Strategic Marketing Pepsi Cola

Strategic Marketing of Pepsi 201
ACKNOWLEDGEMENT
We owe our gratitude to Allah Almighty whose shower of

blessings and kindness has been on us through out the working
on these pages. It is His help that we finally able to compile this
document.
We are indebted to our respected teacher Mr. Shahid Yaqoob

who’s indispensable and intricate comments on various aspects
conjoined with motivation made us come forth holding such as
project. This little effort is dedicated to our parents and teachers.
TEHSEEN ARSHAD
BBA (MBA) Morning
Department of Management Sciences
The Islamia University of Bahawalpur,
1 The Islamia University of Bahawalpur, Rahim Yar Khan

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Executive Summary
Purpose of this project is to study the strategies which Pepsi is

doing in Pakistani market for its product Pepsi cola. Pepsi
International is a world renowned brand. It is a very well
organized multinational company, which operates almost all over
the world. In Pakistan It also has proved itself to be the No.1 soft
drink.
Now days Pepsi is recognized as Pakistanis National drink Pepsi's

greatest rival is Coca Cola. Coca Cola has an international
recognized brand. Coke’s basic strength is its brand name. But
Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product
packaging, is successfully maintaining is No.1 position in Pakistan.
Pepsi is operating in Pakistan, through its 12 bottlers all over
Pakistan. These bottlers are Pepsi's strength. Pepsi has given
franchise to these bottlers. Bottlers, produce, distribute and help
in promoting the brand. Pepsi also launched its fast food chain
KFC i.e. "Kentucky Fried Chicken.”
We also did analysis of the soft dink industry in Pakistan and

world wide. The soft drinks set to become world's leading
beverage sector. Global consumption of soft drinks is rising by 5%
a year.

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Table of Contents
Titles Page #
1. Introduction 01
2. Mission and vision statement 01
3. Facts about company 02
4. Pepsi in Pakistan 04
5. Product in spot light 09
6. Market analysis of soft drinks 10
7. Pakistani soft drink industry 13
8. Industrial SWOT analysis 14
9. External Environmental factors 16
10. Internal Environmental factors 21
11. Pre-marketing Mix 25
12. Marketing Mix strategies 27
13. Conclusion 39
14. Suggestions 40

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INTRODUCTION TO THE COMPANY

Pepsi International is a world renowned brand. It is a very well organized
multinational company, which operates almost all over the world. They
produce, one of best carbonated drinks in the world. Pepsi is a symbol of
hygiene, quality and service, all over the world. Pepsi is producing Cola for
more than 100 years and it has dominated the world market for a long time.
Its head office is in New York.
MISSION STATEMENT
“To be the world's premier consumer Products Company focused on
convenient foods and beverages. We seek to produce healthy financial
rewards to investors as we provide opportunities for growth and enrichment
to our employees, our business partners and the communities in which we
operate. And in everything we do, we strive for honesty, fairness and
integrity.”　
VISION STATEMENT
“To be the world's best beverage company”. Being the best means
providing outstanding quality, service, cleanliness and value, so that their
every customer is contented and happy with their products.”
“To increase the value of their shareholder’s investment through sales

growth, cost control and wise investment of resources.”
FACTS ABOUT THE COMPANY

1) Pepsi is a USA based public company whose stocks are available in
New York.
2) Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising
and package graphics room hillbillies to action-oriented scenes.
3) The third Mountain Dew slogan appeared in 1973 "Put A Little Yahoo in
Your Life."
4) PepsiCo acquired Pizza Hut, Inc. Pizza Hut was founded in 1958 by Dan
and Frank Carney.
5) Taco Bell is was acquired by Pepsi. Taco Bell was established in the
mid 1960s by Glen Bell.
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6) PepsiCo purchased Kentucky Fried Chicken, the leader in the quick

service chicken market. KFC was founded by Colonel Harland Sanders.
Colonel Sanders began franchising the company in 1952. KFC was spun
off along with Pizza Hut and Taco Bell businesses as Tricon Global
Restaurants, Inc. in 1997.
7) PepsiCo purchases Seven-Up International, the third largest franchise
soft drink operation outside the United States
EXECUTIVES
Ms.Indra K.Nooyi
Chairwoman, Chief Exec. Officer and Pres
Mr. Richard Goodman

