 2009–present: "Yeh hai youngistaan meri jaan" (Hindi - meaning "This is our young country my baby") 2009–present: "My Pepsi My Way"(India) 2009–present: "Refresca tu Mundo" (Spanish - meaning "Refresh your world") (Spanish Spoken countries in Latin America) 2010–present: "Every Pepsi Refreshes The World" 2010–present "Pepsi. Sarap Magbago." (Philippines - meaning "It's nice to change") 2010–present "Badal Do Zamana" (Urdu - meaning "Change The World") (Pakistan)

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PepsiCo mission is to be the world's premier consumer Products Company focused on convenient foods and beverages. They seek to produce financial rewards to investors as their provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate. And in everything they do, they strive for honesty, fairness and integrity.


"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today." PepsiCo vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

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PepsiCo’s overriding objective is to increase the value of our shareholders' investment through integrated operating, investing and financing activities. Their strategy is to concentrate their resources on growing their businesses, both through internal growth and carefully selected acquisitions. Their strategy is continually finetuned to address the opportunities and risks of the global marketplace. The corporation's success reflects their continuing commitment to growth and a focus on those businesses where they can drive their own growth and create opportunities. PepsiCo believes that as a corporate citizen, it has a responsibility to contribute to the quality of life in our communities. This philosophy is put into action through support of social agencies, projects and programs. The scope of this support is extensive -ranging from sponsorship of local programs and support of employee volunteer activities, to contributions of time, talent and funds to programs of national impact. Each division is responsible for its own giving program. Corporate giving is focused on giving where PepsiCo employees volunteer.


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As a consumer products company, PepsiCo does not have the major environmental problems of heavy industry. Their biggest environ-mental challenge is packaging generated by their products. Packaging is important to public health and a critical component of the distribution system that delivers products to consumers and commercial establishments. To meet both consumer demand and safeguard the environment, they recycle, reuse and reduce packaging wherever possible. Each business is also committed to responsible use of resources required in manufacturing their products.

Continually fine-tuned to address the opportunities and risks of the global marketplace. Concentrate our resources on growing our businesses, both through internal growth and carefully selected acquisitions. Company developed its traditional products and expanded into low-fat and no-fat snacks as well as salsas and dips.

• Employee networks to mentor and support minority & female employees.

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• Actively and diligently seek out qualified M/WBEs for all possible company requirements. • Make every reasonable effort to help qualified M/WBEs to meet company standards. • Respect the privacy of all visitors who access and use the company’s corporate Web site • Treating all customers with respect, sensitivity and fairness, while providing some of the greatest products on earth. • We respect individual differences in culture, ethnicity and color. PepsiCo is committed to equal opportunity for all employees and applicants. • Corporate program for training employees how to work and manage in an inclusive environment.

PepsiCo Values & Philosophy

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Their Values & Philosophy are a reflection of the socially and environmentally responsible company they aspire to be. That are the foundation for every business decision they make.

Their Commitment

They are committed to delivering sustained growth through empowered people acting responsibly and building trust.

What It Means
Sustained Growth is fundamental to motivating and measuring their success. Their quest for sustained growth stimulates innovation, places a value on results, and helps them understand whether today's actions will contribute to their future. It is about the growth of people and company performance. It prioritizes both making a difference and getting things done. Empowered People means they have the freedom to act and think in ways that they feel will get the job done, while adhering to processes that ensure proper governance and being mindful of company needs beyond their own. Responsibility and Trust form the foundation for healthy growth. They hold themselves both personally and corporately accountable for everything they do. They must earn the confidence others place in them as individuals and as a company.

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Pepsi logo (1970-87). In 1987, the font was modified slightly to a more rounded version which was used until 1991. This logo was used for Pepsi Throwback in 2010.

Pepsi logo (2003-2008). Pepsi Wild Cherry and Pepsi ONE continued to use this design through March 2010. It was outside of the U.S. until 2010. The original version had the Pepsi wording on the top left of the Pepsi Globe. In 2007, the Pepsi wording was moved to the bottom of the globe.

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Photo of a Pepsi can with the current logo and labeling (present)

Pepsi bottle in Mexico. This logo was still in use in Mexico and most countries through early 2010. This Pepsi logo was last used in Canada in May 2009. From the 1930s through the late 1950s, "Pepsi-Cola Hits The Spot" was the most commonly used slogan in the days of old radio, classic motion pictures, and later television. Its jingle (conceived in the days when Pepsi cost only five cents) was used in many different forms with different lyrics. With the rise of television, Pepsi utilized the services of a young, up-and-coming actress named Polly Bergen to promote products, oftentimes lending her singing talents to the 48 | P a g e

classic "...Hits The Spot" jingle. Some of these Bergen spots can be seen on Through the intervening decades, there have been many different Pepsi theme songs sung on television by a variety of artists, from Joanie Summers to The Jacksons to Britney Spears. (See Slogans) In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public. In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise Muck, to coincide with the United States bicentennial celebration. In 1997, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing." In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of their background designs includes a string of repetitive numbers, "73774". This is a numerical expression from a telephone keypad of the word "Pepsi." In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of their can and bottle designs. Also in 2008 Pepsi teamed up with Google/YouTube to produce the first daily entertainment show on Youtube, Poptub. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Poptub is updated daily from Pepsi.

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In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new installment of the campaign asks for team involvement and an advocate to submit content on behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by Mark Messier. Pepsi has official sponsorship deals with three of the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing. On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia over three years, bringing the total Pepsi investment in the country to $4 billion. In July 2009, Pepsi started marketing itself as Pecsi in Argentina in response to its name being mispronounced by 25% of the population and as a way to connect more with all of the population. In October 2008, Pepsi announced that it would be redesigning its logo and re-branding many of its products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi Max began using all lower-case fonts for name brands, and Diet Pepsi Max was re-branded as Pepsi Max. The brand's blue and red globe trademark became a series of "smiles," with the central white band arcing at different angles depending on the product until 2010. Pepsi released this logo in U.S. in late 2008, and later it was released in 2009 in Canada (the first country outside of the United States for Pepsi's new logo), Brazil, Bolivia, Guatemala, Nicaragua, Honduras, El Salvador, Colombia, Argentina, Puerto Rico, Costa Rica, Panama, Chile, Dominican Republic, the Philippines and Australia; in the rest of the world the new logo has been released in 2010, meaning the old logo has been phased out entirely (most recently, France and Mexico switched to Pepsi's current logo). The UK started to use the new Pepsi logo on cans in an order different from the US can. In mid-2010, all Pepsi

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variants, regular, diet, and Pepsi Max, have started using only the medium-sized "smile" Pepsi Globe. Pepsi and Pepsi Max cans and bottles in Australia now carry the localized version of the new Pepsi Logo. The word Pepsi and the logo are in the new style, while the word "Max" is still in the previous style. Pepsi Wild Cherry finally received the 2008 Pepsi design in March 2010.

