Principle of Marketing MOHAMMAD ALI JINNAH UNIVERSITY ISLAMABAD
PROJECT REPORT MBA Section 3 Group Members JALAL UD DIN
MB091027
WAQAS MEHMOOD
MB091028
AHMAD NAWAZ
MB091010
MUHAMMAD RAFEH
MB091022
SHAHBAZ KHAN
MB091046
SUBMITTED TO: MS. SIDRA PARACHA SUBMITTED BY: MARKETING SOLUTIONERS
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DEDICATION
We would like to dedicate this project to our parents who has given us opportunity to study here in MAJU, and to our respected teachers who give us a chance to work on this project.
TABLE OF CONTENTS
Acknowledgement---------------------------------------------------------------------------6
2
Abstract ---------------------------------------------------------------------------------------7 Chapter One Introduction ---------------------------------------------------------------8 1.1 Introduction ---------------------------------------------------------------------8 1.2 History -------------------------------------------------------------------------8-9 1.3 Pepsi Headquarter ---------------------------------------------------------------9 1.4 Board of Directors -----------------------------------------------------------9-10 1.5 Mission ---------------------------------------------------------------------------10 1.6 Vision -----------------------------------------------------------------------------11 1.7 Pepsi Objectives -----------------------------------------------------------------11 1.8 Background and Objectives of Research --------------------------------11-12 1.9 Method Use in this Research --------------------------------------------------12 1.10 Conclusion ----------------------------------------------------------------------12 Chapter Two Literature Review ----------------------------------------------------------13 2.1 Introduction -----------------------------------------------------------------------13 2.2 Pepsi in Pakistan ------------------------------------------------------------------13 2.3 Haidiri Beverages Pvt Ltd ----------------------------------------------------13-14 2.4 Production Process ----------------------------------------------------------------14 2.5 Consumer Behavior----------------------------------------------------------------14 2.5.1 Culture -------------------------------------------------------------------15 2.6 Branding ---------------------------------------------------------------------------15 2.7 Conclusion -------------------------------------------------------------------------15 Chapter Three Research Methodology ----------------------------------------------------16 3.1 Introduction ------------------------------------------------------------------------16 3.2 Marketing Research ---------------------------------------------------------------16 3.2.1 Primary and Secondary Date------------------------------------------17 3
3.3 Conclusion-----------------------------------------------------------------------------------17 Chapter Four Data Analysis and Finding-------------------------------------------------18 4.1 Introduction-------------------------------------------------------------------------18 4.2 Marketing Strategy ----------------------------------------------------------------18 4.2.1 Geographic --------------------------------------------------------------18 4.2.2 Demographic ------------------------------------------------------------18 4.2.3 Psychographic---------------------------------------------------------- -18 4.2.4 Behavioral----------------------------------------------------------------19 4.3 4P’s and 4C’s -----------------------------------------------------------------------19 4.3.1 Products -------------------------------------------------------------------19 4.3.2 Prices ----------------------------------------------------------------------20 4.3.3 Places----------------------------------------------------------------------20 4.3.4 Promotion-------------------------------------------------------------20-21 4.4 4C’s ----------------------------------------------------------------------------------21 4.4.1 Consumer------------------------------------------------------------------21 4.4.2 Cost-------------------------------------------------------------------------21 4.4.3 Convenience---------------------------------------------------------------21 4.4.4 Communication -------------------------------------------------------- 22 4.5 Market Share--------------------------------------------------------------------------22 4.6 Conclusion ----------------------------------------------------------------------------22 Chapter Five SWOT Analysis and Pepsi ----------------------------------------------------23 5.1 SWOT Analysis ----------------------------------------------------------------------23 5.1.1 Strength ----------------------------------------------------------------------------- 23 5.1.2 Weakness -------------------------------------------------------------------------- -23 5.1.3 Opportunities ------------------------------------------------------------------------24 4
5.1.4 Threats -------------------------------------------------------------------------------24 5.2 Ingredients --------------------------------------------------------------------------- -24 5.3 Market Description ---------------------------------------------------------------24-25 5.4 Slogans ---------------------------------------------------------------------------------25 5.5 What’s in Pepsi? ----------------------------------------------------------------------25 5.6 Competitors ---------------------------------------------------------------------------26 5.7 Distribution Review --------------------------------------------------------- --------26 5.8 Placing Distribution --------------------------------------------------------------26-27 5.9 Soft Drinks in Pakistan --------------------------------------------------------------27 5.10 Top ten Soft Drink Selling --------------------------------------------------------28 Chapter Six Conclusion -------------------------------------------------------------------------29 Reference ------------------------------------------------------------------------------------------30 Appendix
ACKNOWLEDGEMENT
First of all we are thankful to Almighty ALLAH for giving us much cooperation and supporting parents who has given us this opportunity to study here. I would like to thank Ms. Sidra Paracha for giving us the confidence and opportunity to prove ourselves.
