You are on page 1of 27


PepsiCo, Inc. is currently one of the most successful consumer products company in the world with annual revenues exceeding $30 billion and has more than 168,000 employees. PepsiCo, one of the worlds largest food and beverage companies, has offered its products through independent bottlers in Pakistan for more than 40 years. PepsiCo's products are recognized and are most respected all around the globe. Currently, PepsiCo divisions operate in three major US and international businesses: beverages, snack foods, and restaurants. In each of these businesses, PepsiCo has attained a leadership position as being the world leader in soft drink bottling, the world largest snack chip producer, and the world largest franchised and company operated restaurant system. Similar case is in Pakistan also. The corporations increasing success has been based on high standards of performance, marketing strategies, competitiveness, determination, commitment, and the personal and professional integrity of their people, products and business practices. Today, Pepsi-Cola Company is a major division of PepsiCo's corporate structure. PepsiCola Company now produces and markets a wide range of beverages to retail, restaurants and food services in more than 191 countries and territories around the world and brings in annual revenue of $10 billion.

Pepsi-Cola Company has introduced 9 beverages in Pakistan that wear the Pepsi-Cola trademark. Five of Pepsi-Cola's brand names: Pepsi, Diet Pepsi, Mountain Dew, 7 UP, and Miranda,. In 2006 Pepsi-Cola Companys number of employees, revenue, net income and operating income were estimated which is given below


Pepsi-Cola was first made in New Bern, North Carolina in the United States in the early 1890s by pharmacist Caleb Bradham. In 1898, "Brad's drink" was changed to "PepsiCola" and later trademarked on June 16, 1903.There are several theories on the origin of the word "Pepsi".

Type Manufacturer Country of Origin Introduced Related products

Cola PepsiCo, Inc. United States 1903 Coca-Cola RC Cola

The only two discussed within the current PepsiCo website are the following: 1. Caleb Badham bought the name "Pep Kola" from a local competitor and changed it to Pepsi-Cola. 2. "Pepsi-Cola" is an anagram for "Episcopal" - a large church across the street from Bradham's drugstore. There is a plaque at the site of the original drugstore documenting this, though PepsiCo has denied this theory. Another theory is that Caleb Badham and his customers simply thought the name sounded well or the fact that the drink had some kind of "pep" in it because it was a carbonated drink; they gave it the name "Pepsi". As Pepsi was initially intended to cure stomach pains, many believe Bradham coined the name Pepsi from either the condition dyspepsia (stomach ache or indigestion) or the possible one-time use of pepsin root as an ingredient (often used to treat upset stomachs). It was made of carbonated water, sugar, vanilla, rare oils, and kola nuts. Whether the original recipe included the enzyme pepsin is disputed. In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles and sales increased to 19,848 gallons. In 1924, Pepsi received its first logo redesign since the original design of 1905. In 1926, the logo was changed again. In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race". In 1929, the Pepsi-Cola Company went bankrupt - in large part due financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years later, the

company went bankrupt again. Pepsi's assets were then purchased by Charles Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused

to give him a discount on syrup. Guth then had Loft's chemists reformulate the PepsiCola syrup formula.


"To be the world's premier consumer Products Company focused on convenient foods and beverages. We 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. And in everything we do, we strive for honesty, fairness and integrity.


To be a leading house of FMCG products with local dominance, global prominence, the strongest financial fundamentals and maximum efficiency


1903 1929

Exhilarating, Invigorating, Aids Digestion Here's Health!


Join the Swing to Pepsi


It's a Great American Custom


You've Got a Lot to Live, Pepsi's Got a Lot to Give


The Joy of Cola


The Joy of Pepsi


During The Great Depression, Pepsi gained popularity following the introduction in 1934 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to 5 cents, sales went through the roof. With twelve ounces a bottle instead of the six ounces Coca-Cola sold, Pepsi turned the price difference to its advantage with a slick radio advertising campaign, featuring the jingle "Pepsi cola hits the spot / Twelve full ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you,", encouraging price-watching consumers to switch to Pepsi, while obliquely referring to the Coca-Cola standard of six ounces a bottle for the price of five cents (a nickel), instead of the twelve ounces Pepsi sold at the same price. Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. From 1936 to 1938, Pepsi Cola's profits doubled. Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth for possession of the Pepsi Cola company. A long legal battle then ensued, with Guth losing. Loft now owned Pepsi, and the two companies did a merger, then immediately spun the Loft company off PEPSI COLA IN PAKISTAN: Pepsi cola is also very popular in Pakistan thats why its market share is about 90% in the soft-drink market. Pepsi cola international, a remarkable name in the cola industry is doing its business in Pakistan through franchising. Pepsi has developed following bottles


in Pakistan till now naubahar bottling company is the largest manufacturer and distributor of Pepsi cola softdrink in Pakistan There franchises are located in Karachi Lahore Multan