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Product Positioning Of Pepsi Co.
Pepsi prefers to position itself as the beverage choice of the “New Generation”, “Generation Next”, or just as the “Pepsi 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. Though Pepsi’s main emphasis is on this segment but they also have a focus on the 12 to 18 year old market. The rich deep blue coloring represents eternal youthfulness and openness. Marketing plans like “Yeh Dil Maange More”, “Got Another Pepsi”, “Ye Pyass Hai Badi” have made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category.

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Pepsi Marketing Mix
Contributing to this industrial revolution among other industries were Manufacturing, Agricultural, Automotive, Chemical, Hotel, Banking Business Services, Real estate, Tourism and information Technology to name a few. But on such industry that has been holding onto its share of the market since its inception note in the USA - its birthplace - but all across the globe as well as the Beverage Industry. It has introduced icons that very few are oblivious to. The industry and its role in the Pakistan economy, the conditions under which it is working and the effects it has on the consumers is to remain the concern of this study. According to Richard D. Brown and George J. Petrol (1986), the history of the Beverages industry start from 1886, when Atlanta chemist "Doe" Pemberton developed a reddish - brown syrup with a smidgen of cocaine (for medicinal purposes) to compete with the many patent medicines and cure - all elixirs of that time. His company recommended it for the relief of hangovers headaches, menstrual pains, and a host of other problem. One warm summer day Pemberton took some syrup down to will is venerable at Jacob's Drug Store in Atlanta. An ounce of the mixture was put into a glass, which was then filled with water and ice, creating the first Coca-Cola. The headquarters of Coca-Cola, now listed by fortune as one of the 50 top corporations in the United States, is still in Atlanta, Georgia. The actual sale and distribution of that magic elixir - which, needless to say, on longer contains cocaine - is handled largely by a number of independent bottlers. These bottlers buy syrup, mix it with carbonated water, and distribute it to retailers in their area. The number of retailers who sell Coke to the public almost exceeds counting. In this way a company with a magic formula but limited capital spread its name around the country and eventually around the globe. 53 | P a g e

The organizational formula for merchandising apparently also had a bit of magic. But, of course, the product was one that people wanted, which is perhaps the first law of success in marketing. Coke had been successful in establishing a strong loyal consumer force, on whom it still relies to this very day. Dong business was no sweat once the industry had set itself for good and the consumer’s tasted veered. Everything seemed to go smooth enough until hell finally broke loose. Trouble started creeping into the very foundations of coke who stated loosing a major share of its market. Thanks to Pepsi. With virtually the same history Pepsi started gaining ground and proved to be an excellent example of how razzle-dazzle advertising sharp marketing and an efficient distribution system can turn a loser in to a winner in a remarkably short period of time. Pakistan today has a very competitive beverages market. Opportunities for this industry to establish itself firmly in this country were grim at first because of the country's low per capita income and because of the business' status depending on consumer impetus. But much of it was more or less the same when the business took a start in the USA as well. The Beverage industry has undergone a revolutionary change during the last couple of decades. The form of processing and the machinery used these days has developed and is very sophisticated. Automatic and computerized plants have been installed in the industry thus making it an industry which is dealing in million of gallons of beverages yearly. Pakistan Beverages, the bottlers for Pepsi, and Coke bottlers National Beverages claim that their primary goal is not to undermine the competition but to expand the market as a whole. Market expansion, in fact, seems to be the buzzword these days in the beverage industry. Analysts believe the potential market in Pakistan is though to be enormous because the country's per capita consumption is as low as 14 bottles per year. Compare this with a 120 bottles per year in the Philippines, and the scope for expansion becomes more than obvious. 54 | P a g e

HISTORY OF PEPSI COLA It starts with a small drug store in North Carolina. This little store belonged to young chemist by the name of "DOC" BROADHAM. He invented a drink that the customers called BROAD'S drink. In 1903, Bradham got its drink registered formally by the name of PEPSI COLA. He set his own company and kept its sales improving gradually. By 1909, more then 250 bottlers in different American states had been allowed to sell under the PEPSI COLA license. PEPSI COLA was first sold in the standard size of 6.5 ounces. In 1932 PEPSI COLA took courage enough to introduce a bottle of 12 ounces. In 1950 the PEPSI COLA'S formula had been changed by reducing its sweetness and calories and a new advertising campaign "Refresh without filling" had been launched effectively. Under the supervision of the diligent sales staff and the Marketing experts, PEPSI COLA began setting new records of eminence. At 30 plants per year, new plants were established all across the globe. A new attractively designed bottle had been introduced in 1957 in place for the 20 years old bottle, and the product line had been enhanced to introduce the new flavors of TEAM & MIRINDA. Sindh Beverages (Pvt.) Ltd., claim that PEPSI COLA today is available to more than a billion people in 153 different countries which include the central independent states and China. Progress Report 1996-98 1996  Refranchised 655 restaurants  Closed 379 underperforming restaurants  Restructured Pepsi-Cola International  Enlisted strong new bottler in Venezuela  Created worldwide snack and beverage units  Announced plan to sell non-core restaurant chains  Repurchased 54 million shares 1997  Spun off Pizza Hut, KFC and Taco Bell as Tricon  Refranchised New Zealand restaurants via public offering  Divested five non-core restaurant chains  Divested PFS restaurant supply unit  Received $5.5 billion in restaurant disengagement proceeds  Divested Syrena candy business in Poland 

