77626001 pepsi cola pakistan
DESCRIPTION
pciTRANSCRIPT
CASE 3
PEPSI COLA PAKISTAN PREPARED BY: Pankaj Jain (05) Jigar Patel (16) Mitul Patel (17) Jignesh Soni (22)
PEPSICO INC.
• In 1990150 countriesSoft Drinks : Pepsi Cola Company : Pepsi Cola InternationalSnack Foods : Frito Lay Inc. : PepsiCo Foods International
Restaurants : Pizza Hut : Taco Bell : KFC
COMPETITIVE ANALYSIS
• In 1990, Soft Drink Market Share
• Coca-Cola focused solely on beverages• PepsiCo had diversified from the
soft drink business into other food-related lines• A very high-stakes struggle for
brand loyalty
PEPSI COLA PAKISTAN INC.(PCI)
• Divided into 5 functional departments:
FranchisingMarketingSoliciting companies (bottlers)Sales & operationsFinance
MARKET & PRODUCTS• Soft drink business divided into 3 main areas Concentrate producer – PepsiCo, Coca-Cola Bottlers Retailers
• Stages in marketing of carbonated drinksPCI manufacture concentrateBottlers add carbonated water & sweetener and
then sold product through retail stores
• In 1991, the per capita consumption of soft drinks in Pakistan was 12 eight-ounce bottles/year – Lowest in the world
Reason: 250 ml bottle price was PKR 4 1 liter bottle price was PKR 12 Average disposable personal income was
PKR 682 Average per year spending for soft drinks =12*225
ml (1 eight-ounce bottle=225ml bottle)*12/1000
= PKR 32.4 Disposable personal income was low
• PCI’s line of products in Pakistan prior to 7-Up acquisition:
Pepsi Cola(cola)Mirinda (orange)Teem (lemon-lime)
• Coca-Cola’s line of products in Pakistan:Coca-Cola (cola)Fanta (orange)Sprite (lemon-lime)
• Market segments: On-premise Restaurants, Cinemas, Snack bars, Parks, Airlines Accounted for 85% of total Pakistani soft drinks market Take-home Accounted for 15% of total Pakistani soft drinks market
DISTRIBUTION
• 54000 small retail outlets sold soft drinks
• Key Factors Soft drinks were highly substitutable Maintaining cold chain is important
PCI branded refrigerators was one way to
maintain cold chain & it encouraged retail
outlet loyalty
ADVERTISING & PROMOTION
• Advertising – (Theme) For long term brand building
• Promotion – (Scheme) mechanisms for acquiring consumers
• PCI allocated 15% budget for Advertising & Promotion, out of this 60% for Advertising & 40% for Promotion
• Objectives: To achieve volume growth & provide support to its brands
Trade promotion: point-of-purchase displays, incentives to sales force, local events, social work, government campaign-related programsConsumer promotion: price-off discounts, free items with purchase of products, collecting bottle caps to win
BOTTLERS
• Pepsi Cola to expand distribution with low investment began using Franchise System
• Franchise systems main components: Bottlers get exclusive rights to produce,
bottle, price, & sell the product in a
designated area. 10 years tenure with option to renew for
a period of 5 year
Bottlers could distribute other beverages that didn’t compete with pepsi products
Bottlers didn’t have to carry secondary products of producer
Mustafa’s top 3 priorities
• Acquiring 7-Up bottlers
7-Up bottlers feared that their brand could be overshadowed and neglected by Pepsi
• Cloudy Teem
Objective was to move clear Teem consumers to 7-Up or Cloudy Teem
• Brand Portfolio & Marketing PlanPepsi’s advertising & promotion budget
focused on maintaining market share 7-Up’s advertising & promotion budget
focused on building market share Mirinda’s advertising & promotion budget
focused on hold share strategy.
Thematic AdvertisingExpenditures
(Rs in 000)
Promotional AdvertisingExpenditure(Rs in 000)