ANALYSIS OF TROPICANAS COMPETITVE PROFILE IN THE PACKAGED FRUIT JUICE SEGMENT

Submitted byAbhishek agarwal

m.b.a. (amity university)

CONTENTS
PEPSICO PROFILE 5

COMPANY ANALYSIS & PORTERS DIAMOND MODEL PORTERS FIVE FORCES MODEL & VALUE CHAIN THE BCG MATRIX SWOT ANALYSIS OF TROPICANA CORE COMPETENCY OF PEPSICO KEY FACTORS FOR SUCCESS PACKAGED FRUIT JUICE MARKET IN INDIA TROPICANA HISTORY BOTTLENECKS IN THE JUICE INDUSTRY ANALYSIS OF THE PACKAGED FRUIT JUICE MARKET CONCLUSION BIBLIOGRAPHY
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7 9 13 14 16 17 18 21 30 33 53 54

ACKNOWLEDGEMENT
It has been a great pleasure to work with an esteemed world class organization like PEPSICO. I am especially grateful to MR.AMIT SRIVASTAVA, who gave me an opportunity to work with him and his team as well as for their constant support & guidance. I would also like to thank MR.AMOL SHARMA & MR.SANJAY KUMAR for their suggestions they provided me during my entire summer internship during June-July (2007). Its been a tremendous pleasure to work under the guidance of my Faculty Mentor PROF. (MS) EKTA RASTOGI. I would take this wonderful opportunity to dedicate her, my project which without her consistent academic guidance & inspiration would never have been possible. I would like to take the unique opportunity to express my gratitude to the Director General of the Amity University, Lucknow Campus Major Gen. K.K OHRI, AVSM (Retd), MR.MUKUL GUPTA, Director, Corporate Resource Centre, (CRC) for providing me a unique opportunity to enhance my core competence in the dynamic discipline of my core interest and passion in finance. Finally, I would like to express my sincere gratitude to my family and friends for their cooperation & motivation.

PepsiCo is one of the most successful beverage and snack food business in the world. The company consists of: Frito Lay Co, Pepsi-Cola Co and Tropicana Products and a variety of other products. BRIEF HISTORY OF PEPSICO: PepsiCo was funded in 1965 by Donald M. Kendall, Pepsi-Cola president and Herman W. Lay, President of Frito-Lay. Pepsi Cola beverage business was founded at turn of the century by Caleb Bradham, a New Bern N.C druggist, who formulated Pepsi Cola. Pepsi Cola Company now produces and markets nearly 200 refreshment beverages to retail, restaurants and food service customers in more then 190 countries and territories around the world and generates revenue of over 18 billion dollars. The soft drink industry customer base is probably the widest and has deepest base in a world that is flooded with so many categories. According to Beverage Digest, the customer base for soft drinks is a whopping 95% of regular users in the United States. This represents a large field of potential customers for Pepsi Cola. Pepsi could just use the majority fallacy to market their product. Pepsi prefers to segment itself as the beverage choice of the New Generation, Generation Next or just as the Pepsi Generation. These terms adopted in Pepsis advertising campaigns are referring to the markets that marketers refer to as Generation X.

The Generation X consumer is profiled to be between the ages of 18 to 29. They have high expectations in life and are very mobile and active. They adopt a lifestyle of living for today and are not worried about long term goals. Pepsi has a main emphasis on this segment and also have a focus on the 12-18 year old market. Pepsi believes that if they can get this market to adopt their product, then they could establish a loyal customer for life. Pepsi Cola is situated in an industry that is dominated by two competitors, Coca-Cola and of course themselves. Although, Pepsi and Coke basically go after consumers who purchase soft drink beverages, Coca-Cola targets its products at the head of household. This is evident in many of the ad campaigns such as Always Coca - Cola which refers to the traditional beverage heritage of its product. They also reinforce this in the name Coca-Cola Classic which is inferring to the older consumer which reflects an image of value, reliability, and old time values. Pepsi customers buy nearly five billion gallons of soft drinks per year. Pepsi customers buy their products because of taste, price, packaging, promotional factors and of a wide variety of brands. Pepsi customers also buy their products due to the high accessibility of Pepsi brands. Pepsi products are distributed to many outlets. For example, supermarkets where Pepsi buys large shelf area and display areas so the customer can find them easier, Convenience stores, gas stations, delis, restaurants, movie theaters and almost and other conceivable spot.

COMPANYANALYSIS
EXTERNAL ANALYSIS (PEST): Pepsi is situated in an environment that is ever changing and dynamic. Pepsi must be concerned of changing taste of the consumer and be able to respond to it immediately. They also need to be

financially strong to keep up with a powerhouse like Coca-Cola and be able to strike back in the long running cola war. The main consumer group for Pepsi is teenagers. They started with the scholarship program. Then, the idea expanded and musical education program was initiated. It was supported because it was fun and educating at the same time. Pepsi must also be able to respond to different cultures in the international environment. Pepsi has also to deal with such environmental issues like the supply of raw materials to produce their products. PepsiCo and moreover Pepsi is subject to the lifestyle changes, because it is based on the advertising campaigns carried on by people with a special lifestyle. PepsiCo is subjected to new techniques of manufacturing for their three business sectors, snack food, juices and soft drinks. Therefore, it has to pay attention to the new distribution techniques and have to fix their attention in the competence developed to know about the new products. As for the changes, in Pepsi, the franchisee system is currently being dismantled and being replaced with one bottling unit across North America. This restructuring will allow Pepsi to act as one unit and eliminate competition with private labels and uncooperative franchisee bottlers.

