Brand Audit and Product Line Extension of Pepsico: Institute of Business and Information Technology Pu, Lahore

Institute of Business and Information Technology
PU, Lahore
Business Project (Marketing)
Brand Audit and Product Line Extension of

PepsiCo
F10BB (Morning)
Supervisor:
Ma’am Amna Arif
Submission:
20th June, 2014
Group Members:
Abeeha Mahmood F10BB038
Furqan Farukh F10BB062
Amaan Ullah Khan F10BB032
Taliha Ghazi F10BB037
Komal Asim F10BB036
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Dedication
We would like to dedicate this report to our parents, whose continuous love, support and
counsel made this whole process fruitful; and also to our teachers who taught us invaluable
lessons in these four years and made us the diligent students we are today.
And finally we would like to dedicate this report to our supervisor, our mentor, our teacher,
Ma’am Amna Arif, who guided us every step of the way and was always there whenever we
needed help, no matter how small the issue. Without her guidance, support, enthusiasm and
expertise this project would not have been possible.
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Acknowledgements
All praises belong to Allah Almighty whose blessings helped us in this journey, flourished our
thoughts and prospered our ambitions.
We would like to thank our parents who consistently encouraged us along the way and always
supported us. We would also like to pay tribute to our teachers who enabled us to overcome
all obstacles that we may find in our way towards success and taught us the real meaning of
education.
We have no words to express our gratitude to our supervisor Ma’am Amna Arif for her
intellectual guidance, cooperation, and enlightened supervision. Her cooperation has been a
ray of shining light for us all that guided us towards the successful completion of this report.
Because of her excellent counselling we have effectively applied all that we learned
throughout our Bachelors program into this one final project.
We are also very thankful to our colleagues who contributed to this study with their valuable
suggestions and provided us with their moral support.
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Abstract
The purpose of this project is to conduct a study on one of the best multinational companies of
the world; PepsiCo, and to perform a deep analysis on its operations, activities and strategies
in Pakistan. In this report our team has also proposed on a Product Line Extension idea for
PepsiCo; to launch their world-renowned sports drink Gatorade here in Pakistan. We have
conducted thorough research and created effective marketing strategies and campaign ideas to
make Gatorade a success here in our country. This report will allow all readers an
understanding about what makes PepsiCo such a loved brand, learn about the world of
beverages industry of Pakistan and how that industry can be successfully expanded into new
horizons.
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Table of Contents
Chapter 1: Introduction to PepsiCo.............................................................................................8

Company Description:.............................................................................................................8
Vision:.....................................................................................................................................9
Mission:.................................................................................................................................10
PepsiCo Objectives and Goals:.............................................................................................13
Gatorade Objectives:.............................................................................................................15
Business Portfolio:................................................................................................................16
Chapter 2: Market Analysis......................................................................................................18
SWOT Analysis of PepsiCo:.................................................................................................18
SWOT Analysis of Gatorade:...............................................................................................20
Segmentation of PepsiCo:.....................................................................................................23
Segmentation of Gatorade:....................................................................................................24
Target Market, Customer Need and Corresponding Features of PepsiCo:...........................25
Target Market, Customer Need and Corresponding Features of Gatorade:..........................28
Total Market Share/Evaluation:............................................................................................29
Positioning of PepsiCo:.........................................................................................................32
Unique Selling Propositions of PepsiCo...............................................................................33
Differentiation of PepsiCo....................................................................................................34
Comparative advantage of major competitors of Gatorade:.................................................35
Unique Selling Point of Gatorade:........................................................................................36
Positioning Statement of Gatorade........................................................................................36
Differentiation Strategy of Gatorade.....................................................................................37
Chapter 3: Industrial Analysis..................................................................................................37
Industry Analysis:.................................................................................................................37
Attractiveness and Strength of the Industry:.........................................................................43
Industry Life Cycle:..............................................................................................................44
Michael Porter’s 5 Forces Model:.........................................................................................47
STEEPLED Analysis of Beverage Industry in Pakistan:......................................................50
PepsiCo Logistics:.................................................................................................................54
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PepsiCo BCG Matrix:...........................................................................................................56
Product Expansion Grid:.......................................................................................................58
Chapter 4: Research and Development.....................................................................................61
PepsiCo Brand Elements:......................................................................................................61
PepsiCo CBBE Model:..........................................................................................................63
Marketing Research:.............................................................................................................64
Chapter 5: Marketing Strategy..................................................................................................73
Marketing Mix of PepsiCo:...................................................................................................73
IMC Tools Used by PepsiCo:................................................................................................78
Revenue Sources of PepsiCo:...............................................................................................80
Pricing Strategies of PepsiCo:...............................................................................................81
Sales Strategy of PepsiCo:....................................................................................................82
Marketing Mix of Gatorade:.................................................................................................82
Revenue Sources for Gatorade:.............................................................................................84
Sales Strategy of Gatorade:...................................................................................................85
Pricing of Gatorade:..............................................................................................................89
IMC Tools for Gatorade:.......................................................................................................91
Expenses.................................................................................................................................102
Chapter 6: Human Resources..................................................................................................103
HR Of PepsiCo:...................................................................................................................103
Objectives of HR system:....................................................................................................103
Policies for HR:...................................................................................................................103
HR Planning:.......................................................................................................................104
HR Functions of PepsiCo:...................................................................................................104
Training of Employees:.......................................................................................................105
Rewards:..............................................................................................................................105
Organization Culture:..........................................................................................................107
Chapter 7: Sales Pipeline........................................................................................................108
Geographical Zones:...........................................................................................................108
Projected Targets:................................................................................................................108
Team Structure:...................................................................................................................109
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Other Distribution Strategies:..............................................................................................109
Chapter 8: Action Programs and Controls..............................................................................110
PepsiCo’s Action Programs and Controls:..........................................................................110
Gatorade Monitoring and Control:......................................................................................111
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Chapter 1: Introduction to PepsiCo
Company Description:
PepsiCo is multinational public corporation. It is known as a manufacturer of beverages,
potato and corn chips and other snack foods. Basically, it is an American multinational food
and beverage corporation that is headquartered in New York having keen interest in
manufacturing, distribution as well as marketing of beverages, grain-based snack foods and
other products as well. Their main businesses are:
 Social Beverages
 Savory Snacks
 Nutrition
These main brands under one roof make hundreds of foods and beverages that give pleasure
to its customers and are loved throughout the world. PepsiCo is known as global beverages
and food leader with the net revenue of more than $65.5billion and a portfolio of the products
that includes 22 brands that generate more than $1million each in annual retail sales.
PepsiCo Family:
PepsiCo has dispersed itself into three big business units which are serving currently in the
whole world. These working business units are:
PepsiCo American Foods (PAF): PAF portfolio business includes: Quaker Food, Frito-Lays
North America and all other kind of Latin American food and snack businesses. It is the
provider of many of the popular food, snacks throughout North and Latin America.
PepsiCo American Beverages: It includes PepsiCo beverages North America. Main task that
PAB do is that it manufactures, market, distributes and sells beverages concentrates, finished
goods of various brands. With the help of different and unique strategic acquisitions ,
partnerships and new product development process PAB has tempt its destiny in introducing
many beverages under its name and fortunately it succeeded in expanding its beverage lineup
over the past 20 years and has offered top-selling choices to its customers for every occasion
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of celebration as well serving different lifestyle. As a result, nowadays PepsiCo is known as a
roof or a flagship brand in portfolio of liquid refreshments beverages including 14billion
dollar brands like coffees, sports and energy drinks, juices, soft drinks and ready-to-drink teas.
Main brands that it includes are Mountain Dew, Gatorade, Aquafina and Tropicana Pure
premium.
PepsiCo Middle East and Africa (AMEA) also named as PepsiCo international, has the
responsibility of distributing, marketing and manufacturing snacks, beverages ad well as food
in Asia, Middle East, Europe and Africa. Number of iconic PepsiCo brands that AMEA
makes, markets, sells and distributes includes Lay’s Chips, Doritos, Kurkure and Smith’s as
well as many Quaker branded snacks, cereals, beverages concentrates and finished good
under various beverages brands like Mirinda, Mountain Dew and Aquafina. PepsiCo Europe
includes all beverage, food and snack businesses in Europe and South Africa. Either
independently or in conjunction with third-party partners, PepsiCo Europe makes, markets,
sells and distributes some of the most respected household brands, including Lay's, Walkers,
Doritos, Cheetos and Ruffles, many Quaker-branded cereals and snacks, beverage
concentrates, fountain syrups and finished goods under various beverage brands, including
Pepsi, Pepsi Max, 7UP, Diet Pepsi and Tropicana. These branded products are sold to
authorized bottlers, independent distributors and retailers. In certain markets, PepsiCo Europe
operates its own bottling plants and distribution facilities. PepsiCo Europe also, either
independently or in conjunction with third-party partners, makes, markets and sells ready-to-
drink tea products through an international joint venture with Unilever (under the Lipton
brand name), and sells and distributes a number of leading dairy products, including Domik v
Derevne, Chudo and Agusha.
Vision:
Generally, vision statement is defined as:
A statement or a description having an idea, goal of what a company or an organization wants

to achieve in the future (either short term or long term benefit). It is supposed to be a clear cut
guide for the company to plan strategies and certain courses of action to achieve that goal.
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Vision of PepsiCo:
“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."
Our 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. PepsiCo, in association with smaller brands, offers a wide
variety of products from beverages to snacks at low cost.” [ CITATION Pep141 \l 1033 ]
Mission:
“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” [ CITATION Pep141 \l 1033 ]
These are some of the Factors that are kept in mind while designing an influencing and
powerful Mission statement:
1. Customer Satisfaction or delightedness
2. Providing best Products or Services
3. Market Oriented
4. Adopting Technology advancements
5. Concern for survival, profitability, and growth
6. Philosophy
7. Self-Concept
8. Concern for public image
9. Concern for employees
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As it is mentioned in the mission “PepsiCo wants to be the world’s premier consumer product
company focused on convenient food and beverages through stores as well as through their
website” (Covering the points 1, 2, 3, 4)
Customer Satisfaction:
PepsiCo have to uphold their commitments and they really want to care for their ultimate
consumers, customers. Their position in the market as well as their offers for their consumers
show that they are fully driven by the intensive and competitive spirit for the marketplace, but
they try their level best and are enthusiastic too for providing solutions that are beneficial both
for the company as well as for their partners. Mission statement shows that they truly believe
that their success depends upon the thoroughly understanding the needs of the consumers,
customers and the people to whom they are surrounded with.
Providing best Products or Services:
“Focused on providing convenient and beverages” it shows that PepsiCo is totally focused in
selling only those products that are tested and approved according to the defined quality
standards, from the moment where they purchase ingredients (raw material) to the moment
when it is manufactured and then reaches to the consumer’s hand.
Market Oriented:
A good market oriented company is one that focuses on consumer’s needs and preferences
and whose profit maximization is done after assuring that it has met the consumer need and
demand. PepsiCo should be more market oriented it must adopt the market development
strategy by expanding or grabbing the opportunity by hitting the markets of those countries
that not already established. As this mission statement is not very much successful in clearing
its market oriented objective. PepsiCo mission statement clears the fact that they focused on
customer satisfaction but haven’t mentioned the point that how going to handle the changing
needs, demands and desire of their customers and how they are going to understand their
needs and wants with care and affection.
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Adopting Technological advancements:
As world is moving very fast towards the technological advancements so PepsiCo is flexible
enough by providing ease to their consumers as well as customers to make their orders
through websites (selling food and beverages through stores as well as our website). This
technological advancement has somehow decreased the traditional market of PepsiCo as now
people have moved widely toward new technologies making companies to focus on e-
marketing more rather than traditional marketing.
“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.” (Covering point 5, 8, 9)
Concern for survival, profitability, and growth:
Statement shows that PepsiCo wants to weigh both long term as well as short term risks and
benefits they wants to maintain balance that may help them to sustain their growth and ensure
their investors that they have invested in the right place.
Concern for Public image:
PepsiCo caters to the public image by rigorously following the Global Code of Conduct.
All PepsiCo employees are expected to embrace the principles of our Code and:
Show respect in the workplace; act with integrity in the marketplace ensure ethics in all the
business activities; and perform work responsibly for our shareholders.
This is the Global code of conduct that acts as a compass and a roadmap for the employees
and other people of the PepsiCo for doing business in the right shows the concern for the good
public image.
Concern for Employees:
Mission statement shows that PepsiCo believes to deal fairly and honestly with their
associates and employs regarding wages, benefits and other conditions of employment;
providing equal opportunity for all associates, with no tolerance for discrimination;
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complying with all applicable laws, regulations and other employment standards; and
requiring their partners, suppliers, contractors and vendors to support these polices through
adherence to their Supplier Code of Conduct. They maintain a "Speak Up" phone line, open
24 hours a day, as well as an Internet portal to enable reporting of any suspected or alleged
human rights abuses.
And in everything we do, we strive for honesty, fairness and integrity. (Covering points 6 and
7)
PepsiCo is absolutely sure about their Philosophies and Self Concepts.
Therefore we can conclude that the Statement of PepsiCo ultimately fulfills all the factors
required to design a good Mission statement.
PepsiCo Objectives and Goals:

PepsiCo has delivered a broad set of goals and missions that help the entire organization in
guiding its strategies and operations. Over the years PepsiCo has consistently improved and
enhanced their goals as they believe in continuous improvement according to the changing
world scenario. These objectives and goals help PepsiCo in maintaining their sustainable
success for the long term.
Business Goal: “Strive to deliver superior long-term financial performance and sustained
shareholder value.” [ CITATION Pep14 \l 1033 ]
How are they planning to achieve it?
In order to achieve this goal PepsiCo has laid out a framework for its top line and bottom line
objectives.
 Growth of its international revenues by twice the real GDP growth rate.
 Aim to grow the snacks and brews market share in the top 20 markets worldwide.
 Aim to be among the top two suppliers in the retail partner surveys.
 PepsiCo plans to continue to expand its division operating margins.
 Deliver the shareholder revenues in the top quartile of PepsiCo’s industrial group.
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 Follow a strong corporate governance formation to ensure highest score in the top
quartile of the corporate governance metrics recognized in the world.
 Empower the people with responsibility and trust so as to ensure the PepsiCo’s
commitment towards sustained growth.
Business Goal: “Encourage people to live healthier by offering a portfolio of both enjoyable
and wholesome foods and beverages.” [ CITATION Pep09 \l 1033 ]
 PepsiCo aims to continue perfecting its food and beverage product choices by meeting
the ever-changing consumer demands and needs and helping them lead a healthier
lifestyle by reducing sodium, sugars and saturated fats from the products and
consistently broadening its portfolio.
 In order to help the consumers make more informed choices and maintain a healthier
lifestyle, clear nutrition information is provided on the products, are sold and marketed
properly to all the consumers worldwide.
 Remain compliant with the global policies and standards on health, environment and
agriculture.
 Fully invest in the research and development sector to help expand the offering
towards more affordable and nutritional products for the lower income class
communities and groups.
Business Goal: “Be a good citizen of the world, protecting the Earth’s natural resources
through innovation and more efficient use of land, energy, water and packaging in our
operations.” [ CITATION Pep09 \l 1033 ]
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 Aim to keep protecting and conserving the global water supplies; most importantly in
the water-stressed areas, increase the water efficiency by 20% by the year 2015, and
support and offer access to safe and healthy water in developing countries.
 Provide innovative packaging which is highly sustainable, and low weight, so as to
reduce the effect on the environment.
 Keep working to eradicate all waste from the landfills of PepsiCo’s manufacturing
facilities.
 Be consistently successful in the reduction of Green House Gas secretions.
 Expand all the best practices with the growers and suppliers of the company in order
to support ecological agronomic growth.
Business Goal: “Invest in our associates to help them succeed and develop the skills needed to
drive the company’s growth, while creating employment opportunities in the communities we
serve.” [ CITATION Pep09 \l 1033 ]
 Enable the associates to thrive by providing them with a supportive and empowering
workplace, and ensure high levels of employee engagement and satisfaction as
compares to its competitors and other Fortunes 500 Companies.
 Provide a safe and healthy environment for all and foster diversity and inclusion in the
workplace which reflects the global publics and communities where PepsiCo operates
in.
 Constantly promote and respect human rights within the workplace and also all across
the supply chain.
Gatorade Objectives:
Here we will discuss the objectives of Gatorade Pakistan.
Business Objective:
Business objective of Gatorade is to capture the entire sports drink market of Pakistan by the
end of the campaign.
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Marketing Objectives
Marketing objectives consist of advertising objectives, creative objectives, media objectives

and sales promotion objectives.
Advertising Objective:
“Establish awareness about what the campaign entrails. We would like to reach our entire
target market, by the end of the campaign.”
All the advertising by Gatorade will be focused on promotion of their product line.
Creative Objective:
“Establish in the minds of the target market an association between Sports and Gatorade, and
also make them aware of the product line of Gatorade”
As the brand is now repositioned as a sports nutrition drink, it needs to be conveyed to the
target market what the offering really is.
Media Objective
“Enlighten our entire target market about what “Gatorade” is by the end of the campaign.”
Different mediums will be used to convey the message of the new reinvented product and
brand image.
Sales Promotion Objective:
“Persuade our target market to participate in the “Gatorade Challenges” during our
campaign.”
Mass Advertising is important, but at the end of the we need to rely on below the line
advertising to create strong connections with the target market and that is the main reason for
carrying out the Sales Promotion Objective.
Business Portfolio:
Some of the best and most loved PepsiCo global brands are sold in Pakistan, which fall under
three categories:
 Social Beverages
 Savory Snacks
 Nutrition
Now let’s discuss the product width and depth of the products available in Pakistan.
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In the Social Beverages category we have:
o Pepsi
o Diet Pepsi
o Mountain Dew
o 7Up
o Mirinda
o Aquafina
o Sting – Available in two different variations; Berry Blast and Gold Rush
In the Savory Snacks category we have:
o Lays – Available in French Cheese, Salted, Masala flavors

