DAYALBAGH EDUCATIONAL INSTITUTE AGRA

SUMMER TRAINING REPORT ON PARTNER RELATIONSHIP MANAGEMENT OF PEPSICO INDIAS FOBO VARUN BEVERAGES LTD. & ACCEPTANCE OF SLIM DIET CANS IN THE TRANS-YAMUNA AND AGRA MARKETS. SUBMITTED BY C. TILAK PRAKASH

ROLL NUMBER: 077 0!

ACKNOWLEDGEMENT
There is always a sense of gratitude one expresses to others for the helpful and needy service they render during all phases of life. I have completed this training with the help of different personalities. I wish to express my gratitude towards all of them. It gives me immense pleasure to express my deep regards and sincere sense of gratitude to Mr. Manmohan R Paul Vice-president (marketing)for his guidance throughout the training. Thank you sir for your able and worthy guidance. I would also like to thank Mr. Rana, Mr. Prashant harma and Mr. !itesh for their support which helped me throughout my training. I would also like to thank my teacher Prof. K Shanti Saroop for steering my confidence and capability for giving me insight into training by giving me exposure to the arena of competitive and real world. "astly I would like to thank my parents and friends for their constant support during the duration of my training. Thank You ne and !ll

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TABLE OF CONTENTS
ABSTRACT12 Research Methodology........................................................................................15 Report and Analysis of Data Collection .26 CSD nd!stry "#er#ie$.2% CSD nd!stry analysis&1 Mar'et Analysis and nd!stry Challenges......&% nd!stry process (pro#e(ent "pport!nities)6 *epsiCo nternational61 +istory..61 *epsiCo , The parent Co(pany.6) "#er#ie$ *epsiCo nternational..66 +o$ *epsiCo o#erca(e Co(petition.6SCA.s%/ *epsiCo ndia..%) ntrod!ction..%) "#er#ie$ "f *epsiCo ndia...%6 *epsiCo $ith R01 2ro!p..%Strategic Di#isions.-/ Mar'eting "#er#ie$ of *epsiCo ndia-1 Mar'eting en#iron(ent.-1 3al!e Deli#ery-& 3al!e Chain-5

) *.s.-Strategic Mar'eting.1// 4actors nfl!encing Mar'eting Strategy1// 0ey S!ccess 4actors...112 SCA.s.11& Co((!nicating $ith C!sto(er.115 Ad#ertising116

*orters 4i#e 4orces.1&5 S5"T Analysis1&*orters 2rand Strategies1)& BC2 Matri61)5 Reco((endation.1)% Concl!sion.15& Bi7liography.............15Appendices16/

!+STR!"T Title& P!RT&,R R,$!T# &S%#P M!&!-,M,&T . P,PS#" #&/#!0S . + $T/.0

This study titled as above aims at exploring the strategies followed by Pepsi'o India to manage its various partners both internal as well as external since it started its operations in India. This study will also explore what changes Pepsi'o India is bringing in order to increase its visibility and market presence to tackle the ever increasing hold of 'oca 'ola on the Indian beverage market. This study aims to explore the overall functioning and position of Pepsi'o India in the marketplace. It also aims to know customer perception regarding Pepsi'o India. To know about these facts this report will primarily focus on the partner relationship management of Pepsi'o India(s main carrying and forwarding agency )arun beverages limited. To know the overall functioning of Pepsi'o India is important in order to get an understanding of the topic. It is also important because is will explore the sales and distribution system of Pepsi India which is considered to be one of the strongest not only in the country but also worldwide. This pro*ect also covers a detailed observation and study of the )I I+P,RIT- campaign and the various retail initiatives specially related to the lim .iet 'ans and their acceptance in the Trans+-amuna and /gra markets both of which are upmarket towns

V!R1& +,V,R!-,S

The various observations and studies were done through route rides, direct marketing, market visits and from the sales team of Pepsi'o India. The aim of the overall training was to have a complete and thorough understanding of the process of the various stages of product movement from the bottling stage to the final consumer and the various agencies which influence and help move these products. /lso the study entails the various push and pull strategies actually used by us suffuse the trans -amuna Market with slim diet cans and also studies the acceptance of the newly introduced lim .iet 'an range. /lthough this study will explore the overall functioning of Pepsi'o India, but in order to be precise it will primarily concentrate on the beverage segment of Pepsi'o India.

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Pepsi'o is one of the oldest, largest and most successful beverage and snack food companies in the world. Pepsi'o was founded by 'aleb 4radham in 567# in , /. Today Pepsi'o and its affiliates operate in more than 5%7 countries in the world and generate revenues in excess of 8 %7 4illion. In its pursuit of never ending growth and expansion, Pepsi'o entered India in 5696 in a *oint venture with Pun*ab :overnment. !owever, Pepsi'o India very soon started its beverage operations in collaboration with the R ; <aipuria group. oon after entering the beverage segment Pepsi'o 2stablished its dominance in the market owing to its expertise in sales, marketing, operations and local collaboration. Pepsi'o maintained its market dominance for many more years to come. !owever, this advantage slipped and Pepsi'o had to concede the market leadership to 'oca 'ola India. everal actors were responsible for this development. 4ut, the most important are= /d campaigns targeting regional markets. .iscontinuation of lums in the distribution network by Pepsi'o. This move by Pepsi'o adversely affected its position of a market leader because while Pepsi'o discontinued the use of lums in its distribution network, 'oke continued it and within one year, it was able to snatch considerable market share from Pepsi'o. /c>uisition of well+established and favored brands like Thums ,p and "imca by 'oca 'ola India. These two brands still constitute a bulk of sales for 'oca 'ola India.

To explore the reasons behind these developments this study will analy@e the marketing initiatives and policies of Pepsi'o India in detail with particular focus on its partner relationship management. The above+mentioned ob*ectives can be achieved by carrying a proper and planned research involving different types and methods. The data collected fo laid the foundations for the study and gave a platform for the analysis and findings which lead to the fulfillment of the ob*ectives. The data collected for research is primary and secondary. Primary data is collected by observation, interviews and >uestionnaires. 3hile secondary data is collected from the internet through different case studies and reports on the ' . industry. Abservation method was carried in 2ast+.elhi to know the market position and market share of Pepsi'o products. Interviews of people from the sales department were conducted to know the sales and distribution network and marketing policies of Pepsi'o India, while >uestionnaire method was used to know about the customer perception of the slim diet can portfolio. econdary data is used to know about the ' . industry and the 'ompany i.e. Pepsi'o. The data collection and analysis paves way for the recommendation ad conclusion of the study that reveals some important findings regarding the strategy and corporate structure and strategy of Pepsi'o India.

' . IB., TR- A)2R)I23

The soda drink and bottled water industry includes more than $,777 companies that manufacture and distribute beverages. Anly in the , / combined annual revenue is more than 8?7 billion. 'oca+'ola and Pepsi'o hold more than 07 percent of the market, following strong consolidation in the past decade. Anly a few other companies have annual revenue above 8077 million. Most are local or regional manufacturing and bottling operations with annual revenue under 8577 million.

'ompetitive "andscape&
.emand for non+alcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. "arge manufacturers have economies of scale in production and distribution, with average annual revenue per production worker close to 85 million. mall companies can compete by producing new products, catering to local tastes, or selling at lower prices.

Products, Aperations C Technology&

Bonalcoholic beverages include sodas Dcarbonated soft drinks, or ' .E, bottled waters, *uices, and a large variety of mixtures. odas account for about 17 percent of the market. The manufacture and distribution of most national soda brands, including 'oke and Pepsi, is a two+tiered process. The primary manufacturer produces a flavored syrup called concentrate that is sold to local bottlers who manufacture and distribute the finished product. In a typical bottling operation, the flavored syrup, corn syrup DsugarE, and filtered water are mixed in appropriate proportions, carbon dioxide gas is in*ected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged.

The two+tiered structure is most efficient for national companies with large volume, because the manufacturing process is simple and because water, the main ingredient of sodas, is expensive to ship and is available locally. maller companies combine the syrup production and bottling operations in one plant. For soft drink bottlers, the ma*or raw materials, aside from the flavored syrup, are corn syrup and containers ++ glass bottles, aluminum cans, or plastic bottles made from polyethylene terephthalate DP2TE. 4ottlers fre>uently operate si@able distribution systems, including warehouses and fleets of speciali@ed delivery trucks. Production and distribution volume is usually measured in cases of 56# ounces, although actual cases of 5#+ounce cans now contain #99 ounces. 'oca+'ola produces more than % billion cases of soft drinks per year= Pepsi'o, over $ billion. In addition to producing canned and bottled soft drinks, large manufacturers sell sweetened syrups to restaurants and other retailers that produce the finished product at the point of sale by mixing the syrup with carbonated water to produce fountain products. /bout $0 percent of 'oca+'olaGs , product is in the form of fountain sales and 17 percent in bottled sales. The manufacturing process for most non+soda beverages is usually more complicated than the mix+carbonate+and+bottle soda process and therefore isnGt usually handled by local bottlers. In most cases, non+soda products are bottled by the manufacturer and distributed through the same types of channels++wholesalers, distributors, brokers++used by food manufacturers, although bottlers may also participate. 4ottled waters, a rapidly growing category of beverage, are either bottled at specific springs or made locally from filtered tap water. Manufacturers and bottlers typically operate under contracts, called 4ottler /greements, that specify the territory within which the bottler has an exclusive right to make, sell, and distribute the manufacturerGs brand in bottles or cans. Fountain products are often sold separately through wholesalers, under .istributor /greements. 4ottle and fountain territories may overlap and bottlers may also be fountain distributors. 'oca+'ola sells products through about 97 local bottlers and 077 fountain wholesalers.

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4ottler /greements usually re>uire that container and packaging materials be bought from suppliers that are approved by the manufacturer, and that the bottlers not handle competing products. /greements also specify the price that the bottler must pay for concentrate. The manufacturer has no control over the prices the bottler charges customers, and usually isnGt obligated to spend money for marketing or promotions in the bottlerGs territory. Aften, however, the manufacturer will provide marketing and promotion support. In one year, for example, 'oca+'ola provided about 8177 million in marketing support to 'oca+'ola 2nterprises, its largest bottler. Many 'oke and Pepsi bottlers hold perpetual contracts that can be terminated only for breach of contract. The industry depends on technology for developing new products in the labs and packaging product at the plants. Most bottling plants are highly automated with a combination of mechanical automation and computeri@ed robotics.

ales C Marketing&
4everage manufacturers, bottlers, and wholesalers sell products through a variety of channels, such as food and convenience stores, restaurants, vending machines, mass merchandisers, and institutions, including schools and colleges. oda bottlers typically own local vending machines. The marketing approach to each of these channels is >uite different and often includes promotional spending. "arge manufacturers may also sell directly to national accounts and usually advertise on national or regional T) and in print. Manufacturers typically produce a line of brands and often test and introduce new products into the market through their existing distribution channels.

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Target egment H -outh&

The childIyouth market is of crucial importance to drinks manufacturers as under+56s constitute #7+$7J of the population in western countries, making them a substantial and lucrative consumer base. 3ith many life+long consumption habits formed during youth, gaining high penetration in the childrenGs and teenagersG market is of key importance to manufacturers with long+term ambitions and growth targets. Targeting oft .rinks to -ouths enables companies to& /ssess the si@e of the soft drinks opportunity by age group ,nderstand childrenGs values and motivations and their impact on the soft drinks market .evelop incumbent market position through enhanced targeting and promotion /ssess trends in new product development in the childrenGs market over the course of the past # years 'ombine business to business executive opinion and local field research

/nalysis and Industry 'hallenges&

In order to survive in this environment, companies must consider the market trends that will likely shape the industry over the next few years. This will help soft drink companies to understand the challenges they will encounter and to turn them into opportunities for process improvement, enhanced flexibility and, ultimately, greater profitability. Market trends for the soft drink industry can be summari@ed by six fundamental themes& 'hanging consumer beverage preferences, featuring a shift toward health+oriented wellness drinks :rowing friction between bottlers and manufacturers in the distribution system

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'ontinually increasing retailer strength Fierce competition 'omplex distribution system composed of multiple sales channels 4everage safety concerns and more+stringent regulations 'onsumers turn to wellness and healthy drinks

In much of the developed world, a significant portion of the population is overweight or obese. This includes two+thirds of /mericans and an increasing number of 2uropeans. 'onse>uently, many people have started to actively manage their weight and change their lifestyles, a shift that is reflected in their choices in the beverage aisles& .emand has increased for beverages that are perceived to be healthy 2nergy drink consumption has also climbed, due to the increasingly active lifestyles of teenagers This trend towards healthier drinks has created a number of new categories, and changed the consumption trends of the beverage industry as a whole. 3hile previously dominated by carbonated soft drinks, the industry is now more evenly balanced between carbonates, and product categories with a healthier image, such as bottled water, energy drinks and *uice&

5$

3hile carbonates are still the largest soft drink segment, bottled water is catching up fast, with an average of 09 liters consumed annually per capita. /mong individual countries, Italy ranks number one in bottled water consumption, with the average Italian drinking 5?? liters per year. Averall, bottled water represents the fastest growing soft drink segment, expanding at 6 percent annually. This growth is being partially driven by increasing awareness of the health benefits of proper hydration. The industry has responded to consumers( desire for healthier beverages by creating new categories, such as energy drinks, and by diversifying within existing ones. For example, the leading carbonated soft drink companies have recently introduced products with 07J less sugar that fall mid+way between regular and diet classifications. imilarly, a outh /frican *uice company has recently released a fruit+based drink that contains a full complement of vitamins and nutrients.

