• An American multinational food and beverage corporation formed in 1965 headquartered in Purchase, New York.

• Merger of the Pepsi-Cola Company and Frito-Lay, Inc. ,an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001.

•Capturing the market of more than 200 countries.

About PepsiCo

Product Diversification(PepsiCo)

•The drink Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina, United States.

•Renamed Pepsi Cola in 1898, named after the digestive enzyme pepsin and kola nuts used in the recipe.

• The original recipe also included sugar and vanilla. Bradham sought to create a fountain drink that was appealing and would aid in digestion and boost energy.

Analysis of Product (Pepsi)

Product Diversification(Pepsi)

Products have kept on increasing the Product line such as:1. Pepsi2. Pepsi light3. 7up4. Miranda5. Gatorade6. Rock Star 7. Lipton Ice Tea

•Pricing is based on consumer’s perception of value and are market determined as consumer perceive that the basic price they pay for brands like Pepsi is justified as it is more about refreshing Cola experience rather than just a thirst quencher.

• Competitively priced because carbonated soft drink market at its full matured stage.

• Employing a combined offerings of its beverages and consumer product making a win -win situation for both retailers and company itself.

• By expanding its use of inexpensive and recyclable plastic bottles.

Pricing Strategy

Place (Distribution)

• Pepsi makes sure that the advertisements reflect the target audience’s interests and nostalgia.

• The advertising strategy includes cool, hip promos to attract more of the target audience.

• There are several types of advertisements that is used by Pepsi that help expose the product out to the public. Examples are print advertisement, outdoor advertisement and broadcast advertisement.

PROMOTION

Using 5 C’s analysis to assess the situation

CustomerContextCompanyCollaborators/ComplementsCompetitors

CustomerCustomers include:-

• authorized bottlers • independent distributors, including foodservice distributors • retailers.

i. Demographic environment.ii. Economic environmentiii. Socio-cultural environmentiv. Political/Legal environmentv. Technological environmentvi.Natural Environment

Analysing the context

Demographic environment. (India)

Age: Pepsi has targeted the particular age group of people from 10-35 in India, from schools to offices it has achieved a complete analysis to whom should the product be sold.Social class: With the help of smart pricing it has majorly covered the upper class, middle class and the upper lower class community.Educational levels: Customer awareness is one of the major tasks taken up by Pepsi constantly updating with its innovation and mention the descriptive details on its beverages it has gained trust from its customers now from yearsForex: if Delhi is facing winters it will start promoting inn the regions such as Mumbai.Population density: With the population of almost 1.3 billion people it has no issue in selling products acrossIndia. The census is well studied according to demographic and geographic analysis.

Economic environment. (India)

Income: This plays a very vital role as the pricing has been done in such a manner that it fits wellWith many brackets of income.Consumption behaviour: The more the income the more is the marginal utility to be satisfied, taking this under consideration Pepsi prices its product. As India is more of consumption oriented Society and is easily attracted by demonstrations the market base of Pepsi has exponentially increased.Aggregate demand: In case of Pepsi, demand of the product increases in the season of summer as the hot weather makes the consumer wants to drink more.Aggregate supply: In summer season to cope up with the increasing demand they have to increase the aggregate supply of their product.Fiscal Policy: If heavy tax is levied on Pepsi then its price will rise leaving a negative impact on its sales, but such a thing has not taken place making it still feasible for a huge customer base.

Following are the cultural and social factors that also affect the product and market: 1. Psychographic It is a combination of demographic and psychological factors. Psychological

attributes mean how you perceive things. The company will focus on the behaviour of consumers and make different changes in their product quantity or quality and in promoting their product so that they can attract the customers. Keeping in view that the behaviour of different 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.

2. Religious: Due to a majority of Hindu cultural values customer of India prefer to use vegetarian products. and Religious factors can influence the market sales of Pepsi.

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

4. Media: It is a very important factor for marketing. Media these days is a very effective way of inspiring people to buy a specific product. Good promotion has boast up sales to a great extent.

Socio-Cultural environment. (India)

India is a politically stable economy; foreign investors are attracted to India. The Indian government is improving business with trade and investment. 1. Political Stability: Whenever the government is considered to be stable, the business will flourish.

