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Jamia Millia Islamia Centre for Management Studies

PEPSI
FOR

STUDY OF COLA WAR BETWEEN PEPSI AND COCA-COLA PURSUED IN U.S.A., INDIA AND RUSSIA

UNDER THE GUIDENCE OF Prof. U.M. Amin

BY Neha Sharma 10-MIB-32

SWOT Analysis PepsiCo Strengths Branding - One of PepsiCos top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it ranked26th amongst top 100 global brands. Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lays Potato Chips, Lipton Teas(PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist. The strength of these brands is evident in PepsiCos presence in over 200countries. The company has the largest market share in the US beverage at 39%, and snack food market at 25%. Such brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annual sales for the company Diversification - PepsiCos diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCos arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes. This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates. Distribution - The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.

Weaknesses Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCos total net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. Wal-Marts low price themes put pressure on PepsiCo to hold down prices. Overdependence on US Markets - Despite its international presence,52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and

labor strikes. Large US customers could exploit PepsiCos lack of bargaining power and negatively impact its revenues Low Productivity - In 2008 PepsiCo had approximately 198,000employees. Its revenue per employee was $219,439, which was lower than its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees. Image Damage Due to Product Recall - Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.

Opportunities Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCos total net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. Wal-Marts low price themes put pressure on PepsiCo to hold down prices. Overdependence on US Markets - Despite its international presence,52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and labor strikes. Large US customers could exploit PepsiCos lack of bargaining power and negatively impact its revenues. Low Productivity - In 2008 PepsiCo had approximately 198,000employees. Its revenue per employee was $219,439, which was lower than its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees. Image Damage Due to Product Recall - Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.

Threats Decline in Carbonated Drink Sales

- Soft drink sales are projected to decline by as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feel the impact of the projected decline. Potential Negative Impact of Government Regulations - It is anticipated that government initiatives related to environmental, health and safety may have the potential to negatively impact PepsiCo. For example, manufacturing, marketing, and distribution of food products may be altered as a result of state, federal or local dictates. Preliminary studies on acryl amide seem to suggest that it may cause cancer in laboratory animals when consumed in significant amounts. If the company has to comply with a related regulation and add warning labels or place warnings in certain locations where its products are sold, a negative impact may result for PepsiCo. Intense Competition - The Coca-Cola Company is PepsiCos primary competitors. But others include Nestl, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Recently Coca-Cola passed PepsiCo in Juice sales. Potential Disruption Due to Labor Unrest - Based upon recent history, PepsiCo may be vulnerable to strikes and other labor disputes. In 2008 a strike in India shut down production for nearly an entire month. This disrupted both manufacturing and distribution.

Market Segmentation As we know that PepsiCo provides varieties of beverages such as carbonated soft drinks, sport drinks, dairy-based drinks, energy drinks, fruit flavored beverages, ready-to-drink coffees, ready-to-drink tea, mineral water and frozen beverage. These products are marketed under brand as Pepsi, Mountain Dew, Gatorade, Lipton, Starbucks, Tropicana, and so on. With these products, PepsiCo aims to attract different groups of consumers. There are two levels in which Pepsi segments its market: Demographic Niche marketing Concentrated Marketing Despite the large customer base in the Soft Drink industry, Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next, or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are what marketers refer to as Generation X, which are profiled to be between the ages of 18 to 29. In addition, Pepsi shifted its focus to the growing American teenage market in the 1990s by forming exclusive contracts with American schools and developing advertising campaigns such as The Next Generation and the Joy of Pepsi, featuring Britney Spears. Pepsi believes that if they can get this market to adopt their product, they could establish a loyal customer in a long run. Niche Marketing Pepsi focused on varietal differentiation since 1990 by introducing a string of niche products. To increase volume in order to counter flat coca sales, Pepsi introduced Sierra Mist in 2002-2003to take the place of 7-up and go head-to-head with Sprite. Pepsi has also tried to boost volume by introducing products that appeal to specific target markets that it currently is not reaching. Pepsi has introduced Code Red and Live Wire, extensions of Mountain Dew, Pepsi One, and Pepsi Blue. Finally, Pepsi is countering declining sales of carbonated drinks through the marketing and distribution of Starbucks ready to drink products, and the acquisition of SOBE and Gatorade. The success of Pepsis Mountain Dew Code Red launched in 2001 was the most successful soft drink innovation in 20 years and has spurred even more niche product introductions for PepsiCo as well as other competitors.

