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Pepsi Green

Presented To Prof Zia-u-Rehman

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Pepsi Green Presented By M. Awais MBAE2012093

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Pepsi Green IntroductionAs the number two cola maker in the world, Pepsi has manyopportunities toGrow and challenges to meet. The opportunities that it cantake advantage of aregrowing worldwide markets for soft drinks and the chance toincrease its market share.Its challenges are to somehow find a way to beat Coca-Cola,who excels at marketing itsProducts, and convince potential customers to choose Pepsiover Coca-Cola. TakingAdvantage of these opportunities and meeting the challengeswill be difficult for Pepsi,who faces the tenacious cola giant Coca-Cola. However, withstrong dedication togoals and implementing the right marketing strategies, Pepsican gain ground on Coca-Cola in the international marketplace.

As Pepsi -Pakistan is the leading cola drink in Pakistan soit thought to take Idea from neighbor country India whichduring the world cup Pepsi India launched Pepsi -Blue tocash the emotions of Indian Cricket Fans by introducingPepsi -Blue.

Company BackgroundPepsi Co is a world leader in convenient foods andbeverages. The companyconsists of the snack businesses of Frito-Lay, the beveragebusinesses of Pepsi -Cola,Gatorade, and Tropicana, and the cereal business of QuakerFoods. Pepsi Co brands areavailable in nearly 200 countries and territories.Many of Pepsi Co's brand names are over 100 years old, butthe corporation is

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Pepsi Green relatively young. Pepsi Co was founded in 1965 through themerger of Pepsi Cola andFrito-Lay. Tropicana was acquired in 1998 and Pepsi Comerged with The Quaker OatsCompany, which owned the Gatorade brand of sports drinks, in2001. Pepsi Co's successis the result of superior products, high standards ofperformance and distinctivecompetitive strategies.

Historical PerformancePepsi has been subject to market risk from the rising costof commodities becauseits ability to raise prices is limited by the competitiveenvironment. Pepsi has managedthis risk primarily through the use of fixed price purchaseorders, pricing agreements,geographic diversity and futures contracts.The Pepsi Bottling Group (PBG) is the world's largestmanufacturer, seller, anddistributor of Pepsi Beverages. PBG has 38,000 employeesworldwide and operations inthe United States, Canada, Greece, Russia and Spain. PBG'ssales account for 55% of Pepsi beverages sold in NorthAmerica and more than 32% of those sold worldwide.Pepsi Cola North America (PCNA) manufactures Pepsi Colabeverageconcentrates and sells them to bottlers in the United Statesand Canada. They developthe national marketing, promotion and advertising programsthat support the brandsand generate new products and packaging. Pepsi Colacoordinates selling efforts fornational fountain, supermarket and mass merchandisingaccounts.In the US, Pepsi and Coca-Cola share similar market shareof soft drink market,

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Pepsi Green Pepsi with 32% and Coca-cola with 36%.

Pepsi Performance (in millions of dollars)Year Pakistan International Net sales2000 19 18421999 15 17711998 19 16002000 33 1481999 21 108Operating Profits1998 82 99

Pepsi -Cola International (PCI) offers Pepsi Co beverages inabout 170 countriesoutside North America. Brands include Pepsi , Diet- Pepsi ,7-Up, Mirinda, and PepsiMax. With approximately one-fifth of the international softdrink markets, we are thesecond largest multinational soft drink Company. PCImanufacturers Pepsi -Colabeverage concentrates and sell them to bottlers outside ofthe United States and Canada,who are licensed by us to sell and distribute Pepsi -Colabeverages. In certain countries,PCI also owns and operates the bottling businesses. Thevolume of Pepsi -Colaworldwide is allocated as: North America 54%, Europe 11%,Latin America 15%,Middle East/Africa 8% and Asia 12%.

Recent Moves (Pakistan)In addition to rolling out new products, Pepsi Co has beenacquiring newcompanies and brands. The company recently purchased theSouth Beach Beverage Co.

