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Strategic Marketing

Pepsi Cola

Pepsi CO. CORPORATE INFORMATION


PepsiCo, Inc. is among the most successful consumer products companies in the world, with 1998 revenues of over $22 billion and 151,000 employees. The company consists of: Pepsi-Cola Company, the world's second largest beverage company; Frito-Lay Company, the world's largest manufacturer and distributor of snack chips and Tropicana Products, Inc., the world's largest marketer and producer of branded juices. PepsiCo's brand names are among the best known and most respected in the world. Some of PepsiCo's brand names are 100 years old, but the corporation is relatively young. PepsiCo, Inc. was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998. PepsiCo's success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of their people. Their overriding objective is to increase the value of their shareholders' investment through integrated operating, investing and financing activities. Their strategy is to concentrate their resources on growing their businesses, both through internal growth and carefully selected acquisitions. Their strategy is continually fine-tuned to address the opportunities and risks of the global marketplace. The corporation's success reflects their continuing commitment to growth and a focus on those businesses where they can drive their own growth and create opportunities

PepsiCo Mission Statement:


"PepsiCo's overall mission is to increase the value of our shareholder's investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity."

CORPORATE CITIZEN
PepsiCo has a long tradition of corporate citizenship. Community Through the PepsiCo Foundation and their operating divisions, they made grants totaling more than $21 million. The funds supported a variety of projects, focusing on education, diversity, humanitarian efforts and other areas of need. they encourage employee volunteerism through a double-match of contributions to organizations in which they are active, as well as through volunteer days and other opportunities. In addition, PepsiCo is involved in hundreds of community organizations, including many focused on diversity and inclusion. As their market grows increasingly diverse, they have made a very focused effort to promote diversity as a genuine competitive advantage. Among other initiatives, this effort includes: Appointing executives 1

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dedicated to managing diversity. Developing multi-year plans to promote diversity. Creating diversity advisory boards. Creating networks to mentor and support minority and female employees. These efforts have been widely recognized.

Environment and Safety


Their environmental and safety records are strong. Their beverage containers are recyclable and they have consistently reduced the amount of materials used to manufacture their containers. Pepsi-Cola cans contain more than 50% previously used aluminum cans. Their glass bottles contain up to 35% previously used glass. In the United States, Pepsi-Cola will begin using recycled plastic in 2002, with a goal of using 10% recycled material in its plastic bottles by 2005. All their divisions recycle. Tropicana recycles orange and grapefruit peels as cattle feed; Frito-Lay similarly recycles leftover potato peels. Frito-Lay reuses millions of delivery boxes that once were discarded after a single use. In the area of safety, PepsiCo facilities to its employees the maximum level of safety equipment.

CORPORATE CITIZEN

1898 Caleb Bradham, a New Bern, North Carolina pharmacist, renames "Brad's Drink," a carbonated soft drink he's created to serve his drugstore's fountain customers. The new name, Pepsi-Cola, is first used on August 28. 1902 Bradham applies to the U.S. Patent Office for a trademark for the PepsiCola name.

1903 In keeping with its origin as a pharmacist's concoction, Bradham's advertising praises his drink as "Exhilarating, invigorating, aids digestion."

Strategic Marketing

Pepsi Cola

1905 A new logo appears, the first change from the original in 1898. Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North Carolina. 1906 Pepsi gets another logo change, the third in eight years. The modified script logo is created along with the slogan, "The Original Pure Food Drink." There are 15 U.S. Pepsi bottling plants. The Pepsi trademark is registered in Canada. Syrup sales rise to 38,605 gallons. 1907 The Pepsi trademark is registered in Mexico. 1909 Automobile racing pioneer Barney Oldfield becomes Pepsi's first celebrity endorser when he appears in newspaper ads describing Pepsi-Cola as "A bully drinkrefreshing, invigorating, a fine bracer for a race." The theme "Delicious and healthful" appears, and will be used intermittently over the next two decades.

1920 Pepsi appeals to consumers with "Drink Pepsi Cola. It will satisfy you." The price of sugar on the New York Stock Exchange reaches 26 cents per pound. Bradham gambles on the price going higher and buys large stocks of sugar. By the end of the year, sugar demand slows on the open market and the price drops to a catastrophic low of two cents per pound.

Strategic Marketing

Pepsi Cola

1923 Pepsi-Cola Company is declared bankrupt and its assets are sold to a North Carolina concern, Craven Holding Corporation, for $30,000. Roy C. Megargel, a Wall Street broker, buys the Pepsi trademark, business and goodwill from Craven Holding Corporation for $35,000, forming the Pepsi-Cola Corporation. 1932 The trademark is registered in Argentina. 1934 Pepsi begins selling a 12-ounce bottle for five cents, the same price charged by its competitors for six ounces. 1939 A newspaper cartoon strip, "Pepsi & Pete," introduces the theme "Twice as much for a nickel" to increase consumer awareness of Pepsi's value advantage. 1940 Pepsi makes advertising history with the first advertising jingle ever broadcast nationwide. "Pepsi-Cola hits the spot/Twelve full ounces that's a lot/Twice as much for a nickel, too/Pepsi-Cola is the drink for you." "Nickel, Nickel" will eventually become a hit record and will be translated into 55 languages. 1940 CEO Walter Mack adopts the standardized, embossed twelve-ounce bottle, which debuts with the "Pepsi-Cola" label blown and baked into the glass. A new logo, with more rounded script letters, is adopted. Mack sponsors a nationwide essay contest which ultimately leads to the hiring of Allen McKellar and Jeannette Maund, among the first African Americans hired in a professional capacity by a major U.S. corporation.

1941 In support of America's war effort, Pepsi changes the color of its bottle crowns to red, white and blue. A Pepsi canteen in Times Square, New York,

Strategic Marketing

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operates throughout the war, enabling more than a million families to record messages for armed services personnel overseas. 1943 The "Twice as much" advertising strategy expands to include the theme "Bigger drink, better taste." 1946 World War II demands that sugar be rationed again. To counter the effects of rationing, Mack purchases a sugar plantation in Cuba, which proves to be a highly profitable venture. Pepsi's theme line becomes "Bigger Drink, Better Taste." Pepsi-Cola moves into Latin America. 1947 International profits reach $6,769,000. Pepsi moves into the Philippines and Middle East. 1948 Corporate headquarters moves from Long Island City, New York, to midtown Manhattan.

1949 "Why take less when Pepsi's best?" is added to "Twice as much" advertising. Pepsi's theme line appeals to Pepsi lovers during hard times with "Why take less when Pepsi's best?" Former U.S. Secretary of Commerce, the late Ron Brown, becomes the first African American to appear in a national consumer campaign when Pepsi initiates a campaign targeting the African-American market.

1950
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Alfred N. Steele becomes President and Chief Executive Officer of PepsiCola. Mr. Steele's wife, Hollywood movie star Joan Crawford, is instrumental in promoting the company's product line. Pepsi-Cola's advertising keeps pace with consumer tastes as Steele pioneers the promotion of Pepsi-Cola as an experience rather than a bargain. The "Twice as much for a nickel" slogan gives way as "More Bounce to the Ounce" takes Pepsi into the energetic decade. 1953 Americans become more weight-conscious, and a new strategy based on Pepsi's lower caloric content is implemented with "The Light Refreshment" campaign. 1954 "The Light Refreshment" evolves to incorporate "Refreshing Without Filling." 1956 A total of 149 Pepsi-Cola bottling plants operate in 61 countries outside the U.S. 1958 Sometimes referred to as "the kitchen cola," as a consequence of its longtime positioning as a bargain brand, Pepsi now identifies itself with young, fashionable consumers with the "Be sociable, have a Pepsi" theme. A distinctive "swirl" bottle replaces Pepsi's earlier straight-sided bottle 1959 Soviet Premier Nikita Khrushchev and U.S. Vice President Richard Nixon meet in the soon-to-be-famous "kitchen debate" at an international trade fair. The meeting, over Pepsi, is photo-captioned in the U.S. as "Khrushchev Gets Sociable."

1961 Pepsi further refines its target audience, recognizing the increasing importance of the younger, post-war generation. "Now it's Pepsi, for those who think young" defines youth

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As a state of mind as much as a chronological age, maintaining the brand's appeal to all market segments. Harvey C. Russell joins Pepsi-Cola, becoming the first African American named a Vice President in a major U.S. corporation. 1962 Pepsi receives its new logo, the sixth in Pepsi history. The "serrated" bottle cap logo debuts, accompanying the brand's groundbreaking "Pepsi Generation" ad campaign. 1963 In one of the most significant demographic events in commercial history, the post-war baby boom emerges as a social and marketplace phenomenon. Pepsi recognizes the change, and positions Pepsi as the brand belonging to the new Generation The Pepsi Generation. "Come alive! You're in the Pepsi Generation" makes advertising history. It is the first time a product is identified, not so much by its attributes, as by its consumers' lifestyles.

1964 A new product, Diet Pepsi, is introduced into Pepsi-Cola advertising. 1965 Expansion outside the soft drink industry begins. Frito-Lay of Dallas, Texas, and Pepsi-Cola merge, forming PepsiCo, Inc. Military 12-ounce cans are such a success that full-scale commercial distribution begins. Mountain Dew launches its first campaign, "Ya-Hoo Mountain DewIt'll tickle your innards." 1966 Diet Pepsi's first independent campaign, "Girl watchers," focuses on the cosmetic benefits of the low-calorie cola. The "Girl watchers" musical theme becomes a Top 40 hit. Advertising for another new product, Mountain Dew, a regional brand acquired in 1964, airs for the first time, built around the instantly recognizable tag line, "Ya-Hoo, Mountain Dew!" 1967 When research indicates that consumers place a premium on Pepsi's superior taste when chilled, "Taste that beats the others cold. Pepsi pours it 7

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on, emphasizes Pepsi's product superiority. The campaign, while productoriented, adheres closely to the energetic, youthful lifestyle imagery established in the initial Pepsi Generation campaign 1969 "You've got a lot to live. Pepsi's got a lot to give" marks a shift in Pepsi Generation advertising strategy. Youth and lifestyle are still the campaign's driving forces, but with "Live/Give," a new awareness and a reflection of contemporary events and mood become integral parts of the advertising's texture. 1972 Preliminary trade agreement is signed between the U.S.S.R. and PepsiCo,

Inc.

1973 "Join the Pepsi people, feeling' free" captures the mood of a nation involved in massive social and political change. It pictures us the way we are one people, but many personalities. Pepsi receives its new logo, the seventh in Pepsi history. The logo evolves into a boxed look with minor typeface changes occurring throughout the next decade. The third Mountain Dew slogan, "Put A Little Ya-Hoo in Your Life," debuts. 1974 First Pepsi plant opens in the U.S.S.R. Television ads introduce the new theme line HELLO SUNSHINE HELLO MOUNTAIN DEW 1975 The Pepsi Challenge, a landmark marketing strategy, convinces millions of consumers that Pepsi's taste is superior. Pepsi Light, with a distinctive lemon taste, introduces an alternative to traditional diet colas. The two-liter Plastishield bottle is INTRODUCED

1976 "Have a Pepsi day" is the Pepsi Generation's upbeat reflection of an improving national mood. "Puppies," a 30-second snapshot of an encounter between a very small boy ven smaller puppies, becomes an instant commercial classic. 8

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1979 With the end of the '70s comes the end of a national malaise. Patriotism has been restored by an exuberant celebration of the U.S. bicentennial, and Americans are looking to the future with renewed optimism. "Catch that Pepsi spirit!" catches the mood and the Pepsi Generation carries it forward into the '80s.