SEGMENTATION OF MARKET A market segment consists of a group of customers who share a similar set of needs and wants. Rather than creating the segment the marketer's task is to identify them and decide which one to target. Leading soft drink company PepsiCo follow the similar segmentation strategy for target marketing. MASS MARKETING However in some of its popular product follow the mass marketing strategy. In this type of segmentation, PepsiCo target the whole market and not any particular segment of the population.

TARGETED MARKETING Although the targeted group of the company is the whole population, they want to earn more revenue from a segment than their other revenue generator sources. For this, they Recognize following bases for segmentation GEOGRAPHICAL REGION PepsiCo treat hot countries such as Asia, Middle East and African differently in comparison to cold countries. As in tropical countries, consumption of soft drinks is 70%in summer and 30% in winter season while in EUROPEAN countries its consumption is almost uniform. So soft drink companies prefer different marketing strategies in Asian and European countries. In countries like India and Pakistan, these companies invest huge resources in the season of summers, and their target area is domestic users, restaurants, school and college canteens and even rural chapels. While in winter season their target is mainly party users and high-income group consumers RURAL VS. URBAN MARKET PepsiCo Company is one of the first global majors to have spotted the potential spin offs from thecountry's rural market. Population of Rural sector is more conscious more about the price whereas Population of Urban sector is more conscious about the quality and brand name of the product. So PepsiCo in Year 2002 bring the 200 ml bottle at Rs.5 specifically targeted at the rural sector so that soft drink can take place of the local drink like lemon, sugarcane juice and Tea etc. Both the companies Coca-Cola and PepsiCo have adopted different marketing strategy for rural and urban areas

Bases of Segmentation: Demographic In focusing on the Pepsi-Cola beverage product, PepsiCo has retained a long history of concentrating on youth as its main target market Generation Next! It has spent billions of dollars in trying to woo the young and nearly young, implying that Coca-Cola is for the older generation. The reason why Pepsi-Cola has fiercely targeted this market is because it is the largest amongst its users. Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. Also, Pepsi continually targets the college market in which they spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities (i.e.: CSUF) to have sold representation of their product distribution. Pepsis use this behaviorist segmentation has been a key to the companys success.
AGE India is considered to be a young country i.e. average age of Indian population is less 38 years. Thus targeting young generation can be a beneficial marketing strategy for soft drink Companies. In fact this is the case, all the major brands like PepsiCo, 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, PepsiCo targeted the generation X (younger generation) as they comprises majority of the population and they positioned PepsiCo in the mind of youth that PepsiCo is for the youth.

GENDER Gender based segmentation is very important. As taste of male and female is different. Let's take the example of mountain dew is promoted as masculine soft drinks while Fanta are having light taste and mainly targeted for loving birds, ladies, and children. In PepsiCo, Miranda orange flavor is popular among Ladies, girls, and children.

Market Targeting Pepsi customers are mostly Teenagers and Young Adults between the ages of 14 to 30. It also targets at Schools, Colleges, Universities, Homes, Restaurants, Hotels, and Stores. PepsiCo has gained a reputation for catering to the teenagers, those in their twenties and even the young at heart. This is a customer base that other soft drink brands have previously overlooked in favor of the mature consumers. PepsiCo also has the distinctive style of portraying the times in their campaigns. Their Generation Next campaign in Australia will suggest that PepsiCo is not just a drink for the next generation; its drinkers are also a generation ahead of their counterparts. PepsiCo can cultivate an image for itself in Australia as the drink for the modern times. It has discovered that the buying power of the youth and the marketing power of celebrities were compatible. They have earned generously out of this formula, and this will also work in Australia.