General Manager is at the top most position in the Pepsi Company. All the decisions are taken by the general manager


This manager looks after the five basic departments of Pepsi Company which are as follows 1. marketing 2. production 3. finance 4. accounts 5. transportation

Marketing department looks after all the marketing strategies made in Pepsi Company Marketing department looks after the duties performed by the -Marketing Service Manager , -Regional Sales Manager -Sales Manager -Area Sales Manager

Marketing Service Manager is also responsible to look after the work of Key Account Manager


Signboard Manager

Production department looks after the production of various products of Pepsi Company .Production Manager is responsible to look after the duties of Production Manager Quality control head Quality control manager is responsible for the duties performed by Quality control inspector Line in charge

Finance department is responsible to look after the affairs related to finance.It look after the duties performed by Assistant finance Accounts manager

Accounts department is responsible for true and fair collection of accounts. It look after the duties performed by Assistant accounts


Account head office Assistant head office

Transportation department is responsible for overall transportation of the products produced in Pepsi Company. It looks after the duties performed by Transport supervisor





In Star market share and industry growth are high. Mountain Dew lies in Star because its demand is very high nowadays and we can make further Mountain dew is very leading product in market now a days. CASH COW In Cash Cow market share is high and industry growth is low. In this case demands are equal to supply. Thats why Pepsi lies in Cash Cow because they have equal supply and demands. Pepsi is very popular drink right from the start so there is no further investment for this product QUESTION MARK A question mark is a situation where market share is low and industrial growth is high. Lays, Kurkure, Pepsi diet and Aquafina lies in this area because they are newly launch products in Pakistan. It can be cash cow and star in future if they get more progress. investment for this product.

Twist was a less demanded product of Pepsi which lies in Dog because all Pepsi Products are making development in the market except twist and now twist is no more in the market of pepsico.




Porter's 5 forces analysis is a framework for industry analysis and business strategy development developed by Michael E. Porter in 1979 of Harvard Business School. It uses concepts developed in Industrial Organization (IO) economics to derive 5 forces that determine the competitive intensity and therefore attractiveness of a market. Porter's Five Forces include three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers, bargaining power of customers.



The beverage industry is highly concentrated. in the carbonated soft drink sector, the top three companies(Pepsi, Coca Cola, and Cadbury Schweppes)account for 90% of the retail sale and in the non carbonated market, the same three companies account for over 75% of all sales. Both markets have a high HHI (herfindahl-hirschman index) which suggest a very concentrated market. Competition in this industry is fierce, especially between Coca-Cola and Pepsi.

The industrys main barrier to enter is with respect to advertising the incumbent firms have spent billions of dollars to create brand loyalty with consumers. The cumulative effects of advertising create an absolute cost advantage for the incumbent firms, thus entrants must overcome not only current advertising efforts, but also the lingering impact of past marketing campaigns .High sunk cost also act as a barrier to entry. Sunk costs in this industry include establishing channel of distribution, advertising expenditure and research and development cost all these factors create difficult barriers to entry for a new firm entering the market and an advantage for success first movers such as Pepsi.

The principal ingredients Pepsi needs to create their products are corn sweeteners, sugar ,aspartame oranges grapefruit vegetable oils potatoes corn and flour An increase in the


price of these inputs or shortage of a commodity may lead to the significant losses for Pepsi because often they cannot pass the cost to consumers due to the competitive pricing environment in which they operate .Pepsi manages this risk primarily through the use of fixed price purchases order, pricing agreement, geographic diversity and future contracts. They use future contact to hedge fluctuation in price of a portion of anticipated commodity purchases primarily oil corn fuel and juice concentrates.

End consumers have a strong buyer power because of the availability of substitutes ,both generic and name brand .It is easy for a consumer to purchase a nearly identical product for a lower price .This gives consumers a great deal of leverage and leads Pepsi to spend millions of dollars to create product differentiation. Retail stores have significant buyer power due to their ability to change high fees for shelf space, which is important channel of distribution for Pepsi .Pepsi has worked hard to build strong relationship with these retailers to minimize this affect.

Many of the products that Pepsi produces have a relatively elastic demands , due to the closeness of substitutes. Most people consider Pepsi and coke perfectly suitable goods along with Lays Potato Chips and a generic store-branded potato chip. generic labels may pose the greatest threat to Pepsi due to lower prices. These private- labels have been gaining market share in the past few years.




