Challenges Faced: 1.

Pepsi has so far targeted only the youth segment and has always involved cele brities in advertising and promotion as per the current trend, on the other hand competitiors like Coca cola has focused on promoting the products to the entire family, so Pepsi has limited its scope. 2. Pepsi has wide distribution network but the reach in rural sector is pretty l ow. Pepsi over the last 3 years has added 1.5L new rural outlets and increased i ts workforece by 20%. Coca cola expanded in the rural regions before than Pepsi did as a result it lost out on market share. 3. Competitor Coca cola launched a camapign to train the dhabawallas with the ba sic skills of handling customers and managing eating joints close on the heels o f its Parivartan training programme that helped build the retailing capability o f nearly 1.8 lakh kirana storeowners. Pepsi has no major initiative to tap the rural audience towards the brand. Pepsi has so far only imitated the strategy that is followed by the competitors and t hus has lagged behind in the market share. Competitor coca cola launched Jalsa i nitiative to rope in rural audeince and also empowered the local kirana shops in villages with a solar powered cooling equipment to attract to overcoome the vag aries in the power supply in villages. 4. One other challenge Pepsi is facing is that it has less number of contact per sonnel for reaching out to retailers. Also some retailers complained that Pepsi doesn't offer coolers, less margings and follow up services is not good. 5. The major consumption of soft drinks in rural India is of the RGBs, and 200ml SKU contributing towards maximum sales volume. To boost the SOM Coca cola reduc ed the price of 200 ml bottle to 8Rs from 10Rs in february 2013 , this caused a major challenge to Pepsi and they had to decreased the price in September 2013 b ut had lost volume sales in the 6 months period.

India s rural market accounts for of around 840 million people, and analysts say r ising income levels and aspirations is increasingly driving demand there. Over 2 009-10 and 2011-12, rural consumption per person grew annually at 19%, according to National Sample Survey Organisation data (NSSO). Observations: 1. On visiting the Big Bazaar outlet Vasant Kunj, we observed at present (novemb er 2013) that only SKU available was that of 2L bottles for all products Pepsi, Mirinda, Mountain Dew. Same SKU was available for Coca cola as well. The price o f 2L pepsi bottle was Rs 70 and for coca cola it was Rs 75. Coke had a new variant Diet coke available in 600ml SKU. 2. There was no scheme at present on any of the carbonated beverages owing to th e winter season. On enquiry with our contact personnel we got to know that in th e cold weather sales volume is low so promotions don't make sense. Even if high schemes are run the offtake will be low. 3. Promotions make sense in the situation when you know that a consumer was plan ning to buy 1 and because of the promotion he is motivated to buy 2 and in winte rs people will hardly buy 1 as consumption is less in the season.