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PepsiCo.

Marketin
g Report
By Mohammad Azmat Imran &
Muhammad Waleed Nasir
Module 2

Principles of
Marketing
SM Saeed

Describe Market Segmentation with respect to your branded product.


MARKET SEGMENTATION:
PEPSI PERFECT divide the target market in to different groups. They may differ in wants,
resources, locations and buying practices. Through market segmentation companies can be
reached more efficiently and effectively with products and services that match their unique
needs.
PEPSI PERFECT Segmentation is done on the basis of following factors.
GEOGRAPHIC SEGMENTATION:
In geographic segmentation, PEPSI PERFECT market is sub divided on the basis of area.
Region: Regional differences exist in respect of demand for products. For example,
PEPSI PERFECT buyers from Sindh are different from the buyers in Punjab.
Urban/Rural: There are differences in buying behaviour of urban and rural customers.
Accordingly, PEPSI PERFECT marketing strategies designe depending upon their likes,
dislikes, moods, preferences, fashions and buying habits.
Locality: PEPSI PERFECT buying is also reflected by the locality within a particular
city. For instance, there are differences in terms of buying patterns of people residing at
Korangi and Defence, within a city.
DEMOGRAPHIC SEGMENTATION:
Company study PEPSI PERFECT market at the different aspects of population. Markets can be
divided on demographic factors like age, gender, education etc. The various demographic factors
are :
Age: Analysing markets by age is to divide the total population into age groups and
analyse the wants and needs of each group.
Income: PEPSI PERFECT Buying patterns depends on income of the consumers. No
two individuals or families spend money in exactly the same way thats why company
launch economy packs of PEPSI PERFECT.
Family Size: The consumption patterns of PEPSI PERFECT definitely vary with the
number of people in the household thats why company introduce 1.5 ltr & 2.25 ltr bottles
in the market.
Race: Consumption patterns of PEPSI PERFECT differ on the basis of race because
market research if first 15% peoples purchased & used your product which have
company launch others 85% peoples follow them.
BEHAVIOURAL SEGMENTATION:
Buyers are divided into groups on the basis of their response e.g usage rate, user status,
loyalty status, buying motives, and so on.

Usage Rate: One possible way to define target market is by product usage. There can be
heavy users, medium users, light users, and nonusers of Pepsi products. Targeting on the
basis who want to increase consumption by present users and to convince and introduce
new product such as PEPSI PERFECT to nonusers and to become users.
User Status: PEPSI PERFECT market can be segmented on the basis of user status OF
Pepsi products such as: non-user, ex-user, potential user, first-time user, regular-user, &
so on.

Readiness Stage: PEPSI PERFECT market can be segmented on the basis of peoples
readiness to buy the product. Some people are well informed and are interested to buy the
product. Some other may be well informed but not interested to buy the product.
Buying Motives: Buyers buy the product with different buying motives such as
economy, convenience, prestige, etc. Accordingly PEPSI PERFECT promotional appeals
can be directed to the target audience.
Conduct and include a perceptual mapping exercise for the brand
Study shows that the population in Southern Asia has a more of a sweet tooth which is why a
huge majority chooses Pepsi over the competitive product; Coke. On interviewing a number of
users of cold drinks, particularly Pepsi users said they enjoyed the sweetness of Pepsi over Coke.
Taste is an important characteristic when it comes to soft drinks as they are meant to refresh a
person.
Second comes the marketing strategy or promotion of PepsiCo in Pakistan. PepsiCo has been
actively sponsoring a number of events and the Pakistan Cricket Team as well. People find it
attractive when events are sponsored by Pepsi, finding it energetic and boosting.
Define the product attributes in detail along with any other variants if you may have
under the same brand.
Two core attributes of PepsiCo are:
Adaptability: We anticipated major shifts in the consumer landscape and business
environment and met them head-on by preemptively retooling the company for
advantage and growth.
Performance: At the same time that we have been driving sometimes radical change,
we have managed to deliver strong financial results over the long term.
The variants of pepsico include:

Pepsi has a product line comprised up of carbohydrate drinks, Lays and many other products in
Pakistan. Pepsis product line satisfies consumer needs because Pepsi produces different types of
soft drinks for different consumers.
The most popular product of Pepsi is Pepsi Cola. Due to its good taste Pepsi is a well-known
product. Thus Pepsi Cola satisfies the consumers needs efficiently by launching a desired
product.