4everage companies and bottlers are conflicting&

In the soft drink markets of 2urope and the , , beverage companies use bottlers to package and distribute products. This structure often causes conflicts of interest between manufacturers and bottlers. Bevertheless, the supply chain must consistently deliver value to the market in order for the segment to prosper. .espite any dissonance, the concept of Kone face to the customerL must be maintained. Many factors are contributing to the friction between bottlers and beverage companies& 4everage companies often profit from increased concentrate sales at the expense of bottlers( margins 4everage companies have historically had higher returns and lower capital re>uirements 4ottlers have historically had lower returns and higher capital re>uirements for building and maintaining production and distribution networks

5%

4ottlers continue to consolidate in an attempt to offset margin pressure through cost reduction. pecifically, si@e helps them to& pread fixed costs over greater volume Make larger investments in automated production lines 'ontain the costs of ac>uiring new customers Increase customer loyalty .eclining prices have further reduced bottlers( margins

oft drink manufacturers continue to develop new products and packaging, which increases operational complexity and, therefore, expenses for bottlers. More new soft drinks have been introduced in the last two years by the top beverage companies than were introduced in the entire decade of the 5667s. 2xamples include& 'oke with "emon, )anilla 'oke, .r. Pepper Red Fusion, Pepsi 4lue, .n", Fanta 4erry, o4e Mr.:reen, ierra Mist, and Mountain .ew 'ode Red. 3hile manufacturers view these new products as a way to build a portfolio of options to hedge against product successes or failures, bottlers see them as a burden since they often re>uire additional capital expenditures.

Retailers( power continuously increases&

3ith 4ig 4a@aar , )ishal and other discount stores leading the charge, India(s dominant retailers are demanding better service and shorter order+to+delivery cycles from soft drink companies. This is dramatically reshaping the industry, forcing soft drink companies to become more efficient, while taking pricing power out of their hands. The dual need for improved supply chain agility and cost efficiency is challenging suppliers to reevaluate the ways in which they plan and manage their supply chains, as they constantly search for approaches that will help them achieve the rock+bottom prices and operational excellence now expected in the industry. Furthermore, the growth of private+label products is encouraging manufacturers to take a number of steps to compete more effectively. Increasingly, they are turning to innovation

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and new product introduction as a means to achieve real differentiation as well as growth. 4randed manufacturers are also looking to get closer to the consumer, with many of the larger ones piloting direct+to+consumer marketing approaches. They are also trying to better understand the in+store consumer experience by monitoring the execution of in+ store activities. Bevertheless, many suppliers are losing brand e>uity. In recent years, a couple of factors have been fueling the growing competition between manufacturers and retailers& Retailers are using their power to set higher standards for marketing and operational excellence, including escalating demands for improved service >uality and shorter order+ to+delivery cycles from manufacturers and distributors. 4ecause of their direct relationships with consumers, retailers have a deeper knowledge of consumer behavior. 'ompetition is becoming more and more difficult&

In the beverage manufacturing industry, competition is growing due to the following factors2
'onstant demand for new niche products related to consumer preferences for healthier and more diversified offerings Industry consolidation, which has significantly raised the bar for the Kscale needed to competeL The growth of private+label products. These competitive pressures have led to& ;, proliferation + number of ;,s in a typical beverage company has doubled from 5665 to #775 / plethora of new product failures& Anly #7J are effective Anly 57J generate significant revenue 51

Most fail within the first two years Further consolidation and rationali@ation to capture cost savings by improving operations and eliminating redundancy& Industry leaders are ac>uiring small, high growth companies Mid+market players are vertically integrating .eclining soft drink prices& Profitability can only be improved through greater efficiency in the supply chain or through more+effective trade promotions, which usually re>uire considerable expenditures.

ales channels are very complex The macro environment in which soft drink manufacturers operate has several uni>ue characteristics& Market to consumersIsell to retailers through wholesalers Must have the ability to communicate directly with retailers Multiple distribution channels easonal demands

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'!/BB2" AF 42)2R/:2 IB., TR-

The beverage industry is a multi+channel industry. Therefore, soft drink companies have several types of customers with diverse characteristics&

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Modern TradeI"arge 'hain Retailers

:reater power in negotiating purchases of concentrations and merges .irect access to the consumer and a tendency to protect this relationship from manufacturer intrusion Re>uest contributions and discounts from brand companies

mall Individual Retailers

!uge number of small point sales ometimes buy products directly through cash and carry or modern trade

#ndirect "hannel (3holesalers)

Medium+si@ed organi@ations as a conse>uence of aggregation through consortia and merging Playing a fundamental role in beverage distribution Possess critical information regarding individual points of sale in terms of volume, assortment, presence of competitor(s beverages, etc. .ue to the complexity of the marketplace, the entire logistical chain must be able to sustain brands, products and services coherently within the various channels, taking into account differing points of sale and diverse customer needs. /dditionally, each beverage manufacturer must provide customers with an extensive set of packaging options, including& Tracking product in various package si@es pecial labeling re>uirements for customers InternationalIdomestic packaging Tracing I recall capabilities. tatutory regulation is increasing.

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:overnments around the world are concerned about food safety and >uality. Periodically, safety failures make big news in the global press. /mid this growing concern, regulators are cracking down on sanitation and a variety of other food+safety re>uirements. 2ach soft drink company must take these industry challenges into consideration, as well as its own strengths and market position, when looking for ways to drive innovation, accelerate growth and increase margins.

#ndustr4 Process #mpro5ement

pportunities

Improve customer relationships with .irect tore .elivery& 4randed beverage manufacturers are attempting to get closer to the consumer, with many larger manufacturers piloting direct+to+consumer marketing approaches. These include active monitoring of in+store activity and, in some markets, a significant move back to direct store delivery D. .E. .irect tore .elivery is a business process used in the beverage industry to sell and distribute goods directly to the customer(s point+of+sale. 3ith . ., the soft drink company gets in direct contact with retailers, restaurants and pubs and other outlets where consumers can obtain the product. Manufacturers can use . . to& Make beverage goods available to stores and customers >uickly Aptimi@e process settlement in sales and distribution through complete coverage of the supply chain Improve customer retention and build customer relationships through personal service Reali@e additional sales opportunities Abtain first+hand information about the market 4etter position brands against competitors

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2nsure product >uality up to the point of sale

4est in class . . companies couple the process of direct delivery with a cultural change in how they view their employees and how their delivery personnel operate& They are not *ust drivers but they have sales skills, communication skills and a global view of the company(s offerings, commercial priorities, and initiatives. .irect tore .elivery is characteri@ed by variable orders and deliveries. 'onse>uently, the process should involve more than *ust bringing goods to the point of sale. It should eventually encompass taking additional orders, picking up empties, collecting money, and more. 4est in class . . operations typically include many value added activities, such as&

Merchandising acti5ities + 2nables the company to leverage fre>uent delivery visits

to the point of sale. These activities include tracking merchandising of other entities Dsuppliers, wholesalers, etc.E= reporting on in+store merchandising activities= carrying out competitive intelligence Dcompetitive products, product mixes, prices, displays, etc.E= and monitoring storeIaccount execution. May also include some preventive maintenance.

!dditional sales opportunities + /llows a company to sell goods Koff the truckL
without any preceding order. The mix of products on the truck is dependent on what is most likely to be sold on a certain trip. upport provided by handheld devices enables drivers to skip back+end paperwork and to close the process through printed invoices.

,nhance relationship 3ith indirect partners - Indirect sales are the process of
selling to an end customer through a third party and tracking that sale as such. .ue to the complexity of the beverage supply chain, conflicts of interest fre>uently arise between beverage manufacturers and beverage distributors&

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oft drink manufacturers profit from increased sales at the expense of distributors( margins oft drink distributors profit from positive local pricing environments, which, if exploited, reduce volume sales oft drink distributors continue to consolidate in an attempt to offset margin pressure through cost reduction

.espite these conflicting interests, it is crucial that beverage manufacturers and beverage distributors maintain Kone face to the customer.L These companies *ointly market and sell the product in the marketplace, and close co+operation yields benefits for both parties. The indirect relationship is a partnership that must be nurtured by both the supplier and the distributor. The stakes are high for everyone. For the manufacturer, a poor relationship with a distributor may cause it to give a competitor Kgreater share of mindL in the local marketplace. For the distributor, a negative relationship with a supplier means constant threats of contract termination and reduced marketing dollars spent in the local market. / strong manufacturerIdistributor relationship is also important because consumers are becoming more difficult to capture and classify. It is not only about sales= it is also about information. 4ut how can strategic information flow freely between partnersM /lthough ##

sharing is implied in the word partnership, the reality is that companies are still uncomfortable about exchanging strategic information. Bevertheless, it is critical for companies to share information regarding sales volume and market intelligence on both the microscopic and macroscopic levels. The importance of the distributor(s role in the indirect channel for beverage distribution suggests that it would be beneficial to establish a common understanding between distributors and manufacturers regarding& 'oding Dproducts, channels, customersE Technology .ata interpretation Marketing and sales actions.

In some cases, distributors are small+ to medium+si@ed companies that only dedicate a few people full+time to operational activities. /s a result of this structure, they are rarely open to implementing a truly KcollaborativeL environment. Recently, however, mergers between distributing companies, and ac>uisitions of distributing companies by manufacturers, have significantly modified many operating and ownership structures. 'onse>uently, a few well+structured and managed distributors have emerged that possess a better understanding of the value of collaboration. These distributors have been at the forefront of facilitating partnership initiatives. Increase sales force effectiveness through incentives management In the beverage industry, the critical path to a company(s success is the effectiveness of its sales force. Bo matter how efficiently the company runs its manufacturing processes, or how well it markets its products, a beverage company cannot succeed without an effective sales force that ensures product placement on the store shelves. / beverage manufacturer(s sales force typically comprises 5?J+#0J of the company(s cost basis. 4everage distributors have an even higher percentage of their tot al costs #$

allocated to their sales forces. -et, how can beverage companies get the most out of their investments and ensure that their sales forces are operating optimallyM Properly managed commission programs allow beverage companies to effectively motivate their sales forces to increase or maintain volume by brand or package. / commission could be a rebate, discount, or other payment to a third party or in+house employee. In order to actively manage sales behavior, it should be paid when the internal or external sales representative meets a pre+established benchmark for a tracked metric. The commission could take the form of either a cash payment or an item. 3hile commissions are usually paid based on sales volume, best+in+class companies take a more holistic view of commission metrics. ome other important measures include& /ccount revenue growth Profit results Bumber of new accounts 'ustomer service metrics /ccount retention.

Manage safety re>uirements through tracking and traceability /s recent history has shown, the ability to track inventory accurately H and to perform a timely and cost+effective product recall H is critical in the beverage industry. Inventory items need to be tracked, monitored, and controlled in different ways and at very detailed levels. In each individual plant or warehouse, each resource re>uires a different level of controlIanalysis. Food safety legislation, such as 2, .irective 5?9, impacts the whole process flow. Traceability is a goal that must be achieved over the entire value chain, re>uiring a batch control system that is able to track and document all related characteristics.

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/t the batch level, it is now possible to assign different product attributes when searching for the product including& Manufacturing 2xpiration .ates helf "ife .ates

'lassifying production lots into batches allows companies to identify specific inventory and automatically record its history, including the history of the raw materials Dand their associated batch numbersE used in its production. In other words, it allows full recall of the materials that have been involved in the overall manufacturing process. These improvements reduce the company(s exposure to litigation and regulatory fines. In addition, track and trace improvements help companies to maintain high >uality standards, which is often a selling point that differentiates one brand from another and that can command a price premium with the consumer. Recording and tracking that >uality is critical. In the final analysis, soft drink companies must strive for the highest >uality standards they can achieve H ones that are superior to those of their competitors.

