Report

Of
Strategic Marketing
On
Pepsico India Holdings Pvt Ltd.

Submitted To- Dr. A. Nag Submitted By-

Amit Pathak (07-II-703)
Anirban Kar (07-II-704)
Shiraz Ansari (07-II-749)
Vinod kr. Singh (07-II-758)

1
 Acknowledgement

We would like to offer our thanks and gratitude to our esteemed faculty,
Dr. A. Nag for his continuous guidance and unflinching support that
contributed in a significant manner towards completion of this project
successfully.
His insight encouraged us to go beyond the scope of the assignment.
This broadened and expedited our learning on this project.

Thanking you
 Contents

 Executive Summery...................................................................4-6

 Soft Drinks Market in India…..................................................6-7

 Introduction................................................................................8

 Objectives of the Report…........................................................9

 Methodology................................................................................10

 Strategies......................................................................................11-19

 Marketing Strategies.......................................................11-12

 Advertising Strategies.....................................................12-13

 Pricing Strategies............................................................13-14

 Packaging & Branding Strategies.................................14-15

 Promotional Strategies....................................................16

 Market segment Strategies.............................................17-18

 Distribution Strategies.....................................................18-19

 SWOT Analysis.............................................................................20

 Findings of Report…....................................................................21-22

 Recommendation............................................................................23

 Bibliography....................................................................................24
 Executive Summary
 After a somewhat subdued performance in 2006 due to a recurrence of the
pesticides controversy, soft drinks sales bounced back strongly to record
double-digit volume growth in 2007. (P- 4)
 With carbonates growth back on a positive upward curve alongside
burgeoning sales of fruit/vegetable juice and bottles water, soft drinks
showed impressive growth in 2007. (P- 4)

 India is one of the top five markets in terms of growth of the soft drinks
market. The per capita consumption of soft drinks in the country is
estimated to be around 6 bottles per annum in the year 2003. (P- 6)

 The major players in soft drinks market in India are PepsiCo and Coca-Cola
Co. like elsewhere in the world. (P-6)

 The market share of each of the company is more or less the same, though
there is a conflict in the estimates quoted by different sources. (P-6)

 PepsiCo entered India in 1989 and has grown to become one of the country’s
leading food and beverage companies. One of the largest multinational
investors in the country, PepsiCo has established a business which aims to
serve the long term dynamic needs of consumers in India. (P-8)

 PepsiCo India and its partners have invested more than U.S. $700 million
since the company was established in the country. PepsiCo provides direct
employment to 4,000 people and indirect employment to 60,000 people
including suppliers and distributors. (P-8)

 The objective of the report is having a detailed view of the soft drinks leader
company Pepsico. Also to know about the market share of Pepsico and other
 leading brands in the soft drinks segment of India. There were various
strategies undertaken by Pepsico to establish its brands successfully in the
Indian market. (P-9)

 The primary data was collected by conducting interviews with the Retailers.

 The secondary data was collected from different websites, magazines, and
news releases. (P-10)

 The ultimate 'Halo 3' accessory: Mountain Dew; Pepsi plots

first beverage based on video game, ties to hot Xbox 360
title. (P-11)

 Pepsi has always stood for the youth. In sync with its new strategy, PepsiCo
has roped in Ishant Sharma and Rohit Sharma to feature in its ‘Yeh hai
Youngistan Meri Jaan’-dumping cricket stars Dravid and Ganguly. (P-13)

 The prices of Aquafina have been brought down from Rs 12 to Rs 10 for its
1-litre PET bottles in the Kolkata market. (P-13)

 The new price points are 300 ml at Rs 6, and 200 ml at Rs 5." Pepsi is
reducing prices of its 1.5-litre and 2-litre PET bottles, to Rs 35 and Rs 40
respectively, against the earlier price of Rs 43 and Rs 50. (P-13)

 It introduced first ever 1.5 & 2 liters packaging (bottles) of softdrinks and
subsidized kiosks (containers). Pepsi Max flavour which ever since
introduced in the market has enjoyed massive consumption in the market.At
some stage, some niche market of Coke was seriously affected as they
switched over to Pepsi flavour. (P-14)
  Pepsi has been catching the trends of society. National songs by bands like
“Vital Signs”, “Awaaz”, “Junoon” and “Strings” were the keys in their
advertisement campaign. (P-16)

 PepsiCo finds that it can grow international sales through its power of one
strategy. Company’s soft drink business could gain shelf space through the
strength of Frito-Lay’s brands. (P-18)

 Products always face seasonal variations which requires alternatives in term

of product line & aggressive marketing to push the product in the market.