Secondly, Pepsi is starting to make strides in developing foreign markets. Pepsi is beginning to pull out of some Coke dominated markets and beginning to sell up in coming foreign markets where Coke is not dominating, like India and China.

PORTERS DIAMOND MODEL (Competitive Advantage):

Pepsi has a competitive advantage over Coke because of the image it portrays. Pepsi promotes itself as the choice of the New Generation. Pepsi gets this advantage by implementing such large marketing projects like Project Globe. This marketing plan, in which Pepsi spent 637 million dollars over five years, is, to introduce the new rich deep blue coloring of its packaging. The rich deep blue color represents eternal youthfulness and openness . Marketing plans like these has made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category. Another competitive advantage that Pepsi has is in their product is Mountain Dew. Mountain Dew has grown a staggering 74.1% over the last five years. It has a 6.3% market share and has recently become the #4 soft drink in America. Pepsi also has an advantage as an innovator in their field. They will be the first soft drink makers to introduce a new one-calorie soda called Pepsi-One with, just approved by the FDA, Ace-K. This new sweetener is slated to be a break through for diet soda in which it limits the after taste associated with diet soda and brings a more cola taste to the product.

PORTERS FIVE FORCES MODEL:

The three different markets of PepsiCo: the soft drink market, the snacks market and the chilled orange juice market are being treated as the same industry. Threat of entry: Established brands with a lot of experience in the market have a good channel of distribution. The brands deliver the products directly to the supermarket; this means that it is necessary for a big company structure (lorries, warehouses, producing plants, etc.) to arrive at retailers and supermarkets which require a big investment of money.

Suppliers: Suppliers well look that at first sight, suppliers are not a problem because its easy to find potatoes, corn and oil suppliers. The problem here is the possibility of variability of prices in the raw materials caused by a bad year of harvesting or there is another petrol crisis.

Buyers: Considering that buyers are the final consumers, in these markets, the consumers get used to one kind of taste and they have these products for the importance of the brand.

 Substitutes: In these three markets, its quite difficult to find substitutes. More than substitutes, fashion, trends and consumers tastes are gaining more importance. Suddenly, people have stopped orange juice for breakfast and started taking more milk or coffee in mornings. Its quite difficult to find a substitute for these products because normally, the people get used to one kind of taste of cola and then it is very difficult to try to adapt the public to a new cola.

Competitive Rivalry: These three markets are full of rivalry. First, there is the Cola market where Coca-Cola owns an incredible 51% market share followed far away by Pepsi with a 21% market share. It is very difficult to penetrate in this market. Then, there is the Snack market where Lays has 40% market share, the second most important brand is Procter &Gamble (P&G), in this market the shares are more distributed, but still being two majors competitors that have most of the market. The last is the orange Juice market which may be the most open market where there is a lot of competence and there is no major brand that holds over the market.

PORTERS VALUE CHAIN - INTERNAL ANALYSIS

PRIMARY ACTIVITIES:

Inbound logistics: Because the company is in a competitive environment, it is not possible to recover the increasing costs with a higher pricing of the final products. For this reason, PepsiCo has a special way to purchase the raw materials. They use futures contracts for covering different fluctuations in the raw material market. (primarily oil, corn, fuel, etc.)

Operations: In Orange juice products, they only use non-concentrate orange juice, for it creates a very tasty and healthy product completely natural. Pepsi just creates the liquid that is sold to the bottlers, then these bottlers can the liquid and then are sold to the customers.

Outbound logistics: PepsiCo use the system direct store distribution. This implies that PepsiCo products are delivered to the retailer and are put forward directly on to the

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shelves. It provides a great business control to PepsiCo and reduces work for the retailers which give it a competitive advantage over most of their competitors.

Marketing and sales: This is a very powerful tool that PepsiCo use. Service that makes PepsiCo value is the direct store distribution.

SUPPORT ACTIVITIES:

Procurement: Here, PepsiCo uses economies of scale. Also, the raw materials are bought in future contract to prevent higher costs in the future because of high prices of the raw materials.

Technology development: More than technology development, customer preference is important. For knowing the customers preferences and wants, it is necessary to study the customers behavior. For e.g. Tropicana Twister shelf-stable juice products had a very important volume growth because the PepsiCo relaunched the brand in 1.75 plastic bottles instead of smaller glass bottles. This provides to the customers, more value and convenience.

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 Human resources management benefits: Highly competitive compensation, bonus opportunities at many levels, eligibility for stock options for almost all positions.

