You are on page 1of 36

Project on Marketing Strategies adopted by PepsiCo India


Project aims to explore, understand and analyse the marketing strategies of PepsiCo
India that has made it the number 1 drink in India.
I have decided to present the marketing strategies project on PepsiCo India after
studying its strategies. I have analysed on PepsiCo product range of beverages and
focused on Pepsi as the subject of our analysis. I have chosen PepsiCo India for many
reasons it is one of the biggest FMCG brands not only in India but also globally.
Indeed PepsiCo is one of the fastest paced products worldwide. Pepsi posed an
exciting opportunity to study a brand that is automatically associated with youth and
Pepsi is carbonated soft drink that is produced and manufactured by PepsiCo which is
created and developed in 1983 and introduced as Brad`s Drink , it was later renamed
as Pepsi-cola on 28th August 1898 then to Pepsi in 1961.
The ultimate objectives of Marketing Strategies is to increase volume, expand share of
worldwide non alcoholic ready to drink beverages sales, maximizing long term cash
flows and create economic value added by improving economic profit. Focus on
enhancing value for these customers and helping them to grow their beverage
business. I strive to understand each customer`s business and needs, whether that
customer is sophisticated retailer in a developed market a kiosk owner in an emerging
In this project I learn how to achieve success and fulfilling the mission which is
depend on ability to satisfy more of their beverage consumption demands and our
ability to add value for customers.
This can be achieved by placing right products in the right markets at the right time.
I have also researched extensively on Pepsi`s distribution network and have made
suggestions as to how it can further improve its reach among users in the future.

Project on Marketing Strategies adopted by PepsiCo India


Marketing Strategy and PepsiCo
Strategy term is derived from the Greek word for general ship or leading an army. It is
a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to
a problem. It is the art and science of planning and marshalling resources for their most efficient
and effective use. A strategy is a long-term plan to achieve certain objectives. A marketing strategy
is therefore a marketing plan designed to achieve marketing objectives. Marketing strategy is the goal
of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes
all basic and long-term activities in the field of marketing that deal with the analysis of the strategic
initial situation of a company and the formulation, evaluation and selection of market-oriented
strategies and therefore contributes to the goals of the company and its marketing objectives.
PepsiCo, Inc., incorporated in 1919, manufactures, markets and sells soft drinks and concentrates,
and snack foods. PepsiCo Inc. Is an American food and beverage corporation headquartered in
purchase, New York with interests in the manufacturing, marketing and distribution of grain-based
snacks foods, beverages and other products? PepsiCo was formed in 1965 when Pepsi-Cola
Company merged with Frito-Lay, Inc., and has since expanded from its namesake product Pepsi to a
broader range of food and beverage brands, the largest of which included adding Tropicana in 1998
and Quaker Oats in 2001. Based on net revenue, PepsiCo is the second largest food and beverage
business in the world, and is the largest in the USA.
PepsiCo has been successful in implementing the 4 managerial functions, planning, organizing,
leading and controlling. Their goals and commitments are clearly defined in PepsiCo`s Mission and
vision statements as well as in their Performance with Purpose campaign. When organization is
considered, PepsiCo has turned the traditional hierarchy pyramid upside-down, placing more focus
on those closest to the customer Pepsi`s 20,000 front line performers and operation staff by
placing them at the top of the organization, The new unified organization eliminates layers of
supervision, focuses on teams designed to create fluid, efficient work processes, removes barriers to
serving customers and better links upper management to the front line. PepsiCo has led its over
300,000 employees straight to the top. Their leadership is as diverse as the products they produce,
made up of a board of 30 individuals from around the world, who work together to ensure the
Performance with Purpose campaign isnt just a catchy phrase. When it comes to the controlling
phase, PepsiCo has continued to rise as a company which has made it number 1 in America and
number 2 in the world. They consider their employees to be their greatest asset.


Project on Marketing Strategies adopted by PepsiCo India


The main purpose of this study is to determine the different strategies that are adopted by the
companies. The strategies will be evaluated to see which is the best amongst them and which are
most effective.

Acceptability of Pepsi products by the consumers and marketers.

Identifying the competitors and positioning Pepsi in comparison to them.
To find out marketing strategy of Pepsi.
To analyze the SWOT analysis of Pepsi.
To know about Customer value of Pepsi.
To know about Customer perception towards Pepsi brand image.
To know about Customer satisfaction.
Impact of market strategy on customer.


A Research Methodology defines the purpose of the research, how it proceeds, how to measure
progress and what constitute success with respect to the objectives determined for carrying out the
research study. The appropriate research design formulated is detailed below. The research
methodology for the present study has been adopted to reflect these realities and help reach the
logical conclusion is an objective and scientific manner.

In order to fulfil the objectives of the study the data can be collected from two sources of

Primary Data
Secondary Data

Primary Data
For this project secondary data was used for collecting data. I have not collected any
primary data or exhaustive statistical analysis.
Secondary data
This study is based on secondary data collected through various sources like

Various sites in internet

Published books of Management
Newspapers and Magazines.


Project on Marketing Strategies adopted by PepsiCo India





1 - 13





















PEPSI`s - 4 P`s
















Strategy is important because the resources available to achieve these goals are usually limited.
Strategy generally involves setting goals, determining actions to achieve the goals, and mobilizing
resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the
means (resources).
A strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the
firm to the challenges of the environment. It is designed to ensure that the basic objectives of the
enterprise are achieved through its proper execution by the organization.
Strategy can be further explained as:

A plan or course of action or a set of decision/rules making a pattern or creating a common


A pattern or common thread related to the organizations activities which are derived from the
policies, objectives and goals.

Concerned with pursuing those activities which move an organisation - from its current
position to a planned future position

Concerned with the resources necessary for implementing a plan or a predetermined course of

Today the term strategy is used in business to describe how an organization is going to achieve its
overall objectives. Strategy is concerned with deciding which alternative is to be adopted to
accomplish the overall objectives of the organization,

Characteristics of Strategy
1. Unified, Comprehensive and Integrated plan
2. Universal Applicability
3. Strategy Alternatives like Stable Growth Strategy, Growth Strategy, Retrenchment Strategy,
and Combination Strategy.
4. Strategy Review
5. Applicable to all Functional Areas like Marketing, Production, Finance and Human
6. Allocation of Resources
7. Objective oriented
8. Related to Environment
9. Future Oriented
10. Levels of Strategy Corporate, Business and Functional Strategy


Strategic Management involves the formulation and implementation of the major goals and
initiatives taken by a company's top management on behalf of owners, based on consideration
of resources and an assessment of the internal and external environments in which the organization
competes. Strategic management provides overall direction to the enterprise and involves specifying
the organization's objectives, developing policies and plans designed to achieve these objectives, and
then allocating resources to implement the plans. Strategic management is not static in nature; the
models often include a feedback loop to monitor execution and inform the next round of planning.
The systematic analysis of the factors associated with customers and competitors (the internal
environment) to provide the basis for maintaining optimum management practices.


