Executive Summary

Purpose oI this project is to study the strategies which Pepsi is doing in Pakistani market Ior its
product Pepsi cola. Pepsi International is a world renowned brand. It is a very well organized
multinational company, which operates almost all over the world. In Pakistan It also has proved
itselI to be the No.1 soIt drink.

Now days Pepsi is recognized as Pakistanis National drink Pepsi's greatest rival is Coca Cola.
Coca Cola has an international recognized brand. Coke's basic strength is its brand name. But
Pepsi with its aggressive marketing planning and quick diversiIication in creating and promoting
new ideas and product packaging, is successIully maintaining is No.1 position in Pakistan. Pepsi
is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's
strength. Pepsi has given Iranchise to these bottlers. Bottlers, produce, distribute and help in
promoting the brand. Pepsi also launched its Iast Iood chain KFC i.e. "Kentucky Fried Chicken."

We also did analysis oI the soIt dink industry in Pakistan and world wide. The soIt drinks set to
become world's leading beverage sector. Global consumption oI soIt drinks is rising by 5 a
year.



Table oI Contents

Titles Page #


1. Introduction 01

2. Mission and vision statement 01

3. Facts about company 02

4. Pepsi in Pakistan 04

5. Product in spot light 09

6. Market analysis oI soIt drink 10

7. Pakistani soIt drink industry 13

8. Industrial SWOT analysis 14

9. External Environmental Iactors 16

10. Internal Environmental Iactors 21

11. Pre-marketing Mix 25

12. Marketing Mix strategies 27

13. Conclusion 39

14. Suggestions 40





INTRODUCTION TO THE COMPANY

Pepsi International is a world renowned brand. It is a very well organized multinational
company, which operates almost all over the world. They produce, one oI best carbonated drinks
in the world. Pepsi is a symbol oI hygiene, quality and service, all over the world. Pepsi is
producing Cola Ior more than 100 years and it has dominated the world market Ior a long time.
Its head oIIice is in New York.





MISSION STATEMENT

"To be the world's premier consumer Products Company Iocused on convenient Ioods and
beverages. We seek to produce healthy Iinancial rewards to investors as we provide opportunities
Ior growth and enrichment to our employees, our business partners and the communities in
which we operate. And in everything we do, we strive Ior honesty, Iairness and integrity."





VISION STATEMENT

"To be the world's best beverage company". Being the best means providing outstanding quality,
service, cleanliness and value, so that their every customer is contented and happy with their
products."

"To increase the value oI their shareholder's investment through sales growth, cost control and
wise investment oI resources."



FACTS ABOUT THE COMPANY



1. Pepsi is a USA based public company whose stocks are available in New York.

2. Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising and package graphics
room hillbillies to action-oriented scenes.

3. The third Mountain Dew slogan appeared in 1973 "Put A Little Yahoo in Your LiIe."

4. PepsiCo acquired Pizza Hut, Inc. Pizza Hut was Iounded in 1958 by Dan and Frank Carney.

5. Taco Bell is was acquired by Pepsi. Taco Bell was established in the mid 1960s by Glen Bell.

6. PepsiCo purchased Kentucky Fried Chicken, the leader in the quick service chicken market.
KFC was Iounded by Colonel Harland Sanders. Colonel Sanders began Iranchising the company
in 1952. KFC was spun oII along with Pizza Hut and Taco Bell businesses as Tricon Global
Restaurants, Inc. in 1997.

7. PepsiCo purchases Seven-Up International, the third largest Iranchise soIt drink operation
outside the United States





EXECUTIVES

Ms.Indra K.Nooyi
Chairwoman, ChieI Exec. OIIicer and Pres

Mr. Richard Goodman
ChieI Financial OIIicer

Mr. John Compton
ChieI Exec. OIIicer oI North America and Member oI Liquid ReIreshment Beverage Oversight
Council

Ms. Cynthia M. Trudell
ChieI Personnel OIIicer and Sr. VP

Mr. Donald M. Kendall
Co-Founder




HEAD OFFICE

PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
United States.
Phone: 914-253-2000
Fax: 914-253-2070
Web Site: http://www.Pepsico.com











PEPSI PAKISTAN

The market in Pakistan is surely dominated by Pepsi. It has proves itselI to be the No.1 soIt drink
in Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971, Iirst plant oI
Pepsi was constructed in Multan, and Irom their aIter Pepsi is going higher and higher. Pepsi is
the choice soIt drink oI every one. It is consumed by all age groups because oI its distinctive
taste. Compared with other Cola in the market, it is a bit sweeter and it contributes greatly to its
liking by all. Consumer's survey results explain the same outcome and Pepsi has been declared
as the most wanted soIt drink oI Pakistan.

Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke's basic
strength is its brand name. But Pepsi with its aggressive marketing planning and quick
diversiIication in creating and promoting new ideas and product packaging, is successIully
maintaining is No.1 position in Pakistan. In coming Iuture Pepsi is also planning to enter into the
Iield oI Iruit drinks. For this purpose it has test marketed its mango juice in Karachi Ior the Iirst
time.

When Pepsi was introduced in Pakistan, it Iaced Iierce competition with 7up, lemon and lime
drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime,
"Teem" to compete with 7up. It successIully, aIter some years, took over 7up, and this enhanced
Pepsi's proIits and market share. In Pakistan, Pepsi with 7up enjoys 70 oI the market share
where as the coke just has 20 markets share.

Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi's
strength. Pepsi has given Iranchise to these bottlers. Bottlers, produce, distribute and help in
promoting the brand. Pepsi also launched its Iast Iood chain KFC i.e. "Kentucky Fried Chicken."


