PEPSI Project

P e p s i P r o d u c t

PEPSI & ITS BEVERAGE SEGMENT IN INDIA SUBMITTED TO Prof A.N.BHATTACHARYA SUBMITTED BY:BY:1.V.SATYA DEEPAK  2.DEEPALI SRIVASTAVA 3.AGAM GUPTA GUPTA 4.ANKUR PANDEY 5.MOHIT KAPOOR 

TABLE OF CONTENTS

1. 2. 3. 4. 5.

Obje Object ctiv ives es Intr Introd oduc ucti tion on Pepsi Pepsi in India Indian n scenar scenario io Pepsi & its its segments(f segments(food ood & beverage beverage industr industry) y) STP(segm STP(segmentat entation,t ion,targ argetin eting g & positioning) positioning)

6. Mark Market etin ing g mix mix 7. Conc Conclu lusi sion on

ACKNOWLEDGEMENTS

We would like to express our sincere gratitude to PROF. PROF. A.N BHATTACHARYA, IILM,Greater Noida for being an excellent guide.

We are also indebted to our group members and other staff members

of IILM who have supported us in completion of this project.

Lastly, Lastly, we thank all those whom we may have inadvertently inadv ertently forgotten to mention.

OBJECTIVES ●

To study the Segmentation, Targeting and Positioning strategies of the Pepsico. ● To study the Marketing Mix strategies of the Pepsico ●

To analyze and identify the problem areas in the above mentioned strategies. ●

To give suggestions to overcome these problems.

INTODUCTION PepsiCo established established its business operations operations in 1989.It aims aims to serve the long long term dynamic needs of consumers in India. PepsiCo is a world leader in convenient snacks, foods and beverages, with revenues of more than $39 billion and over 185,000 employees. PepsiCo is a world leader in convenient snacks, foods and beverages, with revenues of more than $39 billion and over 185,000 employees.The company consists of PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAB) and PepsiCo International (PI).

PAF includes Frito-Lay North America, Quaker Foods North America and all Latin America America food and snack businesses, including Sabritas and Gamesa  businesses in Mexico. PAB includes PepsiCo Beverages North America and all Latin American American beverage businesses. PI includes all PepsiCo businesses in the United Kingdom, Europe, Asia, Middle East and Africa. PepsiCo  brands are available in nearly 200 countries and generate sales at the retail level of more than $98 billion. Some of PepsiCo's brand names are more than 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.

PepsiCo offers product choices to meet a broad variety of needs and  preference  preference -- from fun-for-you fun-for-you items to product choices that contribute to healthier lifestyles. PepsiCo’s mission is “To be the world's premier consumer products company focused on convenient convenien t foods and beverages. We seek to produce healthy financial rewards rewards to investors as we provide opportunities for  growth and enrichment to our employees, our business partners and the communities in which we operate.

PEPSI IN INDIAN SCENARIO

Since the entry of Pepsi-Cola to India in 1989, the soft drink industry has under gone a radical change. When Pepsi-Cola entered, Parle was the leader  with the Thums-up being its flagship brand. Other products offering by Parle included Limca & Goldspot, another upcoming player in the market was, the erstwhile bottler of Coca-Cola, “pure drinks” . Its offering includes CampaCola, Campa-Lemon & Campa-Orange. With the re-entry of Coca-Cola in the Indian market, Pepsi-Cola had to go in for more aggressive marketing to sustain its market share. The chronology of the initial phase of the Cola wars in India was: 1977: Parle launched Thums-up and pure drinks launched Coca-Cola.

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September, final approval for the Pepsi Foods Ltd. Project 1998: In September, granted by the “Cabinet Committee” on economic affairs of the “Rajeev Gandhi Govt.”  1990: In March, “Pepsi-Cola and 7-up” launched markets in north • India. 1990: In May, The government cleared the Pepsi-Cola project again •  but with a change in brand name to “Lehar Pepsi”, simultaneously it rejects the Coca-Cola application “Citra” from the Parle, stable hited the market. •

1991: Pepsi-Cola extended its soft drinks business and reached at national scale. Pepsi-Cola launched its product in Delhi and Bombay. Bombay. 1992: In January, Brito foods application is cleared by the FIPB. Pepsi• Cola and Parle start initial negotiation for a strategic alliance but took   break off after a while. 1993: Pepsi-Cola launched “Slice and Teem”  Teem” captured about 25-30% • of the soft drink market in about 2 years. 1994: Pepsi bought “Dukes & Sones”. • 1995: Pepsi-Cola lunched cans, having capacity of 330ml in various • flavors •

1996: Pepsi-Cola domestic and international operations combined into a Pepsi-Cola Company. International and domestic operations combined into one business unit called “Frito-lay Company”.

