Marketing Plan of PEPSI[1]

Marketing Plan of PEPSI

MARKETING REPORT Submitted By: Name:

MUHAMMAD HAMMAD (L1F10MBAM2123)

ALI ISHAQ (L1F10MBAM2122) BILAL AHMAD (L1F10MBAM2112) RABIA YOUSAF (L1F10MBAM0128) HAREEMA AFZAL (L1F10MBAM2118) MEHW MEHWIS ISH H KHAN KHAN (L1F (L1F10 10MB MBAM AM Section:

G

Subject:

INTRODUCTION TO MARKETING

Submission Da Date:

JANUARY 19 19,2011

Submitted To:

PROF.SHAHZAD ALAM

Page 1 of 24

)


Contents Strong Vs Weak Executive Summary Company Company Description Mission Vision Goals & Objectives Core Business Area SWOT Analysis Industry Analysis Marketing Mix Target Market Market Strategy Marketing Environment Points of Difference Conclusion Pepsi Organizational Organizational Chart/Department Chart/Department

Page 2 of 24


Strong Vs Weak Pepsi and Coca Cola are strong competitors. In Pakistan Pepsi is the market leader and Coca Cola is its competitor. But globally Coca Cola is pioneer and Pepsi is follower. The Pepsi makes defense strategies so that it can maintain its position in the market. While

Page 3 of 24

Marketing Plan of PEPSI Coca Cola is a challenger and it makes attack strategies so that it can become the market

EXECUTIVE SUMMARY

The purpose of this marketing plan is to develop an understanding about how PEPSI is marketed and distributed in the market (Product, Price, Promotion and Distribution). In this project different analysis are performed such as, Company image, image, mission mission statemen statement, t, goals goals & objectiv objectives, es, core busines business s areas, areas, SWOT SWOT Analysis Analysis,, Industr Industry y Analysi Analysis, s, Marketin Marketing g Program Program,, target target markets markets,, Marketin Marketing g Strategy, Marketing Environment, Point of Differences& Differences& Positioning At the end it was discussed that what are the core marketing strategies that make PEPSI the more powerful brand.

COMPANY HISTORY Pepsi Cola International is world-well-known soft drinks brand. It is a very well organized multinational company, which operates in almost all over the world. They produce, one of best-carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all over the world. Pepsi is producing Cola for more than 100 years, and it has dominated the world market for a long time. Its head office is in New York.

Page 4 of 24


Initially Pepsi was used as cough syrup in America, and sold in pharmacy. But the taste of that syrup was liked by the people and then added water and carbonation and with the passage of time it is used as a regular drink and now it is world largest soft drink brand. In beverage sector pioneer is Coca cola and Pepsi is follower. In 1909 more than 24 American States gave license to Pepsi for sale. Pepsi Cola was first introduced in 6.5 ounce bottle. Pepsi was first registered in 1932. In 1932 Pepsi Cola was introduced a big bottle of 12 ounce. In 1950, the Pepsi Cola formula was slightly changed and the sweetness and calories in Pepsi Cola were decreased. In 1957, the bottle was changed to new attractive bottle and the product line was also increased by introduction of two more products that were Teem and Marinda. Today Pepsi Cola is available to more than 100 million of consumers which includes Asia as well as Europe & Africa.

PEPSI in Pakistan In Pakistan Pepsi distribution is indirect. Nationwide Pepsi has 67% of market share in Lahore Pepsi is always at par as compare to coke. In December, 54% share is captured by Pepsi, 49% by coke and remaining 1% by other brands. The market in Pakistan is surely conquered by Pepsi. It has proved itself to be the No.1 soft drink in Pakistan. In 1971, first plant of Pepsi was constructed in Multan, and from there after Pepsi is going higher and higher. Peps Pepsi'i's s grea greate test st comp compet etit itor or is Coca Coca Cola Cola.. Coca Coca Cola Cola is an inte intern rnat atio iona nall recognized brand. Coke’s basic strength is its brand name and Coke’s strategy is not to change the brand name and logos which are in the consumers mind. But Pepsi thinks that change is must and if a product is continuously continuously consumed then its utility starts decreasing. Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging,