1982 With all the evidence showing that Pepsi's taste is superior, the only question remaining is how to add that message to Pepsi Generation advertising. The answer? "Pepsi's got your taste for life!" a triumphant celebration of great times and great taste. 1983 The soft drink market grows more competitive, but for Pepsi drinkers, the battle is won. The time is right and so is their soft drink. It's got to be "Pepsi Now!"

1984 A new generation has emerged in the United States, around the world and in Pepsi advertising, too. "Pepsi. The Choice of a New Generation" announces the change, and the most popular entertainer of the time, Michael Jackson, stars in the first two commercials of the new campaign. The two spots quickly become "the most eagerly awaited advertising of all time". Lemon Lime Slice, the first major soft drink with real fruit juice, is introduced, creating a new soft 9

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drink category, "juice added." In a subsequent line of extensions, Mandarin Orange Slice goes on to become the number-one orange soft drink in the U.S. Diet Pepsi is reformulated with NutraSweet (aspartame) brand sweetener. 1985 Lionel Ritchie leads a star-studded parade into "New Generation" advertising followed by pop music icons Tina Turner and Gloria Estefan. Sports heroes Joe Montana and Dan Marino are part of it, as are film and television stars Teri Garr and Billy Crystal. Geraldine Ferraro, the first woman nominated to be vice president of the U.S., stars in a Diet Pepsi spot. And the irrepressible Michael J. Fox brings a special talent, style and spirit to a series of Pepsi and Diet Pepsi commercials, including a classic, "Apartment 10G". By the end of the year, the New Generation campaign earns more than 58 major advertising and film-related awards. Pepsi's campaign featuring Ritchie is the most remembered in the country, according to consumer preference polls. 1986 7-Up International is acquired in Canada. "Dew It Country Cool" becomes the new slogan for Mountain Dew. Pepsi broadens Mountain Dew popularity with the introduction of Diet Mountain Dew. Mountain Dew is the sixth-largest brand in the industry, supporting double-digit growth annually for the past eight years.

1987 After an absence of 27 years, Pepsi returns to Times Square, New York, with a spectacular 850-square-foot electronic display billboard declaring Pepsi to be "America's Choice." 1988 Michael Jackson returns to "New Generation" advertising to star in a fourpart "episodic" commercial named "Chase." "Chase" airs during the Grammy Awards program and is immediately hailed by the media as "the most-watched commercial in advertising history."

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1989 "The Choice of a New Generation" theme expands to categorize Pepsi users as "A Generation Ahead! In a widely praised initiative designed to help stem the severe dropout problem in U.S. high schools, Pepsi-Cola launches the pilot phase of a multi-million-dollar program, the Pepsi School Challenge, in innercity schools in Dallas and Detroit. Pepsi-Cola introduces an exciting new flavor, Wild Cherry Pepsi 1990 Teen stars Fred Savage and Kirk Cameron join the "New Generation" campaign, and football legend Joe Montana returns in a spot challenging other celebrities to taste-test their colas Against Pepsi. Music legend Ray Charles teams up with Uh-Huh Girls. The slogan for Diet Pepsi is modified to "You Got The Right One Baby, Uh-Huh." Craig E. Weather up is named CEO of Pepsi-Cola North America, as Canada becomes part of the company's North American operations. Pepsi-Cola unveils its new logo, the eighth in 93 years. To foster the earlier scripted logo's sense of movement, "Pepsi," now in italic capital typeface, is removed from a smaller blue and red Pepsi swirl and runs vertically up the package. The Pepsi School Challenge wins the U.S. Department of Labor "LIFT" Award for its efforts to improve education and academic achievement of students preparing for the workforce of tomorrow.

1991 "You got the right one baby" is modified to "You got the right one baby, uhhuh!" The "Uh-Huh Girls" join Ray Charles as backup singers and a campaign soon to become

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The most popular advertising in America is on its way. Supermodel Cindy Crawford stars in an award-winning commercial made to introduce Pepsi's updated logo and package graphics. 1992 Celebrities join consumers, declaring that they "Gotta have it." The interim campaign supplants "Choice of a New Generation" as work proceeds on new Pepsi advertising for the '90s. Mountain Dew growth continues, supported by the antics of an outrageous new Dew Crew whose claim to fame is that, except for the unique great taste of Dew, they've "Been there, done that, tried that." Pepsi-Cola Company implements the "Right Side Up" philosophy, where the customer and frontline employees are at the top of the organization. Publisher Earl Graves and basketball superstar Earvin "Magic" Johnson are appointed Pepsi-Cola franchisees for the Washington, D.C. market. Their new company quickly becomes one of the largest African American-run companies in the U.S.

1993 "Be young, have fun, drink Pepsi" advertising starring basketball superstar Shaquille O'Neal is rated as best in U.S. 1994 New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi CEO Craig Weatherup explaining the relationship between freshness and superior taste to consumers. 1995 In a new campaign, the company declares "Nothing else is a Pepsi" and takes top honors in the year's national advertising championship. Starbucks and Pepsi team up with the North American Coffee Partnership and launch Mazagran, a carbonated coffee drink. Pepsi enters the dairy beverage category with Smooth Moos smoothies.

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1996 In February of this year, Pepsi makes history once again by launching one of the most ambitious entertainment sites on the World Wide Web. Pepsiworld eventually surpasses all expectations, and becomes one of the most launched and copied sites in this new medium, firmly establishing Pepsi's presence on the Internet. 1997 In the early part of the year, Pepsi pushes into a new era with the unveiling of the GeneratioNext campaign. GeneratioNext is about everything that is young and fresh, a celebration of the creative spirit. It is about the kind of attitude that challenges the norm with new ideas, at every step of the way.

1998 Pepsi continues its popular "GeneratioNext" campaign with spots that include: Goose, Gnat and Stunt Driver (featuring racing superstar Jeff Gordon).

1998 (cont'd) In 1998 Pepsi launches its new look, called "Globe," which prominently features a stylized, three-dimensional. Pepsi Globe set against a blue ice 13

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backdrop. It affects all can, bottle, and multican packaging for Pepsi, Diet Pepsi, Caffeine Free Pepsi and Caffeine Free Diet Pepsi. 1999 "The Joy of Cola" new advertising campaign for Brand Pepsi features the voices of actors Marlon Brando, Isaac Hayes and "Queen of Soul" Aretha Franklin. The spots also feature child actress Hallie Eisenberg as the "Little Girl."

1999 (cont'd) Pepsi and Lucasfilm team up again as "Star Wars: Episode I The Phantom Menace" hits movie theaters. Consumer excitement surrounding the longawaited return of the Star Wars series is heightened as special Pepsi bottles and cans offer 24 different Star Wars characters. The collection series includes a gold Yoda can.

1999 (cont'd) Pepsi recruits its first "spokesalien" Marfalump to star in its commercials supporting the campaign. Marfalump, who was created by BBDO and George Lucas' Industrial Light and Magic company, has two great passions: Pepsi and Star Wars. The spots, titled "Landing" and "Play Acting," illustrate the great lengths the young alien will go to enjoy both of his passions. Pepsi-Cola North America welcomes Gary Rodkin as President and CEO. The new look replaces Pepsi's current pedestal logo with a new brand identity that also more prominently features the Pepsi Globe against a blue background. Pepsi celebrates its centennial year with a birthday party that is attended by Pepsi-Cola bottlers from all over the world. Joining the festivities are Pepsi stars and friends including Ray Charles, Kool and the Gang and the Rolling Stones. President and Mrs. George Bush, Lady Thatcher and Walter 14

Strategic Marketing

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Cronkite also help to commemorate the occasion where Pepsi's legacy is honored and a new look for the millennium is unveiled. The three-dimensional globe against an ice blue background becomes the universal symbol for one Pepsi family poised for innovation and world leadership as it enters the new century. 2000 Faith Hill, Sammy Sosa and Ken Griffey Jr. - three of the hottest names in entertainment - signed new deals to endorse Pepsi-Cola products. Singing sensation Faith Hill, who has rocked the charts with her top 10 hits, stared in a new "Joy of Cola" ad with "Pepsi Girl" Hallie Eisenberg. The ad debuted during the March 26 Academy Awards broadcast. Major League Baseball All-Stars Sammy Sosa and Ken Griffey Jr. also stepped up to bat in new Pepsi commercials. In addition to the ads, each slugger was be involved in Pepsi's "Takin' it to the Fields" youth baseball and softball programs, as well as appeared on in-store promotional materials for the brand. From Boston to San Francisco and everywhere in between, consumers' cola choice is clear. In more than 30 markets currently conducting the Pepsi Challenge, the tastes of Pepsi and Pepsi ONE are preferred over Coke products in every market, especially in Philadelphia, Dayton, Tucson, San Antonio and Seattle. In a cross-promotion designed to further engage youth in our products, consumers who take the Pepsi Challenge receive "starter points" for this summer's "Choose Your Music" program.

2001 Pop superstar Britney Spears appears in her first Pepsi commercial during the 2001 Academy Awards. The high-energy spot also runs online, where more than 2 million fans click their way to Britney's own version of "The Joy of Pepsi."

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2001 (cont'd) Pepsi Stuff.com lets consumers redeem points from specially marked packages of Pepsi products for more than a half-million cool prizes, and proves to be Pepsi's most popular online promotion ever.

2001 (cont'd) Colombian singing sensation Shaker stars in a series of new commercials for Pepsi just as her debut English-language album hits stores in the U.S. At the same time, Pepsi agrees to sponsor the Latin pop star's worldwide concert tour.

2001 (cont'd) Pepsi unveils its FunWraps Factory, letting consumers personalize Pepsi cans with fun designs and unique messages. With a wide variety of sports, entertainment and holiday images to choose from, Pepsi drinkers begin creating their own can labels for just about any occasion.

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2001 (cont'd) Pepsi puts "a little twist on a great thing," introducing lemon-flavored Pepsi Twist and Diet Pepsi Twist. The product launch marks the return to lemonflavored colas for Pepsi, which distributed Pepsi Light until the mid-1980s.

Pepsi in Sports

Pepsi leadership has in their journey transformed PepsiCo into the premier consumer products company, by focusing on making this the very best convenient food and beverage enterprise in the world. The landmark merger with The Quaker Oats Company in August positions them to accelerate and sustain their future growth. The year was also outstanding because their entire family of businesses performed well despite the distractions that a big merger typically creates

PEPSICO HEADQUARTERS
PepsiCo World Headquarters is located in Purchase, New York, approximately 45 minutes from New York City. The seven-building headquarters complex was designed by Edward Durrell Stone, one of America's foremost architects. The build-ding occupies 10 acres of a 144-acre complex that includes the Donald M. Kendall Sculpture Gardens, a world acclaimed sculpture collection in a garden setting. The collection of works is focused on major twentieth century art, and features works by masters such as Auguste Rodin, Henri Laurens, Henry Moore, Alexander Calder, Alberto Giacometti, Arnaldo Pomodoro and Claes Oldenberg. The gardens were originally designed by the world famous garden planner, Russell Page, and have been extended by Franois Goffinet. The grounds are 17

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open to the public, and a visitor's booth is in operation during the spring and summer.

