Edited Format

Far Eastern University Diliman
Sampaguita Avenue, Mapayapa Village, Diliman, Quezon City, 1101 Metro Manila
Marketing Plan
Pepsi-Cola Products Philippines Incorporated
Cando, Jean Clark
Carmelotes, Alen Gabriel
Caro, Anfernee
Cheng, Alexander V.
Concepcion, Earl Sebastian F.
Danao, Matthew
A Marketing Plan submitted to the faculty of the Senior High School Department
Far Eastern University – Diliman
in Partial Fulfillment of the Requirements
for the courses of
Principles of Marketing
Applied Economics
Business Finance
Quantitative Techniques
October 2019
II. External Analysis
A. Industry Definition
Pepsi-Cola Products Philippines Inc. belongs to the Food and Beverage industry.
The industry group, Beverage Manufacturing, includes three types of
establishments: (1) those that manufacture nonalcoholic beverages; (2) those that
manufacture alcoholic beverages through the fermentation process; and (3) those that
produce distilled alcoholic beverages. Ice manufacturing, while not a beverage, is included
with nonalcoholic beverage manufacturing because it uses the same production process as
water purification.
Industries in the Food Manufacturing subsector transform livestock and agricultural
products into products for intermediate or final consumption. The industry groups are
distinguished by the raw MODULE 2 Industry definition Ÿ Present task environment
analysis Ÿ Potential changes in macroenvironment analysisŸ Threats and opportunitiesŸ
Industry and Competitive AnalysisŸ Broader Societal Expectations (CSR) Pepsi-Cola
Products Philippines, Inc.: Strategic Management Paper Baylosis, 2017 MBA 218 6
materials (generally of animal or vegetable origin) processed into food products. The food
products manufactured in these establishments are typically sold to wholesalers or retailers

for distribution to consumers, but establishments primarily engaged in retailing bakery and
candy products made on the premises not for immediate consumption are included.
B. Industry Segmentation
Marketing segmentation means dividing a market into smaller groups with distinct
needs, characteristics or behaviors who might require separate products or marketing
mixes. Marketers consist of buyers and buyers differ in one or more ways. They may differ
in their wants, resources, locations, buying attitudes, and buying practices. Through market
segmentation companies divide large, heterogeneous markets into smaller segments that
can be reached more efficiently with products and services that match their unique needs.
1) Demographic Segmentation
The company also made area wise segmentation and usually moves towards
college, cinemas, restaurants, hotels, where the strength of young people are
greater. The company also focuses towards students of colleges and schools.
2) Psycho-graphic Segmentation
The company also segments its market with respect to social class, lifestyles
and personalities, they focuses their attention towards lower upper and middle class
because those people afford to drink Pepsi.

3) Behavioral Segmentation
Behavioral segmentation is benefits, occasions, brand loyalty etc. are the
company tries to market their product for the occasions like weddings, concerts and
sports events. Now days the demand of Pepsi Cola has increased due to the wedding
ceremonies. So the company tries to attract the customers in such Metropolitan
areas. It also focuses towards the Brand loyal people or the people who are heavy
user of Pepsi Cola. And those people are in the colleges and universities.
C. Industry Size and Growth
Philippines Carbonated Softdrinks Market (%)

2.2
8.7
17.4
48.4
23.3
Coca-Cola Cosmos Pepsi ARC Others

D. Seasonality
The Company’s sales are subject to seasonality. Sales are generally higher in the
hot, dry months from March through June and lower during the wetter monsoon months of
July through October. While these factors lead to a natural seasonality on the Company’s
sales, unseasonable weather could also significantly affect sales and profitability compared
to previous comparable periods. Higher sales are likewise experienced around the
Christmas/New Year holiday period in late December through early January.
Consequently, the Company’s operating results may fluctuate. In addition, the Company’s
results may be affected by unforeseen circumstances, such as production interruptions. Due
to these fluctuations, comparisons of sales and operating results between periods within a
single year, or between different periods in different financial years, are not necessarily
meaningful and should not be relied on as indicators of the Company’s performance.