Page 5 of 24


is succ success essfu fully lly maint maintain aining ing is No.1 No.1 positi position on in Pakis Pakista tan. n. Last Last year year Pepsi Pepsi introduced Fruit Drink SLICE and Energy Drink STING. STING. When Pepsi was introduced in Pakistan, it faced 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, Pepsi took over 7 UP, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7 UP enjoys 70% of the market share where as the coke just has 20% market shares. In 1992 PEPSI introduced a new product named Mountain Mountain Dew. In Pakista Pakistan n Mountain Mountain Dew’s overall overall sale is more more than Coca Cola’s overall sale. It has a monopoly in citrus flavor and still in growth. In the year 2005 PEPSI introduced a new and different product named AQUAFINA. 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. If according to franchise, in Sindh and Balochistan Pepsi market share is almost 76 77 %, coke is about 1213 %.

PEPSI in Lahore Pepsi production was started in Lahore in 1976 by Ex- Governor Saddiq Husain Qureshi. In 1988, Pepsi plant was buyout by RIAZ BOTTLERS. BOTTLERS. After 1988, Riaz Bottlers are producing Pepsi Cola International's products under "Franchising". The Pepsi Cola International provides all specifications and Riaz Bottlers follow them. In Pakistan Pepsi distribution is indirect, but in Lahore Riaz Bottlers is the direct distributor of Pepsi. As far as Riaz bottler concern it is in direct, because having own vehicles and reaches wholesale and retailers directly. In Lahore and Kasoor, Riaz bottlers are 100% direct. Riaz bottlers have 8 ware houses, 4 in Lahore and 4 in Kasoor, and 240 vehicles serves product in market. Riaz bottlers have 18000 outlets on Lahore and Kasoor.

Page 6 of 24


MISSION/ VISION Business mission of Pepsi, in Pakistan, is to be the best and biggest seller of carbonated soft drinks. We are working for providin providing g a high quality refresher refresher product product to passiona passionate te crowd. We have a refined plant by which we manufacture the product according to the health health stand standard ards. s. We have have a numb number er of brands brands loyal loyal and and have have full full attraction for the quality conscious people to consume our product. We have triggered ourselves ourselves towards growth and high profitability. profitability. We are coping with the technological advancement by installing the new machinery by which we makes a frequent flow of our supply to the customer.

GOALS & OBJECTIVES

•

The company main objective is to achieve the highest level of quality and their all strategies are related with this objective. The company is quite successful in achieving this objective, as they are known for their quality in the market.

•

Company's Company's second main objective is product development. Along with the product Quality Company largely emphasizes on the development of the product.

•

Company's third objective is to increase their revenues from international operations.

•

At the corporate level, Pepsi has centralized and formal structure. All the policy matters related to different businesses and regions are made at the upper level and guidelines are received from the parent office in USA, the

Page 7 of 24


routine and local level decisions are made by subsidiary itself, like the distribution network, marketing etc. •

Pepsi has a policy of setting sales targets for each region. They have also the targets for earning certain level of revenues from each region.

•

Plans related to their objectives and policies are as follows:

•

To accomplish their goal of achieving highest quality product. They use their technical expert terms to visit the different plants and collect samples to send them Tokyo for lab testing, every month. Now, they are planning for further tightening the quality standards by forcing the franchisers to use different new techniques for total quality management. So, those highest quali quality ty stand standard ards s could could be achie achieve ved. d. They They invite invite diffe differen rentt expe experts rts of franchisers from different countries to participate in short courses related to quality at different area head quarters.

•

To accomplish their goal of new product development, they are spending huge amounts of money on R&D.

•

For achieving their third goal of increasing international revenues, they are planning planning to expand expand their their internat internationa ionall operatio operations. ns. Especia Especially, lly, they are targeting to those underdeveloped countries, which have high GDP and per capita income.