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Divested Gerber baby food business in Mexico  Placed more than 150,000 beverage coolers and vendors in the U.S.  Enlisted new bottlers for territories in Brazil, Philippines, Japan and Scandinavia  Renegotiated bottler contracts to centralize fountain beverage distribution  Expanded U.S. fountain beverage sales and service group  Acquired Pehuamar snack business in Argentina  Divested Obregon flour mill in Mexico  Repurchased 69 million shares 1998  Acquired Tropicana, world’s largest branded juice company  Announced public offering of The Pepsi Bottling Group  Launched new blue globe logo for brand Pepsi  Launched WOW! fat-free snacks nationally in the U.S.  Launched Pepsi One, sweetened with Acesulfame K  Acquired Smith’s Snackfoods Company, Australia’s market leader  Acquired snack chip businesses in France, Holland, Belgium  Divested BN biscuit business in France  Entered joint venture to become snack chip leader in South and Central America  Acquired Barcel, Chile’s second-largest snack company  Expanded stake in Tasty Foods Egypt  Acquired bottling operations in four U.S. states and two Canadian provinces  Placed 190,000 beverage coolers and vendors in the U.S.  Acquired Cracker Jack snack brand  Agreed to sell Polish chocolate and biscuit units  Consolidated Pepsi and Frito-Lay U.S. media buying  Repurchased 59 million shares.

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Pepsi-Cola Brands

PepsiCo is home to hundreds of brands around the globe. Listed here are some of our most recognized. Pepsi
• • • • • • • • • • •

Pepsi Pepsi Max Pepsi Max Cease Fire Pepsi Natural Pepsi One Pepsi Throwback Pepsi Wild Cherry Caffeine Free Pepsi Diet Pepsi Diet Pepsi Wild Cherry Caffeine Free Diet Pepsi

• • • • •

Slice - Diet Orange Slice - Grape Slice - Orange Slice - Peach Slice - Strawberry

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• • • • • • • • • •

Tropicana Fruit Punch Tropicana Lemonade Tropicana Light - Lemonade Tropicana Light - Orangeade Tropicana Orangeade Tropicana Pink Lemonade Tropicana Strawberry Melon Tropicana Twister Soda - Diet Orange Tropicana Twister Soda - Grape Tropicana Twister Soda - Orange

Tropicana Twister Soda - Strawberry Mountain Dew
• • • • • • • • • • • •

Mountain Dew Mountain Dew Code Red Mountain Dew Distortion Mountain Dew Live Wire Mountain Dew Throwback Mountain Dew Typhoon Mountain Dew Voltage Mountain Dew White Out Caffeine Free Mountain Dew Caffeine Free Diet Mountain Dew Diet Mountain Dew Diet Mountain Dew Code Red

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• • • • • • • •

Aquafina Aquafina FlavorSplash - Grape Aquafina FlavorSplash - Peach Mango Aquafina FlavorSplash - Raspberry Aquafina FlavorSplash - Strawberry Kiwi Aquafina FlavorSplash - Wild Berry Aquafina Sparkling - Berry Burst Aquafina Sparkling - Citrus Twist

Starbucks (Partnership)
• • • • • • • • • • • • • •

Frappuccino - Caramel Frappuccino - Coffee Frappuccino - Dark Chocolate Mocha Frappuccino - Light Vanilla Frappuccino - Light Mocha Frappuccino - Mocha Frappuccino - Vanilla DoubleShot Coffee Drink DoubleShot Light Coffee Drink DoubleShot Energy - Cinnamon Dulce DoubleShot Energy - Coffee DoubleShot Energy - Mocha DoubleShot Energy - Vanilla DoubleShot Energy - Vanilla Light

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Chapter No.3

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Pepsi-Cola In Pakistan
Pepsi International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. In Pakistan It also has proved itself to be the No.1 soft drink. Now days Pepsi is recognized as Pakistanis National drink Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke’s basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position in Pakistan. Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC i.e. "Kentucky Fried Chicken.” We also did analysis of the soft dink industry in Pakistan and world wide. The soft drinks set to become world's leading beverage sector. Global consumption of soft drinks is rising by 5% a year. The market in Pakistan is surely dominated by Pepsi. It has proves itself to be the No.1 soft drink in Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going higher and higher. Pepsi is the choice soft drink of every one. It is consumed by all age groups because of its distinctive taste. Compared with other Cola in the market, it is a bit sweeter and it contributes greatly to its liking by all. Consumer’s survey results explain the same outcome and Pepsi has been declared as the most wanted soft drink of Pakistan. Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke’s basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position in Pakistan. In coming futurePepsi is also planning to enter into the field of fruit drinks. For this purpose it has test marketed its mango juice in Karachi for the first time.

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When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, "Teem" to compete with 7up. It successfully, after some years, took over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share where as the coke just has 20% markets share. Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC i.e. "Kentucky Fried Chicken.”

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Unique Selling Proposition (USP) Of Pepsi
The unique selling point of Pepsi in Pakistan is its exclusive advertisement campaigns. Infect, the major reason of Pepsi’s large market share is its fervent promotional campaigning. Pepsi has an edge because of its strong brand image, and if you have a brand you have a immediate advantage because you have a backbone, or a framework on which to hang your products. Pepsi’s ads reflect the social, cultural values of Pakistan, whereas the ads of coca cola (its major Competitor) mostly have Western or a Turkish theme. Their current slogan “Pepsify kro gay” has been highly successful. The main stream celebrities of Pakistan are used for Pepsi’s promotions thus having them to endorse a brand is a guaranteed success in itself.

Promotion Strategy
Pepsi promotes its products in a many ways, but focuses mainly on getting products associated with entertainment icons that appeal to youth. The first major use of this technique was the signing of Pakistan cricket team as celebrities. Pepsi has followed this strategy by signing other pop music stars like junaid jamshed and other singers. Two other areas of entertainment that have been used by Pepsi to promote its brands are sports and movies. Sports are a popular source of entertainment throughout the world and is a using it to promote the brand is a main focus of Pepsi. Since sporting events are seen many times by fans, it provides a good opportunity to increase brand recognition. Movie stars are also popular throughout the world and are greatly admired by people, so using them in advertising has a positive effect brand image. Some of the ways in which Pepsi attract consumers are: ¨ Free Samples ( New products) ¨ Discounts ( RAMDAN Offers) ¨ In-Store Displays – Signs, banners etc. ¨ Entertainment – Games with free T-shirts, Pepsi points under the cap etc. ¨ Sponsorship – sports teams/clubs/events.

