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Contents
Executive Summary _________________________________________________________________________________________ 1
Company Analysis ___________________________________________________________________________________________ 2
Situational Analysis _________________________________________________________________________________________ 3
Industry Analysis ___________________________________________________________________________________ 3
SWOT Analysis_______________________________________________________________________________________ 3
Pest Analysis _________________________________________________________________________________________ 3
Competition Analysis ________________________________________________________________________________________ 4
Target Market ________________________________________________________________________________________________ 4
Market Segmentation _______________________________________________________________________________________ 4
Marketing Strategy __________________________________________________________________________________________ 5
Marketing Objectives _______________________________________________________________________________ 5
Action Plans __________________________________________________________________________________________ 5
Product Strategy ___________________________________________________________________________________ 5
Price Strategy ______________________________________________________________________________________ 6
Place Strategy ______________________________________________________________________________________ 6
Promotion Strategy ________________________________________________________________________________ 6
TeO will be an aerated Ice Tea from the JV PepsiCo and Tata Tea available in bottles as well as cans.
It will be positioned as a ready-to-drink Tea product. The beverage will be available in 4 flavors
initially and will bring an entirely unique drinking experience to its consumers. It will present itself as
a funky and unusual alternative to traditional tea while providing the great taste in a convenient
packaging.
TeO will be the first product of the PepsiCo Tata Tea venture and a drink with nutritional benefits of
tea to its consumers.
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Executive Summary
The following Marketing plan is about the introduction of a new innovative product under the Pepsi -
Tata Tea Joint venture signed earlier in April 2010.
We propose to launch “TeO” which represents a unique mix of tea with bubbles. It is a symbol of
rejuvenation, making it more interesting and lively. TeO will be an aerated, ready to drink Iced Tea.
This market does not have many competitors. By introducing a new variation for the Pepsi beverages
family, it will provide Pepsi with a pioneer advantage and make TeO a successful venture. The
product will be projected as a source of Vitamin C and rich in antioxidants with a refreshing Fizz for
hydration.
The product will be targeted to the youth of India with an aim at highlighting the benefits of Tea. The
market share will be increased through targeted advertising, promotions leveraging PepsiCo’s
existing brand ambassador’s Ranbir Kapoor & Katrina Kaif. Further with IPL 2011 scheduled next
year, the JV can focus on developing campaigns, promotions, awards, incentives to the customers.
The product will be targeted to the Middle class and the Upper middle class, Youth. The
consumption of aerated beverages is highest in Indian metros and the Tier-II cities because of
disposable incomes. Further, people do not mind trying new beverages and considering that its
PepsiCo-Tata product, the market is bound to give an overwhelming response.
Company Analysis
Tata Tea and PepsiCo signed an agreement on 10 April 2010 to work together for the development
of new beverages. The proposed Tata Tea-PepsiCo joint venture
for health and wellness beverages is for exploring and developing
new innovative, ready to drink beverages. The JV is aimed at
leveraging the Tata brand’s expertise in low-cost consumer
products coupling it with PepsiCo’s distribution muscle, go-to-
market expertise and R&D strength in beverages.
The companies have signed a non-binding memorandum of understanding that could be converted
into a joint venture and thus the proposed joint venture would not conflict with existing
arrangements of either company.
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Situational Analysis
Industry Analysis
The Indian aerated beverages industry is valued at 50-bn-rupee and growing now at 6% to
7% annually. In India, Coke and Pepsi have a combined market share of around 95% directly or
through franchisees. Fake products also account for a good share of the balance. There are two
distinct segments of the market, cola and non-cola drinks. The cola segment claims a share of 62%,
while the non-cola segment which includes soda, and drinks with orange and mango flavors. The per
capita consumption of soft drinks in India is around 5 to 6 bottles.
Aerated drinks are consumed by all except those who cannot afford to buy any drink. 91% soft drink
sales are made to the lower, middle and upper middle classes. The industry estimates that the
beverage market should grow at twice the rate of GDP growth. The Indian market should have,
therefore, grown by at least 12% but it has been growing at a rate of about 6%. Going forward the
supermarket / Retail sales will expand at a much higher rate because greater number of higher
income Indians will prefer to shop at supermarkets because of convenience, higher standards of
hygiene, and attractive ambience. According to an independent beverage industry report, about 120
billion liters of beverages gets consumed in India annually, out of which 55 percent of sales comes
during the summer.
