A PROJECT ON PEPSI CO. STING ENERGY DRINK

Final Project A PROJECT ON PEPSI CO. STING ENERGY DRINK (2011) -------------------------------------------------

Submitted By: Farhan Abid Ghulam Shabbir

1632-109004 1632-109007 MBA (Marketing)

-------------------------------

Approved by:

_____________________ Dean Faculty of Marketing

_____________________ Project Supervisor

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Inner Title A PROJECT ON PEPSI CO. STING ENERGY DRINK

A PROJECT SUBMITTED TO THE PIMSAT INSTITUTE OF HIGHER EDUCATION IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER IN BUSINESS ADMINISTRATION (MARKETING) BY

FARHAN ABID & GHULAM SHABBIR MASTER IN BUSINESS ADMINISTRATION FACULTY OF MARKETING, PIMSAT INSTITUE OF HIGHER EDUCATION, PAKISTAN





















































TABLE OF CONTENTS

Serial

Description

Page No.

Certificates Acknowledgements Dedication Executive Summary

vii-ix x xi xii

Chapter No. 1

Introduction To Energy Drink

13-14

1.1 1.2 1.3 1.4 1.5 1.6 1.7

Ingredients Of Energy Drink Effects Attempts To Ban History Caffeinated Alcoholic Energy Drinks Anti-Energy Drinks Hidden Risks

15-18 19-20 21 22-24 25-26 27 27-28

Chapter No. 2

Introduction To Pepsi

29-30

2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12

Company Overview A Brief Pepsi History Mission Vision Objective Strategies Policies PepsiCo Values & Philosophy Marketing Product Positioning Of PepsiCo Pepsi-Cola Marketing Mix Pepsi-Cola Brands

31-32 33-40 41 41 42 43 44 45-46 47-51 52 53-56 57-69

Chapter No.3

Pepsi-Cola in Pakistan

60-62

3.1 3.2 33

Unique Selling Proposition(USP) Of Pepsi Promotion Strategy Of PepsiCo In Pakistan S t ti Of P i i P ki t

63 64 65



























TABLE OF CONTENTS

Serial Chapter No.4

Description Sting Energy Drink

Page No. 78-80

4.1 4.2 4.3

Ingredients Advertising Campaigns Pepsi Sting Big Change In Price

81 82 83

Chap Chapter ter No.5 No.5

Paki Pakista stan’ n’ss En Ener ergy gy Drin Drinks ks Marke Markett

84-8 84-85 5

5 .1 5 .2 5 .3 5 .4 5 .5 5 .6 5 .7 5 .8

Red Bull Booster Ozo Powerful Speed Sting Other Energy Drinks Comparison Chart

86 87 88 89 90 91 92

Chapter No.6 Chapter No.7

Research Methodology Suggestions

7.1 7.2

Energy Drinks Should Not Be Mixed With Alcohol Energy Drinks Should Not Be Consumed During Exercise Energy Drinks Should Not Be Consumed By Children Energy Drinks Should Not Be Consumed By Pregnant Woman

97 98

Conc Conclu lusi sion on & Reco Recomm mmend endati ation onss

101-1 101-103 03

Bibliography & Reference Questionnaire The End

104-105 106-107 108

7.3

7.4 Chap Chapter ter No.8 No.8

92 93-94 95-96

99 100



























PROJECT PROJECT COMPLETION COMPLETION CERTIFICATE

Certified that the research work contained in this project titled “A Project on Pepsi Co. Sting Energy Drink” has been carried out

and completed by Mr. Farhan Abid and Mr.Ghulam Shabbir, Roll no. 1632-109004, 1632-109007 under my supervision during their Master of Business Administration.

______________________ Date: _______________ Research Coordinator





























CERTIFICATE OF EXAMINERS

Certified that the quantum and quality of the research work contained in the project titled “A Project on Pepsi Co. Sting Energy Drink” is adequate for the award of degree of Master of Business Administration.

Internal Examiner Signature: ________________ Name: Name: ______ _________ ______ ______ _______ ____ ____________________

External Examiner Signature: ________________ Name: Name:





























Date: ____________________

DECLARATION

I, Farhan Abid and Ghulam Shabbir, Roll no. 1632-109004, 1632109007, Student’s of Master of Business Administration during the session 2011, hereby declare that the matter printed in the dissertation titled “A Project On Pepsi Co. Sting Energy Drink” is our own work and has not been printed, published and submitted as research work in any form in any university, research institute etc, in Pakistan or abroad.





