THE BCG MATRIX:

T ROPICANA

PEPSI

FRITO-LAY

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Frito-Lays Inc is a Cash Cow for PepsiCo. It generates more cash than it needs to maintain its share market. Frito-Lays is the leader of its market and has its principal competitor very far in the market share. PepsiCo should maintain this product in the same way and invest its profits in companys other products. Tropicana is a question mark for PepsiCo. It is due to new acquisition, and although it is a product leader in its market, PepsiCo has to invest in Tropicana for achieving a bigger market share and to increase the international market share. Pepsi is very difficult to be placed because, in spite of the fact that it generates more cash than it needs to maintain its share market, it is not the leader of its market. It can neither be considered as a star product because of the same reason and then it probably could be placed in the middle of the matrix.

SWOT ANALYSIS:
STRENGTHS A financially strong company with Frito-Lays as a very strong brand, which is a world leader in the snack chip industry having a 40% market share. Promotional programmes which makes them world-wide leader in marketing. Focused only on young population. Diversification, which brings in economies of scale and other large financial advantages. Competitive prices, as the production line is very well developed and the products are cheap and accessible to everyone.
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 Flexibility to adjust to new trends. The Research of the taste. Comprehensive system of rewarding and educating its employees. Enough growth momentum for short term. Industry leading company in terms of ROE. Diversified product portfolio. Strong sales on convenient stores. WEAKNESSES: Pepsi may be one of the weaknesses, since the share it has is 21% which is much below than that of the Coca-Cola Company, with a 51% share. No Promotion for the Other PepsiCo Products Approaching the New Markets Lack of long term strategy Low payout ratio Weak international distribution channel Weak sales on fountain. OPPORTUNITIES: New markets where the competence is not established yet.e.g. In china.

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 NFL Sponsorship Rights (largest football league) which would enable PepsiCo to have a great coverage at all games, enabling them to target the young and hip market. Still low soft drinks consumption in developing countries. Strategic alliance for international distribution with other beverage company. THREATS: Size of Company The increasing size of the company demands a varied marketing program. This in turn requires investment in capital and energy. Market Threats PepsiCo Beverages now has to compete in an aggressive market. No longer is Coca-Cola the only rival. Cott, Schweppes and Kraft are emerging as strong competitors. Increased buying power & volume of retailers. Decreasing soft drinks demand from the young age. Less brand loyalty in non-CSD beverage market.

CORE COMPETENCIES: For Pepsi, efficiency, innovation in marketing techniques & customer responsiveness are the core competencies. Using less input in the value chain of its primary activities, Pepsi is able to be more efficient and to attain a lower cost structure. Moreover, PepsiCo built its competitive advantage mainly by achieving greater economies of scale in the sectors of communication, distribution and bottling thus reducing production costs.
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Marketing and Customer Responsiveness:

Extensive advertising campaigns are used to target young people. Furthermore, Pepsi keep the consumers perception waiting by acquiring Mountain Dew, and creating Pepsi blue. Improving the quality of the companys product offering is consistent with achieving customer responsiveness as in developing new products with features that existing products lack. Branding Equity:

Comparisons are made between PepsiCo brands, competitive brands, and other global brands by company over time which is used to focus managerial attention on how PepsiCo brands and marketing programs are performing towards their competitors. This is a successful method of understanding the consumer behaviour and also to project the caring Pepsi-Cola image.

KEY FACTORS FOR SUCCESS: When Pepsi-Cola was created, the management was looking for the recipe for success that would also be matched with the creation of a unique name and logo. Thus, the whole cola war story was the driving force of every change Pepsi implemented in its business strategy. The creators of Pepsi decided to use the same colors and lettering as Coke, simultaneously promoting and expanding the same product.
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In the short run, the strategy worked out and allowed Pepsi to take advantage of the Cokes previous business innovation. However, in the long run, Pepsi would have to build its own reputation and differentiate itself from its rival. Basically at that time, Pepsi focussed on achieving lower cost production in its bottling and distribution units. Therefore, the promotion of their products was put aside by the result of this strategic choice. The financial crisis commanded important changes with regards to innovation. From being a follower, Pepsi became the leading innovator.

PACKAGED FRUIT JUICE MARKET IN INDIA:

Total Size: 182 million litres Juice Market, 19mn packaged. Annual Growth Rate: 40-50% Major Players:
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Dabur, Pepsi, Leh Berry & Mother Dairy. Driving Forces: Product innovation, expanding market and increased consumer preference for healthy foods. Current Market: Rs110-crore Future Projections: Expected to reach Rs. 170 cr by next year. The fruit juice/nectar market is projected to grow at a scorching pace of 40 %, whereas a Tetra Pak study has found that a whopping 86% of the fruit juice market is still lying untapped.