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Segmentation Of Pepsi In Pakistan
Segmentation Variables
World Region Country Cities Density Climate Asia Pakistan All major cities of Pakistan Urban Hot and Dry 14-30 Male, Female 1-2, 3-4, 5 + Married, Unmarried Rs. 10,000 + From middle class to upper class Schools, Colleges, Universities Major religion of Islam, Christianity and Hinduism Asian Pakistani Middle class, upper class Actualizes, Fulfilled, Believers, Achievers, Strivers, Experience’s markers and Strugglers


Age Gender Family size Family life Cycle Income Occupation Education Religion Race Nationality

Social Class Lifestyle

Occasions Benefits User Status Loyalty Status Readiness Stage Parties, Birthdays, Sports, Regular Occasions Quality Taste First Time User Strong Aware, Interested

Place (Distribution) Strategy
Distribution is an important aspect of success in the beverage industry. Since the cola companies want to focus on making syrup and marketing, they need to have strong, loyal bottlers. This is especially the case in foreign markets where the cola companies fiercely battle for good bottlers. The building of bottlers through joint ventures and the increased maintenance of current

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bottler relationship should be the main focus of Pepsi’s international marketing. One of Coca-Cola’s major strength’s is its ability to build relationships with its bottlers. Coca-Cola is very methodical in making sure that its bottlers are happy, while Pepsi has been known for neglecting its bottlers. This is one area that Pepsi must improve if it is going to take market share away from Coca-Cola. Product is distributed through PepsiCo distribution centers. The distributor delivers it to the grocery retailers, vending companies, restaurants, and warehouse/club stores. The distribution segments can be broken down into the following: • Convenience Stores and Gas Stations: 12% of the market • Vending Companies: 11% of the market • Restaurants: 20% of the market • Warehouse/Club Stores: 6% of the market • Super Markets and Retail Stores: 51% of the market.

SWOT Analysis Of PepsiCo In Pakitan
One of the most important part of the Marketing Plan is SWOT analysis. Lets see the SWOT analysis of PePsi Co in Pakistan

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1. Company Image: It also is a reputable org. and is well known all over the world. Perception of producing a high quality product. 2. Quality Conscious: They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo. 3. Good Relation with Franchise: Throughout its history it has a good relation with franchisers working in different areas of the world where they have the production facilities. 4. Production Capacity: It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia. 5. Market Share: It has a highest market share i.e. 62% in Pakistan and leading a far step head from its competitors.

6. Large No. of diversity businesses: This is also its main strength as it ahs diversity in many businesses such as i. Pepsi beverages ii. Pepsi foods 67 | P a g e

iii. Pepsi Restaurants. 7. High Tech Culture: The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database an they use computers as business tools for analysis and quick decision making. 8. Sponsorships: They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programs like music etc. WEAKNESS 1. Decline in taste: During the last years, it was published in Financial post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months.

2. Political Franchises: Such as in Pakistan, Hamayun Ahkhtar is its franchisee who has a strong political support from a political party which is in opposition. In; their era in government less taxes are imposed on them but relation increases as they come in opposition. So the selection is not appropriate as this thing is harmful to their image as well as the strategies. 3. Short term Approach: 68 | P a g e

They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as “nothing official about it”. 4. Weak Distribution: They lack behind in catering the rural areas and just concentrating in the urban areas. 5. Low consumer knowledge: Unable to maximize local consumer knowledge. 6. Lack of soft drink: Lack of soft drink “know-how” as a result of diversified business units and generalist managers OPPORTUNITIES 1. Increase Population: As almost in all over the world growth rate is increasing which in turn increases the demand of products and necessities and especially in Asia the market is growing at a faster rate as compare to other continents. So they have to attract new entrants.

2. Changing social trend: As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product. 3. Diversification: 69 | P a g e

They may enter in garments business in order to promote their brand mane, by making sports cloths fro players which represent their name by wearing their clothes. 4. Distribution of snack foods: Opportunity to distribute Pepsi snack foods in the future. THREATS 1. Imitators: They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product. 2. Government Regulation: They face problem if government employ taxes on them which force them to raise the price of their product. 3. Corporation’s shortage problem: Again this is also a serious threat from it suppliers as if supplier is unhappy with the company. He may reduce the supply and exploit the company. This action will surely affect the production process.

4. Non-carbonated substitutes: Non-carbonated substitutes, such as juices and tea brands are maintaining a strong foothold in the market. 5. Political instability:

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The big threat to Pepsi in Pakistan is Political instability and civil unrest. 6. Threat of labor strikes: External threat of labor strikes and power outages in Pakistan.


We have discussed SWOT analysis of Pepsi-Co in our previous topic now here we are going to discuss the TOWS Matrix of Pepsi-Co, keeping in mind its SWOT analysis. Following is the detailed analysis of Pepsi-Cola TOWS matrix: 71 | P a g e


One weakness that Pepsi posses is that it has very strong taste it really feels that something highly toxic going inside the body, where as the same product of the coke is not much strong.

They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product. During the last years, it was published in financial post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months. If they soon pay no attention towards that this will create a big problem for them.

• •

Large size may lead to conflicting interests. New one calorie products have no existing customer base; generic brands can make similar drinks – cheaper. It is also big threat for any company people may like or dislike new launching product.

Such as in Pakistan, Hamayun Ahkhtar is its franchisee who has a strong political support from a political party which is in opposition. In; their era in government less taxes are imposed on them but relation increases as they come in opposition. So the selection is not appropriate as this thing is harmful to their image as well as the strategies. So this may become a big threat for the Pepsi.


They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as “nothing official about it”. If they don’t focus on sudden changing’s in their advertising then they can convert this weakness into opportunity.

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They lack behind in catering the rural areas and just concentrating in the urban areas. They should try to increase their distributions and also focus on capturing rural areas; this will become a big opportunity for them.

The other big weakness on Pepsi is that they don’t pay any attention towards garments. They may enter in garments business in order to promote their brand name, by making sports cloths fro players which represent their name by wearing their clothes. That must increase the customer and income of the Pepsi.