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Aptimi@e the extended supply chain In a business environment characteri@ed by strong competition, changing consumer preferences, a complex distribution channel, and conflicting relationships between soft drink manufacturers and distributors, the beverage supply chain is under significant pressure. Moreover, the world(s dominant grocery retailers Dwith 3al+Mart paving the wayE continue to demand increasingly better service >uality and shorter order to delivery cycles from manufacturers. This confluence of factors is forcing manufacturers to become more efficient, while taking pricing power out of their hands. The need for both improved supply chain agility and cost+efficiency is challenging suppliers to re+assess how they plan and manage their supply chains. The logistic chain must be able to sustain brands, products and services cohesively, while taking into account different channels, customers, points of sale and customer needs. /ccordingly, companies should consider taking the following steps to improve their supply chains&

,nsure product a5aila6ilit4 on-shelf H An+shelf availability is becoming a

critical issue for both manufacturers and retailers. / system that avoids out+of+ stocks improves consumer value, builds brand and store loyalty, increases sales and H most importantly H boosts category profitability. The traditional practice of filling out+of+stocks with other products is no longer sufficient H particularly from the manufacturer(s point of view. If consumers cannot find the brand they want, their loyalty to that brand suffers. / #77# :M/ study found that out+of+stocks *eopardi@e 81 billion in retail sales every year. "ess conservative estimates put this figure as high as 8#7 billion.

.le7i6le ordering8 fle7i6le deli5ering H Most retailers are demanding

increased flexibility in order lead+times and delivery methods, putting additional pressures on the supply chains of manufacturers and distributors. To withstand these pressures, companies need to streamline product movement through programs such as store+specific shipments. They must also meet the strategies of progressive retailers, which re>uire flow+through distribution and cross+docking.

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!ccuratel4 forecast demand H Properly forecasted demand drives two of

the primary metrics used to measure the efficiency of a beverage company(s supply chain& customer service and inventory. /ccurate forecasts are essential to achieving improved customer service and lower inventory levels. 2ven with recent success in developing and maintaining efficient supply chain processes, forecasting inaccuracy remains a significant industry problem. /ccording to the #77$ :M/ "ogistics tudy, more than one+third of all forecasts are inaccurate at the national level. This figure *umps to almost one out of every two at the regional Ddistribution+centerE level. Meanwhile, at the store level, differences in store formats and si@es hamper the forecasting process, and few have the tools to accurately manage the sheer volume of data generated by forecasting. Furthermore, many manufacturers do not have the technology to properly support their planning and forecasting efforts. Many manufacturers are still forecasting sales in months, although their plants run on weekly plans. That means they have to s>uee@e weekly totals out of monthly boxes.

#mplement a full4 integrated empties management process H

2mpties management is the process of managing returnable containers, including kegs, 'A# tanks, bottles and cratesDan essential part of direct store deliveryE. / successful empties management system gives the manufacturer a detailed picture of the entire empties lifecycle, including the location and status of a company(s assets. This process&

$o3ers costs 64 controlling high-5alue empties assets #ncreases control 64 managing empties at customer locations /ecreases manufacturing issues 64 tracking empties. Reduce time-to-market for ne3 products
/n efficient new product development system is essential in the beverage industry. Bew products need to be brought to market >uickly in order to capitali@e on changing consumer preferences and competitive threats. !owever, new products must be developed tactically, and the product(s potential must be understood and analy@ed before #?

it hits the market. 'urrently, success rates for new products are astonishingly low H dropping from ?0J to #0J in the last decade according to /MR H and most fail within the first two years after introduction. The companies that are best able to execute the whole product development cycle will clearly have an advantage. This re>uires reducing time+to+market as well as making effective use of scarce internal resources and improving collaboration with partners. In addition, great attention must be paid to aligning the related marketing initiatives De.g. advertising, sales promotions, etc.E with the new product introductions. Innovation is one of the primary growth drivers for beverage companies, and it can involve changes to the product itself or to the product(s packaging& Product innovation H Focuses on providing new tastes and flavors to demanding consumers. Packaging innovation +H 2mphasi@es developing differentiated packaging according to the consumption situation. Aften, beverage manufacturers use packaging innovation to increase product shelf life. To ensure new product success, beverage companies must oversee the integration, consolidation and reuse of knowledge from all involved parties Dincluding beverage manufacturers and bottlersE, from R C . through production, and down to sales, marketing, and financials. 4y emphasi@ing greater collaboration and implementing 3eb+based workflow, beverage companies can reduce lead+time from concept to shelf by #0 + %7J and, at the same time, better integrate safety controls into the development process.

#ncrease customer retention through effecti5e trade promotions&

In an environment characteri@ed by strong retailers and discriminating consumers, beverage companies must utili@e processes and tools to protect their market shares. To do this, they must make a favorable impact at the point of sale through promotional activity.

#9

Trade promotions have become a necessary and expensive cost of doing business. 3ith a si@able percentage of volume being driven through a smaller base of retailers, the competition for shelf space has never been higher. If a beverage company fails to execute a trade promotion at 3al+Mart, a competitor will. Furthermore, as trade promotions have proliferated over the past few years, they have also become more targeted. In response, beverage companies must create promotions for specific demographics, channels, and retailers, which make the sales process more costly and complex. Trade promotions vary widely in terms of method, approach, and structure. Many local promotions are run ad+hoc with marginal capital investments by field sales associates, while others re>uire significant investment and involve pre+scheduling in co+operation with national chains. Two of the most commonly used trade promotions in the beverage industry are coupons and rebates. 'oupon and rebate management are critical to enhancing relationships between the beverage manufacturer and wholesalers, customers and, in the case of coupons, consumers.

"oupon programs, which are in essence trade promotions addressed to the final
consumer, are mainly executed via discounts at large retailers. The coupon, a certificate with a stated value, can be applied immediately or reserved for the next purchase. / properly executed coupon program enables beverage companies to pass savings directly to the end consumer. An the other hand, rebate programs are trade promotions addressed to the retailer. Therefore, contractual terms and conditions between the manufacturer and the retailer must be monitored and executed. Rebates are often part of special trade promotions, and management of the rebates typically follows one of the following flows&

#6

.igure - Re6ate management in direct sales

.igure- Re6ate management in #ndirect Sales

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#mpro5e margins 64 optimi9ing the telesales channel

For a large number of companies in the beverage industry, telephone sales is the primary method of order taking and customer interaction. /n effective telesales process can increase revenues and complement other sales processes, such as . . and field assets management. This is accomplished by integrating the phone sales function with the company(s other operations. 3hen correctly executed, inbound and outbound telesales functionality enables companies to manage effectively and efficiently all contacts related to sales and customer services. In addition, it helps build client relationships, sell new business, and expand and retain the current customer base. 3ell+implemented telesales functionality also enables business processes to be integrated and standardi@ed. This effectively Kcloses the loop,L creating a consistent experience for customers within a multi+channel environment. ome of the key benefits that a company can gain through telesales include&

Re5enue ,nhancement
Improved sales effectiveness by consolidating the customer relationship 4etter up+selling Improved cross+selling Increased customer retention 2xpanded customer base 2nhanced competitiveness via services that match or surpass those of competitors

Margin #mpro5ement
Reduced costs for order processing

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/ccelerated sales process "ower sales costs in comparison to field sales Increased flexibility and speed to market .ifferentiated service levels according to customer relevance and need.

Implementing closed+loop processes between the telesales operations and other departments can provide agents with a comprehensive view of all customer interactions across the enterprise H in real time. In order to optimi@e the telesales channel, agents must have tools to manage the entire sales process, from generating leads, planning calls, and prioriti@ing sales opportunities and activities, to managing contacts and placing orders >uickly. 4usiness performance improvement priorities H the path to value /gainst the backdrop of these market challenges, how can soft drink companies drive profitable growth and create value for their owners or shareholdersM In practical terms, there are four areas on which companies in the soft drink business need to focus& Revenue protection and enhancement H for example, as driven by product and packaging innovation, differentiated >uality, improved product availability, and better management of customer relationships 'ost reductionImargin improvement H for example, through improved operational efficiency, lower labor costs, reduced waste and the capture of operational synergies from ac>uisitions Improved asset utili@ation H for example, through reduced inventory levels of soft drinks held in cold storage and faster turnaround of re+usable transit packaging in the supply chain RegulatoryIassurance H for example, through demonstrating >uality by participating in retailer assurance schemes and assisting trade customers in achieving full compliance with new traceability legislatiAB

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P,PS#"

#&T,R&!T# &!$

%#ST RY . P,PS#"
:*;<++'aleb 4radham, a young pharmacist from Bew 4ern, Borth 'arolina, begins
experimenting with many different soft drink concoctions= patrons and friends sample them at his drugstore soda fountain.

:*;*++Ane of 'alebGs formulations, known as N4radGs .rink,N a combination of

carbonated water, sugar, vanilla, rare oils and cola nuts, is renamed NPepsi+'olaN on /ugust #9, 5969. Pepsi+'ola receives its frist logo.

:;'=++ 4radham applies for a trademark with the ,. . Patent Affice, 3ashington ..'.,
and forms the first Pepsi+'ola 'ompany.

:;')++Pepsi+'olaGs first bottling franchises are established in 'harlotte and .urham,

Borth 'arolina. Pepsi receives its new logo, its first change since 5969.

:;<>++/ landmark year for Pepsi+'ola. The drink is a hit and to attract even more sales,
the company begins selling its 5#+ounce drink for five cents Dthe same cost as six ounces of competitive colasE. 'aleb 4radham, the founder of Pepsi+'ola and N4radGs .rink,N dies at 11 DMay #?th, 591?+February 56th, 56$%E.

$$

56%5++The Bew -ork tock 2xchange trades PepsiGs stock for the first time.
In support of the war effort, PepsiGs bottle crown colors change to red, white, and blue.

5617++-oung adults become the target consumers and PepsiGs advertising keeps pace
with NBow itGs Pepsi, for those who think young.N

561$++ Pepsi+'ola continues to lead the soft drink industry in packaging innovations,
when the 5#+ounce bottle gives way to the 51+ounce si@e. Twelve+ounce Pepsi cans are first introduced to the military to transport soft drinks all over the world.

5610++2xpansion outside the soft drink industry begins. Frito+"ay of .allas, Texas, and
Pepsi+'ola merge, forming Pepsi'o, Inc. Military 5#+ounce cans are such a success that full+scale commercial distribution begins.

:;('++Pepsi introduces the industryGs first two+liter bottles. Pepsi is also the first
company to respond to consumer preference with light+weigh, recyclable, plastic bottles.

:;*>++Pepsi advertising takes a dramatic turn as Pepsi becomes Nthe choice of a Bew
:eneration.N

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:;*)++/fter responding to years of decline, 'oke loses to Pepsi in preference tests by

reformulating. !owever, the new formula is met with widespread consumer re*ection, forcing the re+introduction of the original formulation as N'oca+'ola 'lassic.N The cola war takes None giant sip for mankind,N when a Pepsi Nspace canN is successfully tested aboard the space shuttle.

:;;:++ Pepsi introduces the first beverage bottles containing recycled polyethylene
terephthalate Dor P2TE into the marketplace. The development marks the first time recycled plastic is used in direct contact with food in packaging.

:;;=++ Pepsi+'ola and "ipton Tea Partnership is formed. Pepsi will destribute single
serve "ipton Ariginal and "ipton 4risk products.

:;;>++ Pepsi Foods International and Pepsi+'ola International merge, creating the
Pepsi'o Foods and 4everages 'ompany.

:;;(++ Pepsi'o. announces that it will spin off its restaurant division to form Tricon
:lobal Restaurants, Inc. Including Pi@@a !ut, Taco 4ell, C ;F', it will be the largest restaurant company in the world in units and second+largest in sales.

:;;*++ Pepsi celebrates its 577th anniversary.