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1997: Pepsi-Cola brought “Mirinda Orange” opposite to “Fanta”. 1998: Pepsi-Cola launched “Mirinda Lemon” opposite to “Limca”. • 1999: Pepsi-Cola launched “Diet Pepsi” in can and 1.5 Lit. “PET”  •  bottle for health conscious people. 2001: Pepsi-Cola launched Slice in “Tetra” Pack. • 2003: Pepsi-Cola launched “Pepsi Blue” to get the favour of world • cup season. 2005: Pepsi-Cola launched Mirinda in “Straw Berry” flavour to get the • favour of movie Batman. 2005: Pepsi-Cola launched 7-up as “7-up ice”. • • Pepsi-Cola launched “Mountain Dew” to be more competitive with Coca-Cola •

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2009: Bangalore, March 9 PepsiCo PepsiCo India India has has launched launched its packaged packaged nimbu paani ‘Nimbooz by 7Up. •

2010: Introduction of Pepsi Pepsi max

PRODUCT LINES OF PEPSICO FOOD

PepsiCo's foods division Frito-Lay is the leader in the branded salty snack  market and all it's products are free of trans-fat and MSG. It manufactures Lay Lay s Potato Potato Chips Chips,, Cheeto Cheetoss extrude extruded d snacks, snacks, Uncl Unclee Chips Chips and tradi traditio tional nal snacks snacks unde underr the Kurkur Kurkuree and Leha Leharr brands brands.. The The compan company y s high high fibre fibre 

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 breakfast cereal, cereal, Quaker Oats and low fat and roasted snack options like Aliva enhance the healthful choices available to consumers. BEVERAGE

PepsiCo India's expansive portfolio includes iconic refreshment beverages such as Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain Dew; in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100%, Tropicana Twister fruit juices

BEVERAGE INDUSTRY

Beverage industry is one of the fast growing industries in India .it can be divided into two sections i.e. carbonated and non-carbonated. the carbonated drinks that can be further classified into cola, lemon orange, mango and apple segments.

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Marketing is also to convert social needs into profitable opportunities.  Now we will talk about the segmentation , targeting and positioning of the  beverage sector. To explain STP strategies we have focused on the soft drink  segment of the pepsi.

SEGMENTATION

The market has being segmented segmented by pepsi on the following following grounds. grounds. Pepsi Co have adopted different different marketing strategy for rural and urban areas. A:-DEMOGRAPHIC DEMOGRAPHI C SEGMENT S EGMENTA ATION Age

India is considered to be a young country i.e. average age of Indian

 population is less 38years. Thus targeting young generation can be a  beneficial marketing marketing strategy for soft drink companies. In fact this is the case, all the major brands like Pepsi, coca cola, and thumps up, mainly target younger generation in India. In Europe, as average population is older than Asian countries, Coca cola targeted the older generation of the population. Similarly in USA, Pepsi targeted the generation X (younger generation) as they comprises majority of the population and they positioned Pepsi in the mind of youth that Pepsi is for the youth. Pepsi attempts to capture the youth of today by focusing on their personality personality,, lifestyle and attitude of youth through advertisement Geographic region

As mentioned earlier pepsico has segmented the market on the basis of rural and urban area.As the climate of the country is hot and dry it aims at the geographical areas where people actually require something to quench their  thirst. That is why pepsi came with chota pepsi in rural areas to tap the market where people wants cold drink which is good as well as cost effective. effective. B:- Behavioral

In occasions like parties, birthdays, sports and regular occasions the soft drinks are preferred at every occasion. It is liked by each and every member  of the family whether a child or an adult or an teenager. Even if there is no occasion due to environmental factors people do purchase pepsi.

C:- GENDER 

Gender based segmentation is very important. i mportant. As taste of male and female is different. Let’s take the example of coca cola, thumps up is promoted as masculine soft drinks while coca cola and Fanta are having light taste and mainly targeted targeted for loving birds, ladies, and children. Same example is available in Pepsi, mirinda orange flavor is popular among ladies, girls, and children.

D:- TASTE AND PREFERENCES PRE FERENCES

According to the taste and preference of the customers pepsi came up with the product like diet pepsi.It came up with diet pepsi in order to cater to the needs of those people who are very health conscious. TARGETING

Pepsi targets both the rural as well as the urban segments. For urban segments the targeting strategy is trendy cans,fridge packs which is mostly trendy and liked by the youngsters. The rural market is targeted with entirely different strategy altogether. They keep price as an important decision making variable. POSITIONING

Positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its  product or brand or organizati organization. on.