Wavy by Lays – Available in Salt and Black Pepper, Barbeque, Sour Cream and
Onion flavors
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o Doritos – Available in Nacho Cheese, Spicy Nachos, Cool Original flavors
o Cheetos – Available in Cheese, Magicorn, Ketchup, Red Flaming Hot flavors
o Kurkure – Available in Red Chili Jhatka, and Chutney Chaska flavors
Kurkure Nuts – Available in Salted Peanuts and Masala Peanuts
Kurkure Nimko Mix
In the Nutrition Category we have:
o Quaker – Available as Quaker White Oats and Oatmeal
Chapter 2: Market Analysis
SWOT Analysis of PepsiCo:

Strengths:
 PepsiCo is one of the most successful and globally recognized brands in the world,
and offers one of the most diversified product portfolios in the market.
 It is the National market leader in Pakistan.
 PepsiCo has an extremely widespread distribution channel all across the globe. Its
products are distributed to more than 10 million stores a week across over 100
countries.
 One of the most extensive and loyal employee strength of about three hundred
thousand people.
 Holds robust standards about corporate social responsibility. The PepsiCo Foundation
manages various awareness and societal benefit programs regarding education, health,
recycling and much more.
 Makes earnings of approximately $1 billion a year from more than 22 brands all
across the world. Because of their broad product portfolio, PepsiCo doesn’t have to
rely on just a few brands to generate mass revenues.
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 Have the most successful marketing and advertising campaigns, which results in the
highest market share in the overall food and drink industry.
 Have strong sponsorships with global events like sporting events and music concerts.
Weaknesses:
 Faces strong competition in the fizzy drinks segment from its biggest competitor Coca
Cola; which means there is higher brand switching.
 PepsiCo may be the market leader in Pakistan but within the beverages sector all
across the globe, the Coca Cola Company has the largest market share, which places
Pepsi at a competitive disadvantage.
 PepsiCo has been involved in some questionable practices; whereas they create such
advertisement sometimes that misleads the consumers, for example they actually use
tap water for their Aquafina water bottles where initially they show that it is mountain
spring water. It has faced criticism for such practices.
Opportunities:
 PepsiCo makes large investments in BRIC countries and many other emerging
markets where there is ever growing beverages and savory snacks demand, so by
capturing those markets PepsiCo has great opportunity to increase its revenues and
market share at a global level.
 People are becoming more and more health conscious, their demand for environment
friendly and healthy products is increasing day by day; so as PepsiCo is involved in
many CSR projects PepsiCo has the opportunity to grow its sales on that basis and
grow their product portfolio with even healthier food and snacks.
 PepsiCo is one of those companies in the world who have always been successful in
acquiring other companies which cultivates their customer base; hence there is always
opportunity for further growth through acquisitions.
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 In Pakistan and also in the rest of the world bottled water and savory snacks
consumption is drastically expanding. Therefore PepsiCo has the highest potential to
rule these segments.
Threats:
 Coca Cola is the biggest threat to Pepsi in Pakistan, especially in Lahore where Pepsi
is not the market leader.
 Because people have become more health conscious, they become careful towards
consuming carbonated drinks with high levels of sugar and calories; so that’s why
Pepsi, Mountain Dew, 7up and Mirinda do face threats in that regard.
 Due to the unstable economic conditions in Pakistan the purchasing power of

consumers is radically affected.
 Some researchers have shown that some of the PepsiCo products have such
ingredients that if consumed in large quantities may cause Cancer, that’s why many
legal requirements have been imposed on PepsiCo to disclose negative information on
the labels and not to misinform the consumers.
SWOT Analysis of Gatorade:

This SWOT analysis is of Gatorade international, however the strengths, weaknesses,
opportunities and threats of launching Gatorade in Pakistan are also mentioned here.
Strengths
 Gatorade believes in innovation and creating unique products. In 2010 G Series was
launched, which had not just one but several product lines including formula powder,
power shakes, chews and pre, during and post-game recovery beverages. So Gatorade
constantly evolves.
 Worldwide Gatorade has loyal customers. They do not easily switch to PowerAde or
any other competitor.
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 Gatorade has a 73% market share in the world; Gatorade is one of the top two for
functional sports beverages.
 Pepsi and Gatorade already have strong contacts and relationships with many key
athletes across numerous sports disciplines both in Pakistan and abroad.
 Gatorade was literally created in Lab in University of Florida in 1965. So over 40

years of science backs up the scientific claims made.
 Gatorade’s Sports Science Institute definitely puts the company at an advantage over
competitors, especially in Pakistan where the main competitors of Gatorade are
Vitamin Water and Red Bull.
 The fact that Gatorade is the leader and innovator in sports science and nutrition
research is definitely one of the main strengths of the company.
 Gatorade already is an established brand in the world so it is easier to launch it in

Pakistan.
Weaknesses
 One of the major weaknesses of Gatorade is its poor exposure and sales in the world -
sales are mostly generated in United States
 Due to the large number of the product lines Gatorade offers, it is at risk of losing
control over the key messages they try to convey to the consumer.
 One of alarming things about launching Gatorade in Pakistan and one of its major
weaknesses is that Gatorade only sees 0.4 percent growth from new consumers. This
means that theoretically their market share will not rise and it can even cause problems
retaining their current market share.
 The weaker product lines of Gatorade pull down its overall revenue and inhibit the
possibility of growth in its stronger lines.
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 Large geographic market areas especially the northern areas of Pakistan are struggling
to capture consumers.
 The packaging of all the products is too similar. Customers cannot easily differentiate
between the different kinds of products.
Opportunities
 Emerging markets and expansion opportunities in Pakistan can be very helpful to the
company.
 This sports drink can not only be marketed to sportsmen but also fans of sports and
young adults who play sports as a hobby.
 If Gatorade eliminates weaker product lines and invests in lines with larger market
share, it can give Gatorade the potential to increase its revenue.
 Gatorade has the possibility of creating its athlete base by capturing key athletes in
Pakistan as there is no proper sports drink in the country as of yet.
 For the Pakistani Market Gatorade can create more low-calorie drinks to appeal to
health conscious or non-athletic consumers.
 If Gatorade advertise the benefits of its products in Pakistan with its launch, it would
be easier for the consumers to develop trust with the product and truly understand the
advantages of the product.
 Research has shown that Gatorade needs to increase its interactive advertising and
work on below the line advertising as it is the most form of advertising for sports
drinks.
Threats
 One of the biggest threats to Gatorade in Pakistan would be the fact that Pakistani
Market is not used to the concept of sports drinks. As Gatorade will be the pioneer
here it would need to create awareness.
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 Another threat from the Pakistani market is that in Pakistan the most popular sports is
Cricket, and cricket is not a rigorous sport and is not as exhausting as for example
basketball etc which is the main market for Gatorade in USA.
 Rigorous sports like Football, Tennis and Hockey exist, but they exist on a smaller
level, so the target market for Gatorade is Pakistan is small
 The increasing price of sugar and other ingredients would influence Gatorade’s ability
to remain price competitive as compared to other functional beverages which are
indirect competitors of Gatorade.
 The main competition of Gatorade in Pakistan would be Red Bull which although not
a sports drink still has a large impact in the Pakistani market especially the
segmentation targeted by Gatorade.
 People in Pakistan are becoming more health conscious and want drinks with small
amounts of calories and sugar.
Segmentation of PepsiCo:
Demographic & Psychographic Targeting
Demographically, Pepsi’s various products are segmented beyond the barriers of age and
gender, as most PepsiCo products are aimed at the youngsters of Pakistan.
Carbonated beverages are aimed mostly at friends instead of families, youngsters instead of
elders and teens instead of children. Drinks like Mountain Dew and Sting are for adventure
seekers and extreme urban sport lovers. Pepsi Cola is strictly targeted at cricket and music
followers.
Snacks like Lays, Wavy & Cheetos, on the other hand, are specifically targeted towards
teenagers & kids above the age of 6.
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Geo-Local Targeting
PepsiCo is rarely targeted on the basis of geography, but it is, surprisingly, available at places
where Coke never is; however PepsiCo mostly focuses in the regions of Punjab.
Behavioral Targeting
PepsiCo is a brand that targets the behavioral characteristics of a regular Pakistani. It’s neither
an expensive brand that only the upper class can afford nor it’s so cheap that the upper middle
and the elite class tentatively avoid. Social grouping, outdoorsy behavior and plain and simple
thirst are some behavioral themes in Pepsi’s domain.
Segmentation of Gatorade:
Gatorade has a differentiated marketing strategy. Gatorade focuses in several different
segmentation of the market and has different product for each segment. A differentiated
marketing strategy helps to widen brand appeal.
Demographic:
Demographics consist of males and females of ages 18-34 of the upper middle and upper
class.
Primary Market: Athletes.
Secondary Market: Sports Fans, Fitness Enthusiasts and Students.
Geographic:
In Pakistan Gatorade will be targeted to areas in which people actively take part in sports and
also have “Affordability”. That would make up all major cities of Pakistan where street sports
are common. Other than that Gatorade would also be targeted to stadiums all over Pakistan.
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Psychographic and Behavioral:
Gatorade will be targeted to young people who are enthusiastic and motivated. These young
individual are impulsive and like playing sports. They like outdoor activities and value social
acceptance. They also like variety and choices. Their qualities include:
 Motivated
 Enthusiastic
 Passionate
 Like Outdoor Activities
 Value Social Acceptance
 Play or like Sports
Target Market, Customer Need and Corresponding Features

of PepsiCo:
PepsiCo products fall under three product categories of Social Beverages, Savory Snacks and
Nutrition. The Target Market has been divided into all those people who make usage of
PepsiCo products, and those target groups are defined here as Students, Children, Families,
Professionals, Health Conscious consumers and Elderlies. What are their respective customer
needs and which product features fulfil that need, let’s take a look.
Social Beverages:
Target Market Customer Need Corresponding Features
Students Get instantly refreshed, Lots of calories, sweeteners,

revitalize your energy and caffeine and added
enjoy the sweet taste ingredients which cause
instant energy and freshness
Families Have a good time with family A refreshing fizzy drink with
and enjoy a complimentary the sweet taste adds to the fun
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drink with food in parties, when taken alongside food
occasions or gatherings
Professionals Enjoy relaxation, freshness Large quantity of caffeine

and get a sudden oomph in proves to be great for
the energy level during a long revitalizing energy level and
hard day at work. freshens your mind
Health Conscious Relish on the taste of a cool Products like Diet Pepsi have
drink without the fear of any low or no calorie formulas
harmful effects on health which are perfect for health
conscious consumers
Savory Snacks:
Students Get relief from hunger and Most of the savory snacks of
enjoy spicy and tasty snacks PepsiCo come at very
with your friends at an affordable rates, and as the
economical price such products get highest
sales by the student
demographic therefore it suits
the customer needs perfectly
Families Get a perfect lightweight The snacks are made to be

snack for any occasion no very lightweight and are
matter how big or small proved to be made from such
wholesome ingredients which
are tasteful and healthy for
anytime consumption
Children Love to eat something spicy The variety of flavors offered

or tangy just for the sake of by PepsiCo is one of the main
the fun of it reasons for its popularity in
the market, especially among
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children whose flavor
preferences keep changing
from time to time.
Nutrition:
Health Conscious Lower risk for high blood Pure ingredients, lots of
pressure, diabetes and other whole grains and a source of
dangerous diseases iron, magnesium, and many
other beneficial minerals and
vitamins
Elderlies Avoid risk of diseases and Source of fiber and grains

stay healthy and vigorous which lower chances of
health issues
Families Control weight, cholesterol, Ingredients which are low in

and lead a healthier lifestyle sugar, fat and other harmful
food constituents
Target Market, Customer Need and Corresponding Features

of Gatorade:
Gatorade has 73.52 percent market share in its category i.e. Sports Drinks. In 2011, Gatorade
underwent a brand repositioning and during this time it developed several product lines of
Gatorade products targeted at different types of athletes. Internationally Gatorade has 3
major product lines. In Pakistan we are planning to introduce Gatorade with just one product
line (G-series Thirst Quencher). Once we receive a positive feedback of the product we will
launch rest of the product lines too.
These product lines include:
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 The traditional G-series for athletes
 The G-series Pro for extreme sports athletes
 G-series Fit for fitness athletes
Gatorade’s primary competitors in Pakistan include Vitamin water and Red Bull. Vitamin
water is yet to establish itself in Pakistan however Red Bull would stand its ground once
Gatorade tries to enter the Pakistani Market. That is because as of yet, Pakistanis do not
differentiate between “Energy Drinks” and “Sports Drinks”.
Once launched in Pakistan Gatorade would have to first create awareness among the public of
the advantages of using “Sports Drink” and then attract its targeted consumers which are
mostly males and females (though primary targets are males) of ages 18-34 of the upper
middle and upper class; people who are enthusiastic and motivated and like playing sports.
Although Gatorade is a sports drink, it is available for all consumers and is consumed even by
those who do not exercise regularly. Thus, Gatorade should primarily target athletes and
secondarily target non-athletes.
Customer Need and Its Solution
When Gatorade was first produced it wasn’t meant for commercial purposes. A team of
university physicians tried to determine why players were affected by heat and heat related
illnesses. Players were losing fluids and electrolytes through sweat that were not being
replaced. To cater to this need of this specific target market Gatorade was produced; a
precisely balanced carbohydrate-electrolyte beverage that quickly replaces those key
components and increase the productivity of the Athletes.
Pakistan is known for its extreme heat and high temperatures. Our players are using cold
drinks or energy drinks to replenish their fluids. A small research facility in Pakistan
(Islamabad) like the one in USA: The Gatorade Sports Science Institute (GSSI) should be
established to research on the weather and environmental conditions in Pakistan and share
information on and expand the knowledge of sports nutrition and exercise science in Pakistan.
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Total Market Share/Evaluation:
Target Company Revenue Forecasting:
PepsiCo (in millions) Coca Cola (in millions)

Year Sales Expenses NI Year Sales Expenses NI
2009 43,232 35,125 5,946 2009 30990 22446 6824
2010 57,838 49,389 6,320 2010 35119 25887 11787
2011 66,504 56,738 6,443 2011 46542 35637 8584
2012 65,492 56,261 6178 2012 48017 36791 9019
2013 66415 56600 6740 2013 46854 35731 8584
2014 76102.2 65769.2 6759.2 2014 54892.2 42540.6 9185.2
2015 77402.06 66738.16 6840.66 2015 58242.36 45337.68 7870.76
2016 80104.95 69273.83 7005.128 2016 59992.29 46752.74 8270.508
2017 85167.13 73777.58 7231.072 2017 64201.25 50289.66 7922.826
2018 89490.37 77789.69 7283.634 2018 68774.8 54129.17 7695.547
Market Trend – Product Lifecycle of PepsiCo:
Social Beverages
Pepsi Cola, the market leader from PepsiCo. is in its maturity stage across the nation, as a
matter of fact, Pepsi Cola is so popular in Pakistani market that its market potential is almost
saturated, which means that the drink doesn’t carry much potential for newer markets as it
already has a huge share of the market for itself. Coke being the market leader only in Lahore
is quite behind in competition regarding the whole nation.
7UP also shares the same status while Mirinda is shaky when it comes to market leadership.
There are too many alternatives and substitutes available against Mirinda in the market
making its growth irregular. Its probable PLC is still in late-growth period.
Mountain Dew is still new to the market, with a prominent history of not more than 10-12
years. It is still growing and is marketed only to extreme sport loving teenagers and young
adults. Its PLC lies in mid-growth period.
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Sting is a leading energy drink in competition with a lot of local energy drinks, also in growth
stage while all other juice-beverages are in growth stage as well.
Savory Snacks
Lays is probably a market leader in the snack industry but not quite in the late maturity stage
as it has efficiently dominated the market in its tenure of 9 years here. It’s still competing with
a variety of other products from a number of brands. Early-maturity could be its probable
PLC. Wavy is very new still, making it early to mid in its growth period. Cheetos and
Kurkure are old and very popular amongst all minor groups of the market, so they’re in late
growth. Doritos is slowly trying to gain market here because it isn’t produced locally, falling
in initiation stage.
Nutrition
Quaker oats is a very old but not a very popular product amongst Pakistanis. Not much can be
said about it as its competitive products are similarly unpopular like itself, also, there isn’t
much of a market for a fine product like Quaker Oats to catch up to people still having Fauji
Cornflakes in their breakfasts, making Quaker Oats fall very early in growth stage.
Product Lifecycle of Gatorade:
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Let’s first discuss Gatorade in the world. Gatorade has a well-established brand name.
The brand was first introduced in 1965.
It saw its rapid growth once it was made the official drink of NFL in 1983.
Aggressive branding and marketing for Gatorade started once it was acquired by PepsiCo in
2001. After that its sales grew even further as it moved forward in its growth stage.
When it reached its maturity stage its sales remained constant till 2011.
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This was when Gatorade reinvented its brand name in 2011 by repositioning itself as a
sports nutrition brand. The main logo was changed to “G” and new G-Line products were
launched. It appears as if Gatorade is starting from scratch. In a way we can say that Gatorade
has rejuvenated and entered into the growth phase again because annually, the sales of
Gatorade have grown.
Today in its growth phase again, Gatorade has started to target a wider array of
athletes capturing the attention of new customers while retaining the current ones. Annually,
the sales of Gatorade are growing.
Well if we talk about Pakistan, the drink has not been introduced yet, thus we
cannot place it in any of the 4 stages. So before it is launched here in Pakistan it is in the idea
generation phase.
Complete Profile of Competitor:
PepsiCo’s direct competitor is the Coca-Cola Company and its indirect competitors include
Nestle, Murree Breweries, and RedBull.
Take a look at the Income Statement, Balance Sheet and Ratio Analysis of Coca Cola
Company provided in the Excel file to deduce what is their market position in the world.
Positioning of PepsiCo:
Pepsi’s new global brand positioning (announced this year) is reflected in their caption
“Live for Now” which invites and inspires Pepsi fans to live each moment to the fullest
through a breadth of global, pop-culture platforms, including relationships with music and
entertainment brand evangelists, digital innovation, epic events and unique partnerships.
Weather it is food and snacks, or carbonated beverages, PepsiCo always positions its products
as hip and cool while targeting it to the youngsters, which in Pakistan are the masses as most
of the population of Pakistan right now consists of the youth. This type of positioning also
enables the brand to pursue new partnerships.
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Unique Selling Propositions of PepsiCo
How, as a company is PepsiCo unique? How is it different from its competitors? Well it’s
not unique in just one way. Some of the unique selling propositions of the company are as
follows:
 Market/Customer Orientation
PepsiCo without a doubt is a market oriented company as it focuses on consumer’s
needs and preferences and its profit maximization is done after assuring that it has met
the consumer need and demand.
 Delightedness of the Customers

