25381564 marketing-plan-of-mountain-dew

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Nitin Lahoti 200 9 Table of Contents Introduction.............................................. 2 Objective................................................. 2 Executive Summary......................................... 2 Industry Analysis......................................... 3 Company Analysis.......................................... 3 Competitor Analysis....................................... 4 Climate Key Trends (PEST)................................. 4 SWOT Analysis............................................. 5 Market Segmentation:...................................... 6 Marketing Mix............................................. 8 Price.................................................... 10 Distribution:............................................ 12 Promotion................................................ 13 Plan for the Next 1 year................................. 14 Conclusion............................................... 15 ASHISH, MADAN, VISHAL, NITIN, G.V. KALYAN Page 1

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Page 1: 25381564 marketing-plan-of-mountain-dew

Nitin Lahoti 2009

Table of Contents

Introduction........................................................................................................................2

Objective.............................................................................................................................2

Executive Summary...........................................................................................................2

Industry Analysis...............................................................................................................3

Company Analysis.............................................................................................................3

Competitor Analysis..........................................................................................................4

Climate Key Trends (PEST).............................................................................................4

SWOT Analysis..................................................................................................................5

Market Segmentation:.......................................................................................................6

Marketing Mix...................................................................................................................8

Price..................................................................................................................................10

Distribution:.....................................................................................................................12

Promotion.........................................................................................................................13

Plan for the Next 1 year...................................................................................................14

Conclusion........................................................................................................................15

Bibliography:....................................................................................................................16

ASHISH, MADAN, VISHAL, NITIN, G.V. KALYANPage 1

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Introduction

Marketing Plan is a basic concept which is required to make a product successful. It consists of

company’s strategy based on industry and targeted customers trends to make that product

successful. Marketing plan analysis is done because companies want to distinguish the relevancy

of their marketing plan in current scenario. This analysis comprises of industry analysis,

company analysis, product analysis, competitor analysis and products 4Ps. As part of our

academic work we have to analysis a product’s marketing plan and we choose Mountain Dew

because it’s in soft drink industry in which every youth is interested.

Objective

1. To understand the concept of marketing and marketing strategy and market planning.

2. To understand how key trend affects the product and industry and how consumer buying

behaviour affects the product.

3. To understand the concept of market segmentation, market positioning and targeting by using a

The main objective of this report is to understand how and what the strategies are used by

PepsiCo to overcome the competitors.

Executive Summary

This report is the marketing plan analysis of Mountain Dew in India. It is a product of

PepsiCo which is a well known food and beverage company worldwide. This report emphasize

on how Mountain Dew establish itself in Indian market and also how it has make a good brand

image among its target customer. This report is also analysing mountain dew’s 4Ps which are

important to understand when we are analysing product. We also included the competitor’s

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analysis of Mountain Dew and analyse them. For all this process we used credible and reliable

sources and based on these sources we recommended plan for next one year.

Industry Analysis

Non alcoholic market can be divided into soft drink and fruit juice. Some common soft

drinks are flavoured water, sweet tea, iced tea, squash, fruit punch and lemonade. Noncarbonated

and carbonated is further part of soft drink. Carbonated drinks are cola, oranges, lemon while

non carbonated drink mango drinks (India Agro Industry, 2009).

The total size of food industry in India is almost $ 65.6 billion and soft drinks (juices and

carbonated beverage) contain $ 1 billion. Indian soft drink market consumption in a year is 284

million crates. Soft drink market is highly seasonal; consumption in during off-season is 15

million crates and in peak season is around 25 million crates per month. In urban area

consumption of soft drinks is 75% of whole market. Indian soft drink market is dominated by

MNC companies Coca-Cola and PepsiCo (Non-alcoholic beverage market in India, 2009).

The consumption of Soft drink in India has a share of 46.8% within the non alcoholic

drink industry. In 2004 the total market value of soft drink was 307.2 $ billion and expected to

grow 367.1 $ billion in 2009 (Analytics, Press Release for Energy drink, 2009)

Company Analysis

The business of PepsiCo is based on its vision of making tomorrow better than today

(PepsiCo India).

