MARKETING MANAGEMENT PROJECT

REPORT

PEPSICO CARBONATES
CONTENTS
1.
2.
3.
4.
5.

PEPSICO PRODUCTS & COMPETITORS IN THE SEGMENT (P. No. 02-06)

CONSUMER PROFILE (P. No. 06-08)
CONSUMER BEHAVIOR (P. No. 08-12)
EXTERNAL ENVIRONMENT IMPACT ANALYSIS
MARKETING MIX OF PEPSI

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

1

MARKETING MANAGEMENT PROJECT

REPORT

PEPSICO INDIA
INDUSTRY DIVISION:

S
o
f
t
d
r
n
k
s

MAJOR PLAYERS IN DIFFERENT CATEGORIES

SOFT DRINKS:

Parle Bisleri Ltd.

Coca-Cola Co
Pepsi Co Inc.
Manikchand Group
UB Group
Parle Agro Pvt. Ltd
Dabur India Ltd
National Dairy Development Board
Unilever Group
Tata Global Beverages
Tunip Agro Pvt. Ltd.
Red Bull GmbH
Hambard Wakf Laboratories Ltd.
Pioma Industries Ltd.
Dharampal Satyapal Ltd.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

2

MARKETING MANAGEMENT PROJECT

REPORT
Tata Tea Ltd.

BOTTLED WATER:
Parle Bisleri Ltd.
Pepsi Co Inc.
Coca-Cola Co
Manikchand Group
UB Group
Parle Agro Pvt. Ltd
National Dairy Development Brand
Tata Global Beverages Ltd.
Dharampal Satyapal Ltd.
Narang group
Tata Tea Ltd.

CARBONATES:
Coca-Cola Co
PepsiCo Inc.
Parle Agro Pvt. Ltd.
Dr. Pepper Snapple Group Inc.
Cadbury Schweppes Plc.

JUICES:
Coca-Cola Co
PepsiCo Inc.
Parle Agro Pvt. Ltd.
Dabur India Ltd.
Tunip Agro Pvt. Ltd.
Pioneer Food Group Ltd.
Hershey Co.
Tata Global Beverages Ltd.
Tata Tea Ltd.
Godrej Group

RTD Tea:
Unilever Group
Nestle SA
Sports & Energy Drinks:
Pepsi Co Inc.
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
3

MARKETING MANAGEMENT PROJECT

REPORT

Red Bull GmbH

Suntory Holdings Ltd.
Hector Beverages Ltd.
Thai Beverage PCL
Goldwin Healthcare Pvt. Ltd.
Coca-Cola Co
JMJ Group
GlaxoSmithKline plc
Fraser & Neave Ltd.

CARBONATED SOFT DRINKS

(Market Division by brands)
BRAND
Sprite
Thums Up
Pepsi
Limca
Coca-Cola
Mountain Dew
Mirinda
7-Up
Fanta
Evervess
Kinley
Dukes
Diet Coke
Appy
Diet Pepsi
Schweppes
Pepsi Caf Chino
Pepsi Gold
Schweppes
Vanilla Coke
Others
(In decreasing order of brand shares)

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

4

COMPANY
Coca-Cola Co
Coca-Cola Co
Pepsi Co Inc.
Coca-Cola Co
Coca-Cola Co
Pepsi Co Inc.
Pepsi Co Inc.
Pepsi Co Inc.
Coca-Cola Co
Pepsi Co Inc.
Coca-Cola Co
Pepsi Co Inc.
Coca-Cola Co
Parle Agro Pvt. Ltd.
Pepsi Co Inc.
Dr. Pepper Snapple Group Inc.
Pepsi Co Inc.
Pepsi Co Inc.
Cadbury Schweppes Plc
Coca-Cola Co
Others