E. Stage in the Product Life Cycle

F. Environmental Scan
F.1.
Political
Political factors play a significant role in determining the factors that can impact
Pepsico, Inc.'s long term profitability in a certain country or market. Pepsico, Inc. is
operating in Beverages - Soft Drinks in more than dozen countries and expose itself to
different types of political environment and political system risks. The achieve success in
such a dynamic Beverages - Soft Drinks industry across various countries is to diversify
the systematic risks of political environment. Pepsico, Inc. can closely analyze the
following factors before entering or investing in a certain market.
 Political stability and importance of Beverages - Soft Drinks sector in the
country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Consumer Goods
sector.
 Bureaucracy and interference in Beverages - Soft Drinks industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Consumer Goods

 Favored trading partners
 Anti-trust laws related to Beverages - Soft Drinks
 Pricing regulations – Are there any pricing regulatory mechanism for
Consumer Goods
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Beverages - Soft Drinks
 Mandatory employee benefits
 Industrial safety regulations in the Consumer Goods sector.
 Product labeling and other requirements in Beverages - Soft Drinks
Legal
In number of countries, the legal framework and institutions are not robust enough
to protect the intellectual property rights of an organization. A firm should carefully
evaluate before entering such markets as it can lead to theft of organization’s secret sauce
thus the overall competitive edge. Some of the legal factors that Pepsico, Inc. leadership
should consider while entering a new market are –
 Anti-trust law in Beverages - Soft Drinks industry and overall in the
country.
 Discrimination law
 Copyright, patents / Intellectual property law

 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
Economic
The Macro environment factors such as – inflation rate, savings rate, interest rate,
foreign exchange rate and economic cycle determine the aggregate demand and aggregate
investment in an economy. While micro environment factors such as competition norms
impact the competitive advantage of the firm. Pepsico, Inc. can use country’s economic
factor such as growth rate, inflation & industry’s economic indicators such as Beverages -
Soft Drinks industry growth rate, consumer spending etc to forecast the growth trajectory
of not only --sectoryname-- sector but also that of the organization. Economic factors that
Pepsico, Inc. should consider while conducting PESTEL analysis are –
 Type of economic system in countries of operation – what type of economic
system there is and how stable it is.
 Government intervention in the free market and related Consumer Goods
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Pepsico, Inc. needs to raise capital
in local market?
 Infrastructure quality in Beverages - Soft Drinks industry

 Comparative advantages of host country and Consumer Goods sector in the
particular country.
 Skill level of workforce in Beverages - Soft Drinks industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates
Socio-Cultural
Society’s culture and way of doing things impact the culture of an organization in
an environment. Shared beliefs and attitudes of the population play a great role in how
marketers at Pepsico, Inc. will understand the customers of a given market and how they
design the marketing message for Beverages - Soft Drinks industry consumers. Social
factors that leadership of Pepsico, Inc. should analyze for PESTEL analysis are –
 Demographics and skill level of the population
 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Pepsico, Inc. ’s industry

 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies
encourage entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests
Technological
A firm should not only do technological analysis of the industry but also the speed
at which technology disrupts that industry. Slow speed will give more time while fast speed
of technological disruption may give a firm little time to cope and be profitable.
Technology analysis involves understanding the following impacts –
 Recent technological developments by Pepsico, Inc. competitors
 Technology's impact on product offering
 Impact on cost structure in Beverages - Soft Drinks industry
 Impact on value chain structure in Consumer Goods sector
 Rate of technological diffusion

F.2.
G. Customer/Consumer Analysis
G.1. Profile of Consumer/Customer
Demographic Characteristics
 All age and gender from children to adults with income coming from
parents or work.
Geographic Characteristics
 Population density and part of region.
Psychographic Characteristics
 Working to upper class who are willing to pay and buy the product of
PepsiCo.
Behavioral Characteristics
 Personality towards PepsiCo products, the degree of loyalty, and the
benefits they sought from the product.
G.2. Segmentation of Consumer/Customer
Demographic Segmentation
 Obtainable to all genders and age range.
 Consumers who are average, above average and high average earners.
 Targets the Students, Employees, and Professionals.
Geographic Segmentation
 Forefronts either domestic/international.
Psychographic Segmentation
 Working class, Middle class, and upper-class type of consumers.
Behavioral Segmentation
 Customers that are ‘Hard core loyals’ and ‘Soft core loyals’.
 Consumers who are easygoing, determined, and ambitious.
H. Industry Trends
The Company is not aware of any trend that may affect its liquidity. The Company’s
performance will continue to hinge on the overall performance of the Philippine economy,
the natural seasonality of operations, and the competitive environment of the beverage
market in the Philippines.
The company’s sales volume declined by as much as 20 percent last year as the
business was impacted by the higher taxes on sweetened beverages slapped by the
government under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
However, the firm still ended 2018 with higher net sales of P33.59 billion compared to
P30.31 billion in 2017 due to the price increases driven by the excise taxes.
As for the PCPPI, “The effect of the TRAIN law on volume and cost continue to
adversely impact the company’s profitability with net loss at P81 million year-to-date,”
The firm will continue to invest for future growth despite the decline in volumes. It spent
a total of P1.7 billion in capital expenditures during the January to September period.
III. Key Success Factors

