Professional Documents
Culture Documents
Pepsi Marketing Report
Pepsi Marketing Report
Purpose of this project is to study the strategies which Pepsi is doing in Pakistani
market for its product Pepsi cola. Pepsi International is a world renowned brand. It is a
very well organized multinational company, which operates almost all over the world. In
Pakistan It also has proved itself to be the No.1 soft drink.
Now days Pepsi is recognized as Pakistanis National drink Pepsi's greatest rival is
Coca Cola. Coca Cola has an international recognized brand. Coke’s basic strength is its
brand name. But Pepsi with its aggressive marketing planning and quick diversification
in creating and promoting new ideas and product packaging, is successfully maintaining
is No.1 position in Pakistan. Pepsi is operating in Pakistan, through its 12 bottlers all over
Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers.
Bottlers, produce, distribute and help in promoting the brand. Pepsi also launched its fast
food chain KFC i.e. "Kentucky Fried Chicken.”
We also did analysis of the soft drink industry in Pakistan and worldwide. The soft
drinks set to become world's leading beverage sector. Global consumption of soft drinks
is rising by 5% a year.
1|Page
INTRODUCTION TO THE COMPANY
It was first introduced as "Brad's Drink" in New Bern, North Carolina in 1898 by
Caleb Bradham, who made it at his pharmacy where the drink was sold. It was later
named Pepsi Cola, possibly due to the digestive enzyme pepsin and kola nuts used in the
recipe. Bradham sought to create a fountain drink that was delicious and would aid in
digestion and boost energy.
In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to 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 1909, automobile race
pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as "A
bully drink...refreshing, invigorating, a fine bracer before a race". The advertising theme
"Delicious and Healthful" was then used over the next two decades. In 1926, Pepsi
received its first logo redesign since the original design of 1905. In the year 1929, the
logo was changed again.
In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered
bankruptcy - in large part due to 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 Pepsi-Cola syrup formula.
During the Great Depression, Pepsi gained popularity following the introduction
in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the
price was slashed to five cents, sales increased substantially. With a radio advertising
campaign featuring the jingle "Pepsi-Cola hits the spot / Twelve full ounces, that's a lot /
2|Page
twice as much for a nickel, too / Pepsi-Cola is the drink for you," arranged in such a way
that the jingle never ends. Pepsi encouraged price-watching consumers to switch,
obliquely referring to the Coca-Cola standard of six ounces per bottle for the price of five
cents (a nickel), instead of the 12 ounces Pepsi sold at the same price. Coming at a time
of economic crisis, the campaign succeeded in boosting Pepsi's status. In 1937
500,000,000 bottles of Pepsi were consumed. 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, Guth v. Loft, then ensued, with the case reaching the
Delaware Supreme Court and ultimately ending in a loss for Guth.
The market in Pakistan is surely dominated by Pepsi. It has proven itself to be the
No.1 soft drink in Pakistan. Now days Pepsi is recognized as Pakistanis National drink.
In 1971, first plant of Pepsi was constructed in Multan, and from there after Pepsi is
going higher and higher. Pepsi is the choice soft drink of every one. It is consumed by all
age groups because of its distinctive taste. Compared with other Cola in the market, it is a
bit sweeter and it contributes greatly to its liking by all. Consumer’s survey results
explain the same outcome and Pepsi has been declared as the most wanted soft drink of
Pakistan.
3|Page
SITUATION ANALYSIS
COMPANY ANALYSIS
Mission Statement
Vision Statement
“To be the world's best beverage company”, Being the best means providing
outstanding quality, service, cleanliness and value, so that their every customer is
contented and happy with their products.”
“To increase the value of their shareholder’s investment through sales growth, cost
control and wise investment of resources.”
Market Share
When Pepsi was introduced in Pakistan, it faced fierce competition with 7up,
lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced
its lemon and lime, "Teem" to compete with 7up. It successfully, after some years, took
over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up
enjoys 70% of the market share where as the coke just has 20% markets share.
Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These
bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce,
distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC
i.e. "Kentucky Fried Chicken.”
4|Page
MARKETING ENVIRONMENT
MARKETING MIX
1) Product
The soft drinks market in Pakistan enjoys dynamic growth in both volume and
value terms. Carbonated drinks have become part of the culture in Pakistan and
multinational companies have maintained standards over the years to provide the nation
with high-quality drinks. Rural areas of Pakistan have driven sales of carbonated drinks
to new heights as more than 60 percent of the population resides in rural areas and young
consumers are more attracted to advertising. Pepsi is the most popular and leader brand in
the Pakistani market and is consumed by children and adults alike. Pepsi is a responsible
corporate brand of Pakistan and have contributed a lot to the economy.