SWOT Analysis
Strengths Weaknesses
Strong Core Brand Health concerns will impact soft drinks
Strong Market Position sales
Strong Revenue Growth Concentrated in North America, where
Strong Distribution Capabilities almost 70% revenues come from
Economies of Scale
Broad Product Line and Reputation
High production capacity in India
Opportunities Threats
Growing Indian Population and Growing Sluggish growth of aerated drinks
F&B Industry Coca Cola and other smaller, more
Focus on the most important consumer nimble operators
trend – “Convenience” i.e. Ready to Increasing no. of collaborated
Drink segment competitors like Cadbury Schweppes
Niche in the Ready to Drink Iced Tea Commodity price increases, fluctuating
Segment oil prices affect production and
distribution
Pest Analysis
Political Influences: Pepsi was successful in starting its operations in India soon after the
liberalization policy in 1990. Its earlier attempts had failed. Since then, Pepsi has come a long way in
portraying itself well and understanding the Indian political system. Pepsi shall not have any
problems introducing new products for the Indian consumers. However for setting up new factories,
it may find difficulties in land acquisition.
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Economic: The rising prices of fuel for machinery, transportation money supply, energy availability
and cost, business cycles in India could be a reason to worry. However Pepsi India has a strong
financial backing from its parent company PepsiCo.
Socio cultural influences: Pepsi’s products like other FMCG products are subject to the lifestyle
changes, as through advertisements they target the lifestyle of individuals. They have to pay a
special attention to the lifestyle changes. The new products & their advertisements should conform
or promote the existing lifestyle.
Technological: The Indian technological advancements can easily facilitate PepsiCo’s operations.
Most of the operations can be automated and there is also availability of cheap skilled labour.
Competition Analysis
Pepsi's top competitor in the soft drinks industry is Coca Cola which is the current market leader in
the Indian Soft Drinks Industry. The domestic brands also have a good amount of market share when
calculated as a whole. Parle Bisleri Ltd., Parle Agro Ltd., Others constitute the major competitors. In
the Iced Tea segment Nestle Iced Tea is the market leader. However, the Aerated Iced Tea market is
still unserved. Thus Pepsi-Tata Tea JV will initiate a new product TeO, an aerated Iced Tea.
Target Market
Segment Identification: TeO is a Ready to drink, bottled aerated ice-tea, under the Functional Drink
with health benefits for the consumers on the go, employees, students who lead a busy lifestyle.
Their hectic lifestyle is being addressed by lessening time & enhancing the convenience
Segment Needs: The product will cater to physiological needs of hydrating, refreshing and
nutritional value and also the social needs like perception of a social and fun drink.
Segment trends: The current trends indicate a shift away from the artificial flavored drinks to more
beneficial and natural products for the mind and body. There is an increasing trend towards the
instantly drinkable - on the go products for people with an active lifestyle through variety seeking in
a wide introduction of natural flavors.
Segment Growth Potential: The growth potential for the aerated beverages segment is huge and
some analysts predict it to be twice the GDP.
Size of the segment (population): There are 300 million Indians who consume aerated beverages.
Positioning: TeO will be positioned as an RTD, bottled, canned ice tea fizz. It will be projected as a
unique drinking experience, with a variety of flavors, with benefits of being an anti-oxidant, rich in
Vitamin C and a hydrating, refreshing drink for the young people.
Market Segmentation
Main Dimensions Variables Breakdowns
Region All India- Nationwide
Geographic Density Urban, Suburban
Segmentation Climate All year round
Age 10-29 years, Teenagers, students
Demographic Gender Male and Female
Segmentation Income >2,00,000 p.a.
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Occupation Students, Young professionals
Education Class10th and above, Graduates, Post
graduates, Vocational
Generation Gen Y
Personality Brand conscious, extroverts, party
Psychographic animals, adventurous,
Segmentation Lifestyle Dependent on parents, care-free, no
major responsibilities, active social life
Benefits Sought Refreshing, Cool, Nutritional, convenient,
quality / Premium price
Usage rate Weekly basis, light to medium
Behavioural
Usage Status Non User, regular user,
Segmentation
Loyalty Status None, medium, strong
Readiness stage Unaware, aware
Attitude toward product Positive, indifferent
Marketing Strategy
Marketing Objectives
The objectives of the marketing plan are strategically centered around 3 criteria: to create a strong
consumer awareness towards a completely new aerated iced tea product from Pepsi; to establish a
wide brand recognition through the capture of market shares in the iced tea drinks segment, and to
become the top market leader in this particular segment within the forecasted sales figures.