High expenses may have trouble balancing cash-flows of such a large operation. The staff may show dishonesty. They should try to pay much attention towards their cash flow, and audit there statements on regular basis.


In many countries Pepsi had more expensive products than Coke; such a high price may limit a lower income family from buying a Pepsi product, therefore which is a big threat for Pepsi that may Pepsi have to face in the future.

In foreign countries Pepsi have many branches with different flavors as compare to Pakistan, which has only 2 or 3 Pepsi products. Non-carbonated substitutes, such as juices and tea brands are maintaining a strong foothold in the market. Pepsi has a big threat from COKE, which are its main competitor from about 100 years.

Pepsi is a foreign company therefore they have a big threat every time on them of Political instability and civil unrest.

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced.

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Continuous efforts to research trends an reinforce creativity, if they fail in their efforts then there is a big threat for the company. The competitors may get benefit by their plans.


The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency and that will become such a big opportunity for Pepsi.

It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia. Established network of 45 distributors each supplying 1,100 retailers. High per capita soft drink consumption – average of 22 servings compared to 5 for Pakistan. At will become such a big opportunity. Due to large production the product of Pepsi is always available in the market and that will become useful to attract taste lovers customers.

Large No. of diversity businesses is also its main strength as it ahs diversity in many businesses such as Pepsi beverages, Pepsi foods, Pepsi Restaurants, and due to large number of diversity they can capture more customer, therefore it will become such a big opportunity for Pepsi.

Pepsi is also a reputable organization, and is well known all over the world. Perception of producing a high quality product and strength can become a big opportunity for Pepsi if they use it in well arranged manner, such as advertising more and also by conducting concerts to attract more customers.

They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo, if they show test reports on label of there products this will also attract customers.

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They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programmed like music etc. this will become such a big opportunity to build such a large number of customers. So we can say that it is one of the big strength that may become a big opportunity for Pepsi.

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PEST Analysis of Pepsi

The Pest Analysis identifies the political, economical, social a technological influences on an organization. POLITICAL INFLUENCES: - The production distribution and use of many of PepsiCo product are subject to various federal laws, such as the Food, Drug and Cosmetic Act, the Occupational Safety and Health Act ad the Americans with Disabilities. - The businesses are also subject to state, local and foreign laws. - The international businesses are subject to the Government stability in the countries where PepsiCo is trying get into (underdeveloped markets). - The federal, state, local and foreign environmental laws and regulations. - The businesses are also subject to de taxation policy in each country they are operating. - They also have to comply with federal, state, local and foreign environmental laws and regulations.

ECONOMIC INFLUENCES: - The companies are subject to the harvest of the raw material that they use in their snack foods, soft drink and juice, like corn, oranges, grapefruit, vegetables, potatoes, etc. - Because of they rely on trucks to move and distribute many of their products, fuel is also an important subject, so they are subject to the fuel prize. sociocultural SOCIOCULTURAL INFLUENCES: - PepsiCo and moreover Pepsi is subject to the lifestyle changes, because of it bases her advertising campaigns in a concrete kind of people with an special lifestyle, it is for that PepsiCo has to pay a special attention on the lifestyle changes. - Particularly in the United States Pepsi drinkers are very defined, there is a kind of people who drinks Pepsi another kind who drinks Coca-Cola, it is for that they have to pay attention to the social mobility for not losing a possible market. - Taking into

account that PepsiCo is trying to introduce itself in underdeveloped markets, they have to be careful with the possible problems with the governments of this countries, and with the problems could rise from PepsiCo act with the people of this countries. rize fluctuation, and to possible fuel crisis. - Operating in International Markets involves exposure to volatile movements in foreign exchange rates. The economic impact of foreign exchange rates movements on them is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. PepsiCo is also subject to other economical factors like money supply, energy availability and cost, business cycles, etc. TECHNOLOGICAL INFLUENCES: - PepsiCo is subject to new techniques of manufacturing, for their three business sectors, snack food, juices and soft drinks. - It has to pay attention to the new distribution techniques. - And they have to fix their attention in the competence developed, to know about the new products. Porter’s Diamond: The Porter’s Diamond Analysis tries to explain the Competitive Advantage of Nations. There are four attributes of a nation comprise Porter’s Diamond of national advantage, they are: Factor Conditions: The basic factor conditions are natural resources, climate, location, the more advanced factor conditions are skilled labour, infrastructure and technology. There are some of these factors that can be obtained by any company (like unskilled labour and raw materials) and, hence, do not generate sustained competitive advantage. Even though, we have to take into account that specialized factors involve a heavy and sustained investment, we have to know that if we are able to achieve them, we could generate a competitive advantage. Some of the factor conditions PepsiCo has to take into account, in each coun

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Chapter No.4

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Sting Energy Drink

Pepsico has now entered the energy drinks market by launching ” Sting” in Pakistan recently. The media break is pretty much visible with good frequency on selected TV channels. The quick feedback is that the selected channels are hitting the right audience. Besides, we can hear the disruptive radio executions also on most radio channels. Sting Energy Drink is a carbonated energy drink from PepsiCo International. It was launched in Pakistan in 2010 with a widespread advertising campaign. Sting is launched in two flavors – “Gold Rush” and “Berry Blast” at a price of Rs. 60. The product is widely distributed and pretty much available everywhere. The highlighting factors are that it tastes better, it is priced much lesser than the competition, easily accessible and that it provides a timely boost of energy that keeps you going in your busy life in a balanced way.

Name Bicolor Type Manufacturer Distributor Availability Introduced Color Flavor Variants Related Website


Carbonated Energy Drink PepsiCo

Pakistan, Malaysia & Philippines. 2010

Gold Rush & Berry Blast


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Carbonated water, Sugar, Citric Acid, Artificial flavour, Maltrodextrin, Sodium Citrate, Sodium Hexametaphosphate, Taurine, Potassium Sorbate, Caffeine, Sodium Benzoate, Tartrazine, Inosital, Calcium Disodium EDTA, Modified Food Starch, Panax Ginseng Extract, Niacinamide, Sunset Yellow, Pyridoxine Hydrochloride and Cyanocobalamin.