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ABSTRACT Pepsi-Cola is a carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores, restaurants and from vending machines. The drink was first made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since 1903, including Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil), Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, and Pepsi Ice Cucumber in Japan. Pepsi cola is situated is an Industry that is dominator by two Competitors Coca Cola and 6
of course themselves. Although Pepsi and Coke basically go after all consumers who purchase soft drink beverage Coca Cola targets it product at the head of household. According to the beverage digest the customer base for soft drinks is whopping 95% of regular user in United States. This represents the large number if potential customers for Pepsi Cola. The Pepsi's advertising the campaigns are referring to the markets that marketers refer to as Generation X. The Generation X consumer is profiled to be between the age of 18 to 29. They have high expectations in life and very active. They adopt a lifestyle of living for today and not worry about long term goal. They also have a focus on the 12 to 18 year old market.
Chap 1 1.1
INTRODUCTION
INTRODUCTION Pepsi-Cola was first made in New Bern, North Carolina in the United States in the
early 1890s by pharmacist Caleb Bradham. On August 28, 1898 , "Brad's drink" was changed to
"Pepsi-Cola"
and
later
trademarked
on
June
16,
1903
Caleb Bradham bought the name "Pep Kola" from a local competitor and changed it to Pepsi-Cola. "Pepsi-Cola" is an anagram for "Episcopal" - a large church across the street from Bradham's drugstore. Caleb Bradham and his customers simply thought the name sounded well or the fact that the drink had some kind of "pep" in it because it was a carbonated
drink;
they
gave
it
the
name
"Pepsi".
7
As Pepsi was initially intended to cure stomach pains, many believe Bradham coined the name Pepsi from either the condition dyspepsia (stomachache or indigestion) or the possible one-time use of pepsin root as an ingredient (often used to treat upset stomachs). It was made of carbonated water, sugar, vanilla, rare oils, and kola nuts. Whether the original recipe included the enzyme pepsin is disputed. www.pepsi.com
1.2
HISTORY
Pepsi is a world leader in convenient snacks, foods and beverages. Its revenue is more than 39 billion Dollars and over 185, 000 employees. The company consists of Pepsi Co Americas Foods (PAF), Pepsi Co Americas Beverages (PAB) and Pepsi Co International (PI) Pepsi Co Americas Foods includes all Latin America Food and snacks businesses and all business in Mexico. Pepsi Co America Beverages includes Pepsi Co Beverages all North America and all Latin American Beverage Businesses. Pepsi Co International includes in the United Kingdom, Europe, Africa Middle East and Asia. Pepsi Co Brands are available in 200 Countries .Some of the Pepsi Co Brands names are more than 100 year old but the corporation is relative young. Pepsi Co was founded in 1965. Pepsi and Coca cola merge with each other and the name of the product is Pepsi Cola. Pepsi Co merged with the Quaker oats Company in 2001. www.scribd.com
1.3
PEPSI HEADQUARTER
Pepsi Headquarter is located in New York. The Seven Building Headquarter is designed by Edward Durrell Stone. www.scribd.com
1.4 BOARD OF DIRECTORS
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PepsiCo’s business strategy and affairs are overseen by the Board of Directors, which is comprised of two executive directors and ten independent outside directors. Only independent outside directors make up our three standing Board Committees, 1) Nomination and Corporate Governance 2) Audit 3) Compensation.
Victor J.
Dzau,
M.D. Indra
Nooyi
K.
Arthur C. Martinez
Dina Dublon
Lloyd
Trotter
Ray L. Hunt
Michael D. White Sharon Percy Rockefeller
Alberto Ibargüen
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Daniel Vasella
James J. Schiro
Ian M. Cook
www.pepsi.com
1.5 MISSION "To be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce healthy 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." www.pepsi.com
1.6 Vision Pepsi co’s responsibility is to continually improve all aspects of the world in which we operate environment, social, economic-creating a better tomorrow then today. We believe sustainability lives at the instruction of public and corporate interest. It encompasses citizens and corporate social responsibility, which are about doing the right things for the society and for the business. It encompasses the heath of the company, which is about fulfilling our mission of creating financial rewards and growth. We have articulated what we stand for and the core values we are committed to support. www.pepsi.com
1.7 OBJECTIVES The Objectives that the Pepsi Company wishes to achieve is that it wants to remain and continue to be the best or number one beverage company in Pakistan. As Pepsi is already the
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number one beverage company in Pakistan but it has to maintain its position power and status to in order to achieve their target market
1.8
Background and Objectives of the Research
We visit the Pepsi Industry (Haidiri Beverages Pvt Ltd.) because we want to know that what the Marketing Strategy of Pepsi is for its customer. How Pepsi Industry apply 4P’s and 4C’s and how they deal with customer and how they introduced its product in the market. The main theme of this research is related to all Marketing Operation. Through this visit we do SWOT analysis of Pepsi. We chose this industry because it has strong marketing strategy. Our Objectives is to learn about Pepsi’s marketing management and relationship with its customers. Our main objective is how a marketer handled all the marketing Operations.