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P,PS#"

? T%, P!R,&T " MP!&Y

Pepsi'o, Inc. is one of the worldGs largest food and beverage companies. The companyGs principal businesses include&

.rito-$a4 snacks Pepsi-"ola 6e5erages -atorade sports drinks Tropicana @uices Auaker .oods

Pepsi'o, Inc. was founded in 5610 through the merger of Pepsi+'ola and Frito+"ay. Tropicana was ac>uired in 5669. In #775, Pepsi'o merged with the Ouaker Aats 'ompany, creating the world(s fifth+largest food and beverage company, with 50 brands H each generating more than 85 billion in annual retail sales. Pepsi'o(s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high level of integrity of our people. Pepsi+'ola Borth /merica, head>uartered in Purchase, B.-., is the refreshment beverage unit of Pepsi'o 4everages and Foods Borth /merica, a division of Pepsi'o, Inc. Pepsi'o 4everages and Foods Borth /merica also comprises Pepsi'oGs Tropicana, :atorade and Ouaker Foods businesses in the ,nited tates and 'anada. Pepsi+'ola Borth /mericaGs carbonated soft drinks, including& Pepsi, .iet Pepsi, Pepsi Twist, Mountain .ew, Mountain .ew 'ode Red, ierra Mist, and Mug Root 4eer account for nearly one+third of total soft drink sales in the ,nited tates. Pepsi+'ola Borth /mericaGs non+carbonated beverage portfolio includes />uafina, which is the number one brand of bottled water in the ,nited tates, .ole single+serve *uices and o4e, which offers a wide range of drinks with herbal ingredients. The company also

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makes and markets Borth /mericaGs best+selling, ready+to+drink iced teas and coffees via *oint ventures with "ipton and tarbucks, respectively.

V,RV#,B ? P,PS#"
The Pepsi'o challenge Dto keep up with archrival The 'oca+'ola 'ompanyE never ends for the worldGs P# carbonated soft+drink maker. The companyGs soft drinks include Pepsi, Mountain .ew, and lice. It owns Frito+"ay, the worldGs P5 maker of snacks such as corn chips D.oritos, FritosE and potato chips D"ayGs, RufflesE. 'ola is not the companyGs only beverage& Pepsi'o sells Tropicana orange *uice brands, :atorade sports drink, and />uafina water. Pepsi'o also sells .ole *uices DlicensedE and "ipton ready+to+drink tea Dlicensed from ,nileverE. Its Ouaker Foods division offers breakfast cereals D"ifeE, pasta DPasta RoniE, rice DRice+/+RoniE, and side dishes DBear 2astE. 3al+Mart is Pepsi'oGs largest customer, accounts for 6J of sales. Pepsi'o may be vying for more Pepsi+drinking people but its hefty snacks and *uice sales help to >uench the companyGs thirst for bottom+line growth. Frito+"ayGs salty snacks rule the , market= the snack division accounts for about one+third of company sales. The company announced a ma*or restructuring in #77?, splitting its two business units DPepsi+'ola Borth /merica and Pepsi'o InternationalE into three& one for , food, a second for , drinks, and a third for food and drinks abroad. '2A Indra Booyi said that due to the companyGs healthy growth in recent years, Pepsi'o is approaching a si@e that can be better managed as three units rather than two. The split looks like this& Pepsi'o /mericas Foods includes Frito+"ay Borth /merica, Ouaker, and the "atin /merican food and snack businesses= Pepsi'o /mericas 4everages includes Borth /merican beverage sales, including :atorade and Tropicana= and Pepsi'o International includes business in the ,;, the rest of 2urope, /sia, the Middle 2ast, and /frica.

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3ith a saturated soft+drink market, the company continues to try new iterations& In #77? the company introduced its first vitamin+enhanced water, called />uafina /live. It signed a licensing agreement with 4en C <erryGs in #771 for the sale of 4en C <erryGs milkshakes in the , , as well as a deal with tarbucks for the distribution of the coffee purveyorGs 2thos water brand. !ot on the heels of 'okeGs introduction of 4lak, in #771 Pepsi launched a coffee+flavored cola, named, Pepsi Max 'ino, in the ,;. )enturing further into the non+cola category, Pepsi'o ac>uired sparkling *uice companies IQQ2 and Baked <uice in #771. It also began selling Fuelosophy, a smoothie drink, at organic grocery store chain 3hole Foods, and struck a deal to develop products with *uice maker Acean pray 'ranberries. 4owing to the publicGs growing concern about childhood obesity, in #771 Pepsi, along with 'oca+'ola, 'adbury chweppes, and the /merican 4everage /ssociation agreed to sell only water, unsweetened *uice, and low+fat milk to public elementary and middle schools in the , . /s for high schools, the agreement calls for no sugary sodas to be sold and one+half of the offered drinks to be water, diet sodas, lemonade, or iced tea. The agreement was facilitated by former president 4ill 'linton. '2A teve Reinemund stepped down as '2A in #771 in order to spend more time with his family. !is replacement was Indra Booyi, the companyGs president and 'FA. Indian+ born Booyi, the 55th female '2A of a FART,B2 077 company, has been instrumental in strategic decisions at the company, such as the ac>uisition of Tropicana and merger with Ouaker Aats. hortly after her appointment, Booyi restructured the top level of power at the company. he appointed <ohn 'ompton, previously head of the Ouaker+Tropicana+:atorade unit, to the newly created position of '2A for Pepsi'o Borth /merica, reporting directly to her.

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% B P,PS#"

V,R"!M, " MP,T#T# &

%o3 Pepsi"o outgunned "oke2

"osing the cola wars was the best thing that ever happened to Pepsi while 'oke was celebrating, P2P I took over a much larger market. Pepsi beat 'oke in .ecember for the first time in their 579+year rivalry, surpassing its nemesis in market capitali@ation. The great irony of PepsiGs rise is this& It has never sold more soda than 'oke, even today. NPepsiGs been on fire,N notes Robert van 4rugge, beverage analyst with has sunk $7 percent. 2ven ten years ago, it was easy to write off Pepsi'o DResearchE as the loser in the cola wars against 'oke DResearchE& the proof was everywhere. The companyGs profits trailed those of its rival in /tlanta by %? percent. Its value in the stock market was less than half of 'oca+'olaGs. 'okeGs '2A at the time, Roberto :oi@ueta, was so sure of his companyGs dominance that he practically dismissed Pepsi, telling FART,B2, N/s theyGve become less relevant, I donGt need to look at them very much anymore.N Pepsi'o turned its cola 3aterloo into an opportunity to retrench, regroup, and ultimately outflank its old foe. "osing the cola wars, it turns out, was the best thing that ever happened to Pepsi. It prompted PepsiGs leaders to look outside the confines of their battle with 'oke. / decade ago, 'oke offered investors a compelling story& a recession+resistant product inexpensive enough that consumers would buy it in good times and bad, but valued enough that they would willingly pay an extra nickel or so above what no+name brands charged. anford

004ernstein. Aver the past five years its stock has risen more than a third, while 'okeGs

$6

3hat 'oke investors didnGt envision was that an emerging preference for other soft beverages ++water, sports drinks ++ would fracture demand. Bor did they see that the business strengths that once applied to cola would take hold across a broadened soft drink and snack+food market ++ a market that Pepsi, and not 'oke, dominated. NThey were the first to recogni@e that the consumer was moving to noncarbonated products, and they innovated aggressively,N observes :ary !emphill of 4everage Marketing. Pepsi'o embraced bottled water and sports drinks much earlier than its rival. PepsiGs />uafina is the Bo. 5 water brand, with 'okeGs .asani trailing= in sports drinks, PepsiGs :atorade owns 97 percent of the market while 'okeGs Powerade has 50 percent. Throughout the past five years under '2A teve Reinemund, the company has deftly moved with every shift in consumer tastes. N!eGs thinking about what the products should look like in the future,N says )ictor .@au, a director of Pepsi'o.

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Sustaina6le competiti5e ad5antage

Three ma*or sustainable competitive advantages give Pepsi'o a competitive edge as it operates in the global marketplace& 4ig muscular brands= Proven ability to innovate and create differentiated products= and Powerful go to market systems. 'ost and Ouality. Timing and know how. trongholds. .eep pockets.

%5

trategic 'ompetitive /dvantage

2xploitation Profits from a sustained competitive advantage "aunch 'ounterattack

Traditional )iew

Time Firm has already moved to advantage # Profits from a series of actions 2xploitation 'ounterattack

!ypercompetition
Time

"aunch

'oke& 5991= Pepsi& 596$. 56$$& Pepsi struggling to stave off bankruptcy. .ropped price of its 57c, 5# o@. bottle to 0c, making it a better value. /d *ingle Ktwice as much for a nickelL better known in the , than the tar pangled 4anner.

Price I Aunce

'oke Pepsi 'oke Price I Aunce

%#

Pepsi

Perceived Ouality

Perceived Ouality

Pepsi keeps price advantage through 17s and ?7s, when Pepsi charged its bottlers #7J less for its concentrate. 3ith rising ingredient costs, Pepsi could no longer offer twice as much for the same price. o, it raised price to 'oke(s level giving it a war chest to fuel an aggressive ad campaign. 4attle shifted from Price to Ouality, with Pepsi targeting the youth. 3hat followed was the Pepsi 'hallenge C KReal ThingL 'oke ads

Price I Aunce

Pepsi

-outh C Middle 'lass egments Perceived Ouality

Price I Aunce

'oke

First move& Pepsi 'hallenge #nd move& 'oke(s /d war Perceived Ouality

Perceived >uality caught up. .eeper pocketed and lower cost 'oke initiated a price war in selective markets where Pepsi was weak in the ?7s. Pepsi responded with its discounts and by the end of the 97s, 07J of food store sales were on discount Ather companies moved into the lower left >uadrant of the market. 4ut the two ma*or players forced price down to Kultimate value.L To break price spiral, 'oke launched Bew 'oke to keep 'oke loyals and induce switching among Pepsi buyers. 4ut this move from 'oke was re*ected by the market.

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/ttempts to move to next arena via niches in caffeine and sugar substitutes were adopted.

Price I Aunce

Price I Aunce

:enerics R' 'ola

'oke C Pepsi Price piral

Bew'oke 'lassic 'oke C Pepsi /ctual Bew'oke Intended Perceived Ouality

Perceived Ouality

%%

P,PS#"
#ntroduction&

#&/#!

Pepsi'o entered India in 5696 and in the span of a little more than a decade it became the countryGs largest selling soft drinks company. The 'ompany has invested heavily in India making it one of the largest multinational investors. The group has built an expansive beverage, snack food and exports business and to support the operations are the groupGs %$ bottling plants in India, of which 50 are company owned and #9 are franchisee owned.

Pepsi'o stays committed to providing its consumers with top >uality beverages. Its diverse portfolio of brands include the flagship cola brand + Pepsi= .iet Pepsi= ?,p= Mirinda= Mountain .ew= lice fruit drink= Tropicana brand 577J fruit *uices in various flavours= />uafina packaged drinking water= :atorade plus local brands "ehar 2vervess oda, .ukes "emonade and Mangola.

Pepsi'o is also a dominant player in the snack food segment in India. Pepsi'oGs snack food company Frito+"ay is the leader in the branded potato chip market. It manufactures "ayGs Potato 'hips= 'heetos extruded snacks, ,ncle 'hips= traditional namkeen snacks under the ;urkure and "ehar brands= and Ouaker Aats.

Pepsi'o is one of the largest MB' exporters in India and its export business consist of three categories + agri business, commodities and Pepsi system sales. Pepsi'o has made significant investments with the Pun*ab /griculture ,niversity to develop a comprehensive agro+technology program that has helped thousands of farmers across India improve the yield of their farms and the >uality of their agricultural products. Pepsi'o has leveraged its knowledge in contract farming to develop seaweed cultivation

%0

in Tamil Badu and has partnered with the :overnment of Pun*ab to help farmers of the state through the utili@ation of developed technology for citrus farming.

/s part of its sustainable development initiatives, Pepsi'o India has been a committed leader in the promotion of rain water harvesting, water conservation recycling and the reduction of effluent discharge. Pepsi'o has also established @ero waste centers and P2T recycling supply chains and assisted victims of natural disasters. Pepsi'o stays dedicated in its endeavor to develop community outreach programs by supporting rural water supply schemes, administering medical camps in villages, providing computers to rural schools and creating opportunities for women in rural areas through vocational training as an alternate means of livelihood.

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V,RV#,B
Pepsi"o Mission

. P,PS#"

#&/#!2

NTo be the worldGs premier consumer products company focused on convenience foods and beverages. 3e seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. /nd in everything we do, we strive for honesty, fairness and integrity.N Pepsi"o in #ndia Pepsi'o entered India in 5696 and has grown to become one of the country(s leading food and beverage companies. Ane of the largest multinational investors in the country, Pepsi'o has established a business which aims to serve the long term dynamic needs of consumers in India.