Chief Financial Officer
Mr. John Compton

Chief Exec. Officer of North America and Member of Liquid Refreshment
Beverage Oversight Council
Ms. Cynthia M. Trudell

Chief Personnel Officer and Sr. VP
Mr. Donald M. Kendall

Co-Founder
HEAD OFFICE
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
United States.
Phone: 914-253-2000
Fax: 914-253-2070
Web Site: http://www.Pepsico.com

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PEPSI PAKISTAN
The market in Pakistan is surely dominated by Pepsi. It has proves itself to
be the No.1 soft drink in Pakistan. Now days Pepsi is recognized as Pakistanis
National drink. In 1971, first plant of Pepsi was constructed in Multan, and
from their after Pepsi is going higher and higher. Pepsi is the choice soft
drink of every one. It is consumed by all age groups because of its distinctive
taste. Compared with other Cola in the market, it is a bit sweeter and it
contributes greatly to its liking by all. Consumer’s survey results explain the
same outcome and Pepsi has been declared as the most wanted soft drink of
Pakistan.
Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized
brand. Coke’s basic strength is its brand name. But Pepsi with its aggressive
marketing planning and quick diversification in creating and promoting new
ideas and product packaging, is successfully maintaining is No.1 position in
Pakistan. In coming future Pepsi is also planning to enter into the field of fruit
drinks. For this purpose it has test marketed its mango juice in Karachi for
the first time.
When Pepsi was introduced in Pakistan, it faced fierce competition with 7up,
lemon and lime drinks, which was established during 1968, in Multan. Pepsi
introduced its lemon and lime, "Teem" to compete with 7up. It successfully,
after some years, took over 7up, and this enhanced Pepsi's profits and
market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share
where as the coke just has 20% markets share.
Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These
bottlers are Pepsi's strength. Pepsi has given franchise to these bottlers.
Bottlers, produce, distribute and help in promoting the brand. Pepsi also
launched its fast food chain KFC i.e. "Kentucky Fried Chicken.”
FOUNDERS OF THE COMPANY

The company was initially owned by late Nawab Saddiq Hussain Qureshi &
family till 1989. The Pepsi International franchise declared the management
incompetent, thus, the company was handed over to a new set of personnel.
The factory set up was reorganized & re-established with expansion in
various sectors. The Pepsi International did this by offering it to Mr. Jehangir

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Tareen, who formed up his new team. Mr. Jehangir Tareen is Nephew of
General (late) Akhtar Abd-ur-Rehman.
EXECUTIVES
Board of Directors:
Mr. Akbar Akhtar Khan (Chairman)
Mr. Haroon Akhtar Khan (Chief Executive)
Mr. Gazi Akhtar Khan
Mst. Rasheeda Begum
Mrs. Mudina Akbar Khar
Mr. Saifullah Khan Paracha
Mr. Saeedullah Khan Paracha
Company Secretary
Mr. Amjad Jhanzeb Khan
Bankers
Allied Bank of Pakistan Ltd.
Citibank N.A.
MCB
NDFC
The Bank of Punjab
UBL
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Legal Advisor
Cornehus, Lane & Mufti,
Nawa-i-Waqat Building,
4-Shahrah-e-Fatima Jinnah, LHR.
Auditor
Taseer Hadi Khalid & Co.
Chartered Accountants.
Mill
Kanjawani, Tehsil Samundri, District Faisalabad.
REGISTERED OFFICE
31 – N,
Gulberg II,
Lahore,
Pakistan.
UAN: 111-724-725
VARIOUS PRODUCTS IN PAKISTANI MARKET

PEPSI COLA, MIRINDA, TEEM, 7UP, MOUNTAIN DEW, DIET 7UP, DIET PEPSI,
LAYS, KURKURE, AQUAFINA, PEPSI TWIST AND TROPICANA JUICES (introduced
in Karachi only).
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FINANCIAL SUMMARY OF THE COMPANY AND

