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

PepsiCo believes that if they can get this market to adopt their product. New York which deals in manufacturing and marketing a wide variety of beverages and snack-based foods. 2 . it is one of the largest consumer products company in the world. PepsiCo also focusses on another market. PepsiCo has become the largest selling soft drink in the world and is liked by people of all ages.000. A recent survey has shown that about 90% of the world population prefers Pepsi when asked the question of which soft drinks do they prefer. INTRODUCTION PEPSICO Inc. headquartered in Purchase. Despite being a strong competitor against Coca Cola.In addition. with annual revenues over $30billion and employees in excess of 4. they could establish a loyal customer in a long run. which includes Teenagers that are between the 12 to 18 years old. is an American multinational corporation. Its recently launched product Quaker Oats is taking the lead among its competitors when it comes to breakfast creals. Today. which is listed in the FORTUNE 500 COMPANIES LIST. 80.

PepsiCo acquired Tropicana in 1998. PepsiCo India primarily encompasses 3 Divisions: BEVERAGES RESTAURANTS PEPSI. It was in 1994. and are governed by a separate management. she has been a prominent figure in the restructuring of PepsiCo. 3 . According to Business week magazine. the fortunes of PepsiCo met tremendous boost. merged with Quaker Oats along with Gatorade. it has developed 43 bottling plants in India. of which 15 are company owned and 28 are franchisee owned. she was elected the new CEO of the company. It is the 2nd largest manufacturer of soft drinks in the world. and later. Indra Krishnamurthy Nooyi. she joined PepsiCo. MOUNTAIN DEW. CHEETOS. was named President and Chief Financial Officer in 2001.Its been over a decade now. Pepsi-cola began business globally in 1934 with Canada as its first host country. In 2007. TIME FOR THE CEO’s PROFILE Born in Chennai. RUFFLES PIZZA Each of these divisions functions as a distinct Strategic Business Unit. Under Nooyi’s presidency. PepsiCo brands are available in nearly 200 countries across the globe. KFC AQUAFINA. when Pepsi-Cola merged with Frito-Lay. 7UP HUT.The company has built an expansive beverage. did her post graduate diploma from IIM Calcutta in 1976.PepsiCo Inc was previously called Pepsi-Cola. thereby setting the steps for growth in the years ahead. followed by Boston Consulting Group in 1980. PEPSICO INDIA PepsiCo entered India in 1989. she joined Johnson& Johnson. MARKETING MIX OF PEPSICO Marketing Mix may be defined as the set of marketing tools that a firm uses to pursue its marketing objectives. snack food and exports business and to support its operations. This paved the way for the company to enhance its market potential. LIPTON ICED-TEA SNACK FOOD LAYS.As a start to her career. The foundation of PepsiCo was laid in the year 1965.

It can take 2 forms: tangible and intangible. there are 3 more tools which take the form of extended marketing mix. 4 .Marketing mix decisions must be taken judiciously as they have significant bearing on organizational decision making and its profitability. and come into Services sector :  PHYSICAL EVIDENCE  PEOPLE  PROCESS 4 CORE P’s OF MARKETING PRODUCT It is anything that can be offered to the market that can satisfy customer needs and wants. There are basically 4 core P’s in marketing mix attached with FMCG Industries:  PRODUCT  PRICE  PLACE  PROMOTION Apart from these .

PepsiCo offers over 35 products. PRODUCT CONSISTENCY: how closely related are the various product lines. PRODUCT MIX OF PEPSICO BEVERAG ES SNACK BASED FOODS LAYS RUFFLES CHEETOS FRITOS CORN CHIPS TOSTITOS QUAKER OATS DORITOS RESTAURAN TS PEPSI MOUNTAIN DEW 7UP LIPTON ICED TEA MIRINDA GATORADE ENERGY DRINK TROPICANA JUICE PIZZA HUT KFC TACO BELL LONG JOHN SILVERS PRODUCT WIDTH: no of product lines offered. PRODUCT DEPTH: no of variants of a product in a product line. PRODUCT LEVEL 5 . So Pepsi has depth of 4. PepsiCo products are consistent in terms of distribution channels. For eg: Pepsi comes in quantities of 250ml/500ml/1000ml/2500ml packs.Product element has various dimensions: Product variety Product Quality  Brand name  Packaging and Size   PRODUCT MIX may be defined as the group of products that a company offers to the market. while inconsistent in terms of product differentiation for buyers. PepsiCo offers 3 product lines. • Beverages • Snack based foods • Restaurants PRODUCT LENGTH: no of items in a product mix.