FOUNDERS OF THE COMPANY

The company was initially owned by late Nawab Saddiq Hussain Qureshi & Iamily till 1989.
The Pepsi International Iranchise declared the management incompetent, thus, the company was
handed over to a new set oI personnel. The Iactory set up was reorganized & reestablished with
expansion in various sectors. The Pepsi International did this by oIIering it to Mr. Jehangir
Tareen, who Iormed up his new team. Mr. Jehangir Tareen is Nephew oI General (late) Akhtar
AbdurRehman.


EXECUTIVES

Board oI Directors:


Mr. Akbar Akhtar Khan (Chairman)

Mr. Haroon Akhtar Khan (ChieI Executive)

Mr. Gazi Akhtar Khan

Mst. Rasheeda Begum

Mrs. Mudina Akbar Khar

Mr. SaiIullah Khan Paracha

Mr. Saeedullah Khan Paracha



Company Secretary


Mr. Amjad Jhanzeb Khan

Bankers


Allied Bank oI Pakistan Ltd.

Citibank N.A.

MCB

NDFC

The Bank oI Punjab

UBL

Legal Advisor


Cornehus, Lane & MuIti,

Nawa-i-Waqat Building,

4-Shahrah-e-Fatima Jinnah, LHR.



Auditor


Taseer Hadi Khalid & Co.

Chartered Accountants.

Mill

Kanjawani, Tehsil Samundri, District Faisalabad.

REGISTERED OFFICE

31 N,

Gulberg II,

Lahore,

Pakistan.

UAN: 111-724-725




VARIOUS PRODUCTS IN PAKISTANI MARKET

PEPSI COLA, MIRINDA, TEEM, 7UP, MOUNTAIN DEW, DIET 7UP, DIET PEPSI, LAYS,
KURKURE, AQUAFINA, PEPSI TWIST AND TROPICANA JUICES(introduced in Karachi
only).




FINANCIAL SUMMARY OF THE COMPANY AND PRODUCT In Karachi



The Finance Manager was hesitant to supply any oI the data as the company is private limited
and the competitor Coca Cola is sniIIing every inch oI inIormation oI Pepsi Cola. With the help
oI the dealers and the retailers directly supplied by the Pepsi Cola and some rough Iigure given
by the Iinance manager we became able to make the product cost oI the Pepsi Cola and
Estimated Income Statement Ior the month which comes into market as 9 rupees aIter going
through many hands.

Precisely the exact Iigures were not given so an estimated income statement and price proIit is
made under given Iacts.


15,000,000 (15 million) crates oI all the soIt drinks are sold per year all over Karachi.

250ml regular bottle is taken as standard, 1 bottle oI 1 Liter is taken as 4 bottles oI 250ml.
(250ml*4 1 Liter)

15,000,000/12 1,250,000 crates sold per month.

1,250,000*24 30,000,000 bottles sold per month.

PEPSI share is approximately 65.

30,000,000*65 19,500,000 PEPSI Share.

.







kurkuray

Pepsi twist

Pepsi

Mountain dew




PRODUCT IN SPOTLIGHT: PEPSI





Type:

Pepsi Cola

ManuIacturer:

PepsiCo

Country oI origin:

USA

Introduced:

1902

Ingredients:
Amount per 100mL
Energy 196.5 kJ
Fat 0 g
Sodium 0.98 mg
Carbohydrates 11.74 g
Sugar 11.04 g
Protein 0 g
CaIIeine 10 mg






Market Analysis oI SoIt drinks

SoIt drinks set to become world's leading beverage sector Global consumption oI soIt drinks is
rising by 5 a year, well ahead oI all other beverage categories, according to the new 2003
Global SoIt Drinks Report Irom leading drinks consultancy Zenith International. Now
challenging hot drinks to become the largest overall sector, soIt drinks volume is projected to
reach 467 billion liters in 2003, equivalent to 75 liters per person.

"Economic and climate variations around the world present complications Ior all soIt drinks
companies, but many have succeeded at weathering the elements," commented Zenith Research
Director Gary Roethenbaugh. "As a combined category, soIt drinks oIIer a powerIul growth
proposition. The unrelenting advance oI bottled water and still drinks, coupled with the scale oI
carbonates, help place soIt drinks on track to become the number one beverage sector in 2005.

Market share oI soIt drinks in beverage industry



Concern over diet has persuaded many consumers to scale down their consumption oI sugary
drinks, instead choosing 'healthy' products such as Iruit juice and bottled water. Despite this shiIt
in attitude, the majority oI consumers around the world still Iavor carbonated soIt drinks over
these alternatives, according to latest data Irom TGI. In 11 out oI 15 countries analyzed, it is
revealed that consumption oI carbonated soIt drinks is higher than consumption oI Iruit juice or
bottled mineral water.





Age Iactor aIIecting the sales

Despite the Iact that people in the majority oI countries still appear to Iavor carbonated drinks
over the perceived healthy alternatives such as Iruit juice and mineral water, some interesting
behavioral shiIts underlie these Iigures. In many markets, an increase in the number oI people
choosing diet or low calorie alternatives has contributed to the overall sustained popularity oI
Iizzy drinks.