Frito-Lay North America and Frito-Lay International


PepsiCo's snack food operations had their start in 1932 when two separate events took place. In San Antonio, Texas, Elmer Doolin bought the recipe for an unknown food product a corn chip and started an entirely new industry. The product was Fritos brand corn chips, and his firm became the Frito Company. That same year in Nashville, Tennessee, Herman W. Lay started his own business distributing potato chips. Mr. Lay later bought the company that supplied him with product and changed its name to H.W. Lay Company. The Frito Company and H.W. Lay Company merged in 1961 to become Frito-Lay, Inc. Today, Frito-Lay brands account more than half of the U.S. snack chips industry. PepsiCo began its international snack food operations in 1966. Today, with operations in more than 40 countries, it is the leading multinational snack chip company, accounting for more than one quarter of international retail snack chip sales. Products are available in some 120 countries. Frito-Lay North America includes Canada and the United States. Major Frito-Lay International markets include Australia, Brazil, Mexico, the Netherlands, South Africa, the United Kingdom and Spain. Often Frito-Lay products are known by local names. These names include Matutano in Spain, Sabritas and Gamesa in Mexico, Elma Chips in Brazil, Walkers in the United Kingdom and others. The company markets Frito-Lay brands on a global level, and introduces unique products for local tastes. Major Frito-Lay products include Ruffles, Lay's and Doritos brands snack chips. Other major brands include Cheetos cheese flavored snacks, Tostitos tortilla chips, Santitas tortilla chips, Rold Gold pretzels and SunChips multigrain snacks. Frito-Lay also sells a variety of snack dips and cookies, nuts and crackers.

Pepsi-Cola North America and PepsiCo Beverages International


PepsiCo's beverage business was founded at the turn of the century by Caleb Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi-Cola. Today consumers spend about $33 billion on Pepsi-Cola beverages. Brand Pepsi and other Pepsi-Cola products including Diet Pepsi, Pepsi-One, Mountain Dew, Slice, Sierra Mist and Mug brands account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $60 billion. Pepsi-Cola also offers a variety of non-carbonated beverages, including Aquafina bottled water, Fruitworks and All Sport. 18

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In 1992 Pepsi-Cola formed a partnership with Thomas J. Lipton Co. Today Lipton is the biggest selling ready-to-drink tea brand in the United States. Pepsi-Cola also markets Frappuccino ready-to-drink coffee through a partnership with Starbucks. In 2001 SoBe became a part of Pepsi-Cola. SoBe manufactures and markets an innovative line of beverages including fruit blends, energy drinks, dairybased drinks, exotic teas and other beverages with herbal ingredients. Outside the United States, Pepsi-Cola soft drink operations include the business of Seven-Up International. Pepsi-Cola beverages are available in about 160 countries and territories. Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. Operations grew rapidly beginning in the 1950s. In addition to brands marketed in the United States, major products include Mirinda and Pepsi Max. Pepsi-Cola North America includes the United States and Canada. Key international markets include Argentina, Brazil, China, India, Mexico, Philippines, Saudi Arabia, Spain, Thailand and the United Kingdom. PepsiCo Beverages International also produces, sells and distributes Gatorade sports drinks as well as Tropicana and other juices internationally. Pepsi-Cola provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. This includes some of the world's best-loved and most-recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. The company manufactures and sells soft drink concentrate to Pepsi-Cola bottlers. The company also provides fountain beverage products.

Gatorade/Tropicana North America


Tropicana was founded in 1947 by Anthony Rossi as a Florida fruit packaging business. The company entered the concentrate orange juice business in 1949, registering Tropicana as a trademark. In 1954 Rossi pioneered a pasteurization process for orange juice. For the first time, consumers could enjoy the fresh taste of pure not-from-concentrate 100% Florida orange juice in a ready-to-serve package. The juice, Tropicana Pure Premium, became the company's flagship product. In 1957 the name of the company was changed to Tropicana Products, headquartered in Bradenton, Florida. The company went public in 1957, was purchased by Beatrice Foods Co. in 1978, acquired by Kohlberg Kravis & Roberts in 1986 and sold to The Seagram Company Ltd. in 1988. Seagram purchased the Dole global juice business in 1995. PepsiCo acquired Tropicana, including the Dole juice business, in August 1998. Today the Tropicana brand is available in 63 countries. Principal brands in North America are Tropicana Pure Premium, Tropicana Season's Best, Dole Juices and Tropicana Twister. Internationally, principal brands include Tropicana Pure Premium and Dole juices along with Frui'Vita, Loza and Copella. Tropicana Pure Premium is the third largest brand of all food products sold in grocery stores in the United States. 19

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Gatorade sports drinks was acquired by the Quaker Oats Company in 1983 and became a part of PepsiCo with the merger in 2001. Gatorade is the first isotonic sports drink. Created in 1965 by researchers at the University of Florida for the school's football team, "The Gators," Gatorade is now the world's leading sport's drink.

Quaker Foods North America


The Quaker Oats Company was formed in 1901 when several American pioneers in oat milling came together to incorporate. In Ravenna, Ohio, Henry D. Seymour and William Heston had established the Quaker Mill Company and registered the now famous trademark. Seymour wanted his product to be a symbol of honesty, integrity and strength. The figures of a man in Quaker clothes became the first registered trademark for breakfast cereal and remains the hallmark for Quaker Oats today. In Cedar Rapids, Iowa, John Stuart and his son, Robert, and their partner, George Douglas, operated the largest cereal mill of the time. Ferdinand Schumacher, known as "The Oatmeal King," had founded German Mills American Oatmeal Company in 1856. Combining The Quaker Mill Company with the Stuart and Schumacher businesses brought together the top oats milling expertise in the country as The Quaker Oats Company. The first major acquisition of the company was Aunt Jemina Mills Company in 1926, which is today the leading manufacturer of pancake mixes and syrup. In 1986, The Quaker Oats Company acquired the Golden Grain Company, producers of Rice-A-Roni. PepsiCo merged with The Quaker Oats Company in 2001. Its products still have the eminence of wholesome, good-for-you food, as envisioned by the company over a century ago.

PepsiCo, Inc. Code of Conduct


PepsiCo is committed to providing safe and healthy work environments and to being an environmentally responsible corporate citizen. It is their policy to comply with all applicable environmental, safety and healthy laws and regulations. They are dedicated to designing, constructing, maintaining and operating facilities that protect their people and physical resources. They believe that protecting the environment is an important part of good corporate citizenship. They are committed to minimizing the impact of their business on the environment with methods that are socially responsible, scientifically based and economically sound. They encourage conservation, recycling and energy use programs that promote clean air and water and reduce landfill waste.

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Great People
The last competitive advantage of PepsiCo mentioned is less tangible, but every bit as fundamental to their success. It involves people and values. They believe that, as a company, they are defined by their relationships with their consumers employees, partners and of course, their shareholders. Their destinies are very directly linked: As they grow, shareholders should grow as well. They are going to grow as long as Pepsi continues to attract, develop and retain world-class people. As part of this effort to have a world-class team, they strive to foster a diverse and inclusive work environment one that allows all their employees to achieve professional growth and fulfillment, without regard to gender, ethnicity or other differences. This Part of their executives' compensation is linked to the achievement of diversity goals related to hiring, promotion and turnover within the context of each operating unit's Affirmative Action Plans. And, in fact, their divisions achieves all their diversity goals. With business partners, they try to engage in relationships that are mutually beneficial. They can achieve sustainable success only if their partners & their bottlers succeed alongside them. Their retail customers from the multinational supermarket chain to the single unit convenience store should be able to earn a fair and reasonable profit selling their products, and they should provide them with the best opportunities for sales and profit growth. And their consumers, the people who eat and drink what they make, should get great quality and value every time they buy their brands. "Growth with Integrity" is an idea that binds them all together. They are focused and beautifully positioned to grow. And they continue to close in on their ultimate goal of being the world's very best consumer products company.

Social Aspects:
DOES PEPSI DONATE TO CHARITY?
Community involvement is important to Pepsi-Cola Company because their products touch the lives of so many people. That's why they make numerous inkind and monetary donations each year to support local and national charitable organizations.

DOES PEPSI SUPPORT THE ENVIRONMENT?


Pepsi-Cola has a strong history of caring for the environment. Their goal is to have the least possible impact on the environment, and so far they have been very successful. Among their environmentally friendly initiatives are the "Please Recycle" message on each and every container that they make, and

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their contributions to a number of programs designed to stop littering and promote recycling. Pepsi-Cola is committed to being an environmentally responsible corporate citizen. In their offices, they use their resources wisely and actively recycle cans and paper. They not only strive to meet local and state environmental laws, but also try to exceed them by being industry innovators. In 1995, Pepsi was one of only 20 companies honored by the U.S. Environmental Protection Agency (EPA).

WHAT'S FRESHNESS DATING?


At Pepsi-Cola, quality, taste and consumer satisfaction are their highest priorities. They take great care to ensure that Pepsi-Cola brands deliver the best taste available in soft drink refreshment. That's why since 1994, they have listed a freshness date on all of their packaging to ensure their loyal consumers can enjoy the best tasting beverages possible. While their products are never harmful when consumed after this date, they do recommend drinking the product by then to ensure its flavor is at its best. Also, by storing Pepsi in a cool place, great taste is guaranteed!

SHAREHOLDERS
PepsiCo (symbol: PEP) shares are traded principally on the New York Stock Exchange in the United States. The company is also listed on the Amsterdam, Chicago, Swiss and Tokyo stock exchanges. PepsiCo has consistently paid cash dividends since the corporation was founded.

Exceptional Innovation Capabilities


Without question, innovation is the single greatest driver of growth for PepsiCo and their product categories. After years of making innovation a high priority, PepsiCo has experience and capabilities unrivaled in their industry. Frito-Lay has by far the world's greatest institutional knowledge of snacks and snack consumption. Pepsi-Cola, a longtime leader in new products and packaging, recently added the creative resources of SoBe. And the combination of the Gatorade Sports Science Institute and the Tropicana Nutrition Center gives them unmatched expertise in the growing segment of "functional" beverages that offer nutrition or other health benefits consumers value. The beauty of innovation is the way it differentiates their products in the marketplace. New products and packages or changes to existing ones give consumers exciting new reasons to buy their brands. Equally important, innovation gives retailers a great new reason to feature them prominently. That's a big competitive advantage. So they grab every opportunity to differentiate their products through innovation. 22

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Differentiation also occurs in manufacturing. Frito-Lay patented a new process to produce more intense flavors in its Ruffles Flavor Rush snacks by coating the entire chip, front and back. For Tostitos Scoops, Frito-Lay developed technology to make tortilla chips, typically flat, in a threedimensional spoonlike shape suited to scooping salsa or dip. Sounds easy. It's not. New, more convenient packages also help them stand out from the competition. Tropicana's new 14-ounce plastic orange juice bottle is elegantly contoured to fit easily in the hand and the automobile cup holder. Similar thinking inspired Frito-Lay to create Go Snacks. These smaller versions of their traditional brands come in a plastic canister that also fits easily in hand and cup holder. On-the-go consumers can "pour" the snacks directly into their mouths. In one more example of innovative packaging, the Gatorade E.D.G.E. bottle is ergonomically designed for optimal thirst quenching. In a business where consumers demand great taste, innovative flavors also make their products distinctive. For example, Mountain Dew Code Red, a new version of Mountain Dew "with a rush of cherry flavor," hit the market in 2001 and became one of the most successful new soft drinks ever.