1.9
Method use in this Research
We adopted the following methods in this research •
Visit
•
Interviews
•
Questionnaires
•
Internet
1.10
Conclusion
In this chapter we study the history of Pepsi and also studying headquarter of Pepsi. We mention the objectives and background of the research. That what is Pepsi how it makes. We mention method of research and also the aim of the research, in this chapter.
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Chap 2
LITERATURE REVIEW
2.1 Introduction In this chapter the data which we collect from using Internet, survey,
2.2 Pepsi in Pakistan In Pakistan Pepsi was introduced in 1979, in the beginning Pepsi did face a lot of problem because at that time Coca Cola had 72% market share. However in 1980 Pepsi was offered as a franchise agreement with the Coca Cola company, which they did accept and there after it came to be known as Pepsi Cola. www.pepsi.com
2.3 HAIDIRI BEVERAGES PRIVATE LIMITED The haidiri beverages company was established in 1979. It is the Pepsi's Sole selling Agent in Rawalpindi and Islamabad. It is based in the CDA industrial triangle, Kahuta Road Islamabad. It manages the supply for several wholesalers, Retailers, Restaurants, Hotels and 12
other Food outlets. In order to achieve the projected Sales target effective. Haidiri Beverage's primary functions are to conduct a systemic manufacturing
and supply of product. It has
setup a best manufacturing plant and storage plant in Rawalpindi with multiple production unit and huge Production Capacity. Haidiri Beverages has different Departments for dealing such as Marketing Department, Human Resource Management Department, Production Department, Information Technology Department, Finance Department and Supply Chain Process.
Reference: Malik Mohammad Imtiaz Production Manager
2.4 Production Process Haidiri Beverages produced the large number of product in a day. The production criteria are on demand as well as the market situation. They produced 35, 000 cane per hour and 20, 000 disposal bottles per hour and the machinery run 22 hour in a day. Reference: Malik Mohammad Imtiaz Production Manager
2.5 Consumer Behavior Consumer behavior is a key success of any Company. Consumer behavior is depending upon culture, value, traditions. When marketers offer unique benefits in a new product they encourage consumer to subtype. If successful marketer established a dominant position in a new sub category. When Pepsi Co introduced a new product in a market it will change the
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consumer behavior. When Pepsi attempted to introduce another category breakfast cola’s by introduced Pepsi AM, it was less successful. http://books.google.com.pk/books
2.5.1 Culture The soft drinks market in Pakistan enjoys dynamic growth in both volume and value terms. Carbonated drinks have become part of the culture in Pakistan and multinational companies have maintained standards over the years to provide the nation with high-quality drinks. Rural areas of Pakistan have driven sales of carbonated drinks to new heights as more than 60 percent of the population resides in rural areas and young consumers are more attracted to advertising. Pepsi is the most popular and leader brand in the Pakistani market and is consumed by children and adults alike. Pepsi is a responsible corporate brand of Pakistan and have contributed a lot to the economy.
2.6 Branding There are a number of branding strategies Generic Brand Strategy, Individual Brand Strategy, Family Brand Strategy, Manufacturing's Brand Strategy, Private Brand Strategy and Hybrid Brand Strategy. Individual Brand Strategy is Marinda, 7up and Pepsi etc. they may presented as different line but it operate as under the name of Pepsi.
2.7 Conclusion
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In this chapter we study the establishment of Pepsi Industries in Pakistan. The Haidiri Beverages Pvt. Ltd is very famous name in Pepsi Industries. In this chapter we know a branding Strategy of Pepsi and also studying the Consumers behavior, Culture and value of the Consumers in Pakistan.
Chap 3
RESEARCH METHODOLOGY
3.1 Marketing research When attempting to implement a new market plan a business must address to its target marketing and conduct the reverent information to insure the new marketing plan. When conduct a marketing research the business must 1st defined the problem and then gathering the appropriate information to solve these problem. There are three types of information a business can gather to solve its problems.