PRODUCT in Karachi
　
The Finance Manager was hesitant to supply any of the data as the company
is private limited and the competitor Coca Cola is sniffing every inch of
information of Pepsi Cola. With the help of the dealers and the retailers
directly supplied by the Pepsi Cola and some rough figure given by the
finance manager we became able to make the product cost of the Pepsi Cola
and Estimated Income Statement for the month which comes into market as
9 rupees after going through many hands.
Precisely the exact figures were not given so an estimated income statement
and price profit is made under given facts.
 15,000,000 (15 million) crates of all the soft drinks are sold per year all
over Karachi.
 250ml regular bottle is taken as standard, 1 bottle of 1 Liter is taken as
4 bottles of 250ml. (250ml*4 = 1 Liter)
 15,000,000/12 = 1,250,000 crates sold per month.
 1,250,000*24 = 30,000,000 bottles sold per month.
 PEPSI share is approximately 65%.
 30,000,000*65% = 19,500,000 PEPSI Share.
Kurkuray, Pepsi twist, Pepsi, Mountain dew
PRODUCT IN SPOTLIGHT: PEPSI

Type:
Pepsi Cola

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Manufacturer:
PepsiCo
Country of origin:
USA
Introduced:
1902
Ingredients:
Amount per 100mL
Energy 196.5 kJ
Fat 0 g
Sodium 0.98 mg
Carbohydrates 11.74 g
Sugar 11.04 g
Protein 0 g
Caffeine 10 mg　
Market Analysis of Soft drinks

Soft drinks set to become world's leading beverage sector Global
consumption of soft drinks is rising by 5% a year, well ahead of all other
beverage categories, according to the new 2003 Global Soft Drinks Report
from leading drinks consultancy Zenith International. Now challenging hot
drinks to become the largest overall sector, soft drinks volume is projected to
reach 467 billion liters in 2003, equivalent to 75 liters per person.
"Economic and climate variations around the world present complications for
all soft drinks companies, but many have succeeded at weathering the
elements," commented Zenith Research Director Gary Roethenbaugh. "As a
combined category, soft drinks offer a powerful growth proposition. The
unrelenting advance of bottled water and still drinks, coupled with the scale
of carbonates, help place soft drinks on track to become the number one
beverage sector in 2005.

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Market share of soft drinks in beverage industry

Concern over diet has persuaded many consumers to scale down their
consumption of sugary drinks, instead choosing ‘healthy’ products such as
fruit juice and bottled water. Despite this shift in attitude, the majority of
consumers around the world still favor carbonated soft drinks over these
alternatives, according to latest data from TGI. In 11 out of 15 countries
analyzed, it is revealed that consumption of carbonated soft drinks is higher
than consumption of fruit juice or bottled mineral water.
Age factor affecting the sales

Despite the fact that people in the majority of countries still appear to favor
carbonated drinks over the perceived healthy alternatives such as fruit juice
and mineral water, some interesting behavioral shifts underlie these figures.
In many markets, an increase in the number of people choosing diet or low
calorie alternatives has contributed to the overall sustained popularity of
fizzy drinks.　
Pakistani soft drink industry

About 75 million cases a year for Pepsi alone; the total beverage market is
about 120 million cases of which 65% per cent are Pepsi products; about 20
to 22 per cent are Coca-Cola products and Zum Zum cola and Mecca Cola,
Amrit Cola and Muslim Cola... there are so many colas; there is RC and
Double Cola which are franchised products. Altogether they have around 5
per cent of the market. Due to the Afghan and Iraq wars, they did get a little
footing especially in the frontier and Islamabad area but still they are not
hugely popular
 Total annual sale of soft drink in Pakistan 120 million cases

 Pepsi annual sales in Pakistan 75 million
 Market share of Pepsi 65%
 Consumption growth 1.7 % per year