Pepsi'o India and its partners have invested more than ,. .8?77 million since the company was established in the country. Pepsi'o provides direct employment to %,777 people and indirect employment to 17,777 people including suppliers and distributors. Pepsi'o nourishes consumers with a range of products from treats to healthy eats, that deliver *oy as well as nutrition and always, good taste. Pepsi'o India(s expansive portfolio includes iconic refreshment beverages Pepsi, ? ,P, Mirinda and Mountain .ew, in addition to low calorie options such as .iet Pepsi, hydrating and nutritional beverages such as />uafina drinking water, isotonic sports drinks + :atorade, Tropicana577J fruit *uices, and *uice based drinks H Tropicana Bectars, Tropicana Twister and lice. "ocal brands H "ehar 2vervess oda, .ukes "emonade and Mangola add to the diverse range of brands.

Pepsi'o(s foods company, Frito+"ay, is the leader in the branded salty snack market and all Frito "ay products are free of trans+fat and M :. It manufactures "ay(s Potato 'hips,

%?

'heetos extruded snacks, ,ncle 'hipps and traditional snacks under the ;urkure and "ehar brands. The company(s high fibre breakfast cereal, Ouaker Aats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito "ay(s core products, "ay(s, ;urkure, ,ncle 'hipps and 'heetos are cooked in Rice 4ran Ail to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The group has built an expansive beverage and foods business. To support its operations, Pepsi'o has %$ bottling plants in India, of which 50 are company owned and #9 are franchisee owned. In addition to this, Pepsi'o(s Frito "ay foods division has $ state+of+ the+art plants. Pepsi'o(s business is based on its sustainability vision of making tomorrow better than today. Pepsi'o(s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. Performance Bith Purpose Performance with Purpose articulates Pepsi'o IndiaGs belief that its businesses are intrinsically connected to the communities and world that surrounds it. Performance with Purpose means delivering superior financial performance at the same time as we improve the world. To deliver on this commitment, Pepsi'o India will build on the incredibly strong foundation of achievement and scale up its initiatives while focusing on the following % critical areas that have a business link and where we believe that we can have the most impact.

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P,PS#"
Vision

#&/#! B#T% RKC -R 1P2

Being the best in everything we touch and handle. Mission 'ontinuously excel to achieve and maintain leadership position in the chosen businesses= and delight all stakeholders by making economic value additions in all corporate functions. It can be said with absolute certainty that the R;< :roup has carved out a special niche for itself. Aur services touch different aspects of commercial and civilian domains like those of +ottling, .ood "hain and ,ducation. !eaded by Mr. R. ;. <aipuria, the group as on today can lay claim to expertise and leadership in the fields of education, food and beverages.

The business of the company was started in 5665 with a tie+up with Pepsi Foods "imited to manufacture and market Pepsi brand of beverages in geographically pre+defined territories in which brand and technical support was provided by the Principals vi@., Pepsi Foods "imited. The manufacturing facilities were restricted at /gra Plant only. )arun 4everages "td. is the flagship company of the group.The group also became the first franchisee for -um Restaurants International Rformerly Pepsi'o Restaurants DIndiaE Private "imitedS in India. It has exclusive franchise rights for Borthern C 2astern India. It has total %1 Pi@@a !ut Restaurants C 5 ;F' Restaurant under its company.

The group added another feather to its cap when the prestigious Pepsi'o KInternational 4ottler of the -earL award was presented to Mr. R. ;. <aipuria for the year 5669 at a glittering award ceremony at Pepsi'o(s centennial year celebrations at !awaii, , /. The award was presented by Mr. .onald M. ;endall, founder of Pepsi'o Inc. in the presence

%6

of Mr. :eorge 4ush, the %5st President of , /, Mr. Roger /. 2nrico, 'hairman of the 4oard C '.2.A., Pepsi'o Inc. and Mr. 'raig 3eatherup, President of Pepsi 'ola 'ompany.

Strategic /i5isions2
Pepsi'o India consists of different divisions that include 4everage division, nack food division and the Restaurant division D-um Restaurants India Pvt. "td.E. These divisions work as separate 4,(s and have their separate management. Pepsi'o India divided its beverage division into different operating divisions. The heads of these divisions report directly to the '2A. The heads of these divisions are in charge of their respective areas and are accountable for the proper functioning of all the regions. The FA4A(s also report to the regional heads apart from the 'A4A(s.

07

M!RK,T#&Marketing ,n5ironment2

V,RV#,B

. P,PS#"

#&/#!

Marketing environment is the overall environment in which a 'ompany operates. This consists of the Task 2nvironment and the 4road 2nvironment.

Task ,n5ironment
Task 2nvironment includes the immediate players involved in producing, distributing and promoting the offering. The main players are the company, suppliers, distributors, dealers and the target customers. uppliers include the material and service suppliers such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies. The dealers and distributors include agents, brokers, manufacturer representatives and others who facilitate finding and selling to customers. The suppliers for Pepsi'o India include the bottle suppliers for the soft drinks. These include the Pet bottles and the :lass bottles. Ane of the most vital products re>uired in the operation is Refrigerator. Pepsi'o does not manufacture the refrigerators, instead they are supplied by different vendors who get time bound contracts from the company. The distributors and dealers are part of the sales and distribution network. This will be explained later under the section of TPlace(, in the % P(s segment. The target customer for Pepsi'o is primarily the youth. 4ut, because of increasing competition from 'oke Pepsi'o has expanded its target customer base which now includes people who are prospects for beverages beyond the ' . category. Pepsi'o has started targeting this segment by offering products in the Bon+ ' . category, these include fruit based non+carbonated drinks, *uice based drinks, energy drinks, sports drinks, snack food Dfrom the snack food division i.e. TFrito "ay(E.

05

+road ,n5ironment2
This contains forces that can have a ma*or impact on the players in the task environment. This includes six components& demographic environment, economic environment, physical environment, technological environment, political H legal environment, and socio H cultural environment. 'ompanies need to pay close attention to the trends and developments in these environments and make timely ad*ustments to their marketing strategies in order survive and succeed in the market. This will be explained in detail in the strategic marketing segment.

Value /eli5er4 Process2

The value delivery process consists of the value creation and delivery se>uence. This is done in three phases. The first phase, choosing the value, represents the homework done by the marketing department before the product exists. Marketing is re>uired to segment the market, select the appropriate the target market, and develop the offering(s value proposition. This is known as egmentation, Targeting and Positioning and is the essence of strategic marketing. Ance the business unit has chosen the value, the second phase is providing the value. Marketers need to determine specific product features, prices and distribution. The task in the third phase is communicating the value by utili@ing the sales force, sales promotion, advertising, and other communication tools to announce and promote the product. 2ach of these value phases has different cost implications.

0#

'hoose the )alue D trategic MarketingE 'ustomer egmentation Market election I Focus )alue Positioning

Provide the )alue DTactical MarketingE .istributi on I ervicing ourcing I Making Pricing ervice .evelop ment Product .evelop ment

'ommunicate the )alue DTactical MarketingE ales Force ales Promotion /dvertising

Fig. # H )alue 'reation and .elivery e>uence

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-eneric Value "hain2

Firm Infrastructure Suppo rt Activit ies !uman Resource Management Technology .evelopment Procurement Autbound "ogistics Marketing and ales
Margin

Inbound "ogistics

Aperations

ervice

*ri(ary Acti#ities

The generic value chain is a tool to identify ways to create value for the customer. This model proposes that every firm is a synthesis of activities performed to design, produce market, deliver and support its product. In order to be more precise only the primary activities in the value chain of Pepsi'o India are analy@ed.

Primar4 !cti5ities2 #n6ound $ogistics H This involves bringing and procuring raw materials for the
business. For the carbonated drinks industry only two raw materials are re>uired, they are water and the concentrated salt that is used to produce the final product. For this purpose water is extracted from the ground and the concentrated salt is provided by Pepsi'o India to all the plants in the country.

perations H Aperations primarily includes all the bottling plants. 'urrently there are
$# bottling planting in India that operate for Pepsi'o. Af the $# plants, 50 are owned by Pepsi'o and the rest 5? are DFA4AE, owned by R ; <aipuria :roup.

0%

ut6ound $ogistics H The Autbound logistics of Pepsi can be divided into three
stages. First the finished product from the bottling plants is sent to the depot or the territorial office, from where it is sent to the ' C F centers and the .istributor Points according to their demand. From the ' C F centers and .istributor Points the product is sent out for sale in the market to the retailers.

Marketing and Sales H The sales and distribution network of Pepsi is very strong
and comprises of different layers and a dedicated sales force. This is one of the important factors for the success of Pepsi. To keep the company abreast with competition and to provide support to its channel partners and to increase the sales, Pepsi'o puts lot of effort in its marketing activities. This includes maintaining excellent relations with its channel partners, making huge investments in /dvertising, signing of Megastars as its brand ambassadors, sponsoring various events, launching promotional for any launch or re launch of a product.

Ser5ice H In this industry after sales service is generally not re>uired. The only
exception being leak or burst bottles. In that case, the shopkeeper gets replacement for plastic bottles from the salesmen instantly, while the replacement for glass bottles is provided between #0th and $7th of every month. They are re>uired to collect all the damaged glass bottles and give to the respective salesperson who gives them the replacement within the next few days after getting it approved from the '2 or /.'.

Marketing Mi7 D > P0s2

Marketing Mix has been defined as the set of marketing tools that a firm uses to pursue its marketing ob*ectives. These tools are classified into four broad groups, namely, Product, Price, Place and Promotion. Marketing mix decisions should be made to influence trade channels as well as final consumers. / firm can alter any of the four P(s accordingly, including changes in the product and distribution channel as well. 00

The four P(s represent the seller(s view of the marketing tools available for influencing buyers. 3hereas, from a buyers point of view, each marketing tool is designed to deliver a customer specific benefits according to his or her re>uirements.

Marketing Mix

Target Market

Place 'hannels 'overage Mar'eting 3aria7les8 The 4o!r * Co(ponents of the Mar'eting Mi6 /ssortments "ocations Inventory Transport 01

Product

Product

Prod. )ariety Prod. )ariety Ouality Ouality .esign .esign Features Features 4rand Bame 4rand Bame Packaging i@es Packaging ervices i@es 3arranties ervices Returns 3arranties Returns

Price "ist Price .iscounts /llowances Payment period 'redit Payments

Promotion ales Promotion /dvertising ales Force Pubic Relations .irect Marketing

Fig. $ H Four P(s

Product2Pepsi offers different variety of products ranging from carbonated to Bon

'arbonated oft .rinks. These include H Pepsi "ola Mirinda ( $emon and ( 1p /e3 Slice Tropicana !Euafina (Mineral Bater) range )

0?

These Products come in different si@e H #77 ml, $77 ml, 177 ml, 5#77 ml, # lt. there are nearly %# ;,(s which are monitored and regulated on daily basis.

Product Aualit42
This is one of the most important aspects that any 'o. needs to address. pecially in the case of Pepsi this is even more important because of the controversies and claims regarding the ' 2 report on Pesticides in Pepsi. Therefore pepsi has to maintain stringent >uality norms and standards and norms. Pepsi does that by following one >uality standard worldwide and according to the official website of pepsi, the 'o. maintains that & K/t every level of Pepsi+'ola 'ompany, we take great care to ensure that the highest standards are met in everything we do. In our products, packaging, marketing and advertising, we strive for excellence because our consumers expect and deserve nothing less. 3e promise to work toward continuous improvement in all areas of our organi@ationL. K/t every step of our manufacturing and bottling process, strict >uality controls are followed to ensure that Pepsi+'ola products meet the same high standards of >uality that consumers have come to expect and value from us. 3e also follow strict >uality control procedures during the manufacturing and filling of our packages. 2ach bottle and can undergoes a thorough inspection and testing process. 'ontainers are then rinsed and >uickly filled through a high+speed, state+of+the+art process that helps prevent any foreign material from entering the product. /dditional >uality control measures help to ensure the integrity of Pepsi+'ola products throughout the distribution process, from warehouse to store shelfL.

+rand &ame2

09

This is the most important thing any 'o. in this 4usiness needs to do if it wants to remain and succeed in the 4usiness. Pepsi has successfully done that for so many years. Pepsi has targeted the youth and has invested heavily in advertising and building a brand image Dby launching several campaigns and roping in mega stars such as hahrukh, achin, ganguly, .ravid etc.E that attracts to the youth and this is one of the main reason for the success of Pepsi.

Packaging and Si9e 2 The products are available in packaging and si@es. This is done
to facilitate the use according to the re>uirements of the 'ustomer. .ifferent packaging also affects the usage pattern of the product in various markets. e. g. sale of # lt. bottles is high in areas in which middle and high income group customers stay. 4ut the sale of #77 and $77 ml bottles is high in areas where people in the lower income group bracket stay. The sale of 177 ml bottles is high in areas where students etc. stay. .ifferent packaging is also provided for different products like Tetra Packs, Pet 4ottles and :lass 4ottles Din #77 and $77 mlE.

