REPORT

OF
STRATEGIC MARKETING
ON
PEPSI COLA INTERNATIONAL (PAKISTAN BEVERAGE)

Submit to:

Ma’am Khushbakht
Submit by:
Kashif Raza

Roll No.:
MBS-15-32

DEPARTMENT OF BUSINESS Administration

Bahauddin Zakariya University, Multan Sub-campus Sahiwal

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 ACKN WLEDGEMENT

Working on this report on “PEPSI COLA” was a source of immense knowledge to us.
We are thankful to Almighty ALLAH “most beneficent and the most Merciful” Who made
us able to complete our given project successfully and for giving us much cooperation
and supporting parents who has given us this opportunity to study here. We
acknowledge with a deep sense of gratitude, the encouragement, inspiration and
valuable time received from our faculty members, our colleagues. We would like to
thank Ma’am Khushbakht for giving us the confidence and opportunity to prove
ourselves.
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 Table of Contents

Executive Summary………………………………………………………. 5
Introduction of PepsiCo…………………………………………………... 6
Vision & Mission of PepsiCo……………………………………………... 8
Market Share………………………………………………………………. 8
Product List of PepsiCo…………………………………………………... 9
Marketing Mix 4 P’s of PepsiCo…………………………………………. 13
Value Chain Strategies of PepsiCo……………………………………... 18
Consumer Buying Decision Process……………………………………. 22
Marketing Strategies……………………………………………………..... 23
i. Segmentation Strategies…………………………………………. 23
ii. Targeting Strategies……………………………………………….. 26
iii. Positioning Strategies…………………………………………….. 27
SWOT analysis of PepsiCo………………………………………………. 30
Recommendations………………………………………………………… 32
Conclusions………………………………………………………………… 33
References…………………………………………………………………. 34
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 EXECUTIVE SUMMARY
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.

Pepsi is very popular in Pakistan and it holds about 70% in the soft-drink market. Pepsi
Cola International, a remarkable name in the cola industry is running its business in
Pakistan through different distributors.

These distributors are: Riaz Bottler Lahore, Pakistan Beverage Karachi, Punjab
Beverage Faisalabad, Naubahar Bottler Gujranwala, Haidri Beverages Islamabad,
Northern Bottlers Peshawar, Sakhar Beverages.
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INTRODUCTION TO THE PEPSI COMPANY:

Pepsi International is a world renowned brand. It is a very well organized multinational

company, which operates almost all over the world. They produce, one of best
carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all
over the world. Pepsi is producing Cola for more than 100 years and it has dominated
the world market for a long time. Its head office is in New York.

History of PepsiCo:

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/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
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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.

Pepsi Cola Pakistan:

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.

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. In coming future
Pepsi is also planning to enter into the field of fruit drinks. For this purpose it has test
marketed its mango juice in Karachi for the first time.
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. Now a days
PepsiCo. Is focusing on youngster’s best choice Mountain Dew as a energetic soft
drinks.
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.
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VISI N STATEMENT:
“PepsiCo’s responsibility is to continually improve all aspects of the world in
which we operate - environment, social, economic - creating a better tomorrow
than today.”

Pepsi cola international vision is put into action through programs and a focus on
environmental stewardship, activities to benefit society, and a commitment to
build shareholder value by making PepsiCo a truly sustainable company.

MISSI N STATEMENT:
Our mission is to be the world’s premier consumer products company focused on
convenient foods and beverages. We seek to produce 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.

REVIEW OF MISSION STATEMENT

 To be a result oriented and profitable Company by consistently improving
market share, quality, diversity, availability, presentation, reliability and
customer acceptance.
 To ensure cost consciousness in decision making and operations without
compromising the commitment to quality.
 To set up highly ethical business standards and be a good corporate citizen,
contributing towards the development of the national economy and assisting
charitable causes.
 To adopt appropriate safety rules and environment friendly policies.