In 1989 PepsiCo entered in Indian market and became one of the leading food and

beverage companies in India. PepsiCo India and its partners have invested almost 1 billion U.S.

dollar to growing their business. Including supplier and distributor it provides more than 1,

50,000 Job for people in India. In India it provide diverse range of brands that includes such-

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Pepsi, Mirinda, Mountain Dew and 7UP, low calorie product such as Diet Pepsi, Aquafina

drinking water and fruit juice based drinks- Slice, Tropicana. There are some local brands Lehar

and Mangola. Frito-Lay is market leader in salty snacks market, which is free of trans-fat. It

manufactures traditional snacks under Lehar and Kurkure brands. For supporting operations in

India it has 43 bottling plants, of which 15 are owned by company and remaining 28 are owned

by franchisee (Our History, 2008).

Competitor Analysis

PepsiCo has a good market share in India but facing tough competition from Coca-Cola

Company. Products of Coca Cola Company such as sprite, Coca Cola, Limca and ThumsUp are

the competitor of PepsiCo in soft drink market (Bhushan, 2008). The most important drawback

of its competitor is their promotion and advertisement. Coca-Cola has less number of brand

ambassadors as compare to PepsiCo (Baxter, 2009).

In India with the market share of 16.4% Thums Up is at number 1, sprite with 15.6% at

2nd position followed by Pepsi at 13% according to AC Nielsen data. In India Coca-Cola is

leader market share of 57.8% followed by Pepsi with 35.6%. In the portfolio of PepsiCo Pepsi is

the only one brand with market share of 13.1% but its rival coca cola has four brands that have

more than 10% market share in India. Those are ThumsUp 16.45, Sprite 12.2%, Limca 10.9%

and Fanta 10%.

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Market share of soft drink in India

Coca ColaPepsiCoother

SOURCE- AC Nielson

Climate Key Trends (PEST)

Political factor: The government’s response initially was guarded in nature as well as

individuals health. The government has decided certain rule for beverage industry regarding to

production and also has decided level of ingredients like sugar, carcinogenic pesticide etc that

are used in soft drink. PepsiCo has to follow seriously these rules and set of criteria (PepsiCo

India).

Economical factor: Soft drink is not expensive and it is used by most people. So soft drink

industry is not much tilted towards the economic influences.

But the raw materials they use in their soft drinks, juices and snacks like sugar, vegetables, fruits

and potato may slightly affect the production cost and the profit. The distribution channel and

transportation also affect the product cost slightly.

Another factor is the role of government like increase in tax.

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Social factor: People today are very trendy, sensitive towards the advertisement. It means

people drinking Dew are fashionable and are very trendy. Taking this into account PepsiCo

targeted new generation people, and they are able to differentiate between them.

Some people are conscious about caffeine so they might have negative anticipation

about soft drinks. Also some people think that soft drinks companies spread pollution in

manufacturing process. For this Pepsi has a column in their website mentioning about their social

responsibility.

Technological factor: Technology for manufacturing and packaging of a product,

transportation of raw material or delivery of a product is changing time to time, and thus it also

affects the production cost, transportation cost and unskilled labour. Technology also plays a big

role in packaging and designing of a product.

SWOT Analysis

In this part we are going to analyses the strength, weakness, threats and opportunity of the

PepsiCo.

STRENGTH

1. PepsiCo has good brand name, reputation and broader product line in international market.

2. With the revenue of more than 390 $ million PepsiCo is global leader in convenient snacks

(BrandZ Top 100 Most Valuable, 2009)

3. International brand, innovative capabilities, strong distribution network.

4. Pepsi is market leader in making of snacks, sports drink and bottled water.

5. One of major strength of PepsiCo that it has developed into a large, strong organization because

of its good franchise system.