Ser5icesF BarrantiesF Returns 2 There are no warranties and services Dpost salesE
provided for these products but there is provision of returns in case there is any problem with the product, e.g. leak or burst bottle, half filled bottle etc. The pet or plastic bottles are returned the same day and a replacement is provided for the same but in the case of glass bottles the retailer has to collect all the burst bottles and return it to the salesman around #0th of every month to get a replacement.

Price2
$ist Price2 The Price of each product is fixed and there is no discrepancy. alesmen are not authori@ed to make any change, alteration or give discounts unless authori@ed by the 'ompany.

06

/iscounts2 .iscounts are provided to 3holesalers and lums but there is no discount for retailers. The discounts are negotiated directly with the 'ompany and the 'CF or the .istributor point is not involved in the price negotiation. !llo3ances2 /llowances are given to salesmen on achieving their daily targets. This target is given to every alesman everyday before he goes on his designated route. The .epot In charge D r. ' 2 I ' 2E gives the target to every salesman in consultation with the T.M. Pa4ment period and "redit terms2 Bo credit is provided. The payment procedure is not flexible as the retailers are re>uired to make on the spot payments. /t times, they defer the payment and in that case, the alesman either shows a shortage or pays the rest of the amount by himself. The wholesalers are also re>uired to make in advance but at times they also defer the payment and make the payment at a later date.

Promotion2
Sales Promotion2 This is the most fre>uently used form of promotion which is used to increase the sale of the selected product. These promotions are used from time to time depending upon the sale of the products. If the sale of any particular product declines or shows a declining trend then a suitable increase the sale of that product. !d5ertising2 /dvertising is done by Pepsi'o. 'A4A D'ompany owned 4ottling AperationsE and FA4A DFranchisee owned 4ottling AperationsE have no say in the advertising campaigns and their planning. The advertising account of Pepsi is handled by <3T D< 3alter ThomsonE in association with the 'orporate office of Pepsi'o India. ales Promotion 'ampaign is launched to

17

Sales .orce2 There is a dedicated sales force at every 'CF and .istributor point. 2very alesman is assigned a specific route that he has to cover every day. The alesman has to take care of all the hops on the designated route and address and inform Dto the r. '2 I '2E about any issue any retailer has on the route. The alesmen are also assigned the task of providing all the information to the retailers regarding the daily schemes and the details of all the promotion schemes launched from time to time. These include informing the retailer about the promotional scheme, registration for the scheme, terms and conditions of the scheme etc. The alesman is also assigned the task of registering maximum possible outlets on his assigned route.

Pu6lic Relations2
This is one important aspects related to the success of Pepsi'o in India. Pepsi believes in maintaining good and healthy relations with all its 'hannel partners and every other person in the value chain. This has helped Pepsi in maintaining an extremely competitive position in the market in spite of the continuous onslaught from 'oca 'ola.

Place2
"hannels2 T'hannels are independent organi@ations involved in the process of making a product or service available for use or consumption(. There are different intermediaries in channels that facilitate the availability of goods to the consumer. "o5erage2 Two things come under market coverage. These are Market Reach and Market Penetration. Market Reach can be termed as accessibility and Market Penetration can be termed as Fre>uency.

15

.#-. > ? S!$,S !&/ /#STR#+1T# & &,TB RK . P,PS#" #&/#!.

'AMP/B-

'A4A

FA4A

3/R2!A, 2

'CF

.I TRI4,TAR

/"2 M2B

/"2 M2B

3!A"2 /"2R

",M

R2T/I"2R

R2T/I"2R

', TAM2R

', TAM2R

1#

Initially the focus of the 'ompany remains on reaching all the markets and then the 'ompany shifts its focus on increasing the fre>uency of sales in the respective markets so that the sales and profitability of the 'ompany can be increased. 'ompany DPepsi'oE& Pepsi'o India provides the salt to all the bottling plants in the 'ountry that carry out the bottling operations.

" + & These are 'ompany owned bottling operations operating directly under the
'ompany. Aut of $# bottling plants, Pepsi'o owns 50.

. + & These are Franchise owned bottling operations. R ; <aipuria group does all the
franchisee+bottling operations for Pepsi'o India= currently R ; < :roup has 5? bottling plants for Pepsi.

Barehouses& These are 'ompany or franchisee owned warehouses spread over various
locations that cover the respective territories and come under the purview of their respective /rea or Territory Affices. tocks are sent from the bottling plants to these warehouses, from where they are sent to the ' C F centers and .istributor Points.

" G . "enters2 These are the biggest centers in the distribution network and receive
proper assistance from the 'ompany Deither 'A4A or FA4AE. The ' C F center is owned by a private player and not by the 'ompany. The vehicles D.elivery )ansE are owned by the 'ompany, and the alesmen at the ' C F points are on the 'ompany Payroll.

/istri6utors& These are small, compared to ' C F centers. 2verything at the

.istributor point owned and managed by the distributor, even the salespersons are on the .istributors payroll.

Bholesalers& These are smaller than ' C F centers and .istributor points and get the
stock directly from the 'ompany or Franchisee. They get their stock directly from the 'ompany and thus get special rates and extra discounts from the 'ompany.

1$

Slums& They are generally smaller than the 3holesalers are. !owever, they get special
discounts from the ' C F centers and .istributor points. /ll the different players in the distribution channel namely ' C F centers, .istributor points, 3holesalers and lums have different designated markets and are not supposed to operate in the market designated to any other player.

Retailer& Retailers are the most important chain in the distribution channel of Pepsi as
they are the only point of contact with the customers. Retailers get their stock from all the other channel members in the distribution channel.

1%

STR!T,-#" M!RK,T#&-

. P,PS#"

#&/#!

.emographicI 2conomic 2nvironment

TechnologicalI Physical 2nvironment

Marketing Intermediarie s

Marketing Information ystem % P(s

Target 'ustomers

Marketin g Planning ystem Public

uppliers

Marketin g 'ontrol ystem

Marketing Argani@ation C Implementatio n ystem

'ompetitor s

PoliticalI "egal 2nvironment

ocialI 'ultural 2nvironment

10

/emographic D ,conomic ,n5ironment2

.emographic environment comprises of people of different ages and class. This helps the 'ompany in identifying specific target market for specific products. imilarly, economic environment helps the 'ompany in deciding how much to spend and accordingly price the products. Pepsi distributes its products considering this in mind. 'ans are distributed in areas that have more youth population and two lt. bottles are distributed in areas that have more no. of families. #77 ml bottles are primarily distributed in areas with lower income group people.

Technical D Ph4sical ,n5ironment2

Technical and physical environment refers to the technical capabilities and the infrastructural capabilities and re>uirements of the 'ompany. Pepsi has access to the best technology for its products and it uses the same technology worldwide for its products. This was instrumental in helping Pepsi handle the pesticide controversy.

Political I legal 2nvironment&

This is one of the most important factors that a company needs to consider while starting, establishing and expanding operations in any country. "egal 2nvironment is important because a company needs to confirm to the laws of the land and carry out its operations accordingly. 3hile political environment is important as it can play an important in forming opinions regarding the company. This is the reason why Pepsi operates in India in collaboration, initially it started its operations in India with Pun*ab :overnment and then it started its operations in the carbonated and non+carbonated beverage segment n collaboration with R;< group.

Social D "ultural ,n5ironment2

This plays an important role in determining the acceptability of the product according to he socio cultural norms of the market and the effect the company has on each of these. 'ompanies need to be very careful about this issue as people are very sensitive about their culture and may not tolerate any infringement. This determines the ingredients Dof

11

the productsE and the type advertisement and promotions used by the 'ompany. 4ecause of these factors, Pepsi primarily uses 4ollywood stars and 'ricket stars in India as they are the biggest celebrities and role models and are widely accepted.

Market #ntermediaries2
Market Intermediaries facilitate the availability of products to the customers. Primarily there are three strategies for distribution through market intermediaries. They are 2xclusive distribution, elective .istribution and Intensive .istribution. 2xclusive .istribution means severely limiting the number of intermediaries. It is used when the producer wants to maintain control over the service level and outputs offered by the resellers. It often involves exclusive leading arrangements. elective .istribution involves the use of few selective intermediaries who are willing to carry a particular product. It is used by established companies and by new companies seeking distributors. Intensive .istribution consists of the manufacturer placing the goods or services in as many outlets as possible. Pepsi primarily uses intensive distribution for its products. This is done to increase the market reach and market penetration of its products and to counter competition from its largest and biggest rival 'oke. The sales and .istribution network of Pepsi is already discussed in detail. uppliers& There are no suppliers for the carbonated beverage industry including Pepsi'o. The salt used by all the bottling plants to make the beverages is supplied to them by Pepsi'o irrespective of whether they are 'A4A or FA4A. The concentrated salt is the only ingredient apart from water that is re>uired to manufacture the beverages.

1?

"ompetitors2
For Pepsi the biggest competition comes from 'oke. 2ven outside India 'oke is Pepsi biggest competitor. 4ecause of the fierce competition from 'oke, Pepsi has to be very aggressive in promoting itself through advertisements and other methods like sales promotions. This is evident in the immense expenditure Pepsi incurs on its advertisements and endorsements of its brand ambassadors.

Marketing #nformation S4stem2

.efinition H KMarketing Information ystemL consists of people, e>uipment and procedure to sort, analy@e, evaluate and distribute needed timely and accurate information to marketing decision makers. MI is needed to counter issues like H too much information, too little information, too late information and inaccurate information. The type of information re>uired by Pepsi is regarding new products launched by its competitors primarily 'oke, promotional schemes and daily schemes of 'oke and new brand endorsements etc. Information regarding new product launches is re>uired by Pepsi'o so that they can accordingly plan their strategy, while information regarding promotional schemes and daily are re>uired by all the regional and territorial offices so that they can accordingly introduce and test the schemes.

Marketing planning S4stem2

This is re>uired to make a marketing plan that is a central instrument for directing and coordinating marketing effort. The marketing plan primarily operates at two levels. Strategic Marketing plan H This lays out the target market and the value proposition to be offered. Tactical marketing Plan H pecifies marketing tactics, including product features,

promotion, merchandising, pricing, sales channel and service. .ecisions regarding strategic marketing plan are taken at the corporate level. 3hile most of the decisions regarding tactical marketing plan are taken at the regional and territorial 19

level. These decisions are re>uired for the formulation of marketing planning system for specific markets. These systems include methods of promotion, like sales promotion. and discounts on purchase of products. ales promotion

primarily includes displays and incentives to retailers in the form of gifts, merchandise

Marketing "ontrol S4stem2

It is a system comprising of different procedures and various levels of management to bring efficiency and to keep a check on different marketing functions within the organi@ation. There are primarily four types of marketing control systems. These are, /nnual Plan 'ontrol, Profitability 'ontrol, 2fficiency 'ontrol and trategic 'ontrol. !nnual plan control H These are top and middle management tasks that try to examine whether the planned results are being achieved. This is also done at regional offices apart from the corporate office. These regional offices comprise off the 'A4A and FA4A offices. These tasks primarily comprise off ales analysis, Market share analysis, ales to expense analysis, ales to expense ratio, Financial analysis etc. In Pepsi'o India, this is beyond annual plan. It is done on monthly basis, apart from annually and bi annually. The sales analysis is done to know the sales and sales trend of different brands individually and with respect to their competitors. ales analysis is the primary tool to identify the type and scope of promotions launched by the 'ompany. Profita6ilit4 "ontrol H This is done to examine whether the company is making or losing money while carrying out its business. Profitability is measured in terms of product category, territory, segment, channels, order si@e etc. For Pepsi'o India, the most profitable product I brand among all the products is Pepsi 'ola. 2very territory is re>uired to monitor and increase its profitability. The territorial offices are re>uired to report to the head office and send a detailed report for analysis and planning.

