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The History Of Pepsi
Pepsi was originally named "Brad's Drink", after its creator, Caleb Bradham, a pharmacist in New Bern, North Carolina. It was created in the summer of 1893 and was later renamed Pepsi Cola in 1898, possibly due 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 into 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 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race". In 1931, the Pepsi-Cola Company went bankrupt during the Great Depression- 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 PepsiCola syrup formula.
INTRODUCTION OF PEPSI
Pepsi is one of the most well known brands in the world today available in over 160 countries. The company has an extremely positive outlook for India. This reflects that India holds a central
India is a key market for Pepsi co. The company has set up 8 Greenfield sites in backward regions of different states. activities to benefit society.Soft drink concentrate.position in Pepsi's corporate strategy. Faced with the existing policy framework at the time. Vision: "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate environment. Pepsi has 19 company owned factories while their Indian bottling partners own 21. With the introduction of the liberalization policies since 1991. social. the company entered the Indian market through a joint venture with Volta’s and Punjab Agro Industries. Pepsi took complete control of its operations. our business partners and the .creating a better tomorrow than today. The government has approved more than US$ 400 million worth of investments of which over US$ 330 million have already flown in. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees. economic . PepsiCo intends to expand its operations and is planning an investment of approximately US$ 150 million in the next two-three years. Mission: Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. and a commitment to build shareholder value by making PepsiCo a truly sustainable company. snack foods and vegetable and food processing. One of PepsiCo's key strategies was to develop a completely local management team. PepsiCo entered India in 1989 and is concentrating in three focus areas . and at the same time the company has added value to Indian agriculture and industry." Our vision is put into action through programs and a focus on environmental stewardship.
2.2 ORGANISATION STRUCTURE Managing Director Finance & Accounts Manager Director of Executives Administration of Recruitment Accountant Sales & Marketing Department Production Department Sales Manager Factory Manager Accounts Area Sales Manager Shipping Fountain Pepsi Bottles Soft Drink Quality Production Engineer Production Manager Control Fountain Manager Accountant Chemists Sales Executives 102 Distributors Production . we strive for honesty. And in everything we do. fairness and integrity.communities in which we operate.
Opportunities can arise when changes occur in the external environment.PROCESS ANALYSIS Internal Analysis: The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and weaknesses. External Analysis: An opportunity is the chance to introduce a new product or service that can generate superior returns. Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to: • • • • • • • • • Customers Competitors Market trends Suppliers Partners Social changes New technology Economic environment Political and regulatory environment . Factors should be evaluated across the organization in areas such as: • • • • • • • • • • • • • Company culture Company image Organizational structure Key staff Access to natural resources Position on the experience curve Operational efficiency Operational capacity Brand awareness Market share Financial resources Exclusive contracts Patents and trade secrets The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.
The Pepsi Cola seems to stick to the ice cream making little flavor chunks on the side. The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats. materials. For ice cream fountain drinks quality Coca Cola receives five stars out of five stars. QUALITY #3 -ICE CREAM FOUNTAIN DRINKS: But how well do these drinks do for making ice cream drinks. Now for a smooth fountain drink with ice cream you do not want the chunking of the ice cream on the sides. tolerances. If the product has a poor design you are less likely to reach for it on the shelf for an impulse buy. Pepsi Cola scores a five out of five stars.The last four items in the above list are macro-environmental variables. Product design is important because it really grabs your attention. Product Design & Process Selection Product design – the process of defining all of the companies product characteristics Product design must support product manufacturability (the ease with which a product can be made) Product design defines a product’s characteristics of: appearance. PRODUCT DESIGN QUALITY #1 --PRODUCT DESIGN: Pepsi Cola scores big on product design. The Coca Cola just hovers around the ice cream. Pepsi Cola scores a five out of five stars. Ewwww. The Pepsi Cola drink seems to hold its fizz longer then Coca Cola. That might be why hospitals give flat Coca Cola to patients instead of flat Pepsi Cola. and performance standards. and are addressed in a PEST analysis. Most people really do not like to drink flat soda. The label of the Pepsi Cola bottle is much more colorful and attractive then the label on the Coca Cola bottles. Process Selection – the development of the process necessary to produce the designed product. dimensions. Both drinks have a lot of fizz. unless of course they are sick! For the amount of fizz and how long the fizz lasts. QUALITY #2 --FIZZ: Pepsi Cola has more fizz then Coca Cola. It just totally destroys the texture of the ice cream. For the label. .