6. Strong advertising campaign and marketing policy for promoting brands.

7. Global presence, Sponsorship, Focus on most important customer trend -“satisfaction”.

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WEAKNESS

1. Pepsi is far away from main competitor Coca-cola in international market.

2. More than 50 percent of sales come from snacks (Frito-lay), it is a big threat if snacks market

comedown (Analytics, Store-Bought Non-Alcoholic Beverages in India, 2009).

OPPORTUNITIES

1. Food is must for everyone so it can be expand internationally.

2. Offer and increase new healthy food and beverage because people are moving towards healthy

food.

3. The fastest growing part of industry is noncarbonated drinks.

THREATS

1. Strong competitor in the market like coca-cola, Cadbury Schweppes, Craft food and small bottle

firms.

2. People are moving towards healthy food (Babaria & Dharod, 2009).

Market Segmentation:

Group of individuals who possess similar needs and choices represent a segment of market

(David Jobber, 2005). Mountain dew has segmented itself mainly on the basis of demography

and lifestyle in a niche market of adventurer and extreme sports. In this niche market most of the

consumers are youth (Product Differentiation and Mergers in the Carbonated Soft Drink

Industry, 2005). The key features of this market-

Age: Mountain dew is targeting the consumer of age 12-28 means youth or teenagers. Cold

drinks are very popular among this age group and became a part of lifestyle. In the term of life

stage this age group falls in youth or teenage who lives with their parents and are depends on

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their parents economically. To target this age group Mountain Dew is making its availability

easily to consumer in different volumes (Holt, 2004).

Lifestyles: They are targeting lifestyles of their consumer and it is reflected in their

advertisements. The chief and main consumers of mountain dew are the youth who are ready to

take on excitement, extreme sporting and adventure. They are daring, fun loving, confident and

energetic (Peter & Olson, 2005). It is targeting the consumer’s tendency of fearlessness.

Income Level: It is not concentrating on income levels because their target consumer can easily

purchase the product as it is charging the standard price that is 6, 10, 15, 20 and 45 Rs. for

different volumes. It is also not important because all the other major soft drinks also have the

same price of their variants (mall, 2009).

Targeting: Mountain Dew is targeting customers which are generally college students and

young executives. Generally customers of youth group are not concerned about price. This is a

niche market of adventurer, daring, and extreme sports lover and most of the people falls in this

category are young (Arens, 2006).

Positioning:

Positioning of brand or product is choice of a company to target the market where it can compete

and take advantage over competitor (David Jobber, 2005). Positioning statement of Mountain

Dew by PepsiCo is:

“To 16-18 year old males, who embrace excitement, adventure and fun, Mountain Dew is the

great tasting carbonated soft drink that exhilarates like no other because it is energizing, thirst

quenching, and has a one of a kind citrus flavour” (Shimp, 2008)

Company’s positioning statement itself defining dew’s strategy that this drink will target and

made impact among the persons who are adventurer, funny, excited and daring. Also it is

positioning itself by promoting itself as a high energy and citrus flavour drink (Watts, 2006).

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Segmentation Table:

Marketing Mix

The term Marketing Mix was originally developed by Neil H. Borden to explain the right

combination, in a specific set of situations, of the four foremost factors that are the heart of a

product’s marketing plan (Mackay, 2005).

Product: Mountain Dew is available in different sizes and volumes

200ml

250ml (can)

300ml

1.5 lt.

Ingredients: Regular glass bottle contains carbonated water, high fructose, corn syrup,

concentrated orange juice and other flavours, citric acid, sodium benzoate, caffeine. Sodium

citrate, gum arbic, erythorbic acid, calcium disodium EDTA, brominates vegetable oil and

yellow 5. For a regular glass bottle it provides calories (kcal) 110 and caffeine 35mg (Product

Details, 2009).

Product Level: There are five type of product level which a marketer need to concentrate on for

the success of product (Kotler, Keller, Koshy, & Jha, 2009).