Submission Form for Project

Student’s Name1 Father’s/Guardian’s Name Student’s Name2 Father’s/Guardian’s Name Student’s E-Mail Address1 Student’s E-Mail Address2 Student’s Mobile Number1 Student’s Mobile Number2 Student’s Registration Number1 Student’s Registration Number2 Date of Submission





























ACKNOWLEDGEMENT

A task undertaken without offering prayers to almighty and talking blessings from the elders is not a good beginning. Likewise Likewise the work completed without acknowledging the assistance to those who were always by our sides to make our efforts fruitful in the task left incomplete. Firstly, we would like to thank ‘God’ for his cordial and merciful blessings which have enabled us to complete this this project. This project is an outcome of effort, guidance and channelization of our teachers and parents. We wish to extend our deepest regards and obligation to Sir Bilal Sarwar who has guided us in this project and helped us in all possible ways to





























DEDICATED

To Our Dearest and most respected Parents. Whose efforts and prayers are great source of strength to us in every noble venture? Their love































Exec Execut utiv ivee Su Summa mmary ry We select this topic because there is currently no project is done on that topic. And now a days the energy drinks are played a vital role in our daily life so that why we want to take a look on its all aspects. As we all know that beverages are going become become a necessity of our life. So in this this concern we must have to know the benefits and the disadvantages of these drinks which we like to be consume on daily basis. The Main purpose of this project is to create awareness about energy drinks and its side effects. The other purpose of this project is to tell readers about the Pepsi cola Co. and its new































Chapter No.1































Introduction to Energy Drink

Energy drinks are soft drinks advertised as boosting energy energy.. These drinks usually do not emphasize energy derived from the sugars they contain, but rather through a choice of stimulants,, vitamins, and herbal supplements the manufacturer has combined. stimulants Energy drinks are canned or bottled beverages sold in convenience stores, grocery stores, and bars and nightclubs (in mixed drinks). Most energy drinks are carbonated drinks that contain large amounts of caffeine and sugar with additional ingredients, such as B vitamins, amino acids (e.g. taurine), and herbal stimulants such as guarana. Energy drinks are marketed primarily to people between the ages of 18 and 30 as a stimulant, which is why energy drinks have names that convey strength, power, and speed, and sexuality.































Ingredients

Nowadays, Nowadays, energy drinks drinks have become become common common choice choice of beverages beverages.. Sugar and caffeine are the two major ingredients in energy drinks. drinks. Ingredients in the energy drinks are legal ingredients which are added to give an instant energy boost. What are these energy drinks made of? How can you get charged up right away after drinking these energy drinks? These drinks are commonly known as soft drinks. Let us discuss the energy drink ingredients. Generally, energy drinks include methylxanthines (including caffeine caffeine), ), vitamin B and herbs herbs.. Other common ingredients are guarana guarana,, acai acai,, and taurine taurine,, plus various forms of ginseng of ginseng,, maltodextrin maltodextrin,, carbonated water , inositol inositol,, carnitine carnitine,, creatine creatine,, glucuronolactone and ginkgo biloba. biloba. Some contain high levels of sugar of sugar , and many brands also offer artificially-sweetened 'diet' versions. The central ingredient in most energy drinks is caffeine,, the same stimulant found in coffee or tea caffeine or tea,, often in the form of guarana of guarana or yerba or yerba mate.. mate































Guarana Guarana is a major source of caffeine and is a climbing plant. The seeds of the fruits of Guarana has three times more caffeine than that contained in the coffee beans. This energy drink ingredient increases the metabolic rate of the human body and helps in reducing weight.

Ginseng Ginseng is a herb which increases the energy levels in the human body. It has anti-fatigue components that help to reduce stress. Ginseng is said to stimulate the nervous system to increase the overall stamina of the body and increase the secretion of hormones in the body. There There are some adverse adverse side-effects side-effects of Ginseng Ginseng on the the human body. body. These effects effects are headache and diarrhea which are likely to happen if Ginseng is consumed along with caffeine.

Ginkgo Biloba

































Sugars Sugars are the source of glucose for the human body and is the major ingredient in energy drinks. Carbohydrates is an essential requirement of the human body which helps maintain the body functions. Glucose is used up by the body to perform digestion, breathing and in exercises, like, cycling, walking and swimming. This energy drink ingredient is harmful for the people suffering from diabetes diabetes..