FRUIT JUICE SEGMENT POISED FOR 30% GROWTH:

With people turning more health conscious, the non-carbonated beverage segment has become one of the fastest growing and most exciting businesses at the moment. Evolving from drinks containing a hint of herbs or vitamins, beverages have become an important delivery vehicle for

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efficacious amounts of nutritional ingredients. Beverages are unusual products, in that everyone expects to try new varieties, even from established brands. While all segments of the beverage market are evolving, the growth seems to be directed more towards healthy, light and low-calorie drinks in particular organic and fruit juice varieties. The Rs 500 crore non-carbonated beverage market in the country is composed of fruit drinks, nectar and juices. While the fruit drink segment is estimated at Rs 250-300 crore (branded and packaged), the juice market is valued at Rs 150 crore and the nectar is a small category of about Rs 35-50 crore. And the popular brands vying for a share in the sector are Parle's Frooti, Godrej's Jumpin, Coca Cola's Maaza, Pepsi's Tropicana and Dabur's Real, Nestls Milo, Soy milk from ProSoya and branded fruit juices from Surya Foods, etc. The branded fruit juice market in India is estimated to be worth Rs 500 crore organized fruit beverage market (nectars, drinks and juices combined) and the segment is growing at about 30 per cent per annum. Big players like Dabur, Pepsi, Godrej and Parle Agro are already in the market and in view of the swift growth in the market. Newcomers like Surya Foods and Agro, Mother Dairy, Ladakh Foods, Pioma Industries have come into the market with new products in the recent years. Market share of Daburs real fruit juice is now 60%. Dabur's Real Fruit juice is the market leader followed by Pepsi's Tropicana. The two major fruit juice makers in India, Tropicana and Dabur are going all out to tease Indian taste buds with ethnic flavors. However, Godrej's Jumpin is slowly achieving its space in the fruit juice market. Godrej Industries Foods Division has introduced fruit juices under the Xs brand, which earlier only consisted of nectars. Parle Agro's Frooti and N-Joi too are doing well in the market. Delhi NCR-based Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits, has forayed into the
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juices segment. Mother Dairy has recently launched the Safal brand of juices. Safal is currently available in orange, mixed fruit, grape and an orange-apple combination. Ladakh Foods, makers of the Leh Berry sea buckthorn berry drink, has now launched an apple-peach combination juice and a mixed fruit variant. Ahmedabad-based Pioma Industries, makers of the Rasna brand of soft drink concentrates; test marketed a diluted mango juice in Andhra Pradesh recently. There are now racks filled with fruit juices, nectars and drinks.The health-drinks business is also witnessing plenty of churn, with the segment growing at a robust 20-25% in the past few years, compared with less than 8% for carbonated drinks in the past couple of years. The non-carbonated beverage market is estimated to be worth more than $250 million (in urban areas). According to a recent ACNielsen study, among fruit juices, Dabur's Real is the market leader with 60% share, followed by Pepsi's Tropicana (33%). In the fruit-based drinks category, Coca-Cola's Maaza is the leader, followed by Parle's Frooti and PepsiCo's Slice. Fruit juices in the unorganized segment are considered cheaper and fresher by the consumers; even though they are often unhygienic. Pepsi with its brand Tropicana and Dabur Foods through Real brand compete in the market. Coca Cola India its only juice brand Maaza is further is talking to multi-packaging to attract customers. Mother dairy is also in the line to access the market effectively through Safal brand.The awareness about health and more sophisticated cocktail culture has driven growth in the packaged fruit juice segment.

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TROPICANA-HISTORY: 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. He started his own fruit packing business and shipped jars of sectioned fruit and fresh juice to hotels and restaurants in refrigerated trucks. For the first time, consumers could enjoy the taste of pure not-fromconcentrate 100% Florida orange juice in a ready-to-serve package. 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, Tropicana is the world's largest marketer and producer of branded juices .The Tropicana business, which is now profitable, was merged with PepsiCo in 2001; following the merger of the cola major's three international beverage units - Pepsi-Cola International, Tropicana International and Gatorade International into one single new company PepsiCo Beverages International (PBI).

PEPSI UNVEILS SUMMER PLANS FOR TROPICANA: Tropicana, Pepsi Foods' pure juice brand, for which the soft drinks major, has identified a consolidated consumer-push summer plan. For Tropicana, the focus for the summer will be product innovation, distribution, market penetration and outlet expansion.
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In addition, the Tropicana brand's health and nutrition positioning will be reiterated. For example, one glass of Tropicana juice counts as one of the five portions of fruit and vegetables that should be eaten everyday as recommended by health and medical experts. Tropicana fruit juices are fat-free and with no added salts, being high on potassium content to regulate nerve and muscle function and blood pressure, and that Tropicana juices are a good source of folic acid, which helps reduce the risk of heart disease. In addition to the existing Tropicana premium gold variant, the company recently introduced a second category of juice - Season's Best fortified with vitamins A, C, E and calcium. The pure juices market, estimated at Rs 100 crore, is split almost entirely between Tropicana and Dabur India's Real brand, with the latter enjoying a slight edge over Tropicana in terms of market share. Pepsi Foods had recently announced a foray into contract farming of citrus fruits such as oranges and Keanu in Punjab as a first move towards the backward integration for its Tropicana brand with a long-term view of 100 % localization of orange juice and Pepsi India possibly becoming the supply hub for other regions.

TROPICANA TOPS ON TASTE, HEALTH & PURITY PARAMETERS Packaged fruit juices are as much recognized as social drinks now, with dominant consumption being observed in the company of family and friends.