CORE BUSINESS AREAS Pepsi is dealing with too many products all over the world. But in Pakistan it is dealing only with beverages. The packages dealing with are as follows: 1. PEPSI 2. MIRINDA

Page 8 of 24


3. 7 UP 4. PEPSI Diet iet 5. 7 UP Zero 6. Moun Mounta tain in Dew Dew 7. Aqua Aqua Fina Fina wate water r 8. Slic Slice e Man Mango go Juic Juice e 9. Stin Sting g Ener Energy gy Dri Drink nk Each Each and and ever every y bran brand d has has its its own own perc percen enta tage ge in the the busi busine ness ss of PEPS PEPSII International. The brand picture of different brands of PEPSI is as follows:

Brand Picture 2009 Brand picture 2009 Pepsi

5% 1%

Mirinda

16%

Teem Pepsi Diet

0% 55% 16%

7up 7up Diet Mountain Dew

7%

Picture 2010

BRAND PICTURE 2010

Pepsi Mirinda Teem

16% Pepsi Diet

1% 45%

16%

7up 7up Diet

1%

Page 9 of 24

12% 9%

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 STRENGTHS 1. Company Image It also is a reputable organization and is well known all over the world. Perception is of producing a high quality product. 2. Quality Conscious They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo.

3. Good Relations 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

Page 10 of 24


It has the production production capacity i.e. 60,000 Bottles per hour for 250 ml & 21000 bottles per hour for PET packages is not only in Pakistan 5. Market Share It has a highest market share i.e. 60% in Pakistan and leading a far step head from its competitors. 6. Large number of diversifies businesses This is also its main strength as it has diversified in many businesses such as: Pepsi beverages Pepsi foods Pepsi restaurants 7. Hi Tech Culture The whole culture and business-operati business-operating ng 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. 8. Sponsorships They mainly 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 programmes like music etc. 9- Varia Variatio tion n in produ product ct Ran Range ge

There is much product variation in PEPSI in form of different packages as well as brands. Old like 7 Up much while children like PEPSI & younger like M. Dew much as compared to Pepsi.

Page 11 of 24


WEAKNESSES 1. Declines in Taste During the last year, 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. 2. Image as a Franchiser Such as in Pakistan, Hamayun Akhtar is its franchisee that has a strong polit politica icall suppo support rt from from a polit politica icall party, party, which which is in oppos oppositi ition on.. In their their era in government less tax is imposed on them but retaliation increases as they come in opposition. So the selection is not appropriate as this thing surely harmful to their image as well as the strategies. Also some people treat it as a local industry as compared to coke because it is the franchise of PEPSI international. 3. Short Term Approach They have a lack of emphasis on this in their advertising such as currently when they losses the offer for official drink in the 1996 Cricket World Cup they started a campaign in which they highlight the factor such as "nothing official about it. 4. Weak Distribution They lack behind in catering the rural areas and just concentrating in the urban areas.

OPPORTUNITIES 1. Increasing Population

Page 12 of 24


As almost in all over the world growth rate is increasing which in turn increases the demand of products and requirements and especially in Asia the market is growing at a faster rate as compare to other continents so they have a to attract new entrants. 2. Changing Social Trend As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product.

3. Diversification They may enter in garments business in order to promote their brand name, by making sports clothes for players that represent their name by wearing their clothes. As well as they have the opportunity to move towards juices and chips.

THREATS 1. Government Regulation They face problem if government employ taxes on them, which force them to raise the price of their product.

Page 13 of 24


2. Raw Material Supply Again this is also a serious threat from it supplier 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.

INDUSTRY ANALYSIS Competitor’s Analysis People views about beverages are now changed. In the past there was only two main bottlers were doing business in beverages Coka Cola & PEPSI. Now there are following strong brands in market. 1. PEPSI 2. Coca Co Cola 3. Gourm ourmet et Cola ola 4. RC Cola 5. Shandy Co Cola 6. Amrat rat Cola 7. Macc acca Co Cola. la.

The picture for competitor’s analysis is as follows.