 Pepsi is lagging behind in terms of television advertisements pertaining to

Coca-Cola. (P-21)

 Pepsico can walk to the same way as Coca-Cola, as it has introduced its new
Fridge Pack (1.25 ltr/Rs.35) & Express Pack. (P-23)

 Distributor contest program can be arranged to get maximum efforts from

the distributors. (P-23)

Soft Drinks Market in India

India is one of the top five markets in terms of growth of the soft drinks market.
The per capita consumption of soft drinks in the country is estimated to be around
6 bottles per annum in the year 2003. It is very low compared to the corresponding
figures in US (600+ bottles per annum). But being one of the fastest growing
markets and by the sheer volumes, India is a promising market for soft drinks. The
major players in soft drinks market in India are PepsiCo and Coca-Cola Co. like
elsewhere in the world. Coca-Cola acquired a number of local brands like Limca,
Gold Spot and Thumbs Up when it entered Indian market second time. Pepsi Co’s
soft drink portfolio consists of Miranda and 7Up along with Pepsi. The market
share of each of the company is more or less the same, though there is a conflict in
the estimates quoted by different sources.
The major ingredient in a soft drink is water. It constitutes close to 90% of the soft
drink content. Added to this, the drink also contains sweeteners, Carbon dioxide,
Citric Acid/Malic acid, Colors, Preservatives, Anti Oxidants and other emulsifying
agents, etc.

Market Share of Beverage Companies’ in India in ‘%’

 Introduction

PepsiCo, Incorporated is a large conglomerate with interests in manufacturing,

marketing and selling a wide variety of carbonated and non-carbonated beverages,
as well as salty, sweet and grain-based snacks, and other foods. Besides the Pepsi-
Cola brands (including Mountain Dew), the company owns the brands Quaker
Oats, Gatorade, Frito-Lay, SoBe, Naked, and Tropicana.
PepsiCo entered India in 1989 and has grown to become one of the country’s
leading food and beverage companies. One of the largest multinational investors in
the country, PepsiCo has established a business which aims to serve the long term
dynamic needs of consumers in India.
PepsiCo India and its partners have invested more than U.S. $700 million since the
company was established in the country. PepsiCo provides direct employment to
4,000 people and indirect employment to 60,000 people including suppliers and
distributors.
PepsiCo nourishes consumers with a range of products from treats to healthy eats,
that deliver joy as well as nutrition and always, good taste. PepsiCo India’s
expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda
and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating
and nutritional beverages such as Aquafina drinking water, isotonic sports drinks -
Gatorade, Tropicana100% fruit juices, and juice based drinks – Tropicana Nectars,
Tropicana Twister and Slice. Local brands – Lehar Evervess Soda, Dukes
Lemonade and Mangola add to the diverse range of brands.

PepsiCo has built an expansive beverage business. To support its operations,

PepsiCo has 43 bottling plants in India, of which 15 are company owned and 28
are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has 3
state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of
making tomorrow better than today. PepsiCo’s commitment to living by this vision
every day is visible in its contribution to the country, consumers and farmers.

Objectives of Report

The objective of the report is having a detailed view of the soft drinks leader
company Pepsico. Also to know about the market share of Pepsico and other
leading brands in the soft drinks segment of India. There were various strategies
undertaken by Pepsico to establish its brands successfully in the Indian market.

Basically this project shows us the various types of marketing strategies adopted
by Pepsico to create market place for itself in the rural and the sub-urban areas.

To study the distribution channels used by Pepsico.

Objectives can be summed up as:-

 To make the strategic analysis of Pepsico soft drinks in India.

 To analysis its market position as compared to the competitor.

 To find out the efforts in fighting competition.

 Identification of gap areas in this form of business.

 Assessment of competitor’s presence in the market & its actions.
 Studying consumer behaviors.
 METHODOLOGY
Location : In Delhi Area

Primary Data collection: The primary data was collected by conducting

interviews with the Retailers.

Secondary data collection: The secondary data was collected from different
websites, magazines, news releases.

Overview of the Research Design:-

Primary Research: - An initial meeting with authorized distributors by extensive

discussion to understand the Business Trend.