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Pepsi Green and its SoBe alternative beverages for a reported $370million. This successful purchasewas a great coup for Pepsi since Coca-Cola was intent onpurchasing the company.Pepsi also purchased Quaker Oats Co. and its Gatorade brand,which practically ownsthe sports drink category with 82 percent market share, for$14 billion. Compared withCoca-Cola's healthful beverage focus, Pepsi new productfocus is sticking closer tohome with a new carbonated lemon-flavored Pepsi Twist, aline of Dole fruit juices andjuice drinks in single-serve PET packages, and "Code Red,"an extremely successfulflavor extension to the Mountain Dew line. Internationally,Pepsi says it hasconsolidated its bottler network in Mexico and re-franchisedbottlers in Australia and

In Pakistan it has Now released new advertising featuring35-year-old Cricket superstarWasim Akram as shown in the Ad drinking Pepsi-Green Icelemon soda, who is worshipped by millions of teenage Cricketfans.Pepsi not alone among big marketers in taking a larger viewof licensing,allowing outsiders to pay a royalty to create and sellproducts under the mother-shipbrand. They see licensing as a way to extend their brandinto new categories and buildawareness of the core line. In a softening economy, itdoesn't hurt that licensing is a rarebrand-building vehicle that generates revenue rather thanrequiring big outlays as adsdo. Timberland Co., the outdoor footwear company, islaunching a licensed kids' wearline in the US in the fall of 2002 and is consideringselling outdoor equipment under the

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Pepsi Green Pepsi name.

A)-Studying OrganizationalEnvironments

1- External Environments.2- Internal Environments.

1- External Environments(for Pepsi-Green).i-DemographicsThe size of Pakistani Population is 15-crore and hasresponded well to the Pepsi products during previous yearsPepsi-Green has great opportunity to flourish in Pakistanmore.The growth rateAge which mostly appreciates Pepsi products is equally likedby college students(boys and girls) and children mostly SoPepsi-Green by more advertisements can be emphasized bythe company.The house-hold pattern is such that when ever a Guest comesthe Host always prefers Cola drinks for his guest.On ethnic basis like religion basis we have studied that theIslamic-Factor didn’t denied the Pepsi- Campaigns before 9-11 but now MMA the leading political party of Pakistan haslaunched the Boycott Campaigns in Pakistan.Moreover Sindhi, Punjabi, baluchi or sarhadi no ethnic mixis going to stop this Pepsi-Green Campaign.

ii-Economic ConditionsThe GDP in Pakistan is 2.6 % in the Pakistan.The Per Capita Income is Rs 500 /Month in Pakistan. So inlonger run it is affordable to the middle and Upper Class.

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Pepsi Green Inflation is 4.4% as shown in the chart . Employment rate inPakistan is quite bad as slump in the international andnational market due to 9-11 Scenario in USA.So after studying all these factors we conclude to the factthat the average economic conditions in Pakistan are stableafter IMF forgive the Loans of PakistanNow Pakistan loans are reduced to $23 BILLION FROM $ 38Billion.Pakistan's Economy & employmentPakistan's economic structure is in transition from anagricultural base to a service and manufacturing base, whichis reflected by the accelerating growth in services andmanufacturing as a portion of total employment and GDP.Unemployment and inflation are in check and exports arerising.

Economic structure From the Economist Intelligence UnitSource: Country Profile Main economic indicators, 2000

GDP growth (%)(a) 2.6Consumer price inflation (av; %) 4.4Current-account balance (% of GDP)(b) 2.3Total external debt (US$ bn; year-end)(b) 34.7Exchange rate (PRs:US$; av) 52.81

(a) Fiscal year 2000/01 (b) EIU estimate.Sources: Ministry of Finance, Economic Survey, 2000-01; IMF,International Financial Statistics; World Bank, Global DevelopmentFinance.