IV. Internal Analysis
A. Company Background
Pepsi-Cola Products Philippines Inc. (PCPPI) is the exclusive manufacturer of
PepsiCo beverages and snacks in the Philippines, with a relationship spanning 70 years.
PCPPI is a listed company in the Philippine Stock Exchange (PSE: PIP) with Lotte
Corporation, a holding company of Lotte Chilsung Beverage—one of the biggest beverage
companies in South Korea, as the lead shareholder co-managing with PepsiCo. PCPPI
manufactures and sells well-known food and beverage brands: Pepsi-Cola, Mountain Dew,
7-Up, Mirinda, Mug, Gatorade, Tropicana, Lipton, Sting, Premier, Milkis, Aquafina, and
Cheetos. It has established 14 operations across the country, serving more than 700,000
outlets and providing employment through its extensive distribution network. PCPPI is
committed to create a positive impact on society with programs focused on environmental
sustainability, nation-building, and inclusive development.
A.1. History
Pepsi-Cola Products Philippines, Inc. (PCPPI) was established in 1989 as
Premier Beverages by Luis Lorenzo, Sr. to acquire the bottling and distribution
rights to PepsiCo beverages in the Philippines.
In 1997, the Guoco Group acquired Lorenzo’s holdings in PCPPI. Under
Guoco management, ₱700 million was spent in 1998 to upgrade the facilities of
PCPPI. In 2000, PepsiCo paid P 2 billion to the Guoco Group to acquire a 33%
stake in PCPPI. News reports cited the rationale was to ensure PepsiCo had a
continuing market for its concentrates, even if it meant infusing money into its
licensed bottlers. PCPPI became listed in the Philippine Stock Exchange in 2008.
In September 2010, Korean-based Lotte Chilsung Beverage Company Ltd.
acquired 34% of PCPPI. The acquisition made Lotte Chilsung the largest
shareholder in PCPPI. Lotte Chilsung agreed to pay P4.447 billion to buy the 1.27
billion shares from the Guoco Group.[3][4] In 2013, Lotte Chilsung increased its
stake to 39%. As of March 2013, Netherlands-based Quaker Global Investments
B.V. is the company’s second largest shareholder with 29.5%.[5]
Pepsi-Cola in the Philippines
On October 16, 1946, John Clarkin acquired a franchise to bottle and
distribute Pepsi-Cola in the Philippines, establishing Pepsi-Cola Bottling Company of the
Philippine Islands Ltd. Clarkin was an American who came to the Philippines as a member
of the US Air Force during the close of World War II. In the beginning, the company
imported Pepsi-Cola until 1947, when its first bottling plant was established in Quezon
City. After Clarkin returned to the United States in 1957, PepsiCo International took over
the Philippine operations. In 1983, the Philippine operations became a branch of PepsiCo’s
New York office - renamed PepsiCo, Inc. (Philippine branch) - and operated until 1985.
From 1985 to 1989, Pepsi-Cola Distributors of the Philippines, Inc., a group identified with
Filipino businessmen Ernest Escaler and Eduardo Cojuangco, Jr., took over the Philippine
franchise.
A.2. Mission/Vision
Mission
 FOR CONSUMERS:
By creating joyful moments through our delicious and nourishing products
and unique brand experiences.
 FOR CUSTOMERS:
By being the best possible partner, driving game-changing innovation, and
delivering a level of growth unmatched in our industry.
 FOR ASSOCIATES AND OUR COMMUNITIES:
By creating meaningful opportunities to work, gain new skills and build
successful careers, and a diverse and inclusive workplace.
 FOR OUR PLANET:
By conserving nature’s precious resources and fostering a more
sustainable planet for our children and grandchildren.