Mountain Dew Page 9

Age 16-25    

Life Stage Youth and Teenage  

Who Students and Young Executive

Lifestyles Adventurer, Extreme Sports,

Daring

Positioning Energy and Exhilaration drink

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o Core Benefit: The basic buying reason of that product by customer. The core benefit for

mountain dew is to quench their thirst.

o Basic Product: Basic product is the vital features of that product. Basic product for mountain

dew is carbonated water with some added flavours.

o Expected Product: Expected product for mountain dew is a soft drink which gives more energy

and taste to consumer.

o Augmented Product: It is the extra features provided by company to their customer. It is giving

more energy and taste to their customer by providing them more caffeine in their offering.

o Potential Product: It is the all possible changes and transformation that a product can undergo

in future. Because it is targeting youth it can modified its regular bottle shape into some different

and innovative way so youth can attract. It can launch a new designed art form bottle (CCL and

Mountain Dew Turn the Aluminum Bottle into an Art Form, 2008).

Product Classifications

Durability and Non Durability: It falls under the category of non durable goods because it is

has been used on regular basis by the consumer

Consumer-Goods Classification: Under this classification it comes under the convenience

goods as it is very easily available and requires less search effort.

Product Differentiation

Form: It is differentiating itself in market by the size and shape of its 300ml bottle (Product

Details, 2009). This bottle’s neck is thin and long like beak and no other major soft drink is

offering this type of shape. This different shape attracts youth who is their target market.

PepsiCo India Product

Beverages Juices Sports Drink Bottled Water Snacks

Pepsi Tropicana Gatorade Aquafina Lays

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Miranda Cheetos

7up Uncle Chipps

Mountain Dew Lehar

Slice Kurkure

Dukes Lemonade

Image Differentiation: It has made a different image in customer mind by its effective

advertising. Their advertisements generally consist of extreme sports and Adventure by which it

is targeting youth (Peter & Olson, 2005).

Product Mix and Product Line Analysis

Product Mix: The width of product mix or the number of product line offered by Pepsi in India

is 5 and the length of product mix is 14. The depth of Beverage product line where due is

situated is 6. These all product lines of Pepsi are consistent and related to each other as they all

are drinks or snacks (PepsiCo India).

Product Line Analysis: In product line analysis we can classify mountain dew in ‘specialties’

because lower sales with higher promotion.

Product Depth: Mountain dew has no other variant available in market. It is available only in

one variant but in different volumes i.e. 200ml, 250ml can, 300ml and 1.5lt bottle so its product

depth is 4.

Product Life Cycle: Company changes its marketing plan and strategy as product’s life stage

changes so it is important to know that product is in which life cycle. Soft drinks industry is a

very old industry in India. It is now saturating and stepping towards maturation stage of product

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life cycle. Soft drinks are easily available in urban area and it is now getting popular in rural

areas also so it is better it to put it in the stage where it is moving from growth to maturation.

Price

Market segmentation, positioning and competitor’s pricing strategy plays a major role in

defining a product’s pricing strategy.

In shaping price of a product a company should analyze the consumer’s buying behaviour to

purchase that product on the basis of price (Kotler, Keller, Koshy, & Jha, 2009). So company has

to think 3 important aspects-

Reference prices: It means what the other brands are charging for the same. It is available at the

same price as the others products of the same category are available in market (our market

research).

Price-Quality inferences: Many consumers take price as a quality indicator. Dew is a product of

PepsiCo which has an image of good quality at low price in consumer’s mind.

Price cues: Perception of consumers plays an important role in price setting. In the beverage

industry consumers have a perception to give money in round figure so most of the prices in this

industry end with the digit of 5 or 0.

Setting the Price:

A company has to take some steps before defining the price-

1) Selecting the Pricing Objectives: The pricing objective for mountain dew is survival because

intense competition in sector as well as to increase market share they are using market

penetration pricing strategy (Fund, 2003).