Every organization whether small or big has certain objectives to be achieved. Each of them has to
prepare a broad plan for achieving those objectives. Strategy formulation means defining the strategy
in a very clear and simple word. Strategy formulation means stating the outline and the features of a
strategy. It simply means preparing the action plan. Strategy is a pattern or plan that integrates an
organization's values, major goals, policies and action sequences into a cohesive whole. A well
formulated strategy helps to marshal and allocate an organization's resources into a unique and viable
posture based on its relative internal competencies and shortcomings, anticipated changes in the
environment, and contingent moves by intelligent opponents.
It is important to ensure that the strategy is implemented effectively; Strategy implementation is an
important aspect of strategic management. It is the sum total of all the activities and choices required
for the execution of a strategic plan. It is the process by which strategies and policies are put into
action through the development of programs, budgets and procedures.
The strategic management process results in decisions that can have significant long-lasting
consequences. Erroneous strategic decisions can inflict severe penalties and can exceedingly
difficult, if not impossible, to reverse. Most strategists agree, and therefore, that strategy evaluation is
vital for an organisations well-being; timely evaluations can alert management to problems or
potential problems before a situation becomes critical. Strategy evaluation includes three basic
1. Examining the underlying bases of a firms strategy.
2. Comparing expected results with actual results
3. Taking corrective actions to ensure that performance conforms to plans.


1. Choice of strategy strategic management helps the management to select the best possible
2. Competitive Advantage Innovation, after-sale-service and other activities generate
competitive advantage to the firms.
3. Corporate Image Due to strategic management the performance and image of the firms
4. Organisational Efficiency Efficiency is the ratio of returns to costs. Due to Strategic
management the firms gain higher returns at lower costs.
5. Organisational Objectives - Strategic management enables a firm to effectively implement
strategies in all functional areas like production, marketing, finance, human resources etc
6. Organising Resources Strategic management helps in proper allocation and utilization of
7. SWOT Analysis SWOT analysis helps the firm to keep pace with the changing nature of
the environment affecting the organisation.
8. Facilitates Planning - Strategic management facilitates proper planning of various activities
in the organisation. The alternative plans are analysed in terms of benefits and costs.


1. Limitation of Assumptions - Strategic management is based on certain premises or
assumptions it can be unrealistic and cannot be implemented effectively.
2. Problem in Analyzing Environment organization may not clearly analyse the
opportunities and threats of the external environment.
3. Unrealistic Mission and Objectives - Strategic management may not achieve success if the
mission and objectives are not realistic.
4. Problem of Setting Targets- Shortfall in implementing a target may result in frustration or
5. Problem in Implementation - if the strategy is not implemented properly then even an
exceptional good strategy may not produce desired results.
6. Lack of Evaluation there may be lack of proper evaluation and control which may render
the process of Strategic management unsuccessful.
7. Lack of Commitment of Lower Level - Strategic management requires people with vision,
expertise, commitment and dedication which are rarely available for making organization
8. More theoretical in Nature - Strategic management is a very theoretical in nature.


The strategies should give direction to the managers who will use and implement the plans and
policies the best and proper method, way to adopt it. The selection of the best strategy alternative is
not the end of strategy formulation. Policies define the ground rule for implementation. A policy
defines the area in which decisions are to be made, but it does not give the decision. It spells out the
sanctioned general direction and areas to be followed. Functional strategies operate below the
Strategic Business unit or business level strategies. Functional strategies or functional plans and
policies are made within the guidelines set at higher levels. Plans are made to select a course of
action while policies are required to act as guidelines to action. Environmental factors relevant to
each function area have an impact on the choice of plans and policies. Functional areas are
traditionally divided into finance, marketing, production and personnel. Strategies can be divided as
basic, general, departmental. Organisations frame strategies in al functional areas. The functional
areas include - Human Resource Strategies, Marketing Strategies, Financial Strategies and
Operational Strategies.





1) Human Resource Strategies

Recruitment and Selection Strategy
Training strategy
Performance Appraisal Strategy
Promotion strategy
Transfer Strategy
Compensation and Motivation strategy

2) Marketing Strategies

Product Strategy



Product Line (Multi product or diversified)

Development of Product
Other policies (Packaging)

Pricing Strategy

Rapid skimming- high price heavy promotion
Slow skimming-high price low promotion
Rapid Pricing low price heavy promotion
Slow penetration- low price low promotion
Follow leader pricing, differential pricing

Distribution Strategy
Area of distribution, training of dealers
Promotion and market research Strategy
Advertising, media selection.

3) Financial Strategy
Use Fixed capital
Utilization of funds
Framing Capital structure-equity, preference etc
Provision- future needs.

4) Operational Strategy
Capacity for production
Size and location of plant
Technology and modernization
Quality of products
Research and development


Marketing strategy is the goal of increasing sales and achieving a sustainable competitive advantage.
Marketing strategy includes all basic and long-term activities in the field of marketing that deal with
the analysis of the strategic initial situation of a company and the formulation, evaluation and
selection of market-oriented strategies and therefore contribute to the goals of the company and its
marketing objectives. Marketing strategies are dynamic and interactive. They are partially planned
and partially unplanned. Strategies are dynamics
Your well-developed marketing strategy will help you realise your business's goals and build a strong
reputation for your products. A good marketing strategy helps you target your products and services
to the people most likely to buy them. It should be planned and developed in consultation with your
team. It is a wide-reaching and comprehensive strategic planning tool that:

describes your business and its products and services

explains the position and role of your products and services in the market

profiles your customers and your competition

identifies the marketing tactics you will use

Allows you to build a marketing plan and measure its effectiveness.

5 key of Marketing Strategy concepts

1) Product Positioning and Product Differentiation it influence how consumers perceive a
brand`s characteristics relative to those of competitive offerings
2) Environmental Analysis it is the assessment of the external forces and how they are
changing that will influence the firm, its product and its customer, and that create threats and
3) Marketing Research it applied consumer research designed to provide managers with
information on factors that impact consumers acquisition, consumption and disposition of
goods, services and ideas.
4) Marketing Mix Developments it involves development and coordination of activities
involving Product, Pricing, Promotion and Distribution

5) Segmentation of Customers it involves subdividing the market place into distinct subsets
of customers having similar needs and wants, each of which can be reached with a different
marketing mix.

What does marketing strategy have to do with this materialization out of nothing?

Marketing strategy is sorting out who your audience actually is, and then finding out what has
meaning for them. What do they care about, and how does this relate to your offer? What message
can you deliver that is both true and meets your consumer squarely at the level of their needs?
Marketing strategy is the process of uncovering messages that can be heard. Marketing strategy
allows you to answer the crucial question your offer must address: Why should I care? To
paraphrase Peter Drucker: Consumers do not buy what you sell. They buy what has value to them.