Pakistani soIt drink industry

About 75 million cases a year Ior Pepsi alone; the total beverage market is about 120 million
cases oI which 65 per cent are Pepsi products; about 20 to 22 per cent are Coca-Cola products
and Zum Zum cola and Mecca Cola, Amrit Cola and Muslim Cola... there are so many colas;
there is RC and Double Cola which are Iranchised products. Altogether they have around 5 per
cent oI the market. Due to the AIghan and Iraq wars, they did get a little Iooting especially in the
Irontier and Islamabad area but still they are not hugely popular




Total annual sale oI soIt drink in Pakistan 120 million cases



Pepsi annual sales in Pakistan 75 million



Market share oI Pepsi 65



Consumption growth 1.7 per year



Industrial SWOT analysis

Strengths:

The soIt drinks market in Pakistan enjoyed dynamic growth over the review period in both
volume and current value terms. Carbonates dominate the market in both the on-trade and oII-
trade with the lion's share oI sales. Carbonates have become part oI the culture in Pakistan and
multinational companies have maintained their standards over the years to provide consumers
with high-quality carbonated drinks. OII-trade sales oI carbonates are higher than those oI the
on-trade but both achieved strong growth over the review period

Weaknesses:

Liquid concentrates and powder concentrates are both seasonal categories in the market and their
sales peak in the summer in Pakistan. Both Rooh AIza and Jam-e-Shirin are traditional
sandalwood drinks in Pakistan which are highly regarded by consumers. These drinks can be
Iound in every home in Pakistan, especially in rural areas, throughout the summer and are the
mainstay oI liquid concentrates

Opportunities:

The government oI Pakistan has reduced excise taxes to encourage soIt drinks manuIacturers and
importers. The government also reduced other applicable taxes to promise more proIits not only
Ior soIt drinks manuIacturers already in the market but also to attract potential soIt drinks
manuIacturers to invest in Pakistan. Tax reductions proved extremely beneIicial to the soIt drinks
market in Pakistan and certainly encouraged and attracted multinational companies to invest in
the country's soIt drinks industry. The government also decided to tax the beverage industry on
capacity oI production rather than on actual production and that brave move encouraged soIt
drinks manuIacturers to maximize production and reduce prices

Threats:

Increasing health and hygiene awareness among Pakistanis has greatly increased sales oI
Iruit/vegetable juice products. Both the government and the media have started health awareness
campaigns to make Pakistanis realize that consumption oI Iruit/vegetable juice is as essential as
eating Iood. Fruit/vegetable juices are doing very well in both urban and rural areas. On the other
hand, health and hygiene awareness has also led to increased sales oI bottled water in Pakistan.
Previously bottled water was targeted only at major cities where consumers are more health-
conscious and aware oI the diIIerence between bottled water and tap water. Nowadays, health-
conscious rural inhabitants also drink bottled water due to health concerns.




SWOT Analysis oI PEPSI

SWOT Analysis, which is based on thorough review oI the business (corporation, product
category competition, customers and products), identities and evaluates the internal strengths and
weakness oI the companies well as its external threats and opportunities. The marketing mix is
driven by the results oI the SWOT analysis.



STRENGTH


Demand oI Pepsi is more than its competitors.

Company has a very established name and a good reputation.

Pepsi has large market share than its competitors.

As the target customers oI Pepsi is young generation, so Pepsi has more brand loyal customers.

Most oI the customers are satisIied with the price oI the Pepsi.

Pepsi is an international company and it has a very strong position internationally.

The environment oI Iactory is very good and attractive.

Pepsi spends a lot oI budget on its advertising.

Pepsi has a very vast distribution channel and it is easily available everywhere.

Employees are also motivated.

Pepsi oIIers many discount schemes Ior customers time to time.

Pepsi Cola is sponsoring sports, musical concerts, walks.

The location oI the Pepsi plant is utilized that all major markets oI Lahore are within the reach oI
the Pepsi plant within 30-45 minutes.



WEAKNESSES


Pepsi does not oIIer any sort oI incentive or discount to its retailers.

Pepsi target only young customers in their promotions.

Crown oI the disposable bottle is not good.

Demand oI disposal bottle is declining.

Pepsi tin pack is not available in Iar oII rural areas.

Pepsi is not considering many potential outlets like hotels, college canteens etc.



OPPORTUNITIES


Company may start entering rural areas also.

The company may also diversiIy its business in some other potential business.

Increased interest oI people in musical groups, cultural shows and sports has provided an
opportunity Ior Pepsi to increase its sales through them.



THREATS


The main competitor oI the company is the Coca Cola.

At the international level, Pepsi has a very strong competition with Coke. Coke has started its
advertisements more eIIectively to increase their demand and it is a very strong threat Ior Pepsi.

Cola drinks are not good Ior the health so the awareness level oI the people is in creasing which
is a big threat to the company.

HOW Internal and External Iactors aIIecting the strategies

Marketers need to be good at building relationships with customers, others in the company and
external links. To do this eIIectively, they must understand the major environmental Iorces that
surround all oI these relationships. A company's environment consists oI Iorces outside
marketing that aIIect marketing management's ability to build and maintain successIul
relationship with the target customers. Every company should know the vital importance oI
constantly watching and adapting to the changing environment. As the world is moving Iast
today, no one can be certain about the Iuture. The environment continues to change rapidly. By
careIully studying the environment, marketers can adapt their strategies to meet new marketplace
challenges and opportunities.

Some oI the external and internal environmental Iactors that aIIect the marketing trend oI the
company are as Iollows:

EXTERNAL ENVIRONMENT

The macro environment consists oI the larger societal Iorces that aIIect the microenvironment.
The external Iactors are not under the control oI the marketers; they can just observe them and
make strategies in light oI these Iactors. Some oI these Iactors are given below:

Demographic Factors:


Age

The requirements oI diIIerent age groups are diIIerent. Pepsi should target that age group that
consumes it the most and make promotional strategies according to their behavior. So their main
target is the young generation.

Education

A company has to make promotional strategies keeping in view the customer level. II the
percentage oI education is high in a country then through advertisements people can be made
well aware oI their product and can convey their message easily. Promotion and education has a
direct relationship.

Population Distribution

Population distribution means how much |population lives I urban areas and rural areas. In
Pakistan 35 population resides in urban areas and 65 population lives in rural areas. Pepsi is
Iocusing on urban areas as people there are more inclined towards such beverage while people in
rural areas are more inclined drinking lassi and desi drinks.

Population Density

It means number oI people in one square km per area. Karachi has the largest population density
and Islamabad has less population density in Pakistan. Pepsi sales are more in Karachi as
compared to the sales in Islamabad.