If there is political stability in the country the policies and strategies made by Pepsi are implemented. Foreign companies are also keen to invest in those countries which are politically stable where they have no fear of decline in their market share or shut down due to sudden change of government.

2. Mixed Economy In mixed economy government and private sector both plays their role in developing the economy of the country. Investment by foreign companies like Pepsi is more likely to flourish in mixed economy.

3. Laws Formulation Government has given copy rights to Pepsi so that another company cannot sell their product by the name of Pepsi. The countries where laws are formulated, the strategies and activities of the company are different.

Political environment. (India)

Technological environment. (India)Research & DevelopmentThrough research and development quality of product has increases over the years. Better techniques and machinery are deployed for improvised quality and mass production. When technology is advance the supply of the product automatically increases and therefor pepsi is able to meet with such a huge demand.

Geographical location: Thanks to the fact India is a tropical country with almost 9 months as summers and with minimum seasonal swings the company already has a edge over the market. Even though it tries to cover up an losses by promoting in those regions where condition is still favourable.Climate: Pepsi is more suitable to places like India which is a sub-continent.Infrastructure: Roads are the basic need of transportation of Pepsi from one place to another. The distribution of Pepsi from factories to retailers or distributors are done via roads.

Natural environment. (India)

Company analysis.• First, international market expansion strategy through mergers and acquisitions• Second, formation of strategic alliances in global scale. Specifically, strategic

partnerships have been formed with Tingyi in China in order to claim a share in growing beverage market in China.

• Third, focus on emerging markets. The share of net revenues from developing and emerging markets such as China, India, and Russia have been increased from 24% in 2006 to 35% in 2012.

• Fourth, focus on organisational culture.• Fifth, developing and promoting the idea of One PepsiCo.• Sixth, innovation in marketing initiatives.

COLLABORATORS• Collaborators help the company run its business without actually being part of it. • Suppliers provide the organization with raw materials, equipment, software, and

services that help it operate its business.• G. D. Searle & Company supplies Pepsico with NutraSweet for Pepsico's diet

soft drinks. Collaboration with a supplier like G. D. Searle eliminates the need for Pepsico to make all of its ingredients.

Competition. (Coca-Cola)• Competition from newly emerging superpowers such as China, India, Brazil and

Russia are threatening the level of profitability of PepsiCo for long-term perspectives.

• Currently, PepsiCo is addressing this problem by engaging in mergers and acquisitions and forming strategic partnerships with local business organisations in emerging economies.

• The Coca-Cola Company has historically been considered PepsiCo's primary competitor in the beverage market in December 2005.

• The majority of PepsiCo's revenues no longer come from the production and sale of carbonated soft drinks.

• As a result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business has shifted to include a broader product base, including foods, snacks and beverages.

Product Diversification (Coca-Cola )

STRENGTHS1.Product diversity.

2.Extensive distribution channel.3.Corporate Social Responsibility (CSR) projects.

4.Competency in mergers and acquisitions.5.22 brands earning more than $1 billion a year.

6.Successful marketing and advertising campaigns.7.Complementary product sales.

8.Proactive and progressive.

WEAKNESS1.Over-dependence on Wal-Mart

2.Low pricing3.Questionable practices (using tap water but labelling

it as mountain spring water)4.Much weaker brand awareness and market share in the world beverage market compared to Coca-Cola

5.Too low net profit margin

Opportunities1.Growing beverages and snacks consumption in

emerging markets (especially BRIC)2.Increasing demand for healthy food and beverages

3.Further expansion through acquisitions4.Bottled water consumption growth5.Savory snacks consumption growth

Threats1.Changes in consumer tastes

2.Water scarcity3.Decreasing gross profit margin

4.Legal requirements to disclose negative information on product labels

5.Strong dollar

S.W.O.T

References Annual Report (2012) PEPSICO

Boone, L.E. & Kurtz, D.L. (2013) “Contemporary Marketing” Cengage Learning

Campbell, D., Stonehouse, G. & Houston, B. (2012) “Business Strategy” 2nd edition, Routledge

Holbeche, L. (2013) “Aligning Human Resources and Business Strategy”, 2nd edition, Routledge

Sheetz-Runkle, B. (2010) “Sun Tzu for Women: The Art of War for Winning in Business” Adams Business