Nutritional Information
Serving Size: 250ml

Per Serving Energy(Kcal) Carbohydrate (g) Vitamin B3 (mg) Vitamin B6 (mg) Vitamin B12 (mg) Ginseng Extract (mg) Inositol (mg) Taurine (mg) 160 40 7 0.7 0.9 1.6 17 124

Advertising Campaign
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Sting Energy Drink's Hummer traveling down the streets of Karachi. After the launch of sting in Pakistan, PepsiCo started a widespread campaign, which included road advertising and tv commercials. Starting from Karachi, the Hummer (advertising vehicle) travels through different areas and offers free Sting energy drink to people on the roads. The TV commercial was shot in Malaysia in which a person is shown generating electricity and charging a car battery after drinking the Sting energy drink. It airs on all Pakistani TV channels.

Pepsi Sting Big Change In Price
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Energy drinks has gain a market which don’t care much about the price as they are always expensive then other drinks. Check out the prices of almost all energy drinks in Pakistani market in which you can also see the price of Pepsi’s energy drink ‘Sting’ of Rs. 60/Though Pepsi was already giving their energy drink in less price if we compare it with others. There were only few who are selling in less price than Pepsi but now they have leave everyone behind by giving the same amount of energy drink in Rs. 20/- Pepsi has changed their 250 ml energy drink price from Rs. 60/- to Rs. 20/- and has become the cheapest energy drink provider. If it would be of any unknown company then one could doubt about their quality but it is from one of world’s famous company Pepsi. Even when they sell their energy drink in high price, it was my favorite. And now they are so cheap that I can have them more often. Well there are many people who are not impressed by ‘Sting’ and says that it is just another carbohydrate drink, not an energy drink. People believe that energy drink give you some more hours to wake up, it stimulates your brain to work more, however it is not the case with me. I’ve tried all energy drinks and not one of them become successful to escape me from sleep. So, for me, these all energy drinks are new kind of taste, in which I like ‘Sting’ most. It is good for me now that I can enjoy the same quantity of energy drink in just Rs. 20/Pepsi has changed the tin packing into disposable glass bottle which has tin cap on it. Their tin pack is still of Rs. 60/- which I believe would be older stock in market. They would be giving glass bottle from now on.

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Chapter No.5

Pakistan’s Energy Drinks Market

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We think Red Bull was the first successful energy drink in the market. But afterward companies realize that it is a very big market of those people who like energy drinks. So other companies also jumped in to share their part. Recently we have seen many companies in Pakistan, like Pepsi and Shezan, who have jumped in energy drinks business. One thing is common in all energy drinks that they are costly then other drinks; juices, malt, carbohydrate drinks etc. They have a special market which is increasing day by day. We haven’t seen a shift of people from their regular drink to energy drink but it acts as an add on in drink list. However some people prefer to go for energy drinks only. After lots of energy drinks in market, all are trying to compete each other in any way possible. They are trying to give a better taste because taste is the most prominent change in these energy drinks. Taste is not acceptable in mass market, however many are trying now to increase their market share by giving a different taste. Second thing is their price, they are trying to reduce the price to gather a larger share like a big company Pepsi have introduced their energy drink ‘Sting’ in just Rs. 60/- as compare to Red Bull the most famous energy drink costs above Rs. 125/- Thirdly they are working on distribution, trying to make their drinks available in all parts of the city, in every shop. Few energy drinks have different strategy to remain with their specific market. We are sharing our experience with almost all the energy drinks available in market.

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Red Bull

The most famous energy drink in the market. It was the first one to introduce energy drinks in Pakistani market. Red Bull kept it’s price high and remain with their specific market they target. Their price is Rs. 125/- which makes it the most expensive energy drink in the market. It is mostly available in posh areas of the city in start. Afterward there is a big change that they seek through an other interesting market and start to supply their bottles to Pan wala shops which was not bad at all. People over there start trying it and we think that idea didn’t catch by mass market because it’s hard to see Red Bull at Pan wali dukan anymore. They have shifted to Pepsi’s ‘Sting’. We don’t like their taste much because it seems to me that we are drinking any cough syrup. Though who are fan of Red Bull taunt to all other available energy drinks in market that they have sweeter taste.

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Booster is a German energy drink brand. It attracts one from the start as one looks to its packing. Like all other energy drinks available in long think tin packs, this is available in small, fat plastic bottle. Its packing is different from all energy drinks in the market so it appeals you at the first place. Second important thing is its price, it is one of the cheapest energy drink in market after Ozo. But this is an imported drink which is based in Germany so people would likely to trust the quality of drink. It is of Rs. 50/- but if one buy it from super stores or whole sale market then one might also get it at the price of Rs. 45/- We have seen this rates in Hyperstar. Third interesting thing about Booster is its awesome taste. This was the first energy drink which makes a good impression of whole industry in my mind. Earlier I’ve tried Red Bull only and I thought that all energy drinks would be like cough syrup. It’s unique bottle design calls us to try it for once and then we become a regular customer of it for as long as Pepsico’s Sting jumped in. We have also compared Booster with Red Bull in my view.

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There are two kind of energy drinks in the market. One is the red family and other is the yellow family. Red family has its own taste and there are very few in this, for instance only ‘Red Bull’ and red ‘Sting’. All other energy drinks in market are from yellow family which has almost a same taste with little variations. Variations are like less sweet or more. Yellow ‘Sting’, ‘Booster’, ‘Power Full’, etc. all came in yellow family. Ozo can be also count in yellow family but it has a little different taste. Most important thing about this energy drink is that is is available in few stores only, they have low distribution cycle which makes it hard to find. It is also in different bottle rather than typical energy drinks thin and large tins. This is available in green glass small size bottle with a plastic cap. Taste of this drink is acceptable but we haven’t tried it more because of its availability. Many times we’ve thought to drink this but we didn’t find it in any store. This is the cheapest energy drink in the market till now which costs Rs. 45/- in retail market. If they work on the availability of this drink then it could become beneficial for the company.