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Industrial SWOT analysis
Strengths:
The soft drinks market in Pakistan enjoyed dynamic growth over the review
period in both volume and current value terms. Carbonates dominate the
market in both the on-trade and off-trade with the lion's share of sales.
Carbonates have become part of the culture in Pakistan and multinational
companies have maintained their standards over the years to provide
consumers with high-quality carbonated drinks. Off-trade sales of carbonates
are higher than those of the on-trade but both achieved strong growth over
the review period
Weaknesses:
Liquid concentrates and powder concentrates are both seasonal categories
in the market and their sales peak in the summer in Pakistan. Both Rooh Afza
and Jam-e-Shirin are traditional sandalwood drinks in Pakistan which are
highly regarded by consumers. These drinks can be found in every home in
Pakistan, especially in rural areas, throughout the summer and are the
mainstay of liquid concentrates
Opportunities:
The government of Pakistan has reduced excise taxes to encourage soft
drinks manufacturers and importers. The government also reduced other
applicable taxes to promise more profits not only for soft drinks
manufacturers already in the market but also to attract potential soft drinks
manufacturers to invest in Pakistan. Tax reductions proved extremely
beneficial to the soft drinks market in Pakistan and certainly encouraged and
attracted multinational companies to invest in the country's soft drinks
industry. The government also decided to tax the beverage industry on
capacity of production rather than on actual production and that brave move
encouraged soft drinks manufacturers to maximize production and reduce
prices

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Threats:
Increasing health and hygiene awareness among Pakistanis has greatly
increased sales of fruit/vegetable juice products. Both the government and
the media have started health awareness campaigns to make Pakistanis
realize that consumption of fruit/vegetable juice is as essential as eating
food. Fruit/vegetable juices are doing very well in both urban and rural areas.
On the other hand, health and hygiene awareness has also led to increased
sales of bottled water in Pakistan. Previously bottled water was targeted only
at major cities where consumers are more health-conscious and aware of the
difference between bottled water and tap water. Nowadays, health-conscious
rural inhabitants also drink bottled water due to health concerns.
SWOT Analysis of PEPSI

SWOT Analysis, which is based on thorough review of the business
(corporation, product category competition, customers and products),
identities and evaluates the internal strengths and weakness of the
companies well as its external threats and opportunities. The marketing mix
is driven by the results of the SWOT analysis.
STRENGTH
 Demand of Pepsi is more than its competitors.

 Company has a very established name and a good
reputation.
 Pepsi has large market share than its competitors.
 As the target customers of Pepsi is young generation, so
Pepsi has more brand loyal customers.
 Most of the customers are satisfied with the price of the
Pepsi.
 Pepsi is an international company and it has a very strong
position internationally.
 The environment of factory is very good and attractive.
 Pepsi spends a lot of budget on its advertising.
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 Pepsi has a very vast distribution channel and it is easily

available everywhere.
 Employees are also motivated.
 Pepsi offers many discount schemes for customers time to
time.
 Pepsi Cola is sponsoring sports, musical concerts, walks.
 The location of the Pepsi plant is utilized that all major
markets of Lahore are within the reach of the Pepsi plant
within 30-45 minutes.
WEAKNESSES
 Pepsi does not offer any sort of incentive or discount to its
retailers.
 Pepsi target only young customers in their promotions.
 Crown of the disposable bottle is not good.
 Demand of disposal bottle is declining.
 Pepsi tin pack is not available in far off rural areas.
 Pepsi is not considering many potential outlets like hotels,
college canteens etc.
OPPORTUNITIES
 Company may start entering rural areas also.

 The company may also diversify its business in some other
potential business.
 Increased interest of people in musical groups, cultural
shows and sports has provided an opportunity for Pepsi to
increase its sales through them. 　
THREATS
 The main competitor of the company is the Coca Cola.