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Fruit juices are perceived as anytime beverages, with consumption being spread more or less evenly between the mid-mornings, afternoons and evenings. The generation now is as much inclined to sipping fruit juices as colas, with teenagers, driving the maximum trials. Among the packaged fruit beverages, the `awareness to trial' ratio of PepsiCo's Tropicana juice brand has been rated the highest. Up to 17% of the respondents were aware of Tropicana, while the brand's trial stood at 11%.Also, 8% of the respondents stocked the brand at their homes. Tropicana was also perceived as `reasonably priced'. Another interesting finding is that the average Indian may have a legendary weakness for mango, but when it comes to preference of fruit-based juices; his choices are in tune with international trends. Therefore, it is orange juice that is the most preferred fruit juice flavor in India, followed by apple, sweet orange and mixed fruit. Tropicana has launched a sub-brand Tropicana Tropics and is introducing new flavours mango nectar, guava pulp and litchi juice under this brand. Tropicana juices have 80 % fruit pulp content. At present, Tropicana has about seven flavours in the market - apple, pineapple, orange, apple orange, grape and mixed fruit. The company is now working on building the same capacities for other fruits like guava, pineapple, papaya pulp, grapes and pomegranate.

Pepsi's Tropicana brand fruit juice has registered double digit growth and has outpaced the growth of the packaged fruit juices market in India. India is a very important market for Tropicana and is among the top 10 biggest markets for the brand.

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The company sources orange juice concentrates from Brazil. Tropicana is available in orange, apple, grape and cranberry flavours and a cocktail in Ruby-red. They come in Tetrapaks of 1 litre and pet bottles of 500 ml. Pepsi also markets an energy drink for the sports personnel, called Gatorade and a sugar-free Diet Pepsi. Pepsi, in association with Hindustan Lever Ltd (HLL) is planning to launch Lipton iced tea in a couple of months. The move is to take on its arch rival Coca Cola which was successful in its business in tea and coffee, both hot and cold in association with McDonald's. According to Financial Express, the market for Packaged Fruit Juices is expected to be around Rs 350 crore. The market leader is Dabur Real with a share of 57% and Pepsi Tropicana with a share of 30%. The awareness and trial levels of packaged juices are higher within the SEC A category, than among SEC B consumers, the majority of whom rated these as aspirational. Consumers perceive fruit juices as a grocery purchase, 60 per cent of the respondents consume fruit juices at home. While 55 % of the respondents consumed 1-litre packs at home, 45% consumed 200-ml packs. The Rs 100-crore packaged fruit juice market is estimated to be growing at 25-30 per cent annually, with Tropicana and Dabur Foods' Real holding 40 per cent market share each.

AN OVERVIEW OF THE JUICE PLAYERS IN INDIA:

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FROOTI, THE NO. 1 DRINK: Parle Agro's Frooti is reported to be over Rs 250-crore turnover. Frooti's market share is 85% in the tetrapak segment and 29 % in the mango beverage category (including bottles and tetrapak). Mango fruit beverage is estimated to account for 91 % of the sales of all fruit juice variants while orange juice accounts for only 3.1 %. Further, under the N-joi brand umbrella, the company launched half-a-dozen milky-fruity variants, including peach-milk, strawberry-milk, pineapple-milk, banana-milk, and cheekoo-milk. Frooti remains a dominant mango fruit beverage brand.

DABURS REAL JUICE: Real Fruit Juice is India's leading packaged, 100% preservative free fruit juice brand offering consumers the great taste and wholesome nutrition of freshly squeezed juice in a hygienic and attractive pack. It offers the largest range in India with eight juices: orange, mango, pineapple, grape, guava, mixed fruit, tomato and litchi. . Real' was recognized as the 'Fastest growing brand' for 2001-02 in the first ever beverage industry seminar in India. Real Fruit Juice is a market leader in packaged fruit juice category commanding more than 55% market share. Dabur Foods not only leads with innovation in its product offerings but also has now taken the lead in redefining traditional marketing dynamics in the segment. Dabur Foods has also realigned the flagship brand, Real so that the look and feel of the brand became more effective in communicating its core benefit i.e. Real tastes like eating a fruit. The first step was the relaunch of Real in a new, vibrant and international look designed to maximise drool appeal. The second step was to change the brand communication for which three different TVC's are being used to talk to distinct audiences i.e. school kids, mothers and young professionals in varied real life situations.
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Overall strategy of Dabur Foods is to offer consumers a healthier juice and the widest choice possible.

Real Activ The Real fruit juice is targeted towards the housewife and kids and the Real Active juice is

targeted towards the young adults between the age of 24-35. They are very clearly focussed on the in-home segment and soft drink is more out- of- home impulse purchase.In fact, the

segments for Real as well as Activ are the same. What one needs to do is to capture the target consumers and lure them to Real, make them Real loyal. Real Fruit Juice is a packaged, 100 per cent preservative-free fruit juice brand offering consumers the great taste and wholesome nutrition of freshly squeezed juice in a hygienic and attractive pack. Dabur Foods is the only juice company in India and among the top 5 companies in the world to use the latest spin cap tetra pack, cold fill technology and spill-proof double seal cap for packaging. Real Fruit Juice is India's first and only packaged Fruit Juice brand to get SGS (Societe Generale de Surveillance) certifications for high safety standards used in packaging that conform to the stringent HACCP and GMP standards. The brand has also won the award for 'Highest sales growth achieved by a brand' in the non-dairy category. Real Marketing has been the leader and the driving force for Dabur. Much of Dabur Foods youthfulness comes from Real. The money that has been put behind its advertising has created a perception that has boosted the companys overall image. (Currently, more than two-thirds of Dabur Foods Rs 12-crore ad budget is spent on Real; the rest goes into Coolers.)