16

,fficienc4 "ontrol H ,sed to evaluate and improve the spending efficiency and impact of marketing expenditures. 2fficiency of sales force, advertising, sales promotion and distribution is measured. ales force efficiency is primarily measured by scheduled calls, completed calls and strike rate. cheduled calls are the total no. of outlets on a particular route. 'ompleted calls are, total no. of outlets visited, and strike rate is the no. of outlets on which sales is successful. alesmen are also *udged on their monthly and weekly data and asked to improve their performance if it is not up to the mark. To motivate the sales force they are given daily targets and if they achieve their targets then they receive incentives accordingly. The incentives are announced in advance, the daily incentives are cash based and if any promotional incentives or monthly incentives are there, they are generally in the form of gifts or merchandise. /dvertising efficiency is measured at the corporate level. /lthough it is generally believed that its very difficult to get a precise idea of the advertising efficiency, still some of the factors are taken into consideration to measure advertising efficiency. These can be summed up as, advertising cost per thousand target buyers reached by the media vehicle, percentage of audience who noted, saw, associated or read the /d. 'onsumer opinions on the /d(s content and effectiveness. 4efore and after measures of attitude towards the product. /dvertising efficiency can also be improved by better product positioning, pre testing the /ds, looking for better media buys, and doing post testing. 3e will analy@e the /dvertising campaigns of Pepsi'o India in greater detail later. /nother important factor to be taken into consideration while analy@ing the efficiency is the distribution efficiency. This is a very important aspect of the operations of Pepsi'o India because this industry primarily relies on the push strategy and if the sales and distribution network is not strong then the company will not be able to achieve the desired the sales of its products and will also find it extremely difficult to cope with the competition from the largest soft drinks manufacturer in the world. The sales and distribution network of Pepsi'o is very strong and has a very specific structure. Pepsi'o makes sure that this structure is not altered and works within the specified framework and to its full potential. The effectiveness of the distribution network is *udged based on market reach and market penetration. For this purpose, supervisors Dsales executivesE

?7

accompany the salesmen regularly and make sure that they cover all the shops on the route and also report and any issues found in the market. Strategic "ontrol H This is used to examine whether the 'ompany is pursuing its best opportunities with respect to markets, products and channels. To do a proper assessment for strategic control different instruments including marketing audit, marketing effectiveness, marketing excellence review and the ethical and social responsibility review. Marketing audit is a comprehensive, systematic, independent and periodic examination of a company(s or business unit(s marketing environment, ob*ectives, strategies and activities with a view to determine problem areas and recommending a plan of action to improve the company(s marketing performance.

?5

S!$,S !&/ M!RK,T#&- %#,R!R"%Y . P,PS#" #&/#!.

M9M

9M

9M

TDM

MDM

ADC

MDC

C:

M:

SA;:S*:RS"<S

MAR0:T <2 ASS STA<TS

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M1M ? Marketing 1nit Manager2

In charge of specific @ones De.g. north, south, east, westE and report to the corporate office.

1M - 1nit Manager2
In charge of day to day operations and supervision of all the functions within the organi@ations including operations, logistics, sales and distribution, marketing. The ,nit Manager reports to the M,M.

T/M - Territor4 /e5elopment Manager2

T.M is the in charge of the sales and distribution network of a particular territory within a @one. Responsible for the daily, monthly and annual sales within the territory decides the daily schemes for products and incentives for salespersons. !e is also responsible for cost effectiveness, profit generation and profit maximi@ation within the territory.

M/M - Marketing /e5elopment Manager2

M.M is responsible for all the marketing activities and their effectiveness within a territory. .ecides the format and time frame of the marketing and promotional activities and the incentives given to the retailers.

!/" - !rea /e5elopment "oordinator2

Reports to the T.M, and is in charge of a ' C F center and the distributor point in the area. !e is directly responsible for any issues in the area and is supposed to ensure the smooth functioning of the entire sales and distribution network in the area. /.' is responsible for timely disposal of any issue faced by the retailers. !e decides and approves the boards, displays and hoardings in the area.

?$

M.' + Marketing .evelopment 'oordinator&

Reports to M.M, and is in charge of carrying out all the marketing activities in the area. !e is responsible for the execution and success of marketing and promotional activities. 'oordinates with the outside agencies for displays, boards, checks conducted in the market. !e is also responsible to keep a check on the expenditure of the marketing activities in the market.

", - "ustomer ,7ecuti5e2

Reports to the /.' and is in charge of the salespersons. !e is re>uired to visit the market and accompany every salesperson as fre>uently as possible. !e is the first person to get information about the market I area and is the first contact if the salespersons or retailers face issue. Responsible for assigning and achieving daily sales target given to the salespersons.

M, - Marketing ,7ecuti5e2
Reports to the M.' and is responsible for the daily functioning of the marketing activities in the including awareness of promotions in the market and the response in the market

Salesperson&
They are the most important asset for the company as they are the ones who sell the products, are responsible for ac>uiring new customers, and retain the old ones. Their work also includes informing the retailers about the promotions and any new scheme launched. They are also re>uired to push for the sale of any new product launched in the market and make sure that the retailers are following the company guidelines regarding the launch and the maintenance of )i@icoolers. They report to the '2.

?%

Marketing !ssistant2
Reports to the M2 and is responsible for the distribution and usage of the displays and boards in the area. /lso has to check whether retailers are following the guidelines of the company regarding promotional displays, other displays and displays in the )igicoolers. They report to the M2. Pepsi is one of the most well known brands in the world today available in over 517 countries. The company has an extremely positive outlook for India. NAutside Borth /merica two of our largest and fastest growing businesses are in India and 'hina, which include more than a third of the world(s population.N DPepsi'o(s annual report, 5666E This reflects that India holds a central position in Pepsi(s corporate strategy. India is a key market for Pepsico, and at the same time the company has added value to Indian agriculture and industry. Pepsi'o entered India in 5696 and is concentrating in three focus areas H oft drink concentrate, snack foods and vegetable and food processing. Faced with the existing policy framework at the time, the company entered the Indian market through a *oint venture with )oltas and Pun*ab /gro Industries. 3ith the introduction of the liberalisation policies since 5665, Pepsi took complete control of its operations. The government has approved more than , 8 %77 million worth of investments of which over , 8 $$7 million have already flown in. Ane of Pepsi'o(s key strategies was to develop a completely local management team. Pepsi has 50 company owned factories while their Indian bottling partners own #9. The company has set up 9 greenfield sites in backward regions of different states. Pepsi'o intends to expand its operations and is planning an investment of approximately , 8 077 million in the next three years.

?0

Sustaina6le "ompetiti5e !d5antage2

'ompetitive advantage is a company(s ability to perform in one or more ways that its competitors cannot or will not match. 3hen a company is able to maintain that advantage a long period of time that gives it an edge over its competitors then, this advantage is termed as sustainable competitive advantage. /ny competitive advantage must be seen by customers as a customer advantage. Then only that competitive advantage can be transformed into a sustainable competitive advantage. Three ma*or competitive advantages give Pepsi'o India a competitive edge in the market place. They are&

?1

4ig Muscular 4rands built through better market positioning and heavy investment in advertising and promotions= Proven ability to innovate and create differentiated products through superior operating base= Powerful go to market system built with the help of superior relationship base and an impeccable sales and distribution network.

Making it all work are the extraordinarily talented and dedicated people who are an integral part of Pepsi'o India.

"ommunicating 3ith the "ustomer2

Marketing 'ommunication is the means by which firms attempt to inform, pursued and remind consumers directly and indirectly about the products and brands they sell. Marketing 'ommunication is the central instrument of making brand e>uity. Marketing 'ommunication consists of six ma*or modes of communications called the marketing communication mix. /dvertising. ales promotion. 2vents and 2xperiences. Public Relations and Publicity. .irect Marketing. Personal elling.

/lthough Pepsi'o uses all the modes in some form or the other, but this study will examine various aspects of communication with the internal customers.

??

.#V, . R",S ,..,"T#&- T%, ,&V#R M,&T

?9

B"#$"%&%&$ P'()# '* S+,,-%)#. 5. upplier 'oncentration #. Importance of )olume to upplier $. .ifferenciation of Inputs %. Impact of Inputs on 'ost of .ifferentiation 0. witching 'ost of Firms in the Industry 1. Presence of ubstitute Inputs ?. Threat of Forward Integration

T0#)"1 '* N)( E&1#"&1. 5. 'ost /dvantage. #. Proprietary Products $. /ccess to Inputs. %. :overnment Policy. 0. 2conomies of cale. 1. 'apital Re>uirement ?. 4rand Identity. 9. witching 'ost. 6. .istrbution /ccess. 57.Retaliation.

2xisting Rivalry /mong Firms

B"#$"%&%&$ P'()# '* B+/)#. 1. 4argaining "everage. #. 4uyer )olume. $. 4uyer Information. %. 4rand Identity. 0. Price ensitivity. 1. Treat of 4ackward Integration. ?. Product differentiation. 9. 4uyer 'oncentration )s Industry. 6. ubstitutes /vailable. 57. 4uyers Incentive.

T0#)"1 '* S+2.1%1+1). 5. witching 'osts. #. 4uyer inclination to ubstitute. $. Price performance trade off of ubstitutes.

D)$#)) '* R%3"-#/ 5. 2xit 4arriers #. Industry concentration $. Fixed costs I )alue added. %. Industry :rowth. 0. Avercapacity. 1. Product difference. ?. witching 'osts. 9. 4rand Identity. 6. .iversity of Rivals. 57. 'orporate takes.

Threat of ne3 entrants2

?6

Pepsi(s product differentiation caused by their marketing strategy has limited the threat of new entrants. /lso the heavy start up costs of manufacturing and packaging plants would be a deterrent. 4ut, the biggest deterrent is brand image and reputation= a new company would be very hard pressed to take market share away from established players like Pepsi, 'oke etc. More importantly, the access to distribution channels is currently one of the biggest barriers to entry, and this barrier remains because both 'oke and Pepsi maintain very strong relation with their channel partners.

+argaining po3er of 6u4ers2

The level of bargaining power differs among groups of buyers. The bottlers, retailers and distributors have significantly greater bargaining power than the end consumer does. "arge retailer such as Reliance, 4ig 4a@aar, ubhiksha are able to extract profits from the 'ompany through incentives such as volume+based purchases, promotions and displays. This is particularly true for pet bottles. 4ut, this can also be harmful for the retailers and they losing customers if they refuse to stock a particular brand. The bargaining power of the consumer is low. They are a fragmented group and no one individual(s purchase accounts for a significant portion of manufacturer(s profit. /lthough the presence of substitutes does serve to increase buyer power for consumers, but a high degree of brand loyalty mitigates this loyalty. In short, we can say that the end consumer has medium bargaining power.

+argaining po3er of suppliers2

There are very few suppliers for the entire soft drink industry. The end product is comprised of few ingredients, which are largely commodities. In addition, it is safe to assume that Pepsi accounts for a large percentage of the suppliers total revenues. Thus, it is important for the suppliers to contain whatever bargaining power they have. The overall bargaining power of the suppliers is considered low.

Threat of Su6stitutes2
97

There are many substitutes to sweetened carbonated beverages. pecially in India there are several substitutes that pose a threat to Pepsi'o. They are bottled water, *uices, energy drinks, tea, coffee, energy drinks and ' . from its main competitor 'oca 'ola India. The challenge lies in increasing brand loyalty within these substitute markets, because the substitute products are, for the most part, contained with each manufacturer(s product portfolio. In India the local beverages like tea and nimbu paani pose a threat to some extent to the established players. Therefore the threat of substitutes is very high specially because of negligible switching costs.

,7isting Ri5alr4 among firms2

There is intense rivalry between 'oke and Pepsi. This rivalry leads to a downward pressure on prices and significant investment in advertising in an attempt to build and maintain brand loyalty. In a maturing market such as domestic carbonated drinks, the only way to gain market share is to steal from one(s rival. Thus, 'oke and Pepsi fight heatedly over prices, suppliers, spokespeople, retail space and ore importantly, the taste buds of consumers.

To do a complete analysis of the overall environment is not possible due to the huge sample si@e of the population therefore before presenting my findings I would like to remind the reader the limitations or constraints under which the survey was done. This survey may not be fruitful for the entire population of internal partners of Pepsi'o butit will surely be useful for the particular regions mainly Trans+-amuna and 2ast+.elhi.

.#&/#&-S
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R,S,!R"% M,T% / $ -Y
2very research methodology includes a research design which may be defined as the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research process with economy in procedure. The sampling method that I am being using is the stratified sampling method, the reason behind using this method even though the time consumption when taken into consideration is more is to divide the whole set of population I am considering for my work into different group according to type of information gathered from each set and by that a perfect co+relation could also be done. My data collection processes would consist of series of procedures which would be further divided into primary and secondary data collection. The secondary data are those studies made by others for their own purposes. The secondary data for my research would be collected from the companies own data, archives and their annual financial reports. /lso the findings of prior research studies on outsourcing of accounting processes would give an ample amount of historical data or decision making patterns. /lso I would use internet to get some more information about the industry and use *ournals for getting guidance from the past researches in this topic.