 At the international level, Pepsi has a very strong
competition with Coke. Coke has started its advertisements
more effectively to increase their demand and it is a very
strong threat for Pepsi.
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 Cola drinks are not good for the health so the awareness
level of the people is in creasing which is a big threat to
the company.
HOW Internal and External factors affecting the

strategies
Marketers need to be good at building relationships with customers, others in
the company and external links. To do this effectively, they must understand
the major environmental forces that surround all of these relationships. A
company’s environment consists of forces outside marketing that affect
marketing management’s ability to build and maintain successful
relationship with the target customers. Every company should know the vital
importance of constantly watching and adapting to the changing
environment. As the world is moving fast today, no one can be certain about
the future. The environment continues to change rapidly. By carefully
studying the environment, marketers can adapt their strategies to meet new
marketplace challenges and opportunities.
Some of the external and internal environmental factors that affect the
marketing trend of the company are as follows:
EXTERNAL ENVIRONMENT
The macro environment consists of the larger societal forces that affect the
microenvironment. The external factors are not under the control of the
marketers; they can just observe them and make strategies in light of these
factors. Some of these factors are given below:
Demographic Factors:
 Age
The requirements of different age groups are different. Pepsi

should target that age group that consumes it the most and
make promotional strategies according to their behavior. So their
main target is the young generation.
 Education
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A company has to make promotional strategies keeping in view

the customer level. If the percentage of education is high in a
country then through advertisements people can be made well
aware of their product and can convey their message easily.
Promotion and education has a direct relationship.
 Population Distribution
Population distribution means how much [population lives I urban

areas and rural areas. In Pakistan 35 % population resides in
urban areas and 65% population lives in rural areas. Pepsi is
focusing on urban areas as people there are more inclined
towards such beverage while people in rural areas are more
inclined drinking lassi and desi drinks.
 Population Density
It means number of people in one square km per area. Karachi

has the largest population density and Islamabad has less
population density in Pakistan. Pepsi sales are more in Karachi as
compared to the sales in Islamabad.
ECONOMIC FACTORS:
 Income and Income per Capita
If the income level or per capita income of the people increases, it will
have a positive effect on the consumption of Pepsi.
 Inflation
If the country faces inflationary trend in the market, the price of the
Pepsi will ultimately increase which will lower its demand.
 Consumption Behavior
Pakistan is a consumption oriented society. Due to demonstration

effect the people are more inclined towards consumption than saving.
So the people of Pakistan spent heavily on food items. Hence Pepsi has
a good market share in the present circumstances.

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 Income Distribution
It means how much is in the hands of rich and poor class. In Pakistan
10% rich people posses 93% of wealth and 90% people posses 7% of
wealth. If there is balanced distribution of income in the country, the
consumption of the people will increase hence increasing the sales of
beverages as well.
 Payment Mod
As the use of plastic money is increasing the consumption pattern of

the people are increasing. Although it will have a low affect on the
consumption of Pepsi.
 Employment Opportunities
As employment opportunities increase the living standard of the

people increase and the people consume more.
 Aggregate Demand
In case of Pepsi, aggregate demand of the product increases in the

season of summer as the hot weather makes the consumers want 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.
 Economic Policies
Some of the economic policies which can affect the market of Pepsi are
discussed below:
 Fiscal Policy
It is the policy of taxes. If heavy tax is levied on Pepsi then its price will
rise having negative affect on its consumption.
 Monetary Policy
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Monetary policy is made to restrict or increase the supply of money in

the market. If policies are made to restrict the flow of money in the
market, inflation can be controlled hence increasing the real income of
the people which will ultimately affect the consumption of Pepsi.
 Price Policy
If price of Pepsi is increased its demand will decrease and vice versa.
 Income Policy
If income of the people will increase their purchasing power will

increase and hence increasing the market share of Pepsi.
PHYSICAL FACTOR
 Region
Pakistan is divided into different geographical regions. Marketing and

sales of Pepsi is different in different geographical regions. In hot areas
its demand is more.　
 City Size
The cities which are densely populated the consumption of Pepsi is

more.
 Climate
Pepsi is more suitable for humid or hot weathered countries like

Pakistan. It is a source of refreshment when a person is thirty due to
the hot weather.
 Infrastructure
Roads are the basic need for transportation of Pepsi from one place to
another. Pepsi cannot open factories in every city of Pakistan so it has
to transport it to other cities where Pepsi is demanded.

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Electricity is the basic necessity for production of any product.