MARKETING MANAGEMENT PROJECT

REPORT
Related Trends:
HEADLINES
Carbonates increases in off-trade value by 13% in 2014, rising to INR94.1 billion
Increasing numbers of consumer foodservice outlets, especially chained fast food outlets,
promotes on-trade volume growth in carbonates
The 10% on-trade volume growth in the category 2014 is faster than the 9% off-trade volume
growth
Coca-Cola India Pvt Ltd maintains the leading position in 2014 with a value share of 63%
Carbonates is set to increase in off-trade value at a CAGR of 4% over the forecast period,
rising to INR115.2 billion by 2019
TRENDS
Carbonates continued to evolve further during 2014, moving from an occasionally consumed
beverage towards a beverage for regular consumption. In addition, the trend of consuming
carbonates with fast food such as burgers extended to regular meals consumed at home as
well. Many consumers, especially in Indias tier I cities, started to consume carbonates,
especially cola carbonates, with or after their meals, mainly to quench their thirst.
Carbonates increased in off-trade volume by 9% in 2014, a slow rate of growth in
comparison with the 12% review period off-trade volume CAGR. During 2014, sales of
carbonates continued to face tough competition from other beverages, including juice and
RTD dairy drinks, each of which continued to record strong growth over the review period.
Health-conscious Indian consumers are beginning to move towards other beverages which
are perceived healthier.
With the increase being recorded in the number of double-income households in India, rising
levels of discretionary spending in 2014 led to changing eating habits and an increase in the
frequency of eating out. The trend facilitated growth in on-trade sales of carbonates, which
are the most commonly available beverages in on-trade outlets as well as in off-trade
channels. On-trade sales of carbonates continued to grow in 2014 alongside the expansion of
chained fast food outlets such as Subway, McDonalds and KFC over the review period.
`Demand for low calorie carbonates remains limited to a small niche of health-conscious
consumers who primarily belong to the upper middle class. However, growth in this category
remained stagnant in 2014 because the majority of consumers who enjoy carbonates do not
want compromise on the taste of regular carbonates.
COMPETITIVE LANDSCAPE
Coca-Cola India Pvt Ltd continued to lead carbonates in 2014, mainly due to its wide
portfolio of brands including Thums Up, Coca Cola, Sprite, Limca and Fanta across all
categories of carbonates. All of these brands continued to enjoy strong popularity of India
throughout the review period. The company was thus able to maintain its leading position
in 2014 with a value share of 63%.
Leading player Coca-Cola continued to record positive growth at a stronger pace than its
major rival, with positive growth recorded across its enviable brand portfolio including
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
5

MARKETING MANAGEMENT PROJECT

REPORT

Thums Up, Coke, Sprite, Limca and Fanta. Coca-Cola is thus presenting tough
competition across all categories of carbonates, including lemonade/lime and orange
carbonates. The company continues to focus on aggressive promotional activities in order
to reach out to a wider consumer base.
Carbonates remained a highly consolidated category in 2014 with the two major
multinationals, PepsiCo Holdings and Coca Cola India Pvt Ltd, maintaining their
dominance. These two companies continued to compete strongly with each other to
maintain their respective value shares in various categories of carbonates. In addition to
these multinational giants, smaller brands such as RC Cola have started to become visible
on retail shelves, especially in North India.
Parle Agro introduced Caf Cuba Coffee Rush during the review period. The brand
offered a combination of roasted coffee beans with carbonated fizz and targets mainly
youths and professionals who are ready to experiment with differentiated products.
However, the product is yet to achieve significant space in the category due to the low
promotions and its relatively limited availability.
PROSPECTS
The popularity of carbonates among Indian consumes across all age groups/genders and
the widespread availability of these products in all retail channels across all regions of
India are likely to remain the key drivers of growth in the category over the forecast
period. Carbonates off-trade volume sales are expected to increase at a CAGR of 8% over
the forecast period.
Despite the fact that carbonates are increasingly perceived as inherently unhealthy, most
Indian consumers, especially the younger population, are set to purchase these products
through retail channels for at-home drinking as well as through on-trade channels during
the forecast period. Only a small set of health-conscious consumers are expected to begin
reducing their intake of carbonates during the forecast period, substituting them with
other beverages including juice and dairy-based drinks.
Growing health consciousness coupled with any further increases retail prices expected to
place carbonates in direct competition with other relatively healthy beverages including
juice and flavored milk, mainly in urban areas of India. This trend might emerge as a
potential threat to further growth in carbonates over the forecast period.
Multinational companies including PepsiCo and Coca Cola are looking to gain additional
volume growth from consumers in rural India over the forecast period. While Coca Cola
has already introduced its carbonates at lower price points of INR10, PepsiCo is expected
to continue focusing on expanding its distribution and develop and launch new products
at lower price points in rural parts of India.
Over the forecast period, consumers are because to make a slight shift away from colabased beverages towards lemonade/lime, which is perceived as healthier. As a result, offtrade volume sales of lemonade/lime are likely to increase at a CAGR of 13% in constant
2014 prices over the forecast period.
New product launches such as Parles Caf Cuba are expected to attract higher levels of
consumer attention over the forecast period.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