Product Line
Beverages

Water

Snacks

Juices

Pepsi

Aquafina

Kurkure

Tropicana

Teem

Cheetos

Mirinda

Lays

7-UP
Mountain Dew
Diet Pepsi

Identify the life cycle stage of your brand and the corresponding strategy
The marketing world is full of surprises. Who could imagine that Coca Cola would be
overtaken by Pepsi? If Coke could be overrun by Pepsi, it would be no wonder that Pepsi
might be overtaken by some other beverage. The need then is to combine quality with
ingenuity. Along with that, the reputation of the company has to be kept robust.
Today we live in a fast moving world where novelty and newness count a lot. One cannot
rest on ones laurels. Fresh efforts, newness of approach must remain the cardinal
principles of a well-orchestrated marketing distribution and the campaign must be
relentless. A continuous bombardment in advertisement would convince the clients that
Pepsi is a part of their lives. In order to live with style, Pepsi ought to be an essential
ingredient of ones life.

The Pepsi is at its maturity stage and the sales of company are not growing very
rapidly. Company is doing a lot of promotional activities to let the product remain in the
market. It holds a large share of the market and whenever the sales state declining, the
company can improve it by different promotional activities.
Marketers of Pepsi can try to improve sales by improving one or more marketing
mix elements. They can cut prices to attract new users and competitors customers. They
can also launch a better advertising campaign or use aggressive sales promotion to
improve the sales. Thus, Pepsi is at its maturity stage.

Identify the factors considered in setting the price of your brand and the associated
pricing strategy
The amounts of money charged for a product or service, or sum of the values that
consumers exchange for the benefits of having or using the product or services. As price gives us
the profit so this P is very important for business price of product should be that which gives
maximum benefit to the company and which gives maximum satisfaction to the customer.
Following factors Pepsi kept in mind while determining the pricing strategy.
i.
Price should be set according to the product demand of public.
ii.
Price should be that which gives the company maximum revenue.
iii.
Price should not be too low or too high than the price competitor is charging.
iv. Price must be keeping the view of your target market.
v. The price of Pepsi Cola, despite being market leader is the same as that of its
competitor Coca cola.
vi. Sometimes, Pepsi places its customers into some psychological pricing strategies
by reducing a high priced bottle and consumers think that they save a lot of money
from this.
Prices of Different Bottles
i.
Regular bottle = Rupees 18
ii.
Non-Returnable/disposable= Rupees 45
iii.
Liter Bottle=Rupees 70
iv. 1.5 Liter Bottle= Rupees 90
v. 2 Liter Bottle= Rupees 105
Discounts
Pepsi Cola offers various discounts to those retailers who have the maximum
sales of Pepsi products on daily, monthly and on seasonal basis. Some of the main
discounts given to the retailers are as follows:
Quality Discount
Following are discounts offered by Pepsi.
1/10 Discount
For Instance one case of Pepsi is free on buying 10 cases of Pepsi at
one time.
2/20 Discount
For Instance two cases of Pepsi are free on buying 20 cases of Pepsi
at one time.

Seasonal Discount
Pepsi also offers seasonal discounts schemes by reducing price in
Ramadan and on Eid. Pepsi also offers trade in allowance for
retailers.

Define the type of your product: convenient, shopping, specialty, etc.


Pepsi.co products are totally classified as shopping product available in almost all kind of
stores(class A store, class B stores, class C stores, and depots). In 44 (73%) of the total retail
outlets we visited, owners claimed that Pepsi was the most running brand in the category.
This might be a bit surprising because when we conducted our online survey considering a
demographic of 18-25 year old university going students 53% of them remembered cokes
Share a Coke campaign as opposed to Pepsis Lighting Up Lives or Stings Zor ka jhatka.