Acai Berry Acai berry is another energy drink ingredient which is a rich source of antioxidants. The

































Yerba Mate This substance is derived from leaves of a shrub in the Holly family. It is a natural source of caffeine, but some believe that the form of caffeine in Yerba Mate’ doesn’t produce the negative side affects like the caffeine in coffee and guarana.

Milk Thistle This ingredient mainly found in Rockstar and a few other drinks is used as a liver detoxifying agent. It is placed in energy drinks not really for any energy enhancing properties properties but as a counter counter agent to mixing mixing energy drinks drinks with with alcohol as milk thistle thistle is

































Effects

A variety of physiological and psychological effects have been attributed to energy drinks and their ingredients. Two studies reported significant improvements in mental and cognitive performances as well as increased subjective alertness. Excess consumption of energy drinks may induce mild to moderate euphoria primarily caused by stimulant properties properties of caffeine and and may also also induce agitati agitation, on, anxiety anxiety,, irritability and insomnia insomnia..

































Consumption also has been known to cause pupil dilation when taken with certain antidepressants or SSRIs . Energy drinks do not provide electrolytes, and have a higher likelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from the body to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If the body is dehydrated by 1%, performance is decreased by up to 10%. In the US, energy drinks have been linked with reports of nausea, abnormal heart rhythms and emergency room visits. The drinks may cause seizures due to the "crash" following the energy high that occurs after consumption. Caffeine dosage is not required to be on the

































Attempts to Ban

The popular energy drink Red drink Red Bull was banned in France after the death of eighteen-yearold Irish athlete Ross Cooney, who died as a result of playing a basketball game after consuming four cans of the drink. This ban was challenged in the European Court of Justice in 2004. The French Scientific Committee (J.D. Birkel) concluded that Red Bull has excessive amounts of caffeine. Denmark also banned Red Bull for a while, although the ban has recently recently been revoked. revoked. Britain Britain investigated investigated the the drink, but only issued issued a warning



































History

































Mateschitz developed Red Bull based on the Thai drink Krating drink Krating Daeng, Daeng, itself based on Lipovitan.. Red Bull is the dominant brand in the US after its introduction in 1997, with a Lipovitan market share of approximately 47%.

































In 2004, Balance Bar founder Bar founder Richard Lamb came out of retirement to form a company to distribute FRS FRS,, an drink with the antioxidant quercetin as its key ingredient. Capri Sun targeted 16-25 year-olds with its Island Refreshers line, graduating from a foil

































Caffeinated Alcoholic Energy Drinks

































The products will no longer be delivered to Oklahoma after December 3, 2010 and delivery to retailers has been suspended in New York. On November 17, 2010, the US Food and Drug Administration warned four companies,



































































































































































































































































































































































































































































































































































































































































































































































































































































































When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, "Teem" to compete with 7up. It successfully, after some years, took over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share where as the coke just has 20% markets share. Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in promoting the brand. Pepsi also launched its fast food chain KFC i.e. "Kentucky Fried Chicken.”



























Unique Selling Proposition (USP) Of Pepsi

The unique selling point of Pepsi in Pakistan is its exclusive advertisement campaigns. Infect, the major reason of Pepsi’s large market share is its fervent promotional campaigning. Pepsi has an edge because of its strong brand image, and if you have a brand you have a immediate advantage because you have a backbone, or a framework on which to hang your products. Pepsi’s ads reflect the social, cultural values of Pakistan, whereas the ads of coca cola (its major Competitor) mostly have Western or a Turkish theme. Their current slogan “Pepsify kro gay” has been highly successful. The main stream celebrities of Pakistan are used for Pepsi’s promotions thus having them to endorse a brand is a guaranteed success in itself.



























Promotion Strategy Pepsi promotes its products in a many ways, but 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 followed this strategy by signing other pop music stars like junaid jamshed and other singers. Two other areas of entertainment that have been used by Pepsi to promote its brands are sports and movies. Sports are a popular source of entertainment throughout the world and is a using it to promote the brand is a main focus of Pepsi. 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 products) ¨ Discounts ( RAMDAN Offers) ¨ In-Store Displays – Signs, banners etc. ¨ Entertainment – Games with free T-shirts, Pepsi points under the cap etc. ¨ Sponsorship – sports teams/clubs/events.



