The beverages industry of Pakistan like Pepsi has edge over other industries that have well developed market. People use beverages at their home, offices, and recreational places and at occasions. PLANT

The plant installed at Riaz Bottlers Lahore is more modernized and hi-tech as compared at that of its main competitor COKE (Rehman Beverage in Lahore). LOCATION OF PLANT

The location of Pepsi plant is utilized that all major markets of Lahore are within the reach of the Pepsi plant within 30-45 minutes. targets. SPONSORSHIP ADVERTISINIG

Pepsi Cola has better advertising campaigns. SALES PROMOTION

Pepsi Cola generates aggressive sales promotion activities. COMPENSATION PLAN

Pepsi Cola has good compensation policy. Bonuses are given on the achievements of the

Pepsi Cola has sponsoring scheme walks. TRAINING & DEVELOPMENT

The company provides training to supervisors and employees for better performance.



The beverages industry provides the beverages in different flavors. Usually the carbonated drinks are in three flavors i.e., black soda, lemon, oranges. This variety of flavors has made very deep mark in consumers mind about strong appeal of carbonated drinks like Pepsi, coke, RC Cola. WELL DVELOPED DISTRIBUTION NETWORK:

Carbonated drink due to its extensive use has successfully made wide network of distribution. the market giant of beverages industry such as Pepsi have their own trucks and vehicles to distribute their products. EXTENSIVE MARKET:

Usually the beverage industry of Pakistan is taken as trend setter in advertisement industry. Pepsi started sponsoring cricket team, athletes way before when there was no customs so spending money on such activities. Now pepsi industry hires celebrities from all over the world for their product.


The appointed sales staff by dealers is not properly trained. TIN PACKS, 2.50 ml

Tin pack, 2.50 ml dont reach the market in time because the manufacturing plant of these products is situated at Gadoon Amazai and one of the drawback of tin cans is that they are not being purchased by the retailers because the retailers want to earn more profit, therefore, they purchased expired cans from Dubai.



The bottlers dont have proper check on the retailers who are misusing the merchandising tools.


There is a lot of mishandling in the factory yard during the transportation and at the warehouse which results in a lot of breakage. SEASONAL JOBS

As most of the hiring for low level jobs done in the on season duration, the seasonal workers are laid off immediately when the season closes. CONFLICT AND POLITICS:

After 9-11 scenario and Iraq war, majority Pepsi consumers turned towards other beverages due to sentimental point of view. This sudden shift harmed the market giants for a while but now shift is swiftly moving back towards Pepsi, SEASONAL

The beverage industry is mostly seasonal. Usually its sales increase in summer but in winter its sales decreases drastically .This seasonal variation usually brings mismanagement of target allocation for future.


Pizza Hut and KFC are the subsidiaries of Pepsi Cola currently established at Karachi but company plants to extend the chain throughout the country. SALES PROMOTION


Increased interest of people in musical groups, cultural shows and sports ahs provide an opportunity for Pepsi to increase its sales through them VENDING, MACHINE

The company is planning to install vending machines at shopping malls, big restaurants and departmental stores.


Quality, innovation and responsiveness of beverages like Pepsi to customers, can help them to achieve a competitive advantage by lowering the cost of creating values or by adding value above and beyond that offered by competitor. EXISTING CUSTOMER BASE IS HIGH:

Pepsi industry strives to create value for their consumers, customers, bottlers and the community. They believe their success depends on their ability to satisfy their beverage consumption demands and their ability to add value for their customers .nevertheless, attaining efficiency, quality, innovation and responsiveness to customers require a strategic plan.


Coke is in a race to hire marketing expects in order to increase its sale. FAKE BOTTLERS

Fake Bottlers resembling Pepsi Cola are being sold in the market which is major threat for the company in respect of quality. SMUGGLED CANES


There is also a very big threat for Pepsi Cola because the retailers are purchasing expired cans from Dubai at low rates. Therefore, the manufacturing of local Pepsi Cans is not preferred.


Due to so many non branded beverages in the industry there is consistent threat to reputed companies. Usually these small non branded companies are unregistered and use unhygienic processes to produce carbonated and non carbonated drinks. This unhygienic drink may put the beverage industry of Pakistan like pepsi into some stereotype which can make its consumer to become reluctant to use beverage or decrease the cycle of buying


Help Save the Children "Make A Difference Together!" By participating in Save the Childrens Matching Gift Program employees gifts can be matched at a single, double or even triple match. A great example of this is the PepsiCo Foundation. Since 1997 PepsiCo employees have been generously contributing to Save the Children and increasing their personal contributions through the companys Matching Gifts Program. In 2005 the PepsiCo Foundation generously contributed $100,000 to support Save the Children's response to the food crisis in West Africa and $200,000 to support relief in Pakistan. We commend PepsiCo for their significant involvement and dedication to helping children around the world!