Why does marketing strategy matter?

In marketing, there is strategy and there are tactics. A lot of marketing, in practice, is preoccupied
with what I call tactical experimentation. This is the act of throwing all kinds of things out at the
world or at broad demographic targets to see what works. As you do this you are spending money,
potentially lots of it. The idea in this method is to do this until you find some marketing actions that
work, and when you find them you can then do more of those.
This process often results in the classic Wanamaker dilemmaHalf the money I spend on
advertising is wasted; the trouble is I dont know which half. He was speaking of advertising, but
the principle applies.


There are four (4) main types of marketing strategies that businesses can apply in marketing their
products or services.

1. Market Leader Strategies

Under this strategy, there are three ways in which you could use it to establish yourself as a market
leader. The first way is to expand your total market. This is done by applying strategies that will
increase the numbers of consumers using your product or services. To lead you must find new uses of
existing products or targeting a new market. In identifying new markets, you might have to source
consumers in locations where your product is not known.
Defending the market share you are in control of is the second strategy. The most effective ways of
defending your current market is by capitalizing on improving the quality of your products to be able
to retain consumers. Market segmentation helps in defending your market share.
The third strategy is to expand your market share. To expand your market share you need to
aggressively counter completion. A business can deal with completion by doing what your
competitor does not.

2. Market Challenger Marketing Strategy

The market challenger marketing strategy means that you research and identify minor unmet needs
that you believe your business can cater for competitively. There is little or no competition here, and
it makes it easy to establish yourself in the market. Challengers use the weaknesses of their
competitors as their selling point.

3. Market Niche Marketing Strategy

Having a market niche means that your market is differentiated into fine tuned segments. The niches
make it easier to address the need of consumers in each of the market niches. This is a fundamental
type of marketing strategy as you are able to address the differing preferences of diverse consumers
as well as moving with current trends in the market. Diversifying the market will enable you to reach
out to a wider market.

4. Market Follower Marketing Strategy

The market follower depend waits for his competitors to identify markets and carry out research
consumer preferences. As a follower, you need to be keen your competitors weaknesses and
improve on them. This marketing strategy saves you on cost arising from having to carry out research
because you only have to work on your competitors weaknesses to better your products.

Some more types of Marketing Strategies

Marketing is the important aspect of an organisation. The success of the organisation is largely
attributed to the performance of the marketing. Therefore there must be suitable strategies

Every organisation must have appropriate product strategy. The product strategy enables to
take decisions in respect of

Product Line/Mix
A company may follow either a single product strategy or a multi-product strategy. A
company may concentrate on core product line or a diversified product line business.

Development of new products

A firm must decide about the development of new products or modified products to face the
competition in the market and to meet the needs and wants of the customers.

Other Product policies

A firm must decide on other product policies in respect of Policies relating to - product
packaging, Product Positioning, Branding and Brand extension.

While fixing prices, a firm may consider several factors such as cost of the product, demand for
the product, competition in the market, the nature of product, the nature of consumers, objectives
of the firm etc.

Skimming pricing strategy

High prices are charged in order to earn high profit margins. A firm may follow either
Rapid skimming - where high prices are charged and there is heavy promotion.
Slow skimming where high prices are charged and there is low promotion.

Penetration pricing strategy

Low price are charged in order to capture a good market share. A firm may follow either
Rapid Penetration where low prices are charge and there is heavy promotion.
Slow Penetration - where low prices are charge and there is low promotion.

Other Pricing strategies

There are several other pricing strategies such as follow the leader pricing. Standard
pricing, Differential pricing, Trial pricing, Probe pricing.

A firm must frame policies in respect of promotion. The various promotion strategies are in
respect of

Advertising Strategy

A firm must frame strategy in the area of advertising in respect of

o Advertising budget strategies brand-wise, area-wise, period-wise and media-wise.

o Media scheduling strategies bursting, flighting, pulsing etc.
o Media Selection strategy depending upon nature of product, competitors, advertising,

Sales Promotion Strategy

A firm must give proper emphasis on sales promotion techniques. Therefore a firm must frame
sales promotion strategy in respect of o The amount of funds to be spent on sales promotion techniques like discounts, exchange
offers, free gifts, samples etc.
o Decision on areas like after-sale-service, guarantees etc
o Duration and timing of sales promotion offers whether during festival periods.
o Products or brands and the market areas which needs to be given more focus for sales.

Publicity plays an important role in promotion of goods and services. Publicity is gaining
public visibility or awareness for a product, service or your company via the media. Therefore
a firm needs to frame proper publicity strategy in respect of -

o The media to be concentrated for publicity,

o The period or timing of publicity,
o The relationships with various media people,
o The amount of funds to be allocated for publicity purpose, such as on event marketing during
product launch, gifts t the media people etc

Personal Selling Strategy

Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and
techniques for building personal relationships with another party (e.g., involved in a purchase
decision) that results in both parties obtaining value. It plays an important role in promoting
the sale of products, especially in the case of industrial goods.


Therefore proper decisions must be taken in respect of

The number of sales force, selection and training.
The compensation to the sales force.
The products, which require personal selling efforts.
The markets or areas where personal selling is required etc.
Marketing Research Strategy
Marketing research plays an important role in marketing of goods and services. Marketing
research is "the process or set of processes that links the consumers, customers, and end
users to the marketer through information. It is the systematic gathering, recording, and

analysis of qualitative and quantitative data about issues relating to marketing products and
services. A firm must decide in respect of
o The products which requires market research
o The markets where marketing research to be conducted.
o The type of marketing research such as sales research, product research, consumer research,

pricing research etc.

The amount of funds to be invested in marketing research
The duration and timing of marketing research.
Whether marketing research to be conducted in-house, or by an external agency.
If in-house selection and training of marketing research staff.

A firm must frame strategy in respect of distribution. The distribution strategy needs to be framed
in respect of
o Channels of distribution whether direct channels or indirect channels.
o Areas of distribution whether local, regional, national or international.
o Dealers network the number of dealers, area-wise, product-wise.
o Dealers training training to the staff of dealers, especially in the case of consumer durables
so that they are familiar with the features and operations of the product.
o Dealers incentives and compensation commission to be paid to the dealers and additional
incentives to push the sales in the market.


This means business owners can create a marketing plan that they are more comfortable with and
take advantage of marketing methods that are best for their company. A marketing strategy is the
foundation and key element to achieving success. This is all possible because marketing saves time
and helps business owners to define their product and let potential consumers know they exist.