 FOR SHAREHOLDERS:
By delivering sustainable top-tier TSR and embracing best-in-class
corporate governance.
Vision
This reflects our ambition to win sustainably in the marketplace and
accelerate our top line growth, whilst keeping our commitment to do good for the
planet and our communities. It builds on decades of progress we’ve made since
PepsiCo was founded in 1965, while setting a firm foundation for a new era of
growth and prosperity. To help us achieve this vision, we’ve defined a new set of
aspirations: to become Faster, Stronger, and Better.
A.3. Product/Service Offerings
Brands
Carbonated:
 Pepsi
 Pepsi Light
 Pepsi Max
 7 Up
 Mountain Dew
 Mirinda
 Mug
 Lotte Milkis
Non-Carbonated:
 Tropicana
 Mirinda Fun Mix
 Lipton
 Lipton Sparkling
 Gatorade
 G Active by Gatorade
 Sting Energy Drink
 Aquafina Purified Drinking Water
 Premier Drinking Water
 Lotte Let’s Be
 Knick Knacks X-Blast

Snack Foods:
 Cheetos
 Doritos
 Fritos
 Lay’s
 Ruffles
 Lay’s Stax
Other
 Quaker Instant Oatmeal
 Knick Knacks
 Lotte Xylitol
 Delfi
 Goya
 Boom Boom
A.4. Selling Prices and Pack Sizes
PRODUCT VARIANTS SIZE PRICE
 8oz Glass
Pepsi Bottle
 12oz Glass  5.00PHP
Bottle  9.00PHP
 750ml  18.00PHP
Glass Bottle  25.00PHP
 1Liter Glass  17.95PHP
bottle
 26.95PHP
 250 ml cans
 50.00PHP
 330 ml cans
 61.50PHP
 1.25L
 74.50PHP
 1.75L
 2.25L
 8oz Glass
Bottle
Mountain Dew  12oz Glass  7.00PHP
Bottle  9.00PHP
 750ml Glass
 18.00PHP
Bottle
 25.00PHP
 1Liter Glass
 17.95PHP
bottle
 26.95PHP
 250ml cans
 50.00PHP
 330ml cans
 61.50PHP
 1.25L
 1.75L  74.50PHP
 2.25L
 
 
 7up Diet  
7UP  7.00PHP
 7oz Glass  9.00PHP

Bottle  15.00PHP
 12oz Glass  21.00PHP
Bottle  20.50PHP
 30.00PHP
 750ml Glass  44.00PHP
Bottle
 1Liter Glass
bottle
 330ml cans
 1.25L
 2L

Bottle  9.00PHP
Miranda
Bottle  20.50PHP
 1Liter Glass  30.00PHP
bottle  39.00PHP
 330ml cans
 1.25L
 1.5L
 2.25L

Root Beer 
 8oz Glass
Bottle  7.00PHP
 330ml cans  20.50PHP
 1.25L  30.00PHP
 1.5L  39.00PHP
 2.25L  44.00PHP
Gatorade  Grape  8oz Glass  11.00PHP

Bottle  25.50PHP
 Blue Bolt  30.50PHP
 350 ml  68.00PHP
 Tropical
Fruit  500 ml
 Pink  1.5L
Lemonad
e
 Lemon
Lime
 Orange
Chill
 Gatorade
Propel:
Mandarin
Orange,
Gala
Apple and
Zero-
Calorie
Lemon
 Gatorade
Low Carb:
Lime and
Grape
Tropicana
 Tropicana  8oz Glass  10.00PHP
Twister, Bottle  21.50PHP
no pulp  49.50PHP
Juicy Pulp  355 ml
orange
juice
drink with  1L
real pulp
sacs
Fruit
Burst
Tropical
juice
drink with
real
pineapple
cubes
Sting
 Strawberr  8oz • 330ml  21.95PHP

y
Milkis  Regular,  250 ml  42.00PHP

Strawberr
y
A.5. Distribution Network
The company offers its products through direct sales, distributors, and
wholesalers to supermarkets, restaurants, and convenience store chains. Pepsi-Cola