6

MARKETING MANAGEMENT PROJECT

REPORT

PEPSI CONSUMER PROFILE

BRAND EQUITY
Unique flashy name.
Sphere logo with 3 different colors aids brand recall.
Personifies freshness & youth.
Brand Ambassadors-: Shahrukh khan, Sachin Tendulkar, Ranbir
Kapoor, M S Dhoni (Youth Icons of India).
Taglines-: Yeh Hai Youngistan Meri Jaan, Change the Game, Live for
now.

CONSUMER PROFILE
Target Customers:- Youth.
Age Group:-13-28 years.
Customer Characteristics-:
o Cool
o Youthful
o Funny
o Sporty
o Cricket fans
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
7

MARKETING MANAGEMENT PROJECT

REPORT

CONSUMER SEGMENTATION

Behavioral-:
o Safe & stylish
o Thirst quencher
o Instinctive purchases

Psychographic-:
o Trendy
o Cool

Profile-:
o Young affluent Indians
o

Urban cities of India

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

8

MARKETING MANAGEMENT PROJECT

REPORT

Consumer Behavior
Beverages represent a significant portion of an urban households expense budget.
The total carbonated soft drinks market in India is more than 17000 crore.
The largest chunk, carbonated drinks segment, is completely dominated by the two
global giants, Coca-Cola and Pepsi.
Increase in consumption expenditure of rural households has resulted in a shift
from home-made lassi to Pepsi.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

9

MARKETING MANAGEMENT PROJECT

REPORT
Carbonates India
7.60
7.40
7.20
7.00
6.80
Carbonates India
6.60

Source :
Euromonitor

6.40
6.20
6.00
5.80
5.60
2014-15

2015-16

2016-17

2017-18

2018-19

Understanding the dimensions of consumer behavior for Pepsi

The consumer behavior is influenced by cultural, social and personal factors.
DIMENSIONS OF CONSUMER BEHAVIOUR:
Cultural Factors:
Pepsico in India gives promotional message as: Come Alive with Pepsi.
This message has different meaning in German. In German it means, come
alive out of grave. So, it is important to understand different culture for
making marketing strategy.
Around the elections in June 2014, PepsiCo participated in hundred election
rallies, selling drinks by partnering with local election commissions in high
voter turnout constituencies of UP. Its sales staff sported tees with the
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
10