Market Positioning Firstly the PepsiCo in America try to position its product for the society as whole and for the purpose of refreshment, which can be clearly visible from their advertisement slogans like 1) any whether is PepsiCo whether 2) the light refreshment 3) be sociable, have a PepsiCo This positioning strategy they followed up to 1960 and after analyzing that it is very difficult to capture whole population as whole. So PepsiCo after 1960 started targeted marketing. PepsiCo targeted the youth section and position there product as a necessity for youth and PepsiCo advertisement slogan after 1960try to position PepsiCo as the brand for youth which are clearly visible from there advertisement as follow 1) now its PepsiCo for those who thing young 2) come alive, you're in PepsiCo generation 3) you're got a lot to live and PepsiCo 4) yeh hai youngistaan meri jaan (in India) 5) Taste the once that's forever young In the 1960s and early1970s, PepsiCo was a much more aggressive and innovate company than coke. In this period PepsiCo outflank coke to survive. IN early 1975s PepsiCo introduced the PepsiCo challenge marketing campaign where PepsiCo set up a blind tasting between PepsiCocola In this PepsiCo started direct road show taste competition in which two glass of soft drink one is PepsiCo and another is Coke is given to person not known by him which glass contain which soft drink and after tasting both the glasses they ask which soft drink is having better taste. In this competition PepsiCo said 80% of people like PepsiCo taste over Coke. PepsiCo took this a great advantage of the campaign with television commercial reporting the test results to the public. So through this competition PepsiCo is able to position itself in the mind of customer that PepsiCo have better the taste than coke. In India, PepsiCo was parted ways with Shah Rukh

Khan, Sachin Tendulkar, Rahul Dravid, Sourav Ganguly, Mahender Singh Dhoni, Ranbir Kapoor, Deepika Padukone, Ishant Sharma, Rohit Sharma, Shreeshant and Virender Sehwag to strengthen its youngistaan brigade. Pepsico signed Asin to take war to orange flavor category. PepsiCo had tied up with Chennai super kings for its 7up brand, which is the most preferred drink there. PepsiCo has also signed on Taegu movie actor Ram Charanteja as part of its youngistaan campaign to endorse PepsiCo in Andhra Pradesh. PepsiCo plans to further create positions that will give products the greatest advantage in their target markets. Pepsi has been positioned based on the process of positioning by direct comparison and have positioned their products to benefit their target market.

Slogans

19391950: "Twice as Much for a Nickel" 1950: "More Bounce to the Ounce" 19501957: "Any Weather is Pepsi Weather" 19571958: "Say Pepsi, Please" 19581960: "Don't be a Tramp, Buy a Can" Zane 19611964: "Now It's Pepsi for Those Who Think Young" (jingle sung by Joanie Sommers) 19641967: "Come Alive, You're in the Pepsi Generation" (jingle sung by Joanie Sommers) 19671969: "(Taste that beats the others cold) Pepsi Pours It On". 19691975: "You've Got a Lot to Live, and Pepsi's Got a Lot to Give" 19751977: "Buy a can 50p" (United Kingdom) 19771980: "Join the Pepsi People (Feeling Free)" 19801981: "Catch That Pepsi Spirit" (David Lucas, composer) 19811983: "Pepsi's got your taste for life" 1983: "Its cheaper than Coke!" 19831984: "Pepsi Now! Take the Challenge!" 19841991: "Pepsi. The Choice of a New Generation" (commercial with Michael Jackson and The Jacksons, featuring the Pepsi version of "Billie Jean", "Bad" and "Black or White". "Black of White"'s was promoting the Dangerous World Tour.) 19841988: "Diet Pepsi. The Choice of a New Generation" 19881989: "Diet Pepsi. The Taste That's Generations Ahead" 19891990: "Diet Pepsi. The Right One" 19891992: "Diet Pepsi. The Taste That Beats Diet Coke" 19861987: "We've Got the Taste" (commercial with Tina Turner) 19871990: "Pepsi's Cool" (commercial with Michael Jackson, featuring Pepsi version of Bad) 19901991: "You got the right one Baby UH HUH" (sung by Ray Charles for Diet Pepsi) 19901991: "Yehi hai right choice Baby UH HUH" (Urdu meaning "This is the right choice Baby UH HUH") (Pakistan) 19911992: "Gotta Have It"/"Chill Out" 1992:"The Choice Is Yours" 19921993: "Be Young, Have Fun, Drink Pepsi" 19931994: "Right Now" (Van Halen song for the Crystal Pepsi advertisement) 19941995: "Double Dutch Bus" (Pepsi song sung by Brad Bentz) 1995: "Nothing Else is a Pepsi" 19951996: "Drink Pepsi. Get Stuff." (Pepsi Stuff campaign) 1996:"Change The Script" 19961997: "Pepsi: There's nothing official about it" (During the Wills World Cup (cricket) held in India/Pakistan/Sri Lanka) 19971998: "Generation Next" (with the Spice Girls)