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,
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distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC
i.e. "Kentucky Fried Chicken.”

PepsiCo Products List:

i. Pepsi-Cola Brands:

 Pepsi

 Caffeine Free Pepsi

 Diet Pepsi

 Caffeine Free Diet Pepsi

 Diet Pepsi Max

 Jazz Diet Pepsi

 Diet Pepsi Lime

 Diet Pepsi Vanilla

 Pepsi Wild Cherry

 Diet Pepsi Wild Cherry

 Pepsi ONE

 Mountain Dew

 Diet Mountain Dew

 Caffeine Free Mountain Dew

 Mountain Dew Code Red

 Diet Mountain Dew Code Red

 Mountain Dew Live Wire

 Manzanita Sol

 Mirinda
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 Aquafina

 Aquafina Alive

 Aquafina Flavor Splash

 Aquafina Sparkling

 Dole juices and juice drinks (License)

 Dole Plus fortified juices (License)

 Ethos Water (License)

 Fruit Works juice drinks

 Lipton Brisk (Partnership)

 Lipton Iced Tea (Partnership)

 Lipton Pure Leaf (Partnership)

 No Fear

 Sugar Free No Fear

 Ocean Spray juices and juice drinks (License)

 Frappuccino ready-to-drink coffee (Partnership)

ii. Frito Lay Brands:

 Lay's potato chips

 Lays Kettle Cooked potato chips

 Wavy Lay's potato chips

 Baked Lay's potato crisps

 Baked Doritos tortilla chips

 3D's snacks

 Tostitos tortilla chips

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 Baked Tostitos tortilla chips

 Santitas tortilla chips

 Fritos corn chips

 Cheetos cheese flavored snacks

 Rold Gold pretzels & snack mix

 Funyuns onion flavored rings

 Go Snacks

 Sunchips multigrain snacks

 Sabritones puffed wheat snacks

 Cracker Jack candy coated popcorn

 Chester's popcorn

 Grandma's cookies

 Munchos potato crisps

 Smartfood popcorn

 Baken-ets fried pork skins

 Oberto meat snacks

 Rustler's meat snacks

 Churrumais fried corn strips

 Frito-Lay nuts

 Frito-Lay, Ruffles, Fritos and Tostitos dips & salsas

 Frito-Lay, Doritos and Cheetos snack crackers

 Fritos, Tostitos, Ruffles and Doritos snack kits

 Lay's Fries

 Natural Lays
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  Natural Ruffles

 Natural Cheetos

iii. Gatorade Brands:

 Gatorade Thirst Quencher

 Gatorade Frost Thirst Quencher

 Gatorade Ice Thirst Quencher

 Gatorade Xtremo Thirst Quencher

 Gatorade X-Factor Thirst Quencher

 Gatorade Fierce Thirst Quencher

 Propel Fitness Water

iv. Tropicana Brands:

 Tropicana Pure Premium juices

 Tropicana Twister juice drinks

 Tropicana Smoothies

 Tropicana Pure Tropics juices

 Dole juices (License)

 Tropicana 100 juices

 Naked Juice
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MARKETING MIX of PepsiCo:

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. In marketing, a product is
anything that can be offered to a market that might satisfy a want or need. Until
unless, the product of the company is not strong in the market, it cannot survive
in the long run. 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 Strategies:

 Pepsi Company will launch new product extension in the market due to
customer’s psychological factors.

 Thus Pepsi Cola satisfies the consumer’s needs efficiently by launching

a desired product.

 Pepsi is a responsible corporate brand of Pakistan and have contribute

a lot to the economy.

2) 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.
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 Pricing Strategies:

 Price should be set according to the product demand of public.

 Price should not be low nor high.

 Price should be set according to the product demand of public.

 Price should be that which gives the company maximum revenue.

 Price should not be too low or high than the price competitor is charging from
their customers otherwise nobody will buy your products.

 Price should be that which gives the company maximum revenue.