Their position in the market as well as their offers for their consumers show that they
are fully driven by the intensive and competitive spirit for the marketplace
 Quality Products or Services

PepsiCo is totally focused in selling only those products that are tested and approved
according to the defined quality standards.
 Technological Advancements
As world is moving very fast towards the technological advancements so PepsiCo is
flexible enough by providing ease to their consumers as well as customers to make
their orders through websites and social media platforms.
 Love for Employees

PepsiCo believes to deal fairly and honestly with their associates and employees
regarding wages, benefits and other conditions of employment; providing equal
opportunity for all associates, with no tolerance for discrimination. Any person who
has ever worked at Pepsi would be willing to admit that PepsiCo really do love its
employees.
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Differentiation of PepsiCo
There are many ways in which PepsiCo differentiates itself from its competitors,
which is Pakistan is Coca Cola. Before I point out the many differentiating point of PepsiCo,
let me first point out the major and most important differentiating point for Pepsi. Coca-
Cola's main line of business is its carbonated drinks – about three-quarters of its revenues. For
PepsiCo however, it's only a quarter of their revenues. The rest of PepsiCo's sales come from
snacks and foods, owning such popular brands as Frito-Lay, Doritos, Cheetos, Quaker, and
Cap n' Crunch. That is perhaps the reason why according to many, PepsiCo is doing far better
than Coca Cola, not only in Pakistan but also abroad.
Some of the other ways in which Pepsi differentiates itself from its competitors, here
in Pakistan and also abroad are:
 Perhaps the second most important reason why Pepsi is different and better is because
of its aggressive and smart advertising strategies both locally as well as abroad. The
image Pepsi depicts of itself is attractive and relatable to the masses. That is the reason
for its higher sales in Pakistan. It makes strong connections and sponsorships with
other company’s events like sporting events and music concerts.
 Another very important differentiating strategy by PepsiCo is its B2B relations. Pepsi
rewards its retailers with incentives and loves its retailers like it loves its employees.
Retailers are its customers. PepsiCo believes in delighting its customers.
 Pepsi has a more 'modern' image than Coke. This makes them more popular with
today’s public.
 Pepsi has a slightly sweeter taste than Coke, which appeals to most people.
 PepsiCo is one of the most successful and globally recognized brands in the world,
and offers one of the most diversified product portfolios in the market.
 PepsiCo has an extremely widespread distribution channel all across the globe. Its
products are distributed to more than 10 million stores a week across over 200
countries.
 One of the most extensive and loyal employee strength of about three hundred
thousand people.
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 The PepsiCo Foundation manages various awareness and societal benefit programs
regarding education, health, recycling and much more.
Comparative advantage of major competitors of Gatorade:

Red Bull comparative advantage:
 Red bull is pioneer in energy drink.
 Market leadership- Within the energy drinks market Red Bull is the industry leader
throughout the world.
 Red bull captures the most market of energy drink. Most people do not know energy
drink but red bull.
 Its logo and its color are very helpful to distinguish it from other energy drinks. So that
people can select it easily.
 The company set up to market just one product, Red Bull so its image is very clear and
its Integrated marketing communication is very focused toward its target market.
 Most of its consumers are brand loyal so that it is able to charge such a high price
without losing many customers.
 Compared to can of coke and Pepsi Red Bull is around 3-6 times more expansive. This
is always maintain the image of a premium, quality product and customers often
associate a high price with high quality.
 To ensure quality Red bull manufactures and packages all of its products by itself.
 For quality control the company does not license out or franchise their name.
 To grow the Red Bull brand, company instituted a program, called Perfect Partnership
for retailers.
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Vitamin Water comparative advantage:
 Its idea is unique that offering pure mineral water with vitamin energy.
 It is low cost product that providing mineral water with new taste and energy.
Unique Selling Point of Gatorade:

Our unique selling point is:
“This thirst quencher, make you energize”
Over unique selling point has two parts. First part base on its characteristic that Gatorade
quenches one’s thirst and the second part is because of our target market (athletes and sports
man) they need energy to perform well in sport. So it is a good solution for them that make
them energize along with quenching thirst.
Positioning Statement of Gatorade

Positioning of Gatorade is based on product benefits:
“Gatorade quenches the thirst and vitalizes the body and mind.”
This became the basis for the unique brand personality of Gatorade:
 Energy
 Athletic
 Passionate
 Charming
 Self-confidence
 Thirst quencher
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Gatorade is sportsman drink that it provides energy to sportsman. So we will create image in
the mind of people (by promotion, advertisement etc) that it create self-confidence, charm and
energy.
Differentiation Strategy of Gatorade

Gatorade differentiation strategy is based on product unique characteristics (it is the
only energy drink that quenches thirst) and on catering niche market (athletes and sportsman).
It is the big question for players, heat and performance on field. In summer players
lose fluid and electrolytes which cannot be regenerated by sweat. Players cannot use
carbohydrates because it makes a man lazy. So this product was invented to cope with this
problem and additionally any person can use it who wants to quench the thirst in summer.
Chapter 3: Industrial Analysis
Industry Analysis:
Annual Revenues:
Processed food and beverages industry constitute largest contribution in industrial zone of
Pakistan. They account about 27 percent of total production and 16 percent of total
employment in manufacturing unit. Almost 924 units were engaged in manufacturing of
food and beverages in Pakistan. After an industrial revolution, the beverages industry is
rapidly growing in Pakistan. This industry is now producing soft drinks, fruit juices, syrups,
processed milk, squashes, tea and coffee. About 170 industrial units of beverages are being
currently working in Pakistan. The exports of fresh fruits were valued at US dollars 114
million in the era of 2006-07, which accelerated to US dollars 358 million in the period of
2010-12. The export of juices of oranges, pineapples and other fruits accelerated from 24.41
tons worth Rs. 15.58 billion in the era of 2009-10 to 50.45 million tons worth Rs. 3.65 billion
in the period of 2011-12. . With a combined weight of 12.2 percent in the LSM index, the
sector has once again lead the names of industries showing an increase in output, posting a
seven percent growth over the same period last year at the end of August. Witnessing a steady
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growth, the sector has continued to gain momentum & the sector is likely to carry on with its
current growth well into 2013.
No. of Firms:
There are 25 Soft drink brands in Pakistan. Some of these are local and others are
multinational. These are famous brands that are available in most of the areas of Pakistan.
There could be local small brands that serve a small area. These brands are not included in the
list below.
 Amrat Cola – cola, orange soda, and lemonade
 Best – Best Foods
 Candia – Haleeb
 Coca Cola – cola
 FRESHER Fresh juices, Pomegranate, Guava, peach, strawberry
 Fruit-a-Vitals – Nestle
 Gold Sip Nectar Juices by – Azam Food
 Gourmet Cola – cola
 Kooler Apple, Grape, Lime, Malt, Cocktail, Saudi Champagne
 Sprite
 7Up
 Malt – orange, lemon, peach
 Mirinda
 Murree Brewery - apple, lemonade
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 Nooras
 Pakola – line of fruit-flavored sodas from Mehran Bottlers Ltd and Gul Bottlers – Pvt.
Ltd.
 Pepsi
 Power – Energy drink
 Red Bull
 Rooh Afza – popular juice produced by Hamdard Laboratories
 Rubicon Exotic – juice
 Shakarganj Food Products Ltd – Any Time Juices in mango, orange, peach and apple
flavors
 Shark – energy drink
 Sting – energy drink
 Xtreme
 Mountain Dew
 Fanta
Pepsi
Pepsi is carbonated soft drink manufactured by PepsiCo manufacturer. It is the 1 st best-selling

soft drink in Pakistan.
Coca Cola
Coca Cola is the 2nd best-selling soft drink in Pakistan. It is popular for its top-tier taste. The
coca cola company made syrup and sell it to all over the world for the production drinks. It is
available in restaurants, schools, universities, catering, hospital etc.
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Labor Force:
This data available to us online is of the year 1998. Therefore the recent trends would
definitely be different than the ones shown below.
Administrative Total Labor Both Sexes Male Female

Unit
Pakistan 28,734,533 31.98 59.24 2.23
Rural 18,677,566 31.94 60.19 1.88
Urban 10,056,967 32.07 57.53 2.89
KPK 3,443,432 29.09 55.52 1.64
Rural 2,805,229 28.86 56.22 1.12
Urban 638,203 30.13 52.55 4.18
Punjab 16,602,907 31.98 59.76 2.06
Rural 5,337,918 31.65 57.77 2.38
Urban 11,264,989 32.14 60.75 1.90
Sindh 6,923,766 32.73 58.83 2.96
Rural 3,342,209 32.56 59.66 2.51
Urban 3,581,557 32.88 58.07 3.39
Baluchistan 1,579,215 36.45 65.88 2.07
Rural 1,208,818 37.23 67.8 2.04
Urban 370,397 37.23 60.29 2.18
Islamabad 185,213 30.68 51.89 5.01
Rural 56,321 28.23 52.35 1.86
Urban 128,892 31.89 51.68 6.70
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Labor force distribution in pakistan
5.5 0.64 11
KPK
24.1 Punjab
Sindh
Baluchistan
Islamabad
57.78
Buying Trend:
According to Pakistan bureau of statistics people consuming their money on food and
beverages is 34.83% in 2014 from start of the year till now. Which is highest than any other
goods category. Other majored categories for consumption are clothing & footwear 7.57 %
housing water, gas & fuels are 29.41% transport and health are 9.39 % etc.
Consumers are divided in to three classes on the bases of their income 1. Higher income
which earn 3 lac or more 2.Middle income who earns between 40 thousand to 3lac 3.lower
income who earns below then 40 thousand.
Higher income consumers do spend more in total. They tend to do this not by shopping more
often but instead by spending more per shopping trip.
Lower income consumers are in fact more likely to be found in certain retail channels, like
“dollar” stores, convenience stores and deep discounters. They shop often and spend less per
shopping.
Middle income consumers buying behavior is same like lower income consumers except in
some goods like clothing they do spend more in total.
In recent year remittances sent by overseas Pakistanis crossed $13 billion for the first time in
the country history till now a growth of more than 17% when compared with $11.2 billion of
the corresponding period. Because of this growth, consumer spending increased in grocery,
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textile and beverages. The regular consumed beverages are Tea, Soft drink, juice, milk,
coffee, bottled water and energy drink.
Geographic Concentration:
 Strength of Industry (Market Share)
Currently In Pakistan, there are more than 170 units of beverage are operating in the country.
A comprehensive categorization of the beverage industry would include divisions like;
aerated drinks, juices, milk based drinks, energy and sports drinks, tea, and coffee and also,
bottled and bulk water as well. In Pakistan different players dominate in different categories,
based upon their specialization and target audience. The dynamic Research consultants
conducted a research survey in October 2013. This survey is conducted to know the potential
of beverages in Pakistan.
According to Pakistan bureau of statistics 1.990% consumption is on beverages. It shows a

great potential in the market. That’s why there are more than 25 brands in the Pakistan soft
drink category.
This survey result told that coca cola and PepsiCo are the majored players of the soft drink.
Energy Drinks are ranked as the least consumed beverage. Energy drinks are known to
contain legal stimulants which could bolster brain activity of an individual. Today busy work
Schedule and have heightened stress to such an extent that people at times, have to resort to
such tactics, like drinking energy drinks, rather than taking proper rest and sleep. In Pakistan,
the trend is still not common to such an extreme extent. The major player in this market is
RedBull, which is an international brand with aggressive marketing strategies having mass
market appeal, having 63% of off-trade volume share in 2012. Sting was also introduced
lately by PepsiCo in Pakistan.
The beverage industry in Pakistan has a lot of potential and room for growth and
development. It is one of the few sectors that have shown measurable growth and the
incremental augmentation in consumption is more likely to continue in future as well and will
certainly benefit in the long run. Also, flourishing consumerism and establishment of stronger
brands with innovative and superior products has contributed towards the beverage industry’s
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growth. There exist a lot of opportunities for new entrants and local players to exploit the
untapped facets of the market, for instance the energy drink market or juices, by strategically
positioning their products and by resorting to innovative and effective marketing strategies.
Coffee business remains largely unexploited as well, which is dominated by one brand only.
Therefore, new entrants can penetrate any of these segments which have nascent demand or
few competitors.
Attractiveness and Strength of the Industry:

The food and beverages sector of Pakistan from the past few years has been a sole ray of
sunshine for our large scale manufacturing, being among the very few sectors that have shown
actual and measurable growth. The huge explosion in food consumption among Pakistanis has
proved beneficial for almost all food producing and processing industrial units, and hopefully,
the same trend is likely in the future.
Here are some attractive factors for the Food and Beverage Industry of Pakistan.
 Thriving consumerism is leading the growth of food and beverage sector. It has a
combined weight of 12.2 percent in the Lahore Stock Market index. Witnessing a
steady growth, the sector has continued to gain momentum & the sector is likely
continue to grow till 2015
 Engro Foods has invested around Rs 8.7 billion in 2012-13 for expansion purposes.
Out of this, around two billion rupees were invested in the powdered milk, while the
remainder was invested in capacity expansion and cold chain infrastructure
development.
 To see the export potential of the local industry let’s take 2012 for instance, when
Pakistan exported around $2.20 billion worth of rice and $360 million worth of fruits
and vegetable, $227 million worth of fish and fish preparations, $97 million worth of
meat and meat preparation and $41 million worth of spices on a global scale.
 The food products and beverages sector has improved immensely despite continuing
challenging business environment. Stronger brands, superior products and bigger
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innovations are done in this sector as compared to any other sector by Giants such as
Nestle, Engro foods, Unilever, Halal Foods etc
 Pakistani food products such as rice, spices, pickles, desserts (custard powder, jelly
quick set, kheer mix, firni khas), corn flour, rice flour, pearl barley, kheer, vermicelli,
fried onion, cooking pastes, teas, preserves (murabas), wheat, mango, onion, potato,
cereals, porridge and ice cream powder are in great demand around the world. So the
players continue to enjoy high margins
 It is in this sector that many innovations have been seen in packaging, marketing and
indeed content from local players in order to provide competition to packaged foods
industry of MNC FMCG companies.
 Multinational companies like Unilever and Nestle remain committed to build strong
brands which deliver exceptional value to all of their stakeholders which has a positive
impact on internal cost and marketing efforts for their local subsidiaries
 The ‘Halal’ food industry of Pakistan can be explored more, into more for strong
export growth to countries with large Muslim populations, notably the UK, US and the
Middle-east.
 Consumerism has seen a marked increase in the recent years. The trend of large stores
such as HyperStar, Metro and Makro add to the general trend and provide new
channels of marketing.
 An increasing number of multinational companies are entering into a joint venture

with the local manufacturers, thus opening up new markets and better technology
giving a chance to innovation.
Industry Life Cycle:

Broadly speaking, the food and beverage Industry is still in the growth phase in Pakistan. This
industry has a combined weight of 12.2 percent in the Lahore Stock Market index. It is
witnessing a steady growth, the sector has continued to gain momentum & the sector is likely
continued to grow till 2015.
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In 2012 for instance, when Pakistan exported around billions worth of rice and millions worth
of fruits and vegetable, meat and meat preparation, fish and fish preparations, spices on a
global scale. This value is much higher than the exports in 2011. Furthermore consumerism
has seen a marked increase in the recent years. The trend of large stores such as Hyper Star,
Metro and Makro add to the general trend and provide new channels of marketing. Thus there
is a growth in sales and revenue as well as the exports. The growths in consumer interest also
show the same. Keeping the whole scenario in mind it is clear that our Food and Beverage
Industry is in the growth phase.
Demand
Now the demand for products of this industry has increased over the years and is still
increasing. Consumerism has risen tremendously and is a fine example. The trend of large
stores such as HyperStar, Metro and Makro add to the general trend and provide new channels
of marketing.
Pakistani consumers show a much higher level of consumer confidence in the quality of
locally made brands as opposed to other sectors, and that most smuggled or import substitutes
are financially not feasible for small or middle sized family purchasers. Then there is the
increased awareness of hygiene; which has also caused more and more people to buy canned
or bottled goods.
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Products
The products used in the food and drinks prepared by this sector such as rice, spices, pickles,
desserts (custard powder, jelly quick set, kheer mix, firni khas), corn flour, rice flour, pearl
barley, kheer, vermicelli, fried onion, cooking pastes, teas, preserves (murabas), wheat,
mango, onion, potato, cereals, porridge and ice cream powder are in great demand around the
world. So the players continue to enjoy high margins.
Trade
Not only does this industry have national importance. There is high potential of trade in this
industry. To see the trade potential of the local industry let’s take a look at the statistics of
2012; Pakistan exported around $2.20 billion worth of rice and $360 million worth of fruits
and vegetable, $227 million worth of fish and fish preparations, $97 million worth of meat
and meat preparation and $41 million worth of spices on a global scale. Furthermore globally,
there are roughly 40 noodle suppliers in the merchant market who are predominately Asian
suppliers. A huge opportunity therefore exists for local producers to develop as strong, future
exporters.
Technology
The use of technology is a necessity in any industry. Food and beverage industry is no
different. Increasing number of multinational companies enter into a joint venture with the
local manufacturers, thus opening up new markets and better technology giving a chance to
innovation. Many innovations have been seen in packaging, marketing and indeed content
from local players in order to provide competition to packaged foods industry of MNC FMCG
companies
Competition
Continued competition and the number of players in the industry may be significant over the
past years, the price pressure on the Industry may begin to erode margins. Even though the
threat of new entrants is high in this industry, more and more companies try to step into this
industry which also reflects the growth of the industry.
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Distribution
The undeveloped distribution infrastructure and a fragmented retail industry complicate

supply chain management and make brand building and product penetration a challenge but in
the recent years special attention is being given to distribution. More and more retailers and
restaurants are becoming customers of the products of this industry.
Michael Porter’s 5 Forces Model:

Porter’s 5 forces model is one of the most recognized framework for the analysis of business
strategy which is still used by all Multi Nationals in Pakistan. Porter, the guru of modern day
business strategy, used theoretical frameworks derived from Industrial Organization (IO)
economics to derive five forces which determine the competitive intensity and therefore
attractiveness of a market. This theoretical framework, based on 5 forces, describes the
attributes of an attractive industry and thus suggests when opportunities will be greater, and
threats less, in these of industries.
The Porters 5 Forces model for the beverage Industry in Pakistan is very interesting. Let’s
have a look.
Threat of new entrants:
Only a few new competitors have entered the F&B industry of Pakistan in the recent years.
Generally speaking, there is intra-sectorial mobility, i.e. firms already present in the F&B
industry move into other F&B sub-sectors, either by expanding their range of offer or, more
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often, by acquiring other firms. Let’s take the example of Nestle. It started with Nestle Milk
Pack and Juices, but now it has moved into the healthy whites (soya, drinking yoghurts, and
regular/flavored milk) and value added waters, RTD tea/coffee, iced tea/coffee as well. New
entrants in this market are rare. Thus threat of new entrants is low. In this case let’s take the
example of the beverage industry of Pakistan. In the soft drink category, the two major
players are PepsiCo and Coca Cola; however it took years for two chief local players named
Amrat and Gourmet to emerge as a competition, primarily because of their pricing strategies.
Substitution of products / services:
This threat is rather strong in the Food & Beverage Industry, and has been further accentuated
in recent years, following phenomena such as reverting back to the traditional meals and
changes in eating habits of Pakistanis. As the awareness about the negative health effects of
snack foods increases, people are willing to move back to traditional food prepared at home.
Furthermore people are becoming more health conscious and are trying to stay away from
carbonated drinks and preservatives.
Bargaining power of suppliers:
Negotiation power of Food & Beverage industry suppliers is generally low due to their high
level of fragmentation. Furthermore the companies of the food and beverage industry of
Pakistan are mostly multinational giants, who resort to backward integration and so have
some level of control over the suppliers.
When we talk about commodities, suppliers’ power is related to the various raw materials
involved. The optimization of logistic processes and rationalization of procurement
procedures have led to more efficient relations between raw material suppliers and
manufacturers.
Bargaining power of customers:
Negotiation power of the Food & Beverage companies’ customers is high overall. Over the
years, the contractual power of modern trade has grown progressively, due to high-volume
purchases and the process of concentration amongst the chains. Suppliers and retailers need to
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work together more closely to exchange data and this is forcing food manufacturers to be
more efficient. F&B firms in Pakistan, especially large ones, are increasingly linking with
their suppliers as a necessity. They give them incentives and gifts to keep them motivated and
happy. This trend is most probably related to the high number of B2B transactions in this
industry and this kind of co-operation may bring relevant advantages to the players involved.
Rivalry in the market:
Rivalry in the market is the most important competitive force, together with the bargaining
power of customers. The major Food and Beverage companies of Pakistan include Good Luck
Industries, Ismail Industries, Mitchell’s, Mubarak Dairies, Murree Brewery, Nestle Pakistan,
Rafhan, Shakarganj Food, Shezan, Unilever Pak, PepsiCo, Coca Cola, Amrat Cola and
Gourmet. Rivalry is in fact connected to the growing bargaining power of distribution, as this
industry faces the squeeze of lower shelf prices and high commodity prices on their margins.
STEEPLED Analysis of Beverage Industry in Pakistan:

Socio-Cultural Factors:
Nowadays, consumers in Pakistan have grown a tendency to adopt brand loyalty as a major
deciding factor of consuming a beverage. Due to extensive marketing strategies of the major
players in the beverage industry, the consumers have developed a mind-set of adopting a
particular brand and remaining loyal to it. Therefore effective advertising plays a huge role in
influencing the consumer’s choice. Another social characteristic which must be taken into
consideration is the health consciousness and age groupings. In today’s world people have
grown more health conscious – especially adults - and many studies suggest that soft drinks
have adverse effects on human health; but in spite that fact, soft drink consumption (regular
and diet) still remains to be the second most consumed beverage in Pakistan according to the
research conducted by Dynamic Research Consultants [CITATION San \l 1033 ]. This is maybe
due to the fact that majority of Pakistan’s population consists of youngsters and teenagers, and
they don’t take health as a serious concern while choosing a drink. They just want the
products that taste good, seem different and fun. The beverage that leads the beverage
industry in Pakistan is tea, as it is an inherent part of Pakistani culture. These two industries
remain to dominate the industry.
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Technological Factors:
Technological advancements in Pakistan are introducing new and improved quality

enhancement concepts like JIT, Six Sigma, MRP-II and many others, whose application is
improving the efficiency within the beverage industry’s bottling operations and the overall
quality of the products. These advancements are also helping in introducing new product
lines, such as new flavors, sugar free or caffeine free beverages for health conscious
consumers. The industry leaders like PepsiCo and Coca Cola have adopted such technologies
to introduce new brands that satisfy the ever-changing customer taste, style and likings.
Another sector which is deeply impacted by technology is the distribution process.
Technology can enable the companies gain a competitive advantage by effectively improving
their distribution systems, so to provide higher value to the consumers by giving them the
right products, at the right time and at the right price.
Economic Factors:
The problems of frequent electricity cuts, rising fuel costs and the increasing inflation rates
have affected all of the industries operating in Pakistan. But despite these problems the food
and beverages division has been a sole ray of sunshine for Pakistan's large scale
manufacturing, being amongst the few sectors that have shown genuine and quantifiable
growth. Also, the increase in the spending power of the consumers encourages them to eat
out, which directly benefits the on-trade sales of soft drinks, bottled water and juices. In
addition, manufacturers are continuing to attract consumers and expand their economic
growth by offering discounts, special sales promotions and intensive advertising. For
multinational companies like PepsiCo and Coca Cola, the foreign exchange and global
economic conditions play a big part in affecting their growth. Discrepancies in worldwide
currency exchange rates and macro-economic conditions effect the international operations of
these companies. Also, the industry leaders PepsiCo and Coca Cola are controlling their
general financing and minimizing the borrowing costs by using currency swaps and interest
rate.
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Environmental Factors:
Companies today are becoming more and more geared towards Corporate Social
Responsibility, because they realize that in order to sustain a strong image in the minds of the
consumers companies need to address the larger issues related to the benefit of the society and
environment as a whole. All the beverage companies operating in Pakistan, Nestle, Haleeb
Foods, PepsiCo, and Coca Cola, all of them have very strong Corporate Responsibility, Social
Responsibility, Sustainability, Compliance and Ethical standards established within the
organizations which are bent towards positively affecting the world. Conserving the water
supplies, providing innovative packaging so as to reduce waste and adverse impact on
environment, waste management, working for the ecological agronomic growth, investing in
clean energy sources, also introducing programs to benefit the underprivileged and also
positively impacting the internal environment of the company by empowering their
employees and providing bigger and better opportunities for growth, all of this and much
more is being done by the Pakistani Beverage industry.
Political Factors:
The increasing inflation rate (9.20% as of December 2013), poor security conditions across
the country and power outages are posing a significant threat to the beverage industry.
Additionally, the skyrocketing food prices are putting a tighter strain on the household
budgets of the consumers, and the tense political environment and distressing business
environment will hinder the consumer sector from realizing its full potential over the coming
decade. Also in February, 2014, FBR increased capacity tax rates in the range of 60% to 70%
on the beverage industry in order to stop evasion and malpractices in the sector. This
increased the tax burden on the industry and hit them hard financially. But soon after the
implementation the federal government acknowledged that the introduction of this tax on
beverages was not an excellent choice, as it caused a revenue loss of Rs. 478 million, and
many industry players dealt with a heavy blow because of it [ CITATION Sha14 \l 1033 ] . Other
than that the Budget for fiscal year 2013-14 by the FBR dictated that the federal excise duty
on all aerated (soft) drinks is to be increased from 6% to 9%. [ CITATION Fed13 \l 1033 ]
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Legal Factors:
The beverage industry in Pakistan is operated under strict rules and regulations imposed by
the government which ensure lawful and efficient operations within the country. The
Consumer Rights Commission Pakistan states several laws for the retaining the rights of the
consumers related to consuming beverages. Food and drink sold anywhere must be in pure
and genuine state, and any such complaints about the quality of products should be
administered Food Inspector appointed by the Local Authority. There is also a criminal penal
code regarding activities where there is adulteration of drinks, whether it is by the
manufacturer or reseller.
However there is no independent legislation on occupational safety and health issues in

Pakistan. The main law, which governs these issues, is the Chapter 3 of Factories Act, 1934.
The provisions given in this chapter ensure the health and safety of the workers and
employees of a company, and all of these also apply to the factories operating within the
beverages sector and it talks about various safety arrangements. The Federal or Provincial
government employs inspectors to ensure that all the rules and regulations are properly being
followed on not.
The Constitution of Pakistan, 1973 also dictates a range of provisions regarding

Discrimination Laws. These laws affect the rights of women working in the companies of
Pakistan and ensure equality. It states that no citizen of Pakistan shall be discriminated against
in respect in any such appointment on the grounds of race, religion, gender, caste or place of
birth. All people have equal human rights to work in the government and commercial sector
and have to be treated with equality, justice and respect.
As for the Competition Laws in Pakistan applying to the beverage sector,

“Competition Act, 2010 (CA ‘10) is part of the broader competition policy framework of the
Government of Pakistan through which it endeavors to engender free competition in all
spheres of commercial and economic activity. The crucial objective of CA ’10 is to enhance
economic efficiency and to protect consumers from anti-competitive behavior. Briefly, the
law prohibits situations which tend to lessen, distort or eliminate competition such as actions
constituting an abuse of market dominance, competition restricting agreements and deceptive
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market practices. Although essentially an enabling law, it briefly sets out procedures relating
to review of mergers and acquisitions, enquiries, imposition of penalties, grant of leniency
and other essential aspects of law enforcement.” [CITATION Com \l 1033 ]
Ethical Factors:
The beverages industry continues to undergo extensive smuggling and counterfeiting but the
major companies are incessantly pitching for lower import duty and sales tax, in order to
eradicate the incentive to smuggle. Moreover the multinationals are facing different human
rights issues, rules, regulations and policies of different kinds in Pakistan as discussed
previously which tend to ensure that no non-ethical activity is underwent in Pakistan.
Demographic Factors:
As per the recent survey conducted by the Dynamic Research Consultants in 2013, there are
large differences in the consumption pattern across genders and age groups. The results
suggested that the female demographic is more likely to consume multiple types of beverages
than men. Tea is the most highly consumed drink with higher consumption rates in mature
adults. Energy drinks on the other hand are ranked the lowest consumed drink by both
genders but youngsters comparatively drink energy drinks more than adults due to high
caffeine level and energy boosting elements. Healthy drinks like juices and milk are more
popular in mature adults, particularly in females. And as for the soft drinks, they are more
popular among men of both age groups (young and mature) as compared to women.
PepsiCo Logistics:
PepsiCo’s widespread success in Pakistan and in the rest of the world is due to the efficient
and effective logistics and the distribution management operations. PepsiCo have very highly
technical capabilities to sustain logistics.
Depending on the nature of the product involved PepsiCo choses between various standard
distribution methods to distribute their products all around the world; such as the Direct Store
Delivery (DSD) system, Broker Warehouse Distribution, and the Vending and Food Service
system.
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Direct Store
Delivery
PepsiCo
Distribution
Systems
Broker Vending
Warehouse and Food
Distribution Service
Direct Store Delivery:
Through the Direct Store Delivery System, PepsiCo takes the snack and drinks directly to the
thousands of distribution outlets across the world, from the smallest convenience store to the
largest supermarkets. PepsiCo’s bottlers actually take the products into the store and place
them on the shelves themselves. This ensures that the products placed are fresh and that the
fragile items like potato chips and other snack foods are handled with extreme care. This
allows PepsiCo to merchandise its brands for maximum visibility and appeal in stores.
PepsiCo’s DSD system can place all new products into the national distribution quickly and
efficiently within a week, all the while keeping up great B2B relations with all retailers and
wholesalers. That’s not all; the DSD system also provides big financial benefits to retailers,
since PepsiCo handles all the products and merchandising themselves, so therefore retailers
get to save on labor. The products are sold and restocked every few days, but retailers are
asked for payment after every 30-days cycle, which also adds a lot to the store’s cash flow.
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Broker Warehouse Distribution:
For some of the products of PepsiCo, the traditional broker warehouse distribution system is
more economical than the Direct Store Delivery system. Under the BWD system, third party
distributors move the products to stores, and then the store employees restock the shelves.
This system works best for less fragile, less perishable products which are less probable to be
impulse purchases, for example products like Quaker Oats, cold drinks and juices. The
economic benefit of this system to PepsiCo is that they don’t need to hire additional
employees for stocking purposes.
Vending and Food Service:
All around the world the more and more amount of customers buy snacks and beverages from
vending machines and other small food service companies that serve in office buildings,
schools, colleges, and other public places, so to capitalize on this opportunity, PepsiCo has
created one of the biggest vending and foodservice sales initiative across the globe.
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PepsiCo BCG Matrix:
BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray
firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal
axis) and speed of market growth (vertical axis) axis.
BCG Matrix for PepsiCo Pakistan is different from the BCG Matrix for all other countries.
That is because some of the products of PepsiCo launched in Pakistan are different and the
time they were launched in Pakistan is also different from other countries.
Here is a description of the major products by PepsiCo and the reasons why they lie in their
respective quadrants of the BCG Matrix.
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CASH COWS
Products
The products in this quadrant would include Pepsi, 7Up, Lays and Quaker.
Reason
The reason for these products to be in the Cash Cow quadrant is simple. They have high
market share and due to their maturity their growth stable. Their earnings and cash flow is
high.
STARS
Products
The products in this quadrant would include Kurkure, Cheetos and Mountain Dew.
Reason
The reason for these products to be in the Stars quadrant is that they have high market share
and high market growth. They are doing well with great opportunities. Its earning is lower
than cash cows but growing.
QUESTION MARK
Products
The products in this quadrant would include Aquafina and Doritos
Reason
The reason for these products to be in the Question Mark quadrant is that they have a low
market share right now but they have high market growth. There are opportunities for this
product but they are not yet fully comprehended.
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DOGS
Product
None right now.
Reason
The reason for this is that most of the PepsiCo products of PepsiCo become successful and
thus don’t enter this quadrant. Once in a blue moon a product like Pepsi Twist does fall in
this quadrant but it is quickly removed or de-marketed.
Product Expansion Grid:
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Ansoff proposed an interesting framework called the product/market expansion grid for
detecting and understanding new intensive growth opportunities which is extremely helpful
for our current scenario as our proposition is to launch Gatorade; a sports drink, in Pakistan.
There are four strategies, one for each of the quadrants:
Market Penetration Strategy
In this case the product is in the current market, and it can still grow. Therefore there are three
approaches to increase current product's market share:
1. Encourage customers to buy more.
2. Attract competitor’s customers.
3. Convince non-users to test and use the product.
Product-Development Strategy
When a new product is launched in the current market, the intensive growth strategies could
be to:
1. Develop new features.
2. Develop different quality levels.
3. Improve the technology.
Diversification
In case a new product is launched in a new market, diversification is a genius strategy as