ECONOMIC FACTORS:


Income and Income per Capita

II the income level or per capita income oI the people increases, it will have a positive eIIect on
the consumption oI Pepsi.

InIlation

II the country Iaces inIlationary trend in the market, the price oI the Pepsi will ultimately
increase which will lower its demand.

Consumption Behavior

Pakistan is a consumption oriented society. Due to demonstration eIIect the people are more
inclined towards consumption than saving. So the people oI Pakistan spent heavily on Iood
items. Hence Pepsi has a good market share in the present circumstances.

Income Distribution

It means how much is in the hands oI rich and poor class. In Pakistan 10 rich people posses
93 oI wealth and 90 people posses 7 oI wealth. II there is balanced distribution oI income
in the country, the consumption oI the people will increase hence increasing the sales oI
beverages as well.

Payment Mod

As the use oI plastic money is increasing the consumption pattern oI the people are increasing.
Although it will have a low aIIect on the consumption oI Pepsi.

Employment Opportunities

As employment opportunities increase the living standard oI the people increase and the people
consume more.

Aggregate Demand

In case oI Pepsi, aggregate demand oI the product increases in the season oI summer as the hot
weather makes the consumers want to drink more.

Aggregate Supply

In summer season to cope up with the increasing demand they have to increase the aggregate
supply oI their product.

Economic Policies

Some oI the economic policies which can aIIect the market oI Pepsi are discussed below:

Fiscal Policy

It is the policy oI taxes. II heavy tax is levied on Pepsi then its price will rise having negative
aIIect on its consumption.

Monetary Policy

Monetary policy is made to restrict or increase the supply oI money in the market. II policies are
made to restrict the Ilow oI money in the market, inIlation can be controlled hence increasing the
real income oI the people which will ultimately aIIect the consumption oI Pepsi.

Price Policy

II price oI Pepsi is increased its demand will decrease and vice versa.


Income Policy

II income oI the people will increase their purchasing power will increase and hence increasing
the market share oI Pepsi.

PHYSICAL FACTOR:


Region

Pakistan is divided into diIIerent geographical regions. Marketing and sales oI Pepsi is diIIerent
in diIIerent geographical regions. In hot areas its demand is more.



City Size

The cities which are densely populated the consumption oI Pepsi is more.

Climate

Pepsi is more suitable Ior humid or hot weathered countries like Pakistan. It is a source oI
reIreshment when a person is thirty due to the hot weather.

InIrastructure

Roads are the basic need Ior transportation oI Pepsi Irom one place to another. Pepsi cannot open
Iactories in every city oI Pakistan so it has to transport it to other cities where Pepsi is demanded.

Electricity is the basic necessity Ior production oI any product. Constant load shedding slows
down the process oI production which leads to less production and low market share.

TECHNOLOGICAL FACTORS:


Research and Development

Through research and development quality oI the product can be improved or better techniques
or machinery can be developed which can increase the production. When technology is advance
the supply oI the product increase hence the company experiences growth in their business.

POLITICAL AND LEGAL FACTORS:


POLITICAL STABILITY:

Whenever the government is considered to be stable, the business will Ilourish. II there is
political stability in the country the policies and strategies made by Pepsi can be consistent to be
implemented. Foreign companies are also keen to invest in those countries which are politically
stable where they have no Iear oI decline in their market share or shut down due to sudden
change oI government.

Mixed Economy

In mixed economy government and private sector both plays their role in developing the
economy oI the country. Investment by Ioreign companies like Pepsi is more likely to Ilourish in
mixed economy.







Laws Formulation

Government has given copy rights to Pepsi so that another company cannot sell their product by
the name oI Pepsi. The countries where laws are Iormulated, the strategies and activities oI the
company are diIIerent.

Social Responsibility

Pepsi's social responsibility is to provide its customers with clean and hygienic product so to do
this they have increased the use oI disposable bottles.

SOCIAL AND CULTURAL FACTORS:


Psychographic

It is a combination oI demographic and psychological Iactors. Psychological attributes mean how
you perceive things. The company will Iocus on the behavior oI consumers and make diIIerent
changes in their product quantity or quality and in promoting their product so that they can
attract the customers. Keeping in view that the behavior oI diIIerent consumers is not alike they
have to make their marketing strategies in accordance with their requirements so that they are
convinced to buy the product.

Religious

Religious Iactors can inIluence the market sales oI Pepsi as it happened in 2003 when the U.S-
led attack on Iraq, wide sections oI society in Pakistan have banned American multinationals
Coke and Pepsi

Social Status

Pepsi is a well renowned brand. People who are brand conscious will not drink beverages oI
lesser known brands such as Amrat cola. They will try to show their status by drinking Pepsi
which is known to all as a quality drink.

Media

It is a very important Iactor Ior marketing. Media these days is a very eIIective way oI inspiring
people to buy a speciIic product. A good promotion can boast up sales to a great extent.





INTERNAL ENVIRONMENT

CUSTOMERS:

There are three types oI customers


1. Consumer

2. Business

3. Government

Pepsi main Iocus is the consumers which are the end users. Pepsi has to make its marketing
strategies keeping in view the consumer buying behavior. To Iorecast the behavior oI the
consumer is a business problem. Physical aspect oI the consumer can be satisIied but it is
diIIicult to satisIy the consumer psychologically. Consumer buying behavior is aIIected by
certain Iactors like Cultural Iactors, Social Iactors, Personal Iactors and Psychological Iactors. So
the producer should keep these Iactors in Mind while promoting their product so that they can
acquire the customer and increase their market share.

There are diIIerent consumers in a society whose behavior is not the same. Every consumer has a
diIIerent perception oI diIIerent products. Some consumers are impressed by one quality oI the
product which may be in the view oI other consumer not that impressive. So to deal with
diIIerent consumers in a society one should know about the consumer buying behavior process
which may help in making a true picture oI their product in the mind oI the consumers.