Segmentation Of Pepsi In Pakistan Segmentation Variables

Data

Geography World Region Country Cities Density Climate

Asia Pakistan All major cities of Pakistan Urban Hot and Dry

Demography Age Gender Family size Family life Cycle Income Occupation Education Religion Race Nationality

14-30 Male, Female 1-2, 3-4, 5 + Married, Unmarried Rs. 10,000 + From middle class to upper class Schools, Colleges, Universities Major religion of Islam, Christianity and Hinduism Asian Pakistani

Psychographic Social Class Lifestyle

Middle class, upper class Actualizes, Fulfilled, Believers, Achievers, Strivers, Experience’s markers and Strugglers

Behavioral Occasions Benefits User Status Loyalty Status Readiness Stage

Parties, Birthdays, Sports, Regular Occasions Quality Taste First Time User Strong Aware, Interested

Place (Distribution) Strategy Distribution is an important aspect of success in the beverage industry. Since the cola companies want to focus on making syrup and marketing, they need to have strong, loyal bottlers. This This is especially especially the the case in foreign foreign markets markets where the the cola companies companies fiercely fiercely



























bottler relationship relationship should be the main main focus of Pepsi’s Pepsi’s international international marketing. marketing. One One of Coca-Cola’s major strength’s is its ability to build relationships with its bottlers. Coca-Cola is very methodical in making sure that its bottlers are happy, while Pepsi has been known for neglecting its bottlers. This is one area that Pepsi must improve if it is going to take market share away from Coca-Cola. Product is distributed through PepsiCo distribution centers. The distributor delivers it to the grocery retailers, vending companies, restaurants, and warehouse/club stores. The distribution segments can be broken down into the following: • Convenience Stores and Gas Stations: 12% of the market • Vending Companies: 11% of the market • Restaurants: 20% of the market • Warehouse/Club Stores: 6% of the market • Super Markets and Retail Stores: 51% of the market.

SWOT Analysis Of PepsiCo In Pakitan

One of the most important part of the Marketing Plan is SWOT analysis. Lets see the SWOT analysis of PePsi Co in Pakistan





























1. Company Image:

It also is a reputable org. and is well known all over the world. Perception of producing a high quality product. 2. Quality Conscious: Conscious:

They maintain a high quality as Pepsi Cola International collect sample from its different production production facilities facilities and send them them for lab test test in Tokyo. Tokyo. 3. Good Relation with Franchise:

Throughout its history it has a good relation with franchisers working in different areas of the world where they have the production facilities. 4. Production Capacity:

It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia. 5. Market Share:

It has a highest market share i.e. 62% in Pakistan and leading a far step head from its competitors.





























iii. Pepsi Restaurants. 7. High Tech Culture:

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database an they use computers as business tools for analysis and quick decision making. 8. Sponsorships:

They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programs like music etc. WEAKNESS 1. Decline in taste:

During the last years, 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.





























They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as “nothing official about it”. 4. Weak Distribution: Distribution:

They lack behind in catering the rural areas and just concentrating in the urban areas. 5. Low consumer knowledge:

Unable to maximize local consumer knowledge. 6. Lack of soft drink:

Lack of soft drink “know-how” as a result of diversified business units and generalist managers OPPORTUNITIES 1. Increase Population:

As almost in all over the world growth rate is increasing which in turn increases the demand of products and necessities and especially in Asia the market is growing at a faster rate as compare to other continents. So they have to attract new entrants.





























They may enter in garments business in order to promote their brand mane, by making sports cloths fro players which represent their name by wearing their clothes. 4. Distribution of snack foods:

Opportunity to distribute Pepsi snack foods in the future. THREATS 1. Imitators:

They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product. 2. Government Regulation:

They face problem if government employ taxes on them which force them to raise the price of their product. 3. Corporation’s Corporation’s shortage problem:

Again this is also a serious threat from it suppliers as if supplier is unhappy with the company. He may reduce the supply and exploit the company. This action will surely affect the production process.





























The big threat to Pepsi in Pakistan is Political instability and civil unrest. 6. Threat of labor strikes:

External threat of labor strikes and power outages in Pakistan.































‘WT’ ANALYSIS •

One weakness that Pepsi posses is that it has very strong taste it really feels that something highly toxic going inside the body, where as the same product of the coke is not much strong.