better opportunities are present outside the business. These diversification strategies can be of
three types:
1. Concentric Diversification Strategy: Develop new products with the earlier technology for
new segments
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2. Conglomerate Diversification Strategy: Develop new products for new markets.
3. Horizontal Diversification Strategy: Develop new products with new technology for old
customers.
But these three cannot be implemented in our case. As in our case we do not need to pursue
the growth opportunities for the entire portfolio for Pepsi. We only need to launch Gatorade in
Pakistan.
Market-Development Strategy
When the current product (in our case, Gatorade) is launched in a new market (Pakistan),
there are three approaches to develop the market:
1. Expand distribution channels.
2. Sell in new locations.
3. Identify the potential users.
Thus while launching Gatorade (which is already an established product in the international
market) in Pakistan; we would have to choose the Market-Development Strategy. The first
and foremost thing to do would be market research. The research is done not only to find out
the potential customers of Gatorade in Pakistan but also to see where they are located and
how we would distribute the product.
The demographics of our potential customers would consist of males and females of ages 18-
34 of the upper middle and upper class. In Pakistan Gatorade will be targeted to areas in
which people actively take part in sports and also have the “Affordability”. That would make
up all major cities of Pakistan where street sports are common. Other than that Gatorade
would also be targeted to stadiums all over Pakistan. Gatorade will be targeted to young
people who are enthusiastic and motivated. These young individual are impulsive and like
playing sports. They like outdoor activities and value social acceptance.
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The distribution channels would be almost the same as used currently by PepsiCo for Pepsi,
7Up and Mountain Dew with the exceptions of restaurants.
Chapter 4: Research and Development

PepsiCo Brand Elements:
Name:
 Original name was Pepsi-Cola Company, which emerged from the concept of the
combination of Pepsin (an enzyme that helps in healthy digestion) with Cola.
 Later changed to PepsiCo, which became one of the most widely recognized brand
names in the world.
 Successful in capturing the spirit of “Youth”.
 Implies a hip and chic feel to attract youngsters and adults alike.
 Pioneer of introducing some of the most exciting brand names of the most widely
consumed FMCG products around the globe: Mountain Dew, 7Up, Mirinda, Lays,
Doritos, Cheetos, Kurkure, Aquafina and Sting etcetera.
 Mountain Dew reflects a sense of adventure and extreme sports with its unique name.
 7Up echoes the blooming and uplifting sensation of freshness.
 Mirinda gives off a very cool and fun feel with its charming name.
 Aquafina imitates the impression of drinking pure, healthy, fresh spring water directly
taken from the hills.
 Just by listening to the name “Sting”, you directly get the feel of what this name
illustrates; instant recharge and energy boost.
 Lays, Doritos, Cheetos and Kurkure are all names that promise you a fun-filled, tasty
and spicy experience.
Logo:
 Distinctive mix of elements that cannot be copied.
 The PepsiCo logo very uniquely illustrates the wide expansion of its network all
across the globe.
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 Pepsi logo is the perfect blend of excitement, youthfulness (Red), dependability,
strength (Blue) and sophistication and balance (White).
 Mountain Dew logo reflects the exciting and electrifying nature of the drink.
 The latest 7Up logo is a very sophisticated yet fun representation of clean, bubbly
freshness.
 Just by looking at Mirinda’s logo, the consumer gets the vibes of friendliness,
cheerfulness and coolness.
 Aquafina’s logo represents the mountain areas where fresh water streams pass.
Although Aquafina had to face certain criticism towards this choice of logo because it
misdirected people that the water is taken from the Himalayas whereas PepsiCo makes
no such claims.
 The sensation of bright sunny happiness is reflected from the Lays logo. A feeling of
crisp tastiness is apparent from it.
 Doritos logo is quiet unique on its own, perfectly signifying the hotness of the spicy
nachos.
 Kurkure’s logo is presented in a very simple “Desi” format as this brand is targeted
towards South Asian countries only.
 Quaker shows the brand mascot “Quaker Man” as their logo, and it has not been liked
much by the consumers and some complaints were observed that this logo is scary or
just boring.
Packaging:
 The packaging of the Social Beverages is done in a youthfully charged and thrilling
manner, especially for Mountain Dew, Pepsi and Sting, with color schemes that stand
out in the stores.
 7Up follows the same bottle and coloring pattern as Sprite by Coca Cola, but 7Up’s
much more cheerful and bright outlook provides it with the upper hand over its
competitor.
 Mirinda’s packaging is considered more sophisticated as compared to its competitor
Fanta’s bottle, but as it is supposed to be a cheerful, joy giving drink hence Mirinda
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lacks in this regard that their packaging is more sober as compared to Fanta’s much
more amusing curvy bottle.
 Whether it is Lays, Wavy or Kurkure, these Savory Snacks always stand out because
of their quality packaging and extensive information about the product on that pack.
No other snack product uses this much variety of packs for its numerous flavors, e.g.
Kurleez and also Super Crisp.
PepsiCo CBBE Model:
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Marketing Research:
Our team has conducted a survey to find out the beverage consumption patterns, beverage
preferences and opinions on advertising among our targeted audience. We conducted a
structured in-depth interview with a total of 20 participants (with equal gender distribution),
all of which were students, who all actively participate in sports and are fitness enthusiasts.
With this research, we will be able to deduce which beverages they like to consume the most,
what is their perspective about nutrition, their outlook towards sports drinks, find out the
factors that influence their buying behavior, what creative appeals attract them the most and
other questions which will help us in forming our marketing campaign for Gatorade and how
we should position it.
Age:
Age
Frequency Percent Valid Percent Cumulative

Percent
20-21 6 30.0 30.0 30.0
22-23 11 55.0 55.0 85.0
24-25 3 15.0 15.0 100.0
Total 20 100.0 100.0
Gender:
Gender

Percent
Male 10 50.0 50.0 50.0
Female 10 50.0 50.0 100.0
Total 20 100.0 100.0
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Beverage Consumption:
Beverage Consumption

Percent
Daily 10 50.0 50.0 50.0
Weekly 5 25.0 25.0 75.0
Fortnightly 3 15.0 15.0 90.0
Monthly 2 10.0 10.0 100.0
Total 20 100.0 100.0
From the results you can see that 50% of the respondents consume beverages on a daily basis,
25% consume them on a weekly basis and a small percentage of people drink them on a
fortnightly and monthly basis. From this we can correctly assume that there is a favorable
trend towards beverage consumption among the targeted demographic.
Beverage Consumption Effected by Seasonal Changes:
Effected by Seasonal Changes

Percent
Yes 13 65.0 65.0 65.0
No 7 35.0 35.0 100.0
Total 20 100.0 100.0
The results suggest that 65% of the respondents are indeed affected by seasonal changes and
their beverage consumption lessens during the winter season. But if we examine the results of
both genders separately we discover some variability.
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Among Men:

Percent
Yes 5 50.0 50.0 50.0
No 5 50.0 50.0 100.0
Total 10 100.0 100.0
Among Women:

Percent
Yes 8 80.0 80.0 80.0
No 2 20.0 20.0 100.0
Total 10 100.0 100.0
The reason for such variability is that the men who participate in sports and go to the gym
have to follow a specific diet, and must consume vitamins, minerals and powdered sports
drinks specified by their trainer in order to maintain their fitness and physique. Women on the
other hand are more easily affected by seasonal changes because they don’t follow such
fitness regimes, the reason being that they consider them to be unhealthy for a woman’s
health and hormonal balance.
Beverage Preference:
Beverage Preference

Percent
Carbonated 4 20.0 20.0 20.0
Non-carbonated 9 45.0 45.0 65.0
Both 7 35.0 35.0 100.0
Total 20 100.0 100.0
Page | 66
Both men and women had favorable votes for non-carbonated drinks and also an ‘on and off’
preference towards carbonated drinks. Few of the respondents were very health-conscious,
and they stated that they consider the fizzy beverages to cause various health issues, including
stomach diseases because of their acidic nature and the cause of other weight-gain problems.
Beverage they like to consume to overcome tiredness and exhaustion:
Beverage for Tiredness

Percent
Soft Drinks 5 25.0 25.0 25.0
Juices 9 45.0 45.0 70.0
Energy Drinks 3 15.0 15.0 85.0
Water 3 15.0 15.0 100.0
Total 20 100.0 100.0
Little variability exists between both genders’ preference towards beverages consumed during
times of tiredness and exhaustion. Majority of them like to consume healthy non-carbonated
drinks like juices. The 25% who stated that they like to drink soft drinks during exhaustion
named drinks like Coca Cola, Fanta, and Malts. The energy drinks included Red Bull and
Sting.
Beverage they like to consume for entertainment:
Beverage for Entertainment

Percent
Soft Drinks 18 90.0 90.0 90.0
Energy Drinks 1 5.0 5.0 95.0
Water 1 5.0 5.0 100.0
Total 20 100.0 100.0
Only one of the participants consumed water for entertainment purposes and one participant
preferred the energy drink Red Bull. The remaining 90% of the participants drank soft drinks
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for entertainment purposes, and majority of them favored Coca Cola over Pepsi and few of
them favored Mountain Dew over Fanta.
Examine Nutrition Facts:
Among Men:
Examine Nutrition Facts

Percent
Yes 3 30.0 30.0 30.0
No 5 50.0 50.0 80.0
Sometimes 2 20.0 20.0 100.0
Total 10 100.0 100.0

Among Women:
Examine Nutrition Facts

Percent
Yes 5 50.0 50.0 50.0
No 3 30.0 30.0 80.0
Sometimes 2 20.0 20.0 100.0
Total 10 100.0 100.0
Women examine nutritional facts a tad bit more than men because they are more conscious
about what they consume, especially regarding calories and sugar, and also they are inclined
towards controlling their weight.
Opinion about Energy Drinks and Sports Drinks:
When asked about their opinion about energy drinks, a majority of respondents among both
men and women stated the negative aspects of energy drinks. They said that energy drinks do
give you instant boost and stimulate your energy levels, but sportspersons should avoid such
drinks as they will improve your performance but will definitely shorten your consistency to
perform, and will give health issues if consumed regularly. Majority of women also stated that
energy drinks can cause higher blood pressure and increased sugar level, boost your energy
just for short time, and also contain addictive elements.
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Next we asked their opinion about sports drinks then majority of respondents said that it is
something that boosts your performance during sports, can be used as an alternative to
vitamin pills, and can help you overcome tiredness. Some of the interviewees did not know
what a sports drink was.
Difference exists between energy drinks and sports drinks:
Difference between Energy and Sports Drink

Percent
Yes 7 35.0 35.0 35.0
No 9 45.0 45.0 80.0
Don't Know 4 20.0 20.0 100.0
Total 20 100.0 100.0
Majority of participants said that there is no difference between energy drink and sports drink
and some of them did not know whether a difference exists or not. The 35% who did say that
there is indeed a difference stated that there is a variance of ingredients and consumption
patterns, as in sports drinks are only consumed during sports and other vigorous physical
activities. Here it is important for us to note that in our promotional activities for Gatorade we
must address the issue of awareness. We must promote Gatorade in a way that elaborates the
beneficial effects of the drink and differentiates it from energy drinks.
Would like to consume Gatorade:
Would like to consume Gatorade

Percent
Yes 18 90.0 90.0 90.0
No 2 10.0 10.0 100.0
Total 20 100.0 100.0
After hearing the responses for the previous question we explained the difference between
energy drinks and sports drinks and then asked the respondents to tell us whether they would
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like to have sports drink if it is launched in Pakistan then 90% of the people said yes. There
was 100% positive response from the men’s side and only 2 women out of 10 said no.
Percentage level of chances of consuming Sports Drink during sports or

physical activity:
Percentage Level of consuming Sports Drink

Percent
0% to 20% 1 5.0 5.0 5.0
21% to 40% 1 5.0 5.0 10.0
41% to 60% 5 25.0 25.0 35.0
61% to 80% 6 30.0 30.0 65.0
81% to 100% 7 35.0 35.0 100.0
Total 20 100.0 100.0
Sports drinks have generally favorable votes as compared to energy drinks as majority of
people would indeed like to drink Gatorade during sports or physical activity.
Percentage level of chances of consuming Energy Drink during sports or

physical activity:
Percentage Level of consuming Energy Drink

Percent
0% to 20% 12 60.0 60.0 60.0
21% to 40% 4 20.0 20.0 80.0
41% to 60% 3 15.0 15.0 95.0
61% to 80% 1 5.0 5.0 100.0
Total 20 100.0 100.0
Energy drinks have an extremely unfavorable outcome as suggested by these results, that
majority of people would not like to have an energy drink during sports or physical activity.
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Percentage level of chances of consuming Water during sports or physical
activity:
Percentage Level of consuming Water

Percent
41% to 60% 1 5.0 5.0 5.0
61% to 80% 7 35.0 35.0 40.0
81% to 100% 12 60.0 60.0 100.0
Total 20 100.0 100.0
There is no surprise here that everyone would want to have a glass of water during times of
physical activity. So we can correctly deduce that if positioned and marketed in the right way,
Gatorade can indeed become a popular drink among sportsmen/women and fitness enthusiasts
as a supplement to their fitness alongside regular water consumption.
Factors that Influence Buying Behavior:
Factors that Influence Buying Behavior

Percent
Value and Quality 14 70.0 70.0 70.0
Brand Name 3 15.0 15.0 85.0
Good Advertising 2 10.0 10.0 95.0
Price 1 5.0 5.0 100.0
Total 20 100.0 100.0
Close to no variability exists between the results of men and women’s answers under this
section. 70% of the interviewees stated that the quality of the products and the overall value
provided by them is the biggest factor that influences their buying behavior. After that a small
percentage of people said that their buying behavior is affected by brand name and
advertising. Only one of the respondents said that price is the biggest factor. Hence we come
to the conclusion that if Gatorade’s beneficial aspects, its quality and value provided to its
consumers is boosted in its marketing campaign then people will tend to be more favorable
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towards it. Price is the least important factor, because almost everyone said that if the product
is of the highest quality and delivers what it promises; then price doesn’t matter at all.
From which medium of advertising do you obtain most of the

information/awareness from?
Almost 90% of the participants said that they obtain most of the information and awareness
about products from TVCs and the Social Media (Facebook). A few also stated billboards and
online advertisements. The mediums which were not stated at all were print media and radio
ads. So for our promotional campaign for Gatorade we must focus on Social Media and TVCs
on a larger scale and focus of outdoor ads and online advertisements on a smaller scale.
Which TV channels do you watch the most, during what times of the day?
Most of the male participants watch sports channels like Ten Sports, PTV Sports and movie
channels like HBO and WB around 8pm to 10pm. A few of them also watch news channels
around 7pm onwards.
As for the female participants, majority of them watch 8XM, Hum TV, ARY Digital and
movie channels like HBO. They also watch TV at about 8pm to 11pm. A few of them are
only interested in sports channels like Ten Sports and PTV Sports.
Creative Appeal that attracts you the most:
Among Men:
Creative Appeal that attracts you the most

Percent
Emotional Appeal 3 30.0 30.0 30.0
Rational/Logical Appeal 7 70.0 70.0 100.0
Total 10 100.0 100.0
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Among Women:
Creative Appeal that attracts you the most

Percent
Emotional Appeal 8 80.0 80.0 80.0
Rational/Logical Appeal 2 20.0 20.0 100.0
Total 10 100.0 100.0
Our last question also had very interesting outcomes. As you can see in the statistics, majority
of men prefer the rational/logical appeal rather than the emotional appeal in advertising. They
prefer that the advertisement should state the facts and figures regarding the product, and this
appeal makes it more informative for the consumer. Whereas, the women prefer the emotional
appeal that focus on hope, love and humor over the rational appeal, and state that emotional
appeal have a long lasting effect on the customer and have a better impact as compared to
simple declaration of facts and figures. Now after observing these results we have come to the
conclusion that a creative blend of both the rational and emotional appeal would be the perfect
choice for Gatorade’s commercials as it will capture the attention of majority of consumers.
Chapter 5: Marketing Strategy
Marketing Mix of PepsiCo:

Savory Snacks:
In this category of the products, PepsiCo comes with the products like Lays, Wavy (by lays)
Doritos, Cheetos as well as Kurkure. PepsiCo have designed marketing mix for its savory
snacks for Pakistan. PepsiCo have designed such kind of products in this category that are for
the specific geographical area. Product like lays Cheetos and Kurkure are designed for South
Asian region as like for Pakistan, India and other Asian countries. Here, we will discuss some
of the marketing strategies that are designed for the savory snacks in Pakistan.
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Product:
The savory snacks of PepsiCo are not concerned with any specific region, occupation gender
or race. Their main purpose is to have a target market in every social class in Pakistan. On the
basis of research it has been seen that youth is major market in Pakistan for consuming the
savory snacks so Youth is the major market for PepsiCo as they have high consumption level
of savory snacks but on the other hand, also target families. Products provided in this
category are consumer products, convenience type of products as well as augmented products
having different product attributes (Quality, features, style & design and branding) provided
in different flavors of every snack and every flavor is unique and different from other flavor
providing its target customer with completely different and exciting flavors capturing the
mind of every single customer.
Pricing:
As far as the pricing is concern in the market, it adopts competitive pricing for capturing
major market in Pakistan but due to some other factors PepsiCo also lies in monopolistic
competition because of charging different prices because of its product features its quality and
its target market. Brands under PepsiCo like lays, Doritos doesn't follow single pricing
strategy as because snacks are FMCG'S and in Fast moving consumer goods product market
there will be competitive pricing along with providing customer value. Majorly, the snacks
that PepsiCo have they all are offered in affordable price according to the market. It has been
seen that PepsiCo Savory snacks price is adjusted according to its demand in the market. It is
adjusted between 20 to 50 rupees which is affordable by every single person of middle level
as well as other levels of income group.
Promotion:
Promotion of the snacks is done through different channels, mainly it is done through:
 Billboards and banners

 Magazines and newspaper
 Media (TV channels, Internet as well as through radio)
 Free samples are given to customers for the promotion of the product
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 Sponsor many different shows as well as matches.
Place:
PepsiCo make sure the easy availability of its snacks throughout the country. It makes assure
that snacks have high availability at different superstores, as well as big and small retailers
throughout the country. PepsiCo also make assure that their snacks of its different brands to
be displayed at first shelf making High and easy visibility of snacks at the point of sales.
Social Beverages:
The social beverages of PepsiCo includes Pepsi, Mountain dew, Aquafina, Sting and Mirinda
Like its savory snacks they also have some of the designed marketing mix for their social
beverages as well.
Product:
Consumption of beverages in Pakistan is increasing day by day which have cause a large
impact on the growth of market share of PepsiCo within the Pakistan's market. Different
brands of PepsiCo have different products having vitamins and calories in it. PepsiCo provide
both flavored as well as unflavored drink. Purified water, carbonated drinks are manufactured
through a purification process and by testing it through different technology instruments.
Those (consumer goods) beverages are available in different sizes as people are different in
different areas, some want less and some want more. Beverages like Mountain Dew and Pepsi
targets teenagers and middle age people who need something refreshing in the hustle bustle of
everyday life; while on the other hand brand like Aquafina a brand of bottle water provides
purified water to every single consumer (targeting every age group). These beverages are
available in different packaging and sizes like half liter bottle, regular size bottle as well as in
1.5 liter bottle.
Pricing:
Price of a product plays an important role because this factor plays an important role in
achieving market objective as well as to capture maximum customer and to retain them in best
possible way. Now a days, Brands under PepsiCo are using value based pricing (consumer not
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buying the beverage but also the image of the brand goes with it) also it uses the going rate
pricing strategy by maintaining price almost as of its direct competitors or price can increase
due to price increase in raw material. Nowadays in Pakistan the price ranges of social
beverages is between Rs. 20 to Rs. 75.
Placement:
Mostly it has been seen in the market that brands of the PepsiCo use indirect as well direct
distribution channels too like Indirect distribution channels mostly used by Aquafina i.e.
Aquafina is available to the target consumers through the retail stores who manage to get it
from the wholesalers and the wholesalers acquire these products from the distributors likewise
other brands like Mountain Dew, Pepsi uses direct distribution i.e. these beverages try to
reach and distribute all possible retailers with their product. Sometime they also use the 1.5
formulas i.e. if the retailer needs 10 bottles they will provide them with 15 bottles for its
maximum sale by making its availability possible.
Promotion:
PepsiCo adopts many promotion techniques as well as other mediums to market its social
beverages. It uses:
 Print media ads (magazines, newspapers)

 Radio commercials.
 TV commercials.
 Outdoor media advertising ( Billboards, street furniture and flex designs etc)
In addition, to increase knowledge about the beverage brands of PepsiCo amongst its potential
customers as well as to increase brand equity, different brands of PepsiCo have started
associating itself with different programs that exactly match the slogan as well as theme of the
product or the brand i.e. sponsorship with the programs also with the different restaurants that
can be helpful for attracting the potential consumers and for the brand acknowledgement
within the target consumers. Furthermore brands of PepsiCo also manage to organize as well
as sponsoring the cause related and social events (event marketing) to increase its brand
equity.
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Nutrition Category:
In the nutrition category, PepsiCo have the brand named as Quaker available as Quaker white
oats and oatmeal.
Product:
This product of PepsiCo is categorized in nutrition category as it is mainly used by the target
market daily in the breakfast as Quaker promise to provide nutrition and tasty breakfast ever
to its customer. It offers variety of flavors to its customers. In order to retain its market they
have renewed its product attributes (new packaging and re branding its products) but the
product having the same taste and nutrition factors providing health and convenience to its
customers.
Placement:
Quaker product is placed in superstores, malls as well as it is also available in different

retailer stores. They use to distribute the product in the places where the target market
(housewives, students) spends its time mostly health markets, grocery stores as well as
convenience stores.
Promotion:
Website: They have developed an official website which is accessible by every potential
customer around the globe where they introduce time by time new interactive components
also have pages where they have maintained complaint box where their customers can submit
response about quality of the products and complaints regarding it.
Media: Using YouTube and other social sites for its advertisement (Facebook, Twitter)
Pricing: Its price ranges from Rs. 75 to Rs. 350
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IMC Tools Used by PepsiCo:
The integrated marketing communication consists of some tools which are as follows:
Personal selling, public relation, advertising, direct marketing and sales promotion. It has
been emerged as important part of marketing from last several years because it is the
combination of many important marketing as well as promotional tools which plays a vital
role in communication, coordination and integration with target market, stakeholders as well
as firm's too.
As one of the biggest multinational public corporation manufacturing beverages, potato and
corn chips and other snack foods, PepsiCo also adopts these IMC tools for communication
and to interact with its customers.
Advertising:
As PepsiCo is the company having many famous brands under it categorized in three
categories discussed earlier so it adopts different advertising strategies and makes assure that
the advertisement that they make should be according to theme of the brand that they are
promoting. Brands under PepsiCo also introduce creative concepts and mainly advertise their
products through the use of electronic media as well as outdoor advertising in order to create
awareness among the potential customers. E.g. Pepsi target audience mainly is society of
teenagers with the different regions in Pakistan so Pepsi always make sure that their
advertising strategy includes cool promos and are mostly creative having different elements
like music etc. further, it has been seen in many of the advertisements that "celebrity
endorsement" that has been used as a one of the famous advertising campaign to promote the
product or the brand. E.g. in many of the advertisements Heartthrob Fawad Khan and
Gorgeous Maira Khan has taken as the leads for promoting the brand trying to positioning its
brand in the mind of its potential customer in best possible way.
Sales Promotion:
It has been seen that in recent past years, PepsiCo related brands have been using many useful
sales promotion techniques in order to retain its current customers as well as to have high
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profit in its sales and it has been done on temporarily basis. The sales promotion techniques
used by PepsiCo are:
1. Discount to stores and retailers. (Return back of allowances, certificates calendars that
can be displayed or placed in the retail stores and different sort of incentives e.g. wall
clocks having the brand name, provides Visi cooler i.e. a refrigerator having a glass
door are given to them for getting the shelves to be at the eye catching position of the
target customers.)
2. Customer oriented Sales Promotion: PULL Strategy: One of the sale promotion
strategy that PepsiCo use is pull strategy which is done to attract the end customers
towards the product in which a company offers its target customers coupons, free gifts
or a frequent customer loyalty incentive to have maximum sales as well as to have
high profit maximization through the sales of the product.
Direct Selling:
Brands associated to PepsiCo use direct marketing in many certain ways. PepsiCo itself or its
brand associates itself with other business like many restaurants, shops, as well as movie
theatres to promote its product. E.g. in movie theatres like Cinestar and other cinemas major
brands like Lays, Pepsi, Aquafina are available for the customers to satisfy their needs by
forcing them to buy those products from them which not only make profit but also helps in
building a long lasting relationship with the movie theatres and other businesses on the other
hand, Pepsi, Mountain Dew and other beverages sponsors different events in Pakistan like
cricket, Motor racing etc.
Personal Selling:
Every brand named under PepsiCo has it's unique aspect and value in the mind of the
customer but mainly one of IMC strategy used by all the brands is Personal selling where the
individual representative of the company communicate, relate, sell and give services to the
retailers as well as customers in order to build long term relationship with them. The
representative (salespeople) sell the product in a specific area or region to different customers,
and one they make a customer they sell the product with their services many times as much a
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customer wants weekly or monthly which in result helps to form a close relationship with
customers to have long term relation and to continue business with them.
Public Relation:
"Publicity refers to non-personal communications regarding an organization, product, service

or idea not directly paid or run under identified sponsorship".
PR activities of PepsiCo includes: Social Events/ charity campaigns. Pepsi has also donated a
lot to the earth quake victims and has launched a number of prize schemes to attract new
customers. Positive WOM is one of the factors that help to boost up the sales factor.
Revenue Sources of PepsiCo:

"Pakistan is one of the top 10 markets outside the United States for PepsiCo, says Qasim
Khan, a senior executive in the global food and beverage giant’s management team for Asia."
It has been seen through search that not only Pepsi as the brand of PepsiCo has made its place
in the Pakistani market, but also with the passage of time, Pakistan is now considered as one
the greatest market for mountain dew.
On addition, in past years, Pepsi had added snacks category as well as fruit juices in its
portfolio for its product line in Pakistan and in result of that addition of snack category and
also impressive growth in its beverage business PepsiCo is now considered as the largest and
biggest beverages as well as food company in Pakistan. Different surveys have been
conducted regarding to the revenue sources for PepsiCo in Pakistan and according to those
researches, different resources revenue made by PepsiCo Pakistan with its eight franchisees of
bottling that are operating throughout the country is Rs.82 billion for its financial year ended
on 30th June 2012 that is 19% higher than the previous year. And estimated revenue generated
by PepsiCo Pakistan within the end of year 2013 was above 82 billion.
On the other hand, which has made position of PepsiCo stronger than other companies is that
PepsiCo with the growth market of snacks (Lays, Kurkure, Cheetos) in Pakistan so corn based
snacks and Kurkure which are only available in Pakistan are planned to be export soon to
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Malaysia, Indonesia and Singapore from Pakistan because of the fact that the chips produced
in Pakistan are already certified ‘halal’.
Pricing Strategies of PepsiCo:

Strategies that are basically adopted by the brands associated with PepsiCo i.e. Pepsi,
Aquafina etc are:
Competition based pricing strategy.
Promotional Pricing Strategy
Market Penetration Pricing Strategy: This strategy makes Pepsi and other products to set such
a price that can be affordable to its every target customer.
Discounts: It includes Quality discount to the retailers who have maximum number of sales of
PepsiCo products on monthly, seasonal as well as daily basis. Seasonal discounts includes
discounts given to the customers on the occasion of special events and seasons like price
reduction during the month of Ramadan or on the occasion of Eid as well as special offers are
also given to the customers like 1 litre Pepsi with Canolive free or free drinks with one litre
bottle are offered to the valuable customers.
Incentives: Incentives to those dealers as well as retailers are given on the basis of best sales
of the PepsiCo products and achieving the predefined target of sales. Incentives given to the
retailers are:
 Freezers.
 Certificates
 Transportation services of free of cost.
Incentives given to the best dealers can be new vans or pickups as well as motorbikes for their
best performance or the delivery of the products on the schedule to the next party.
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Sales Strategy of PepsiCo:
Nowadays in Pakistan, more than 20,000 employees have shown loyalty to PepsiCo while
associating with it and they have trained in a way to make sales possible in any of the area,
region of Pakistan. Those employees are deals with customers i.e. retailers and dealers
making a close relationship for the long term benefit and for continuing business.
Any successful sales strategy comprises of analysis, research of the competition, market
knowledge must be there and must know about the current trends awareness. Mostly it has
been seen that the sales representative of PepsiCo uses indirect sales strategy (demonstrating
about the benefits, attributes as well as features of the product that are in the product of
competitors without mentioning the name of the competitors. This strategy makes positive
impact and helps to generate sales and making effective relationship with the customers.
Marketing Mix of Gatorade:
Product
‘Gatorade’s sports drink is scientifically formulated to replace fluids and provide energy to
working muscles. It offers a scientifically validated blend of carbohydrates and key
electrolytes. When it is launched in Pakistan only the G Series Thirst Quencher (for
hydration purposes), will be introduced. In the later years other products by Gatorade will
also be introduced. Once the success of the product becomes eminent, protein shakes meant
for the recovery purposes will be introduced along with Protein bards low Calorie G2 etc
mentioned below.
Product:
 Thirst Quencher
 Protein Shake
 Energy Chews
 Protein Bars
 Post-Game Recovery Beverage
 Low Calorie G2
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Variants:
 Lemon-Lime,
 Orange,
 Cool Blue,
 Citrus Cooler,
 Strawberry Kiwi
 Fruit Punch
Sizes:
 500ml
 700ml
 900ml
Price
‘Gatorade’ will be priced cheaper than its direct competitor at the time (Red Bull).
At first we would only introduce the G Series “thirst quencher” for hydration. Later once the
success of the product becomes eminent; protein shakes meant for the recovery purposes will
also be introduced.
Gatorade (Thirst Quencher) Bottle in ml Price in Rs.

Gatorade 500ml Rs. 100
Place
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‘Gatorade’ will be distributed nationwide using Pepsi Co. distribution network
 Supermarkets,
 Local stores,
 Convenience outlets,
 Drugstores,
 Market stalls
 Online Purchase For Large Quantities
It will benefit from the distribution leverage of Pepsi Co that has excellent branding and
excellent product distributed nationwide.
Promotion (IMC)
The promotion of Gatorade is described in detail in the IMC Strategies section of the chapter.
Revenue Sources for Gatorade:

The initial funding for the project would be provided by PepsiCo, but Gatorade plans
on becoming self-sufficient within the first 6 months of its launch. Its revenue will be
generated by its sale.
But who are the customers of Gatorade? Well as PepsiCo does not have its own stores,
it has other distribution channels. Once bottles of Gatorade are manufactured, they will be
transported to distributers who would sell the product to our final consumers.
So the revenue sources for Gatorade would be the revenue generated by the following kinds
of distributors:
 Departmental Stores
 Convenience Stores
 General store
 Supermarket
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 Mall
 Pharmacies
Sales Strategy of Gatorade:

Gatorade’s sales strategy would set out in detail how we will get our product or service in
front of people who need it. Our sales strategy would be B2B, because the people we want to
direct the sales to are retailers and wholesalers.
Sales Strategy Components Include:

 Target Customer Profile
 Prospect Segmentation
 Sales / Distribution
Model
 Sales Process Definition
(i.e. Sales Cycle)
 Sales Funnel
Calculation
 Pricing Strategy
 Up-Sell Strategy
 Customer Training /
Support Policy
Target Customer Profile

The first step in our sales strategy is to develop a clear understanding of who you we would
be selling to, and to communicate this to the entire sales team. The Target Customer Profile
identifies the typical retailers in the core market of Gatorade. Often times the person in the
target organization that is feeling the need of Gatorade will not be the same person who has
the decision making power to approve the purchase, and this chain of key personnel should be
identified in the Target Customer Profile. Going through this exercise will enable Gatorade’s
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sales team to tailor sales materials, sales processes, and overall sales strategy so they can be
streamlined to more efficiently get “buy off” inside an organization. Key components to be
defined in a Target Customer Profile include target markets, market segments, and roles /
position titles of all those likely to be involved in a purchase decision.
Prospect Segmentation
Once the target customers/retailers have been identified and described, the next step is to
segment the prospects so that they can most efficiently be approached by our sales team. Now
this will involve market research in various geographical locations to identify the top
prospects in a given market. In the case of Gatorade the prospect is divided into regions. A
regional territory will be assigned to a specific sales rep of PepsiCo who may or may not be
located in that region. Prospects are further broken down into the potential business
opportunity the retailer represents, which will allow sales reps to prioritize more lucrative
prospects. As a rule of thumb, good sales plan should start with at least 100 prospects in each
region, and the prospect lists will continue to grow as more market research is done. Below is
an example of a regional breakdown for Punjab.
Regional groupings break Punjab down into the following territories.
 Central I
 Central II
 Central III
 South I
 South II
 North I
Sales / Distribution Model