CONSUMER BUYING BEHAVIOUR PROCESS:

Consumer buying behavior process is explained in some steps which are discussed below:


Need IdentiIication

The consumer is thirsty and he wants to quench his thirst.


InIormation Search

He will search as to what will satisIy his thirst the most.


Evaluation oI Alternatives

He will now evaluate Irom the wide range oI beverages available to him that which one oI them
is suitable to him in terms oI quality, taste and is pocket Iriendly.

Selection

AIter evaluating the product he will select a product.


Purchase

The consumer will buy the selected product.


Post-Purchase Experience:

It is the experience that the consumer gets aIter using the product. He will use the product again
iI he Ieels that his satisIaction aIter use is more or equal to the price oI the product.

AIter looking at above mentioned example, we can get an understanding that a product should be
so desirable that whenever a person identiIies his need, he selects our product among various
substitute products and he Ieel satisIies so that he retains the use oI that product.

SUPPLIER:

He is the person who provides raw materials to the producers or sellers. Suppliers Iorm an
important link in the company's overall customer value delivery system. They provide the
resources needed by the company to produce its goods and services. PepsiCo International
provides raw materials to Pepsi Iranchises in Pakistan. Supplier problems can seriously aIIect
marketing. Marketing managers must watch supply availability i.e. supply shortages or delays,
labor strikes and other events can cost sales in the short run and damage customer satisIaction in
the long run. The company should monitor the price trends oI their key inputs. Rising supply
costs may Iorce price increases that can harm the company's sales volume.


No. Material ManuIacturer/ Supplier(s) Approved Irom
1. Pepsi Concentrate PepsiCo Inc. Ireland & PepsiCo Factory in Hattar Estate. Approval at the
Iactory
2. Caps & Closures Gatron Pakistan Limited Approved Iorm PepsiCo China.
3. Plastic Bottles Galtron Pakistan Limited Approved Irom PepsiCo China.
4. Glass Bottles Balochistan Glass Mills

Tariq Glass Limited Approved by PepsiCo China.
5. Carbonated Water Pakistan Bottlers (Pvt) Ltd. Approved Irom PepsiCo U.A.E, Dubai.

COMPETITOR:

He is the person who is selling the same type oI product in the market.

The marketing concept states that to be successIul, a company must provide greater customer
value and satisIaction than its competitors do.

Pepsi has a tough competition with Coca Cola while it Iaces a little competition with the local
producers like RC Cola, Shandi Cola etc. The local producers hardly aIIect the sales oI Pepsi in
the market.

There are diIIerent types oI competitor in the market. Some oI them in which our product lies are
discussed below:






Close Vs Distant Competitor

Pepsi and Coke are close competitors. It means that both have direct competition in the market,
their products are close substitutes Ior one another. Both the products can inIluence the market
share oI one another through eIIective strategies made to cope up with their competitors.

Pepsi cola and Nestle juice are distant competitors oI one another. It means that their products
satisIy the same want but they are in indirect competition with one another.


Strong Vs Weak:

Coca Cola and Pepsi are strong competitors. In Pakistan Pepsi is the market leader and Coca
Cola is its competitor. The Pepsi makes deIense strategies so that it can maintain its position in
the market. While Coca Cola is a challenger and it makes attack strategies so that it can become
the market leader.

Pepsi and Shandi Cola are weak competitors. Pepsi is the market leader and Shandi Cola is the
Iollower. Pepsi is not in direct competition with the Shandi Cola. It means that Shandi Cola has
little eIIect on the sales oI Pepsi.

DISTRIBUTOR:

Distributor maintains the image oI the product and the sales in the market. II items are not
properly placed by the distributor, it will disperse the market.


CHANNELS OF DISTRIBUTION

The Pepsi uses the Iollowing two channels Ior the distribution oI their products.

Indirect Distribution

Indirect distribution involves agency holders e.g. Riaz Bottlers Pvt. Ltd. Lahore Iranchise has
divided its region i.e. Lahore and Kasur districts in two categories.

Local Zone

These are 62 agencies distributing Pepsi Products (250ml Sd) only around Lahore in their
respective allocated sub zones.

Out Station Zone

17 dealers have been appointed by the bottlers Ior Iar distant places and in out skirts oI Lahore
and Kasur the dealers involved in direct distribution are only authorized to sell 250 ml (STD)
bottle oI Pepsi, Team and Marinda.

Direct Distribution

The Iactory vehicles operate on 45 direct routes in Lahore selling non-returnable bottles Litter,
Pet and Can.





PRE-MARKETING MIX

SEGMENTATION

It means that you divide the target market in to diIIerent groups. Market consists oI buyers and
buyers diIIer in one or more ways. They may diIIer in wants, resources, locations and buying
practices. Through market segmentation companies divide large, heterogeneous markets into
smaller segments that can be reached more eIIiciently and eIIectively with products and services
that match their unique needs.

Segmentation is done on basis oI the previously mentioned external Iactors and the Iollowing:


Behavioral Base

It is how people perceive a speciIic product, in short psychological analysis oI a product. Pepsi
all over the world is recognized as a quality drink and thereIore people drink it without any
hesitation whenever they are thirsty or otherwise. So marketers oI Pepsi have made it a drink Ior
all people and Ior diabetic people they introduced diet Pepsi.

Cognitive Base

It pushes and pulls the consumer. II the outlook oI Pepsi bottle is desirable and it attracts the
consumer, he will buy it even iI he isn't thirsty.

TARGET MARKET

The market which is Iocused by the producer is called the target market. Targeting is to Iocus on
the target market to attract the customers.

CHARACTERISTICS OF TARGET MARKET

The target market should have some Iollowing Ieatures.


Accessible

It means that the target market which is Iocused should be accessible or easily approachable.