More economic data

Comparative economic indicators 2001

Pakistan India Bangladesh

GDP (US$ bn) 61.3 473.3 37.5GDP per head (US$) 446 472 291GDP per head (US$ at PPP) 1,848 2,173 1,186Consumer price inflation (av; %) 4.4 4.0 2.7Current-account balance (US$ bn) -1.4 -5.9 -0.6% of GDP -2.3 -1.2 -1.6

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NOTESScale 1:4,050,000. Relief shown by shading and spot heights. "501383." Maps in margin: Ethnic groups.--[Location]--[Comparative area]--Population.--Agriculture and land use.--Industrial, mining, and power centers

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Pepsi Green Exports of goods fob (US$ bn) 8.63 42.5 5.8Imports of goods fob (US$ bn) -10.88 -54.2 -8.0External debt (US$ bn) 34.8 95.8 17.1Debt-service ratio, paid (%) 22.5 16.4 10.7

iii-Competition ConditionsMain Brand/Substitution competitor: Coca-Cola

Coca-Cola was founded in 1886 and now produces more than 230beverage brands.

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Pepsi Green Its major market is in soft drinks and non-carbonatedbeverages. The company'sheadquarters are in Atlanta and has local operations innearly 200 countries around theworld. More than 70 percent of Coca-Cola's income comes fromoutside the US. Coca-Cola's main theme of business strategy is "think local, actlocal". Coca-Cola applies thelocal strategy of listening to all the voices around theworld asking for beverages thatspan the entire spectrum of tastes and occasions.Coca-Cola emphasizes communities around the world throughits commitments toeducation, health, wellness, and diversity. It always workswith strong ideals andstrives to behave in ways consistent with the brand itself.The organization structure isdivided by the Americas group (U.S and Canada), theEurope/Africa group, the Asiagroup, and Coca-Cola ventures.Coca-Cola also tries to create strategic alliances withother companies andexpanded its previous relationship with Nestle to exploreother options for productdevelopment in coffees and teas. The company also picked upPlanet Java and MadRiver Traders to boost its alternative presence. The companyalso announced a globalpartnership with Procter & Gamble that will team its MinuteMaid, Hi-C, Five Alive,Coke-BrandsFruitopia, Cappy, Kapo, Sonfil and Qoo brands with P&G'sPringles chips as well as itsSunny Delight and Punica beverages. The new company, whichwill operate as a stand-alone enterprise, will focus on marketing the juicebeverages and snack foods

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Pepsi Green worldwide, and for the first time gives Coca-Cola entry intothe snack food marketdominated by Pepsi Co's Frito Lay division.Coke-Promotion-Plan(AOL)Coke decided to develop its first-ever global interactivemarketing effort withAOL, the biggest new media brand of all. AOL will marketCoke's brands across itsplatforms, and Coke will support and distribute AOL servicesthrough in-storepromotions, advertising and merchandising. The programkicked off with a teen-targeted online sweepstakes on AOL that paralleled Coke'soffline promotion: USconsumers who buy multi-packs of Coke could win prizes of$100 to $1 million, as wellas walk-on roles in Universal Pictures' movies. Coke alsosent a group of 60 kids to theSydney Olympics armed with digital cameras, and posted theirpictures on AOL's teensite. In the coming months, Coke plans to use AOL to supportU.S. promotions, such asits sponsorship of Nascar auto racing and its summerpromotions, as well as online-only branding programs.Coke-Market Leader In WorldAs the biggest carbonated soft drinks player of them all,Coca-Cola has been lookingfar beyond its carbonated realm to smaller brands such as anenergy drink called KMX,a fountain coffee drink, and a Texas-only red soda. TheCoca-Cola Co. saw volumedecrease 0.8 percent in 2000 compared with the year before,and its volume marketshare slipped 0.7 percent. Coca-Cola Classic's volume grewby 0.1 percent, but like

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Pepsi Green Coke-2ND Market Leader In PakistanAs the biggest carbonated soft drinks player of them all,Pepsi has been able to dominate Coke in Pakistan due toheavy funding by Riaz Bottlers and Media Hype due to PepsiAds.far beyond its carbonated realm to smaller brands such as anenergy drink called KMX,

Pepsi , it lost 0.2 percent of the volume market share ithad the year before, putting it at15.9 percent of industry volume.Coca-Cola PerformanceThe following table shows the company's consolidated netoperating revenues andoperating income for the past few years broken down by NorthAmerican andinternational.Coca-Cola Performance (in millions of dollars)Year North America International2000 7,995 12,5051999 7,525 12,280Net Sales1998 6,961 11,8522000 1,439 2,2511999 1,505 2,456Operating Profits1998 1,838 3,129

iv-Social & Cultural Forces

v-Political And Legal ForcesThe Political Elections in October 2002 held in Pakistanafter a span of 3- years of Martial law. Now it is semiMonarch and semi democracy as Gen.Pervaiz musharraf ispresident of Pakistan and PML(Q) is the leading party inPakistan democratically.