BOTTLE SHAPE DESIGN: What about bottle shape design? If you put a Pepsi Cola bottle next to a Coca Cola bottle the shape design is virtually the same. ⇒ Washed bottles are then send to the filler where premix (Composed of syrup. ⇒ Uncasing is done by separating empty bottles from the cases/carats. You could remove the labels off of both bottles. ⇒ The filled bottles are passed through inkjet coder for printing price and date. Pepsi Cola and Coca Cola both get five stars out of five stars.QUALITY #4 . Next. ⇒ The whole concentrated is chilled with glycol before filling and then crowning is done. ⇒ Lastly the filled bottles are arranged in the crates (casing) and then palletizing is done for storing it in the warehouse. ⇒ Empty bottles are then fed into the bottle washer where stream with some chemical is used for washing. sit the bottles side by side. For bottle shape design. It would a real challenge to tell which bottle was from Pepsi Cola and which bottle was from Coca Cola. . ⇒ Then again the filled bottles are send for final light inspection and from there they are collected on a table.e. ⇒ Then depalletising is done i. treated water bulk CO2) is filled in it. The steps involved in the production process are:⇒ First the fork lift supplies the empty bottles which are collected from the distributions. separating cases filled or empty bottles from the wooden planks.
5 lt. 200ml 300 ml.PRODUCT MANUFACTURED The product manufactured by “Lumbini Beverages Pvt. Ltd. 200ml 300 ml. 2 lt. Ltd. They are:- Products Pepsi Mirinda Mirinda Mirinda 7 Up Mountain Dew Slice Lehar soda Pet Pet Can Aquafina (Mineral Water) Quantity 300 ml. are very limited ranges as it is not independent to diversity its products. which supplies concentrates for drinks. It is a unit of Pepsi food Pvt. 200ml 300 ml 300 ml 1. 200ml 300 ml. Colour Brunt sugar Sun-set Tetrazine Tetrazine Colorless Colorless Sunset Tetrazine Brunt sugar Brunt sugar Brunt sugar Colorless Flavour Cola Orange Lime Mango Lemon Lemon Mango Lemon Cola Cola Cola White . 200ml 300 ml. 330 ml 1 lt. 200ml 300 ml.
.000 Sq Ft) Haidri has a procurement budget of Rs 2. The company has increased its distribution capacity from one to six filling lines during the last few years lending it a competitive edge over Coca Cola. Production (180.Supply Chain of Pepsi The objective of every supply chain should be to maximize the overall value generated. Storage: Raw and packing (80. Sources of supply of raw material both local and foreign are identified and terms and conditions are negotiated. The production process is 65% automated. Capacity planning is also done at this stage. Supply Chain Planning As the above configurations have been set. The supplier is audited by the most cost efficient quality control department. Haidri Beverages plans two years in advance. Sales forecasting and production planning depends upon the capacity of the organization with respect to: 1. The company has to provide and manage transport for the delivery of products as well as the arrangement of third party services for the procurement of products. The shipping department handles orders and the transport department decides the vehicles for safe delivery. The value of a supply chain generates is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customer’s request. Material planning and sourcing is carried out as well. The company also decides where production plants are to be placed. In order to ensure a good supply chain strategy. Companies start the planning phase with a forecast for the coming year of demand.000 converted 250 ML crates per day). and receives raw material on a convenient basis. Approved suppliers cannot go beyond this budget. Planning establishes parameters within which a supply chain will function over a period of time. the modes of transportation to be made. keeping in mind past performances. It has several contracts with manufacturers. Haidri has production plants at Peshawar and Islamabad. Distributors are also decided by the company. weekly and daily basis at Haidri. The supply chain design is very expensive to alter on short notice and supports the company’s strategic objectives. Pepsi carries out sales forecasting for local demand as well as for export purposes to countries such as Afghanistan. The goal of planning is to maximize the supply chain surplus. The company makes long term decisions in regards to location and capacities of production and warehousing facilities. information systems and so on. (Chopra. The annual sales target is conveyed to the supply chain department of Haidri Beverages. the products to be manufactured or stored at various locations. 2.000 Sq Ft) 3. Planning is carried out on a monthly. Meindl 2006) Supply Chain Strategy or Design: During this phase a company decides how to structure the supply chain over the next several years.9 billion. Storage: Finished goods (120. planning must be done within the above stated constraints.