Substantial

The target Market should be substantial. It should have a speciIic size where strategies can be
made and implemented.

Measurable

One should be able to measure the demand in the market.




Comparable

The producer should identiIy that needs oI diIIerent customers are diIIerent.

ProIitable

The target market should be proIitable Ior the producer.

MARKETING STRATEGIES

There are diIIerent marketing strategies which are applied in targeting. Some oI these strategies
which Pepsi Iollows are discussed below:


Mass Marketing

Big Iirms or companies say that everyone is their buyer whether they belong to rural or urban
area, big or small country, rich or poor, adults and small children etc. Pepsi is mostly used by the
young generation but it claims that it is moving towards mass marketing.

POSITIONING STRATEGY

It means that you try to give image to your product in the mind oI the customers. To give a true
and positive picture oI the product is the best positioning. The company should promote its good
points or comparative advantage which it has over its competitors

DIFFERENTIATION STRATEGY

In order to serve your target market you introduce diIIerent things to your product so that your
product can be diIIerentiated Irom other products.


Basis oI DiIIerentiation

There are many bases on which a product can be diIIerentiated but Pepsi has diIIerentiated its
product on the Iollowing base:

Product DiIIerentiation

Pepsi diIIerentiate its product Irom its competitors on the basis oI brand, quality and taste.

Image DiIIerentiation

Logo is used Ior image diIIerentiation. Logo is what establishes a brand name in the consumer
mind. It is the brands identiIication, signature and image. Pepsi has kept on changing its logo
Irom time to time.





Marketing Mix Strategies



PRODUCT

The soIt drinks market in Pakistan enjoys dynamic growth in both volume and value terms.
Carbonated drinks have become part oI the culture in Pakistan and multinational companies have
maintained standards over the years to provide the nation with high-quality drinks. Rural areas oI
Pakistan have driven sales oI carbonated drinks to new heights as more than 60 percent oI the
population resides in rural areas and young consumers are more attracted to advertising. Pepsi is
the most popular and leader brand in the Pakistani market and is consumed by children and
adults alike. Pepsi is a responsible corporate brand oI Pakistan and have contributed a lot to the
economy.

In marketing, a product is anything that can be oIIered to a market that might satisIy a want or
need. Until unless the product oI the company is not strong in the market it can not survive in the
longer run.

Pepsi has a product line comprised up oI carbohydrate drinks, Lays and many other products in
Pakistan. Pepsi's product line satisIies consumer needs because Pepsi produces diIIerent types oI
soIt drinks Ior diIIerent consumers.

The most popular product oI Pepsi is Pepsi Cola. Due to its good taste Pepsi is a well-known
product. Thus Pepsi Cola satisIies the consumer's needs eIIiciently by launching a desired
product.

New product development by Pepsi

Pepsi is doing new product development on Irequent interval oI times. The purpose oI which is
to reIresh the brand. By new products and innovative ideas consumers can easily be attracted.

In Iollowing ways Pepsi is doing new product development.

New product category

Pepsi which is mainly a company oI soIt drinks AIter establishing a brand in Pakistan Pepsi
came into several new product category. Lays, kurkuray and aqua Iina, Iast Iood restaurants are
the examples oI new product category.

Product line extension

Mountain dew is the most recent addition in the product line oI soIt drinks which is very popular
especially among the youngsters.

However Pepsi launch its several variants with a minor diIIerence on Irequent interval oI time.
There have been many Pepsi variants produced over the years since 1903, including Diet Pepsi,
Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday
Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil), Pepsi Next (available in Japan and
South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, Pepsi Ice Cucumber and Pepsi
White in Japan.


Line Filling

Pepsi claims that they are doing mass marketing but there was an unIilled gap in the consumers.
The diabetic patient can't use the regular Pepsi because oI the sugar. So Pepsi had introduced diet
Pepsi to Iill the gap in their drinks as oI then onwards even diabetic people became their
consumers.

Incremental Improvement

Pepsi jumbo is an example oI incremental improvement made by Pepsi. It was 2.25 litter bottle
introduced Iew years ago in Pakistan. The purpose oI this packing is to oIIer the Pepsi to a
Iamily Ior one or two time meals. Price oI this pack is also kept low so that is can be aIIordable
easily by the consumers.






PRODUCT line

SODA WATER CHIPS JUICES
Pepsi cola AquaIina Lays Tropicana
Teem Kurkure
Mirinda
7up
Dew
Pepsi twist



WIDTH

DiIIerent product line,


Soda

Diet soda

PuriIied water

Chips

Juices



LENGTH

Length includes number oI items produced by Pepsi under each appropriate column oI width.
For example in column oI soda drink marinda and team etc comes in.



DEPTH

The variants that are oIIered by Pepsi in terms oI size and quantity,

1. 175 ml Mini Bottle

2. 250 ml Regular Bottle

3. 300 ml Tin

4. 1000 ml Regular Liter Bottle

5. 1500 ml Disposable Bottle



BRANDING:

Consumer view a brand name as an important part oI the product and branding can add value to
the product. A name, term, sign, symbol or design or a combination oI these intended to identiIy
the goods and services oI one seller or group oI seller and to diIIerentiate them Irom their
competitors.




LOGO

Logo is what establishes a brand name in the consumer mind. It is the brands identiIy, signature,
image and more oIten it is a logo that makes oI breaks a product logo plays a very eIIective role
to improve the product or brand. Pepsi kept on changing its logo Irom time to time along with
the trade marks.