1. Exploratory Research In this research the business clarifies the problem and the find the ways to address it.
2. Descriptive Research In this research the business measure and describe the product characteristic of the target market.
3. Causal research 15
In this research the business used to test the hypothesis about the cause and effect relationship. Pepsi through its market research has addressed all three types of research to define the problem raised by shareholder and gathered information to serve their needs.
3.3 primary and secondary Data 3.3.1 Primary Data We collect the primary data by using the following methods •
Interviewing
•
Questioners
•
Visit
3.3.2 Secondary Data Secondary data are those data which is already given. We collect the secondary data by using these Methods •
Internet
•
TV Commercials
•
Broachers
•
Flyer
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Chap 4
DATA ANALYSIS AND FINDING
4.2 MARKETING STRATEGY 4.2.1 Geographic World Region
Asia
Country
Pakistan
City
All Major city of Pakistan
Climate
Hot and Dry
4.2.2 Demographic Age
14-30+
Gender
Male, Female
Marital Status
Married, Unmarried
Family Size
1-2, 3-4, 5+
Education
School, College, universities
Occupation
For Middle class to Upper Class 17
Income
Rs. 10, 000 +
Nationality
Pakistani
4.2.3 Psychographic Social Class
Middle Class, Upper Class
4.2.4 Behavioral Occasion
Party,
birthday
and
regular
Occasion Position Status
Strong
Benefits
Quality, Taste
4.3 4P’s and 4C’s: PRODUCT
CONSUMER
PRICE
COST
PLACE
CONVENNIENCE
PROMOTION
COMMUNICATION
4.3.1 Products •
Pepsi
•
Diet Pepsi
•
Pepsi Twist
•
7 Up
•
Diet 7 Up
•
7 Up Cherry
•
Mirinda (Orange & Apple) 18
•
Mountain Dew
•
Aquafina
4.3.2 Prices Pepsi has adopted a market pentration price at the time when it was introduced. Coca cola covered the large market in Pakistan but now the price of Pepsi cola is same as of its competitors
•
250 ml bottle……………………….…….. Rs. 15
•
250 ml disposable bottle…………………..Rs. 22
•
Can………………………………………...Rs. 35
•
1 liter (not disposable)……………………..Rs 50
•
1.5 liter (Super Pack)..…………………….Rs. 65
•
2.25 liter (Jumbo Pack)……………………Rs. 130
Reference: Personal Survey
4.3.3 Places Pepsi cola is available in more then 191 countries. Pepsi has 730 plants working correctly around the world and in USA and Canada 200 plants are working there rest 530 are working in other countries of the world as well as working in Pakistan.
4.3.4 Promotion Pepsi does its promotion through media; electronic media as well as print media through flyers, by sponsoring cricket matches and in many other places. Promotion is also done 19
through print media e.g. newspapers are design of Pepsi can. The first of many new designs of Pepsi were released in 2007. The Pepsi have signed some agreements with a very strong and expanded retailers such as Pizza hut and KFC when you go to Pizza hut or KFC you will find only the Pepsi products and nor its competitors products. These agreements are based on the Incentives that Pepsi offers to these retailers. Pepsi has continued using product endorsement by using TV Actors/ Models and cricketers in order to promote their Products.
4.4 4C’s 4.4.2 Cost •
250 ml bottle………….………………………..……Rs. 7
•
Can…………………………………........................Rs. 23
•
250 ml disposable bottle...........................................Rs. 11
•
1 liter (not disposable)……………………….……..Rs 42
•
1.5 liter……………………………………………..Rs. 70
•
2.25 liter……………………………………………Rs. 88
Reference: Sir Imtiaz Production Manager
4.4.3 Convenience It has most effective distribution system among all the soft drinks. It is easily available everywhere even in cities or a village. You can easily get it. Special refrigerators are placed at each and every shop or outlet.
4.4.4 Communication •
Internet 20
•
Phone Call
•
Surveys.
4.5 Market share
http://www.wikinvest.com/images/8/8c/PBGcomp.jpg
4.6 Conclusion This chapter is all about the marketing Strategy. In this chapter we studied the geographic, demographic, Psychographic and behavioral Strategy and also studying about the 4P’s and 4C’s and market share of the Pepsi compare with other beverages industries.
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Chap 5
SWOT ANALYSIS AND PEPSI
5.1SWOT ANALYSIS Strengths
Weaknesses
Brand Strength Reliant upon line extensions Effective step in new market Reliant upon particular carbonated drink Result of Operation Strong Existing Distribution Channels
Opportunities
Threats
New Brands Introduction
Strong Competition
Brands is attractive in global Partner
Potential Health Issues Free Trade
5.1.1 Strengths The Pepsi image is displayed on T-shirt, Cap and Bat this extremely recognizable branding is one of the greatest strengths. Pepsi bottling system is one of their greatest strengths.