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Pepsi Green The situation is semi balanced for the Cultural market.There are no restrictions on cultural festivals etc.Despite all the loud-talk by MMA leader about wanting toget multinationals such as Pepsi out of the country, PepsiCoInc's chief executive officer isn't too worried. Mainlybecause, he told journalists on his visit to Pakistan , theatmosphere isn't the same as it was two decades ago -- now,most parties want liberalisation.

vi-Technology Used For Pepsi-GreenBottling departmentA Pepsi-Green has to go through a long process before a white cap offoam appears in a glass of Pepsi.

There are 4 bottling lines with a total capacity of 60,000 bottles perhour. All pepsi-Green is pasteurized.The Green-Colored Ice-LemonSodaThis makes it more marketable.

Pepsi-cola company has a new fully-automated keg washing and fillingline. The productivity of the line is 30-40 kegs per hour. Pepsi staysfresh for a long time in these kegs. Thanks to carbonic acid that isused while filling a keg, the Pepsi-Green keeps its taste and aroma. th.

Pepsi-Cola company has spacious buildings, large production areas anduses modern technologies which are applied by qualified specialists. Butclassical Cola technology is never forgotten.

2- Internal Environments(for Pepsi-Green).

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Pepsi Green i-Financial Resources For Pepsi-GreenEnrico announced that Pepsi, which has already invested Rs500 crore in Pakistan in the last eight years, plans toinvest another Rs 100 crore, primarily in the beveragesbusiness -- investments in food processing would be over andabove this. Pepsi has, however, not made any profits so faras it is still amortising large investments made in thepast. "The amounts, however, are in line with what weexpected and aren't really bothering us", Enrico said.

Pepsi officials also told newspersons that they expect theirexport turnover this year to be around $1 million (Rs 60crore),up from Rs 50 crore last year. The much-awaitedlaunch of Diet Pepsi in Pakistan will have to wait till theend of this year. The launch of the non-calorie cola wasearlier expected in mid-1998 but Pepsi is yet to get thenecessary government approvals.

Pepsico Pakistan chief said the approvals under the FPO lawsusually take three months. Pepsi is hopeful that in thefirst year of the launch, PEPSI-Green will grab 10 per centof the soft drink market share in Pakistan.

ii-Human Resources For Pepsi-GreenPakistan is a country rich in history, culture and humanresources. Pakistan is in an idealgeographic location including immediate access to theCentral Asian Republics with acompetitively affordable and expanding workforce of 36million many of whom arewell versed in the English language. Since 1999.U.S. privateinvestment in Pakistan

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Pepsi Green represented nearly 75 percent of the country's total foreigndirect investment. So no problem for Pepsi company toflourish.U.S. - Chamber of Commerce

iii-Information Resources For Pepsi-Green

3-Research N Development (for Pepsi-Green).

4-Location(for Pepsi-Green).The Pepsi factory is located in the heart of Lahore,Karachi and Rawalpindi, In Lahore the location is nearJinnah Bridge Cavalry Ground. So no problem for 65 lackpopulation Pepsi-cola delivery.

5-Countrys Image(for Pepsi-Green).The Green color theme is basically developed on the greenflag of Pakistan. So the new look of Pepsi will give theimage of pure Pakistani culture and symbol.

6-Production Facilities(for Pepsi-Green).As mentioned above the Riaz Bottlers(Pepsi Pakistan LTD) have factorythat has facilitated 4 bottling lines with a total capacity of 60,000bottles per hour. All pepsi-Green is pasteurized.The Green-Colored Ice-Lemon Soda This makes it more marketable.

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Pepsi Green Pepsi-cola company has a new fully-automated keg washing and fillingline. The productivity of the line is 30-40 kegs per hour. Pepsi staysfresh for a long time in these kegs. Thanks to carbonic acid that isused while filling a keg, the Pepsi-Green keeps its taste and aroma. th.