2) Determining the Demand: The customer which mountain dew are targeting are less price

sensitive and also it is a low price product so price do not effect so much to demand. It is in a

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segment where price is inelastic and change in price doesn’t lead to a big change in demand

(Fizz goes flat: Non-colas have slipped, 2008).

3) Estimating Costs: Before establishing the cost companies have to count its own expenses.

Mountain dew has several costs in his production and distribution process like intergradient,

bottle, packaging, promotion and advertising, carriage etc.

4) Analysis of competitor’s price: A company should also take a look over its competitor’s price

because it also helps to determine price. Mountain dew has the same price as its rivals.

5) Selecting the pricing methods: PepsiCo has selected value pricing method for its cola products

because it wants customer loyalty with low price and high quality (PepsiCo India).

6) Selecting final price: After passing through all this process company decide the prices of

product which will reach to customer. (We have already mentioned the prices of different

variants of mountain dew) sometimes on different occasions company announces discounts or

allowances but mountain dew has no such type of strategy.

Distribution:

After company manufacture the product, it has to decide that from how many and which type of

channels through product will reach to customer.

Mountain dew is PepsiCo’s product and PepsiCo has a huge supply channel network for its

entire product. Through these channels it distributes mountain dew. So instead of analyzing

supply channels of mountain dew we are analyzing Pepsi’s supply chain management and

distribution systems (Our History, 2008).

Mountain dew is available through intensive distribution because it is easily available at

everywhere. It has implemented this intensive distribution to supply saturation exposure of the

market by using all accessible channels. That’s why Mountain Dew is available in all parts of

rural and urban area at all the miniature and large retails stores, supermarkets, departmental

stores.

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There can be zero to 5 levels of intermediaries implicated in the intact supply chain before

product reaches to the end consumer. This is because India is a big country and PepsiCo don’t

actually have an extensive network of sales agents, brokers and additional force which is very

important and is perfect for make product approachable to the markets. This work is done by

distributors, wholesalers and retailers. The margins reserved by these mediators sort from 2% to

5%. PepsiCo transported its products from 43 manufacturing units which are in separate parts of

India via different C&F agents or warehouses to distributors who further sell it to the stockiest

who lastly sell it to the retailers. Because beverage industry is highly unstable and vibrant so

products should be available in market at all the time. The supply of product primarily depends

upon the quantity required by retailers and it can be supplied on the regular basis or after some

intervals.

PepsiCo also have a bundled service with Pizza Hut where Pepsi products including mountain

dew is available with pizza at special price. It is a zero level channel system. It has tie up with

HUL to distribute in rural area because HUL has a very large network in rural areas of India.

PepsiCo has provided jobs to 150000 people in India including its distributors.

PepsiCo India Product

Beverages Juices Sports Drink Bottled Water Snacks

Pepsi Tropicana Gatorade Aquafina Lays

Miranda Cheetos

7up Uncle Chipps

Mountain Dew Lehar

Slice Kurkure

Dukes Lemonade

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Promotion

Advertising: For advertising different kind of media is being used by mountain dew which is

as follows:

Television

Radio

Internet

Newspaper

Others

The main product of PepsiCo is Pepsi but they are spending 75% of its advertising budget on

mountain dew advertising.

Ads of mountain dew

1. One of the most appealing ad of mountain dew is with tag line “cheetah bhi peetah hai”

where it is targeting there target customer by showing a fighting with a leopard for Dew. This ad

is suitable which its image of daredevil and fearlessness.

2. Second ad includes one man fighting with long horny animal for the dew can. It also

shows hardiness nature and also tells how powerful the drink is with the tag line Do the Dew.

Sales Promotion

Mountain dew is not using many type of sales promotion because it is in a niche market and

customers are loyal. It is using some contests on its website to create awareness about product

and the price for right answers is free adventure tour which is also suitable to its positioning.

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Public relations and publicity

It is not using this tool of promotion very much but in recent in the movie mission Istanbul it was

one of the partners and got publicity by this.