Page 14 of 24


Competitor’s package detain in given below.

PEPSI PRODUCTS

COKE Products

PEPSI PEPSI DIET TEEM 7 UP 7 UP DIET MARINDA M-DEW AQUAFINA

Coca Cola Coke Diet Sprite Sprite Zero Fanta Minute Made Pulpy Orange

STING ENERGY DRINK SLICE MANGO JUICE

If we look look at above above table table we will reac reach h on the the conc conclus lusio ion n that that PEPS PEPSII has has introduced more products in market as compared to COKE. Coke is the biggest and heavy competitor of PEPSI in Worldwide as well as in Pakistan. But if we see market both companies have almost same market share. Coke’s main focus is at Restaurants, Colleges, Cinema Halls etc. But in market

Page 15 of 24


most of the market is dominant by PEPSI. Coke gives heavy discounts to its customers. That’s why more public places prefer to market Coke. If we analyze the Prices, both of them have same process.

Marketing Mix Marketing Mix is the set of marketing tools that the firm uses to follow its marketing objectives. Marketing mix has a classification for these marketing tools. These marketing are classified and called as the Four Ps i.e. Product, Price, Place and Promotion.

Product Product variation PEPSI has much product deviation in case of brands and packages. This leads it to different age person as well as different income level people. Product Range PEPSI has a vast product range varying from 250ml to 2250m. Decision about above packages is in progress. For CSD’s product range varies from 250 ml to 2250 ml For Aqua Fina product range varies from 300ml to 1500ml. Packaging All prod product ucts s of PEPS PEPSII have have very very attrac attractiv tive e pack packagi aging ng.. Rece Recentl ntly y Peps Pepsii has changed its logo and it is Pepsi’s 10 th biggest change of logo. Because Pepsi thinks that change is must and consumer needs change and if any product is continuously consumed then its utility starts decreasing.

Page 16 of 24




PRICE

Prices for different packages of Pepsi are as follows: 1. 2250 2250ml ml CSD CSD----- 80/80/2. 1500 1500ml ml CSD CSD----- 70/70/3. 500 500 ml ml CSD CSD----- 30/ 30/-4. 250 250 ml ml CSD CSD----1 -14/ 4/-5. 1500 1500ml ml Aqua Aqua Fina Fina----- 30/30/6. 500 500 ml ml Aqu Aqua a Fina Fina----- 18/18/7. 300 300 ml ml Aqu Aqua a fina fina----- 15/15/-

All prices are in rupees.



PROMOTION

PepsiCo advertised its products through many different ways e.g. printing media, elec electr tron onic ic medi media, a, sign sign boar boards ds etc. etc. Thro Throug ugh h TV, TV, we have have seen seen diff differ eren entt advertisements of its products such as Pepsi or Dew. PepsiCo also advertise its products by targeting those favorable television programs, like sports especially

Page 17 of 24


Cricket, talk shows etc. The use of Posters are also used to create awareness of the the Pepsi. psi. Pepsi has been a dominan nant spon ponsor sor of the Pak Pakista istan n Cric Cricket ket Team since the 1990s PEPSI PROMOTES ITS BUSINESS BY USING FOLLOWING STRATEGIES 1. Adve Advert rtis isin ing g PEPSI has very strong advertising strategies. Pepsi advertises through print and electronic media. Most of its advertisements focus legend players, acto actors rs or actr actres esse ses s like like Imra Imran n Khan Khan,, Wasim asim Akra Akram m etc. etc. Som Some of its its advertisement the mainly communicate to special age group. Now Pepsi is more emphasizing on youth like Muhammad Aamir, Aisam Ul Haq. Because people make icons and they follow their icons. 2. Incen Incentiv tives es to sale sales s person persons s PEPSI gave heavy incentives to its sales team for achieving targets. This motivates employees to work hard and sincerely. 3. Incen Incentiv tives es to sho shop p keep keepers ers PEPSI team also gave incentives & rewards rewards to shop keepers on the basis of their sale. This can be in terms of freezers, sign boards for shops, as well as in terms of discounts. 4. Publ Public icity ity at at PEPS PEPSII outle outlets ts PEPSI do heavy advertisement at its outlets. They put attractive signboards, Paint at different PEPSI outlets. 5. By makin making g good good relatio relations ns with with key acco account unts s

Page 18 of 24


PEPSI have many key accounts in terms of restaurants and shopping malls. They have very good relation to its key accounts.