Describe the nature of your marketing/distribution channel. What factors were


considered while designing the marketing channel for your brand? Identify the
challenges the company faces in managing the channel members. How are they met
with?
The Pepsi uses the following two channels for the distribution of their products.
i.

Indirect Distribution
Indirect distribution involves agency holders and distribution companies
e.g. Riaz Bottlers Pvt. Ltd. Lahore franchise has divided its region.

ii.

Direct Distribution
The factory vehicles operate on 45 direct routes in Lahore selling nonreturnable bottles Litter, Pet and Can.

1)

Economic Effect Analysis


i.

ii.

Income and Income per Capita


If the income level or per capita income of the people increases, it will have a
positive Effect on the consumption of Pepsi.
Inflation

iii.

iv.

v.

vi.

vii.

If the country faces inflationary trend in the market, the price of the Pepsi will
ultimately increase which will lower its demand.
Consumption Behavior
Pakistan is a consumption oriented society. Due to demonstration effect the
people are more inclined towards consumption than saving. So the people of
Pakistan spent heavily on food items. Hence Pepsi has a good market share in the
present circumstances.
Income Distribution
It means how much is in the hands of rich and poor class. In Pakistan 10% rich
people posses 93% of wealth and 90% people posses 7% of wealth. If there is
balanced distribution of income in the country, the consumption of the people will
increase hence increasing the sales of beverages as well.
Employment Opportunities
As employment opportunities increase the living standard of the people increase
and the people consume more.
Aggregate Demand
In case of Pepsi, aggregate demand of the product increases in the season of
summer as the hot weather makes the consumers want to drink more.
Aggregate Supply
In summer season to cope up with the increasing demand they have to increase
the aggregate supply of their product.

viii.

Economic Policies
Some of the economic policies which can affect the market of Pepsi are discussed
below:
Fiscal Policy
It is the policy of taxes. If heavy tax is levied on Pepsi then its price
will rise having negative effect on its consumption.

Monetary Policy
Monetary policy is made to restrict or increase the supply of money in the
market. If policies are made to restrict the flow of money in the market, inflation
can be controlled hence increasing the real income of the people which will
ultimately affect the consumption of Pepsi.

Price Policy
If price of Pepsi is increased its demand will decrease and vice versa.

Income Policy
If income of the people will increase their purchasing power will
increase and hence increasing the market share of Pepsi.
2) Political Effect Analysis
i.

Political Stability
Whenever the government is considered to be stable, the business will flourish. If
there is political stability in the country the policies and strategies made by Pepsi
can be consistent to be implemented. Foreign companies are also keen to invest in
those countries which are politically stable where they have no fear of decline in
their market share or shut down due to sudden change of government.

ii.

Mixed Economy
In mixed economy government and private sector both plays their role in
developing the economy of the country. Investment by foreign companies like
Pepsi is more likely to flourish in mixed economy.

iii.

Laws Formulation
Government has given copy rights to Pepsi so that another company
cannot sell their product by the name of Pepsi. The countries where laws are
formulated, the strategies and activities of the company are different.

3)
i.

Technological Factors
Research and Development
Through research and development quality of the product can be improved
or better techniques or machinery can be developed which can increase the
production. When technology is advance the supply of the product increase hence
the company experiences growth in their business.

4)
i.

Social and Cultural Analysis


Psychographic
It is a combination of demographic and psychological factors.
Psychological attributes mean how you perceive things. The company will focus
on the behavior of consumers and make different changes in their product
quantity or quality and in promoting their product so that they can attract the
customers. Keeping in view that the behavior of different consumers is not alike
they have to make their marketing strategies in accordance with their
requirements so that they are convinced to buy the product.

ii.

Social Status
Pepsi is a well renowned brand. People who are brand conscious will not
drink beverages of lesser known brands such as Amrit cola. They will try to show
their status by drinking Pepsi which is known to all as a quality drink.

iii.

Media
It is a very important factor for marketing. Media these days is a very
effective way of inspiring people to buy a specific product. A good
promotion can
boost up sales to a great extent.