Qualitative Research:-

1. Understand the business model.

2. Asses the growth potential.

3. Identify factors that might act as trigger or barriers towards the growth of
business.

Secondary Research:-

1. Analysis of business/industry verticals & their trends.

2. Assessment of growth drivers that might impact the growth.

Qualitative Research:-

1. Assessment of competition presence and their strength.

2. Understanding about pricing dynamics (margins, discounts, structure.)

Quantitative Research:-

1. Assessment of drawbacks with respect to existing business.

 2. Competitor Analysis.

Strategies
Marketing
Strategies

In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo
set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind
taste tests the majority of participants picked Pepsi as the better tasting of the two
soft drinks. PepsiCo took great advantage of the campaign with television
commercials reporting the test results to the public. In 1996, PepsiCo launched the
highly successful Pepsi Stuff marketing strategy. By 2002, the strategy was cited
by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine
promotion marketing."

In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first
time, included more than thirty different backgrounds on each can, introducing a
new background every three weeks.

In October 2008, it was announced that Pepsi would be redesigning their logo and
re-branding many of their products. Pepsi, Diet Pepsi and Pepsi Max will use all
lower-case fonts for name brands, Mountain Dew will be renamed "Mtn Dew," and
Diet Pepsi Max will be re-branded as Pepsi Max. The brand's blue and red globe
trademark will become a series of "smiles," with the central white band arcing at
different angles depending on the product.

The ultimate 'Halo 3' accessory: Mountain Dew; Pepsi plots first beverage
based on video game, ties to hot Xbox 360 title.

 Apple and Pepsi to give away free songs- San Francisco-based Apple and
Pepsi-Cola North America, Purchase, N.Y., have announced a promotion to
legally give Pepsi consumers 100 million free songs from Apple's iTunes Music
Store, which is available to Mac and Windows PC users. Pepsi ready for
blockbuster summer- It'll be a summer like no other with music that's never
been heard before, TV that's never been done before and the chance for one
lucky consumer to become a billionaire. From music and entertainment firsts to
 new product and packaging news, Pepsi-Cola North America, Purchase, N.Y.,
has announced a lineup of summer marketing plans.

 PepsiCo to become an official NFL sponsor- Beginning in

the upcoming 2002 season, Pepsi-Cola will become the "official
soft drink sponsor of the NFL," Purchase, N.Y.-based PepsiCo
announced in April. PepsiCo may use NFL logos in advertising
and promotions, while NFL clubs also will be able to sell local
sponsorship packages to Pepsi and other soft-drink companies.

 Pepsi ready for blockbuster summer.- It'll be a summer like no

other with music that's never been heard before, TV that's never been done
before and the chance for one lucky consumer to become a billionaire. From
music and entertainment firsts to new product and packaging news,
Advertising strategies:-

With the swinging fortunes of cricket stars, PepsiCo India is gearing up to launch a
brand new advertising campaign for Pepsi with out any star endorsers. Currently,
PepsiCo India has twelve star endorsers from Bollywood and the Indian cricket
team.

“Pepsi’s new campaign will be a consumer–centric advertising campaign without

any celebrities,” informed industry sources. ‘Celebrities may come and go but
brands are forever,’ seems to be PepsiCo’s new motto. According to industry
sources, PepsiCo is now shifting its marketing focus to MS Dhoni, the highest paid
IPL player. “The company will bring in MS Dhoni to the centre space from side
lines. Of course, PepsiCo will make Dhoni wear some decent clothes to erase his
Lungi-clad image,”

Enthused by the response to Dhoni’s ‘Mind it’ ads, the company will now project
Dhoni as its brand icon in the next few months, predict industry analysts. “Young
cine stars Deepika Padukone and Ranbir Kapoor now star in Pepsi Youngistan
campaign. Very soon, we may see Dhoni sharing the screen space with Shar Rukh
Khan in Pepsi ads,”
Pepsi has always stood for the youth. In sync with its new strategy, PepsiCo has
roped in Ishant Sharma and Rohit Sharma to feature in its ‘Yeh hai Youngistan
Meri Jaan’-dumping cricket stars Dravid and Ganguly.

Pricing Strategy:-

PEPSI uses both the skimming and penetration pricing strategy. The brands,
which has price greater than Pepsi beverage is skimming pricing strategy, and
brands having prices less than one can of Pepsi adopted penetration-pricing
strategy.

PepsiCo India has reduced prices of Aquafina, its bottled water brand, in at least
one market. The prices of Aquafina have been brought down from Rs 12 to Rs 10
for its 1-litre PET bottles in the Kolkata market. At least in the Kolkata market,
Aquafina's new pricing strategy places the brand in direct competition with Kinley
from Coca-Cola India and Bisleri brand. Both brands are priced at Rs 10 for 1-litre
bottles. In other markets, however, Aquafina continues to be priced at Rs 12, which
is Rs 2 higher than rivals Bisleri and Kinley.