allocate to shipping. procurement cycle). Pepsi has a seasonal demand. set delivery and so on. Pepsi Sales order and processing: The Shipping Manager receives sales order from Sales Team. During this phase. The sales are made to base distributors on advance payment against orders then shipping manager plans according to the demand of distributors on daily basis. At Haidri. manufacturing. sales and supply chain departments get together to decide the inventory usually on a weekly basis. All processes that are part of the procurement cycle. Supplier Manufacturer Distributor Retailer Customer Figure 1 Push/Pull View of Supply Chain: With push process execution is initiated in anticipation to a customer order. generate pick lists at a warehouse. There is less uncertainty about demand. set a date that an order is to be filled. The goal of supply chain operations is to handle incoming customer orders in the best possible manner. replenishment cycle. replenishment. distributors through telephone. and customer order cycle are push processes.Supply Chain Operation: Company makes decision regarding individual customer orders. Competitive and Supply Chain Strategies Figure 2 There are three major sustainable advantages that give PepsiCo a competitive edge as they operate in the global marketplace: . manufacturing cycle. Process views of a supply chain: The processes in a supply chain are divided into a series of cycles each performed at the interface between two successive stages of a supply chain. fax & email one day before dispatch. firms allocate inventory or production to individual orders. Cycle View of Supply Chain: There are five stages in a supply chain (Supplier Manufacturer Distributor Retailer Customer) and four supply chain process cycles (customer order. the production. Just in time concept is applicable in non-seasonal period and not applicable in seasonal period.
and the availability of the product. They believe their commercial success depends upon offering quality and value to their consumers and customers. muscular brands. They do this through sales growth. For example there is a greater demand for “Pepsi” as compared to “Mirinda Apple. Pepsi has a low demand uncertainty as compared to “Mirinda Apple. and coordinates selling efforts (PepsiCo 2000 Annual Report). cost controls and wise investment of resources. 2. providing products that are safe. Big.1. Due to decreased lead time (the customer may purchase its competitor’s product if . b) Demand uncertainty and implied demand uncertainty: Demand for Pepsi varies by product. it knows the requirements of consumers. Pepsi is considered as a drink which is refreshing during summer. oversees the quality of the products. price and availability of the product. economically efficient and environmentally sound. reasonable prices. It understands the needs of both. and providing a fair return to their investors while adhering to the highest standards of integrity. Marketing and Sales Strategies: PepsiCo has developed the national marketing. with demand hiking around festivals such as Eid and occasions such as weddings. A customer while purchasing a bottle of Pepsi will consider product quality. Thus. Consumers generally require a small response time.” which is new. Hence. wholesome. Pepsi’s implied demand uncertainty varies with the product type as well as the customer needs. Proven ability to innovate and create differentiated products and 3. Powerful go-to-market systems. and taken regularly during winter. which are a fast moving consumer good. Supply Chain Strategy Step 1: The Customer and Supply Chain Uncertainty a) Identifying customer needs: Haidri needs to understand the customer needs for each targeted segment and the uncertainty the supply chain faces in satisfying these needs. high service level. As Haidri deals with beverages. promotion and advertising programs that support its many brands and brand image. reasonable price and some variety (for example health conscious people favor diet versions of sodas). PepsiCo's overall mission is to increase the value of shareholder's investment. Haidri caters to both cities and rural areas. the quantity of product needed for each lot is taken care of with past demand in mind. As demand for beverages is seasonal. Pepsi in Pakistan particularly focuses its competitive strategy as to producing sufficient variety.” The product “Pepsi” is approaching its maturity stage in the PLC whereas “Mirinda Apple” is in the introductory stage. develops new products and packaging.
meet a high service level. In cities. Predictable supply and demand Predictable supply & uncertain demand or uncertain supply & predictable Highly uncertain supply & demand Figure 3 PEPSI Step 2: Understanding the Supply Chain Capabilities Highly Efficient Somewhat Efficient In towns Somewhat Responsive Highly Responsive PEPSI in cities Figure 4 The efficiency and responsiveness varies according to the consumer needs. In remote areas the company focuses on being somewhat efficient as other modes of transportation could turn the product to be highly expensive. product type and market segments. The company does not have many difficulties in delivering a product and has a fixed delivery schedule (on daily basis). and uses economies of scale in production. handle a large . “Pepsi” hence has a predictable supply and somewhat uncertain demand depending on market conditions.Pepsi is not available at that time). Supply uncertainty is also affected by new products. therefore as the company has focus on cost reduction. “Pepsi” is not a new product and its market is going towards maturation. the product Pepsi is more inclined towards being somewhat efficient. the company focuses its attention on being highly responsive as Pepsi has to meet short lead time. New products have higher supply uncertainty. implied demand uncertainty increases. the demand is certain. uses slow and inexpensive modes of transportation. This is true for cities where unmet demand by Pepsi is met by Coca Cola. need for greater variety and higher level of service. c) Uncertainty for the capability of the supply chain: After determining the demand uncertainty it is important to take a look at the uncertainty resulting form the supply chain. According to the company it does not deal with distributors who do not have 20 to 25 vehicles. implied demand uncertainty. Amrat Cola and other such competitors.