Evolution oI Pepsi logo



1909-1939: Delicious and HealthIul
1939-1950: Twice As Much For A Nickel Too
1950-1963: The Light ReIreshment
1953-1961: Be Sociable
1961-1963: Now It's Pepsi For Those Who Think Young
1963-1967: Come Alive! You're In The Pepsi Generation
1967-1969: Taste That Beats The Others Cold
1969-1973: You've Got A Lot To Live, Pepsi's Got A Lot To Give
1973-1975: Join The Pepsi People Feelin' Free
1975-1978: Have A Pepsi Day
1978-1981: Catch That Pepsi Spirit
1981-1982: Pepsi's Got Your Taste For LiIe!
1983-1983: Pepsi Now!
1984-now: Pepsi, The Choice OI A New Generation

2000 The choice oI a new generation.

2003 Zinda Dilon Ki Pehchan.

2006 Generation next.



PRICE

The amount oI money charged Ior a product or service, or sum oI the values that consumers
exchange Ior the beneIits oI having or using the product or services. As price gives us the proIit
so this P is very important Ior business price oI product should be that which gives maximum
beneIit to the company and which gives maximum satisIaction to the customer.

Following Iactors Pepsi kept in mind while determining the pricing strategy.


Price should be set according to the product demand oI public.

Price should be that which gives the company maximum revenue.

Price should not be too low or too high than the price competitor is charging Irom their
customers otherwise nobody will buy your product.

Price must be keeping the view oI your target market.

The price oI Pepsi Cola, despite being market leader is the same as that oI its competitor Coca
cola.

Some times, Pepsi places its customers into some psychological pricing strategies by reducing a
high priced bottle and consumers think that they save a lot oI money Irom this.

Prices oI diIIerent bottles


Regular bottle e rupees 10

Non Returnable/disposable rupees 17

Liter Bottlerupees 30

1.5 Liter Bottle rupees 50

2.25 Liter Bottle rupees 60

Analysis oI the product in Pakistani market

According to a survey conducted by brand award association availability has been declared as
the second best contributing Iactor in the success oI Pepsi and it simply indicates that
eIIectiveness oI its distribution network which ensures its availability in every Iar oII corner oI
the country. AIIordability has been rated as the third best option and indicates consumer's
sensitivity to prices oI daily consumption items. Quality has been considered as the lowest rated
criterion and it is unusual. It indicates that counterIeit product is getting prevalent in the market.
There are more than ten COLAS in the market and the popular acceptance oI Pepsi is creating
problems in its way oI success. Pepsi will have to make a strong drive to close all illegal
manuIacturing and packing oI cola carbonated drinks which has become common now-a-days
and counterIeit cola replacements can be seen in every market





PRICING STRATEGIES

Competitionbased pricing approach

Pepsi has intense competition with the coca cola the largest soIt drink company world wide. So
its pricing cant exceed too much nor decrease to much as compared to the price oI coca cola. II
price oI the Pepsi exceed too much Irom the coke peope will shiIt to the coca cola and on the
other hand iI the price oI Pepsi decreases people might get the impression that quality oI the
Pepsi is also low.


Promotional Pricing Policy

Pepsi has oIIered promotional prices very Irequently. Especially on some occasion Pepsi reduces
its rates. like in Ramazan Pepsi reduces its rate unto 5 rs on 1.5 litter bottle.

Market Penetration Pricing Policy

Prices in beverage industry are determined by the consumer. In an economy like that oI Pakistan,
consumers tend to switch towards a low priced product. Pepsi objective is to target every
consumer oI the country so Pepsi has to set its prices at such a level which no one can oIIer to its
consumers. That is why Pepsi Cola charges the same prices as are being charged by its
competitors. Otherwise, consumers may go Ior Coca Cola in case oI availability oI Pepsi at
relatively high price.

DISCOUNTS

Pepsi Cola oIIers various discounts to those retailers who have the maximum sales oI Pepsi
products on daily, monthly and on seasonal basis. Same oI the main discounts given to the
retailers are as Iollows:

Quality Discount

Following are discounts oIIered by Pepsi.

1/10 Discount

I.e. one case oI Pepsi is Iree on buying 10 cases oI Pepsi at one time.

2/20 Discount

I.e. two cases oI Pepsi are Iree on buying 20 cases oI Pepsi at one time.

Seasonal Discount

Following are discounts oIIered by Pepsi.

Pepsi also oIIers seasonal discounts schemes by reducing price in Ramadan and on Eid. Pepsi
also oIIers trade in allowance Ior retailers.

3 B F Discount

I.e. some times, especially in the oII-season duration, in order to increase the sale oI Mirinda and
Teem, 3-BF discount is given (i.e.) 3 bottles Iree on purchasing every case oI Teem and Mirinda.

INCENTIVES

Mainly two types oI incentives are given by the Pepsi Cola:


Incentive to Retailers

Pepsi Cola provide various incentives to retailers on the best sales and achieving the
predetermined sales targets. These incentives are in the shape oI:

Deep Freezers

Return Tickets

Free Transportation Services.

Incentive to Dealers

The best dealer oI the year is awarded with a brand new Suzuki Pickup. The second best is
awarded with Motor Cycle. The third best is awarded with Return Ticket to Middle East.



Credit

There is no credit system in the beverage industry. Every single bottle is sold on the cash basis.

Special OIIers

Pepsi Cola gives special oIIers to consumers on special occasions like Ramadan and Eid days
instead oI decreasing the price oI the products, some special packs like Pakkora Mix, Chat
Massala, or Free Drinks with Liter Bottles are oIIered.

PLACEMENT

Placement is accomplished through eIIicient and suIIicient channels oI distributions. These
channels constitute systems oI economic institutions through which producers deliver goods and
services into the hands oI their users. There are various channels through which Pepsi distributes
its output.




PRODUCT OUTFLOW

Pepsi Cola International has given Iranchises all over Pakistan. These companies have installed
their plants in diIIerent parts oI Pakistan with these speciIied areas and names e.g.