PEPSICO strategic business units

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Frito-Lay Brands
Lay's potato chips Lay's Bistro Gourmet potato chips Lay's kettle cooked potato chips Wavy Lay's potato chips Baked Lay's potato crisps Maui Style potato chips Ruffles potato chips Baked Ruffles potato chips Ruffles Flavor Rush potato chips Doritos tortilla chips 3D's snacks Tostitos tortilla chips Baked Tostitos tortilla chips Santitas tortilla chips Fritos corn chips Cheetos cheese flavored snacks Rold Gold pretzels Funyuns onion flavored rings Sunchips multigrain snacks Cracker Jack candy coated popcorn Chester's popcorn Grandma's cookies Munchos potato crisps Smartfood popcorn Baken-ets fried pork skins Oberto meat snacks Frito-Lay dips & salsas Frito-Lay nuts Doritos, Cheetos & Chester's snack crackers Fritos, Tostitos & Doritos snack kits Outside the U.S. Bocabits wheat snacks Crujitos corn snacks Fandangos corn snacks Hamka's snacks Niknaks cheese sticks Quavers potato snacks Sabritas potato chips Twisties cheese snacks Walkers potato crisps Walkers Square potato snacks Walkers French Fries potato sticks Walkers Monster Munch corn snacks Miss Vickie's potato chips Munchies snack mix Gamesa cookies Dippas Sonric's sweet snacks

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Pepsi-Cola Brands
Pepsi-Cola Caffeine Free Pepsi Diet Pepsi Caffeine Free Diet Pepsi ONE Wild Cherry Pepsi, Pepsi Twist Mountain Dew Diet Mountain Dew Mountain Dew Code Red Mug Sierra Mist Slice Lipton Brisk (Partnership) Lipton Iced Tea (Partnership) Dole juice drinks FruitWorks juice drinks Aquafina purified drinking water Frappuccino coffee beverages (Partnership) SoBe juice drinks and teas AMP Outside the U.S. Mirinda 7UP Pepsi Max Kas Teem Pepsi Limn Pepsi Light

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Gatorade Brands
Gatorade thirst quencher Gatorade Frost thirst quencher Gatorade Fierce thirst quencher Gatorade Ice thirst quencher Gatorade energy bar Propel fitness water

Tropicana Brands
Tropicana Pure Premium Tropicana Season's Best juices Tropicana Twister juice drinks Tropicana Smoothies Tropicana Pure Tropics juices Dole juices Outside the U.S. Loza juices and nectars Copella juices Frui'Vita juices Tropicana 100 juices Alvalle Gazpacho

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Quaker Brands
Quaker Oatmeal Quaker instant oatmeal Cap'n Crunch cereal Life cereal Quaker Toasted Oatmeal cereal Quaker 100% Natural cereal Quaker Squares cereal Quisp cereal King Vitaman cereal Quaker Bagged cereals Quaker Oh's! Cereal Mother's cereal Quaker rice cakes Quaker Quakes rice snacks Quaker Chewy granola bars Quaker Fruit & Oatmeal bars Rice-A-Roni side dishes Pasta Roni side dishes Near East couscous/pilafs Aunt Jemima mixes & syrups Quaker grits Outside the U.S. FrescAvena beverage powder Toddy chocolate powder Toddynho chocolate drink Coqueiro canned fish Sugar Puffs cereal Harvest Crunch cereal Cruesli cereal Quaker Oatso Simple hot cereal Scott's Porage Oats Quaker Snack-a-Jacks rice cakes Quaker Dipps granola bars

Water World - the battle for a global brand


The world's drinks giants Coca Cola and Pepsi are among the world's most recognised brand names. As the popularity of bottled mineral water continues to reach new highs and take share from these carbonates, questions of the first truly global water brand are beginning to surface. Among those best placed are Europe's big players. Can Evian, Volvic or Perrier create the Coke & Pepsi of the water world?

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Current Corporate Strategy:


Growth and Integrity
The 2001 results show that people across this company recognize that the single biggest reason for the merger is growth. Growth, after all, is what PepsiCo is about. It always has been. Growth is important. But equally important is how they get there. Growth and integrity have gone together at Pepsi for as long as their existence. And they will do everything in their power to ensure that continues. In fact, they literally designed PepsiCo so they can fulfill their ambitions for growth without ever having to cut corners, compromise their integrity or otherwise violate the sacred trust placed in PepsiCo by their shareholders, their employees and so many others.

Built to Grow
It starts with a laser focus on "convenience." Convenient, easy-to-consume products are the fastest-growing part of the global food and beverage industry. Around the world, people are spending hundreds of billions of dollars each year on foods and drinks that fit their busy lifestyles. And they're spending more each year. It's a vast opportunity. It's also an area they know very well. They have been making and selling convenient products for decades. In that time they have become the leader in convenient foods and drinks in the United States and the world they compete in. Far more exciting, they are better equipped than any other company for continued success in this big, expanding worldwide market.

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Product Portfolio:
HOW DO they MAKE PEPSI?
Actually, there's no secret to how to make Pepsi (except for the recipe). But there is a system. And that system, plus a lot of hard work, is what enables Pepsi-Cola and the independent Pepsi-Cola bottlers all around the world to bring the consumes that high-quality, consistently refreshing Pepsi taste each time they open one of pepsi's products. The system starts with the finest ingredients available -- kola nuts, vanilla beans, flavor oils, citrus, sweeteners and the purest waters we can distill. Then they add the best technology and all the care we can muster to blend their ingredients. And during the 100-plus years they have been making soft drinks, they have also created their own exacting production and quality standards, monitored with constant testing to guarantee quality and consistency in their products. Finally, they have their own local distribution system. It's designed to make sure that the Pepsi consumers open at home is as fresh and delicious as it was when they sealed it at their plant. And it serves every city and town in the world.

QUALITY
At every level of Pepsi-Cola Company, they take great care to ensure that the highest standards are met in everything they do. In their products, packaging, marketing and advertising, they strive for excellence because their consumers expect and deserve nothing less. They promise to work toward continuous improvement in all areas of their organization. At every step of their manufacturing and bottling process, strict quality controls are followed to ensure that Pepsi-Cola products meet the same high standards of quality that consumers have come to expect and value from them. They also follow strict quality control procedures during the manufacturing and filling of their packages. Each bottle and can undergoes a thorough inspection and testing process. Containers are then rinsed and quickly filled through a high-speed, state-of-the-art process that helps prevent any foreign material from entering the product. Additional quality control measures help to ensure the integrity of Pepsi-Cola products throughout the distribution process, from warehouse to store shelf.

WHAT INGREDIENTS ARE IN PEPSI PRODUCTS?


They only use the finest ingredients to make Pepsi-Cola products. To guarantee their consumers consistent quality, each ingredient must pass Pepsi29

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Cola's high standards, rigorous quality control tests and strict bottling procedures. All ingredients are listed on the label in order of decreasing amount. PepsiCola products contain natural flavors, including extracts of the kola nut, vanilla beans and flavor oils derived from natural sources such as citrus and other fruits. Caramel (made from corn sugar) adds color and flavor to our colas. Their ingredients add a refreshing taste: phosphoric acid in colas; citric acid and sodium citrate in Mountain Dew, Slice and Diet Pepsi. They also put a freshness date on every can and bottle. Soft drinks may lose some flavor over time so their freshness date tells consumers when the product is freshest and best tasting. Every can and bottle of Pepsi-Cola products has a Nutrition Facts panel, which shows the number of calories and other nutrients per serving. There is essentially no fat in any Pepsi-Cola products. The main ingredients found in Pepsi-Cola products include carbonated water, carbohydrates, sugar, sodium, potassium and caffeine. For a complete breakdown by ingredients by product, Pepsi, Diet Pepsi, Pepsi ONE, Mountain Dew, Slice, Mug Root Beer, Aquafina or FruitWorks is recommended.

Aspartame: Aspartame is a sugar substitute used in their diet beverages and many other food products. Aspartame is made of the same building blocks as protein, so it is considered a "nutritive sweetener," but the very small amounts used in diet drinks contribute no calories. Acesulfame-K: Acesulfame-K (or "Ace-K") is a non-nutritive, calorie-free sweetener. A blend of Acesulfame Potassium and Nutrasweet is used to provide taste and sweetness to Pepsi ONE. Sodium: All of their products are "low sodium" and contain less than 110 mg per eight-fluid- ounce serving. A number of beverages have less than 35 mg sodium per serving, so they are considered "very low sodium" products. Potassium: Potassium in Pepsi-Cola products may come from water or as part of certain ingredients. For example, potassium may be combined with benzoic acid, which helps prevent spoilage and flavor changes. Potassium is an electrolyte that helps meet the mineral needs of active people. Caffeine: Caffeine provides a characteristic flavor to soft drinks. Caffeine is naturally found in coffee, tea and chocolate. There is no caffeine in CaffeineFree Pepsi, Caffeine-Free Diet Pepsi, Fruitworks, Aquafina, Slice, MUG Root Beer/Cream Soda, Sierra Mist or Caffeine-Free Mountain Dew.

Pepsi Product Caffeine Content (per 8 fl. oz.)

