Group revenue, PepsiCo is the second largest

 

 

 

Group Names

Gohar Farid                                     L1S16BBAM0025

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Ahmad Maqsood                             L1S16BBAM0039

Muneeb Tahir                                  L1S16BBAM0041

Amna Sultan                                     L1S15BBAM0193

Ramsha Fawad                                 L1S15BBAM0059

Abdul Haseeb                                    L1S16BBAM

 

Group G

 

Company                                                    PepsiCo,LTD

Product                                                          
 Pepsi

Final Project

 

Submitted to                                                 Sir shahzad Alam

 

 

PepsiCo , LTD

PepsiCo, Inc. is an
American multinational food, snack, and beverage corporation headquarter is in, New York. PepsiCo has interests in the manufacturing,
marketing, and distribution of snacks, beverages, and other products. company’s
products are distributed across more than 200 countries, resulting in
annual net revenues of $43.3 billion Based on net revenue,
PepsiCo is the second largest food and beverage business in the world. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since
2006. Approximately 274,000 employees are working in PepsiCo.

 

Pepsi History

·       
Pepsi
was first introduced in United States,
in 1893 by Caleb Bradham.

·       
 It
was renamed Pepsi-Cola in 1898

·       
In
1909, automobile race pioneer Barney Oldfield was
the first celebrity to endorse Pepsi-Cola

·       
 In
1926, Pepsi received its first logo redesign since the original design of 1905.
In 1929, the logo was changed again.

·       
In
their early stages pepsi faces many problems like bankruptcy and Pepsi’s assets
were purchased by Charles Guth,
the President of Loft, Inc.

 

Mission of pepsi

The mission of pepsi is to be the
world’s best consumer products company of foods and beverages and  provide consumers with delicious, affordable,
suitable snacks and beverages. Pepsi seek to produce financial
rewards to investors as they provide opportunities for growth to their
employees. In everything pepsi do, they strive for honesty, objectivity and
customer satisfaction.

 

 

 

 

 

Vision of Pepsi

 

Vision of Pepsi is to work for benefit
of society, and a commitment to build shareholder value and to deliver top financial performance to their shareholders and satisfy their customers.

 

 

Placement of product

 

Placement: Availability of any
product is considered to be one of the most important factors of marketing
process. If you know about the product you also like the product and you are a
loyal customer of the product but if it is not easily available to you may
think to change the company which has products that are easily available for
you. Pepsi is an international scope company which has a global network for
distributing its product globally. Pepsi has a very vast market presence which
is dependent on its well organized distribution network. The brand ensures a
lot of distribution strategies which are based upon the customer needs, product
characteristics and local trade culture. Following are some the strategies used
by Pepsi for its placement:

Direct storage delivery

Customer ware house

Online order placement

Pepsi works on its placement a lot and they make sure
that they supply their product in ever part of the country. They supply their
products from small scale retailers to larger ones Pepsi uses both direct and
indirect methods for their distribution. For both small and large scale
retailers Pepsi has different incentives, on accomplishment of the goal they
are given perks which are to motivate them to increase the sale of the brand.
Another way that Pepsi uses to place the product is by giving wholesalers there
product in bulk and then they further distribute it to the local retailers.
There are some areas where wholesalers have a very strong hold and they do not
let the company’s competitors enter the local market. By doing this these
wholesalers are awarded with a lot of perks. Pepsi has contract with a lot of
local food chains where they only use Pepsi products by following this, these
chains get a lot of incentives and perks. This is also an important factor
which gives a glimpse of how intelligently Pepsi places its products. For
convenience of the consumers Pepsi make sure that its product reach in every
nook and corner of the country. Pepsi do not want its loyal customers to switch
to any of their competitors so they make it sure that its products are easily
available. They have also a lot of factories which are located in different
parts of the country which allows its distribution easy and quick. Another
reason of having production plants in different areas is to deliver the product
fresh, so that the consumer may enjoy its real taste. For the convenience of
its consumer pepsi has developed a lot of packaging. Pepsi comes in all
packaging from 250ml regular bottle to 2.5 litter family pack. Pepsi has
developed a great structure which is responsible for better placement, ensuring
its customer convenience is also one of the major goals of the company.  

    

Distribution of pepsi

 

There are six Pepsi bottlers in Pakistan

·       
Riaz Bottlers

·       
Hadiri Bottlers

·       
Naubahar Pepsi Bottling

·       
Northern Bottling Company

·       
Shamim & Co?