Products Philippines, Inc. is based in Muntinlupa City, the Philippines. It has
established manufacturing facilities accross the country, serving at least 500,000
outlets and providing employment through its extensive distribution network.
Direct Store Delivery
Under the DSD system, PepsiCo delivers products directly to retail stores.
Of the three channels, DSD enables PepsiCo to merchandise with maximum
visibility. It’s more suitable for products that are restocked often and are sensitive
to promotions and marketing.
Customer Warehouse
The customer warehouse system is a less expensive distribution channel.
It’s ideal for products that are less fragile and perishable, have lower turnover, and
are not purchased impulsively.
Third-Party Distributor Networks
PepsiCo distributes food and beverage products to restaurants, businesses,
schools, and stadiums through third-party food service and vending distributors and
operators.
A.6. Highlights of Historical Performances
(2018)
PCPPI bagged three Excellence Awards during the 7-Eleven Suppliers’
Night for having implemented various creative, customer-intuitive sales and
marketing initiatives, which contributed to 7-Eleven’s business growth in 2018.
The company won an Innovation Award for its initiative in developing activities
and projects tailor-made for 7-Eleven, in particular the exclusive launch of Pepsi
Vanilla 500ml in stores. The award also acknowledged the company’s consistent
run of price promotions for summer and Christmas which helped maximize sales
of the Softdrinks category. PCPPI also received the Brand Activation Partnership
Award for its strong support of 7-Eleven’s marketing activities. For 2018, the
company contributed to campaigns for Gulp (co-branded with Deadpool and
Pokémon), and Slurpee activations (Slurpee Summer Hit Song, and Slurpee Build
Your Own Concert). As a result of the latter, PCPPI helped regain sales for Slurpee,
in spite of TRAIN and subsequent price increase. In addition, PCPPI also supported
7-Eleven’s other events (the annual Run 2018 and Trail 2018) and promotions
(New Year New Ride Promotion). Finally, PCPPI also won the Account
Management Award which recognizes the sales team’s dedication in client-
servicing. The company maintained excellent service through continuous weekly
coordination with CDI and PSC Marketing on requirements and system
improvements, and by sending Quality Service Assistants on daily store visits to
assess product assortment quality and execution.
(2009)
PepsiCo current performance and achievement is Conserved more than 12
billion liters of water through efficiency improvements within PepsiCo operations
as compared to the 2009 baseline. Achieved a 16 percent reduction in per unit use
of energy in beverage plants and a 7 percent reduction in snack plants in 2010
compared to a 2009 baseline. Introduced the first fully compostable Sun Chips bag,
which is made with 100 percent renewable plant-based materials. Increased the
percentage of executive positions held by women globally to 30 percent. Reduced
saturated fat by more than 50 percent in U.S. Lays and Ruffles potato chips.
PepsiCo’s success is the result of superior products, high standards of performance,
distinctive competitive strategies and the high integrity.
B. Review of Current Marketing Efforts
The PepsiCoPh is Operating in more than 200 countries, the parent company
of Pepsi has been the leading company in the food & beverages industry having more than
100 years of experience in the market.
The convenience of purchasing, availability, Low-price, favorable taste are some of the
things a customer expect in a competitive non-alcoholic beverages market and that’s what
offered by Pepsi which makes it a leader in its segment fighting neck- on the neck with
Coca-Cola.
1) Current Target Market
Pepsi's market share is increasing 1 or 2 points over the last 8 to 10 years, which is
quite significant. If we take up to last 10 years, it’s almost 12% increase in the company’s
share. 1996 was a bad year for Pepsi because the pricing was high. And as the consumer
income has caught up, hopefully consumers will now get familiar to this price change. There
will be now more competition and whenever there is competition there is a lot of market
activity, distribution improves, promotion improves and advertising improves. At the end of
1996 in Nov., Dec., when Coca Cola launched its 300 Ml pack Pepsi also launched its 300
ML. This created competition and prices went down. This increase the market so much, that
Pepsi sales were so high during Nov., Dec., that it has never been whole year. This shows
that market has great potential to grow.
D. Current Marketing Strategies and Activities
It uses mass marketing strategy to target the groups of the customers of different
demographics and geographic regions. Segmentation is the important strategy which helps
the brand in targeting the specific group of customers with differentiated offerings. Pepsi
is the mass market product which uses undifferentiated targeting strategies in order to be
competitive and increase its sales. In the non-alcoholic beverage market, it has positioned
itself as a young, vibrant and passionate brand which challenges the conventional things.
BCG Matrix in the Marketing strategy of Pepsi
Pepsi and Diet Pepsi (Pepsi Zero Sugar) are the Cola beverages in which Pepsi
deals in. The offerings of PepsiCo under the Pepsi brand are Stars in the BCG matrix due
to its popularity among the youth and the emotional connect with the masses in their special
moments & celebrations.
Distribution Strategies of Pepsi
As a fast consuming commodity, the sales of soft drinks are expected to depend on
the distributing channels. The success of distribution strategy is able to encourage the
consumers make purchase decision right away. Pepsi is one of the leading beverage
companies in the world. Apart from Cola and soft drinks, the company also supplies water,
juice, tea drinks, etc. One of the remarkable slogans of Pepsi is “Dare for more”. Channel
strategies are related to several factors, including places, margins, brand strategies, etc.
However, the most important factor must be the business objective of the company. As for
Pepsi, certainly, the distribution strategy plays an important role in relation to the long term
business strategy of Pepsi. In general, the distribution strategies of Pepsi contain several
aspects, traditional retailing distribution, online channel and franchised partner.