1. Increase in Sales & Expansion of Business

Marketing strategies helps company to choose the best possible strategy and implement in a very
effective way which will help to increase sale of product. Proper marketing strategies help to expand
the business which results into great profit and capture a huge place in market which would be very
difficult for small business to compete with you.

2. Increase in Profit

Effective implementation of marketing strategies enables a company to achieve its organisational

objectives such as increase in profit and increase in market share. The company gains higher returns
at lower cost.

3. Provides a Plan
Not everyone markets according to a plan, and this is the very reason one should write down a plan
and stick to it. A marketing plan acts as a guide as the business progresses, so owners can see where
their time and money is going. It provides a look into the future goals of the company, and gives stepby-step directions on how to achieve those goals.

4. Defining a Brand
Defining a brand means knowing what you are selling, and to whom youre selling it to. In other
words, you must also define your audience. Without knowing who to market to, business owners can
lose. Due to marketing strategies the image of the company improves in the mind of various people.

5. Out-flanking Your Competition

With knowledge gained from identifying your best customer profile you can create a core marketing
message that will differentiate you from your competition.

6. Make it easy for them to find You

We call it a Total Web Presence. Your website is your hub and all of your marketing tactics are
designed to direct your prospects to your educational hub. That includes offline as well as online. A
great marketing strategy will help you identify where you prospects hang out and that enables you
to put out bread crumbs of content which redirect them to your website.


Marketing strategies can give your marketing efforts and campaigns a focus. Instead of hoping that
customers find their way to your small business or marketing to everyone all the time, marketing
strategies help to divide what is an ocean of consumers into navigable segments. These segments can
then be addressed individually so that your marketing message is attractive to each

1. Cost
Adverting and marketing costs money. If you dont do the proper research then you might end up
throwing money away. Wasting marketing efforts by targeting the wrong audience using an
inappropriate medium would be a serious and costly mistake. So it is important to do your research
beforehand and keep your costs to a minimum.

2. Investment of time
Researching the appropriate marketing strategy, designing and writing the adverts, getting them
published, dealing with any response. Its important to spend time keeping track of how successful or

not your marketing campaign is. A potential disadvantage of marketing here is the risk of time wasted
for an unsuccessful campaign.

3. Failure
An obvious disadvantage to a promotional strategy is its potential for failure. You could invest time
and money designing and advertising a sale, and sacrifice normal profits during the promotion, only
to achieve moderate results. Careful research and expert advice from a marketing consultant can help
maximize your chances for success, but nothings guaranteed.

4. Predictability
If your promotions occur in a predictable pattern, potential customers might wait for a sale rather
than buy the product or service at full price now. That means if a retail clothing store offers a sizable
discount on most holidays, sales will be low between holidays, and relatively few customers will ever
pay full price.

5. Bargain Hunters
New customers might learn to love your product or service and become long-term clients. Or they
might abandon you as soon as the promotion is over and continue to hunt for bargains. Converting
bargain hunters to permanent customers depends on developing brand loyalty.

6. Competitions
Competitors in the marketing space may be another disadvantage. You have to work hard to make
your product stand out or else you may lay back in spite of spending your time and money.

The recipe for Pepsi (the soft drink), was first developed
in the 1880s by a pharmacist and industrialist from New
Bern, North Carolina, named Caleb Bradham-who called
it "Pepsi-Cola" in 1898. As the cola developed in
popularity, he created the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903.
The Pepsi-Cola Company was first incorporated in the state of Delaware in 1919. The company went
bankrupt in 1931 and on June 8 of that year, the trademark and syrup recipe were purchased
by Charles Guth who owned a syrup manufacturing business in Baltimore, Maryland. Guth was also
the president of Loft, Incorporated, a leading candy manufacturer, and he used the company's labs
and chemists to reformulate the syrup. He further contracted to stock the soda in Loft's large chain of
candy shops and restaurants, which were known for their soda fountains, used Loft resources to
promote Pepsi, and moved the soda company to a location close by Loft's own facilities in New York
City. In 1935, the shareholders of Loft sued Guth for his 91% stake of Pepsi-Cola Company in the

landmark case Guth v. Loft Inc. Loft won the suit and on May 29, 1941 formally absorbed Pepsi into
Loft, which was then re-branded as Pepsi-Cola Company that same year. In the early 1960s, the
company's product lines expanded with the creation of Diet Pepsi and purchase of Mountain Dew.
PepsiCo was the first company to stamp expiration dates, starting in March 1994
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the company
it is known as at present. At the time of its foundation, PepsiCo was incorporated in the state
of Delaware and headquartered in Manhattan, New York. The company's headquarters were relocated
to its still-current location of Purchase, New York in 1970, and in 1986 PepsiCo was reincorporated
in the state of North Carolina.
Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside
of its core focus of packaged food and beverage brands; however it exited these non-core business
lines largely in 1997, selling some, and spinning off others into a new company named Tricon Global
Restaurants, which later became known as Yum! Brand, Inc. PepsiCo purchased the orange juice
company Tropicana Products in 1998, and merged with Quaker Oats Company in 2001, adding with
it the Gatorade sports drink line and other Quaker Oats brands such as Chewy Granola Bars and Aunt
Jemima, among others. In August 2009, PepsiCo made a $7 billion offer to acquire the two largest
bottlers of its products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this
acquisition was completed, resulting in the formation of a new wholly owned subsidiary of
PepsiCo, Pepsi Beverages Company. In February 2011, the company made its largest international
acquisition by purchasing a two-thirds (majority) stake in Wimm-Bill-Dann Foods, a Russian food
company that produces milk, yogurt, fruit juices, and dairy products. When it acquired the remaining
23% stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest food and
Beverage Company in Russia. In July 2012, PepsiCo announced a joint venture with the Theo Muller
Group which was named Muller Quaker Dairy.
Its marketing strategy is mainly to work within the company Performance with a Purpose
Strategy. Bring Customers in my promoting a product that promotes a theory of making the world
better- Smart Selling and focusing on Business Portfolio Analysis, where to sell their productInternational Markets, making products that fit in customers life style-Customer Relationships. It's
been years since Wild Cherry Pepsi saw any sort of significant marketing support. According to
Beverage Digest, Wild Cherry Pepsi grew 2.9% last year, compared to a 3% decline for the entire

carbonated soft drink category. Pepsi has been focused on a trademark, or master brand, approach
this year, preferring to put its marketing muscle behind ads that feature multiple brands in the case of
an ad airing during the Academy Awards.
John Grozier, SAP's vice-president of CRM product marketing. Pepsi selected SAP to kick off of a
major business transformation for the company. Ultimately this is an enterprise-wide decision and the
specific plans being worked out right now. The CRM campaign asks consumers to suggest ways that
Pepsi can get involved in social causes. With the effort, PepsiCo is taking its marketing initiatives to
where its target audience is already spending much of its time.
They have hired 300,000 entrepreneurs, dreamers, doers, rainmakers and shakers. They encourage
them to be the best at whatever theyre doing and whoever they are. Stretch assignments, early
responsibility, job rotations and awesome mentors are just part of what makes the real world at
PepsiCo an unbeatable training ground. At PepsiCo, they provide more than a salary. Total Rewards
is everything receive as an employee your pay, health care benefits, wellness programs, retirement
plans and work/life benefits. Each year, you have the opportunity to choose the health and insurance
benefits that are right for you and your family. PepsiCo's savings and retirement benefits are designed
to help you reach your future retirement goals. The plans are designed to work together.