Pepsi
The choice for great cola taste. Pepsi-Cola25 Caffeine-free Pepsi0 30

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Mountain Dew37

Diet Pepsi-Cola24 Caffeine-free Diet Pepsi0 Wild Cherry Pepsi25 Diet Wild Cherry Pepsi24 Pepsi ONE37 Pepsi Twist25 Diet Pepsi Twist24

Caffeine-free Mountain Dew0 Diet Mountain Dew37 Caffeine-free Diet Mountain Dew0

Mug Root Beer0


Diet Mug Root Beer0 Mug Cream Soda0 Diet Mug Cream Soda0

Orange Slice0
Diet Orange Slice0 Lemon-Lime Slice0 Fruit Punch Slice0 Pineapple Slice0 Strawberry Slice0 Peach Slice0

Sierra Mist0
Aquafina0 Fruitworks (all flavors) 0 Lipton Brisk6

Pepsi ONE (8 fl. oz)


Contains: Carbonated water, caramel color, natural and artificial flavors, phosphoric acid, aspartame, citric acid, sodium benzoate (preserves freshness), caffeine and acesulfame potassium. Calories1 Total Fats (g) 0 Sodium (mg) 30 31

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Potassium (mg) 20 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 37

PEPSI TWIST
New Pepsi Twist is a refreshing alternative to the usual cola. It's got the same great taste of Pepsi, but they have added a twist of lemon for an unexpected zing a little twist on a great thing. Pepsi Twist (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, caramel color, phosphoric acid, potassium citrate, caffeine, citric acid, potassium benzoate (preserves freshness), ascorbic acid, calcium disodium EDTA (to protect flavor) and natural flavors. % Juice0 Calories100 Total Fats (g) 0 Sodium (mg) 25 Sodium (%DV)1 Total Carbohydrates (g) 28 Total Carbohydrates (%DV) 9 Sugars (g) 27 Protein (g) 0 Caffeine (mg) 25

Diet Pepsi Twist (8 fl. oz)

Contains: Carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate (preserves freshness), caffeine, citric acid and natural flavors.
% Juice0 Calories0 Total Fats (g) 0 Sodium (mg) 25 Sodium (%DV) 1 Total Carbohydrates (g) 0 Total Carbohydrates (%DV) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 24

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SIERRA MIST
Sierra Mist (8 fl. oz)

Contains: Carbonated water, high fructose corn syrup and/or sugar, natural flavors, citric acid, potassium benzoate (preserves freshness), potassium citrate, ascorbic acid, calcium disodium EDTA (to protect flavor).
Calories100 Total Fats (g) 0 Sodium (mg) 25 Potassium (mg) 0 Total Carbohydrates (g) 26 Sugars (g) 26 Protein (g) 0 Caffeine (mg) 0

DIET SIERRA MIST


Diet Sierra Mist (8 fl. oz) Calories0 Total Fats (g) 0 Sodium (mg) 25 Total Carbohydrates (g)<1 Sugars (g) 1 Protein (g) 0 Caffeine (mg) 0

SLICE
Bolder, better and caffeine free! Other Slice flavors include: Diet Orange, Lemon-Lime, Diet Lemon-Lime, Fruit Punch, Pineapple, and Strawberry, Dr. Slice and Slice Red. Orange Slice (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium citrate, potassium benzoate (preserves freshness), gum arabic, malic acid, potassium sorbate (preserves freshness), yellow 6, salt, ester gum, natural flavors, calcium disodium EDTA (to protect flavor) and brominated vegetable oil. Calories130 Total Fats (g) 0 Sodium (mg) 35 33

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Potassium (mg) 70 Total Carbohydrates (g) 34 Sugars (g) 33 Protein (g) 0 Caffeine (mg) 0

Diet Orange Slice (8 fl. oz) Contains: Carbonated water, citric acid, aspartame, potassium citrate, potassium benzoate (preserves freshness), citrus pectin, gum arabic, yellow 6, salt, malic acid, glycerol ester of wood rosin, natural flavors, calcium disodium EDTA (to protect flavor) and brominated vegetable oil. Calories0 Total Fats (g) 0 Sodium (mg) 35 Potassium (mg) 60 Total Carbohydrates (g) 1 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 0

Fruit Punch Slice (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium benzoate (preserves freshness), gum arabic, salt, red 40, potassium sulfate, glycerol ester of wood rosin, calcium disodium EDTA (to protect flavor) and natural and artificial flavors. Calories120 Total Fats (g) 0 Sodium (mg) 35 Potassium (mg) 28 Total Carbohydrates (g) 34 Sugars (g) 32 Protein (g) 0 Caffeine (mg) 0

Strawberry Slice (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, natural and artificial flavors, citric acid, potassium benzoate (preserves freshness), salt, red 40, potassium sulfate and calcium disodium EDTA (to protect flavor). Calories120 Total Fats (g) 0 Sodium (mg) 35 34

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Potassium (mg) 27 Total Carbohydrates (g) 31 Sugars (g) 31 Protein (g) 0 Caffeine (mg) 0

Cherry Lime Slice (8 fl. oz) Contains: High fructose corn syrup and/or sugar, treated water, natural and artificial flavors, citric acid, sodium benzoate (preserves freshness), gum arabic, red 40 and caramel color. Calories110 Total Fats (g) 0 Sodium (mg) 30 Potassium (mg) 0 Total Carbohydrates (g) 29 Sugars (g) 28 Protein (g) 0 Caffeine (mg) 0

Pineapple Slice (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium benzoate (preserves freshness), gum arabic, salt, potassium sulfate, natural and artificial flavors, glycerol ester of wood rosin, calcium disodium EDTA (to protect flavor), yellow 5 and yellow 6.

FRAPPUCCINO
The taste that makes the break. Starbucks Frappuccino Coffee Drinks are distributed through the North American Coffee Partnership (NACP), a joint venture between Pepsi-Cola North America and Starbucks. Bottled Frappuccino drinks are the creamy, cold, delicious coffee drinks that allow you to have a Starbucks moment anytime, anywhere. They come in several indulgent flavors: Coffee, Mocha, Vanilla, Mocha Light and Mocha Amaretto. They are available in single serve, four-packs, and 12-packs. FRUITWORKS FruitWorks is fortified with 100% of the RDI (U.S. Recommended Daily Intake) of Vitamin C and 20% of selected B Vitamins. There are currently five exciting fruit blends available --Apple Raspberry, Peach Papaya, Pink 35

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Lemonade, Strawberry Melon, and Tangerine Citrus -- all of which are carbonation and caffeine free. Apple Raspberry (8 fl. oz) Contains: Water, high fructose corn syrup, filtered pear juice from concentrate, malic acid, natural flavors, phosphoric acid, ascorbic acid (vitamin C), sodium polyphosphates, potassium benzoate and potassium sorbate (preserves freshness), citric acid, xanthan gum, red 40, calcium disodium EDTA (to protect flavor), B vitamins (niacin, pantothenic acid and vitamin B6), and blue 1. Calories100 Total Fat (g) 0 Sodium (mg) 70 Potassium (mg) 25 Total Carbohydrates (g) 28 Sugars (g) 25 Protein (g) 0 Caffeine (mg) 0 Peach Papaya (8 fl. oz) Contains: Water, high fructose corn syrup, filtered pear juice from concentrate, citric acid, phosphoric acid, ascorbic acid (vitamin C), sodium polyphosphates, natural flavors, potassium benzoate (preserves freshness), gum arabic, potassium citrate, potassium sorbate (preserves freshness), xanthan gum, ester gum, calcium disodium EDTA (to protect flavor), B vitamins (niacin, pantothenic acid and vitamin B6), yellow 6 and red 40. Calories110 Total Fat (g) 0 Sodium (mg) 70 Potassium (mg) 40 Total Carbohydrates (g) 30 Sugars (g) 28 Protein (g) 0 Caffeine (mg) 0 Pink Lemonade (8 fl. oz) Contains: Water, high fructose corn syrup, citric acid, clarified lemon juice from concentrate, natural flavors, ascorbic acid (vitamin C), sodium polyphosphates, potassium citrate, potassium benzoate (preserves freshness), gum arabic, potassium sorbate (preserves freshness), ester gum, calcium disodium EDTA (to protect flavor), B vitamins (niacin, pantothenic acid and vitamin B6), and red 40. Calories110 Total Fat (g) 0 Sodium (mg) 50 Potassium (mg) 55 Total Carbohydrates (g) 30 36

Strategic Marketing

Pepsi Cola

Sugars (g) 29 Protein (g) 0 Caffeine (mg) 0 Strawberry Melon (8 fl. oz) Contains: Water, high fructose corn syrup, filtered pear juice from concentrate, citric acid, phosphoric acid, potassium citrate, natural flavors, ascorbic acid (vitamin C), sodium polyphosphates, potassium benzoate (preserves freshness), gum arabic, potassium sorbate (preserves freshness), xanthan gum, ester gum, calcium disodium EDTA (to protect flavor), B vitamins (niacin, pantotheic acid and vitamin B6), red 40 and blue 1. Calories110 Total Fat (g) 0 Sodium (mg) 70 Potassium (mg) 70 Total Carbohydrates (g) 30 Sugars (g) 25 Protein (g) 0 Caffeine (mg) 0

Tangerine Citrus (8 fl. oz) Contains: Water, high fructose corn syrup, filtered pear juice from concentrate, citric acid, natural flavors, ascorbic acid (vitamin C), sodium polyphosphates, phosphoric acid, potassium benzoate (preserves freshness), gum arabic, potassium sorbate (preserves freshness), xanthan gum, ester gum, calcium disodium EDTA (to protect flavor), B vitamins (niacin, pantothenic acid and vitamin B6), yellow 5 and red 40. Calories100 Total Fat (g) 0 Sodium (mg) 50 Potassium (mg) 25 Total Carbohydrates (g) 28 Sugars (g) 25 Protein (g) 0 Caffeine (mg) 0

Regular Pepsi (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, caramel color, phosphoric acid, caffeine, citric acid and natural flavors. Calories100 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 10 37

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Total Carbohydrates (g) 27 Sugars (g) 27 Protein (g) 0 Caffeine (mg) 25

Regular Caffeine-Free Pepsi (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, caramel color, phosphoric acid, citric acid and natural flavors. Calories100 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 10 Total Carbohydrates (g) 27 Sugars (g) 27 Protein (g) 0 Caffeine (mg) 0 Diet Pepsi (8 fl. oz) Contains: Carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate (preserves freshness), caffeine, citric acid and natural flavors. Calories0 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 20 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 24

Diet Caffeine-Free Pepsi (8 fl. oz) Contains: Carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate (preserves freshness), citric acid and natural flavors. Calories0 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 20 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 0

Wild Cherry Pepsi (8 fl. oz)

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Contains: Carbonated water, high fructose corn syrup and/or sugar, caramel color, phosphoric acid, natural flavors, caffeine, and citric acid. Calories110 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 5 Total Carbohydrates (g) 29 Sugars (g) 29 Protein (g) 0 Caffeine (mg) 25

Diet Wild Cherry Pepsi (8 fl. oz) Contains: Carbonated water, caramel color, phosphoric acid, aspartame, potassium benzoate (preserves freshness), gum arabic, natural flavors and caffeine. Calories0 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 18 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 24

LIPTON BRISK ICED TEA AND LIPTON ICED TEA:


Lipton's Iced Tea Lipton's Ice Tea is the real deal. For self-assured, energetic tastes. The Pepsi Lipton Tea Partnership is a joint venture between Pepsi-Cola Company and Lipton, based in Englewood, Cliffs, and New Jersey. The partnership produces, markets and distributes ready-to-drink Lipton BRISK, Lipton Iced Tea and Lipton BRISK Fountain Iced Tea. LIPTON BRISK It's bold, it's confident, it's Lipton BRISK. BRISK is available in four bold flavors: Lemon, Diet Lemon, Raspberry and Sweet Tea and is available in 20ounce, one-liter and two-liter bottles, convenient 12-pack and 24-pack cans and on the fountain. Lipton Brisk Lemon Flavored (8 fl. oz) 39

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Contains: Water, High Fructose Corn Syrup and/or Sugar, Citric Acid, Instant Tea, Sodium Polyphosphates, Natural Flavors, Phosphoric Acid, Sodium Benzoate and Potassium Sorbate (Preserves Freshness), Caramel Color, Calcium Disodium EDTA (To Protect Flavor) and Red 40. Calories80 Total Fat (g) 0 Sodium (mg) 65 Total Carbohydrates (g) 23 Sugars (g) 22 Protein (g) 0 Caffeine (mg) 6