E. Current Marketing Problems and Concerns
Pepsi Co Ph has satisfied consumers' bellies for more than a century. But recently, the
company has left shareholders craving more. With increased competition and loss of
market share, many investors wonder if this global snack food and beverage giant is simply
fizzling out. Are more bland results ahead for PepsiCo?
Increased focus on negative health effects of soft drinks and unhealthy foods.
The risk to PepsiCo is that persistent and continued emphasis on these effects may
curtail soda and snack-food consumption. Soda makers are banding together to proactively
tackle the issue. In selected cities next year, they will roll out vending machines that'll not
only display the number of calories in a container of soda, but also suggest a lower-calorie
beverage option. Fast-food operators have mostly borne the brunt of the backlash against
unhealthy foods, but PepsiCo could feel more pressure regarding its salty snacks in the
future.
Restructuring and acquisition costs.
PepsiCo's credit rating was lowered due to the debt it took on to fund bottler
acquisitions. The acquisitions and restructuring costs will pressure bottom-line growth in
the short term and have the potential to lower return on investment and increase commodity
cost pressures.
Some possible solutions for Pepsi, if they want to gain competitive advantage in
the market, is to invest further in its supply-chain management. Emphasis in research has
been placed upon global supply-chain management, where the notions of channel strategies
have been drawing the interest of all. Pepsi needs to incorporate these concepts and tools
into its marketing strategy in order to enable efficiency in supply-chain management. Its
focus needs to be on customer satisfaction in the market and cost efficiency along with a
leadership strategy that takes into account cultural gaps that are affecting its ability to reach
all customers.
V. Competitive Analysis
A. Industry Participants
A.1. Players in the industry including the company under study
The company is competing for the betterment of its firm, becoming more
sustainable and to widen their target market. Companies are using different marketing
strategies in order to pull potential investors and consumers. There are a few leading
companies when it comes to carbonated beverages. The national chains are a growing
presence: Pepsi-Cola Philippines, Coca-Cola Philippines, Cosmos Corporation, ARC
Refreshment Corporation. They benefit from national advertising, economies of scale,
volume buying, and a general trend toward name-brand loyalty for buying in the
channels as well as for products.

A.2. Include both direct and indirect competitors
Pepsi-Cola direct competitors are, Coca-Cola, Cosmos Corp., and ARC
Refreshment Corporation. Pepsi and Coke’s products such as “Pepsi Perfect” and
“Vitamin Water” are slightly substitutable for one another. Their products can
influence the market share of one another through effective strategies. One example
of Pepsi’s indirect competitor is Nestle Juice. They are distant competitors of one
another. It means that their products satisfy the same wants but they are in an indirect
competition with one another.
B. Competitive Brand Performance
Pepsi-Cola Coca-Cola Cosmos Asiawide Nestlé

Refreshmen Philippines
Corporation
t Corp.
BRAND
Market
Shares 17.4% 48.4% 28.3% 8.2% 60%
Awarenes 97.91% 99.58% 30% 22.91% 98.33%

s Level
Based on the information we gathered, Coca-Cola has the best performance among the
following beverages company. Due to its wide-range of market, Coca-Cola Company became one
of the most popular brand in the world. The main competitor of the Pepsi-Cola Products
Philippines Inc. is the Coca-Cola Company. Even Coca-Cola’s market share in the beverage
market, they are dominating, despite this instance, Pepsi-Cola still have what it takes to compete
and top the market.
C. Comparative Analysis
Pepsi-Cola Coca-Cola Cosmos Corp Asiawide Nestlé Philippines

Refreshment
Corp.
BRAND
*Teenagers *Teenagers *Adults *Mostly *Parents

teenagers
*Adults *Adults *Family *Family
Target Market *Athletes
*Athletes *Overweight *18-25 years *Teenagers
old *Adults
*Overweight *Family
Pepsi The Coca- Cosmos Asiawide Nestlé Philippines