Peps Pepsii pref prefeers to posi osition tion itse itsellf as the beve beverrage choi choicce of the the “New Generation”, “Generation Next”, or just as the “Pepsi Generation”.

These terms adopted in Pepsi’s advertising campaigns are referring to the marke arkets ts that that marke arkete ters rs refe referr to as Gen Thee Gener neratio tion X Genera eratio tion n X. Th consumer is profiled to be between the ages of 18 to 29. They have high expectations in life and are very mobile and active. They adopt a lifestyle of  living for today and not worrying about long-term goals. Though Pepsi’s main emphasis is on this segment but they also have a focus on the 12 to 18 year old market. The rich deep blue coloring represents eternal youthfulness and openness. Marketing plans like “Yeh Dil Maange More”, “Got Another

Pepsi”, “Ye Pyass Hai Badi” and now its “Yeh Hai Youngistaan Meri

Jaan” have made Pepsi one of the coolest brands recognized among teens in

the top five and the only beverage product in this category

MARKETING MIX

Product A business business needs to consider the products that it produces and the stage of the  product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in the life cycle. In case of Pepsi, in the rural markets, the 300ml bottle and now days the new

small or commonly known as the “chota pepsi” is very much popular. The Pepsi Co. is even thinking of introducing their new Pepsi-Aha, but presently they are concentrating more on the normal pepsi as the rural market is a niche market. Pepsi is even successful in introducing the big 1-1.5 liter PET bottles in the rural markets. These big bottles are very popular during big festivals and marriages.

We see that pepsi has differentiated the product category on the basis of diet and regular pepsi as well depending on the varied needs of the customers.

PRICE

As far as the pricing goes, the 300 ml Pepsi bottle is priced at Rs. 10 now it is 12. But the company soon realized that this pricing worked in the urban markets but not in the rural markets as in the rural markets, Pepsi is not a

necessity but a luxury. luxury. They found out that people in the rural markets bought cold drinks only if there was some occasion. A price price point of Rs 10 for a 300 ml bottle has proved a major deterrent: it has kept away new consumers in the urban and semi-urban pockets, and it has blanked out the far larger rural markets where annual per capita consumption is less than a bottle. So the Rs. 10 bottle was not that successful. But their sales increased after introducing

the “chota Pepsi”. This 200ml Pepsi was reasonably priced between Rs.5Rs.7. This was a major weapon for the expansion of the rural market.But there are other areas of concern — principally that the 200 ml offering should not cannibalize 300 ml sales. In that case, there will be no market growth. That is why pricing could be crucial. Pepsi, for instance, has reckoned that giving consumers 33 per cent (100 ml) less cola at 50 per cent of the price (Rs 5) is not a sustainable option and can, at best, be used as an introductory offer.300 offer.300 ml bottles have almost vanished from the market now.Hats Off to the pricing strategy of the Cola Companies who have been successfully able to sell 66% of the product at the cost of 100% almost in a phased manner  and making consumer habitual and unaware of the increased price. PLACE

This generally refers to the physical locations of product sales as well as the methods of distribution. However, However, it is also considered to be the "place" or  "position" in the market of the product; refer to information below. below. Businesses need to make many decisions related to "place": access, parking, competition, physical location etc. In case of the distribution network, there is no involvement of wholesalers in the distribution of products. It is more like an agent network. The companies have divided the country into various regions and established a franchisee in each region. The franchisees have their own bottling plants and manage all the day-to-day operations. However, However, of late, the soft drinks companies have started setting up company owned  bottling units have been acquiring some of its franchise bottles. For Pepsi, the rural market is a chosen thrust this year. It has targeted to reach 20 to 28 per 

cent of the rural population in the first year of this operation. In the first stage, the corporation is planning a massive roll out in villages with  populations of 5000. To do this effectively, Pepsi is focusing on establishing a cold chain. The company has developed special freezers that allow its products to stay chilled despite power cuts of three to four hours. It will also use traditional

iceboxes to sell its product in rural India. For the rural markets, Pepsi is looking at the wholesale route since the logistics of direct distribution are too huge to handle in the interiors. PROMOTION

This refers to the promotion of the product to the target market. This is achieved through a combination of: advertising: use of electronic and print media. The "reach" (how many people will see the advert), frequency (how many times will I advertise the product?) and impact of the advertising must also be evaluated. The popularity of the product has also increased due to their advertisements or basically famous cricket and bollywood personalities endorsing this  product. For instance the Sachin “Aala re Aala” Aala” advertisement where even he is wearing a mask along with those rural kids. Or you can even take the new Sachin and Amitabh Bachchan advertisement where both of them say “ Yeh Dil Maange More!!!!!!!” Sachin has done many advertisements for Pepsi in the span of 10 years.