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'Real' was recognized as the 'Fastest growing brand' for 2001-02 in the first ever beverage industry seminar in India. Real Fruit Juice is a market leader in packaged fruit juice category commanding more than 55% market share.

TROPICANA: A juice is one category that Pepsi is pushing hard and is one of its thrust areas. Though the sales are relatively low, the brand still manages to record a growth rate of around 45% to 50% every year. Over the next two years, this will become a big category, especially when one adds Tropicana, and other fruit-based juices like Slice and Mangola.

India is a country where we dont eat too much fruit and dont drink anything out of a pack, since it is supposed to contain colours and additives. Moreover, Indian consumers prefer to drink sweet juices and Tropicana orange juice is not sweet but slightly sour. Thus, we had manifold problems on hand. We decided to carry the taste as the differentiating factor and called it the taste of good health. The taste of good health isnt necessarily delicious. Go ahead and enjoy it. This worked wonders, and Tropicana is doing extremely well. This idea suited Indian consumers, who prefer things fresh. Thus, while carving out the strategy for Tropicana, we had to overcome a lot of cultural barriers. Nowhere else in the world is Tropicana marketed as the taste of good health.

SAFAL:

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Mother Dairy India Ltd (MDIL) relaunched its Rs 165-crore, fresh and frozen vegetable brand Safal, with focus on the juice market. The company has launched packaged fruit juices under its flagship brand, Safal. Starting from Delhi, the product is scheduled for launched on a nation-wide scale in the months to come. The company says that having pioneered the marketing of fresh and frozen vegetable products backed by a modern produce handling and processing facility, Safal is now ready to take on the packaged fruit juices category. Mother Dairy has launched packaged fruit juices under the Safal brand. This is nearly 20 years after it launched its 'Safal' brand of processed encouraging small and medium scale units in export promotion efforts. A comprehensive range of services is provided to the overseas buyers. "We inform and advise them of product availability, price structure, reliable structure, delivery schedules, quality control status and special information that an overseas buyer may need. FRESHGOLD FROM SURYA FOODS & AGRO: Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits have forayed into the juice segment. It has set up a state-of-the-art manufacturing facility in Noida, Uttar Pradesh, with an investment of Rs 25 crore. The plant has a capacity of producing 1.5 lakh litres of juice per day. Branded `Freshgold', the one-litre juice in cartons is available in supermarkets and malls in and around Delhi for Rs 60.

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LEH BERRY: Hoping to break even in 4 years, the company commands a market share of approx 10%. Marketing Strategy of the sea buckthorn juicer, the only juice having a tie up with the defense canteens. Unfortunately, harping on medicinal properties is not what lured the consumers. Taste and thirst-quencher is what they look for in a juice, primarily. Thats why the juice failed initially. Ladakh Foods has launched Leh Berry a couple of months ago. The juice will be competing with established players as Tropicana and Real. Leh Berry believes it has the advantage of a fresh taste, but its competitive edge may well lie in its positioning. Ladakh Foods is marketing Leh Berry as a nutrition drink (it prefers not to use the word health, with its bitter, medicinal associations), based on the chronicled nutritional properties of the seabuckthorn fruit. Ladakh Foods' target of capturing at least 7 per cent of the market share within a year and 20 per cent by 2006-end is ambitious.

BOTTLENECKS IN THE JUICE INDUSTRY:

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 Price: Pricing is one of the major worries. Price is a barrier to this category because

when you give fresh juice, packaging becomes critical. So, what the industry is now trying to do is to offer different packaging to suit different price points while simultaneously working on ways to offer better quality and an improved taste.
Packaging: This is an interesting one. The costs need to be controlled to keep the prices

low. Currently, PET bottles are another reason for the high prices. On the other hand, with the increasing number of health conscious consumers, there is more demand for better and safer packaging. Health consciousness drives the demand for liquid cartons. Indians of all ages are becoming health and calorie conscious, showing a preference for healthy beverages like fruit/vegetable juices that contain no preservatives, no color and no flavour additives. Moreover, in an effort to differentiate the image of juice drinks away from carbonates, these products were introduced in liquid cartons. Liquid cartons are being preferred since the packaging allows long shelf life, allows preservation of the original taste and flavour and also allows the juices to be stored without refrigeration. Liquid cartons also make it possible to transport the perishable products across long distances, and juices of seasonal fruits can be made available to the consumer throughout the year. Therefore, the growth rate of liquid cartons has been impressive during the review period, and is expected to grow further in the coming years.