International is Cola brand Bottling Refreshment is the Philippines’
a world - has turned Corporation is Corporation favorite when it
renowned out to be one gradually stills on the edge comes to nutrition,
brand. It is a of the most losing its of the Philippine health and
very well recognizable place in the Market. Its wellness. Nestlé
organized and a popular market. popularity for today is a robust
multinational brand of all Bigger brands the teenagers is and stable

company, times and in the their organization, proud
which operates their Philippines advantages, of its role in
Positioning almost all over beverage has taken over that’s why they bringing the best
the world. company is the Cosmos are still in the food and beverages
They produce, among the Bottling Corp. market. throughout the
one of best world’s stages of the
carbonated largest Filipino
drinks in the beverage consumers’ lives.
world. companies.
* Pepsi * Coca-Cola * Pop Cola *RC Cola *Nestlé Non-Fat
Milk
* Mountain * Coca-Cola * Sarsi *RC Cola No
Dew Zero Sugar *Bear Brand Milk
* 7 Up * Fanta *Juicy Lemon *Nestlé Fresh and
Low Fat
* Mirinda * Sprite *Fruit Soda
Orange *Nescafe
* Mug Root * Minute
Product
Beer Maid *Seetrus
* Gatorade * Royal True *Arcy’s
Orange Rootbeer
* Sting
* Sparkle *Rite ‘n Lite
* Tropicana
* Milkis
* Lipton
*Pepsi *Coca-Cola *Pop Cola *RC Cola *Nestle Non-Fat

Milk
*Mountain
Dew
*Sarsi *RC Cola No
Sugar
*Bear Brank Milk
Packaging and *Coca-Cola

Zero Sugar
Labelling
*Fanta
*7Up
*Sprite
*Juicy Lemon
*Mirinda *Minute *Nestle Fresh and
Low Fat
Maid
*Mug
Rootbeer *Royal-Tru *Fruit Soda
Orange Orange
*Nescafe
*Gatorade
*Sparkle
*Seetrus
*Arcy’s
*Sting Rootbeer
*Tropicana
*Rite ‘n Lite
*Lipton
*Milkis
Pepsi-Cola Cooler, Nestle school bags

shirts, Tote Bottle and (KitKat), Nestle
bags Can Mugs, Nestle Shirts
Accessories,
Merchandising Drinkware,
Bags and
totes, Coca-
cola can mug
VI. SWOT Analysis
Pepsi-Cola’s SWOT Analysis – Recommendations
Pepsi-Cola can use its strengths to effectively respond to the issues identified in this SWOT
analysis, especially those considered as threats. The realistic actions that Pepsi-Cola could take to
improve its competitiveness and international growth are as follows:

1. Diversify businesses to minimize market risk exposure
2. Further penetrate developing markets to grow revenues
3. Improve product healthfulness to attract more consumers
4. Enhance recycling efforts to address environmentalism
Internal Strategic Factors
Pepsi-Cola’s continued global growth and prominence reflects the company’s strengths.
This aspect of the SWOT analysis framework outlines internal strategic factors that enable firms
to fulfill their business goals. The following are the most significant strengths of PepsiCo:
1. Strong brand image
2. Broad product mix
3. Extensive global production network
4. Extensive global distribution network
As a successful global company has one of the strongest brands in the market. This strength
enables the firm to attract consumers to its new products. In addition, the broad product mix
represents Pepsi-Cola’s increasing ability to reach various markets and segments, such as through
Frito-Lay products, Quaker products, and Pepsi products. Pepsi Cola’s extensive global production
and distribution networks are strengths that support the company’s international growth and
expansion strategies. In this aspect of the SWOT analysis, Pepsi Cola’s strengths are sufficient to
support its global growth strategy.
Pepsi-Cola’s Weaknesses (Internal Strategic Factors)
Pepsi-Cola suffers from a number of weaknesses that act as barriers to international growth.
The internal strategic factors that limit organizational development are considered in this aspect of
the SWOT analysis framework.
1. Low penetration in Asia
2. Limited business portfolio
3. Weak marketing to health-conscious consumers
Pepsi Cola derives about 70% of its revenues from markets in North America and South
America. This weakness indicates that the company has not yet maximized potential revenues
outside the Americas. In addition, PepsiCo operates primarily in the food and beverage industry.
This is a weakness because it maximizes the company’s vulnerability to risks in the food-and-
beverage market. Also, PepsiCo fails to effectively market many of its products to health-
conscious consumers. This aspect of the SWOT analysis highlights weaknesses that PepsiCo must
address through changes in its growth strategy.