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Power Full

Power Full is also a new energy drink in market. We guess they all have started this year except few like Red Bull, Booster and Ozo which were available last year too. Red Bull would be the oldest one but new energy drinks are taking their share and at one side they are reducing the share of Red Bull but at the other side they are creating a larger market for energy drink users. Power Full promote their energy drink through road hoardings and we thought to give it a try. It’s bottle didn’t attract us a lot but its red color on tin indicates us that it would be something like Red Bull. After opening the can I came to know that it is from the yellow family and after taking a sip I came to know that its taste is like Booster. However it is less sweeter than Booster and people might like to have this instead of Booster. But it’s price is Rs. 80/- and for us sweet is good. We would prefer Booster on Power Full. Though some people like Power Full experience and it kept them awake for whole night. If it serves the meaning of energy drinks then it could remain in the market otherwise we don’t see its space after lot of others with better efficiency and taste

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After seeing lot of potential in energy drinks market, Shezan also introduced its energy drink with the name of Speed. Their packing is cool and weS was looking for something different. Plus their price was like of Red Bull, We bought it for Rs. 120/- whereas new energy drinks have tried to beat the prices. Speed has kept its price above which might attracts people about its quality and uniqueness. Well we tried it and found it out the typical yellow flavor energy drink like others mentioned above. Neither the taste is new nor the low prices. It would be only one time try and then shift to other international brand like Booster which is giving same quality but in less rates, less than Speed’s half price. Though one person share his experience with Speed that he remain fresh whole night after having this drink.

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Recently Pepsi introduced their energy drink in Pakistan with the name of Sting. They must have came in the market after lot of research. They checked the loop holes in energy drinks market and try to fix it from the product. Earlier energy drinks was considered as a sour drink which people take to energize themselves and to wake up late at night. Sting has add better taste in it. They have made it full of flavor with ingredients of energy drinks as well. People in large loves it taste and most of them have started drinking energy drinks after the arrival of Sting; count us in too. They have introduced two flavors in energy drinks which we believe compete all energy drinks available in market. For competing Red Bull they have introduced their red berry flavor in red can. Taste is awesome and that is my favorite flavor energy drink. For all others who used yellow color and have their own specific taste, Sting yellow is exactly the same, might be little better in flavor. Most important about Sting to catch the mass market is its rates. They are one of the cheapest energy drink in the market except a few like Booster and Ozo. Sting can is of Rs. 60/- If a less price energy drink came in market, people would think about its quality and might not go for it. But when a big company like Pepsico came up with energy drink, whether its price low, people won’t question about its quality. 91 | P a g e

Other Energy Drinks

After these famous energy drinks in Pakistan which we mentioned above there are many others. Above drinks are available at most of the stores but some drinks are available only in few stores. Even we’ve seen few only in one store, We don’t know where they distribute their drinks. In this we have Shark energy drink, Power Horse energy drink etc. these are mostly from the yellow family. We guess it would be easy to make a drink of yellow family that’s why everyone came up with this.

Comparison Chart
Energy Drinks Sting Red Bull Ozo Speed Power Full Booster Price Rs.60/Rs.20/Rs.125/Rs.45/Rs.120/Rs.80/Rs.50/Flavors Two One One One One One Tin Yes Yes Yes Yes Yes Yes Regular Yes No No No No No

It Shows from the above given chart that sting energy drink have a competitive edge on its competitors by providing energy drink in two different flavors and also in regular glass bottle. And it is available on affordable cost in any market of Pakistan.

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Chapter No.6

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Research Methodology
The survey was carried out to understand the perception about the Energy Drinks, which are consumed on the daily basis by different Consumers in the world and what are the actual ingredients, effects and hidden risks of energy drinks. And also the survey was carried out to understand the Pepsi Cola history and its strategies, policies and marketing campaigns for its different products. The data was collected through an informal discussion and observation. The survey was carried out also to understand the Pepsi cola Pakistan and the performance of the Sting energy drink and also verify its unique selling point.

The methodology used to collect information and data about the Pepsi cola and energy drinks for the project was mainly analytical and qualitative in nature. Allotted time was spent in the markets of Lahore and on internet net to understand how the energy drinks play vital role in our today’s trend. The data collection was done in the following manner: 1. Primary Data Collection: Data collection from source through personal interview and collection of data through magazines, books and company records etc. 2. Secondary Data Collection: Data collection through surveys and visiting on different web sites. 3. Data Collection through Observation: Data collected by observation at the outlets and interacting with each outlet.

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Chapter No.7

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One of the biggest concerns is that we just don't know enough about the effect of the combination of ingredients in energy drinks. Many ingredients are believed to work synergistically with caffeine to boost its stimulant power. For instance, one can of Red Bull contains 1000 mg of taurine. A German double-blind study compared a taurine and caffeine drink, a caffeine-only drink, and a placebo drink. Stroke volume--the volume of blood ejected with each beat of the heart--was increased only in the group taking the taurine-and-caffeine drink. Taurine appears to play an important role in muscle contraction (especially in the heart) and the nervous system. Red Bull also contains 600 mg of glucuronolactone, a substance that is naturally found in the body. There is a lack of published information on the health effects of glucuronolactone supplementation in humans or on the safety of this combination. Energy drinks contain sugar (although sugar-free energy drinks are now available), because it is a quick source of energy. B vitamins are sometimes added to energy drinks in small amounts. It makes energy drinks appear healthy, although they probably contribute little. B vitamins are needed to convert food into energy.

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Energy Drinks Should Not Be Mixed With Alcohol

Red Bull and vodka has become a popular mixed drink at bars because it has a reputation for reducing the depressant effects of alcohol (e.g. fatigue) while enhancing the "feel good" buzz. But while people may not feel impaired, their blood alcohol concentration is still high. People may consume larger amounts of alcohol as a result. A study compared the effects of alcohol alone to an alcohol plus energy drink combination. Researchers found that the alcohol plus energy drink significantly reduced subjective alcohol-related symptoms such as headache, weakness, dry mouth, and impairment of motor coordination, even though breath alcohol concentration and objective tests of motor coordination and reaction time didn't reflect this. The caffeine in energy drinks is also dehydrating, which may slow the body's ability to metabolize alcohol.

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Energy Drinks Should Not Be Consumed During Exercise
Energy drinks should not be confused with sports drinks such as Gatorade, which are consumed to help people stay hydrated during exercise. Sports drinks also provide carbohydrates in the form of sugar and electrolytes that may be lost through perspiration. The caffeine in energy drinks acts as a diuretic and promotes dehydration. A California high school was the first to ban energy drinks after two students experienced dizziness and disorientation after drinking an energy drink before football practice.