Action Plans
Product Strategy
The Core: Aerated Iced Tea beverage, in a pre-bottled, ready to drink format.
The Augmented Product: Nutritional information, Status - Functional Drink, features promoting the
website, health benefits of an antioxidant.
Marketing Considerations
Product Life Cycle - TeO is a low learning product. With a strong marketing campaign, sales
will begin immediately and the benefits of the purchase are readily understood. Since TeO is
prone to product imitation, PepsiCo’s strategy is to broaden distribution quickly, which is
currently feasible thanks to the company’s high manufacturing capacity.
Product – TeO will be widely distributed in the Urban and Suburban areas. The bottle design
is explained below:
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Twist Cap
Freshness Seal
A Pepsi Product
Teo’s logo
Easy to grab
Other great
flavors
Flavor Indicator Nutritional
Facts Ingredients
Volume
Price Strategy
The price strategy that will be undertaken will consider the following aspects:
1. Consumer demand
2. The product lifecycle
3. Potential substitutes
Customer demand
Customer demand is a crucial factor which is driven by tastes, income and availability of others
similar products at a different price. Being a Pioneer of TeO, Pepsi’s intention is to position it as a
unique, innovative and attractive product. This gives a certain control over TeO’s price. A certain
psychological pricing method will also be considered for pricing
Place Strategy
TeO will be distributed through channels like supermarkets, convenience stores, independent food
stores, discount stores, vending machines, fountain soda dispensers, stalls in colleges/office areas
etc and tie-ups wih cinema halls and food joints, outlets, leveraging Pepsi’s distribution potential to
the maximum.
Promotion Strategy
Objectives: To initiate strong awareness about the launch of TeO throughout Generation Y (10-29
years old) consumers as well as their parents. To win market shares over our competitors.
Message: The promotional outputs will convey the clear message that “TeO is a drink for
adventurous, young people for complete cool refreshment.”
Media selection: It is important to note that Generation Y consumers only give partial attention to
media. Therefore they need to be targeted through integrated programs using more than one
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communication media at a time. Marketers can communicate with Generation Y by using a variety of
targeted promotional tools.
Advertising:
Output Examples
Television MTV, Channel V, Ten Sports
Radio 93.5, 95.0, 98.3, 104.0, 104.8 FM
Magazines Cosmo, Elle, RD, Men’s Health
Internet Banners on Sports/Gaming/Kids websites
Outdoors Billboards and prints in select areas like campuses, buses, trains, metro
stations, tourist areas, discotheques (as a mocktail mix)
Others Not Relevant
Public Relations Special displays/events in schools, colleges, malls, sports events, sponsorship
activities
Publicity Conferences, press releases (print & online)
Advertisement Banner:
Promotional Mix:
Consumer oriented:
Trade oriented:
Allowances and discounts: Case Allowance - the free goods approach will be used so it can
encourage retailers to buy more of the product to get a certain amount for free.
Cooperative advertising: To encourage retailers to buy our product and to maintain our high
level of advertisement that consumers expect from Pepsi.
Other considerations:
Scheduling of the advertising: Pulse scheduling (promotional presence year-round, but
emphasized and intensified before and during summer).
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Ultimate consumer: Pepsi will use more of mass media because the amount of potential
buyers is large.
Financials
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Net Sales for TeO
Organised Retail & Un
Tie-ups with Pubs, organised
Cinemax's (35% of Retail(65%
total) of total)
CONTROL
In the first month of operation Management will review whether the strategies are going in right
direction and then make appropriate changes to counter it.
Operating control
It involves checking ongoing performance against the plan and taking corrective action when
necessary to ensure that to ensure that sales targets and profitability are on track as projected. The
above marketing plan will act as a basis to assess the current strategy & its progress.
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Strategic Control
It tracks the strategies implemented currently with the opportunities the market has to offer.
Marketing Strategies become quickly outdated and need to be reassessed and reframed. A major
tool is marketing audit.
Marketing Audit
There will be a need of monthly marketing audit regarding current activities and sales volume.
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