REFERENCES REC: SHIRTS OF CRICKTERS

MARKETI NG MIX OF PEPSI

Marketing mix of Pepsi being classified into product, price, place, promotion, details of each element is as below:

Product:
Pepsi has wide product line in case of its food and, Pepsi itself range from 1.5 liter, 2.25 liter bottle and Pepsi can. Pepsi Co. itself was the first company for making bottles with polyesters, plastic bottles these bottles are made of polyethylene terephthalate or "PET plastic," which is a form of polyester used to make strong, lightweight, shatter-resistant bottles. As far as the packaging of product is concerned it has changed its logo several times since its inception.

Price:
Price of Pepsi is some way similar to its major competitor coca cola the reason is to get profit through premium price. Price range of bottles is as follows: Half liter bottle 20 1.5 liter bottle 75 2.25 liter bottle: Pepsi can:

 Placement:
Manufacture -------------- Wholesaler---------------Retailer Manufacturer -------- Company Warehouse-------------- Retailer Pepsi mostly build its bottle through joint ventures .distribution is done through its distribution centre, where the delivery is made to retail stores , restaurant, grocery stores and to the ware house club centers .Following is the breakdown of its distribution Convenience Stores and Gas Stations: 12% of the market Restaurants: 25% of the market Warehouse/Club Stores: 6% of the market Super Markets and Retail Stores: 57% of the market.

Promotion:
Pepsi use different techniques for the promotion of its product. While promotion fun and entertainment is the one thing that is associated with Pepsi. It focuses mainly on getting products associated with entertainment icons that appeal to youth. The first major use of this technique was the signing of Pakistan cricket team as celebrities. Pepsi has put its focus one sports and movies while promoting its product. Sports because it is one of the popular way of entertaining the people Since sporting events are seen many times by fans, it provides a good opportunity to increase brand recognition. Movie stars are also popular throughout the world and are greatly admired by people, so using them in advertising has a positive effect brand image. Some of the ways in which Pepsi attract consumers are: Free Samples ( New product DEW) Discounts ( RAMDAN Offers) In-Store Displays Signs, banners etc. Entertainment Games with free T-shirts, Pepsi points under the cap etc.

PEPSIS PRODUCT LINE IN PAKISTAN

Pepsi is dealing in too much product line but in beverages its products include: PEPSI MIRINDA 7 UP PEPSI Diet 7 UP Zero Mountain Dew Aqua Fina water Slice Mango Juice Sting Energy Drink

brand Picture 2010

BRAND PICTURE 2010

Pepsi Mirinda Teem

16% 1% 16% 1% 12% 9% 45% Pepsi Diet 7up 7up Diet Mountain Dew

If we compare the brand picture for last two years we will reach to the conclusion that Percentage of mountain dew was increased in year 2010 than year 2009. This means that now Mountain dew is the stronger brand after PEPSI.

SWOT ANALYSIS

Strength:
Company Image/brand equity:
Pepsi has a reputable image all over the world, IT has a brand name that holds its prestige in the all over market .This image and brand equity give Pepsi an edge over its competitors

Strong and vast distribution network:

The vast distribution network of Pepsi is another strength .the improvement in packaging and the commencement of plastic shells has given Pepsi a favorable response from distributors and dealers, company makes sure to make its product available to the distributors and its regular supply

Strong brand portfolio:

Pepsi owns 80% of the top snack brand. And have a diversified product line consisting of Pepsi beverages and Pepsi foods

Market Share
Pepsi has a high market share among its competitors it has 60% share in Pakistan market that makes it far step head from its competitors

Promotion & Sponsorships:

Pepsi is always been different in its promotional campaigns .its campaigns are related to sports mainly cricket. They use celebrities in their advertising campaign like Imran Khan, Wasim Akram, Waqar Younas etc. Because people make icons, and they follow their icons. Also sponsor social activities programs like music etc.

Variation in product
Pepsi has different variations with in its brands i.e 7up, mountain dew and within Pepsi itself .in Pepsi it always do variations in its packaging Good relationship with franchise

Weaknesses:
Centralized decision making: Pepsi has a highly decentralized decision making process The salesmen feel Dissatisfied for they are totally powerless to make any decisions themselves In dealing with their buyers they have not the slightest authority to allow their buyers any credit or discount. Significant focus on carbonated drinks: Pepsi has made its significant focus on carbonated drinks .this strategy will not work in long run world is fighting obesity and moving towards healthier foods and drinks Short term approach: Other the carbonated drink another short term approach is the segment Pepsi is targeting, they are targeting sport lover youngsters therefore this limits targeting to a specific market . Decline in taste:

it was published in Financial Post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months.this make the customer decline towards the taste of carbonated drinks offer by companies like Pepsi and coca cola.