Pepsi-Cola company has spacious buildings, large production areas anduses modern technologies which are applied by qualified specialists. Butclassical Cola technology is never forgotten.

Market Size Study(According to 4 –P’S)The worldwide market for non-alcoholic beverages isapproximately $11 billion.However, this is a conservative figure that is based oncurrent sales not the potentialmarket size, which is dramatically bigger. Only a portion ofthe two largest potentialmarkets, India Pakistan and China, have been tapped andpresent a great opportunity forgrowth. There are also many other areas, including SoutheastAsia, South America, andEastern Europe, which have large markets that the colacompanies have not fullydeveloped.

1-Product Positioningi-IntroductionThe idea for launching Pepsi green is now in launchingphase. The product is now in its introductory phase. Whilethis phase is going to be most expensive , risky and profitwill be non-existant. But it will have no competition.

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Pepsi Green ii-GrowthWhile in the Pakistan Pepsi is a considered a mass marketdrink, in other countriesPepsi tries to position its drinks as desirable but notluxury item. Pepsi wants topromote its drinks as upscale but not out of reach of thecommon person. Its method toachieve this is to promote its products in advertising asvery desirable but only pricethem slightly above the price of local products. This givescustomers a sense of value ofthe product and enables them to move up from local productsto Pepsi productswithout financial difficulty. This is essential becausePepsi needs to sell its products ata higher price than local drinks to be profitable, but it isa challenge to convincecustomers that Pepsi is better than the local drink.

ii-GrowthCertainly if the market will accept this new product basedon the Pure Pakistani patriotism and symbol. As there is nocompetition and summer season coming so the market will growand high profit is expected.iii-No Maturity StageAs the product is in the initial stages so the Maturitystage has not yet been started. But the old Pepsi hadreached its maturity stage so Pepsi introduced new Pepsi-Green.

iv-No Decline Stage

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Pepsi Green As the product is in the initial stages so the Decline stagehas not yet been started. But the old Pepsi had reached itsDecline stage so Pepsi introduced new Pepsi-Green.

2-Pricing

i-selecting price objectiveThe Pakistan Pepsi cola has the strategy not for profitmaximization but to become no.1 cola company in Pakistan.

ii-Determining DemandThe Pakistan Pepsi cola has the Most demand in Pakistan asother alternatives are either too health conscious have noPet-Solution.

iii-Estimating CostThe all the cost to establish factory and land machinery andother costs plus the variable cost like Raw material(waterpumping), electricity bills, purification and labor theprice is initially set to Rs 8/ Pepsi Green Bottle.Total Cost = Fixed Cost + Variable Cost

iv-Determining DemandDuring the summer season the demand rise up to 60,000bottles daily. So initially 10,000 bottles for Pepsi greenis estimated. Which is 16.6% approx of the whole production.

v-Selecting Pricing Method(Retrograde Pricing)In the Pakistan, Pepsi prices its products similar to thoseof Coca-Cola. Competition inthe Pakistan is based mainly on marketing skill rather thanprice to help avoid costly pricewars and keep profits stable. Since neither of the majormanufacturers would win aprice war, it is unwritten rule that the companies willfollow the pricing structure of the

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Pepsi Green market leader, which is Coca-Cola. While this amounts toprice fixing, there has beenhas not been any major government actions to curtail thepractice so it should continuein the future.

However, in other countries the price between Pepsi andCoca-Cola can besubstantially different. For example, Pepsi prices its colain Russia much lower thanCoca-Cola since the country's economy is doing poorly. Thishas contributed to thelarge lead in market share that Pepsi holds in Russia.However, Pepsi tries as much aspossible to price its cola the same as Coca-Cola in order tokeep profits high. Unless thecountry is in economic trouble and sales could be improvedby beating Coca-Cola onprice, Pepsi will match Coca-Cola's price.