000 cases of empty bottles.1. Applicant must deposit Rs. As competition increases. Step 3: Achieving the Strategic Fit Making one stage more responsive allows the other stage to focus on being more efficient. 000. at least at the supply chain end. restaurants and hotels like Pizza Hut. Expanding Strategic Scope of Pepsi: In Pepsi the agile inter-company scope of strategic fit is essential because the competitive playing field has shifted from company-versus-company to supply chain-versus-supply chain. Strategic scope must cover all boxes. the company has to decide either to transfer the responsiveness to the manufacture stage or to the retailer stage. allowing them to face the higher implied demand uncertainty. While discussing the Pepsi’s supply capability it is seen that Pepsi tends to be more responsive in the cities and a bit less in towns.” “Mountain Dew” and “Mirinda Apple” to their beverage line. These are known as national key accounts and are very important in terms of competition. Pepsi is expanding their strategic scope as they are increasing their product line by adding “Pepsi Max. . tailoring the supply chain to best meet the needs of each beverage demand. At the same time. Therefore. This in return allows the manufacturer and supplier to be more efficient.variety of products and respond to wide ranges of quantity demanded especially at the retail stage. transferring the responsiveness to the retailer and distributor. multiple beverage types contribute to a broader product portfolio causing Haidri to adjust its strategies accordingly. The Pepsi supply chain assign different roles to its different stages. Applicant must have 20. o Export Parties Indirect distribution: o Through Base market distributors o Through Outstation distributors Before delivering the product some certain guiding principles are followed for the assessment of distributor’s capability by Haidri: Applicant must have 20 to 25 vehicles (depending on the area). KFC. Distribution Channels Direct distribution: o Delivery of post mix cylinders & handling of key accounts: The key accounts are different wholesalers.000 as a security. The agile inter-company scope of strategic fit requires the company to evaluate every action in the context of the entire supply chain. Metro which serve as a place for key sale.
just-intime (JIT) remains one of the most cost-effective supply chain solutions. verify picked orders. Therefore Pepsi’s supply is low supply uncertainty. on-time delivery is not an option-it's an absolute necessity. weight and ID of all of objects. J-I-T Is Key to Manufacturers' Success When it comes to delivering high-cost. Review and Revise Distribution: This is usually done through taking over key revenue areas. Distribution Strategy . It follows the just in time concept which is applicable in Non-seasonal period and not applicable in the seasonal period. the distribution is taken back and an addition of new distributor is done. Identify damages before shipment. And when a JIT process is in place. Some of its supply source capabilities are: Less breakdowns High quality Flexible supply Mature capacity production process Checking and Inventory Control Gain control over your inventory with a Cargoscan™ dimensioning system. Redimensioning and weighing incoming and outgoing goods from your warehouse will help you discover irregularities from your supplier and customer.Haidri uses light and heavy vehicles for safe delivery of goods to the distributors for timely delivery. and more. our inventory control systems automatically collect dimensions. giving you full stock control at all stages of the supply chain. If the distributor does not achieve its sales target. perishable products to manufacturing sites.
It was a great opportunity for me to do the project work in the end of the course because till now we learned the theory regarding the marketing and the marketing related concepts. From the analysis of the data collected from the retailers the investigator got some important findings regarding the company and the industry. Soft drink industry is a vast growing industry when compared to many other industries. has been collected from the survey. Lot of valuable information regarding the company and also the retailers. Through this study I learned a lot that how to approach a customer or any other people and how to explain our view to them. Doing my project in Pepsi is a great experience as it gave me lot of opportunity and scope to understand the soft drink industry and its marketing structure and distribution channels. For those findings some of the suggestions made to the company were really applicable for the growth and benefit for the company in order to increase its market share and to become the market leader in the soft drink industry. .The project was a great experience for me in order to study the marketing aspects in the world. Pepsi Company is one of them. I wish the company to achieve its objectives achieved soon. but now we got the chance to implement that theoretical knowledge to do the project and got the practical experience in the marketing field. I got appreciation for the suggestion to the Company. This industry is a place where two major players are there in the world. Thus. finally it can say that the Company needs a lot of improved distribution channel management activities along with various promotional strategies for the customers to get the top position in the soft drink industry. because a large number of competitors craving for the same market. which helped me clearly to understand the real problems faced by the marketers to distribute and also make retailers to sell the company’s products in the market. I understood how difficult to do the marketing in the present scenario to get success in the marketing field.