Opportunities for Pepsi Cola (External Strategic Factors)
Pepsi-Cola has opportunities for continued global growth. In this aspect of the SWOT
analysis framework, external strategic factors that provide options for business improvement are
identified. Pepsi-Cola opportunities are as follows:
1. Business diversification
2. Market penetration in developing countries
3. Global alliances with complementary businesses
Pepsi-Cola has the opportunity to diversify its businesses, such as by acquiring a
complementary firm that is not in the food and beverage industry. Another opportunity is for
PepsiCo to increase its penetration in developing countries to generate more revenues from
markets outside the Americas. In addition, PepsiCo can create alliances with complementary
business to increase its market presence. Based on this aspect of the SWOT analysis, PepsiCo has
significant opportunities to strengthen its business resilience.

Threats Facing Pepsi-Cola (External Strategic Factors)
The food and beverage industry experiences a variety of threats. External strategic factors
that could reduce business performance are considered in this aspect of the SWOT analysis
framework. In Pepsi-Cola’s case, the following are the most significant threats:
1. Aggressive competition
2. Healthy lifestyles trend
3. Environmentalism
Aggressive competition is a major threat against the company. The influence of the Coca-
Cola Company is especially significant against Pepsi-Cola. In addition, the healthy lifestyles trend
is a threat against Pepsi-Cola’s products, many of which are seen as unhealthful because of their
sugar, salt, or fat content. Also, environmentalism threatens the company in how consumers
negatively respond to product waste and Life cycle issues. This aspect of the SWOT analysis
indicates that Pepsi-Cola must reform its strategies to overcome the threats to business.

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Far Eastern University Diliman

Pepsi-Cola Products Philippines Incorporated

Cando, Jean Clark

Carmelotes, Alen Gabriel

Concepcion, Earl Sebastian F.

II. External Analysis

The industry group, Beverage Manufacturing, includes three types of

Industries in the Food Manufacturing subsector transform livestock and agricultural

distinguished by the raw MODULE 2 Industry definition Ÿ Present task environment

analysis Ÿ Potential changes in macroenvironment analysisŸ Threats and opportunitiesŸ

Industry and Competitive AnalysisŸ Broader Societal Expectations (CSR) Pepsi-Cola

products manufactured in these establishments are typically sold to wholesalers or retailers

needs, characteristics or behaviors who might require separate products or marketing

because those people afford to drink Pepsi.

Behavioral segmentation is benefits, occasions, brand loyalty etc. are the

ceremonies. So the company tries to attract the customers in such Metropolitan

C. Industry Size and Growth

Philippines Carbonated Softdrinks Market (%)

Coca-Cola Cosmos Pepsi ARC Others

Christmas/New Year holiday period in late December through early January.

results may be affected by unforeseen circumstances, such as production interruptions. Due

meaningful and should not be relied on as indicators of the Company’s performance.

E. Stage in the Product Life Cycle

following factors before entering or investing in a certain market.

 Political stability and importance of Beverages - Soft Drinks sector in the

 Risk of military invasion

 Level of corruption - especially levels of regulation in Consumer Goods

 Bureaucracy and interference in Beverages - Soft Drinks industry by

 Legal framework for contract enforcement

 Intellectual property protection

 Trade regulations & tariffs related to Consumer Goods

 Favored trading partners

 Anti-trust laws related to Beverages - Soft Drinks

 Pricing regulations – Are there any pricing regulatory mechanism for

 Taxation - tax rates and incentives

 Wage legislation - minimum wage and overtime

 Work week regulations in Beverages - Soft Drinks

 Mandatory employee benefits

 Industrial safety regulations in the Consumer Goods sector.

 Product labeling and other requirements in Beverages - Soft Drinks

to protect the intellectual property rights of an organization. A firm should carefully

should consider while entering a new market are –

 Anti-trust law in Beverages - Soft Drinks industry and overall in the

 Copyright, patents / Intellectual property law

 Consumer protection and e-commerce

 Health and safety law

investment in an economy. While micro environment factors such as competition norms

Pepsico, Inc. should consider while conducting PESTEL analysis are –

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.

 Government intervention in the free market and related Consumer Goods

 Exchange rates & stability of host country currency.

 Efficiency of financial markets – Does Pepsico, Inc. needs to raise capital

 Infrastructure quality in Beverages - Soft Drinks industry

 Comparative advantages of host country and Consumer Goods sector in the

 Skill level of workforce in Beverages - Soft Drinks industry.

 Education level in the economy

 Labor costs and productivity in the economy

 Business cycle stage (e.g. prosperity, recession, recovery)

 Economic growth rate

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.

 Education level as well as education standard in the Pepsico, Inc. ’s industry