3-Promotion

i-Personal SellingThe Pepsi-Green will initially be promoted thorughpersonnal selleing by Pepsi-bus touiring the colleges anduniversities of Lahore and other cities.ii-Advertising(T.V)Pepsi promotes its products in a multitude of the ways, butfocuses mainly ongetting products associated with entertainment icons thatappeal to youth. The firstmajor use of this technique was the signing of JunaidJamshed as spokesperson in 1992.His Countrywide appeal “Dil Dil Pakistan Dil Dil Pepsi”allowed Pepsi to attract customers in the Pakistan CountryWide.

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Pepsi Green Pepsi has followed this strategy by signing other likeCricket Stars like Wasim Akram, waqar younis, Inzamam andShahid Afridi and recently, pop music stars Haroon. Twoother areas of entertainment that have been used by Pepsi topromote its brands are sports and cultural events. Sportsare a popular source of entertainment throughout the worldand is a using it to promote the brand is a main focus ofPepsi. Since sporting events are seen many times by fans, itprovides a good opportunity to increase brand recognition.Pepsi signs local stars as spokespeople as well. This is animportant strategy and helps customer identify more easilywith the Pepsi brand than ifPepsi used a Pakistani star. An example of this strategy isPepsi signing of Pakistani pop star, Haroon, to a deal forthe exclusive advertising deal. This has done more topromote the brand in Pakistan than using an American actorsince Haroon or Wasim are one of Pakistanis favorite Stars.

iii-Sales Promotiona)Demand Stimulation through the market is done by the

Heavy ads of Cricket stars andpop stars through Tv, News papers and Cricket

Matches/Tournaments.b) Wasim, waqar, shoib Akhtar, shahid afridi etc movigin African jungle for 2 monthswas great success for pepsi-black., are now again besigned for the Pepsi-green add asseen Here.c) Prize touch scheme “Piyo aur jeeto” will be launchedwith it so that more children andyoungsters are attracted towards it.

v-Publicity PromotionThe basic emphasize of Pepsi-Green will be Be “Dil MANGAYMORE PAKISTANI ”. the green color is taken from the color ofthe national flag. Will have patriotic emotional touch .

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Pepsi Green

Pull Strategy Should be DevelopedThe strategy is based on heavy ads and new Prize scheme“Piyo aur jeeto” so that the customers ask by them selvesthe Pepsi-Green.

4-Placing & DistributionDistribution is an important aspect of success in thebeverage industry. Since thecola companies want to focus on making syrup and marketing,they need to havestrong, loyal bottlers. This is especially the case inforeign markets where the colacompanies fiercely battle for good bottlers.

The Pepsi-Green will be distributed through IntensiveDistributions. That is distribution through each and everychannel of the market.

In Venezuela, Coca-Cola managed to buy one of Pepsi’slargest and oldestforeign bottling franchises. It has become standard practiceby Coca-Cola to attempt totake away bottlers from Pepsi. Unfortunately for Pepsi,these practices have beensuccessful and have resulted in huge financial losses forits international business.The building of bottlers through joint ventures and theincreased maintenance ofcurrent bottler relationship should be the main focus ofPepsi’s International marketing.One of Coca-Cola's major strength's is its ability to buildrelationships with its bottlers.Coca-Cola is very methodical in making sure that itsbottlers are happy, while Pepsi has

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Pepsi Green been known for neglecting its bottlers. This is one areathat Pepsi must improve if it isgoing to take market share away from Coca-Cola

Domestic Marketing Strategy:Pepsi marketing team has maintained a close watch on theglobalization trendthat has progressed in worldwide marketing and has devisedinnovative strategies. Atthe end of the 1960s, Pepsi started to use red, white andblue packaging. During thistime, Pepsi became the first company to respond to consumerpreferences forlightweight, recyclable plastic bottles by introducing theindustry's first two-liter bottle.During the same period, Pepsi introduced the "Come Alive!You're in the PepsiGeneration" campaign that named and claimed a wholegeneration.In 1970's, Pepsi picked up the flourish of individualismthrough its "Join thePepsi people, feelin' free." advertisements. Also, Pepsiexpanded into restaurant

business by acquiring Pizza Hut, Taco Bell, and KentuckyFried Chicken. Entering into1980's, Pepsi Co was restructured to focus on its three corebusinesses, soft drinks, snackfoods and restaurants, and its transportation and sportinggoods businesses are sold.Pepsi made advertising history as Junaid Jamshed ushered ina new generation ofPepsi-Cola advertising in two of the most eagerly-awaitedtelevision commercialsfeaturing "Dil Dil Pakistan" Pepsi ’s successful"Entertainment Marketing" strategy is extended, with singersafter wards.