 Price should not be too low or too high than the price competitor is charging.

 Price must be keeping the view of your target market.

 The price of Pepsi Cola, despite being market leader is the same as that of its
competitor Coca cola.

 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 e= 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

1. 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:

i. Quality Discount:

Following are discounts offered by Pepsi.

 1/10 Discount:
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 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.

ii. Seasonal Discount:

Pepsi also offers seasonal discounts schemes by reducing price in Ramadan

and on Eid. Pepsi also offers trade in allowance for retailers.

3) Distribution:

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 non-

returnable bottles Litter, Pet and Can.

Distribution Strategies:

 Pepsi has given franchises in all over the Pakistan for the distribution.

 Pepsi has 12 different units in different areas of Pakistan.

 There are 62 agencies distributing Pepsi only around Lahore in their

respective allocated sub zones.

4) Promotion Strategies:

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
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 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.

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.

i) Advertising:
For advertising, it used printed and electronic media. Every newspaper and
magazine carries Pepsi advertisements that make the people interest toward
it. Advertisement of Pepsi are eye catching and attractive. Through
advertising it informs the customer about new brands and flavours. Pepsi
designs their advertisement campaign focusing on the target markets. They
research for the need of people before make the ads.

ii) Sale Promotions:

Pepsi has used the a variety of sales promotions over the years. They have
used celebrity such as Michal Jackson, Beyonce’ for endorsements. This has
been shown with the use of BeyoncA1/2.

iii) Personal Selling:

Pepsi Use pull strategy for selling the product. In every occasion Pepsi brings
special offers. Like, they reduce the price; give extra quantity of drinks in the
same price.

iv) Direct Marketing: Pepsi uses its direct marketing to distribute their products
through Pizza Hut, KFC etc. More then that, they use ecommerce such as
“Refreshment Services Pepsi.com” to market the product.
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5) Packaging:

“Packaging is a part of product planning in which a firm researchers, designs,

and produces its packaging.”

The physical container may be a cardboard, metal, plastic or wooden box; a

cellophane, wax paper, or cloth wrapper; a glass, aluminum, or plastic jar or can;
a paper bag; styro foam; some other material; or a combination of these
products frequently have more than one physical container. But packaging
depends upon the product nature as well as structure means either it is liquid,
semi liquid or solid. 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,

i. 250 ml Regular Bottle ii.

ii. 300 ml Tin iii.

iii. 1000 ml Regular Liter Bottle

iv. 1500 ml Disposable Bottle v.

v. 2000 ml Jumbo Bottle 3)

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Value Chain Strategies of PepsiCo:

Before analyzing Pepsi’s Value Chain strategies we need to understand what it is. A
value chain is basically a set of activities that an organization carries out to create value
for its final product and therefore, its customers. These are activities evolve around
administrative, operational and marketing strategies. The way in which value chain
activities are performed determines costs and affects profits either maximizing or
minimizing it. In conclusion, the Value Chain will help us understand the sources of
value for any organization including Pepsi.

1. How Pepsi has enhanced its operations:

In the soft drinks industry, customers requirements as well as the new trends and
habits in individuals affect companies’ operations so keeping its value of their
products is difficult. In the case of Pepsi, they have decided to divide its value
chain activities in two division: Support Activities and Primary Activities.

i. Support Activities:

Within Pepsi’s support activities the company includes the firm structure
as being more focus on business strategies, market strategies and
marketing policies. In the HR Management activities they emphasizes in
the product development, market research and staff growth opportunities
by enforcing their training and recruitment. For the technological
department they are very focus on the internet sales by adding a
marketing database and a highly secure transaction processing system.
Finally, in procurement they are centralized in the raw materials needed
for the final product, this materials must comply a large list of quality
requirements as so does the equipment used.

a) Technology:

Pepsi also maintains heavy focus on technology and research and development.
From production to distribution and sales, everywhere it has invested in
technology. Apart from that it also focuses on technological innovation to through
RF&D. It has six R& D centers around the world that are connected to the
external technology and assessment hubs connecting it with partners, tech start
ups and university researchers. The company collaborates with partners in the
other industries to fuel innovation across products, packaging, equipment and the
other things. In this way, Pepsi is continuously focusing on innovation for growth.
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b) Human Resource Management:

This is also a very important area of Pepsi value chain. The company has
focused on hiring and developing talent and creating an environment of learning
and growth. It pays them, good salaries and also complements the payments
with rewards. Pepsi focuses on employee motivation and engagement. Apart
from it, the focus is on performance management to provide the employees with
career growth.

c) Procurement:

Pepsi procures from thousands of farmers and suppliers. It uses technology to

make the entire process easier and efficient. It has maintained good
relationships with its suppliers and provided guidelines that the suppliers are
required to follow.

d) Firm Infrastructure:

The role of a firm’s infrastructure is central to its success. Pepsi has managed a
large infrastructure including its management, human resources, financial and
technological infrastructure. It is also educating its suppliers and focusing on
innovation through its R&D centers.

ii. Primary Activities:

When talking about Pepsi’s primary activities we must mentioned their

inbound logistic, the economies of scale can be specified as the main
source of value for Pepsi. Pepsi also benefits from locating its production
sites within close geographical proximity to the main sources of raw
materials in order to save on transportation costs.

a) Inbound logistics:

Pepsi Cola has managed a very large supply chain which consists of tens of
thousands of farmers and suppliers. It treats its suppliers as business partners.
These business partners provide its system with raw material including
ingredients, packaging and machinery as well as goods and services. However, it
has also set guiding principles for the suppliers to follow. At a minimum these
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 suppliers are required to comply with all the applicable laws and regulations. In
its guidelines Pepsi also emphasizes on responsible environmental and
workplace policies and practices. It has managed excellent relationship with it
suppliers and that helps it maintain a continuous and uninterrupted flow of raw
material.

b) Operations:

The operations function of Pepsi includes concentrate development and all the
administrative functions of headquarters. Pepsi is a global business that operates
at a local scale in every community where it does business. The Pepsi system
operates through many local channels. However, it does not own or control all its
bottling partners. The company just manufactures and sells beverage bases and
syrups to bottling operations. The company owns the brand and is responsible
for the consumer brand marketing initiatives.

Surely, its operation play an importance place in the value of the final product.
PepsiCo portfolio comprises 22 brands including Pepsi-Cola, Tropicana,
Gatorade, Mountain Dew and Diet Pepsi. In order for Pepsi to maintain track on
its production operation the company uses sophisticated operational systems
and advanced technologies with a particular focus on sustainability issues as an
integral part of its CSR strategy.

c) Outbound logistics:

This part of Pepsi Value chain consists of its bottling partners and distributors. It
bottling partners manufacture, package, merchandise and distribute he final
product to the customers and vending partners. These vending partners then sell
the product to the customers. The customers of Pepsi include the grocery stores,
restaurants, street vendors, convenience stores, movie theatres and amusement
parks. The bottling partners of Pepsi work with the customers to execute
localized strategies developed in partnership with Pepsi Company.

PepsiCo creates value in outbound logistics via using multiple product

distribution formats. The formats are:

 Direct-Store-Delivery.
 Deliveries to customer warehouses.
 Using distributor networks.
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d) Marketing sales and service:

The company keeps a solid budget for advertising of around 2.4 billion and sells
its products to final consumers via re-sellers and intermediaries such as
supermarkets, grocery stores, restaurants, fast-food chains and others.

2. How Customers have benefitted from these improvements:

Pepsi does not follow a standard design of their product and that is what spread
it around the world. The company tailored its products to suit the regional or local
palette and introduced new flavors depending on the country. One example is the
Sakura flavor Pepsi that they launched in Japan during the Sakura Blossom
Season.