PepsiCo has slashed prices of its 300 ml returnable glass bottles to Rs 6 in the
capital and this price cut may be extended to other markets to make its brands
more affordable.

"In a high-consumption market like Delhi, aggressive price points devolving from
the 300-ml segment will work much better. Pepsico’s price strategy for this
market, therefore, works off this thinking. As a consequence, 200-ml bottles are
priced at Rs 5. The new price points are 300 ml at Rs 6, and 200 ml at Rs 5."
Pepsi is reducing prices of its 1.5-litre and 2-litre PET bottles, to Rs 35 and Rs
40 respectively, against the earlier price of Rs 43 and Rs 50.
Packaging & Branding Strategy:-

The war of the market between the two giants' soft drinks manufacturers is going
on.Despite the niche market to penetrate on, the main war of these two giants
company is on the production of best selling, appetizing cola drink. It is also the
contestation of economic power of the most consumed soft drink. In the mid 90's
Pepsi launched an aggresive marketing and branding strategy in India and so and
penetrate the market which was largely dominated by Coca Cola.

It introduced first ever 1.5 & 2 litres packaging (bottles) of softdrinks and
subsidized kiosks (containers). Pepsi Max flavour which ever since introduced
in the market has enjoyed massive consumption in the market.At some stage,some
niche market of Coke was seriously affected as they switched over to Pepsi
flavour. The current Coke Zero flavour,packaging and branding appears to be an
intellectual property and recipe theft by Coca Cola.
Under a new branding strategy, Pepsi is introducing new can and bottle designs
every few weeks, planning to sell 20 or more different ones annually in every
market. Pepsi has already started selling the new packages in several countries,
including China, Australia, Brazil, Mexico and the United States, and they are
coming soon to Europe.

The Lampard packaging, which is being prepared for the British market, is one of
dozens of new can and bottle designs coming from Pepsi as it seeks to connect
with the "Second Life generation" — young consumers.

GRAPHICAL REPRESENTATION OF PACKAGING

Promotional Strategy:-
The largest companies in world can demonstrate the best promotion strategies
which are worth learning and following if one wishes to get success in the world
trade and production. Pepsi promotes its products by personal selling, advertising,
and sales promotion. For advertising, and sales promotion it used printed and
electronic media. Every newspaper and magazine carry Pepsi advertisements.
Advertisement of Pepsi are eye catching and attractive. Through advertising it
informs the consumer about new brands and flavors.

Pepsi designs its sales promotion strategies and advertisement campaign focusing
strictly on the target markets. Pepsi has been catching the trends of society.
National songs by bands like “Vital Signs”, “Awaaz”, “Junoon” and “Strings”
were the keys in their advertisement campaign. Sponsoring the pop industry and
the cricketing team helped Pepsi hit right on target of their primary market which
consists of teenagers. The "Pepsi Play for a Billion" promotion, giving 1,000
consumers the chance to play for $1 billion (with $1 million guaranteed) live
nationally on The WB network.

Promotional Media they use:-

Market Segment Strategy:-

Market segmentation is the process of dividing markets comprising the
heterogeneous needs of many consumers into segments comprising the
homogeneous needs of smaller groups. Segmentation is usually done by
demography, geography and socioeconomic variables. The easiest way to segment
consumer market is to use demographic variables such as age, gender and
education level. Organizations that operate globally usually segment consumer
market geographically.

Market segmentation is the process of dividing markets comprising the

heterogeneous needs of many consumers into segments comprising the
homogeneous needs of smaller groups. Segmentation is usually done by
demography, geography and socioeconomic variables. The easiest way to segment
consumer market is to use demographic variables such as age, gender and
education level. Organizations that operate globally usually segment consumer
market geographically.

Cross-border market segmentation

Believing that globalisation was the crucial end goal of a connected world, Pepsico
spend a great deal of time, attempt, and money preparing for global business has
grown dramatically. As a result, there has been a growth of global brands in
beverage industry.

PepsiCo provides varieties of beverages such as carbonated soft drinks, sport

drinks, dairy-based drinks, energy drinks, fruit flavored beverages, ready-to-drink
coffees, ready-to-drink tea, mineral water and frozen beverage. Those products are
marketed under brand as Pepsi, Mountain Dew, Gatorade, Lipton, Starbucks,
Tropicana, and so on.
Why PepsiCo have to produce so many types of products? -The reason is
relevant to market segmentation. PepsiCo aims to attract different groups of
consumers with difference types of products.