The goal of PepsiCo India is to nourish consumers with a range of products that deliver great taste,
convenience and affordability, from simple treats to healthy offerings.

PepsiCos foods division Frito-Lay is the leader in the branded salty snack market. All its products
are free of trans-fat and MSG. It manufactures Lays potato chips; Cheetos extruded snacks, Uncle
Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high-fibre
breakfast cereal, Quaker Oats and low-fat and roasted snack options like Aliva increase the number
of healthy choices available to consumers.


Lehar Namkeen
Quaker Oats
Uncle Chipps

PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Nimbooz,
Mirinda, Slice and Mountain Dew, in addition to low-calorie options such as Diet Pepsi, hydrating
and nutritional beverages such as Aquafina drinking water, isotonic sports drink Gatorade and fruit
juices such as Tropicana.

Mountain Dew


PepsiCo use different mediums of advertising
Print Media They often use print media for advertisement. They have a separate department for print media.
POS Material Pos material mean point of sale material this includes: posters and stickers display in the stores and
in different areas.
TV Commercials As everybody knows that TV is most common entertaining medium so TV Commercials is one of the
most attractive ways of doing advertisement. So Pepsi Company does regular TV commercials on
different channels.

Billboards and Holdings Pepsi is very much conscious about their billboards and holdings. They have so many sites in
different locations for their billboards.
Be it the IPL season or Cricket and FIFA World Cup or festive occasions like Navaratri, Pepsi pours
out its advertisements and campaigns on billboards, television, radio, internet, Newspapers and
Magazines. This not only increases its visibility manifold, but also significantly serves as a strong
Brand Recall.

PepsiCo has been shaping its pricing strategies in ways which will suit the soft drink global market. Pepsi has

also adopted segmented pricing strategy making the price of its products be higher in luxurious hotels
and other executive sectors.
Seen as sold They do agreements with a shop keepers and stores to exclusive sale in stores. These stores are
called as KEY accounts in their local language. And Pepsi also invest heavy budget on these stores
and offers them free samples and free bottles and some time cash incentives. Pepsi have a good sale
in the market because according to expert which product is seen more in the market that sells more
Different Price In Different Seasons Sometimes PepsiCo change their product price according to season. In India summer is to be a good
season for beverage so in winter they reduce their prices to maintain their sales and profit. The
pricing strategy of PepsiCo is to reduce the price of its products during holy months like Ramadan
and Eid. This serves as a promotional price strategy for the company.

Pepsi Company makes two types of sellingDirect Selling In direct selling they supply their products in shops by using their own transports. They have almost
450 vehicles to supply their bottles. In this type of selling company have more profit margin.
Indirect Selling They have their whole sellers and agencies to cover all area. Because it is very difficult for them to
cover all area of INDIA by their own so they have so many whole sellers and agencies to assure their
customers for availability of Pepsi products.
Facilitating the product by infrastructure for providing their product in good manner Pepsi company has provided infrastructure which
includes Visicooler, Freezers, Display Racks, Free empty bottles and shells for bottles


Pepsi in India categorically targets the youth. With the Oh Yes Abhi campaign it positions the
brand with the Youngistaan Brigade. It has religiously employed august personalities from these
Cricket and Bollywood to create an inspirational reference groups. It has always positioned itself as a
brand of the current age by continually changing its brand ambassadors: from Juhi Chawla to
Deepika Padukone, Aamir Khan to Ranbir Kapoor and Sachin Ramesh Tendulkar to Unmukt Chand.

Getting shelves They gets or purchase shelves in big departmental stores and display their products in that shelves in
that style which show their product more clear and more attractive for the consumers.
Eye Catching Position Salesman of the Pepsi Company positions their freezers and their products in eyecatching positions. Normally they keep their freezers near the entrance of the stores.
Sale Promotion Company also do sponsorships with different college and schools cafes and sponsors their sports
events and other extra curriculum activities for getting market share.
UTC Scheme UTC mean under the crown scheme, Pepsi often do this type of scheme and they offer very handy
prizes in it. Like once they offer bicycles, caps, TV sets, cash prizes etc. This scheme is
very much popular among children

Target Customer: Youth in Urban Cities. The campaigns have been customized with catchy
slogans that use a hybridized set of Hindi and English words, Hinglish to be in coherence to
the language the youth. Popular Campaigns were: Yehi Hai Right Choice Baby, Aha! (1990),
Ye Dil Maange More (1999-2006), Ye Pyaas hai Badi (2000),Ye hai Youngistaan Meri Jaan (2009),
Change the Game (2011), Oh Yes Abhi (2013-14) In Oh Yes Abhi, Pepsi portrays the impatience
of the so called Youngistaan. Celebrity endorsers such as Ranbir Kapoor and Mahendra Singh
Dhoni have been roped in for the campaign. Through this initiative, Pepsi has engaged audiences
through large scale ATL communication activities.
World Cup Association PepsiCo has spent INR 160 Crore to Board of Control for Cricket to bag the title sponsorship and the
tournament was officially declared PEPSI IPL 2013-14. It gained a lion share of 67% exposure
among central sponsors, Repucom International.
Pepsi Concerts -

A.R Rehman distinct style, lyrics and songs have made him an instant hit among them asses in
INDIA. His enormous popularity in the country & abroad is supported by Pepsi`s commitment
towards providing healthy and fun-filled entertainment for the youth of INDIA.
Pepsi Food Mela With a splash of food, fun & prizes to be won, the Pepsi food mela treated the people of mumbai, to a
festive food festival comprising of 50 restaurants, spread out all over the bustling citys map. The
promotion saw the avid families and friends enjoying the delicacies at the restaurants; all resiliently
upholding the Pepsi identity.
Go out and get some Pepsi Ramzan Campaign
A very special occasion for the people of INDIA Ramzan saw another very special Pepsi`s
promotion, marketing the popular 1.5 litre PET bottle & the 1 litre bottle with a super price-off
promotion. The emphasis on enjoying Pepsi at Iftar with friends & family.
Pepsi TV Mazza
The Pepsi new campaign is Pepsi T.V Mazza, it is a UTC Scheme in which people are getting
television sets of different sizes. These days this scheme is very popular among the people.