PLACE

PEPSI has a very vast distributive teams, which main objective is to make PEPSI available at an arm’s length. Riaz Bottlers is a direct distributor of Pepsi in Lahore and Kasoor. They have 8 ware houses in Lahore and 4 in Kasoor. From each and every warehouse Pepsi team do direct distribution to its customers. PEPSI Lahore is using direct distribution technique for sale and marketing of its product. and 240 vehicles serves product in market. Riaz bottlers has 18000 outlets on Lahore and Kasoor.

TARGET MARKETS Pepsi's market share is increasing 1 or 2 points over the last 8 to 10 years, which is quite significant. If we take up to last 10 years, it’s almost 12% increase in the companies share. 1996 was a bad year for Pepsi because the pricing was high. The company prices when to Rs.8 and as the consumer income has caught up to Rs.8 so hopefully consumer will now get familiar to this price change. There will be now more competition and whenever there is competition competition there is a lot of mark market et activ activity ity,, distri distribu butio tion n impro improve ves, s, prom promoti otion on impro improve ves s and and advertising improves. As in Karachi, at the end of 1996 in Nov., Dec., when Coca Cola launched its 300 Ml pack Pepsi also launched its 300 ML. This created competition and prices went down to Rs.3. This increase the market so much, that Pepsi sales were so high during Nov., Dec., that it has never been whole year. This shows that Pakistani market has great potential to grow.

Page 19 of 24


MARKET TARGET Pepsi customers are teenagers young and adults. It also targets at schools, colleges, universities, homes, restaurants and stores.

MARKETING STRATEGY BUSINESS MISSION Business mission mission of Pepsi, in Pakistan, Pakistan, is to be the best and biggest seller of carbonated soft drinks. OBJECTIVES To sell maximum amount of cases, to have and try to capture maximum marke markett share share.. Peps Pepsii has set set their their mark market eting ing objec objectiv tives es,, acco accordi rding ng to the resources they possess, and these objectives are quite appropriate, under the prevailing competitive position and the opportunities. STRATEGY Core marketing strategy is to achieve the objectives, objectives, to provide consumer consumer the product he wants. To provide Pepsi at an “arms length", to the consumers. For this company has allocated sufficient resources. BUDGETS Company has allocated sufficient resources to different market segments. Sufficien Sufficientt resource resources s are provided provided for product product develop developmen ment, t, adverti advertisem sements ents,, promotion and other marketing mix elements. This can be seen by the quality of ads produced by Pepsi. Pepsi ads are often shown during the most expensive

Page 20 of 24


time on the prime time during dramas, talk shows, i.e. between 7.00 Pm to 9.00 Pm. They also sponsor cultural events, musical concerts, cricket matches etc that involves very high costs. But Pepsi is able to get the desired results out of its huge investments in promotion, advertisements and product development.

MARKETING ENVIRONMENT DEMOGRAPHIC Demo Demogra graph phic ic chan changes ges and and devel developm opment ent poses poses some some threa threats ts and and opportunities. Pepsi Cola International keeps close tracks of demographic trends and and deve develo lopm pmen entt in the the mark market et.. Incr Increa easi sing ng migr migrat atio ion n to citi cities es prov provid ides es opportunity for Pepsi to increase its production, adjust its prices, accordingly. People are now becoming more aware of calories and are more conscious about their their healt health. h. Pepsi Pepsi begi begin n this this trend trend by offeri offering ng diet diet versi version on for for low low calor calories ies conscious consumers. So Pepsi International keeps a very close eye on the demog demograp raphi hic c chang changes es,, occurr occurring ing in Pakis Pakistan tan and then then plans plans its marke marketin ting g strategies according to these developments. ECONOMIC Pepsi is a luxury product. It's not like "Rolls Royce", but it is also not like "flour". People can drink water too instead of Pepsi. But rising income always affects the company. When people have more disposable income, Pepsi sells more. It is also an desire product. It has no planned purchase. Normally, we do not go out, especially to drink Pepsi. Very often, we see Pepsi sign board, a khokha, and decide to buy Pepsi. In Pakistan, Pepsi's' sales were rising, along with other