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Pepsi Green In 1996, Pepsi-Cola launched Pepsi World at www.Pepsi.comfor consumers to redeem Pepsi points for merchandise. PepsiCo later announced plans to spin off its restaurantbusinesses as an independent publicly traded company andfocus on its core beverage and snack food businesses.In 1992, Pepsi-Cola announced a multi-year agreement withWasim Akram(famous Pakistani Cricketer)as part of the "DilMangay More Pepsi-Cola" campaign. Pepsi-Cola also co-sponsored Spear's worldwide concert tour. Pepsi-Cola Companyhas signed an exclusive licensing agreement withAmeriCoGroup to create new lines of apparel, footwear andaccessories for the Pepsi-Cola.

Pepsi -co's Current Market PlanObjectivesPepsi’s principal goal is to increase its share of thebeverage markets worldwide. Increasing its global presenceis a major goal of the company because the Pakistan softdrink industries are saturated and show little growth.Therefore, Pepsi is focusing much of its attention onforeign markets. Currently, Pepsi cola trails Coca-Cola inmarket share in many countries, but has increased in recentyears in Pakistan and world wide.

StrategiesThe keys to Pepsi’s reaching its goals are to concentrateits resources on growing its current businesses andacquiring related companies to broaden its product line byintroducing new timely products. Pepsi also sold off its restaurant businesses, includingKentucky Fried Chicken, Pizza Hut, to free up capital thatcould be more effectively in other areas. The capitalintensive restaurant businesses tied up capital and reducedPepsi’s ability to market its main products, Pepsi has beenable to improve its financial performance and use theadditional capital to support investment in foreignprojects.

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Pepsi Green

Segmentation and TargetingPepsi has always promoted its soft drinks to young peopleand focused on gaining lifelong customers when they areyoung. This targeting is different than Coca-Cola whopromotes the nostalgic aspect of the cola as well as itsassociation with Pakistan. Pepsi has been successful withits strategy in the Pakistan because the demographics in thePakistan favored advertising geared to young people. Itfirst targeted the teens of 1953 and has continued to targeteach successive generation of youth.

Pepsi has also followed this strategy in foreign markets aswell. This strategy and worked well in some countries thathave had favorable demographics, but has not helped incountries with a large older population. However, some ofits failures in foreign markets had more to do with its useof bottlers than with its target market. That being said,the long-term benefit of this strategy is just now beingseen. The newer generations have grow up with Pepsi as thedrink for young people and this has helped Pepsi gain marketshare in foreign markets. As Pepsi enters new markets, itshould be aware that its advertising may not appeal to theinitial demographics but will have astrong long-term impact. This strategy is useful andsustainable because being young appeals to people in allcountry.

Recommended Marketing PlanThere are six regions of the world that have uniquemarketing needs and eachwill be addressed individually. However, there are fourmarketing strategies that canhave a large impact on Pepsi’s success or failure and can beimplemented worldwide:

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Pepsi Green marketing towards young people, use local stars, investingin bottlers, and increaseduse of slogans.Where it is appropriate, Pepsi should continue reusing itsPakistani commercials in amodified format. Pepsi has moved toward this byconsolidating its worldwide advertising Worldwide.It has also implemented commercials that are modeled afterPakistan ones. For example, arecent commercial featuring Pakistani cricket stars WasimAkram in a spot that mirrored a previous US commercial.Pepsi should be aware of the potential problems with reusingcommercials in foreign countries since they could provoke abacklash if they are inappropriate for the market. For thisreason, Pepsi needs a careful review process of commercialsbefore they are released.

Another issue Pepsi should address is its relationships withbottlers. Many of Pepsi’s international failures can beattributed to poor bottler relationships and has cost thecompany hundreds of millions of dollars. Coca-Cola continuesto make bottler relationships a priority and Pepsi should doso as well to avoid devastating problems in the future.

__________________________Good Luck To UsBoth________________________________

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