Currently, Pepsi is promoting their “made with real sugar campaign” in which they
are changing the image of the company.
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CONSUMER DECISION PROCESS:

Consumer decision process or consumer buying behavior is explained in some steps

which are discussed below:

i. Need Identification:

The consumer is thirsty and he wants to quench his thirst.

ii. Information Search:

He will search as to what will satisfy his thirst the most.

iii. Evaluation of Alternatives:

He will now evaluate from the wide range of beverages available to him that
which one of them is suitable to him in terms of quality, taste and is pocket
friendly.

iv. Selection:

After evaluating the product he will select the Pepsi product.

v. Purchase:

The consumer will buy the selected product which is Pepsi.

vi. Post-Purchase Experience:

It is the experience that the consumer gets after using the Pepsi. He will use
the product again if he feels that his satisfaction after use is more or equal to
the price of the product. After looking at above mentioned example, we can
get an understanding that a product should be so desirable that whenever a
person identifies his need, he selects our product among various substitute
product and he feel satisfies so that he retains the use of that product.
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Marketing Strategies of PepsiCo:
MARKET SEGMENTATION OF PEPSICO:

Pepsi 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 segmentation is done on the basis of following factors.

1. GEOGRAPHIC SEGMENTATION:

In geographic segmentation, PEPSI PERFECT market is sub divided on the

basis of area.

 Country: Pakistan
 Cities: All major cities
 Density: Urban

i. Region:

Regional differences exist in respect of demand for products. For example,

Pepsi buyers from Sindh are different from the buyers in Punjab.

ii. Urban/Rural:

There are differences in buying behavior of urban and rural customers.

Accordingly, Pepsi marketing strategies design depending upon their likes,
dislikes, moods, preferences, fashions and buying habits.

iii. Locality:

Pepsi 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.

2. 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.

PepsiCo is not bounded to any particular age, gender, income or lifecycle stage.
The brand is meant for all the users of every age group but its target market is
mainly youth.
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 Age: 15-35
 Gender: Male, Female
 Family Size: 1-2, 3-4, 5+
 Family Lifecycle: Married, Unmarried

i. Age:

Analyzing markets by age is to divide the total population into age groups and
analyze the wants and needs of each group.

The main customer of Pepsi cola is young people whose age is 10 to 35.

ii. Income:

Pepsi perfect buying patterns depend on income of the consumers. No two

individuals or families spend money in exactly the same way that’s why
company launch economy packs of Pepsi.

On income basis Pepsi also segmented their market by making little pack.
They offer a competitive price range to all class of people. They consider the
economic situation in our country. So they introduced Pepsi in different price
for different people whose income is different. They think about students, poor
people, and middle class people economic condition for their pricing.

iii. Family Size:

The consumption patterns of Pepsi definitely vary with the number of people
in the household that’s why company introduce 1.5 liter & 2.25 liter bottles in
the market. People can easily choose a suitable pack based on their family
size.

iv. Race:

Consumption patterns of Pepsi differ on the basis of race because market

research if first 15% peoples purchased & used your products which have
company launch others 85% peoples follow them.

3. BEHAVIOURAL SEGMENTATION:

Behavioral segmentation divides buyers into groups based on their knowledge,

attitude, uses or responses to a product. In this segment, Pepsi has been
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 concentrating carefully. Because they offer in every special occasions, for the
people who seek for benefits off their products, to their loyal customer base.
Occasional cases like religious festivals; special days like Eid, mothers day,
friendship day, any individual’s birthday or marriage ceremony or anniversary in a
word in every special occasions there are people whom buying Pepsi for
celebration is must.

