SAIF REHMAN KHAN

Analyzing the Marketing Strategy of PepsiCo

Name: SAIF REHMAN KHAN

Student Registration ID: 11783

Course: FUNDAMENTALS OF MARKETING

Instructor: ABBAS JAFFRY

 EXECUTIVE SUMMARY :

Pepsi is the 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.
Revenues generated PepsiCo in the Pakistan and its eight bottlers Rs91 billion for the financial
year ending June 30, 2013, Pepsi has a significant market share 65% in the Pakistan and
dominated as a market leader but Pepsi has lost market share due to Coca-Cola sponsorship of
Coke Studio, previous Pepsi market share is almost 75% that’s why management changed
marketing technique and Pepsi associate with music and sponsor a music show. Now Pepsi
launch a new soft drink and the name is “PEPSI PERFECT “ a vitamin-enriched Pepsi, with 50%
less sugar than regular Pepsi, and black in color and flavor stronger than regular Pepsi. Pepsi
Perfect target market is generally anyone between the ages of 15 to 50 , specially those peoples
they are health concious and those they want to purachase novelty things. They advertise heavily
in Universities and Schools surroundings , TV channels, Promotions, Sign boards and
restaurants. As far as packaging and distribution concern, packaging is different from the
previous one’s in which staw is built-in in the bottle and distribute this product through it’s 08
bottler in Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers.
Bottlers, produce, distribute and help in promoting the brand.
 INTRODUCTION TO THE COMPANY:

Pepsi is the world renowned brand. It is a very well organized multinational company, which
operates almost all over the world. They produce, one of the best carbonated drinks in the world.
Pepsi is a symbol of 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. 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 taste
compared with other soft drinks in the market. Consumer’s survey results explain the same
outcome and Pepsi has been declared as the most wanted soft drink of Pakistan.
MISSION STATEMENT:

“To be the world's premier consumer Products Company focused on convenient foods and

beverages. We seek to produce healthy financial rewards to investors as we provide opportunities

for growth and enrichment to our employees, our business partners and the communities in

which we operate. And in everything we do, we strive for honesty, fairness and integrity.

” 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.”
 MARKET ANALYSIS:

 MARKET SEGMENTATION:

 PEPSI PERFECT divides the target market in to different groups. They may differ in

wants, resources, locations and buying practices. Through market segmentation

companies can be reached more efficiently and effectively with products and services that

match their unique needs.

 PEPSI PERFECT Segmentation is done on the basis of following factors.

 GEOGRAPHIC SEGMENTATION: In geographic segmentation, PEPSI PERFECT

market is sub divided on the basis of area.

• Region: Regional differences exist in respect of demand for products. For example,

PEPSI PERFECT buyers from Sindh are different from the buyers in Punjab.

• Urban/Rural: There are differences in buying behaviour of urban and rural customers.

Accordingly, PEPSI PERFECT marketing strategies designe depending upon their likes,

dislikes, moods, preferences, fashions and buying habits.

• Locality: PEPSI PERFECT buying is also reflected by the locality within a particular

city. For instance, there are differences in terms of buying patterns of people residing at

Korangi and Defence, within a city.

 DEMOGRAPHIC SEGMENTATION:

Company study PEPSI PERFECT market at the different aspects of population. Markets can be

divided on demographic factors like age, gender, education etc. The various demographic factors

are :
 Age: Analysing markets by age is to divide the total population into age groups and

analyse the wants and needs of each group.

Income: PEPSI PERFECT Buying patterns depends on income of the consumers. No

two individuals or families spend money in exactly the same way that’s why company

launch economy packs of PEPSI PERFECT.

Family Size: The consumption patterns of PEPSI PERFECT definitely vary with the

number of people in the household that’s why company introduce 1.5 ltr & 2.25 ltr

bottles in the market.

Race: Consumption patterns of PEPSI PERFECT differ on the basis of race because

market research if first 15% peoples purchased & used your product which have

company launch others 85% peoples follow them.