a product can be a physical good. Today’s competition essentially takes place at the 6 . Products are the means to an end where in the end is the satisfaction of a customer’s needs or wants. deliver exceptional taste and offer greater benefits. a person. acquisition. our product portfolio makes it more enjoyable to lead a healthier life. the marketer has to turn the core benefit into a basic product. a retail store. or use or something that can satisfy a need or a want . inclusion of additional features. (for PepsiCo the basic product is Pepsi cola ) • Expected product: A set of attributes or characteristics that customer normally expects and agree to when they avail the services. At the same level. It is a goods or services that must be present for the guests to use the core product. • Core product: Our intent is to offer snacks. attributes or related services that serve to differentiate the product from its competitors.A product is anything that can be offered to a market for attention. an organisation.Therefore. • Basic product: A version of the product containing only those attributes or characteristics absolutely necessary for it to function. benefits. food and drinks that satisfy consumers changing preferences. a service. a place or even an idea. Increasingly. We’re changing because our consumer is changing and because the health of the health of the world’s population demands it. • Augmented product: It exceeds customer expectations.

which consumers are ready to pay. of its PEPSI SELECTING THE FINAL PRICE Pepsi always sets its prices in line with Coca Cola. competition takes place mostly at the expected product level. PRICE It is the monetary value/sum for which goods and services are exchanged. market price 7 . or as a bundled packaging with its DETERMINING DEMAND Since Coca Cola is the closest competitor for Pepsi. Coca Cola is an intense competitor. and still reaps in the revenues. pricing strategies were evaluated. PRICES AND OFFERS Coca Cola’s costs. but with different offers. Price element has the following dimensions:  List Price  Discounts  Allowances  Payment period SETTING THE PRICING POLICY SELECTING PRICING OBJECTIVE PepsiCo’s objective was maximum market share and survival. demand for Pepsi ESTIMATING COSTS Cost of production is evaluated in terms of its variable and fixed costs. SELECTING A PRICING METHOD Pepsi came with an innovative strategy a few years ago. (In less developed countries. PepsiCo is one such company.product-augmentation level. by introducing ANALYSING COMPETITIOR’S COSTS. which insists in keeping the prices at a level.

PepsiCo India follows the following Distribution Channel : PEPSICO WAREHOUSE DISTRIBUTOR SALESMAN WHOLESELL ER RETAILER RETAILER CUSTOMER CUSTOMER 8 .PLACE This element deals with the channels of distribution that will be used to make the products available to consumers. for the movement of products from manufacturers to the end users. Generally.

etc. The best example is of PepsiCo’s ads on television medium. Britney Spears etc.Because. Sachin Tendulkar. • Celebrity branding: when a celebrity endorses a company’s product. Its products are available in the following sites:  Supermarkets  General stores  Wholesale markets  Online shopping websites PROMOTION It deals with all those activities directed towards creating awareness about the existing and upcoming products. goods or services is defined as advertising. PepsiCo deals in FMCG products. • Banners and billboards • Sponsorship and partnership: For eg: playing sponsors for a cricket series. • Sales promotion • Web-marketing: PepsiCo is also involved in promoting its products DEVELOPING AN ADVERTISING PROGRAM SETTING THE ADVERTISING OBJECTIVE 9 . Facebook. the scale of distribution is very huge. PepsiCo has been associated with several celebrities like Aamir Khan. All those means through which the company communicates the existence of products . It engages into several forms of promotion like: • Advertising: any paid form of non-personal presentation of ideas. PepsiCo lays utmost emphasis on promotion of it products. Yahoo etc. in order to retain present customers and attract the new ones. so that it reaps in the profit benefits and a competitive market share.

The reason why Pepsi-Cola has fiercely targeted this market is because it is the largest amongst its users. Also. and so on. DEMOGRAPHIC: In focusing on the Pepsi-Cola beverage product. These products are marketed under brand as Pepsi. implying that Coca-Cola is for the older generation.DECIDING ON ADVERTISING BUDGET CHOOSING THE ADVERTISING MESSAGE DECIDING ON MEDIA AND MEASURING EFFECTIVENESS SEGMENTATION. Mountain Dew. There are two levels in which Pepsi segments its market: Demographic and Niche Marketing. Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. POSITIONTING OF PEPSICO MARKET SEGMENTATION As we know that PepsiCo provides varieties of beverages such as carbonated soft drinks. PepsiCo has retained a long History of concentrating on youth as its main target market – “Generation Next!” It has spent billions of dollars in trying to woo the young and nearly young. dairy-based drinks. TARGETING. NICHE MARKETING: Pepsi focused on varietal differentiation since 1990 by introducing a string of niche products.with these products PepsiCo aims to attract different groups of consumers. sport drinks. Gatorade. energy drinks fruit flavoured beverage. To increase volume in order to counter flat coca sales. Pepsi continually targets the college market in which they spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities. Pepsi 10 . Lipton. Tropicana. Starbucks.