Lipton Brisk Raspberry (8 fl. oz) Contains: Water, High Fructose Corn Syrup and/or Sugar, Natural Flavors, Citric Acid, Instant Tea, Phosphoric Acid, Sodium Polyphosphates, Potassium Sorbate and Potassium Benzoate (Preserves Freshness), Caramel Color, Calcium Disodium EDTA (To Protect Flavor) and Red 40. Calories90 Total Fat (g) 0 Sodium (mg) 50 Total Carbohydrates (g) 24 Sugars (g) 23 Protein (g) 0 Caffeine (mg) 7

Lipton Brisk Tea Sweetened No Lemon (8 fl. oz) Contains: Water, High Fructose Corn Syrup and/or Sugar, Phosphoric Acid, Natural Flavors, Instant Tea, Sodium Polyphosphates, Potassium Sorbate and Potassium Benzoate (Preserves Freshness), Caramel Color, Citric Acid, Calcium Disodium EDTA (To Protect Flavor) and Red 40. Calories70 Total Fat (g) 0 Sodium (mg) 50 Total Carbohydrates (g) 18 Sugars (g) 18 Protein (g) 0 Caffeine (mg) 5

Diet Lipton Brisk Lemon Flavored (8 fl. oz) Contains: Water, Citric Acid, Instant Tea, Natural Flavors, Sodium Polyphosphates, Caramel Color, Potassium Sorbate and Potassium Benzoate (Preserves Freshness), Aspartame, Citrus Pectin, Acesulfame Potassium, Calcium Disodium EDTA (To Protect Flavor) and Red 40. 40

Strategic Marketing

Pepsi Cola

Calories0 Total Fat (g) 0 Sodium (mg) 50 Total Carbohydrates (g)<1 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 7 Mirinda Orange (8 fl. oz)

Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium benzoate (preserves freshness), purity gum, yellow 6, natural flavor, ester gum, ascorbic acid (to protect flavor) and sodium citrate. Calories110 Total Fat (g) 0 Sodium (mg) 25 Total Carbohydrates (g) 31 Sugars (g) 31 Protein (g) 0

Mirinda Red (8 fl. oz)

Contains: Carbonated water, high fructose corn syrup and/or sugar, natural and artificial flavor, citric acid, potassium benzoate (preserves freshness), salt, red 40, calcium disodium EDTA (to protect flavor). Calories140 Total Fat (g) 0 Sodium (mg) 45 Total Carbohydrates (g) 38 Sugars (g) 38 Protein (g) 0

Mirinda Fruit Punch (8 fl. oz)

Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium benzoate (preserves freshness), gum arabic, salt, red 40, potassium sulfate, natural and artificial flavors, ester gum and calcium disodium EDTA (to protect flavor).
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Calories120 Total Fat (g) 0 Sodium (mg) 35 Total Carbohydrates (g) 34 Sugars (g) 32 Protein (g) 0

Mirinda Grape (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, artificial flavors, potassium benzoate (preserves freshness), salt, red 40 and blue 1. Calories120 Total Fat (g) 0 Sodium (mg) 45 Total Carbohydrates (g) 34 Sugars (g) 33

Mirinda Grapefruit (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, citric acid, potassium benzoate (preserves freshness), purity gum, Erythorbic acid (preserves freshness), ester gum, natural flavors, and caramel color. Calories120 Total Fat (g) 0 Sodium (mg) 25 Total Carbohydrates (g) 32 Sugars (g) 31 Protein (g) 0

Regular (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, concentrated orange juice and other natural flavors, citric acid, sodium benzoate (preserves freshness), caffeine, sodium citrate, gum arabic, yellow 5, Erythorbic acid (preserves freshness), calcium disodium EDTA (to protect flavor) and brominated vegetable oil. Calories110 Total Fat (g) 0 Sodium (mg) 50 Potassium (mg) 0 Total Carbohydrates (g) 31 Sugars (g) 31 Protein (g) 0 42

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Caffeine (mg) 37 Mountain Dew: Code Red (8 fl. oz) Contains: Contains: Carbonated Water, High Fructose Corn Syrup and/or Sugar, Orange Juice from concentrate, Citric Acid, Sodium polyphosphates, Natural Flavor, Sodium Benzoate (Preserves Freshness), Caffeine, Sodium Citrate, Gum Arabic, Erythorbic Acid (Preserves Freshness), Calcium Disodium EDTA (to protect flavor), Red 40, Potassium benzoate (Preserves Freshness), Brominated Vegetable Oil, Yellow 5 and Blue 1. Calories110 Total Fat (g) 0 Sodium (mg) 70 Potassium (mg) 0 Total Carbohydrates (g) 31 Sugars (g) 30 Protein (g) 0 Caffeine (mg) 37

Diet Mountain Dew (8 fl. oz) Contains: Carbonated water, concentrated orange juice, citric acid, aspartame, potassium benzoate (preserves freshness), citrus pectin, potassium citrate, caffeine, gum arabic, natural flavors, brominated vegetable oil, yellow 5 and Erythorbic acid (preserves freshness). Calories0 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 45 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 37

Regular Caffeine-Free Mountain Dew (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, concentrated orange juice and other natural flavors, citric acid, sodium benzoate (preserves freshness), sodium citrate, gum arabic, Erythorbic acid (preserves freshness), calcium disodium EDTA (to protect flavor), yellow 5 and brominated vegetable oil. Calories110 Total Fat (g) 0 Sodium (mg) 50 43

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Potassium (mg) 0 Total Carbohydrates (g) 31 Sugars (g) 31 Protein (g) 0 Caffeine (mg) 0

Diet Caffeine-Free Mountain Dew (8 fl. oz) Contains: Carbonated water, concentrated orange juice, citric acid, aspartame, potassium benzoate (preserves freshness), citrus pectin, potassium citrate, gum arabic, natural flavors, brominated vegetable oil, yellow 5 and Erythorbic acid (preserves freshness). Calories0 Total Fat (g) 0 Sodium (mg) 25 Potassium (mg) 45 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 0

Mug Root Beer (8 fl. oz)


Contains: Carbonated water, high fructose corn syrup and/or sugar, caramel color, sodium benzoate (preserves freshness), natural and artificial flavors, citric acid, modified food starch, Erythorbic acid (preserves freshness) and gum arabic. Calories110 Total Fat (g) 0 Sodium (mg) 45 Potassium (mg) 0 Total Carbohydrates (g) 29 Sugars (g) 29 Protein (g) 0 Caffeine (mg) 0

Diet Mug Root Beer (8 fl. oz) Contains: Carbonated water, caramel color, aspartame, sodium benzoate (preserves freshness), natural and artificial flavors, citric acid, modified food starch and gum arabic. Calories0 Total Fat (g) 0 Sodium (mg) 45 Potassium (mg) 0 44

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Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 0

Mug Cream Soda (8 fl. oz) Contains: Carbonated water, high fructose corn syrup and/or sugar, natural and artificial flavors, sodium benzoate (preserves freshness), citric acid and caramel color. Calories120 Total Fat (g) 0 Sodium (mg) 45 Potassium (mg) 0 Total Carbohydrates (g) 32 Sugars (g) 32 Protein (g) 0 Caffeine (mg) 0

Diet Mug Cream Soda (8 fl. oz) Contains: Carbonated water, natural and artificial flavors, sodium benzoate (preserves freshness), aspartame, citric acid and caramel color. Calories0 Total Fat (g) 0 Sodium (mg) 50 Potassium (mg) 0 Total Carbohydrates (g) 0 Sugars (g) 0 Protein (g) 0 Caffeine (mg) 0

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S.W.O.T ANALYSIS
General Environment
THREATS & OPPORTUNITIES Social The social aspect pertaining to the case is very important and relevant. the impact of the social environment on Pepsi is very favorable due to the increase in population especially in the youth. Economic: The economic environment described in the case as well as through our research is again important & relevant. And although the world economy is in recession but loyal customers as well as other PepsiCo brand lovers managed to purchase their products. Political: The Pepsi legacy continues even after a hundred years and over the span of time a part of few minor glitches Pepsi has been operating in a very favorable political environment through out the world. Legal: Pepsi has adhered to all the legalities of the individual nations and due to this strict code of conduct they've never really come across any unnecessary legal issues. Technological: When it comes to Pepsi, it isn't an issue of technology but an issue of a Formula that is for the new product development they don't necessarily wait for technology advancement but bank on their formula advancement.

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Operating Environment:
International: Pepsi has developed a very strong based for its operation in the International arena and as such they don't have any obstacles. Suppliers: The suppliers of the Pepsi Co. hold a very favorable position not only in the eyes of the company but also in the eyes of the consumers. And hold a very special position in supplying the Pepsi products. Competition: Pepsi has never closed its eyes even to the smallest direct or indirect competitors and since the beginning always forged ahead with either mergers or acquisitions. This shows the seriousness of the Pepsi Co. towards its commitments to be best in food & Beverages Company in the world. Coca-Cola is considered the biggest competitor of the Pepsi Cola Company, & strategist at every level specially keep in mind the activities of Coke. Customers: Pepsi Cola holds its customers at a very special place because they know their existence depends on their loyal customers, & it's their commitment to this customer base and their customers loyalty to the Pepsi Cola Company which has turned their Brands into a forever brand. Labour: Integrity in the Pepsi Co. is followed in any & every situation and compromise on this integrity is never endeared. Pepsi Co. over its hundred-year history has never had problems with its employees due to its employee friendly policies. And their labour force also realizes their part and their roles in the growth & prosperity of Pepsi Co.

Internal Environment:
STRENGTHS & WEAKNESSES Organizational Aspect: The internal working environment of Pepsi Co. is very advanced again due to their vast experience at Pepsi Co. managers at all levels are not afraid to make mistakes which may be uncontrollable and always refer to their seniors for assistance or advise. Marketing Aspect: The marketing team of Pepsi Co. continues to lead the marketing aspects in the beverages industry around the globe with their most wild imaginative and 47

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creative ideas which have created a personality for the Pepsi Co. brands which is shared by their customers. Every product of Pepsi characterizes the ideal or actual personality of their customers. Financial Aspect: Pepsi Co. is a listed company on most of the global stock exchanges they have a special commitment towards its shareholders and towards the increment of their shareholders' wealth. Pepsi Co. enjoys excellent working relationship with their creditors and have never gone back on their financial commitment even in time of world wars and when the "great depression" occurred. Personnel Aspect: As mentioned earlier, Pepsi Co. takes very good care of its employees and intern demands the highest level of commitment from its personnel. in their eyes it's a game of give & take which they've been following very effectively. Production Aspect: Pepsi Co. uses state of the art production facilities through out the world even in regions where they are not producing directly. They use the highest standards of quality raw material which constitutes their products.