Events and Experiences

Events are the important part of its promotion as it is targeting youth. It is organizing many bike

racing, mountain riding events where youth participates. It has also organized road shows with

Jagran Solutions for consumer awareness in 185 cities of 7 states.

Word of mouth

This is the important way of promotion where satisfied customers encourage other people who

come in his contract. Mountain dew is enjoying this tool of promotion because it is youth

targeted drink and satisfied youth themselves promote it as a good drink among his friends.

Plan for the Next 1 year

After doing the whole analysis for mountain dew’s marketing strategies we are now able to give

our opinion that what should company do for better results.

Product

As we have already described that what is the mountain dew’s product strategy at the time so

now we will only emphasize on the key points they can change in their product.

There is only one flavour of mountain dew available in Indian market. We will make this

existing mountain dew more specifically targeted at these youngsters by including additional

features like stylish shape of bottle and design etc.

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We will launch more variant of mountain dew like caffeine free mountain dew for the consumers

who are more health conscious, flavoured mountain dew which can be lemon, orange etc. We

will also like to launch an energy drink variant of Dew which made of coconut water.

Mountain dew’s differentiation strategy is good at the time and it has made an image in

customer’s mind. We will also like to differentiate it on the basis of social awareness issues like

pollution, poverty, population, corruption etc. with this strategy we segment market on the basis

of psychographic.

Price:

Mountain dew is available at different price range in India. All prices at which it is

available are reasonable and less marginable because of intense competition in market. All the soft drinks

in Indian market are available at same price range so it can’t hike its price also it can’t cut down prices

because already there are less margins. But there are very less discount offer are provided by mountain

dew so it can give some discounts on a bundle purchasing like 5rs. Off on the purchase of two 2liter

Bottles.

Promotion

There is no brand ambassador for it so we will like to select a brand ambassador to

endorse and promote mountain dew. We will like to select Narayanan Karthikeyan as the brand

ambassador for it because he is from F1 racing and suitable for the brand image of mountain

dew.

We will to promote it mostly near colleges and BPO centres because most of the

people there are young. In beverage industry personal selling is not applicable. Instead of this we

like to sponsor more adventurer program and associate with them. We can also advertise on the

social and public issues like pollution and corruption because today’s youth is so sensitive about

these issues and he will associate themselves very soon with these advertisements.

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Place

Indian soft drink industry is estimated to grow at 8% per year so it is important to

secure good supply throughout country. For this we will apply Pepsi Bottling Group (PBG) in

India because it has successfully managed PepsiCo’s distribution in USA. Also we will make

some strategic partnership as already with pizza hut. India has a lowest per capita consumption

of cola so there are a lot of possibilities to do in rural area.

Strategy on the basis of competitor -

Coca cola’s market share is greater than PEPSICO. As we can see that the market share of

mountain dew is 6.8% is less than his main competitor sprite 15.6% and ThumsUp is 16.4(AC

Nielson). In terms of taste and same kind of product sprite is main competitor of mountain dew,

but sprites main target is collegians as it is indicated by Sprite ad “Seedhi Baat” USP by coming

out with the Ghumo Ghumao Sprite Express TV ads”. ThumsUp is also eating the market share

of Mountain Dew as its ad is also targeting the adventures and young promoted by Akshay

Kumar. So seeing the both competitor we will spend more money on advertisement to make it

more attract and adventures.

For designing a communication strategy we will use creative strategy. In which we will use

transformational appeals as a communication. To defeat both competitors we would like to

organize some adventures events and road show.

Conclusion

After analyzing and describing the whole marketing strategy of mountain dew we can

conclude that mountain dew is doing well in market. We want to conclude that practices makes

improved but not ideal so we hope that this report will help PepsiCo to improve results. With the

best marketing plan a product can’t be successful because outside forces will affect it but with

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the marketing plan process you can achieve success because then you are also adopting

conditions.

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