We would select and build an effective distribution channel that best enables our sales team
to sustain a relationship with the target customer. Our decision would be to use intermediaries
to the sell the product, and these intermediaries are of course the retailers. PepsiCo already
has prevailing distribution models, which will be the right choice from which to start.
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Sales Process Definition (i.e. Sales Cycle)
The Sales Process of Gatorade refers to a systematic approach to selling Gatorade. It is the
continuous step-by-step process (a.k.a. “The Sales Cycle”) that the sales team takes with each
lead from the initial contact with the prospect to the close of the sale. The goal of breaking
down and defining the steps is to provide a framework for tracking sales and understanding
the status of every sales prospect at any given point in time. It would also help to identify
inefficiencies in the system so that sales managers can take action to improve the conversion
rates for each stage, resulting in a quicker Sales Cycle, more total sales and increased
revenue. The Sales Process / Sales Cycle of Gatorade will break down as follows:
 Contact Prospective Customer Account

 Establish Retailer’s Interest
 Send initial sales materials / marketing collateral
 Qualify the lead (prospect’s ability to purchase)
 Product trial
 Overcome Objections
 Negotiate pricing
 Close sale (Customers signature on Term Sheet)
Sales Funnel Calculation
The Sales Funnel Calculation is a mathematical model for estimating the number of
“unqualified leads” that will be required to be brought into the sales cycle and converted into
sales in order to reach a sales team’s targets. It’s also a valuable tool for providing a
benchmark for sales managers to gauge the success of their team’s performance. An
unqualified lead is a cold lead that is, a prospective retailer that should reasonably be
interested in the product, but has not yet been contacted or otherwise indicated interest in the
product. These leads become more “qualified” as they pass through each stage of the sales
cycle until they finally turn into closed sales. However, there will naturally be some
percentage of attrition of these leads at each stage of the cycle. The Gatorade Sale’s Team
would estimate a reasonable amount of attrition at each stage, track the sales team
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performance, and then adjust these estimates for accuracy as more data on sales conversions
become available. The ongoing objective is to take steps to continually improve the
conversion rates for each stage of the sales cycle by continually refining the sales process.
Gatorade Supply to Value Chain Conversion

Converting our supply chain into a value chain is a very important strategy. Supply chains
consist of weak bonds and can be broken easily by Gatorades competitors. A value chain is
made of stronger bonds and is harder to break. Price alone is insufficient to break the supply
chain. Every supplier is an investment of time and money to build the relationship and strive
for continuous process improvement. We will invest a lot of time with our retailers, so we
need to build a solid relationship. Relationships take time. We would take the time to get to
know our client, and share a little bit of our self. We would keep up with our Retailer as well
as their industry, this will help us speak the same language as the Retailer, understand what
keeps them up at night, and cater your interaction and offerings accordingly.
Here are a few steps for our sales team to follow; for converting the Supply Chain to Value
Chain are as follows:
Step 1
Meet with distributors in person. While telephone and email are effective means of
communication, they should not be the only means. By scheduling time for face-to-face
meetings with Gatorade’s distributors our sales person is sending the message that they are
important to our business.
Step 2
Keep communication open. An open line of communication is essential in any relationship --

business as well as personal. It is important for Gatorade’s distributors to know that they have
a voice that is heard. Likewise, we need to keep them informed about what is going on in our
end of the business.
Step 3
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We would support our distributors by participating in their meetings. Not only will this keep
our sales person informed about the inner workings of their end of the business, but it will
show that we care enough to be involved. Participating in meetings will also give us the
chance to voice our opinion and take a more active role in the business.
Step 4
Our sales person would attend any event sponsored by Gatorade’s distributors. This shows
our support for their business and is an excellent opportunity for networking. In addition to
strengthening our relationship with the distributors we may also be able to build new business
relationships.
Pull or Push Strategy
As our customers are retailers we would be using push strategy. This would mainly include
negotiation with retailers to stock Gatorade
A push promotional strategy works to create customer demand for Gatorade through
promotion: for example, through discounts to retailers and trade promotions. Appealing
package design and maintaining a reputation for reliability, value or style would also be used
in our push strategy. We would offer more money on each crate or pack than any other
company including Coca Cola.
Pricing of Gatorade:
A comparison of prices of imported Gatorade available at certain super stores and its
competitors. Gatorade is available for 135 right now. Our Marketing Research in which we
conducted interviews from numerous sportsmen, athletes and fitness enthusiasts showed that
more people will be interested in buying Gatorade if it was of Rs. 100 or less. Once the
bottling of Gatorade begins in Pakistan like that of Pepsi, it will be cheaper to produce and
thus easier to sell at Rs. 100 for a profit.
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Current Market:
Energy / Sports Store Volume Carbonated Price

Drink
Gatorade (Imported) Super Stores 500ml No Rs. 135
COMPETITORS
Red bull General and Super 250ml Yes Rs. 170
Stores
Speed Super Stores 250ml Yes Rs. 100
Mad Croc Super Stores 250ml Yes Rs. 100
Vitamin Water General and Super 500ml No Rs. 40

Stores
Sting General and Super 500ml Yes Rs. 50
Stores
After Launching Gatorade
Gatorade (Thirst Quencher) Bottle in ml Price in Rs.

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IMC Tools for Gatorade:
Digital Media Marketing

Almost 90% of the participants said that they obtain most of the information and awareness
about products Online and from TVC’s. Digital Marketing or Online Marketing is one of the
major IMC tools we will be working on. Pepsi already spends around 12% of its budget on
Digital Media. The reason behind this is that our target market is the youth and the most used
cannel by the youth is the internet.
Website and Social Media Page
The current website and social media platforms are not be relatable to our audience so we
would have to make a new website and social media platforms.
Website: http://www.gatorade.com.pk
Facebook: https://www.facebook.com/gatoradepk
Google+: https://plus.google.com/gatoradepk
YouTube: www.youtube.com/user/PepsiGatorade
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SEO and SEM (Google AdWords)
Furthermore special focus will be given to SEO and SEM (Google AdWords). Banner Ads
of Gatorade Marketing Campaign will appear on websites frequently visited by young
Pakistanis preferably sports fans and players (our target market).
Content Marketing
Content Marketing will also be focused. The blog http://www.blog.gatorade.com.pk will be

regularly posted with nutritional facts and fitness related tips and videos. The impact of each
of the ingredients of Gatorade on the body will be discussed in these posts, thus blogs will
help in promoting the “science side” of Gatorade.
Mobile App
Mobile Apps are a glimpse of tomorrow. Gatorade will create a mobile app game featuring
sports professions endorsing Gatorade. Its popularity would undoubtedly help in promotion of
the drinks amongst young adult and teenagers (the primary target of our drink)
Advertising
The marketing strategy in the following section will aim to connect sports with Gatorade in
Pakistan to dominate the sports drink market by targeting sports individuals and fitness
enthusiasts and to reach a secondary target in non-athletes as well. The creative strategy will
provide the layout of how the ads will communicate the message of what Gatorade is. The
media strategy will propose media vehicles in which to invest where the target markets are
most likely to be reached. Sales promotions will revolve around the Gatorade’s G Series
product launch and a cause related project, the “G” Challenge,” to increase participation with
the brand. Lastly, we will provide a means of evaluating the effectiveness of this strategy.
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TVC
This is one of the most important tools of IMC for Gatorade. Almost 90% of the participants
said that they obtain most of the information and awareness about products from TVCs and
the Social Media (Facebook).
The ad we will use in this campaign would be of 30 Sec and will have clips from different
sports matches. Now one of the most important things to remember here is that Gatorade
signifies fierce burning passion and energy. So only those clips would be taken which are
compatible to the image created by Gatorade in the Pakistani public. At launch of Gatorade
only this type of ad will be aired.
These commercials will be made in a way that they would have potential to go viral amongst
the public, so that the people do the advertising for us.
The story board for the TVC shown below will give you an idea of what the ad will be like.
This only shows 6 screens because the entire ad is of 30 Sec following the same pattern as
that of the 6 Screens shown in the story board.
The ad will feature the soundtrack “Lock It Up – Chant Version” by Chad Hugo and will
have clip of players playing with fierce burning passion and energy from different sports
matches. These clips will be of around 4 sec. Between these clips will be clips of mere 1 or 2
sec showing a Gatorade bottle shoved on the table. This ad will meets two purposes. One; It
will pump up the audience creating a strong association of Gatorade with Passion and Zeal.
And second it will create a clear association of the brand with sports hence introducing it as a
sports drink and not an energy drink.
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Print
Gatorade will create print ads for

magazines whose main readers are
the youth of Pakistan for example
Spider (Monthly computer
magazine, Karachi) (Dawn
Group), Game Mode (Monthly
video game magazine, Peshawar),
The Cricketer (Monthly cricket
magazine, Karachi), Joules
(Monthly Alternative Energy Mag,
Karachi), Smash (Magazine for teens), Brand New (Brand magazine, Karachi). This will only
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be done for a few months after the launch of Gatorade as no medium of communication can
be left when creating initial awareness about the product.
OOH
Gatorade is a sports drink, the concept of which is new and unique in Pakistan. So our OOH
advertising will also be unique. We will adopt the newly introduced 3D Advertising and
Gorilla Advertising. Cutouts will be placed at the most untraditional of places which would
not only attract attention but also help creating a “Dynamic” and “Fiery” image of the brand
in the minds of the public. Even if billboards are used they will have 3D cutouts to make them
3D.
Ideas
A billboard of the picture of

Aisam Ul Haq will be a 3D
cutout having the racket, and the
Gatorade bottle, protruding out
of the billboard. We would
employ Kinetic Pakistan
(Outdoor Advertising Firm) for
the job.
One of the ideas we had about

gorilla advertising combines
with free giveaways to produce a
campaign that is both beneficial
as well as interesting with the potential to go viral. What happens when you combine
Gatorade and a thermometer: you get a Gato-meter! Gatorade will introduce its “Beat the
Heat” campaign. The Gato-meter will be a thermo activated; bottle shaped vending machine
that will make use of touch screen technology to detect people’s body temperature. People
who had high body temperature and heart rate will be awarded free Gatorade Hydration; and
not only that! We would also encourage people to increase their body temperature by hoola
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hooping and dancing around. Fun, engaging and some serious viral content! This has been
done before by Lipton.
Radio Ads
According to the research conducted by our team, Radio is not used by our target customers
usually. However they agreed when we asked them if they tuned in a sports match during
tournaments. Therefore radio is a medium we cannot ignore.
Radio Spot
The radio spot would be of 15Sec; this is half the length of our TVC. In this ad we would
basically use the same soundtrack “Lock It Up”. The sound track’s beat would be a quick
reminder of the brand and would instantaneously bring to mind the actual TVC. The sound
track would go on for about 10Sec and after that the voice over would narrate the name of our
brand “Gatorade” and its tagline; “That’s G”.
Public Relations
Many of the respondents in our survey told us that sometimes “Opinion Leaders” have much
more importance than any advertisement. The PR activity of Gatorade would aim at creating
publicity for their whole line of products. They are aimed at creating credibility for the brand
as they have wider acceptability than other promotional tools. By using mass media such as
TV and newspapers to publish the news they can also create buzz in terms of reaching a large
number of people. Our campaign aims to maintain our already established target audience of
hard-core athletes, while it also aims to generate an audience of less serious athletes from the
general public.
Sponsorships/Partnerships
For Colleges and Universities Gatorade would introduce player of the year award which
would aim at recognizing achievements of College and University students in areas of
academic and athletic excellence in various sports arenas which would promote their
contribution to developing educated sportspersons in Pakistan.
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Other than this, the following will also be targeted as smaller entities for sponsorships.
 Sports Complexes
 Sports Clubs
 Community Centers
 Gyms
On a national level we will target the following sports institutions:
 Pakistan Hockey Federation

 Pakistan Cricket Board
 Pakistan Football Federation
 Sports Board Punjab
Celebrity Endorsements
Source credibility is of utmost importance to promote a sports drink. We will endorse athletes
such as Shahid Afridi, Naseem Hameed, Aisam-ul-Haq Qureshi, Shakeel Abbasi part of
the new generation of high performing athletes, who can be closely associated with the
essence of G. By sponsoring a range of athletes from different sports arenas, they can also
place Gatorade, more prominently in the marketplace than competitors. They will appear in
our TVCs and also help our reputation on social media. They will be paid a certain amount to
tweet or to give a status about Gatorade.
Launch (Media) Party
We would conduct a media party inviting officials and media persons of all major sports and
news channels. The 10 lucky winners (customers) will be invited to the party and each be
able to bring one friend and will receive VIP passes to the party. We would also like to invite
Pakistan Cricket Team, Pakistan Football Team, Pakistan Hockey Team players and
the national level top players of all games to the event. In order to promote awareness of the
G Series at the party, free gift bags that contain the new G Series products along with
other Gatorade related items (e.g. water bottles, sweat bands, etc.) will be provided to all VIP
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party guests, which would include all college and pro-athletes at the event along with the 10
winners and their friends.
The party will feature the G series beverages for guests to drink, all incorporating beverages
from the G Series in their makeup. In order to increase publicity for the event, the event will
be a tie in to a national level cricket game and will serve as a high-class sort of pep-rally. Geo
Sports and PTV Sports will be invited to cover the event, which will increase awareness
from those attending the party. The party will also offer a variety of activities for guests that
incorporate sports and the G Series. Examples would include an activity in which guests must
throw a ball from a significant distance and aim at a specific target. Those who are able to hit
the target would receive some sort of prize related to the G Campaign. We hope that this PR
event will bring positive publicity to the G Series in the regional area of the party and that
national press coverage will expand awareness to the national level. We will measure the
effectiveness of our PR campaign by examining both the local and national response to our
media party and by measuring changes in attitudes and behavior through phone interviews
and online surveys.
Sales Promotions
Ideas:
When considering sales boosting techniques adopted for the brand as a whole it can be said
that their objective is on persuading customers to try the product with an aim of repeat
purchases afterwards. The implementation of the ‘Team sales network’ which offers up to
80% discounts for orders made for sports-teams and special discounts for colleges and
universities through “High school hydration packs” can be useful here.
The sales promotion techniques can be said to be allowing them high control by enabling
targeting of a particular audience and also allowing them to adjust the effort to suit consumer
response. The credibility can be said to be high as delivering promised gifts and allowing
discounts removes skepticisms.
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The general objectives for our Gatorade sales promotions are: building awareness about “G.”
It is necessary to complement the advertising strategy and amend this problem by issuing
several consumer promotions and trade promotions to consumers so that they can experience
new G products.
Another objective for our sales promotions is stimulating interest for G. Our aim is to reveal
to consumers why G’s diverse product line is the “new and improved” Gatorade through sales
promotions we will offer. G’s new product line “G series,” featuring before, during, and after
drinks, is unprecedented by Gatorade or any other sports beverage company. The sales
promotions we issue will focus on G’s new products, namely the G series, to generate
consumer interest in new products that G has to offer.
In terms of strategy for our sales promotions, we wish to follow the “push-pull” strategy, in
which the trade promotions we offer will ideally “push” Gatorade through the distribution
channel to retailers, and subsequently “pull” consumers into stores to buy Gatorade products.
By offering several consumer promotions for Gatorade, we hope that we can drive consumers
to try new G products, purchase the products repeatedly, and purchase larger quantities of the
products.
In regards to trade promotions, we aim to give G products desirable shelf space in beverage
aisles of supermarkets so that consumers will quickly notice them. Due to the low levels of
awareness of G, it is also necessary to advertise G in stores to increase the likelihood that
consumers will notice G and pursue its products. We plan to include banner posters (with
adhesive to place along shelves), promoting G and explaining that it is the new name for
Gatorade. Because our budget is limited, we must choose to allocate money to only certain
consumer and trade promotions that we believe to be most effective. The consumer
promotions we plan to issue are:
 Sampling,
 Premiums,
 Specialty advertising, and
 Sweepstakes.
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 Giveaways in form of Gorilla Marketing Campaign “Beat the Heat”
We believe that sampling will be an effective consumer promotion because G products are
new to the market and are still “under the radar.” Samples of the new G products (such as the
“G Series” beverage line) can acquaint unfamiliar consumers with G. We also wish to
distribute premiums as an incentive for consumers to purchase G products. If consumers
notice that something free comes with their purchase of a G product, they will likely be more
enticed to purchase a product. Therefore, promotion for G will presumably familiarize
consumers with the brand and help them to identify G as the new Gatorade.
Lastly, we plan to implement a sweepstakes program incorporating sports-related charities
while consumers will earn the chance to win VIP tickets to G’s launch media party in Gaddafi
Stadium Lahore, or a trip to a sports championship game of the consumer’s choice. Providing
consumers with opportunity to win large, coveted prizes such as these, we hope that our
sweepstakes, and the opportunity to learn more about the charities, will be added incentives to
purchase G products. The trade promotions we plan to implement are in-store advertising and
expanded shelf space. As aforementioned, our principal aim is to increase awareness about G.
In-store advertising for G products will likely help achieve this. We also feel that giving G
products expanded shelf space will be an effective trade promotion because it will give G
more visibility to consumers. Consumers might overlook G, especially if they do not know
what it is, if G products are relegated to a low shelf, or have limited shelf space.
Implementation
In terms of consumer promotions, we plan to distribute samples of G products, such as

samples of the three stages of the “G-series,” in stores by the beverage aisles. Supermarkets
often have taste samples of drinks or food products throughout the store; consumers who plan
on perusing the beverage aisle can taste test a sample of new G products. The sampling can
also extend to large sporting events held around the nation.
We also plan to offer premiums to consumers. Because G products are just beginning to enter
the market, we feel it would be a good idea to offer free premiums with the purchase of G
product packages (such as the “G Series”) until G is fully established in the marketplace and
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consumers recognize what it is. These free premiums would likely attract consumers to G
products because they are an added incentive to buy unfamiliar products. Examples of free
premiums we would include are free sweatbands and free water bottles that come with a
package of a purchased G product.
Our promotional tactics include giving away free merchandise featuring the “G” logo, such as
workout towels, t-shirts, and workout bags as business gifts. The G logo on this
merchandise will likely reinforce awareness of G among consumers.
In terms of trade promotions, we plan to execute our in-store advertising by displaying
posters for G products in stores (especially by beverage aisles), so that consumers will have a
greater likelihood of noticing G in addition to its placement on shelves. These posters will
feature a G logo, and will explicitly show that G is Gatorade’s new image.
Another trade promotion we plan to implement is expanded shelf space in beverage aisles.
Relative to Gatorade’s competition, namely RedBull, Sting, Vitamin Water we strive to
designate more shelf space to G products so that consumers will notice G before other sports
beverages. We also plan to place G products together, especially all three steps of the “G
Series,” to ensure that customers can easily locate G products.
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MARKETING HEADS Expenses
ATL
Digital Media Marketing:

Online Ads Campaign: 6,000,000 * 3 18,000,000
Social Media Management: 300,000 *3 900,000
Website Development 200,000
Android App Development 300,000
TVC: 3,000,000 * 30 (Days) 90,000,000
OOH
Billboards: 18,000,000*3 54,000,000
Gorilla Marketing: 5,000,000 * 2 10,000,000
Print: 500,000 * 3 1,500,000
Radio: 500,000 500,000
TOTAL ATL 175,400,000
BTL
Endorsements 10,000,000 * 3 + 50,000 * 4 30,200,000

Sponsorships 5,000,000
Launch Party 500,000
Sampling, Premiums, Giveaways 5,000,000
TOTAL BTL 40,700,000
TOTAL MARKETING EXPENSES 216,100,000
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Chapter 6: Human Resources
HR Of PepsiCo:
It has been seen in many research studies done on PepsiCo that the motto that make the
employees to work in a more motivational way is their belief that "People of their company
are their biggest, greatest assets". PepsiCo follows some of the established policies for making
the HR strategies. They always try their hard as much as they can to acknowledge the
phenomenal work and contribution towards achieving the goals. Their focus is basically on
the "People/Individual Development' and for this purpose they ensure that:
PepsiCo staff must comprises of World Class Professionals as well as it should be ensured
that the right system must be designed and should be in place which encourage them for
developing their full potential for doing their work efficiently and effectively.
PepsiCo must create and design mutually and collaborative working environment that enables
individuals of the company to grow and using their potential as much as they can.
Building of a team of professionals who will help in business decisions.
Development of Performance Management and reward system.
Objectives of HR system:
 Providing direction, leadership within the employees.
 Working for the well-being of the employees.
 Development of Career Planning program as well as training of the employees.
 Retain and evaluate the best employees counted as asset of the company.
Policies for HR:

"Policies are legally compliant with clearly expressed processes for timely revisions and a
framework in place to foster employee adherence."
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Developing of an interactive website comprises of all other HR functions with the purpose of
facilitating communication between organization as well as employees enabling sharing of
data as well as it enables sharing of information as well. HRIS (Human resource information
system) has helped in changing and enhancing Relationship building between the employees
and the management of the company.
HR Planning:
Its main purpose is to figure out that what are the requirements for the current as well as
demands for the future of the workers. Organization assures that they have the right kind of
people in a right number working at their right place. This piece of work is accomplished by
the method of performance evaluation, recruitment (regular), training & development
programs as well as regular training programs.
HR Functions of PepsiCo:
Every corporation has an objective of maximizing its productivity as one of its main
objectives so do PepsiCo have. People hired in the Human resource department of PepsiCo
are highly qualified and professionally trained personnel so there is no chance of flaw in
decision making process. They possess ample number of resources for acquisition of
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knowledge from outside (external) resources. Preference is given to the new entrants of the
market in order to increase their efficiency.
Training of Employees:
Once the process of recruitment is done, organization has new recruits (hired) then necessary
training as well as orientation is given to them so that they have enough knowledge about the
work has to be done.
Just like any product life cycle, for the purpose of training of employees there is also a
process called by the name of career life cycle comprises of 4 stages,
 Preparation
 Development
 Maturity
 Decline
So the methods involved in training the employees these are the annual training programs
which are necessary for the employees to attend these programs have following points:
Lectures: To the new recruits certain lectures are given about when and what new product is
going to be launched, what new strategies are going to be adopted in further years for the
development of the organization or when an old product in the market is needed to be
refreshed or if any promotion campaign is required for it.
Visual ads: This method is one of the most common formats of training the employees and
used very much as it is advantageous too.
High-tech training methods: Computer interactive details are also one of the methods that
are used or help in the training process, PepsiCo has recently updated its hardware as well as
software capabilities in order to train the faculty with high tech trends of technology so that
they can cope up with the present market.
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Rewards:
Rewards are been given to the best employees of the organization in order to attain their best
performance and support for the company. Incentives and compensation is given to them for
their motivation and to be the part of the company following are the incentives and
compensation given by the PepsiCo are:
Organization gives annual (yearly) bonuses to the middle as well as lower level employees in
the hierarchy on the other side, upper level (CEO, managers) have profit sharing.
Paid vacations are given from company's side to best performing employees.
Insurance has been given regarding health, and in case of any accident or disability.
Assurance for the educational assistance as well as Retirement plan and club memberships
etc.
Paid leaves like sick leave or maternity leave is given.
PepsiCo perceives that these are some of the factors which keep their employees motivated.
PepsiCo once stated that according to them, Evaluation, motivation and compensation are
inter-linked all together.
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Organization Culture:
PepsiCo believes that being a responsible corporate citizen is not only the right thing to do,
but the right thing to do for the business.
PepsiCo has an exceptional and marvelous culture, a community of gifted people lead by
shared principles. They are dedicated to providing its people with a reassuring and endowing
workplace. Organizational culture is the conduct of humans who are part of an organization
and the meanings that the people respond to their activities. Culture includes the organization
ethics, dreams, standards, working language, schemes, codes, beliefs, and behaviors. It is also
the outline of such shared behaviors and assumptions that are imparted to new organizational
members as a way of distinguishing, and even thinking and feeling. Organizational culture
moves the way individuals and groups interact with each other, with clients, and with
stakeholders.
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Talent sustainability is about recurrently working to grow and retain outstanding people.
PepsiCo is devoted to capitalizing in its personnel to help them prosper. They improve the
skills needed to get-up-and-go the company’s progression, while creating employment
openings in the societies they serve.
PepsiCo’s Organizational Goals and Commitments
 Guarantee high levels of employee commitment and fulfilment.
 Ensure a secure workplace by showing persistence to reduce injury rates, while

struggling to expand other occupational health and safety metrics through finest
practices.
 Nurture diversity and inclusion
 Inspire the employees to lead healthier lives by offering workplace wellness programs.
 Support moral and legal compliance through annual training in the PepsiCo’s Code of
Conduct, which outlines PepsiCo’s steadfast commitment to its human rights policy,
including treating every employee with dignity and respect.
Chapter 7: Sales Pipeline
Geographical Zones:
On a Geographical basis, Pepsi is going extremely strong in Lahore and the rest of the Punjab.
However it is not so popular across the nation as it is in this province. The main characteristic
that makes PepsiCo’s foods and beverages so strong among its TG is its association with
Cricket and many other sports (like Lays and Pepsi with FIFA World Cup nowadays).
Gatorade by PepsiCo is an extremely smart choice for such an audience because it ultimately
is sports oriented and yes, another prominent reason could be the summer season as well.
For Gatorade, stores have been categorized by PepsiCo’s sales team for effective distribution.
The categorization falls under mostly two big divisions namely; big stores and medium-level
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stores. Small stores are also another possibility as the popularity of the drink rises and more
intense distribution is required.
Big stores for Gatorade are classified as Modern Stores and are located in prime
commercial/residential locations such as DHA, Model Town, and Johar Town etc. Lahore is
divided into 12 big divisions related to snacks and beverages by PepsiCo.
Since Riaz Bottlers are the main suppliers of the merchandise, they will also be providing
bottling services for Gatorade as well. Riaz Bottlers have made sub-divisions of each division
in Lahore for an effective approach to each wholesaler, retailer and convenience store, and
due to this strategy the distribution is effective throughout the province.
Supply Chain for Gatorade will load the merchandise on the loading trucks and will be
delivered to the retailers/wholesalers in due time. The concentrates for Gatorades will be
produced in the newly established company in Islamabad. The concentrate for beverages
comes from UK.
Projected Targets:
The main thing the Sales Team at PepsiCo worries about is its Targets, which is the backbone
of the distribution of Gatorade and other beverages. The team gets yearly and then monthly
target which must be fulfilled for the incentives they receive on a monthly basis, obviously to
keep them motivated to perform more and better.
Team Structure:
A PO (Purchase Order) is sent to PepsiCo for stock rejuvenation, for each distributor must
maintain a 10-days’ worth of stock at all times. That is why there is a sales team for each
Distributor in each division.
The Sales Officer has DSRs (Distributor Sales Representative) working under him. The DSR
is the person who actually is responsible for the physical delivery of the stock into the stores.
The Territory Sales Officer (TSR) supervises over each distribution. He categorizes each shop
in his assigned district. The HOS (Head of Sales) has target allocation all over Pakistan; those
targets are then communicated to the Regional Sales Manager, who has 3-5 Area Managers
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working under him. The Area Manager has 3-4 TSRs, who, following the hierarchy, have 15-
18 DSRs working under their supervision.
Currently Lahore has 6 Area Managers. 1 Delivery Car is assigned typically for 100 shops,
and each car has a dedicated DSR and their main target is Wholesalers, which means that the
retailers will automatically acquire the Gatorade from the wholesaler when the need arises.
Other Distribution Strategies:

PepsiCo also have Sales Promotion if they want to achieve the target faster and that is why the
salary for each employee is target oriented, because their gross salary is quite low. Incentives
are the only way to grow the salary at PepsiCo. Even the distributor also gets incentives for
achieving his targets.
In the retail market, once has to be a little ruthless if you want to have your product to be
present at a retailer/convenience store. Sometimes PepsiCo pays a retailer to have its product
placed at the shop instead of the competitor’s.
There also is very strong coordination of the Sales Team with the rest of the departments.
Sales have a huge increment in Ramadan and Eid seasons while there only is a slight setback
in sales in off-seasons like from December to February (10-15-%).
There is no doubt a very large potential for Gatorade here, even when the product is slightly
niched but it must be taken strongly in our minds that the product must not cannibalize other
competitive products by PepsiCo like Sting, which is a direct alternative for the Gatorade.
Chapter 8: Action Programs and Controls
PepsiCo’s Action Programs and Controls:

PepsiCo’s marketing effectiveness is currently being tracked by A.C. Nielsen Pakistan, which
helps the company in strategic decision making. Through the market research firm PepsiCo
gets detailed information about market share, techniques about broadening their segmentation,
monitoring marketing campaigns and measuring their effectiveness and reports on
understanding consumers behaviors.
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As for the internal controls and corrective actions, PepsiCo only monitors its performance
through observing their sales volumes. They review their sales on a weekly, quarterly,
monthly and yearly basis and compare them with previous records in order to discern whether
the current marketing campaigns are improving sales or not. They also follow several tactics
for monitoring the popularity and sales figures, for example we at PepsiCo also have a
mission control center that tracks social media activities of the target market. This will be
described in the last section.
The advertising agencies that work for PepsiCo, such as GreyDensity, send weekly reports
about the ongoing social media marketing campaigns that describe how effective the
campaign is, how many “Likes” they received on which posts, what is the PTA (People
Talking About), nature of the comments, number of shares and measuring the Engagement
Rate. Based on these analysis and judgments, PepsiCo optimizes their marketing campaigns.
Gatorade Monitoring and Control:

The main two purposes of marketing campaigns are:
1. Brand Awareness
2. Increasing Sales Volume
Monitoring Sales Volume:
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Monitoring and controlling the purpose of Increasing Sales Volume of Gatorade would be
achieved by weekly, monthly and quarterly sales analysis. This analysis will be done in house
at the Gatorade headquarters. Every campaign would be measured by the increase in sales
volume through the sales analysis. The yearly monitoring will also be done through marketing
research by A.C. Nielsen Pakistan (Pvt.) ltd.
Monitoring Brand Awareness:
Measuring and controlling brand awareness is really important. The best way to do that is
through the monitoring of social media networks. Our new efforts behind the scenes of the
PepsiCo-owned sports drink maker will be putting social media quite literally at the center of
the way Gatorade approaches marketing. We would create the Gatorade Mission Control
Center inside of PepsiCo’s headquarters, a room that would sit in the middle of the marketing
department and could be thought of as a war room for monitoring the brand in real-time
across social media.
Mission Control Room
This room would feature big monitors with seats for Gatorade’s marketing team to track a
number of data visualizations and dashboards –- also available on to employees on their
desktops — that we would have custom built with partners including IBM. Below are a few of
the visualizations that we could get from the online monitoring of social media networks
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This is a visualization of tweets that are relevant to Gatorade; PepsiCo is tracking terms
relating to its brand, including competitors like Vitamin Water and Red Bull, as well as
Gatorades athletes and sports nutrition-related topics.
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This is kind of what the monitor that measures blog conversations across a variety of topics
would look like. It would show how hot those conversations are across the blogosphere. We
would also run detailed sentiment analysis around key topics and product and campaign
launches.
We would monitor our “Beat The Heat” campaign. Our commercials will feature the song
“Lock It Up”; this will be observed in our Mission Control which would see if the song is
being discussed heavily in social media. Keeping that in mind we can launch future
campaigns after observing the reactions of the fans.
Other than this on a day-to-day basis, such Gatorade’s tools would also be used for more
conventional marketing tactics like optimizing landing pages and making sure followers are
being sent to the top performing pages.
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Bibliography:
PepsiCo. (2009). Performance with Purpose - The Promise of PepsiCo. Annual Report, 7.
PepsiCo. (2014). Our Mission and Values. Retrieved from PepsiCo Official Website:
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Brand Audit and Product Line Extension of Pepsico: Institute of Business and Information Technology Pu, Lahore

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Institute of Business and Information Technology

Business Project (Marketing)

Brand Audit and Product Line Extension of

Chapter 1: Introduction to PepsiCo.............................................................................................8

A statement or a description having an idea, goal of what a company or an organization wants

“PepsiCo's responsibility is to continually improve all aspects of the world in which we

1. Customer Satisfaction or delightedness

2. Providing best Products or Services

4. Adopting Technology advancements

5. Concern for survival, profitability, and growth

8. Concern for public image

9. Concern for employees

Providing best Products or Services:

Concern for survival, profitability, and growth:

Concern for Public image:

Concern for Employees:

PepsiCo is absolutely sure about their Philosophies and Self Concepts.

PepsiCo Objectives and Goals:

How are they planning to achieve it?

How are they planning to achieve it?

How are they planning to achieve it?

How are they planning to achieve it?

Marketing objectives consist of advertising objectives, creative objectives, media objectives

Sales Promotion Objective:

In the Savory Snacks category we have:

o Lays – Available in French Cheese, Salted, Masala flavors

In the Nutrition Category we have:

o Quaker – Available as Quaker White Oats and Oatmeal

Chapter 2: Market Analysis

SWOT Analysis of PepsiCo:

 It is the National market leader in Pakistan.

 Due to the unstable economic conditions in Pakistan the purchasing power of

SWOT Analysis of Gatorade:

 Gatorade was literally created in Lab in University of Florida in 1965. So over 40

 Gatorade already is an established brand in the world so it is easier to launch it in

Primary Market: Athletes.

Secondary Market: Sports Fans, Fitness Enthusiasts and Students.

 Like Outdoor Activities

 Value Social Acceptance

 Play or like Sports

Target Market, Customer Need and Corresponding Features

Target Market Customer Need Corresponding Features

Students Get instantly refreshed, Lots of calories, sweeteners,

Professionals Enjoy relaxation, freshness Large quantity of caffeine

Target Market Customer Need Corresponding Features

Families Get a perfect lightweight The snacks are made to be

Children Love to eat something spicy The variety of flavors offered

Target Market Customer Need Corresponding Features

Elderlies Avoid risk of diseases and Source of fiber and grains

Families Control weight, cholesterol, Ingredients which are low in

Target Market, Customer Need and Corresponding Features

These product lines include:

 The G-series Pro for extreme sports athletes

 G-series Fit for fitness athletes

Customer Need and Its Solution

PepsiCo (in millions) Coca Cola (in millions)

Market Trend – Product Lifecycle of PepsiCo:

Product Lifecycle of Gatorade:

Complete Profile of Competitor:

 Delightedness of the Customers

 Quality Products or Services

 Love for Employees