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GE MULTIFACTOR PORTFOLIO MATRIX


This approach has many names including the nine cell GE Matrix. GEs nice cell business portfolio matrix and the market attractiveness business strength matrix. It was developed at General Electric with the help of McKinsey and Company. A leading consulting firm. Each of an organization Business or Product is plotted in the matrix on two dimensions, industry attractiveness and business strength . each of these two major dimensions is a composite measure of a variety of factors. The two-dimension make good sense for strategy formulation, because a successful business is typically on that is in an attractive industry and has the particular business strengths required to succeed Depending of where businesses are plot on the matrix , three basic strategies are formulated Invest and grow Select Investment Harvest/Divest

In our analysis we draw GE nine cell matrix based on the information given in case study , for different brand owned by Pepsi Co, and are available in Pakistan These Brands are Mirinda Pepsi Cola Diet Pepsi Mountain Dew 7 Up Slice Aquafina

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Computation of Industry Attractiveness and Business Strengths


Mirinda Industry Attractiveness 1 2 3 4 5 6 7 8 Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment Weight 0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1 Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000 Rating 2 2 4 4 3 2 4 3 3 5 4 5 Rating 4 3 2 2 2 4 2 5 Value 0.8 0.6 0.3 0.3 0.1 0.2 0.1 0.75 3.15 Value 0.2 0.3 0.4 0.4 0.15 0.3 0.1 0.075 0.15 0.25 0.2 0.75 3.275

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Pepsi
Industry Attractiveness 1 2 3 4 5 6 7 8 Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment Weight 0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1 Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000 Rating 5 3 4 5 4 4 5 4 4 5 5 5 Rating 5 4 4 2 2 4 2 5 Value 1 0.8 0.6 0.3 0.1 0.2 0.1 0.75 3.85 Value 0.5 0.45 0.4 0.5 0.2 0.6 0.125 0.1 0.2 0.25 0.25 0.75 4.325

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Diet Pepsi
Industry Attractiveness 1 2 3 4 5 6 7 8 Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment Weight 0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1 Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000 Rating 2 4 5 5 3 4 4 4 3 4 5 5 Rating 4 4 2 4 2 4 2 5 Value 0.8 0.8 0.3 0.6 0.1 0.2 0.1 0.75 3.65 Value 0.2 0.6 0.5 0.5 0.15 0.6 0.1 0.1 0.15 0.2 0.25 0.75 4.1

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Mountain Dew
Industry Attractiveness 1 2 3 4 5 6 7 8 Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment Weight 0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1 Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000 Rating 1 1 2 1 2 1 1 0 1 4 1 2 Rating 4 3 2 1 2 3 2 5 Value 0.8 0.6 0.3 0.15 0.1 0.15 0.1 0.75 2.95 Value 0.1 0.15 0.2 0.1 0.1 0.15 0.025 0 0.05 0.2 0.05 0.3 1.425

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Slice
Industry Attractiveness 1 2 3 4 5 6 7 8 Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment Weight 0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1 Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000 Rating 3 3 4 3 4 3 4 3 3 5 3 4 Rating 4 3 2 2 2 4 2 5 Value 0.8 0.6 0.3 0.3 0.1 0.2 0.1 0.75 3.15 Value 0.3 0.45 0.4 0.3 0.2 0.45 0.1 0.075 0.15 0.25 0.15 0.6 3.425

7 Up Industry Attractiveness Weight Rating 79 Value

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1 2 3 4 5 6 7 8

Overall Market Size Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment

0.20 0.20 0.15 0.15 0.05 0.05 0.05 0.15 1

5 4 4 1 2 4 2 4

1 0.8 0.6 0.15 0.1 0.2 0.1 0.6 3.55

Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel

Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000

Rating 4 4 5 4 5 4 5 4 4 5 3 5

Value 0.4 0.6 0.5 0.4 0.25 0.6 0.125 0.1 0.2 0.25 0.15 0.75 4.325

Aquafina
Industry Attractiveness 1 Overall Market Size Weight 0.20 Rating 5 Value 1

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2 3 4 5 6 7 8

Annual Market Growth Rate Historical Profit Margin Competitive Intensity Technological Requirement Inflationary Vulnerability Energy Requirements Environment

0.20 0.15 0.15 0.05 0.05 0.05 0.15 1

5 4 1 2 4 2 4

1 0.6 0.15 0.1 0.2 0.1 0.6 3.75

Business Strengths 1 2 3 4 5 6 7 8 9 10 11 12 Market Share Share Growth Product Quality Brand Reputation Distribution Network Promotional Effectiveness Productive Capacity Productive Efficiency Unit Costs Material Supplies R&D Performance Managerial Personnel

Weight 0.100 0.150 0.100 0.100 0.050 0.150 0.025 0.025 0.050 0.050 0.050 0.150 1.000

Rating 3 4 5 2 1 1 5 2 5 5 3 3

Value 0.3 0.6 0.5 0.2 0.05 0.15 0.125 0.05 0.25 0.25 0.15 0.45 3.075

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NEW CORPORATE MISSION:


To create superior customer value and maximize shareholders equity by developing new products and reaching more markets. Our success depends on the quality, our product they must be safe, economically efficient and environment friendly. We take care all our stakeholders and work as a family and provide equal opportunity to all our employees to develop and grow with their own company.

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Objectives
Increase Profitability and shareholders wealth Cost Cutting by improving methods of production New product development To enter new markets for existing products Improve quality of our products To enhance corporate image and become worlds number one organization in soft drink industry More opportunities for employees to develop and grow Safe guard natural environment

Corporate Strategy:
Strategy related to specific Brand:
Mirinda Industry is relatively attractive and Business strengths needs more concentration at the same time company holds moderate market share. Company should follow Invest/grow Strategy Pepsi Cola Industry is attractive and Business strengths are good at the same time Pepsi holds good market share. Company can follow Selective investment strategy. Diet Pepsi Industry attractiveness is high but total market is size is comparatively small. Business holds relatively good strengths. In such case company can make selective investment. Mountain Dew Industry attractiveness is medium and Company is lacking business strengths. In such case company have two choices either it can make some investment to get the desire capabilities or it can Harvest. 7 Up Industry attractiveness is high and Business strengths are good . Therefore there is no need to make huge investment rather selective investment can be make in some areas of interest. Slice 83

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Industry attractiveness is moderate and same in case of business strengths. Company need to make investment to over come the weak point its has. Aquafina Industry is highly attractive but business is lacking some required strengths. So think that company must make investment to over come its weak points.

Other Corporate Strategies:


New product development:
From our analysis of whole case study and relevant information gathered we come to know that there is a room for new product in company product mix offered in Pakistan. Company may introduce some of its exiting products in Pakistan or come up with entirely new product that could compete with Local Brand like ROOH AFZA, NORUS, etc.

Strategic Alliance, Theres Strength In Numbers


Strategic alliances occur when two separate businesses join together to offer a broader set of skills or services to joint clients, to the mutual benefit of both companies. An alliance between companies that provide different, but complementary, services or products allows both companies to create an advantage over competitors by broadening the scope of their operations. Alliances can make your business more valuable to your client, expand your business, multiply your sales force, and give you a dependable supplier of the aligned service or product. There are no rules restricting alliances: Large businesses may join with small businesses and vice versa; small businesses may band together, or large businesses may collaborate with each other. But there are three basic characteristics that most successful alliances share: The alliance benefits both partners. Good agreements open new doors for the partners and allow room to evolve as future opportunities occur. Successful alliances create new value through collaboration. Partners must value the skills each party brings to the alliance. For an alliance to flourish, both parties must be involved in managing the partnership. An alliance without trust and respect is doomed to failure. Pepsi Co can have strategic alliance with other up stream and down stream organization, this will give them competitive edge over their competitors. While going for an strategic alliance Pepsi must concentrate on what they do best, and bring added value to their customers.

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Marketing Strategy
SEGMENTING
They are committed to marketing their products to all groups, treating all customers with respect, sensitivity and fairness, while providing some of the greatest products on earth. Early in its history - as far back as the 1940s - Pepsi-Cola recognized the importance of diversity. Pepsi pioneered targeted marketing and national lifestyle advertising featuring minorities. they developed education and sports programs spotlighting minorities. they partnered with many groups to create programs that contribute to minority communities. they sponsored major music tours by entertainers such as Michael Jackson and Tina Turner. they support minority media and interests. Over the years, their success has been recognized with numerous awards. Most importantly, their products are purchased and enjoyed by all groups of consumers.

PACKAGING
Providing their consumers with easy-to-use, convenient and innovative containers is one of their top priorities. Package introductions they have made over the years include the industry's first two-liter bottle; the first company to respond to consumer preference with lightweight, recyclable, plastic bottles; The Cube, an easy-to-store 24-pack; Big Slam, the wide-mouth one-liter bottle; as well as our three-liter bottle, designed to provide consumers with extra value (not all products and packaging is available in all markets). Their local bottlers, many of which are privately owned, franchise operations, make all packaging decisions. Most of their bottlers are following the industry-wide trend to use plastic packaging due to environmental considerations. The industry is now making greater use of fully recyclable aluminum cans and PET plastic bottles. The "CUBE" is Pepsi's new innovative 24-can multipack. It was dubbed the "CUBE" by consumer focus groups, which are a small test market population that's invited by Pepsi-Cola to give the company feedback before the introduction of a new package or product. The consumer focus groups Pepsi used for this product coined the name the "CUBE" and it stuck! Polyethylene terephthalate, or "PET plastic," is a form of polyester used to make strong, lightweight, shatter-resistant bottles for soft drinks, water, juice and other non-food products. Bottles made from PET plastic, which are marked with the number one code on the or near the bottle of the bottle, are recyclable into products including new containers, fiberfill for sleeping bags and coats, fabric, carpet, auto parts, film and more

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PRICING
Providing quality products at the lowest possible price has always been one of Pepsi's main concerns. One of the ways they have been able to assist this effort is by expanding their use of inexpensive and recyclable plastic bottles. The soft drink industry today is confronted with a bewildering array of price increases. Their expenditures for labor, ingredients, transportation and more all continue to rise. The cost of aluminum alone has increased dramatically since last year. Across their entire system however, they have been cutting overhead and re-engineering their manufacturing process in order to keep their prices competitive. It is their policy to limit any price increases to the retail trade to the lowest possible extent.

Distribution Service
They should go to market through a distribution network offering extraordinary strength and flexibility. Their goal should be to put their products within easy reach of the consumer. Their distribution systems must be design to help then to achieve their goal. Because practices and customs vary by market and because retail customers have different needs, Therefore they Should have several successful models for service that they use around the world. Direct Store Delivery Vast and powerful direct store delivery (DSD) systems are at the heart of that network. Through these systems they take snacks and drinks directly to tens of thousands of distribution outlets, from the tiniest convenience store to the largest warehouse outlet. They and their bottlers actually take products into the store and set them on the shelves. That helps to ensure that their products are fresh and that fragile items like potato chips are handled with care. It also allows them to merchandise their brands for maximum visibility and appeal. Their systems can move new products into distribution very quickly, sometimes as fast as a week. And because they call on retail customers so frequently, they know very quickly how a new product is selling. At the same time, DSD provides big financial benefits to retailers. Since they handle the products and do the merchandising, retailers save on labor. And because their products typically are sold and restocked every few days, while retailers pay for them on 30-day cycles, they add a lot to a store's cash flow.