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 Excise: Though the future of this industry is luring, the government is planning to levy

8% excise on food products including packaged fruit juice. This would entail revaluation and resetting the goals and targets for the juice Majors. Tax structure: Pricing is also the downfall of fruit juice importers. It is difficult to make inroads into the middle class as it finds the prices prohibitive. Sales tax on imported products is not uniform across the States. In Tamil Nadu, it is 21 per cent, much lesser in Andhra Pradesh and Karnataka. So, a one-litre bottle of Berri costs Rs 110 while a Tropicana is in the Rs 75 range. This obviates any international presence in the market, wherein the global players dont have an option but to enter through the Franchisee model. Forward and backward integration This is one aspect that producers have recently started tackling and has become imperative as a cost-control measure. Price: Offering different price points to cater to different sets and tastes of the customers. For instance, a 125 ml pack of fruit drink Maaza from Coca-Cola India at just Rs 5 and a 500 ml Tropicana blend for Rs 25. Promotion Health and hygiene would be the linchpin of the campaigns in the future. The organized players are more hygienic than roadside fruit juices and are a big hit with yuppies. Niche markets This is one aspect very particular to the juice market. For this segment, since the consumers have specific needs from the products, be it Impulse purchases, health conscious buyers, seasonal purchases, regular servings, nutritional values or

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medicinal prescription, they become more appraised on the specifics and attributes of the product they are looking for. Down the line, the producer and in turn the marketer needs to be very clear in terms of the content that he is producing, and selling to the customer, and consequently, the customer who is ready to buy that. Specific products for Specific consumers thats the key ! . Taste and thirst-quencher is what they look for in a juice, primarily.

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ANALYSIS OF THE PACKAGED JUICE MARKET

QUESTIONAIRE
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NAME OF THE OWNER: NAME OF THE OUTLET: ADDRESS: STREET NAME: CITY: PHONE:
PLEASE TICK MARK THE BOXES WHICH YOU THINK ARE ACCORDING TO YOUR KNOWLEDGE IS CORRECT:

Classification of the outlet: Convenience/Bakery Restaurant Grocery Others (institution)

Do you sell fruit juices? YES NO

If yes then, which brand & flavors are sold in your outlet:-

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Brand Tropicana Real Safal Gold Imported Others

Flavors

Which flavors generally demanded by the customers for fruit juice?

Flavors Mango Mix Fruit Orange Apple Pineapple Others

Customer Demand

Rating

Who are the more frequent buyers of these juices:CHILDREN YOUTH MID-AGED OLD

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Are the flavors that you sell are available as and when needed? Yes No

Which packaging of juice is frequently bought by customers?

200 ml

500ml

1 Lt

METHODOLOGY

SAMPLING DESIGN:
SAMPLING PROCEDURE: Random sampling SAMPLE SIZE: 110 SAMPLE UNIT: All retail outlets of Rajajipuram, Alambagh, Lda, Ashiana & Bangla Bazaar.
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SOURCES OF DATA: Primary data: From structured questionaire SECONDARY DATA: From magazines & internet

OUTLET

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SHARE

ALAMBAGH & ASHIANA-LDA

OUTLET CATEGORY OUTLETS

CONVENIENCE/BAKERY RESTAURANT GROCERY OTHERS TOTAL

24 4 25 2 55

In Alambagh, Grocery shops have a share of 45.45% whereas Convenience/Bakery shops are having a share of 43.63%. Some of the shops, mainly convenience/bakery are of high value selling which have a large variety of items and are having an appealing & pleasing shelf space. So, those shops need more attention.
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OUTLET CATEGORY CONVENIENCE/BAKERY RESTAURANT GROCERY OTHERS TOTAL

OUTLETS 6 5 1 1 13

In Ashiana-Lda, Convenience/Bakery shops are having a share of 46.15% & grocery 25%. This is a very wide market and has a great potential.

RAJAJIPURAM & BANGLA-BAZAAR

OUTLET CATEGORY BAKERY/CONVENIENCE RESTAURANT GROCERY OTHERS 2 55 25 4 NO OF OUTLETS 24

TOTAL OUTLETS

In Rajajipuram, convenience & grocery shops are having the same share i.e., 37.5%. The area is still developing and is having a great potential .
OUTLET CATEGORY OUTLETS

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BAKERY/CONVENIENCE RESTAURANT GROCERY OTHERS TOTAL

4 3 15 3 25

In Bangla-Bazaar, grocery shops are having a greater share than other category of outlets i.e., 60%. Convenience/bakery shops are comparatively much less & are having a share of 16%.

AREAWISE PREFERENCE

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OF FLAVOURS

ALAMBAGH & ASHIANA-LDA

FLAVOURS MANGO ORANGE MIX-FRUIT APPLE PINEAPPLE

OUTLETS 21 18 16 8 6

LYCHEE/GRAPES/GUAVA LYCHEE/GRAPES/GUAVA 5

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Mango flavour has the highest share in Alambagh i.e., 28%. Orange & mix-fruit flavours are the second preference with 24% & 22%.

FLAVOURS MANGO ORANGE MIX-FRUIT APPLE PINEAPPLE LYCHEE/GRAPES/GUAVA

OUTLETS 5 4 9 6 3 1

In Ashiana-Lda, mix- fruit flavour has the highest share of 32%. Apple flavour has the second preference of people and has the share of 21%.

RAJAJIPURAM & BANGLA-BAZAAR

FLAVOURS MANGO ORANGE MIXFRUIT APPLE

OUTLETS 9 6 7 4

PINE-APPLE LYCHEE/GRAPES/GUAVA

2 2

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In Rajajipuram, mango flavour has the highest share of 30%. Mix-fruit and orange flavours are their second preference having a share of 23% & 20%.