·       
Pakistan beverages limited

 

Bottlers’ Duties

The bottlers’ duties were classified
into the following four categories:

Sales

·       
To sell no other cola

·       
To push and promote sales at
competitive prices throughout the territory

·       
Not to use Pepsi to push
some other non-PCI product Advertising and Promotion

·       
To actively advertise and
promote the product

·       
To use approved advertising
materials, campaigns and media Product

·       
To observe company’s quality
control standards and procedures in terms of the following:

·       
Water

·       
Supply samples

·       
Access to premises

·       
Tests and records relating
to sanitation o Use of approved packages

 

CHANNELS OF DISTRIBUTION

 

According to PCI records,
approximately 54,000 Pakistani retail outlets sold soft drinks. Since large
stores were practically nonexistent in Pakistan, almost all of these retail
outlets were small stores with limited storage capacity

Grocery Stores         34%

Tobacco and Pan
shops     25%

Hotels/Restaurants   16%

Bakeries and
confectionary         15%

Chemist and
pharmacies    3%

Others   7%

 

The Pepsi uses the following
two channels for the distribution of their products.

 

Indirect Distribution

Indirect distribution
involves agency holders e.g. Riaz Bottlers Pvt. Ltd. Lahore franchise 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 for far distant places and in out skirts of Lahore
and Kasur the dealers involved in direct distribution are only authorized to
sell 250 ml (STD) bottle of Pepsi, Team and Marinda.

 

Direct Distribution

In direct distribution the
retailors directly orders form the manufacturers. So the factory vehicles
operate on 45 direct routes in Lahore selling non-returnable bottles Litter,
Pet and Can’s in direct distribution the retailors directly orders form the
manufacturers

?

                        

 

 

 

 

 

 

Pricing method

During
setting their price Pepsi focus on two main aspects regarding their price.

?      What would the demand of their
product in market

?      What is the price of their
competitor’s product.

Pepsi focuses on that the price of
our product should not be too high or too low than the price of their
competitors. Otherwise their consumers switch the brand due to their high
prices of the product. Pepsi also took a survey to collect the information
about their product as well as their products demand in market. They set their
price by comparing them with their competitors. Pepsi basically focuses on
their quantity not on their quality. Therefore the sale of coca cola is very
high as compared to the PepsiCo. Price should be set according to the product
demand of public. Pepsi has one department i.e cost and budget department which
take care of the tasks related with the pricing.

 

Promotion

It
is the most important piece of marketing. If you perform all other pieces and
don’t do promotion then product might fail. Awaring customer of a product or
brand, generating sales, and creating brand loyalty  in a way that you achieve to persuade them
and let them buy your product. They use these mediums to promote their
products.

1.     Advertisement

2.     Posters

3.     Banners

4.     Pepsi also advertise their product
by printing the logo of pepsi on shirts of international players of Pakistani
cricket team.

5.     To promote their product pepsi
gives different discounts and schemes occasionally to attract their customers.

Pepsi
also gives special offers on ramzan they reduce their prices as well. They also
gives different kind of offers like scratch the code under the cap and win bike
or something which occurs occasionally . Pepsi has given its franchise to
bottlers. Pepsi is operating in Pakistan through these bottlers. Bottlers
produce, distributes and promotes the product. Pepsi has also launched its food
chain in KFC They have well groomed and employees on their counter in
Super markets like Hyperstar and Metro. They hire all famous actors and models
in their advertisements to attract customers.

 

 

SWOT analysis of
Pepsi

 

Strengths

 

·       
Pepsi
is widely consumed world over. 

·       
Pepsi
is recognized as one of the best soft drinks and cheaper than any other soft
drink in the world and widely consumed by people world over.

·       
Pepsi
has one of the largest market shares in beverages.

·       
Pepsi
represent large number of celebrity icons in the world.

·       
Pepsi
is recognized as the drink of a new generation.

·       
Pepsi,
despite of recession never lost its market share and never compromised on both
profitability and availability in the market. 

·       
Pepsi
has a very huge distribution network working day and night to insure its
availability in the market.

·       
Employees
are also encouraged by the management of the company to gives incentive and
perks to encourage employees as a tool to retain them in the organization.

·       
Pepsi
encourages brand awareness by supporting sports, musical concerts, which keeps
them in the lime light.

 

 

 

Weakness

 

·       
Pepsi do not give any kind of incentive to
its dealers.

·       
Young customers are the main target for their
promotions.

·       
There is scarcity of Pepsi tin pack in rural
areas

·       
Pepsi is not easily available in hotels, or
in college canteens etc.

·       
Fake Pepsi bottles are widely used in rural
areas despite checks and balances.

