http://articles.economictimes.indiatimes.com/2011-06-06/news/29625847_1_sanjeevchadha-manu-anand-pepsico-india Creating verticals to cater to different segments of consumers, across functions like sales, operations, distribution and marketing.

g. In line with Indra Nooyi's target to generate $30 billion in revenues from 'healthier' products-internally called better-for-you and good-for-you products-by 2020, up from the existing $10 billion. India will be the first country in the PepsiCo system to target the value segment with multiple products. Has further split its GTM model into three divisions. o Premium arm for distributing Tropicana juices, Gatorade sports drinks and Quaker oats; o Mid-rung one for aerated drinks like Pepsi and Slice and snacks like Kurkure and Lays; o Division catering to mass products like Lehar Iron Chusti. Launched biscuits and snacks priced at 2 under the Lehar Iron Chusti brand in Andhra Pradesh initially. This line-up of healthy foods is targeted at women under 'Project Asha', PepsiCo's codename for Nooyi-commissioned plan to develop lowpriced nutritional foods for the poor. Even in PepsiCo's core business of snacks, such as Kurkure and Cheetos, the firm is stepping up focus on 5 and 3 packs. These packs are growing the fastest among PepsiCo's foods arm and contribute 45-50% to the division's foods sales. While in aerated drinks, selling bottles and cartons for 5 amounts to sacrificing profitability, PepsiCo will look at products at 5 through its joint venture with Tata Global Beverages.

http://www.businessworld.in/en/storypage/-/bw/the-two-faces-of-pepsico/399682.0/page/0 Amorphous entity called Value Foods Organisation (VFO) The concept has been frozen, but it goes through its share of iterations. It is more than an experiment, but less than a full-blown launch

The PepsiCo-BCG team identified two major trends. First, there is a movement from unbranded to branded among mid- and low-income consumers due to increasing affluence. Second, there is a trading down among high income consumers, who look for quality at affordable prices. VFO is an independent PepsiCo within PepsiCo. It has very different codes from what we do at Pepsi-Frito Lay. The codes are: be entrepreneurial; behave like a local player; think on your feet; go by gut, not research; low cost and profit margins," says Anand. If the company takes 10-12 months to launch a Frito Lay product, VFO launches snacks in three months. What helped in delivering such speed to market was an intensive study of rivals such as Haldiram's and Rajkot-based Balaji Group. PepsiCo founded VFO with 4-5 distribution levels, against Frito Lay's 6-7, for quick decision-making. This ensures high retailer margins. The VFO salesmen were also

spared the onerous task of business generation, research and feedback. They cover 50 outlets a day, a challenge for any consumer firm. As there is little writing, there is absolutely no complication. They cut the invoice, drop the stock and move on. Battles with products at the low end of the value chain are won only by sticking to price points convenient to the consumer. Critical to target pricing is zero advertising and fully-outsourced production and distribution. Disadvantage of asset-light model: Less capex in company-owned manufacturing plants and distribution, but it also keeps its margins low.