Pepsi Shopping Festival

Pepsi hosted The Pepsi Shopping Festival Lahore`s first shopping festival, are sounding success
with tempting discounts, live music, great prizes and fireworks. Liberty marketing DELHI was a hive
of activity during the weeklong shopping extravaganza. The inaugural event proved so popular that it
is now set to become an annual fixture.
Covert Advertisement Pepsi as a brand has been featured in several movies like Subhash Ghais Taal and Karan Johars My
Name is Khan to create a brand recall.
Targeting Health Conscious Groups It has introduced products with low sugar, zero sodium and saturated fat. Through its bottled water,
juices and sport drinks like Gatorades, PepsiCo is aspiring to outperform its rival.
Pepsi Pet Promotion
In 1996 Pepsi launched 1.5 litre Pet contour bottles for the first time in INDIA targeting house wives
and family home. It took a limelight and gained momentum with a campaign promoting the unique
packaging. Pepsi Pet was offered through Price Off promotion in the market.

PepsiCos international activities in Saudi Arabia, China, Mexico, India and Eastern Europe account
for more than half of the company revenue and its operating profit. As a result, the company has been
increasing its global advertisements all over the 190 countries in which it runs its businesses.
The global advertisement is an international strategy used by the company to create brand awareness.
The company has recognized the need to have a careful integration of high standards in its various
supply chains and more so at the retail level across the world as a strategy of increasing its
competitive advantage. The company also strives to ensure excellence and specifically for the brands
or products together with the packaging, advertising and marketing as a way of ensuring customer
loyalty and brand loyalty. The rationale behind this company strategy is to ensure that all customer
get high quality products and this is because quality controls are highly realized in the process of
bottling, packaging and from the warehouses to the shelves. As part of its international strategy,
PepsiCo markets its products using the localization process where the local bottlers in the subsequent
countries determine which products to pact in order to sell in their locality. The strategy behind this is
to ensure that its products are produced in the country where they will be consumed.



The Pepsi Store: Urban Strategy

In order to penetrate the urban sector this store will be opened in most of the tier 1, 2 and 3
cities, especially in the hubs: an educational hub or an industrial hub. These stores will be
of Franchise Owned Franchise Operated model, and they have to pay the company certain
amount of money yearly or half yearly. These stores will associate itself with the education
centre attracting the youth, as the entire product portfolio will be available in these.

Secondly, they can also associate with the shopping centres creating Pepsi Floor or Pepsigasm
courts, where the furniture and the floor will be painted in Pepsi colours, depicting its logo, its
major brands.

In order to advertise, these stores will open exclusive stalls in college fests, corporate meals, and
government fares and in other public gathering occasions.


The Pepsi Pouch: Rural Strategy

It is time Pepsi needs to shift focus to the severely untapped potential of rural market.

In order to gain its stand on rural market, company has to focus upon three factors
Availability, Affordability & Acceptability. As we know the cost of soft drinks and other

products are considered as high range products because of the low per capita income,
therefore a single 300 ml Pepsi bottle is generally shared between two. In order to mitigate
this problem, Pepsi pouches can be introduced at a reduced price of Rs.3.

This pouch will be a 100 ML soft drink pouch. This pouch is a plastic pouch which is fitted
with a capped straw to drink.

Distribution model is as follows: Factory -> Regional / Zonal Distributor -> Multiple
Local Distributors -> Caravan / Mobile Distributors -> Consumers

This particular packaging can compete head on with the generic colas as distributed by
regular mom-pop shops in the villages.

The penetration is expected to increase by 30%, as forecasted according to historic scenario

of introduction of 200ml bottles at the half price of 300 ml bottles.

Pepsi should improve the design of the package first. As it is advertised as the choice of new
generation, the design must be looked young and fresh. So the colour should be more sharp
and attractive.

Pepsis 4Ps

Basic Ingredients: carbonated water, high fructose corn syrup, sugar, colourings, phosphoric
acid, caffeine, citric acid and natural flavours. The caffeine free Pepsi-Cola contains the same
ingredients minus caffeine.

PepsiCo Indias product line includes Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain
Dew, in addition to low-calorie options such as Diet Pepsi, hydrating and nutritional
beverages such as Aquafina drinking water, isotonic sports drink Gatorade and fruit juices
such as Tropicana and Tropicana 100%.

It has launched Duke Brand of drinks in Raspberry, Gingerade, Ice Cream Soda and Masala
Soda flavours, along with retro-packaging to remind consumers of the brand.


Sold in almost every General Store, Super Store, Theatre, Restaurants and even in vending
machines in almost every country.

PI sells the Pepsi brand concentrates to bottling partners who manufacture and bottle the
Pepsi products and distribute it to consumers via various channels e.g. major supermarket
chains, convenience stores, smaller milk bars, restaurants and fast food outlets.

Product is made available in adequate quantities at places where customers are normally
expected to shop through Direct Distribution and Indirect Distribution,


Pepsi decides its price on the basis of competition. It has not taken the position of a price
leader/loss leader and has always chosen the competitor to set the price and decide upon its
pricing strategies later.

The Indian customer is price conscious, Price Inelastic and loyal to traditional products. The
strategy here is to keep the price as low as possible.


Pepsi, Cricket and Bollywood have been joined at the hip since the colas entry into India.

Pepsi pours Million of rupees every year into celebrity advertising, and this is done by having
a Pan India celebrity like the Indian Cricket teams captain MS Dhoni, or Sachin Tendulkar,
while at the regional level, stars with a more local fan following are used.

Pepsi needs to explore opportunities and increase visibility by smart and consistent use of
social media.


1. Brand Image
Branding is a potent element for a product. As for PepsiCo their strategy to heighten their brand
awareness was with multiple projects under the name Pepsi Refresh, campaign, events and a great
list of celebrities as the brand endorser which shows their strong presence as a sponsor and also a
strong and valuable brand. A consumer from different country can identify Pepsi though it`s in a
foreign language and they may still recognize the product immediately. They have delicately
positioned the brand in the mind of customers so that customer thinks of the brand in the right or
desired manner which will in the end maximize potential benefit to the company.

2. Gain Vast Attention

Pepsi has associates themselves with these keywords- fun, refreshing, youthfulness and had appeal
the younger generation. Even with the usage of famous celebrity endorsers had gained vast attention
from all ages of consumers.
3. Fulfilment of Objectives
Pepsi has set their objectives according to the resources they possess and these achieved its objective
are quite appropriate under the prevailing competitive position and the opportunities.

4. Increase in Sales
PepsiCo has boosted sales with its different kind of marketing strategies. In 2011 Cricket World Cup
was a mega success and boosted the sales a lot. The reason for increase in sales is

Advertisement had created a great impact in increasing sale.