/!T! " $$,"T# & M,T% /

The data collection mode used to get the desired information from primary sources C ,nstructured .irect Interviews Cthe instruments used in the Ouestionnaire. In this research data was collected through two different modes, namely+ direct interviews. Primary data collection econdary data collection

Primar4 data collection& Primary data was collected through Ouestionnaire urveys and

9#

Secondar4 /ata "ollection&

econdary data was collected from old reports and

maga@ines and data provided by )arun 4everages itself.

$imitations
The limitations faced during the training and while undergoing my research was lack of availability of first hand data. /s the data included is secondary in nature, authentication of the data is ma*or concern. The next difficulty was the facts and figures had change due to change in financial year, thus it could affect the recommendation and conclusion part. /lso there were huge constraints when it came to time as a one month period only allowed me a bit of primary research plus the population si@e being humongous my sample pf 07 retailers does not necessarily represent the entire population rather it can be taken as a representative group of the regions in which the survey was taken.

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SB T !&!$YS#S
In order to get clear understanding of the position of .iet Pepsi in the various markets we did a 3AT analysis from the data obtained from the survey and the various retailer interviews

STR,&-T%S2
P!"K!-#&- !&/ PR#"#&- H Pepsi has the advantage of having provided the same kind of health based carbonated drink the lim .iet Pepsi 'an which in comparison to the .iet coke is a much more attractive offering because it is slim sleek e>ually healthy and way cheaper. /#STR#+1T# & H /s already mentioned Pepsi India has one strongest and most efficient sales and distribution networks not only in India but also throughout the globe. /lso in the particular market where the survey was done the sales people have developed a network which is powerful enough to make or break sales for Pepsi in any given >uarter P R H Ane of the most important factors of success of Pepsi'o in India is the relationship the company and its constituents have with the channel partners. The 'ompany officials and even the employees of FA4A have very good rapport and relations with the 'hannel partners. /lso the recently introduced retailer benefit schemes such as the gold card membership and other free gifts and offerings not only motivate the retailers but also helped us create visibility for the lim .iet 'an range in a profound. The experience of working with people who welcome us with a smile rather than a frown will always be remembered.

90

& &-"!R+ &!T,/ H This is one those strengths of Pepsi that often goes unnoticed but plays a very important role in success of Pepsi in India and even around the globe. The non+carbonated segment is dominated by Pepsi, Tropicana is the market leader in fruit *uices. In the mineral water segment, />uafina clearly outsells ;inley without ay fuss. 4ottling H Pepsi has the advantage of being in partnership with the largest bottler in India, the R ; <aipuria :roup. R;< :roup controls almost 10J of the bottling operations of Pepsi'o in India. /t times this is also seen as a weakness of Pepsi in India attributing to the fact that the <aipuria group is so strong that in certain circumstances it can even defy the parent 'ompany. Pepsi H Pepsi 'ola is the biggest strength of Pepsi as it is the market leader in the 'ola segment and clearly outsells both the products the 'oca 'ola 'ompany namely 'oke and Thums ,p. Pepsi controls almost 17J market share in the 'ola segment.

B,!K&,SS&
S," &/ M V,R /#S!/V!&T!-, + .iet Pepsi 'ola does have the first mover advantage which .iet 'oke has and this may prove to be a ma*or shortcoming also in the /gra Market no 2xtensive efforts have been made to populari@e it. 4rand H An a comparative scale .iet 'oke proves to have a better brand image in customers mind than. This compels to incur extra expenditure in /dvertising, Promotions and ponsorship. M"/ &!$/S H This is one of the most important reason why .iet 'oke outsells Pepsi worldwide and specially in the ,nited tates. imilarly, in India .iet Pepsi may suffers in sales because of institutional sales. Bow Pepsi is trying very to bridge this gap in the near future.

91

,JP,&/#T1R, H Right from the very beginning Pepsi has hired the biggest and the most expensive stars in the country as its brand ambassadors and has spend heavily on advertising which has affected its balance sheet. Vi9icoolers H /t presently this is one the biggest problems faced by Pepsi. Pepsi is not able to get refrigerators in India so they have to import it other namely ri "anka, Mauritius etc. 4ecause of this, retailers are facing lot of problems in vigicoolers. They are not able to get new refrigerators, replacements for old ones, even the repair work takes lot of time because at times even the spares are not available on time.

PP RT1&#T#,S&
"owest Per 'apita 'onsumption H 2ven after almost decades of presence in the market, there are growth opportunities for .iet Pepsi in India as here the per capita consumption of carbonated beverages is one of the lowest in the world. !ealth 4ased& apart from its <uice 4ased drinks portfolio Pepsi can ,se the lim .iet can to the maximum by promoting it as a health drink at 'heaper prices.

T%R,!TS&
&- 0s H B:A(s like ' 2 can seriously hamper the sales and prospects of companies operating in this industry. This happened during the pesticide controversy involving both coke and Pepsi. %,!$T% H :rowing health awareness among people and some of ill effects of carbonated beverages have pursued many people to switch over to non+carbonated beverages that can seriously hamper the long+term prospects of the entire Industry and not Pepsi.

9?

,&V#R &M,&T H 2nvironmental concerns are often raised because of the massive amount of water extracted by the bottling plants resulting in the drop in groundwater level which affects the local population adversely.

In India Pepsi'o adopted the strategy of growth through intensification. In the intensification strategy, it used market penetration by developing one of the strongest sales and distribution network in the world and utili@ing it to the fullest. Pepsi did market development by making the aware of the best products available at their disposal, by using the best technology to produce the products, by properly communicating with the customer, and making the customer reali@e that he is important. Pepsi also explored new markets by venturing new segments like fruit based beverages, sports drinks, snack food division. Pepsi expanded and established itself in the market place by constantly developing new products to the customers, like Tropicana, :atorade, and Pepsi 4lue. In this way, Pepsi was also able to effectively counter the threats posed by substitutes and new entrant

99

R2'AMM2B./TIAB
This is one of the most important and most difficult part of the study. I arrived at certain recommendations for Pepsi'o IndiaDTrans+-amuna and /gra marketsE after the analysis of the data. ome of the important recommendations are as follows There should be and correct feedback from the retailers on the performance of salesmen. This will help improve their efficiency and accountability. Moreover, this will also help in reducing the confusing that the retailers have at times because the salesmen does not explain the schemes properly. /s already mentioned )i@icoolers are a ma*or reason of dissatisfaction among retailers. The periodical maintenance check of )i@icoolers is done at three months. This should be done at an interval of %0 days or 17 days instead of the current practice of 67 days / complete survey of the every territory should be done for standys, banners logo racks etc. and then a proper budget and plan should be made for their availability at the re>uired places, instead of doing it in bits and pieces as the current practice is this will help with promotion at every retailer level There should be incentives for salesmen for every display they enroll because they are assigned this task and if they get incentives for the same then it will greatly increase the efficiency of the promotional activities. Pepsi should also introduce a version of .iet Pepsi 'ola as a sports drink range this is a completely new and untapped market which will help in providing the impetus for .iet Pepsi

96

Pepsi should start more aggressive marketing of its .iet Pepsi range of products as they have very good growth and future prospects while there is not much growth in the carbonated beverages sector.

In order to respond effectively to changing market trends and challenges, soft drink companies must support their improvement efforts with industry+specific solutions. These solutions should have the following characteristics and provide the following capabilities&

+asic processes
Pre+configured processes with clearly defined implementation scope H / streamlined implementation strategy is necessary to minimi@e disruptions to the business while maximi@ing enterprise+wide adoption. 3hen a world+class solution tailored to the specific needs of the soft drink industry is coupled with a rapid implementation approach, it can deliver immediate business value, generating a high overall return on investment and a low total cost of ownership. Manage financials including cost management H /n effective solution must provide an integrated finance system capable of handling cost management, meeting internal and external reporting re>uirements, providing real+time data access, and drilling+down to greater levels of detail. Manage procurement process H Becessary capabilities for efficient procurement include supporting vendor price comparisons and flexible pricing processes for the actual value of the raw ingredients. It should also support >uotation handling, contract management, and batch handling. Meet customer expectations for managing Their Arders H /n effective solution should be able to effectively manage the entire process for handling customers( orders, encompassing variable pricing, delivery, invoicing and payment. It should support

67

beverage companies in shortening order cycle times, making on+time and in+full deliveries, and providing optimal payment methods for customers. ptimi9e planning and manufacturing to suit specific 6usiness reEuirements H olutions in this arena should support a multi+step manufacturing process. This includes the ability to perform automatic batch determination based on expiration date during production+order processing. Pro5ide efficiencies in integrated in5entor4 management H Integrated inventory management capabilities are crucial. The system should be able to automatically update all stock figures after material movements have been posted. These figures should be accessible in real+time for decision support. Manage product safet4 H /s food safety re>uirements become more advanced across the beverage industry, track and trace capabilities are a prere>uisite. /n effective solution should have the functionality to find a defective batch that has already been delivered to a customer. 4everage+specific processes Plan deli5eries H 2ffective solutions feature powerful tools that businesses can use to efficiently load, dispatch, and track any number of deliveries. /n emphasis should be placed on eliminating redundant trips and matching the appropriate vehicles and drivers to customers for each delivery. 4y extending route management into the order management system, companies could reap potential cost savings of #0J to 07J. Monitor route 6usiness H 4everage companies must be able to account for every item delivered, and take >uick action to resolve item discrepancies. 4est+in+class solutions provide powerful check+in and check+out functions that record all deliveries and returned goods.

65

They should also provide tools to monitor >uickly and accurately the entire transportation operation, or that of a transportation supplier, from loading and delivery to accounting and settlement of returned goods. The system as a whole should ensure complete loads, on+time deliveries, solid inventory control, and seamless invoicing. Keep track of empties H 4est+of+breed beverage industry solutions paint a detailed picture of the entire empties situation, showing the location and status of crates, kegs, or pallets, and helping optimi@e return logistics. It should also permit >uick access of each customer(s empties account as well as print delivery notes or invoices recording the empties involved in a delivery. Manage re6ates and 6onus agreements H Rebate and bonus agreements are critical to enhancing relationships among beverage manufacturers, wholesalers and customers. -et, the task of managing rebate programs is becoming increasingly difficult as current rebate arrangements often involve numerous parties, including many that are not directly involved in the initial transactions. 2ffective beverage solutions provide companies with the tools needed to manage easily and accurately large, complex partner constellations with any number of bonus or rebate arrangements. They should also provide coupon management. These functions apply both to direct and indirect customers. Manage commissions H In the beverage industry, complex commission structures are needed to motivate the sales force and to encourage them to push certain brands and to develop specific markets. 4est+in+class solutions allow companies to complete commission based transactions, make payments both to internal and external sales forces, and track the payment of these commissions over time.

6#

'AB'", IAB
/fter analy@ing all the aspects of the data available and giving some important recommendations a suitable conclusion which should be derived for this study. !owever, before starting the conclusion part, the ob*ective of the research must be kept in mind so that we can arrive at a befitting conclusion for the research problem. The primary ob*ective of this research was to develop a complete understanding of the overall functioning of Pepsi'o India including the sales and distribution network and marketing DPartner Relationship Management to be preciseE. The data collected provided a sound base for understanding the overall organi@ational set up of Pepsi'o in India. 4y analy@ing the data and the literature review, following conclusion was inferred& The ales and .istribution Betwork of Pepsi is very strong and almost flawless.

Pepsi'o India had the first mover advantage when it entered the market and it capitali@ed on that advantage to grab the market.

Franchisee based operations combined with the 'ompany(s operations add strength to the overall presence of the 'ompany in the market.

Franchisee takes care of its operations and Pepsi'o does not interfere in its operations. The Franchisees are re>uired to report to the 'ompany at specific time intervals.

The /dvertising 'ampaigns are conceived, implemented by the Pepsi'o and Franchisee has no say in that.

6$

Promotional activities within every territory are under the territory office and the officials of that office are responsible for the effectiveness and successful implementation of these campaigns.

4ecause of fierce competition Pepsi'o has spend heavily on /ds in order to increase the brand recall and successfully face the competition.

Pepsi has good brand image and recall in the customer(s mind but the most surprising thing is that when compared with 'oke, Pepsi lags behind in terms of brand image.

/lthough the overall functioning of Pepsi is very efficient, there are certain areas that can be improved.

Pepsi'o is finding it difficult to counter the competition from 'oke in carbonated 4everages egment but it has distinct advantage and upper in almost all the other segments like snack food, non carbonated beverages, sorts drink, restaurants etc.

.iet Pepsi even though newly introduced hasn(t yet caught up with .iet 'oke the way it should.

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