Pepsico is looking for the common denominator in other countries that signal the
potential for success in translating established offers across other borders in cross-
border market egmentation. On the other hand, defined cross-border segmentation,
which segments customers on consumer preferences independent of geography.
The above verifications indicate that marketers are advised to target the customers
that share the relatively homogenous characteristics and geographical borders are
no longer relevant.

Distribution Strategy:-

PepsiCo also found that it could grow international sales through its power of one
strategy. company’s soft drink business could gain shelf space through the strength
of Frito-Lay’s brands. . In 2006 the average consumption of carbonated soft drinks
in India was 32 serving per month, while the average consumption of CSDs in
other developed countries was 5 servings per month.

 The company is always manufacturing right product and serve it to the

customer.

 The company serves the products at the right place where the product has
large demand.

 The product reaches to the places at right time to meet the satisfaction of the
customers.

 The product reaches the places everyday when it is necessary.

 DISTRIBUTION BASED STRATEGY

MANUFACTURE WARE DISTRIBUTO OUTLETS

UNIT HOUSE Franch R
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MANUFACTUR WARE OUTLETS

UNIT HOUSE

Joint Venture:
WARE OUTLETS
MANUFACTUR PARTNERS HOUSE
UNIT

SWOT Analysis
 STRENGTH WEAKNESS

 Strong Brand name.  Low supply, high demand.

 Pepsi has effective  Competitor is stronger.

marketing teams and
innovative campaigns.  Distribution problem.

 Well deviated sales force.  Customers prefer

competitor’s product
 Taste is favorable for all more.
type of customers.
 Not all PepsiCo products bear
the company name.
 Coke is Selling in more than
200 Countries which is 32
countries more then Pepsi.

OPPORTUNITY THREAT

 Second brand position in  Rapid change in competition

India. pattern.
 Consumers always
 A growing market.
want new taste &
flavor.
 Increased consumer  Thums up is more popular
spending. than Pepsi.
 Competitors like coco cola
which has already estab-
lished it self as the leader
 .Other substitute products
providers like RC cola , real
and Amul etc also posses
threat since they are offering
substitute products.
 Government policy eg
taxation, laws, training
standards.

Findings of Report
 Pepsico’s 7up is more popular related to taste & preferences as compared to
Sprite of Coca-cola.

 One of the best brands like Mountain Dew is doing a monopoly business. It
has no competitor in the market because of its unique taste.

 Mirinda (orange & lemon flavor) is yet to grab good market position as
compared to Limca of Coca-Cola.

 Tropicana (in fruit juice segment) is doing its business better as people have
started developing taste for the product.

 Though Pepsi is doing far better business in terms of ‘Can’ segment by

launching products like ‘My Can’(slim),but it has not focused on bottle
segment.

 Products always face seasonal variations which requires alternatives in term

of product line & aggressive marketing to push the product in the market.

 Pepsi is lagging behind in terms of television advertisements pertaining to

Coca-Cola.

 Pepsico is focusing lesser on rural sector than Coca-Cola.

 Pepsi is lagging behind in taste preferences. Examples- firstly pepsi has only
Pepsi and Diet pepsi in cola segment while Coca Cola has three products
like Coco Cola, Diet coke and Thumbs up in this segment Thumbs up sells
the most & Coca cola has one product in soft drinks segment that is selling
higher then any other product, even suggested by doctors i.e. Limca.

Market Share of Inter Brands of Pepsi

 Glass Strength

Recommendation
 Extensive sales promotion and attractive offers can enrich the business.

 Pepsico can walk to the same way as Coca-Cola, as it has introduced its new
Fridge Pack (1.25 ltr/Rs.35) & Express Pack.

 More Glow Sign Board advertisement can be provided to the major

outlets as a promotional activity.

 Staffs should be given adequate incentives & awards to motivate them

towards achieving goals.

 Sales training can be provided to make the sales men more active.

 A target can be given to the major outlets to increase sales volume.

 Internal conflict between dealers and distributors should be resolved for

proper distribution of the products.

 To know the actual problems of a market, company executive can arrange

regular meeting with the distributors. So the solution against the problems
can be taken.

 Always good relation should be kept with the dealers.

 Bill to bill credit facility can be given.

 There should be alternative day visit to each outlet.

 Distributor contest program can be arranged to get maximum efforts from

the distributors.

 More discounts & offers should be given to the direct agency holders of
Pepsi to to increase the volume of distribution (providing coupons, gifts etc.)
 Bibliography

 www.pepsico.com
 www.pepsicoindia.co.in
 www.wikipedia.org
 www.google.com