19981999: "Its the cola" (100th anniversary commercial) 19992000: "For Those Who Think Young"/"The Joy of Pepsi-Cola" (commercial with Britney Spears/commercial with Mary J. Blige) 19992006: "Yeh Dil Maange More!" (Hindi meaning "This heart asks for more") (India) 2002: "Change the World" (Japan) 2003: "Its the Cola"/"Dare for More" (Pepsi Commercial) 20062007: "Why You Doggin' Me"/"Taste the one that's forever young" (Mary J. Blige) 20072008: "More Happy"/"Taste the once that's forever young" (Michael Alexander) 2000present: "Pepsi ye pyaas heh bari" ((Urdu) meaning "There is a lot of thirst" (Pakistan)) 2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake) 2008: "Pepsi is #1" v commercial (Luke Rosin) 2008present: "Something For Everyone" 2009present: "Refresh Everything"/"Every Generation Refreshes the World" 2009present: "Yeh hai youngistaan meri jaan" (Hindi meaning "This is our young country my baby") 2009present: "My Pepsi My Way"(Pakistan) 2009present: "Refresca tu Mundo" (Spanish meaning "Refresh your world") (Spanish Spoken countries in Latin America) 2009: "Joy It Forward" (Canada) 2010present: "Every Pepsi Refreshes The World" 2010present "Pepsi. Sarap Magbago." (Philippines meaning "Its nice to change") 20102011 "Badal Do Zamana" (Urdu meaning "Change The World" by CALL)(Pakistan) 2010-2011 "Love!" (Japan, for Pepsi Nex) 2010present: "Pode ser bom, pode ser muito bom, pode ser Pepsi" (Can be good, can be very good, can be Pepsi) Brazil 2011present: "Change the game" (India, Bangladesh & Pakistan for the 2011 Cricket World Cup) 2011present "Dunya Hai Dil Walon Ki" (Pakistan-meaning World is For Lovers by Ali Zafar) 2011present "Ici, c'est Pepsi" (Qubec-meaning Here, it's pepsi) 2011present "Go Next!" (Japan, for Pepsi Nex) 2011present "Summer Time is Pepsi Time" 2011present "Born in the Carolinas" 2012- "Where there's Pepsi, there's music" - used for the 2012 Super Bowl commercial featuring Melanie Amaro.

Marketing strategy at PepsiCo


The marketing strategy of PepsiCo and its impact on customer side. To know about the customer perception towards PepsiCo's product and Brand Image. I also research on the customer satisfaction level. I study about how PepsiCo provided different value to their different customer. PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 18 different product lines each generating more than $1billion in annual retail sales. PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats that deliver enjoyment, nutrition, convenience as well as affordability. The group has built an expansive beverage and foods business. PepsiCo have a variety of range in their products they have food and beverage segment like in food they have Aliva, Kurkure, Lays and Quaker Oats. And in beverage they have PepsiCo, Mountain Dew, Slice, 7up and Nimbooz. I did descriptive and exploratory research to know about the different facts of PepsiCo and their customer. Exploratory research I did on PepsiCo's customer and Descriptive research on PepsiCo's retailer. Then researcher finds out the buying priority of PepsiCo on different parameter like Refreshment, Taste, and Brand and for thrust. They should also take part in Green marketing or social welfare activities to make the brand image of PepsiCo. They should increase their CSR activities. PepsiCo is market Leader so it's hard to retain this position in today's competitive environment. So they have to focus on their brand image they have to increase their brand loyal customers. They have to choose other medium of advertisement like newspaper, wall painting, Internet etc. so they can reach to their customer easily. PepsiCo is good brand name. People trust on PepsiCo on the Quality base so they should increase their kind of image in the market.

Marketing mix-PEPSICO
Marketing Mix is the set of marketing tools that the firm uses to pursue 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. The most basic marketing tool is product which includes product design, quality, features, branding, and packaging. A critical marketing tool is price i.e. the amount of money that customers pay for the product. It also includes discounts, allowances, credit terms and payment period. Place is another key marketing mix tool. And it includes various activities the company undertakes to make the product accessible and available to the customer. Some factors that decide the place are transport facilities, channels of distribution, coverage area, etc .Promotion is the fourth marketing mix tool which includes all the activities that the company undertakes to communicate and promote its product to target market. Promotion includes sales promotion, advertising, sales force, public relations, direct marketing, etc.