 Occasions: Parities, Birthdays, Sports, Regular occasions

 Benefits: Quality, Taste
 User Status: First Time User
 Loyalty Status: Strong
 Readiness: Aware, Interested

Buyers are divided into groups on the basis of their response e.g. usage rate,
user status, loyalty status, buying motives, and so on.

i. 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 to nonusers and to
become users.

ii. User Status:

Pepsi 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.

iii. Readiness Stage:

Pepsi market can be segmented on the basis of people’s 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.

iv. Buying Motives:

Buyers buy the product with different buying motives such as economy,
convenience, prestige, etc. Accordingly, Pepsi promotional appeals can be
directed to the target audience.
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 4. Psychographic Segmentation:

For psychographic, PepsiCo caters to all social classes, but the vast majority of
attention goes to people in the middle/upper class. This is demonstrated by their
social media efforts.

 Social Class: Middle Class, Upper Class

 Lifestyle: Actualizes, Believers, Fulfilled, Achievers,
Strivers, Experience makers, Strugglers.
 Personality: Adventurous

Market Targeting:

The reason why Pepsi has fiercely targeted this market is because it is the largest
among its users. Market segment profiles have shown that the majority of carbonated
beverages drinkers are youth and middle age people. Pepsi continually targets the
Schools, Colleges, Universities, restaurants, hotels, and fast food stores. For this they
always spend huge amounts of money to compete with Coca Cola in acquiring
contracts with universities to have sold representation of their product distribution. Pepsi
customers are mostly teenagers and young adults between the ages 14 to 29.

Market targeting can be carried out several different levels. Companies can target very
broadly through “undifferentiated marketing”, very narrowly through “micro marketing” or
somewhere between “differentiate marketing” and “concentrated niche marketing”.
There are four strategies of market targeting. Pepsi follows the strategy of “concentrated
of niche marketing”. In niche marketing companies goes after a large share of one or a
few segments or niches.

Through concentrated marketing, the firm achieve a strong market position because of
its greater knowledge of customer it serves in the niche. It serves and the special
reputation in acquires. Pepsi customers are mostly teenagers and young adults
between the ages of 14 to 30.

They focused on varietal differentiation since 1990 by introducing a string of niche

products. To increase volume in order to counter flat Coca Cola sales, Pepsi introduced
sierra mist in 2002-2003 to take the place of 7up and go head to head with Sprite.
Pepsi has also tried to boost volume by introducing products that appeal to specific
target markets that it currently is not reaching. Pepsi has introduced Code Red and Live
Wire, extensions of Mountain Dew, Pepsi one, and Pepsi blue.
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Finally, Pepsi is countering declining sales of carbonated drinks through the marketing
and distribution of star bucks ready to drink products, and the acquisition SOBE and
Gatorade. The success of Pepsi’s Mountain Dew Code Red launched in 2001 was the
most success full soft drinks innovation in 20 years and has spurred even more niche
product introductions for PepsiCo as well as other competitors.
In some sense Pepsi also follows the idea of “MICRO MARKETING”. As they are
promoting their brands to the local customer groups. They are sponsoring the signboard
for the little or big shopkeepers in town. They are also providing refrigerator logoed
“Pepsi”. All these they are doing to attract their target customers.

Market Positioning:

PepsiCo plans to further create position that will give products the greatest advantage in
their target markets. Pepsi has been positioned based on the process of positioning by
direct comparisons and have positioned their products to benefit their target market.

Positioning Strategies of Pepsi:

To find “Points of Differentiation”. Pepsi have followed some strategies which have
differentiated themselves from others. Usually marketers try to differentiate along the
lines of following things.

 Product differentiation
 Channel differentiation
 Image differentiation

Pepsi have differentiated themselves in the fields of product differentiation, channel

differentiation and image differentiation. The unique characteristics of their product and
their brand image has differentiated themselves from the others beverages in market.

i. Product Differentiation:
Product differentiation comes into play for sure in the case of Pepsi when
looking at Pepsi, people think of soda.

ii. Channel Differentiation:

Coke and Pepsi distribute their drinks through independent bottlers. These
firms make the ingredients for the drinks and then ship them to the local
bottlers, who pretty much finalize the product. After this is done, this bottler
has the right to distribute whatever brand it wants too a specific region. On
the other hand, a brand such as candy dry does something much different.
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 Candy dry packages its product its several locations and then ships them to
wholesale grocers who distribute them to the local grocery stores and outlets.
This is a great example as to why candy dry is strong within local grocery
stores. But why they are not present in vending machines like Pepsi is.
Further more, I found it really interesting that since the vending machine
market is dominated by Pepsi and Coke. That candy dry actually has to be
purchased in order to get in to a vending machine; something that doesn’t
happen too often.

iii. Image Differentiation:

Creating a strong and distinctive image requires creativity and hard work.
Symbols, Signs, Logos and Color are used to create strong-company or
brand recognition and image differentiation.

Positioning Statement for PepsiCo:

As we discussed earlier that Pepsi positions itself on “Points of Difference” as well as

“Points of Parity”. Pepsi’s POD is their forward thinking attitude. According to that
Pepsi’s positioning statement is

“To new generation, those who want the best taste in drinks, Pepsi is cold drink which
gave the best taste, low fat in a reasonable spending”.

Of course Pepsi's main competitor is Coke who is in the same category and has a very
similar target audience.

Pepsi positions itself on points of difference as well as points of parity.

Pepsi's POD is their forward thinking attitude. I don't believe any of the other cola
brands (including Coke) are very strong in that area. This falls into image differentiation.
Pepsi has the image of being action oriented and I think that a large part of their target
audience associate themselves with the brand because of that image.

Pepsi's POP is their wide selection to fit every lifestyle of consumer. They have regular
Pepsi, Pepsi max with more caffeine, Pepsi cherry vanilla, caffeine free Pepsi, diet
Pepsi and Pepsi zero to name a few.

Pepsi also considers themselves the bold, refreshing, robust cola which Coke and other
colas could also claim. These points of parity are product differentiations.
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I know tons of people who only drink Pepsi, I know a lot of people who only drink Coke
and I also know a bunch of people who don't really care which it is as long as they're
getting cola. Maybe a bunch of people grew up with either Coke or Pepsi in their houses
because that's what their parents drank and so the brand preference has been passed
through generations. Others I'm sure, as I mentioned before, can associate with Pepsi's
POD and that's how they bought in.

"We will need to invest in capability, in foresights and dynamic trend-spotting, design
and creating social communities,"

"The new positioning injects new energy into not only the brand but the people who
work on it," giving them a license to experiment with "exciting new initiatives

Pepsi’s Brand positioning has finally always been as a refreshing cola drink for the
youth, ubiquitous on just about every social occasion. The positioning has remained
same since its inception in 1898. "The brand positioning was prompted primarily by the
market segments largely untapped by coca cola (young generation) and its sweet
sugary taste suited for its young consumers". Thus it was able to create a Point of
difference from Coca cola.

POD’s:

i. Goodwill/ emotional connected with an consumers

ii. Generic name in the beverages segment

iii. Campaigns are directed at young as much as older.

iv. Excellent Distribution System

POP’s:

i. Good quality beverages

ii. Constant innovation in marketing campaigns

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SWOT ANALYSIS OF PEPSI AS COMPARE TO COMPETITORS:

SWOT Analysis, which is based on thorough review of the business (corporation,

product category competition, customers and products), identities and evaluates the
internal strengths and weakness of the companies well as its external threats and
opportunities. The marketing mix is driven by the results of the SWOT analysis.

1. Strengths:

 Demand of Pepsi is more than its competitors.

 Company has a very established name and a good reputation.

 Pepsi has large market share than its competitors.

 As the target customers of Pepsi is young generation, so Pepsi has more

brand loyal customers.

 Most of the customers are satisfied with the price of the Pepsi.

 Pepsi is an international company and it has a very strong position

internationally.

 The environment of factory is very good and attractive.

 Pepsi spends a lot of budget on its advertising.

 Pepsi has a very vast distribution channel and it is easily available

everywhere.