Opportunities
Easy penetration of new market: Due to the brand equity and image Pepsi has built for the last several years , give company advantage of penetration into different market while enjoying higher acceptance from customers because of its brand name associated with taste and quality. Increase in population: Increase in population not in Pakistan but in worldwide has given opportunity of high demand .specially in Asia market is growing faster so the company has lot of opportunity to take advantage of the increase in demand Change in social trend: There is a change in market trend towards fast food and beverages therefore this trend provides Pepsi a favor to capture the fast moving market
Diversification:

Pepsi can take the advantage of its name and can go into different market. But it needs to make sure to go into market that give pepsi some association with its image and name, PepsiCo can tie up with major showrooms, computer centers &Restaurant.

 Threats
Non-Carbonated Substitutes: because of carbonated drinks associated with obesity , it has pose threat for carbonated drinks like Pepsi by its non-carbonated substitutes i.e. juices Competition: PepsiCo has a very strong competition with Coke. Coke has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi. Government regulations: Currently there is no regulation by government but in future government can impose taxes on food and beverages which force the company to raise the price of their product. Food and beverages is in maturity stage: F&B

Imitation by competitors: with the emergence of me-too products with same kind of packaging and relatively low price can pose a threat by switching off price sensitive consumers

EXTERNAL ENVIRONMENT ANALYSIS

External environment for Pepsi consist of all the factors that are beyond the control of Pepsi .Therefore Pepsi makes its strategy accordingly .the details of strategies are a following:

Geographic
World region Country Cities Density Climate Asia Pakistan Every where Urban plus rural Every season type

Demographic
Age Gender Income Education Religion Family life cycle 14-30 Both Rs 10,000 and above School, college, university All the religions single, unmarried

Psychographics
Lifestyle Social class Sport lover, believer, striver and experience maker Middle, upper, upper middle

Demographic Factors:
Age Pepsi should target each age group. its not the youngsters that enjoy having cold drinks but they should change the image of youngsters focused to family focused by focusing on every age group within a family Education A company has to make promotional strategies keeping in view the customer level currently Pepsi is focusing on urban people much .Promotion and education has a direct relationship. Therefore the promotional strategies must cover the rural people Population Distribution Population distribution means how much population lives in urban areas and rural areas. In Pakistan 35 % population resides in urban areas and 65% population lives in rural areas. PepsiCo.is focusing on urban areas as people there are more inclined towards such beverage while people in rural areas are more inclined drinking lassi and desi drinks.

Economic Factors:
There are economical factors that Pepsi needs to consider upon that are: Income and Income per Capita If the income level or per capita income of the people increases, it will have a positive effect on the consumption of Pepsi. Consumption Behavior Pakistan is a consumption oriented society. Due to demonstration effect the people are more inclined towards consumption than saving. So the people of Pakistan spent heavily on food items. Hence Pepsi has a good market share in the present circumstances. Income Distribution

It means how much is in the hands of rich and poor class. In Pakistan 10% rich people posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced distribution of income in the country, the consumption of the people will increase hence increasing the sales of beverages as well.

Physical Factor:
Region Pepsi is not focusing on any particular religion with Pakistan as the country is divided unto different religious and ethnic groups City Size In Pakistan in highly density areas the consumption of Pepsi is more. Climate For country like Pakistan Pepsi has a more demand because of its hot weather that remains 6 month a year. It is a source of refreshment Infrastructure Roads are the basic infrastructure for transportation of Pepsi from place to place Pepsi cannot open production unit in every city of Pakistan so it has to transport it to other cities where Pepsi is demanded. Electricity is the basic necessity for production of any product. Constant load shedding slows down the process of production which leads to less production and low market share.