PepsiCo announced it will contribute U.S $2 million (Rupees 120 million) to assist victims of last weeks earthquake in Pakistan. The contributions, which will come from both PepsiCo and the PepsiCo Foundation, will include a donation of $1 million to the Presidents Relief Fund for Earthquake Victims, established by Pakistan President Pervez Musharraf, and an additional $1 million contribution to support recovery and rebuilding efforts carried out by other relief organizations The earthquake has had tragic consequences for hundreds of thousands of individuals and families, said Mike White, PepsiCo International chairman and chief executive officer. As a company with a longstanding commitment to Pakistan we appreciate the opportunity to provide some assistance to the victims at this very difficult time. The contribution to the Presidents Relief Fund is expected to be presented next week in Islamabad by Saad Abdul-Latif, president of PepsiCos Middle East and Africa Region. In addition to the $2 million provided by PepsiCo and the PepsiCo Foundation, independent Pepsi-Cola bottlers in Pakistan have made financial contributions as well as donations of truckloads of water and PepsiCo beverages. In addition to the $2 million provided by PepsiCo and the PepsiCo Foundation, independent Pepsi-Cola bottlers in


Pakistan have made financial contributions as well as donations of truckloads of water and PepsiCo beverages. PepsiCo, one of the worlds largest food and beverage companies, has offered its products through independent bottlers in Pakistan for more than 40 years.


There are four types of decision making styles which are adopted by the manager when making a particular decision. 1.DIRECTIVE STYLE A decision making style characterized low tolerance of ambiguity and a rational way of thinking. 2.ANALYTICAL STYLE A decision making style characterizes by a high level tolerance for ambiguity and a rational way of thinking. 3.CONCEPTUAL STYLE A decision making style characterized by high tolerance of ambiguity and intuitive way of thinking. 4.BEHAVIORAL STYLE A decision making style characterized by a low tolerance for ambiguity and an intuitive way of thinking.


Directive style is adopted by the Pepsi Company in making decisions. Because they make their decision at a time and have low tolerance of ambiguity and a rational way of


thinking .They take all there decisions in short run.their decision making style is directive and decision flow is top to level managers and directors orders the middle level and front line managers and labour to act upon the rule prescribe by the company directors.

Due to the incentive competition and high professionalism, Pepsi cold has adopted new ways of promotion Pepsi Cola is arranging. The cultural programs like musical concerts. They specially arrange free programme. In these shows they also distribute prizes When Pepsi launched in Pakistan, it saw the whole environment, culture and traditions of Pakistan. They changed their Pepsi according to Pakistans culture and society. Because Pakistan is a Muslim State. So Pepsi adopted and learned the culture of Pakistan and as well as the other countries cultures. Because Pepsi is available whole of the world they have different strategies according to their culture. Pakistan Pespi is used in following occasions: Marriages Birthdays Invitations Any movement of life

Pepsi always keeping in mind the values of cultural life. Individual value


Equality Activity Progress and achievements Efficiency and practicality Mastery over environment


.Pepsi will introduce ONE-CALORIE PEPSI-COLA in the market. This product is though found in U.A.E, but is not available here in Pakistan. It can meet the needs of extremely weight - conscious people. 300-ml PEPSI-COLA bottles are though available in Karachi, but are not found in Lahore. They will soon be introduced here. They are planing to enhance the distribution of their visi coolers. .PEPSI-COLA is trying to enhance its transportation facilities. They are about to change their logo


There is no drawback in the system of Pepsi co because it is an international company and has introduced a number of products all over the world internationally and locally.



In todays fast moving, dynamic and competitive business world, and organization can seek survival only if its marketing activities are properly timed and the 4Ps i.e. products, price, place, promotion are intelligently designed according to the prevailing conditions. Pepsi Cola is one of the largest soft drink producing company if the company has achieved tremendous success through intelligent use of 4Ps. Pepsi Cola has got competitive advantage through installing high tech and modernized plant. Better distribution channels and strong promotion has made Pepsi Cola a market leader in the soft drinks industry.


Through Pepsi Cola has gone a long way showing a remarkable progress Pakistan and has developed and modernized itself with the passage of time. Yet there is always a room for improvement. First of all, Pepsi Cola should evaluate all the causes due to which its previous brands flopped. Overcome all the weaknesses which occur during the time of launching a new brand. Pepsi Cola should also minimize problems faced during the transportation of the product and also the storage in the warehouse Sales Staff. Disposable bottle at cheaper rate. Check on the retailers. They should try to approach local restaurants to maximize their sales. They should launch single product to compete the taste of COKE.