•

They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsi’s product. During the last years, it was published published in financial financial post that that there has has been big complaints complaints from the the customers customers with regard to the bad taste that they experienced during the span of six months. If they soon pay no attention towards that this will create a big problem for them.

•

•

Large size may lead to conflicting interests. New one calorie products products have no existing existing customer customer base; generic generic brands can can make similar drinks – cheaper. It is also big threat for any company people may like or dislike new launching product.































•

They lack behind in catering the rural areas and just concentrating in the urban areas. They should try to increase their distributions and also focus on capturing rural areas; this will become a big opportunity for them.

•

The other big weakness on Pepsi is that they don’t pay any attention towards garments. They may enter in garments business in order to promote their brand name, by making sports cloths fro players which represent their name by wearing their clothes. That must increase the customer and income of the Pepsi.

•

High expenses may have trouble balancing cash-flows of such a large operation. The staff may show dishonesty. They should try to pay much attention towards their cash flow, and audit there statements on regular basis.

‘ST’ ANALYSIS •

In many countries Pepsi had more expensive products than Coke; such a high price may limit a lower income family from buying a Pepsi product, therefore which is a































•

Continuous efforts to research trends an reinforce creativity, if they fail in their efforts then there is a big threat for the company. The competitors may get benefit by their plans. plans.

‘SO’ ANALYSIS •

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency and that will become such a big opportunity for Pepsi.

•

It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in South Asia. Established network of 45 distributors each supplying 1,100 retailers. High per capita soft drink consumption – average of 22 servings compared to 5 for Pakistan. At will become such a big opportunity. Due to































•

They mainly use celebrities in their advertising campaigning like Imran Khan, Wasim Akram, and Waqar Younas etc. Also sponsor social activates programmed like music etc. this will become such a big opportunity to build such a large number of customers. So we can say that it is one of the big strength that may become a big opportunity for Pepsi.































PEST Analysis of Pepsi

The Pest Analysis identifies the political, economical, social a technological influences on an organization. POLITICAL INFLUENCES: - The production distribution and use of many of PepsiCo

product are subject subject to to various federal federal laws, laws, such as the Food, Drug Drug and Cosmetic Cosmetic Act, Act, the Occupational Safety and Health Act ad the Americans with Disabilities. - The businesses are also subject to state, local and foreign laws. - The international businesses are subject to the Government stability in the countries where PepsiCo is trying get into (underdeveloped markets). - The federal, state, local and foreign environmental laws and regulations. - The businesses are are also subject subject to de taxation taxation policy policy in each country country they are operating. operating. - They also have to comply with federal, state, local and foreign environmental laws and

































account that PepsiCo is trying to introduce itself in underdeveloped markets, they have to be careful with with the possible problems problems with with the government governmentss of this countries, countries, and with the the problems could could rise from from PepsiCo PepsiCo act with with the people people of this this countries. countries. rize fluctuation, and to possible fuel crisis. - Operating in International Markets involves exposure to volatile movements in foreign exchange rates. The economic impact of foreign exchange rates movements on them is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. PepsiCo is also subject to other economical factors like money supply, energy availability and cost, business cycles, etc.

































































Sting Energy Drink

































Name

Sting

Bicolor Type

Carbonated Energy Drink

Manufacturer

PepsiCo

Distributor

































Carbonated water , Sugar , Citric Acid, Acid, Artificial flavour , Maltrodextrin, Sodium Citrate, Citrate, Sodium Hexametaphosphate, Taurine Taurine,, Potassium Sorbate, Sorbate, Caffeine Caffeine,, Sodium Benzoate, Benzoate, Tartrazine,, Inosital Tartrazine Inosital,, Calcium Disodium EDTA, EDTA, Modified Food Starch, Panax Ginseng Extract, Niacin Extract, Niacinamide amide,, Sunset Yellow, Yellow, Pyridoxine Hydrochloride and Cyanocobalamin Cyanocobalamin..

Nutritional Information Serving Size: 250ml



































































Energy drinks has gain a market which don’t care much about the price as they are always

































































We think Red Bull was the first successful energy drink in the market. But afterward companies realize that it is a very big market of those people who like energy drinks. So other companies also jumped in to share their part. Recently we have seen many companies in Pakistan, like Pepsi and Shezan, who have jumped in energy drinks business. One thing

































Red Bull



























































































































































































































































































































































































































































































































































A PROJECT ON PEPSI CO. STING ENERGY DRINK

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