Technological Factors:
Research and Development Through the better technology and research and development quality can be improve and new innovation with in product can be done as a result experience growth

Social and Cultural Factors:

Psychographic The company will focus on the behavior of consumers and make different changes in their product quantity or quality and in promoting their product so that they can attract the customers. Keeping in view that the behavior of different consumers is not alike they have to make their marketing strategies in accordance with their requirements so that they are convinced to buy the product. Religious Religious factors can influence the market sales of Pepsi as it happened in 2003 when the U.Sled attack on Iraq, wide sections of society in Pakistan has banned American multinationals Coke and Pepsi. Social Status Pepsi is a well-known brand. Brand conscious p[people of pepsi would not drink beverages of lesser known brands such as Amrat cola or gourmet cola. They will try to show their status by drinking Pepsi which is known to all as a quality drink.

Cultural Environment:
Pakistan has used adaptive strategy by adapting to different culture within country .in although it is international brand put Pepsi has adaptive its promotional strategy according to the Pakistans culture.Pepsi has done promotions through sponsorship. some of the examples are:

DIL DIL PAKISTAN

Endorsing wasim akram, imran khan, shahid afridi and waqar younis
Pepsi has targeted youngster by changing its slogan accordingly .That reflect trendy, enthusiasm , lively, energetic and fashionable .some of the examples of the Pepsis slogan for its target market is: The Choice of a new Generation", Through the above slogan Pepsi appealed to youth and enjoyed a high margin but then after Pepsi changed its slogan to PEPSI: GENERATION NEXT And then pepsi changed its slogan to: ASK FOR MORE

INDUSTRY ANALYSIS
Competitors Analysis Pepsi has many competitors in the industry but the fierce competition is from coca cola .pepsi has following competition in the market now there are following strong brands in market. 1. PEPSI 2. Coca Cola 3. Gourmet Cola 4. RC Cola 5. Amrat Cola Pepsis product in beverages Pepsi Pepsi diet Teem 7up 7up diet Marinda Mountain dew Sting energy drink

COKE products Coca cola Coke diet Sprite Fanta Minute made pulpy orange Sprite zero

Mango slice AQUAFINA eater bottled

The above comparison shows that Pepsi has vaster product line in terms of beverages in comparison of its competitor COCA COLA. The positioning of these two brand is totally different coke is more focused on family tradition, gatherings and fun element while Pepsi ahs an image of sports and energy

INTERNAL FACTOR EVALUATION ANALYSIS: IFE MATRIX

Strength
Brand equity

Weight
0.20 3

Rate
0.6

Total Score

Strong Distribution network

0.07

0.14

Strong brand portfolio

0.09

0.27

Promotion & sponsorship

0.11

0.22

Market share

0.08

0.16

Variation in product Range

0.06

0.12

Good relationship with franchise

0.04

0.04

Weaknesses
Centralized decision making 0.09 2 0.18

Significant focus on carbonated drinks

0.08

0.32

Short term approach ( target specific market)

0.07

0.14

Decline in taste

0.11

0.44

Total

2.63

EXTERNAL FACTOR EVALUATION MATRIX

EFE MATRIX
Opportunity
Easy penetration of new product

weight
0.18 3

score

Total Score
0.54

diversifications

0.14

0.56

Increase in population

0.09

0.18

Change in social trend

0.10

0.3

Threat
Non-carbonated substitute 0.17 2 0.34

competition

0.14

0.42

F & B industry is mature

0.07

0.14

Government regulation

0.06

0.12

imitation

0.05

0.1

Total

2.7

The Strengths-Weakness-Opportunities-Threats (TOWS) Matrix

Strengths
1. Brand equity

Weaknesses
1. Centralized decision making 2. Significant focus on carbonated drink 3. Short term approach 4. Decline in taste

Tows Matrix

2. Strong distribution network 3. Strong brand portfolio 4. Promotions and sponsorships

5. Market Share 6. Variation in product range

7.

Good relationship with franchise

Opportunities
1. Easy penetration of new product. 2. Diversification 3. Increase in population 4. Change in social trend

S-O Strategies S1,S4,S5,O1,O2 Pepsi can introduce diversified products because it has good brand equity and promotions & sponsorship strength S1, S2,O4
Pepsi has good distribution network , it can take advantage of change in social trend by going into fast food restaurant

W-O Strategies

W3,O3
By taking the advantage of increase in population , Pepsi can target different segments

Threats

S-T Strategies

W-T Strategies

1. Non-Carbonated Substitutes 2. competition 3. F & B industry in maturity 4. Government regulation

5.