Page 21 of 24


thin things gs that that the the comp compan any y did, did, like like,, sale sales s prom promot otio ion, n, adve advert rtis isem emen entt and and distribution, which was very effective. POLITICAL ENVIRONMENT Develop Development ments s in politica politicall environ environmen mentt also affect affect company company's 's strategi strategies. es. Higher Higher perce percent ntage age of sales sales tax and excis excise e duty duty has has been been impos imposed ed on the the company's product, which affects the selling price, and ultimately the buying. It affects packaging. Due to current sales structure, manufacturing bigger packs become unviable. Current duty structure has affected Pepsi’s take home packages, i.e. 1.5 liter bottle, 2.25 liter pet and non-returnable packages. 250 ml is the most viable package under current condition. CULTURAL ENVIRONMENT Although Pepsi is an international brand, but it is very closely aligned with Pakistan cultural environment. Pepsi, in Pakistan is no doubt No.1 beverage brand. Yet it is also recognized as a "National drink". Pepsi's has related its ads and promotion, to nationalism, like sponsoring Dil Dil Pakistan, Pepsi with Imran Khan, Pepsi with Wasim and Waqar, etc. This reflects that Pepsi is a part of Pakistan. Changes Changes in life style of consume consumerr affect affect the Company's Company's product. product. For example, in a depressed society like in Pakistan, when people go out for picnic, and during leisure time. They enjoy themselves by cooking themselves, and very

Page 22 of 24


ofte often n take take NR Peps Pepsii with with them them.. 80% 80% cons consum umpt ptio ion n of Peps Pepsii is, is, outs outsid ide e consumption. As youth is the target segment of Pepsi, so their changing life styles also provide opportunities for the company to alter its strategies. Young people are more trendy and fashionable, and their behavior changes from time to time. Pepsi's slogan "Choice of a new generation", Has appealed appealed the Pakistani Pakistani youth, youth, allot, allot, and the company company sales sales were were incre increase ased d cons conside iderab rably. ly. Then, Then, they they shift shifted ed to new new slogan slogan,, " GENERATION NEXT" and now one more step ahead with "ASK FOR MORE". Fast Fast urbaniza urbanization tion also provides provides opportu opportunit nities ies to the company company.. People People migrating to cities, are influenced by the cultural change, and they tend to buy Pepsi more as people in urban areas are more aware about soft drinks.

POINT OF DIFFERENCES There There is a unique unique point point of differen difference ce which which differe differentia ntiates tes PEPSI from other products. They are as follows: For PEPSI Dil Hai to Mango Aur For 7 Up Style Zara Hatke For Mountain Dew

Page 23 of 24


Dew Na Kya To Phir Kya Jya For Aqua Fina Fina Nahin to Peena Nahin Ab Sirf Aqua Fina He Peena

CONCLUSION

PEPSI is the good reputable brands of the world and one of the top brand in Pakistan. People who are really brand conscious they use this drink.. People make a use of this brand as many many functions functions as they can. Due to sponsorship sponsorship to different cultural events or legends, this brand has a good image to the citizens. Pepsi is such a brand that it will market it itself nowadays even no extra force is required. But company is promoted it brand at its maximum by making discounts, Schemes or in term soft key accounts. After the afghan war and Iraq attack some political parties make a bad impression at the usage of this brand. But due to that effects there came no change in its sale. Brand loyal people use the products due to good taste and quality.

Page 24 of 24

Marketing Plan of PEPSI[1]

Recommend Documents