FLAVOURS MANGO ORANGE MIXFRUIT APPLE PINEAPPLE LYCHEE/GRAPES/GUAVA

OUTLETS 11 7 10 3 2 3

In Bangla-Bazaar, Mango flavour has the highest share of 31%.Mix-fruit & Orange flavours are the second preference of the people with 28% & 19%.

AGE-GROUP
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DISTRIBUTION

ALAMBAGH & ASHIANA-LDA

AGE-GROUP CHILDREN YOUTH MID-AGED OLD

OUTLETS 11 26 30 1

In Alambagh, mid-aged people have the highest share of 44% with youth having a share of 38%. 44

AGE-GROUP CHILDREN YOUTH MIDAGED OLD

OUTLETS 1 9 10 0

In Ashiana-Lda, mid-aged people are having the highest share of 50% with youth having a share of 45%.

RAJAJIPURAM & BANGLA-BAZAAR

AGE-GROUP OUTLETS CHILDREN YOUTH MID-AGED OLD 5 12 13 1

In Rajajipuram, mid-aged people are having a share of 42% with youth having a share of 39%.
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AGE-GROUP CHILDREN YOUTH MID-AGED OLD

OUTLET 4 10 9 0

In Bangla-Bazaar, youth is having the highest share of 43.47% with mid-aged people having a share of 39.13%.

AREAWISE SHARE
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OF JUICES

ALAMBAGH & ASHIANA-LDA

JUICES TROPICANA REAL (ACTIV, TWIST) GOLD IMPORTED BRITTANIAS TREAT

OUTLETS 20 24 11 3 2

ANIK FRUITONIK 2 NONE 24

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Daburs Real share is the highest with 28% share with Tropicana having a share of 23% which is comparatively less than Daburs Real.
JUICES TROPICANA REAL (ACTIV, TWIST) GOLD IMPORTED BRITTANIAS TREAT ANIK FRUITONIK NONE OUTLETS 9 7 5 0 2 0 2

In Ashiana-Lda, Tropicana has the highest share of 36% with Daburs Real having a share of 28%.

RAJAJIPURAM & BANGLA-BAZAAR

JUICE TROPICANA REAL (ACTIV, TWIST) GOLD IMPORTED BRITTANIAS TREAT ANIK FRUITONIK NONE

OUTLETS 6 7 2 0 1 1 4

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In Rajajipuram, Daburs Real is having a share of 33% & Tropicana having a share of 29%.

JUICE TROPICANA REAL (ACTIV, TWIST) GOLD IMPORTED BRITTANIAS TREAT ANIK FRUITONIK NONE

OUTLETS 9 10 2 0 0 1 13

In Bangla-Bazaar, Daburs Real is having a share of 28% which is slightly higher comparatively to Tropicanas share of 26%.

AREAWISE ANALYSIS
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OF PACKAGE MOSTLY

CONSUMED
ALAMABGH & ASHIANA

PACKET SIZE 200 ML 500 ML 1L

OUTLETS 24 7 29

50

In Alambagh, the packet size mostly consumed is of 1 litre with 200 ml pack being the second preference.

PACKET SIZE
200 ML 500 ML 1L

OUTLETS
8 1 8

In Ashiana-Lda, both the 200 ml pack & 1 litre bottle is mostly preferred each having an equal share of 47%.

RAJAJIPURAM & BANGLA-BAZAAR

PACKET SIZE 200 ML 500 ML 1L

OUTLETS 12 7 11

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In Rajajipuram, 200 ml package is having the highest share of 40% with 1litre & 500 ml pack having being the second preference & having a share of 37% & 23%.

PACKET SIZE 200 ML 500 ML 1L

OUTLETS 6 4 9

In Bangla-Bazaar, 1litre pack is having the highest share of 47% with 200 ml & 500 ml pack having a share of 32% & 21%, being the second preference.

RECOMMENDATION & CONCLUSION

Pepsi, however, being a very large company, has a strong presence in the market but inspite of it, while doing the survey and collecting the primary data from various sources (markets), it was found that it suffers from some inefficiencies which need to be looked upon with care and should be given special attention. The suggestions are as follows: i. Starting from the promotional aspect, more catchy advertisement about the various products of PepsiCo should be there in order to differentiate itself from its competitors.

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There should be more POP displays, kiosks even at the smallest retail outlets. ii. Another thing which is to be focused is the dealer-distribution network. There is a much greater need to strengthen the relationship with the distributors as well as more with the owners of the retail outlets. iii. Linking to the dealer-distributor network, PepsiCo should strengthen its supply chain management system, thereby, meaning that products should be made available to the dealers on time. Moreover, the facilities which are provided by the companies to the dealers such as the refrigeration system, etc should be emphasized more. Therefore, it can be concluded that more importance should be focused on strengthening the relationship particularly with the retail outlet owners and they should be made available with the products at right time along with other facilities in order to strengthen its brand image in the local markets.

BIBLIOGRAPHY

Reference books & Magazines:

Marketing Research by G.C.BERI Business Today

Websites:
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www.pepsico.in www.tropicana.com

Database extracted from:

CMIE database PROWESS

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