MARKETING MANAGEMENT PROJECT

REPORT
message: 'Vote karo sabhi... Oh Yes Abhi' - merging its ad tagline with a
social message. This was done keeping in view that UP is the state with
highest number of voters.
And PepsiCo boss Indra Nooyi wants the India arm to be a key growth
bastion, to close in on its larger rival. Of 1.2 billion people in this country,
only 250 million consume soft drinks, indicative of great potential.
The cola category has hit a bit of a glass ceiling in urban markets, which
have contracted with consumers getting a lot more conscious about health.
Thus, the focus seems to be on rural consumers, because they are not so
impacted by the health story." Both firms are reaching over two million
retail outlets each. Shiv Shivakumar, chairman and CEO, PepsiCo India has
said, "The range of hydration needs in India will multiply and multiply
quickly.
Aerated drinks today are consumed by all except those who cannot afford to
buy any drink. An NCAER study says that 91% soft drink sales are made to
the lower, middle and upper middle classes.
Increase in per capita expenditure of rural India by almost 20% has allowed
Pepsi to target even R3 and R4 with a 200 ml bottle costing Rs. 8. The
distribution penetration of beverages is stronger than cigarettes. The
(beverage) industry is reaching villages even with a population of 200 if
not directly, then indirectly through distributors." So much so, that drug
company Novartis is reportedly planning a pilot piggybacking on Pepsi's
distribution clout to carry essential medicines to rural consumers.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

11

MARKETING MANAGEMENT PROJECT

REPORT
Social Factors

DR
ie
rf
e
cr
te
n
c
e
G
r
o
u
p
s

Personal Factors:
With a reduction in average family size to 4.2 and with both the parents
working, ready to drink beverages such as Pepsi have become an almost
permanent component of the fridge.
Ad campaigns help Pepsi be personified as a young, vibrant, energetic,
sporty personality that syncs to the mindset of todays youth. Associating
with IPL, Cricket world cup helps in tapping onto the cricket frenzy nation
of ours.
The changing lifestyle of the consumers along with the presence of many
healthier alternatives, is leading to a decline in the demand for Pepsi.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

12

MARKETING MANAGEMENT PROJECT

REPORT
Pepsi Market share breakdown - India
16.00
15.50
15.00
14.50
14.00

India Carbonates
Pepsi PepsiCo Inc

13.50
13.00
12.50
12.00
2007 2008 2009 2010 2011 2012 2013 2014

Psychological Factors:
In 2007 Indra K. Nooyi became the CEO of PepsiCo. PepsiCo has received
many awards and recognitions over the years, including being ranked in the
top 25 of the best global brands, ranking number four overall by Diversity
Inc, and earning the Green Award by the Environmental Protection Agency.
This has helped create a socially-conscious-brand image in the minds of its
socially conscious consumers.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

13

MARKETING MANAGEMENT PROJECT

REPORT

Pepsi marketing mix

Product-

Carbonated beverage

Nutrition factServing size 12 fl oz (355 ml)

Servings per container 1
Amount per serving
Calories 150
Calories from fat 0
Total fat
Saturated fat
Trans fat
Cholesterol
Sodium
Potassium
Total carbohydrate
Dietary fiber
Sugars
Protein

0g
0g

% Daily value
0%
0%

0g
0 mg
15 mg
0 mg
41 g
0g
41 g
0g

0%
1%
0%
14%
0%

Price- Pricing of a product depends on a lot of different variables and hence

it is constantly updated. Providing quality product at the lowest possible
price has always been the main objective of the Pepsi.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

14

MARKETING MANAGEMENT PROJECT

REPORT
Place- Place refers to the distribution channel of a product. Since Pepsi is a
consumer product, it needs to be available as far and wide as possible. Pepsi
is easily available in restaurants, general stores etc.

Promotion- Pepsi mainly promotes its product through different type of

advertisement. for example1. Print advertisement- ads that are printed by companies and published
in newspapers, magazines, flyers.
2. Outdoor advertisement- ads are on: Billboards, kiosks on electric
poles, bus shelter, wall poster, banners and vehicular display.
3. Broadcast advertisement- advertising on radio, television and internet
are broadcast advertising.
4. Pepsi also promote its product through sports sponsorship.
5. Brand ambassadors- Sachin Tendulakar, Shahrukh khan, M.S. Dhoni,
Hrithik Roshan, Deepika Padukone and Ranbir Kapoor.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

15

MARKETING MANAGEMENT PROJECT

REPORT

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

16