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Promotion
Promotion is the specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives. Objectives The objectives that are met by promoting are to move the target market through the following phases: Unawareness -> Awareness -> Beliefs/Knowledge -> Attitude -> Purchase Intention -> Purchase It is believed that consumers cannot skip over a phase, but they need to move through them. Promotion is used to move the target market from one phase to another to finally purchase. The Offer The offer needs to be identified before you begin any promoting. What are you offering the target customer? What do you want the target market to do?

PEPSI ADVERTISING
For over 100 years, Pepsi-Cola has produced some of the finest soft drinks ads available anywhere in the world. From today's "Joy of Cola" campaign starring "Pepsi Girl" Hallie Eisenberg to yesterday's "Nickel, Nickel" (1939), their ads are as memorable as the products they produce. Both electronic and print media is used for promotional purpose.

Pepsis brand management


The bond arising from the customer's entire experience with the brand leads to a relationship that can last forever. As the alignment grows stronger, so does the brand. People love it. And they buy it. Thus, born in corporate boardroom, pepsi has become a social artifact, having stolen its way into the popular lexicon and created history. This forever brand has continued to survive in spite of the changes taking place all around it. And the passage of time has failed to tarnish its glory. Who cares what it is made of? What matters is only that its tangy flavor has quenched the thirst of millions, its swoosh of effervescence has soothed parched souls since the 1890s and its scarlet hue has painted the world in to its three colours. on one hand we have a marketing meltdown that is flagellating at least 50 per cent of all brands, on the other we have Pepsi that has continued to achieve meteoric growth despite all odds. This begs one question: what makes this forever brand different? The search for the right answer is what has driven an extensive research effort over the past few years to extract the essence of the success and to study the core ideas that have clicked so well with the consumers. In the campaigns of this forever brand-five ways have been 87

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identified to the consumers' heart: self-statement, emotion, perception, virtual benefit, pride and values.

Self-statement
Consumers prefer pepsi because it expresses their (desired) character and identity. This is all about the brand's power to tell a sharp, crisp and precise story about them. pepsi helps its consumers define their identity and express it. Within a split second, Pepsi can draw a complete picture of the consumer character, personality and identity. This forever brand is found to express precisely that personality or character trait aspired to by the consumer. To make the brand the 'megaphone' for what the consumer wants to express, Pepsi is powered by a provocative ideology that the consumers want to proclaim.

Emotion
Consumers prefer Pepsi because they love the brand. To generate feelings so powerful that consumers have to buy the brand out of love, Pepsi is positioned as an ally to the consumers on an important emotional stance, which their marketers identify as the key behind it. The bond arising from the customer's experience with Pepsi leads to a relationship that can last forever. As the alignment grows stronger, so does the brand. People love it. And they buy it.

Perception
The way people perceive Pepsi is the result of programmes deeply ingrained in their minds. Consumers prefer the brand because perception and behavior programmes point to it as the only logical choice.

Virtual benefit
Consumers prefer this brand because it offers a compelling (virtual) benefit. To shape a virtual edge over competitors, with the unique flavor, Pepsi, refreshes one to feel as cool as ice.

Pride and values


Consumers prefer Pepsi because it creates an inner satisfaction that they are still young.

Game plan of Pepsi: Conclusion


Three main strategic imperatives for Pepsi

Owning and broadening the category


Pepsi should strived hard to 'own' the category by making their brand's personality thoroughly distinct and then tried to broaden the way consumers 88

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think about the category and the brand. Here Focused should be on six primary personality traits viz. youthful, fun, adventurous, exclusive, outdoorsy and romantic.

Capturing all occasions


Pepsi can enhance is competitive position by seeking out every possible sales opportunity by crowding sales channels and by maximising penetration and by using alliances to build presence quickly.

Building high-credibility personalities


Pepsi must enhance their credibility and inspire trust in consumers. But broadly, they seem to distinguish themselves most in the areas of trustworthiness, leadership and intelligence, Company must communicate confidence so that customer feel that this soft drink is safe and they can always enjoy it The world around Pepsi is changing beyond recognition. And so is the temperament of the custodians of civilization. In order to keep pace with the times, this legendary brand went ahead to make small compromises with the fascinating changes around it while its core identity remained as unaltered as a genetic code. Pepsi must try to enhance its credibility, command trust, capture mind shares, earn loyalty and generate shareholder value

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Table OF Contents Title Fly Title Page Executive Summary i ii iii

EXECUTIVE SUMMARY:
The company consists of: Pepsi-Cola Company, the world's second largest beverage company; Frito-Lay Company, the world's largest manufacturer and distributor of snack chips and Tropicana Products, Inc., the world's largest marketer and producer of branded juices. PepsiCo, Inc. was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Pepsi recruits its first "spokesalien" Marfalump to star in its commercials supporting the campaign. Pepsi-Cola North America welcomes Gary Rodkin as President and CEO. The new look replaces Pepsi's current pedestal logo with a new brand identity that also more prominently features the Pepsi Globe against a blue background. Pepsi celebrates its centennial year with a birthday party that is 90

Strategic Marketing

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attended by Pepsi-Cola bottlers from all over the world. In more than 30 markets currently conducting the Pepsi Challenge, the tastes of Pepsi and Pepsi ONE are preferred over Coke products in every market, especially in Philadelphia, Dayton, Tucson, San Antonio and Seattle. Pepsi Stuff.com lets consumers redeem points from specially marked packages of Pepsi products for more than a half-million cool prizes, and proves to be Pepsi's most popular online promotion ever. Pepsi unveils its FunWraps Factory, letting consumers personalize Pepsi cans with fun designs and unique messages. Pepsi puts "a little twist on a great thing," introducing lemon-flavored Pepsi Twist and Diet Pepsi Twist. The product launch marks the return to lemon-flavored colas for Pepsi, which distributed Pepsi Light until the mid-1980s. Today consumers spend about $33 billion on Pepsi-Cola beverages. Brand Pepsi and other Pepsi-Cola products including Diet Pepsi, Pepsi-One, Mountain Dew, Slice, Sierra Mist and Mug brands account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $60 billion. Pepsi-Cola also offers a variety of non-carbonated beverages, including Aquafina bottled water, Fruitworks and All Sport. In 1992 Pepsi-Cola formed a partnership with Thomas J. Lipton Co. PepsiCola also markets Frappuccino ready-to-drink coffee through a partnership with Starbucks. In 2001 SoBe became a part of Pepsi-Cola. Outside the United States, PepsiCola soft drink operations include the business of Seven-Up International. PepsiCola beverages are available in about 160 countries and territories. Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. In addition to brands marketed in the United States, major products include Mirinda and Pepsi Max. Pepsi-Cola North America includes the United States and Canada. Pepsi-Cola provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. New advertising and exciting promotions keep Pepsi-Cola brands young. The company manufactures and sells soft drink concentrate to Pepsi-Cola bottlers. The company also provides fountain beverage products. Pepsi-Cola Caffeine Free Pepsi Diet Pepsi Caffeine Free Diet Pepsi ONE Wild Cherry Pepsi, Pepsi Twist Mountain Dew Diet Mountain Dew Mountain Dew Code Red Mug Sierra Mist Slice Lipton Brisk (Partnership) Lipton Iced Tea (Partnership) Dole juice drinks FruitWorks juice drinks Aquafina purified drinking water Frappuccino coffee beverages (Partnership) SoBe juice drinks and teas AMP. The world's drinks giants Coca Cola and Pepsi are among the world's most recognised brand names. Can Evian, Volvic or Perrier create the Coke & Pepsi of the water world? They only use the finest ingredients to make Pepsi-Cola products. To guarantee their consumers consistent quality, each ingredient must pass Pepsi-

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Strategic Marketing

Pepsi Cola

Cola's high standards, rigorous quality control tests and strict bottling procedures. There is essentially no fat in any Pepsi-Cola products. The main ingredients found in Pepsi-Cola products include carbonated water, carbohydrates, sugar, sodium, potassium and caffeine. For a complete breakdown by ingredients by product, Pepsi, Diet Pepsi, Pepsi ONE, Mountain Dew, Slice, Mug Root Beer, Aquafina or FruitWorks is recommended. For over 100 years, Pepsi-Cola has produced some of the finest soft drinks ads available anywhere in the world. Pepsis brand management Who cares what PEPSI is made of? Consumers prefer pepsi because it expresses their (desired) character and identity. pepsi helps its consumers define their identity and express it. Consumers prefer Pepsi because they love the brand. Consumers prefer Pepsi because it creates an inner satisfaction that they are still young. New mission statement of Pepsi can be; To create superior customer value and maximize shareholders equity by developing new products and reaching more markets. Our success depends on the quality, our product they must be safe, economically efficient and environment friendly. We take care all our stakeholders and work as a family and provide equal opportunity to all our employees to develop and grow with their own company Company can also follow following strategy for there specific SBU. Mirinda Industry is relatively attractive and Business strengths needs more concentration at the same time company holds moderate market share. Company should follow Invest/grow Strategy Pepsi Cola Industry is attractive and Business strengths are good at the same time Pepsi holds good market share. Company can follow Selective investment strategy. Diet Pepsi Industry attractiveness is high but total market is size is comparatively small. Business holds ratively good strengths. In such case company can make selective investment. From our analysis of whole case study and relevant information gathered we come to know that there is a room for new product in company product mix offered in Pakistan. Company may introduce some of its exiting products in Pakistan or come up with entirely new product that could compete with Local Brand like ROOH AFZA, NORUS, etc. 92

Strategic Marketing

Pepsi Cola

The bond arising from the customer's entire experience with the brand leads to a relationship that can last forever. As the alignment grows stronger, so does the brand. People love it. And they buy it. Thus, born in corporate boardroom, Pepsi has become a social artifact, having stolen its way into the popular lexicon and created history. This forever brand HAS continued to survive in spite of the changes taking place all around it. And the passage of time has failed to tarnish its glory. Who cares what pepsi is made of? What matters is only that its tangy flavor has quenched the thirst of millions, its swoosh of effervescence has soothed parched souls since the 1890s and its scarlet hue has painted the world in to three colours. Pepsi should strived hard to 'own' the category by making their brand's personality thoroughly distinct and then tried to broaden the way consumers think about the category and the brand. Here Focused should be on six primary personality traits viz. youthful, fun, adventurous, exclusive, outdoorsy and romantic. Pepsi must enhance their credibility and inspire trust in consumers. But broadly, they seem to distinguish themselves most in the areas of trustworthiness, leadership and intelligence, Company must communicate confidence so that customer feel that this soft drink is safe and they can always enjoy it. The world around Pepsi is changing beyond recognition. And so is the temperament of the custodians of civilization. In order to keep pace with the times, this legendary brand went ahead to make small compromises with the fascinating changes around it while its core identity remained as unaltered as a genetic code. Pepsi must try to enhance its credibility, command trust, capture mind shares, earn loyalty and generate shareholder value.

CASE STUDY On

PepsiCo
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Strategic Marketing

Pepsi Cola

Prepared by: SYED SHAUKAT ALI HASSANI (MBA Final SEMESTER) Submitted to: Mr. M. A. BUTT (Course facilitator of BIM&CS)

May 24, 2002


Bahria Institute Of Management And Computer Sciences Karachi (Bahria University)

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