S1`,S2,T1
Pepsi can introduce noncarbonated drinks by taking the advantage of its brand equity and distribution

W4,T3
By improving the taste, pepsi can take long term position on maturity stage

imitation

INDUSTRY ANALYSIS
Competitors Analysis Pepsi has many competitors in the industry but the fierce competition is from coca cola .pepsi has following competition in the market now there are following strong brands in market. 1. PEPSI 2. Coca Cola 3. Gourmet Cola 4. RC Cola 5. Amrat Cola Pepsis product in beverages Pepsi Pepsi diet Teem 7up 7up diet Marinda Mountain dew Sting energy drink Mango slice AQUAFINA eater bottled

COKE products Coca cola Coke diet Sprite Fanta Minute made pulpy orange Sprite zero

The above comparison shows that Pepsi has vaster product line in terms of beverages in comparison of its competitor COCA COLA. The positioning of these two brand is totally different coke is more focused on family tradition, gatherings and fun element while Pepsi ahs an image of sports and energy

CURRENT OPERATION ANALYSIS (PART II)

SUPPLY CHAIN OF PEPSI CO

Pepsi has several contracts with manufacturers so the capacity planning is done in advance while the sale for casting and the production capacity depends on the capacity of the organization Supply chain planning( for casting- monthly , weekly, and daily basis) Supply chain operations( planning regarding individual customer need and want)

Information flow

Tier 1 supplier

tier 2 supplier

Manufacturer

customer

PURCHASING, LOGISTICS, MRKETING, PRODUCTION, R & D, FINANCE

1) CUSTOMER RELATIONSHIP MANAGEMENT 2) SUPPLIER RELATIONSHIP MANAGEMENT 3) DEMAND MANAGEMENT 4) ORDER FULFILLMENT 5) RETURN MANAGEMENT

For forecasting Pepsi use time series method, qualitative and casual method

Supply chain flow

CUSTOMER

Customer order cycle Replenish ment cycle

RETAILOR

DISTRIBUTOR

manufactu ring
MANUFACTURER

Procureme nt cycle

SUPPLIER

HR MANAGEMENT

PROPOSED PLAN FOR PEPSI (PART III)

The proposed idea is to come up with a product called:

Nes

CO

Nesco will be positioned as a ready to drink iced tea. As mentioned in the threat of Pepsi co that carbonated drinks has a threat of switching customer base. As people are becoming aware of the negative effect of highly carbonated drink and these drinks are also associated with obesity. Therefore the idea is to offer ready to drink iced tea Objective: The product will be available in different flavors (strawberry, mint, lime).The ides id to enhance the consumer experience and provide alternative to the traditional tea by satisfying the need of the generation Y consumers with a new innovative product Competition: Nesco will have the major from Lipton iced tea, and Snapple Point of difference: The product will cater to both physiological and social need. That will cover nutritional and the sense of social acceptance, fun & belongingness

SEGMENTATION FOR NESCO

Density Climate Age Gender Occupation Race Personality

Urban, suburban All (East, West) 13-30 years old (teenagers, studying age and young adults) Male and Female Students, young professionals For all the people belong to different race Brand conscious, anchored in popular culture, inclined for differentiation and sophistication, very tolerant towards multiculturalism and internationalism (open-minded), quick maturation with modern products Most of them dependent on parents, no major responsibilities, highly influenced by peer groups, active life, importance of school, work and social life Nutritional benefit, quality and premium product Seasonal (peak in summer), daily-basis, weekly basis Non-user, regular user (current user through existing barshops) None, medium, strong

Lifestyle

Benefits sought Usage rate User status Loyalty status

Marketing plan:

Brand personality: energy, funky, cool, functional, original, funny, healthy, etc. Brand equity: pepsi provides a quality, consistent, innovative and accessible soft drink reputation.

Promotional Mix:
Consumer oriented: Contests: uncover secret code underneath the cap and get chance to win exciting gifts .get an opportunity to meet one of your favorite sports person.this strategy will increase the consumer involvement with the product Samples: distributed in supermarkets, school/universities. Samples are a way to avoid product resistance since Arguments: It will encourage new product purchases and it represents low risk for consumers since they get it for free. They have nothing to loose by trying it. Point-of-purchase: in supermarkets (to reach the parents of generation Y). Arguments: It is also a mean to increase product trial and provides a good product visibility. Allowances and discounts: case allowance (Arguments: The free goods approach will be used so it can encourage retailers to buy more of the product to get a certain amount for free).

Another opportunity that Pepsi can get is to enter in the garment business by making sports cloth for players having Pepsi logo on it so the image of Pepsi will be associated with the diversification.