 Employees are also motivated.

 Pepsi offers many discount schemes for customers time to time.

 Pepsi Cola is sponsoring sports, musical concerts, walks.

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

2. Weaknesses:

 Pepsi does not offer any sort of incentive or discount to its retailers.

 Pepsi target only young customers in their promotions.

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  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.

3. Opportunities:

 Company may start entering rural areas also.

 The company may also diversify its business in some other potential
business.

 Increased interest of people in musical groups, cultural shows and sports

has provided an opportunity for Pepsi to increase its sales through them.

 PepsiCo New Products Can Easily Penetrate In The Market.

 Noncarbonated Drinks Are The Fastest-Growing Industry

 Changing Social Trends (Fast Foods)

 May Tie Up or Liaison With Major Showrooms, Computer Centers &

Restaurant

4. Threats:

 The main competitor of the company is the Coca Cola.

 At the international level, Pepsi has a very strong competition with Coke.
Coke has started its advertisements more effectively to increase their
demand and it is a very strong threat for Pepsi.

 Cola drinks are not good for the health so the awareness level of the
people is increasing which is a big threat to the company.

 Non-Carbonated Substitutes (The Mango Season)

 Beverage Industry Is Mature

 Fake Products (Imitators)

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Recommendations:

After completing our project we have concluded some recommendation for the Pepsi
cola company, which are following.

According to the survey, conducted by the international firm Pakistani people like
little bit sweeter cola drink. So for this Pepsi cola company should produce their
product according to the local demand.

Marketing team should try to increase the availability of Pepsi in rural areas
they should also focus the old people and children.

Train local employees instead of foreigners to work in production Department

Update TQM Standards for betterment of Continuous Processes.

Improve Packing Process to maintain the quality in different Packing (250ml and
cans).

Stop In-house Production.

Implementation of Rules within the Territory of All the Franchises.

Install vending machines in different public places to promote product and brand
name.

Mobile Vans must be introduced to attract the consumers towards Pepsi brands.

Pepsi uses plastic bottles and cans which can be harmful for society so Pepsi
should be produced recyclable bottles.

In our country, with brand name people prefer Pepsi 23% but without brand name
it is 51%. So need to improve its brand value.

Should increase promotion strategy to introduce new product line like Pepsi next,
Pepsi zero etc.
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Conclusion:
Pepsi has been successful in generating profits in this extremely rivalries
industry. What the company should do now is employ a strategy that now only
addresses its own deficiencies in an effort to grow market share, but one that will
increase the overall size of the pie. This strategy, in the end, will allow Pepsi to
grow and sustain above- average return.

From all the above discussion it is concluded that PepsiCo. Should go for market
penetration that is to increase its market share through tie up with different
restaurants & clubs as well as continue or go with its already adopted strategies
such as increase its share through huge advertisement and through sponsoring
different events such as PepsiCo.

Pepsi has enough resources and finance to enhance the product line
aggressively in Pakistan as well. But in-stable economic, political and security
conditions in Pakistan is a big hurdle in making bigger investments in Pakistan.
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References:

 Pepsi
http://www.pepsiproductfacts.com/?or=pusa.1067.
 PepsiCo
http://www.pepsico.comcompany/The -Pepsico-Family.aspx.
 Wikipedia: Pepsi
http://en.wikipedia.org/wiki/pepsi.
 Wikipedia: Pepsi
http://en.wikipedia.org/wiki/PepsiCo.
 Market Targeting
http://aboutpepsico.blogspot.com/2017/23/market-targeting-is-process-of.html.
 http://mpmcgraw.wordpress.com/2017/11/24/product-differentiation/.
 New York Times
http://topics.nytimes.com/top/news/business/companies/pepsico.
 https://stanleytp018503.wordpress.com/2010/08/06/pepsis-value-chain-analysis-
model/
 www.wikipedia.edu.com, www.scrided.com,
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