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Value Chain
Marketing Program Investment:
PepsiCo’s products include mostly carbonated drinks but have expanded their products since
its merger with Frito Lay. These products span from salty snacks to fruit juices and teas.
However, for the sake of this case study, the primary focus is the product Pepsi-Cola.
PepsiCo’s portfolio comprises 22 brands including Pepsi-Cola, Tropicana, Gatorade,
Mountain Dew and Diet Pepsi and each brand belonging to PepsiCo generated at least one
billion USD in retail sales. Inbound logistics practices of each brand within PepsiCo’s
portfolio reflect the nature and quantity of raw materials used, the proximity between the
location of suppliers and manufacturing plant and other sets of factors.

The economies of scale can be specified as the main source of value for PepsiCo derived
from inbound logistics primary activity. PepsiCo also benefits from locating its production
sites close to the main sources of raw materials to save on transportation costs.

Program Quality Multiplier.

One of the strongest reasons Pepsi retains its brand image is its promotions. Pepsi targets
mainly youngsters through various Brand ambassadors. In India, the brand ambassadors have
been the best celebrities as well as sportspersons in the country.
Along with traditional media channels, Pepsi also uses trade promotions and sales
promotions at the point of purchase. Discounts and packaging are always being bundled to
give the best combination and value to the customer to increase purchases as well as brand
equity.
The bottom line is that Pepsi cannot exist without the proper promotions. This is because
Pepsi belongs in the FMCG (Fast moving consumer goods) market, and in FMCG, you either
perform or perish. The FMCG market is one of the toughest markets for businesses.
However, Pepsi is not only surviving, but it is thriving in the FMCG market. Thus, hoping
that Pepsi keeps reinventing its marketing mix so that it remains in the top 2 categories of soft
drinks

Customer mind-set
Pepsi has always targeted the youth segment. The changing demands of the younger generation in
the country have resulted in changes in the positioning of pepsi.

This can be observed from the changes in the taglines, logos, advertisement messages and mean of
communication of messages.

The company has indicated that it’s new positioning “Why not meri Jann” reflects pepsi’s marketing
research results and better aligns with a younger generation’s desire to capture the excitement.

Pepsi has a unique pop culture with its loyal consumers. So instead of investing a new meaning to
the brand, the marketing team is going to refresh tee brand’s confidence and swagger as a pop
leader.
Pepsi focused on to of the biggest obsessions of the youth, cricket and showbiz industry, to design its
advertisement campaigns.

Even the hoardings and print ads expanded on this theme. Popular celebrities from these two
domains are used to generate a connect of the brand with the youth.

These celebrities are treated as role models and trend setters for the youngsters and pepsi has tried
to make use of these desired qualities to project its brand.

Pepsi has even tried to leverage its logo as a mean of connecting with its target consumers. Recently
the pepsi logo was modified to create a connection with popular emotions. These changes in logo
were undertaken at the global level but as a result of internet activities, they were also able to
generate buzz among youth.

Market place conditions multipliers.

A strong distribution network has gone a long way in marketing sure that the marketing strategies
have been converted to actual sales.

In addition to branding strategies, the company also comes up with promotional strategies from
time to time. These further help in boosting the sales of the product.

Market Performance
Price premium
Price elasticities
Market shares
Expansion Success
Cost Structure
Profitability
Shareholders Value
Stock price
P/E Ratio
Market capitalization

Price

Pepsi’s pricing strategy is driven by their competitors’ prices and customer

demand. The company encourages bulk sale, with the cost of higher volumes
of Pepsi being cheaper per ounce than smaller volumes.

This strategy helps foster the distribution channels they have in place.