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Energy Drinks Should Not Be Consumed by Children

Energy drinks have high levels of caffeine and sugar that create a major spike in your adrenaline, and blood pressure. After burning off the caffeine high and the sugar high associated with these energy drinks a person crashes and burns. That's why when little kids drink energy drinks, or have a can of soda they get all this energy once the body sends the caffeine and sugar coated junk to a child's bloodstream. They will be running around, practically jumping off the ceiling with the high the drinks have caused. And then several hours later, your child becomes crabby and tired, and feels like taking a nap. Energy drinks are not a good thing to let your children drink, due to the high levels of sugar and caffeine. Besides you will have a caffeine sugar junkie begging you for his next fix. You'll be pestered by, "Mom can I have another energy drink?" And the begging won't stop because the more you let your child drink this dangerous concoction the more he will crave it. It's just like we adults that have to have coffee to get started in the morning. If we don't have any caffeine we feel tired, lethargic, and we can get a great big headache. This happens in children also, but because they have smaller bodies they feel the rush of caffeine and sugar faster than adults and crash and burn sooner. Besides having caffeine, sugar- addicted child driving you crazy for more sweet stuff, your child's health can be ruined by energy drinks. High levels of sugar can raise a person's triglycerides that when high enough for along time can harm your child's health. High levels of caffeine consumed over a lengthy period of time can cause harm to a child's developing body. And the high levels of sugar can cause a child to become overweight

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Energy Drinks Should Not Be Consumed By Pregnant Woman

Women who are pregnant are advised to avoid energy drinks (especially during the first three months of pregnancy), as high amounts of caffeine can increase the risk of miscarriage, difficult birth and delivery of low-weight babies.

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Chapter No.8

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Lack of energy is the single most common health complaint among people in the United States and around the world. After the deep study on energy drinks now we can easily understand the benefits and disadvantages of energy drinks. Studies have shown that "red pepper" and "caffeine" significantly increased energy expenditure in test subjects yet there are few products if any that provide a means for those seeking a remedy for this energy "void". Products are available with caffeine as the main "energy booster" but few if any products that combine caffeine and red pepper. We have found that "energy drinks" provide the initial quick energy boost but also has a quick energy crash when the caffeine wears down. The also make you go the bathroom when you may be in the middle of an something important. "Energy bars" on the other hand have a delayed reaction and do not provide the initial "energy boost" you need when you need it. We have also found that that these products do not provide consumers with nutritional support in any form. Energy drinks are just concentrated forms of caffeine sodas. Energy bars are packed with calorie packed ingredients that may cancel out the low calorie diet you may be on. We know that there are many pro and amateur athletes, dieters, workers, and anyone with an interest in improving energy levels individually or corporately that are concerned with the interests expressed here and I will share future findings on these matters.

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Although the Pepsi Cola doing good advertising campaigns for running its new product sting energy drink. But there are some recommendations for Pepsi Cola to increase the sale of sting energy drink and to get the competitive advantage on its competitors like Red Bull, Power Full, Booster, Speed and Other energy drinks in Pakistan’s market. • The Company should run the product promotional campaigns in different markets of Pakistan like Nestle and other companies are doing. Currently they are only concentrating on Karachi’s market but there is a wide market for energy drinks sale in Pakistan. So they have to think about that one.

• The Company should target different universities of Pakistan and do some
promotional activities to promote the sale of sting energy drink like coca cola is doing it, for its different products e.g. Sprite Mad About TV.

• The Pepsi Cola Should concentrates to run such a TV programs to attract a
consumer towards them, like Coca Cola is doing e.g. Coke Studio.

• The Company should also have to take a look on street shows or different musical
shows because a large part of our youth usually used to attend it. And we think that is the best way to convey your message to a large number of consumers. • Pepsi Cola must have to highlight the ingredients which have positive effects to reenergize the body. As they already do this for their other products like Pepsi Max & 7up Free.

• A large number of consumers in Pakistan are illiterate even somebody can never
understand the real mean of energy drink. By creating awareness of energy drinks in that class of consumers Pepsi Cola easily generate a large amount of its revenue from this.

• And we can’t neglect the side effects of energy drinks. So in this concern the
company has to spend more on its R&D department so that they find the alternate ingredients which have no harmful effects on human body.

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Bibliography & Reference
BOOKS:-• • Principle of Marketing by Philip Kotler Marketing Management by Philip Kotler

Business Research Methods by Alan Bryan and Emma Bell

NEWSPAPERS:-• • • • • The Nation Dawn Daily Jung Nawaiwaqat Daily Times

Magazines:-• • • • • • Akhbar-e-Jehan Herald News Line The Lahore View Business Magazine Aaj

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Website:-• • • • • • • • • •

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Name : ____________________________________ Address :

____________________________________ ____________________________________ Contact No. :


Q.1. Do you like cold drink? (a.) Yes ( ) (b.) No ( ) (c) Occasionally ( )

If no than specify _______________________________________________________

Q.2.Which cold drink do you most likely? (a) Pepsi ( ) (b) coca cola ( ) (c) Both ( ) (d) Other ( )

If other than specify______________________________________________________

Q.3.Are you satisfied with Pepsi product? (a) Yes ( ) (b) No ( ) If no than specify ________________________________________________________ 106 | P a g e

Q.5.Do you like Sting Energy Drink of PepsiCo? (a.) Yes ( ) (b) No ( ) If no than specify _________________________________________________________

Q.6 which quantity do you mostly use? (a) Glass ( ) (b) Tin ( )

Q.7.The rate of Sting Energy Drink is sufficient or not? (a) Yes ( ) (b) No ( ) If no than specify ________________________________________________________

Q.8 which segment do you most like of Sting Energy Drink? (a) Children ( ) (b) Young ( ) (c) Old ( )

Q.9. what changes do you want Sting Energy Drink should have? (a.) Taste ( ) (b.) Packages ( ) (c ) Price ( )

Q.10.Is Sting Energy Drink is suitable for small kids and old people? (a.) Yes ( ) (b) No ( )

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If no than specify ________________________________________________________

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