 

Opportunities

·       
Effective marketing campaign may promote
Pepsi in rural areas.

·       
Pepsi may also expand its business in some
other ventures.

·       
People’s interest has increased in musical
groups, cultural shows and sports have given Pepsi a choice of a new
generation.

·       
Large numbers of celebrities are Pepsi
iconic.

 

Threats

·       
Coca Cola is a good competitor of Pepsi.

·       
Pepsi has a tough competition with Coke
worldwide. Coke has started its ads to increase their demand and it is a very
strong threat for the company.

·       
Coca Cola has started aggressive market
campaign to acquire market share of other competitors there by creating threat
to Pepsi cola despite the fact that a large number of budget have been
allocated for its advertisement. This will create serious threat to Pepsi cola
lovers.

 

 

BCG Matrix

 

BCG is a four dimensional framework which show the multiple
segments position, with regard to its relative market share and industry sale
growth rate. BCG matrix has four component namely, Dogs, Cash Cows, Stars
and Question mark.

 

 

 

 

Stars

Those segments
fall into the category of stars, which operates and compete in high sales
growth industry and have high relative market share. Fortunately, PepsiCo has
many star segments, which make sense because it is one of the world largest
beverage and food processing corporation. Pepsi, mountain dew and Tropicana
juices comes in this segment because all these products have high sales and
high market shares.

 

Cash Cows

Cash cows are
considered to be those segments which are operating in low industry sales
growth rate and have high market share. Lays chips and Aquafina comes in cash
cow segment because they have low sales growth and high market share

 

 

Dogs

Dogs are
considered to be the useless segments of company. This segment hold the
category which have low relative market share in low sales growth industry.
Pepsi max comes in such category because pepsi max has low market share as well
as low sales.

 

Question Mark

According to
BCG matrix; Question mark are those segments which, operate in high sales
growth industry and have low relative market share. Diet pepsi, Mirasnda,
7UP and nimbooz comes in such segment.

 

Plc pepsi

 

This is a
valuable tool for marketers to manage the merchandise because it progresses
through its life cycle. Managers area unit inspired to
anticipate trade changes and have methods for every stage
it promotes a proactive coming up with approach. There area unit 5 key
stages of the merchandise life cycle: 
1) Pre-launch
No sales and profit area unit created as a result of the
merchandise remains in development.

2) Introduction

Initial sales area unit created to innovators, shoppers UN
agency get pleasure from making an attempt new merchandise, however these area
unit lean to recuperate development prices

3) Growth

sales being to extend chop-chop because the product
gains quality among the first majority. it’s at
this stage that profits area unit initial generated

4) Maturity

this is the longest stage and generates the bulk of a product’s sales
and profits
from the late majority. To
‘milk’ the merchandise for the maximum amount profit
as potential,
extension methods area unit usually enforced to
pro-long the maturity stage.
5) Decline

eventually
all merchandise stop commercialism, like VHS
tapes. needless to say, sales begin to say no till the
merchandise isn’t any longer profitable.

 

 

Recommendation

 

1 -Growth opportunity is found
in the increase of consumer demand for healthier food and beverage options. If
PepsiCo expands more into these product categories, they could drastically
increase their sales. In order to do this, they will have to produce food and
drinks with lower amounts of sugar and calories. Pepsi should decrease the
sugar content in Pepsi which will help them to acquire the market which are
more health conscious as by WHO they are imposing the sugary taxes on the carbonated
drinks which will mean decrease in the profit margins. Pepsi should also
introduce zero sugar Pepsi in Pakistan

                                 

2-Heavy reliance on their direct sales to  on franchises like KFC, Pizza Hutt, and Burger
King in Pakistan is more frequently available in restaurants than local
retailors where coca cola is taking the market edge. So they should also focus
on the neighborhood stores because they are seller’s shops which will increase
their sales.

 

3-The Pepsi is not available in many rural area
where in Pakistan the good amount of population lives in rural areas that is
also a good potential market which is not catered. So the Pepsi can acquire
that market   

4-Pepsi should focus people of all age while
marketing its product because everyone is the potential customer  but they are strictly marketing to the youth
age group of 13-25 while coca cola target every age group by using slogan like
“open happiness”

5-Pepsi should do more CSR activities to
increase their Brand Reputation in Pakistan

6-PepsiCo can introduce new flavors in Pepsi
which can help them to capture the market which don’t like the coal flavor

7-Pepsi is attracting more male audience by
promoting sport events and rock music which are typically taste of men so it is
said that they majorly focusing the Men’s basically. Which show their baised
marketing. So they should also market their product for girls.