Pepsi has a product line comprised up of carbohydrate drinks, Lays and many
other products in Pakistan. Pepsi’s 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 consumer’s needs efficiently by
launching a desired product.
Product Line
5|Page
2) Packaging
In case of Pepsi Cola, they take the packaging designs by considering what is
better for company and what is better or convenient for the transportation. For protecting
the syrup, Pepsi Cola uses the glass as well as plastic bottles of different quantity.
The variants that are offered by Pepsi in terms of size and quantity,
3) Price
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.
6|Page
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.
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
1/10 Discount
2/20 Discount
For Instance two cases of Pepsi are free on buying 20 cases of Pepsi
at one time.
Seasonal Discount
7|Page
4) Placement/Distribution Channel
The Pepsi uses the following two channels for the distribution of their products.
i. Indirect Distribution
5) Promotions
In Pakistan Pepsi is the most liked soft drink especially by young generation so the
Pepsi cola company has devised such marketing strategy which attracted them. For this
reason they started monitoring the habits of the generation. What they saw was that the
students were crazy about cricket and usually liked to idealize them so in order to
increase their sales the Pepsi cola company paid high amounts of money to the cricketers
to act as their spokes men.
Some of the most famous cricketers in the modern era have acted as spoke persons
also film stars have been acting as spoke persons.
The Pepsi cola company has after doing research also has introduced different size
of bottles offered at lower prices so that everyone can afford them. Also Pepsi Company
has introduced other soft drinks including Mountain Dew, Seven Up and Mirinda. Pepsi
company has introduced other flavors such as Pepsi twist, Pepsi max diet Pepsi.
Pepsi Cola Company has also become official sponsors of Pakistan cricket and has
sponsored a number of series.
Also Pepsi has donated a lot to the earth quake victims and has launched a number
of prize schemes to attract new customers
As a result of this marketing strategy Pepsi has become the largest seller of soft
drinks in Pakistan and is slowly forming a monopoly in drinks market. Although many
soft drinks like Pepsi have been introduced such as Amrit Cola, RC Cola offered at lower
prices but none of these drinks have been able replace it.
8|Page
Frequency of the Pepsi ads varies from time to time. When the season is on Pepsi
do heavy advertisement especially in Ramzan days or Eid occasions but this
advertisement not remain consist. We can hardly see the ads of Pepsi now as there is
winter season.
OTHER FACTORS
9|Page
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
Price Policy
If price of Pepsi is increased its demand will decrease and vice versa.
Income Policy
i. Political Stability
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.
10 | P a g e
iii. Laws Formulation
3) Technological Factors
i. Psychographic
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
11 | P a g e
CONSUMER DECISION PROCESS
Consumer decision process or consumer buying behavior is explained in some
steps which are discussed below:
i. Need Identification
iv. Selection
v. Purchase
It is the experience that the consumer gets after using the product.
He will use the product again if he feels that his satisfaction after use is
more or equal to the price of the product.
12 | P a g e
SWOT ANALYSIS OF PEPSI
i. Strengths
ii. Weaknesses
Pepsi does not offer any sort of incentive or discount to its retailers.
Pepsi target only young customers in their promotions.
Crown of the disposable bottle is not good.
Demand of disposal bottle is declining.
Pepsi tin pack is not available in far off rural areas.
Pepsi is not considering many potential outlets like hotels, college
canteens etc.
13 | P a g e
iii. Opportunities
iv. Threats
14 | P a g e
MARKET SEGMENTATION
It means that you divide the target market in to different groups. Market consists
of buyers and buyers differ in one or more ways. They may differ in wants, resources,
locations and buying practices. Through market segmentation companies divide large,
heterogeneous markets into smaller segments that can be reached more efficiently and
effectively with products and services that match their unique needs.
Segmentation is done on basis of the previously mentioned external factors and the
following:
i. Behavioral Base
It pushes and pulls the consumer. If the outlook of Pepsi bottle is desirable
and it attracts the consumer, he will buy it even if he isn’t thirsty.
15 | P a g e
SUGGESTIONS
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 one’s laurels. Fresh efforts, newness of approach must remain the cardinal
principles of a well orchestrated marketing strategy 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
one’s 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 competitor’s 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.
16 | P a g e
CONCLUSION
Pepsi is a well renowned company and it has maintained its position well by
understanding the client psychology, by ensuring quality, by introducing ingenuity in
products, by enlarging its product base, by keeping economic factors in view and by
intense and jazzy advertisements.
Whenever and where ever there is a spotlight event, Pepsi must figure in, like the
one day international cricket matches between India and Pakistan many other such
occasions. The key word for success in the Marketing World is to “remain in the
spotlight” and that is what Pepsi is doing.
17 | P a g e