Pepsi’s rural market advertisement- Pepsi has unveiled a major campaign in Andhra Pradesh, roping in top Telugu film star, Pawan Kalyan, even as the star's elder brother, Chiranjeevi, Chiranjeevi, is into pushing Coca-Cola's Thums Thums Up. Pawan Kalyan, however, ruled out any rivalry between him and his brother. Though he will sing Yeh Dil Maange more, his brother will say Yeh Dil Maange no more. “We have our lives and we have our own choices,” he said on the possible in-house cola feud.

Pepsi also kicked off a rural campaign, spread over two months. Decorated Pepsi vans will roll out into market of the State. Every consumer drinking a Pepsi from these vans will get to play a game and win prizes. These include

Pawan Kalyan memorabilia, T-shirts, autographed posters and calendars.

Explaining the reason for choosing Pawan Kalyan to endorse Pepsi, Mr. Mr. Rohit Ohri, Director HTA, Pepsi's ad agency, said Pepsi and Pawan Kalyan were going to be an ideal combination. “Both are so youthful, energetic and fun-loving,” he said. Mr. Vijay Shanker Subramaniam, Vice-President (Marketing), (Marketing), Pepsi Foods Ltd, said the company was starting an “aggressive campaign” in Andhra Pradesh. Apart Apart from the van operations, which were flagged off by Pawan Kalyan, other campaigns have been lined up throughout the year. Later, Pawan Kalyan presented a cheque for Rs 5 lakh to Mr. Mehmood Ali, a mechanic with the Andhra Pradesh State Road Transport Transport Corporation for  winning Pepsi's Mera number ayega campaign.

1 9 92 1 9 93 1 9 95

Gotta Have It Be Young, Ha Have Fu Fun, Dr Drink Pe Pepsi Nothing Else is a Pepsi

1 9 97

Generation Next

1 9 98

Same Great Taste

1 9 99

The Joy of Cola

The Joy of Cola 1999

2003

2004 Pepsi. It's the Cola 2005

2006

Analyze and identify the problem areas in the above mentioned strategies 1.

lack lack of effi efficie ciency ncy in dist distri ribut bution ion networ network k in some some produ product ct lines. lines. for eg. My can and Aliva. 2. Lack Lack of of emph emphas asis is on on the the bran brand d valu valuee in adv adver erti tise seme ment nts. s. For For eg. eg. Aliv Alivaa and kurkure. 3. Lack Lack of ef effici ficien ency cy in in prod produc uctt mar marke kett surv survey ey befo before re the the lau launc nch h of   products. For eg pepsi blue and kurkure desi beats.

4.

Thee tar Th target get mark market et is is yout youth h and and the the tast tastee is not not in in rela relati tion on wit with h the the tast tastee of target market(pepsi is too sweet)

ALTERNATE SOLUTIONS 1. as the produc productt is is mass mass produc productt ther theref efore ore the effic efficien ientt dist distrib ributi ution on syst system em should be there. Pepsi does not have apt number of distributors in its supply chain. Due to this reason we don't see my can in all the stores across the stores. 2. Thee adv Th adver erti tise seme ment ntss shou should ld hav havee the the log logo o of Peps Pepsii so so as to get get pro prope per  r  attention of the customers & encouraging them to purchase it. 3. They They should should have have an an eff effici icient ent depart departme ment nt for conduc conductin ting g the the survey surveyss so so that they are able to succeed at the customers front. 4. Ther Th eree can can be a dif differe ferent nt pro produ duct ct lau launc nch h that that can can be be a goo good d comp compet etit itio ion n to its rival products in this market

CONCLUSION

The project gives the basic insight of the  beverage segment of the pepsi co.where in the group has tried to identify the conceps taught in the class to the real life senario.we have tried to cover the entire sector by describing the following concepts:1. The 4 P's 2. STP concept 3. Demo Demogr grap aphi hicc & Psy Psyco cogr grap aphi hicc fact factor orss 4. Marketing mi mix

In this project we have tried to identify the flaws in the  beverage industry of the company and the group has tried to bring out some worthy solutions to the problems arising in this sector. sector.

As we can see from the above chart pepsi was the top fizzing brands in year  2005.It was having the maximum market share of 35% which was much higher than the brand having the second second highest market share. share. To To increase its share in current scenario pepsico has launched pepsi MAX. Pepsi is still the market leader in current era..

BIBLIOGRAPHY

1. 2. 3. 4. 5. 6.

http://bimtech-retail.com/blog/

www.wikipedia.com www.scribd.com www.pepsico.com www.pepsiindia.co.in www.beveragedigest.com