 BEHAVIOURAL SEGMENTATION: Buyers are divided into groups on the basis of their

response e.g usage rate, user status, loyalty status, buying motives, and so on.

o Usage Rate: One possible way to define target market is by product usage. There can be

heavy users, medium users, light users, and nonusers of Pepsi products. Targeting on the

basis who want to increase consumption by present users and to convince and introduce

new product such as PEPSI PERFECT to nonusers and to become users.

o User Status: PEPSI PERFECT market can be segmented on the basis of user status OF

Pepsi products such as: non-user, ex-user, potential user, first-time user, regular-user, &

so on. Readiness Stage: PEPSI PERFECT market can be segmented on the basis of

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.
 o Buying Motives: Buyers buy the product with different buying motives such as

economy, convenience, prestige, etc. Accordingly PEPSI PERFECT promotional appeals

can be directed to the target audience.

7 P’s of PepsiCo Marketing Analysis

1. Product
Beverage Products – Diet Pepsi, Gatorade, Mountain Dew, Thirst Quencher,
Tropicana, Aquafina Bottled Water, Sierra Mist.
Savory Food Snacks – Fritos Corn chips, Cheetos, Ruffles Potato Chips, Lays
Potato Chips, Tostitos, Doritos.
Other Food Products – breakfast cereals, cakes and cake mixes.
PepsiCo recently created Baked Snacks North America Business Unit to meet
consumer’s interest in more nutritious snacks and foods.

2. Price
Expenses related to transportation, ingredients and labor continue to pressure the
beverage industry toward price increases.
PepsiCo’s drink pricing strategies may be heavily influenced by its working
relationship with Wal-Mart whose low price themes put pressure on PepsiCo to
hold down prices.
The company strives to cut or maintain current prices by cutting overhead and re-
engineering the manufacturing process.

3. Place:
Pepsi has an extensive market presence which depends upon its well-set
distribution network. The brand uses a variety of distribution systems based upon
the customer needs, product characteristics as well as local trade practices.  The
types of distribution systems it uses are:
Direct Store Delivery
Customer warehouse
Foodservice and vending distribution networks
 4. Promotion:
Apart from in-store promotion, Pepsi also spends heavily on marketing and
advertisement of its products. In 2016 its total marketing expenses were higher
than $2.5 billion. A significant part of this sum goes to digital advertising. Why
despite being a brand name does Pepsi spend so heavily on advertising is because
of the intense competition in the soda industry? Apart from driving sales,
marketing is aimed at customer engagement and CRM. The brand uses television
as well as internet and social media channels to connect with its customers. The
traditional advertising and marketing channels and spaces are also used by it to
keep the customers engaged.

5. Physical Evidence
PepsiCo’s website provides a wealth of information about the company including
the firm’s rich history and manufacturing process.
PepsiCo is an industry leader in packaging – helping to promote and implement
standards for sustainable packaging.  
PepsiCo has a packaging philosophy: reduce, reuse, recycle, remove and renew.

6. People
Pepsi has people working under its sales team that play a vital role in its marketing
efforts. These people have been trained in persuasive techniques, but also to show
respect to the business customers taking into consideration their preferences.
Pepsi has people working in its customer service department. These are contacted
by customers in case of any issues within the product, and these people guide
customers through the process of getting the issues resolved. These people are
trained to respect the customers and try their best to get their issues resolved.
Pepsi has people working with suppliers to obtain raw materials. These people play
a vital role in maintaining or improving the quality of the final product produced.
 7. Process
Pepsi to make sure that its products are always available at retail stores has systems
installed where retailers can notify when their inventory levels are low. Pepsi
provides them with more products while ordering its productions to replenish its
stock. This ensures that products are always available to customers when needed.
Pepsi has an online delivery process, where orders are received in the computer
system and based on these orders, the relevant product from the inventory is
shipped to the delivery service provider.
Pepsi is actively involved in researching market opportunities in order to
understand customer needs. It also develops understanding regarding customer
needs through feedback collected at store, its helpline or social media pages.

CONCLUSION:

Pepsi launching a new product called as “PEPSI PERFECT” it’s a vitamin en-riched soft drink

due to market trend changed consumers mostly prefer vitamins and energy drinks instead of soft

drinks because consumers are health concious. Pepsi is a well known company and it has

maintained its position well by understanding the client psychology, by ensuring quality, by

keeping economic factors in view and by advertisements.

 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 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. Fresh efforts, newness of approach must remain the principles

of a well marketing strategy. A continuous bombardment in advertisement would convince the

clients that Pepsi is a part of their lives. Pepsi to be an essential ingredient of their life