City Name oI Franchise
Karachi Pakistan Bottlers
Lahore Riaz Bottlers
Faisalabad Punjab Beverage

Pepsi Cola provides consumers place utility which is, where ever and when ever you want it, you
get it! Pepsi's channel oI distribution is very aggressive according to the consumers,
manuIacturers and distributors. Pepsi has 12 diIIerent units in diIIerent areas oI Pakistan, which
make the Pepsi easily available all over the country.

The cities in which the Pepsi units are:


Lahore

Sukkur

Karachi

Multan

Dera Ghazi Khan

Islamabad

Faisalabad

Quetta

Hyderabad

Sahiwal

Hattar

Pepsi is an international brand so it also has other units in other countries oI the world like
America, Europe, AIghanistan, Middle East and Central Asia. The big advantage Ior Pepsi in
Pakistan is that it distributes the product through bottlers. So bottlers' eIIort also contributes in
the promotion oI Pepsi.




CHANNELS OF DISTRIBUTION

Direct Distribution

Indirect Distribution

Local Zone

Outside Zone

Direct Routs 45



Authorized Dealers - 17

Agencies 62






CHANNELS OF DISTRIBUTION

The Pepsi uses the Iollowing two channels Ior the distribution oI their products.

1. Indirect Distribution

Indirect distribution involves agency holders e.g. Riaz Bottlers Pvt. Ltd. Lahore Iranchise has
divided its region i.e. Lahore and Kasur districts in two categories.

Local Zone

These are 62 agencies distributing Pepsi Products (250ml STD) only around Lahore in their
respective allocated sub zones.

Out Station Zone

17 dealers have been appointed by the bottlers Ior Iar distant places and in out skirts oI Lahore
and Kasur the dealers involved in direct distribution are only authorized to sell 250 ml (STD)
bottle oI Pepsi, Team and Marinda.

2. Direct Distribution

The Iactory vehicles operate on 45 direct routes in Lahore selling non-returnable bottles Litter,
Pet and Can.



SPECIAL POINTS

Other than these some special points are also being looked aIter by direct sales vehicles such
hotels restaurants, public parks, big and reputed super stores etc. At Avari, Pearl continental,
village, Seas magniIicence etc. Pepsi Cola directly distributes the products.

Promotional Strategies

In Pakistan Pepsi is the most liked soIt drink especially by young generation so the Pepsi cola
company has devised such marketing strategy which attracted them. For this reason they started
monitoring the habits oI the generation. What they saw was that the students were crazy about
cricket and usually liked to idealize them so in order to increase their sales the Pepsi cola
company paid high amounts oI money to the cricketers to act as their spokes men.

Some oI the most Iamous cricketers in the modern era have acted as spoke persons also Iilm stars
have been acting as spoke persons.

The Pepsi cola company has aIter doing research also has introduced diIIerent size oI bottles
oIIered at lower prices so that every one can aIIord them. Also Pepsi Company has introduced
other soIt drinks including mountain dew, seven up and marinda. Pepsi company has introduced
other Ilavors such as Pepsi twist, Pepsi max diet Pepsi.

Pepsi Cola Company has also become oIIicial sponsors oI Pakistan cricket and has sponsored a
number oI series.

Also Pepsi has donated a lot to the earth quake victims and has launched a number oI prize
schemes to attract new customers

As a result oI this marketing strategy Pepsi has become the largest seller oI soIt drinks in
Pakistan and is slowly Iorming a monopoly in drinks market. Although many soIt drinks like
Pepsi have been introduced such as Amrit Cola, Quibla Cola oIIered at lower prices but none oI
these drinks have been able replace it.

Following are the strategies:

Comparative Parity Method:

As we have already discussed Pepsi pricing strategy is determined y consideration the strategy oI
coca cola so in this case also Pepsi ads are telecasted with the competition in coca cola which is
its direct competitor.

Objective and task methods

When Pepsi introduced any new variant they have advertised it heavily. Objective oI which is to
make a space Ior new product in the market. We have seen the heavy advertisement oI Pepsi max
in previous days.

Seasonal advertisement:

Frequency oI the Pepsi ads varies Irom time to time. When the season is on Pepsi do heavy
advertisement especially in ramzan days or eid occasions but this advertisement not remain
consist. We can hardly see the ads oI Pepsi now as there is winter season.



CONCLUSION

Pepsi is a well renowned company and it has maintained its position well by understanding the
client psychology, by ensuring quality, by introducing ingenuity in products, by enlarging its
product base, by keeping economic Iactors in view and by intense and jazzy advertisements.


Whenever and where ever there is a spotlight event, Pepsi must Iigure in, like the one day
international cricket matches between India and Pakistan many other such occasions. The key
word Ior success in the Marketing World is to "remain in the spotlight" and that is what Pepsi is
doing.

SUGGESTIONS

The marketing world is Iull oI surprises. Who could imagine that Coca Cola would be overtaken
by Pepsi? II Coke could be overrun by Pepsi, it would be no wonder that Pepsi might be
overtaken by some other beverage. The need then is to combine quality with ingenuity. Along
with that, the reputation oI the company has to be kept robust.

Today we live in a Iast moving world where novelty and newness count a lot. One cannot rest on
one's laurels. Fresh eIIorts, newness oI approach must remain the cardinal principles oI a well
orchestrated marketing strategy and the campaign must be relentless. A continuous bombardment
in advertisement would convince the clients that Pepsi is a part oI their lives. In order to live with
style, Pepsi ought to be an essential ingredient oI one's liIe.

The Pepsi is at its maturity stage and the sales oI company are not growing very rapidly.
Company is doing a lot oI promotional activities to let the product remain in the market. It holds
a large share oI the market and whenever the sales state declining, the company can improve it
by diIIerent promotional activities.

Marketers oI Pepsi can try to improve sales by improving one or more marketing mix elements.
They can cut prices to attract new users and competitor's customers. They can also launch a
better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Pepsi
is at its maturity stage.