1. Product
In marketing, a product is anything that can be offered to a market that might satisfy a want or need. It is of two types: Tangible (physical) and Intangible(non-physical). Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes, not just the physical merchandise. All products offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service)spectrum. A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product. The term goods is used primarily by those that wish to abstract from the details of a given product. As such it is useful in accounting and economic models. The term product is used primarily by those that wish to examine the details and richness of a specific market offering. As such it is useful to marketers, managers, and quality control specialists. PepsiCo-Product The PepsiCo-Cola drink contains basic ingredients found in most other similar drinks including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and natural flavors. The caffeine free PepsiCo-Cola contains the same ingredients but no caffeine. Some of the different and varied brands of PepsiCo are as follows All sport Aquafina Caffeine-free PepsiCo Crystal PepsiCo Diet Pepsico Gatorade Izze Jazz Josta Kas Manzanita sol

Mirinda Mountain dew Mountain dew AMP Mountain dew live wire Mountain dew MDX Mug root beer Pepsi Pepsi blue Pepsi one Pepsi cappuccino Pepsi max Pepsi samba Pepsitarik Pepsi twist Propel fitness water Sierra mist Slice soBe storm teem Tropicana products Tropicana twister

2. Promotion 1. Advertising
2. Personal selling 3. Sales promotion 4. Publicity and public relations The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Both the companies PepsiCo and coke are famous for their promotions. The rivalry was first started when PepsiCo started with its blind taste tests known as the PepsiCo Challenge. The challenge is designed to be a direct response to critics who allege that Coca-Cola and PepsiCo-Cola are identical drinks, with no meaningful differences. The challenge takes the form of a taste test. At malls, shopping centers and other public locations, PepsiCo representative setup actable with two blank cups, one containing PepsiCo and one with Coke. Shoppers are encouraged to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or PepsiCo. If PepsiCo is revealed, the shopper is given a small prize. The implication is that PepsiCo tastes better than Coke, and thus consumers should purchase PepsiCo. Mainly PepsiCo is the company sponsoring most cricket telecasts happening in India and spends most of its revenue in that field PepsiCo instituted a so called PepsiCo Stuff promotion whereby

customers could accumulate PepsiCo Points from buying various products these points could be used to by other products, most recently AmazonMP3. A recent promotion involving the NY Yankees was not well received when not enough free tickets were made available. In 2008 PepsiCo employed Tiger Woods to promote a Gatorade brand called Gatorade Tiger. PepsiCo continues is promotional association with the NFL and the Super Bowl specifically marketing PepsiCo and Doritos. In 2009 PepsiCo launched its PepsiCo throwback campaigned offering a drink with the sugar content of its original product. PepsiCo has advertised its products through many different ways and media. Through TV, we have seen different advertisements of its products such as Pepsi or Dew. PepsiCo also advertise its products by targeting those favorable television programs, like sports, TV series etc. In addition, PepsiCo has also made used of some events like Pepsify Karogey? to promote its products. Through newspapers like Jung and Dawn, PepsiCo has advertised a wide range of products it offers to its customers. The usage of Posters are also used to create awareness of the products that PepsiCo offers.

3. Place
Place is a term that has a variety of meanings in a dictionary sense, but which is principally used in a geographic sense as a noun to denote location, though in a sense of a location identified with that which is located there. In marketing, place refers to one of the 4 P's, defined as "the marketplace". It can mean a geographic location, an industry, a group of people (a segment) to whom a company wants to sell its products or services, such as young professional women (e.g. for selling cosmetics) or middle-aged family men(e.g. for selling family cars). PepsiCo-Place

PepsiCo again has spread worldwide. PepsiCo when entering a new market does not go in alone but it looks for partners and mergers.
Till now PepsiCo has collaborated with companies like Quaker Oats, Frito-lays, Lipton, Starbucks, etc. PepsiCo like Coke has spread all over the world. It is because of this worldwide spread that now it is coming up with Advertisements which can be broadcasted in the different nations in the world. The recent example with would be the PepsiCo advertisements having David Beckham as it brand ambassador. PepsiCo is primarily a US based company with approximately 52% of its

revenues located in the states.


PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales.

In addition the company plans on major capital initiatives in Brazil and Mexico. The company is also acquiring Russia's leading Juice Company, Lebedyansky, and V Water located in the United Kingdom. Decisions with respect to distribution channel focus on making the product available inadequate quantities at places where customers are normally expected to shop for them to satisfy their needs. Pepsis supply is low uncertainty. Some of its supply source capabilities are: Less breakdowns High quality Flexible supply capacity Mature production process Venues where Pepsi is sold off-site consumption include grocery stores, convenience stores and vending machines. However, Pepsi is most effective in grocery stores where it has 33%market share. This is contrary to the fountain station channel, where Pepsi has less than half the market share.

4. Price
In economics and business, the price is the assigned numerical monetary value of a good, service or asset. Price is also central to marketing where it is one of the four variables in the marketing mix that business people use to develop marketing plan. Pricing is a big part of the marketing mix. Choosing the right price and the right pricing strategy is crucial to the marketing process. The price of the product is not something that is fixed. On the other hand the price of the product depends on many other factors. Some times the price of the product has got nothing to do with the actual product itself. The price may act as a way to attract target customers. PepsiCo-Price PepsiCo again decides it price on the basis of competition. The best think about the company PepsiCo is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. But this risk taking attitude has also earned PepsiCo losses. Though lowering the price would attract the customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier but now PepsiCo is a full-fledged and growing company. It has covered all its losses and is now growing at a rapid rate.

Pepsi being a company that emphasizes on product quality tends to sell its products with price range from moderately low to high prices, depending on the use and the targeted customers. Pepsi decides its price on the basis of competition. Fortunately, Pepsi is very flexible and is able to reduce its price very quickly. For example, in the month of Ramadan whenever Coca-Cola reduces their prices, Pepsi also responds through price cuts and then eventually after that period, it raises its price. Unfortunately, Pepsi has also made several losses in taking risks. Though lowering the price would attract customers, PepsiCo wasnt able to cover up the cost incurred in production, and therefore resulted in losses. However, PepsiCo is now a full-fledged and growing company, and has covered all its losses and is growing at a rapid rate. Direct Price Discrimination: This is evident in the international operations of Pepsi. Domestically, direct price discrimination is based on distribution channel segmentation, Indirect Price Discrimination: Quantity discounts along with price coupons used in supermarkets are obvious indirect price discrimination tools Pepsi can use. However the most effective indirect price discrimination tool Pepsi has is in fact its brand name. The Pepsi brand equity actually allows the company to maintain pricing power. Is product image translates into perception for higher quality vis-vis private labels and substitute drinks. Pepsi may enhance its price discrimination capability through creating bundle offers to restaurants and convenience stores. The Frito Lay Brand, controlled by PepsiCo through FritoLay North America, is the undisputed leader in the salty snack segment. If Pepsi bundles snacks with soft drinks as part of its pricing strategy aimed at fast food restaurants and convenient stores, it may be able to increase sales and obtain better shelf space from retailers. This may prove a very important tactic in trying to re-claim share in

the fountain drink segment, a large part of which was lost after Pepsis exit from the restaurant business in 1997 Pricing Strategy PepsiCo must base its pricing strategies on several key trends that continuously shape the global marketplace of soft drinks. One particular trend is labeled as "premium-taxation". This phenomenon causes the polarization of different markets. This would then trigger the consumers to demand and pay much higher prices for perceived quality. However, discounting in prices is also simultaneously taking place, therefore squeezing out the middle range. More often than not, supermarkets undergo internationalization which leads to a tighter squeeze for shelf space. This will in turn leave PepsiCo as a winner. It is for this reason why PepsiCo must value the "premise sector" so much because this would allow consumers to try their brands at low risk and price. In terms of market segments, premium and specialty brands of PepsiCo with have a disproportionate share of volume growth at an estimated 4-5% per year, as against the 2-3% overall growth rate. These rates come up as a result of both the rise in GDP among developing markets and consumer demands for higher value propositions, which is obviously dominated by international brands. PepsiCo practically operates on a relatively fragmented market, with the top four soft drink companies accounting for 22% of global volume five years ago and only about 28% today.