Sports and Regular Occasions. Despite the large customer base in the Soft Drink industry. Taste. It also targets at Schools. Pepsi has also tried to boost volume by introducing products that appeal to specific target markets that it currently is not reaching. Strivers. Experience’s makers and Strugglers. Pepsi One. 3-4. Fulfilled. Universities. Unmarried Middle Class.introduced Sierra Mist in 2002-2003 to take the place of 7-up and go head to head with Sprite. BASIS OF SEGMENTATION: Segmentation Variables Demographic: Data 14-30+ Male. and Stores. The success of Pepsi’s Mountain Dew Code Red launched in 2001 was the most successful soft drink innovation in 20 years and has spurred even more niche product introductions for PepsiCo as well as other competitors. Finally. First time user. Parties. and the acquisition of SOBE and Gatorade. Homes. These terms adopted in Pepsi’s advertising campaigns are what marketers refer to 11 . Interested. Aware. extensions of Mountain Dew. Pepsi prefers to segment itself as the beverage choice of the “New Generation”. Upper Class. 5+ Married. Age Gender Family Size Family Life Cycle Psychographic: Social Class Lifestyle Behavioural: Occasions Benefits User Status Loyalty Status Readiness Stage MARKET TARGETING Pepsi customers are mostly Teenagers and Young Adults between the ages of 14 to 30. Generation Next. or just as the “Pepsi Generation”. Pepsi is countering declining sales of carbonated drinks through the marketing and distribution of Starbucks ready to drink products. and Pepsi Blue. Quality. Female 1-2. Birthdays. Achievers. Actualizes. Restaurants. Colleges. Believers. Pepsi has introduced Code Red and Live Wire. Strong. Hotels.

Pepsi believes that if they can get this market to adopt their product. which are profiled to be between the ages of 18 to 29. In Generation X. Pepsi has been positioned based on the process of positioning by direct comparison and have positioned their products to benefit their target market. featuring Britney Spears. they could establish a loyal customer in a long run. Pepsi shifted its focus to the growing American teenage market in the 1990s by forming exclusive contracts with American schools and developing advertising campaigns such as “The Next Generation” and the “Joy of Pepsi”. 12 . MARKET POSITIONING PepsiCo plans to further create positions that will give products the greatest advantage in their target markets.

PepsiCo is indeed a customer centric organization.PEPSICO: A CUSTOMER CENTRIC ORGANIZATION? Yes. and re-orientation of value proposition. 13 . Attaining true customer centricity requires fundamental and innovative thinking.t customer. Every company must realign itself w.r. and not its products and services.

THEREFORE CUSTOMER ACTIVITIES MUST BE DIRECTED TOWARDS FULFILLING THEM. It sets quarterly goals. now when organization aims at high profits. and creating products of value. which can pav the way for future products/innovation. THE ABOVE MENTIONED CORE VALUES IS WHAT EVERY CUSTOMER LOOKS FOR. Convert expectations into reality. and role model for millions across the globe. in terms of innovating the existing products. and gets all employees to focus on that. and also to find out opportunities in the market. firms need to become more and more customer centric. market share. and learn about their experiences PepsiCo has a CEO in Indra Nooyi. who’s proved to be a leader. motivator. and themes around the customer.Customer centricity is reflected by PepsiCo on the following fronts: Put the customer at the centre. In general 14 . POTENTIAL OF CUSTOMER MARKETS Every marketer’s job is to estimate the market size. by studying people’s minds. so as to understand the customer demand for the products. In the presence of competition and .

MARKET DEMAND It may be defined as the sum total of demand. MARKET SHARE OF PEPSICO MEANING: It is the total share of a company of the total market. BIBLIOGRAPHY WEBSITES 1. generated annual net revenues of $43. which were distributed across 200 countries. it is said that PepsiCo is 2nd largest Food and Beverage business n the world. while PepsiCo was also into different sectors of snack-based foods .in 15 . AVAILABLE MARKET: these are the group of people who have the income. Coca Cola was ahead in field of Beverage. Pepsi took the lead for the first time in 112 years. Coca Cola is considered to be the closest competitor of PepsiCo. In Dec 2005. POTENTIAL MARKET: the no of customers who have an interest in buying a product. It products. On this basis. PepsiCo products contributed retail sales of over $1billion each. of all customers taken collectively. but eventually don’t translate this into final purchase. MARKET DEMAND OF PEPSICO As of 2009. in its beverage section.3 billion.S snack-food market.and restaurants. interest and need for purchase of product. TARGET MARKET: it is the part market which the company has decided to focus on. and practise its marketing objectives. PepsiCo’s Frito-Lay holds a relatively high share in U. It defines what percent share the company has out of the total market. www.pepsico.terms. which accounts for approximately 39% sales (2009 report). market size is identified on the basis of potential customers in the market. It depends upon the availability of the company’s products in the target market. REFERANCE BOOK PHILLIP KOTLER 16 .google.2. www. www.

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