5.1.2 Weaknesses Pepsi has recently reported some declines in unit case volume in Indonesia and Thailand due to reduce the consumer Purchasing power. Pepsi has effects on the teeth which is an issue for health care.
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5.1.3 Opportunities Packing Changes is effected sales and industry positioning but in general, the public has tended not to be affected by new product. Pepsi's bottling system also allows the company to take advantage of infinite growth opportunities around the world.
5.1.4 Threats Consumer buying power is represents a key threats in the industry. The competition between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demand for their of face losing market share to competition, furthermore consumer can easily switch to other beverage with a little cost.
5.2 Ingredients •
Carbonated water.
•
Sugar
•
High fructose corn syrup.
•
Color (Caramel)
•
Phosphoric acid.
•
Caffeine.
•
Emulsifier
•
Natural flavors.
Reference: Malik Muhammad Imtiaz Production Manager
5.3 MARKET DESCRIPTION Pepsi has become the largest selling soft drink in the world. It has liked by the people of all ages belonging to different field of life belonging different cast religion. 23
A recent survey shows about the 90% of the population of the world use Pepsi. It available in the market in different Flavor and different variety.
5.4 SLOGANS One of the main reasons of the popularity of the Pepsi is to use slogan to attract the customers Different Slogans have been used in different countries to attract different kind of people in all over the world. In Pakistan they use number of slogan to attract the customers. Some slogan which is used in Pakistan are "YEH DIL MANGY MORE", "DIL HAI TO MANGO MORE" and "PEPSIFY KARO GAY" etc.
5.5 WHAT IS IN PEPSI?
www.scribd.com
5.6 Competitors 24
Pepsi is the largest beverage company in Pakistan with 65% market shares. In 1994 the Coca cola Company reduced the price to Rs.5 and Pepsi has to reduce the price in order to compete. In doing this both companies had bear a huge losses. Coke had a loss of 9 million whereas the Pepsi bearing a loss of 14 million. The following are some competitors of the Pepsi •
Coca cola
•
Amrat cola
•
Murre Brewery
•
Nestle(only in mineral water)
5.7 Distribution Review Pepsi applied two methods to distribute their products.
5.7.1 Direct Distribution: •
Pepsi Direct distribute their Product to Whole Sellers, Restaurants, Hotels, Pizza hut, KFC, Saver Food and Metro etc.
•
Export Parties
5.7.2 Indirect Distribution •
Through Base market Distributions
•
Through Outstation Distributors
Reference: Malik Mohammad Imtiaz
5.8 Placing Distribution 25
The distribution system of Pepsi Cola Company is organized as follows There are branches in every city of Pakistan and these branches are controlled by the head branches which is located in Karachi. There is some Sales Manager and sales executives. The sales executive is also known as Territory Development Manager (TDM) who is responsible about the trucks. Then further down is the sales officer who has a wide authority and then there is a sales supervisor who looks after the trucks and finally salesman. Each sales manager handles 60 trucks. The distribution agencies are formed in every large city of Pakistan. The trucks of the company supplies products to these distribution agencies and then these agent further supplies these products to the retailers. Before delivering the products some certain guiding Principles are followed by Pepsi Co •
Applicant must have 20-25 vehicles (Depending on the Area).
•
Applicant must have 20, 000 Cases of Empty Bottles.
•
Applicant must Deposit Rs. 1, 000, 000 as a security.
5.9 Soft drinks in Pakistan There are various kind of soft drink used in Pakistan Such as Pepsi Coca Cola Amrat Cola Rooh Afza Pakola Gourmet Cola Mazza Juice http://archaeology.about.com
5.10 Top Ten Selling Soft drinks 26
http://money.cnn.com/2005/03/07/news/fortune500/cokepepsi_sales/
CONCLUSION 27
Pepsi has a long-standing commitment to protecting the consumer whose trust and confidence in its products in the bedrock of its success. In order to ensure that Consumers stay inform about the global quality of all Pepsi product sold in the world, Pepsi product carry a quality assurance seal on them. Pepsi commitment is to deliver sustained growth, through empowered people, acting with responsibility and building trust.
Reference: Imtaiz M Malik
Production Manager
Shoukat M
Assistant Manager Advertising ang Key Accounting 28
Chaudhry A Mohammad
General Manager
Survey and TV Commercials Magazine Internet: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL: (WWW)URL:
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