Pepsi gave heavy incentives to its sales team for achieving targets.
Publicity at Pepsi Outlets by putting attractive signboards, paint at different outlets.
Pay incentives to shop keepers in terms of freezers, sign boards for shops, as wellas in terms of

Making good relations with key accounts.

5. Increase in Market Share

With the help of effective marketing strategies PepsiCo had increase its sales and profit thus increase
in market share. He is now second largest company in the world.

6. Easily Availability
Pepsi is much more widely available by creating sort of convenience for consumers thus getting the
loyalty of the consumers.

7. Competitive Advantage

To distinguish themselves from other competitors PepsiCo have always targeted younger generation.
Their advertising and marketing strategies are fixed to target teens age with fun and music. PepsiCo
has a tremendous opportunity to duplicate this strategy in other areas of the world. PepsiCo has
effectively faced the competition in the market.

8. Volume Growth
Beverage and foods maker PepsiCo has reported flat volume growth in beverages for the quarter
ended June 14, 2014 (the firm follows a 12-week quarters which does not correspond directly with a
traditional three month reporting system) and low single digit growth for snacks during the same
period in India. The company noted, In the previous quarter, net revenue grew 1 per cent, reflecting
volume growth and favourable effective net pricing, partially offset by the impact of the prior year
refranchising of our Vietnam beverage business, which negatively impacted net revenue growth by 2
percentage points.

9. Customer Satisfaction
Selling a non-alcoholic soft drink is a quench the thirst of their consumers. Core benefit is the
fundamental need or want that consumers satisfy by consuming the product or service. The expected
product is defined as a set of attributes or characteristics that buyers normally expect and agree to
when they purchase a product. When consumer gets a hold of a PepsiCo product they are expecting
the sweet, citrusy flavour burst. PepsiCo has a great customer support as they offer easy accessibility
and fast response as well as Pepsi availability as a when required.
10. Logo Reorganization
The logo of the company still has its image in the minds of the people. With all the respondents they
would recognize the Pepsi Logo.

11. Innovative Products

PepsiCo have fine-tuned and ramped up with innovation machine, increasing our rate of success of
new innovations to make this one of PepsiCos best years ever for innovation products across
multiple markets and unlock growth opportunities in new product categories, such as dairy, hummus
and other fresh dips, and baked grain snacks. Over the last decade our nutrition business revenue has
grown substantially and, in 2013, represented approximately 20% of PepsiCos net revenue.

12. Globalization
Globalization go-to-market capability is one of PepsiCos most important strategic advantages, and,
in 2013 they further reinforced this key differentiator in very tangible ways. They have increased
number of routes in key markets and greatly improved in-store presence for snack and beverage

SWOT Analysis of PepsiCo



Huge brand recognition among consumers One of PepsiCo`s top brands is of course Pepsi,
one of the most recognized brands of the world.
Strong and efficient supply chain network, ensuring that all the products are available even in
the most remote place.

Diversified product portfolio

Global reach with presence in over 200 countries.

Excellent branding and advertising with global celebrity as brand ambassadors.



Overdependence on Wal-Mart - Wal-Mart is PepsiCos largest customer

Overdependence on US Markets - Large US customers could exploit PepsiCos lack of

bargaining power and negatively impact its revenues.



Increase penetration into developing countries and capture their market

Per capita consumption of juice is quite low, which implies huge scope in upcoming years

Mergers and acquisitions to strengthen the brand

Innovation continues to broaden its product base by introducing True North Nut Snacks and
increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo
to adjust to the changing lifestyles of its consumers.



Stiff competition from unbranded and local products.

Entry of more domestic and international players

Inflation, economic slowdown and instability causes decline in the purchasing power of
consumers. PepsiCo is in the process of diversification, but is likely to feel the impact of the
projected decline.

Potential Negative Impact of Government Regulations It is anticipated that government

initiatives related to environmental, health and safety may have the potential to negatively
impact PepsiCo.

The most popular flavors in the market is Pepsi
Pepsi is a market leader and Coca-Cola is the market challenger in the whole market.
A retailer gives more preference to the PepsiCo products like Pepsi, Mountain, Dew, Slice,
Mirinda, Tropicana and 7up.
Aquafina has build up market very well
Sales have increased after locating Visi Cooler outside of outlets.
The company new concept Pre-Sale got the good response, means the concept of Pre-Sale
prefers by the Retailers.
The New Product of Pepsi Minute Maid has a big flop in the surveyed city.
There is a Communication Gap in Distribution Channel so Retailers are not getting
advantages of discounting and trade schemes.

As the most of the dealers have complaints that the seller does not tell them about the
schemes. For this before launching any scheme company should advertise it by distributing
pamphlets to the dealers mentioning the period of the scheme and time to time proper check
is required.
The number of visi coolers and signage should increased
Company should develop policy so that the soft drinks are made available at all the outlets
during the peak season and not let the opportunity bypass.
Besides the Diet cola for the ladies, Pepsi can introduce many other new choices. For
example, it can create a new kind of cola more suitable for children. Maybe by addition of
Vitamins or some nutritious element that is necessary for children. A cola with very light
alcoholic content can also be deliberated over which might be suitable for the adults.
More variants in health and sport drinks can be introduced and actively campaigned in urban
cities where consumers are largely shifting their buying behaviors to health based drinks and
fruit based beverages. Sponsoring the major sport events across the country and annual sport
fests held at popular colleges can be a strategy adopted to position its health based drinks.



Marketing strategy includes all basic and long-term activities in the field of marketing that deal with
the analysis of the strategic initial situation of a company and the formulation, evaluation and
selection of market-oriented strategies and therefore contribute to the goals of the company and its
marketing objectives.
After research and analysis of this project i can conclude that in today`s time the challenge in front of
organisations is to first understand and then satisfy the needs of the customers. The needs of the
customers today are experiences and not just the products. The organisation has to concentrate on
delivering the experiences to the customers leading to satisfaction and association with all the
dimensions of the brand. Organization challenge also lies in being able to cope with the changing
market situations and come up with promotional gimmicks and products that would continue to hold
the interest of those already into the product and that would attract the newer generation who are
ready to experiment.
After analysing PepsiCo and its Marketing Strategy I come to the conclusion that the Marketing
Strategy of Pepsi is working for them and the product is gaining popularity among youth day by day.
PEPSI is the good reputable brands of the world. People who are really brand conscious they use this
drink. People make a use of this brand as many functions as they can. Due to sponsorship to
different cultural events or legends, this brand has a good image to the citizens. Pepsi is such a brand
that it will market it itself nowadays even no extra force is required. But company is promoting its
brand at its maximum by making discounts schemes or in term soft key accounts. It is seen that
people prefer more of Pepsi and it is very popular in India. Industries have pampered consumers by
giving them discounts and freebies. After completion of the project and the analysis of Pepsi I came
to conclude that after launching the promotion there was a drastic jump in sales of Pepsi. People are
very much aware of the products and its promotions especially teens. Brand loyal people use the
products due ti good taste and quality.


Pepsi Cola V/S Coke Wars Case Study

During the 1980s, Coca-Cola and Pepsi-Cola (Pepsi was introduced as Pepsi-Cola later on
named as Pepsi) began an escalating campaign of mutually-targeted television advertisements which
became known as the Cola Wars. This Case study is based on the findings with respect to the
following key aspects: Carbonated soft drinks industry`s structure, evaluation of driving change
factors in this industry and finally analysis of key strategic factors it is faced with.

Key Strategic issues for Coca-Cola and Pepsi-Cola

Between 1975 and 1995 Coca-Cola and Pepsi-Cola achieved average annual growth of 10% in a
Carefully waged competitive struggle when both US and worldwide consumption rose. In the late
1990s however US CSD consumption dropped for two consecutive years for both Coke and Pepsi.
Whilst trying to bring the business back on track with the launch of various derivatives of the regular
Coca-Cola and Pepsi-Cola need to consolidate their international business activities. International
consolidate of the market share is more than ever important. Both brands face the interesting issue
they are an icon to the American way of life and culture which may have advantage in western
hemisphere oriented countries but also disadvantages in the Arabic states. The current political
situation where the US is heavily engaged in anti-terrorism activities also has an impact on the
consumption of American products. Therefore coke is investing into a so called Global Strategy
which means that in every culture other than the US the product needs to adapt to local cultural
specificities. Secondly Coca-Cola and Pepsi-Cola should diversify more with respect to the creation
of a holding company to minimise risk in case the CSD business is slowing down for a longer time.
Coke has already invested in a media company to boost not only marketing around the brand but also
the creation of a multi-functional company. Last but not least both Coke and Pepsi have to be aware
of low-price producers, which already hold a market share of about 20% worldwide.

The Rivalry on Various Fronts The strategies applied and its success report.
Target Marketing
Whether targeting a particular market demographic was a successful strategy. Pepsi were pioneers for
niche and segmented marketing. In the 1940s they targeted their marketing directly towards African
Americans. Later they defined the Pepsi Generation and took a stand with the young side of the
1960s generation gap. The Pepsi Generation was one of the first and best known instances of what
came to be known as lifestyle marketing.


Bottling was the biggest area of conflict between Pepsi and Coke. This was because bottling
operations held the key to distribution an extremely important feature for soft-drink marketing. As
the wars intensified, both companies took pains to maintain good relationships with bottlers.

Adding an Additional Benefit

Whether adding the additional benefit of a larger bottle was a successful strategy. In fact, Pepsi did
introduce a large 12 oz bottle early on in the Cola Wars to compete with Cokes 6.5 oz bottle. They
accompanied the new product feature with the advertising jingle Pepsi-Cola hits the spot / twelve
full ounces, thats a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you. The
campaign was a huge success at the time and allowed Pepsi to double their profits.
Coke, which also sold for a nickel (5 cents), had difficulty matching Pepsis new product. Not only
would it require changing the size of the Coke bottle, but it would also require changing the size of
all of the Coke refrigerators which were built to only accommodate the smaller 6.5 oz bottle.

Geographic Distribution
Whether adjusting their product distribution strategy was a successful- Pepsi, which had traditionally
been sold through drug stores, was the first to start branching out to alternative distribution channels.
They were also the first to start marketing outside of the United States.

Improved Taste
Whether improving the perceived taste of Pepsi was a successful strategy -In fact the Pepsi
Challenge, which was a market strategy centred on improving the customers perception of the taste
of Pepsi, was another enormously successful strategy. In these televised blind-taste challenges, a
Coke drinker was asked to determine whether they actually preferred the taste of Pepsi. It turns out
that a statistically significant majority of Coke drinkers did, in fact, prefer the taste of Pepsi. This
genuine finding, in part, led Coke to launch its unsuccessful New Coke strategy.

Product Line Extension

Pepsi beat Coke in the Diet-Cola segment, as it managed to launch Diet Pepsi much before Coke
could launch Diet Coke. After the Government gave clearance to the use of Aspartame and
Acesulfame-K (potassium) in combination (ASK), for use in low-calorie soft drinks, Pepsi officials
lost no time in rolling out Diet Pepsi at its Roha plant and sending it to retail outlets in Mumbai. Diet

Pepsi product that was added to the Market by Pepsi has an additional benefit of being low in
calories. And today Diet Pepsi is considered to be Pepsis flagship product, with regular Pepsi being
considered to be the product line extension.

When Coke re-entered India, it found Pepsi had already established itself in the soft drinks market.
The global advertisement wars between the cola giants quickly spread to India as well.
Internationally, Pepsi had always been seen as the more aggressive and offensive of the two, and its
advertisements. The world over were believed to be more popular than coke`s. It was rumoured that
at any given point of time, both the companies had their spies in the other camp. The advertising
agencies of both the companies (Chaitra Leo Burnett for Coke and HTA for Pepsi) were also reported
to have insiders in each other's offices who reported to their respective heads on a daily basis.

Pepsi and Coke fought the war on a new turf in the late 1990s. In May 1998, Pepsi filed a petition
against Coke alleging that Coke had 'entered into a conspiracy to disrupt its business operations.
Coke was accused of luring away three of Pepsi's key sales personnel from Kanpur, going as far as to
offer Rs 10 lakh a year in pay and perks to one of them, almost five times what Pepsi was paying
him. Sales personnel who were earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many
truck drivers in the Goa bottling plant who were getting Rs 2,500 a month moved to Coke who gave
them Rs 10,000 a month. While new recruits in the soft drinks industry averaged a pay hike of
between 40-60% Coke had offered 300-400%. Coke, in its reply filed with the Delhi High Court,
strongly denied the allegations and also asked for the charges to be dropped since Pepsi had not
quantified any damages.

Increasingly Complex Environment

Market Models can evolve to be increasingly complex. And they can be used to simulate very
specific market phenomenon. Pepsi could then evaluate whether creating a very broad product
portfolio and launching each of these products into the market over time would be a successful
Strategic Recommendations
Both Pepsi and Coke should strengthen their brand image like in the past i.e. both companies dispose
of a global brand architecture which they should keep but allow local markets to develop their own
brand strategies to adapt more quickly and efficiently to changing consumer demands.

Secondly according to recent surveys consumer behaviour is based on products, which are familiar to
them however also offer unknown surprises. So the launch of derivatives should be further
developed. The principal however with this kind of brand is that the original product is not to be
changed only the scenario around it.

Strategic Management book of Part 1 written by Michael Veg and published
by Manan Prakashan in June 2014

PepsiCo Annual Report

Neha Sailesh Thakkar