Constant load shedding slows down the process of production which
leads to less production and low market share.
TECHNOLOGICAL FACTORS
 Research and Development
Through research and development quality of the product can be

improved or better techniques or machinery can be developed
which can increase the production. When technology is advance
the supply of the product increase hence the company
experiences growth in their business.
POLITICAL AND LEGAL FACTORS
 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 can be consistent to be
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.
 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.
 Laws Formulation
Government has given copy rights to Pepsi so that another

company cannot sell their product by the name of Pepsi. The

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countries where laws are formulated, the strategies and

activities of the company are different.
 Social Responsibility
Pepsi’s social responsibility is to provide its customers with clean

and hygienic product so to do this they have increased the use of
disposable bottles.
SOCIAL AND CULTURAL FACTORS
 Psychographic
It is a combination of demographic and psychological factors.

Psychological attributes mean how you perceive things. The
company will focus on the behavior 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 behavior 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.
 Religious
Religious factors can influence the market sales of Pepsi as it

happened in 2003 when the U.S-led attack on Iraq, wide sections
of society in Pakistan have banned American multinationals Coke
and Pepsi
 Social Status
Pepsi is a well renowned brand. People who are brand conscious

will not drink beverages of lesser known brands such as Amrat
cola. They will try to show their status by drinking Pepsi which is
known to all as a quality drink.
 Media

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It is a very important factor for marketing. Media these days is a

very effective way of inspiring people to buy a specific product. A
good promotion can boast up sales to a great extent.　
INTERNAL ENVIRONMENT
A. CUSTOMERS:
There are three types of customers
1. Consumer
2. Business
3. Government
Pepsi main focus is the consumers which are the end users. Pepsi has to
make its marketing strategies keeping in view the consumer buying
behavior. To forecast the behavior of the consumer is a business problem.
Physical aspect of the consumer can be satisfied but it is difficult to satisfy
the consumer psychologically. Consumer buying behavior is affected by
certain factors like Cultural factors, Social factors, Personal factors and
Psychological factors. So the producer should keep these factors in Mind
while promoting their product so that they can acquire the customer and
increase their market share.
There are different consumers in a society whose behavior is not the same.
Every consumer has a different perception of different products. Some
consumers are impressed by one quality of the product which may be in the
view of other consumer not that impressive. So to deal with different
consumers in a society one should know about the consumer buying
behavior process which may help in making a true picture of their product in
the mind of the consumers.
CONSUMER BUYING BEHAVIOUR PROCESS:
Consumer buying behavior process is explained in some steps which are

discussed below:
 Need Identification

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The consumer is thirsty and he wants to quench his thirst.
 Information Search
He will search as to what will satisfy his thirst the most.
 Evaluation of Alternatives
He will now evaluate from the wide range of beverages available to

him that which one of them is suitable to him in terms of quality, taste
and is pocket friendly.
 Selection
After evaluating the product he will select a product.
 Purchase
The consumer will buy the selected product.
 Post-Purchase Experience:
It is the experience that the consumer gets after using the product. He
will use the product again if he feels that his satisfaction after use is
more or equal to the price of the product.
After looking at above mentioned example, we can get an understanding

that a product should be so desirable that whenever a person identifies his
need, he selects our product among various substitute products and he feel
satisfies so that he retains the use of that product.
B. SUPPLIER:
He is the person who provides raw materials to the producers or sellers.

Suppliers form an important link in the company’s overall customer value
delivery system. They provide the resources needed by the company to
produce its goods and services. PepsiCo International provides raw materials
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to Pepsi franchises in Pakistan. Supplier problems can seriously affect

marketing. Marketing managers must watch supply availability i.e. supply
shortages or delays, labor strikes and other events can cost sales in the
short run and damage customer satisfaction in the long run. The company
should monitor the price trends of their key inputs. Rising supply costs may
force price increases that can harm the company’s sales volume.
No. Material Manufacturer/ Supplier(s) Approved from
Pepsi PepsiCo Inc. Ireland & PepsiCo Approval at the

1.
Concentrate Factory in Hattar Estate. factory
Caps & Approved form

2. Gatron Pakistan Limited
Closures PepsiCo China.
Approved from
3. Plastic Bottles Galtron Pakistan Limited
PepsiCo China.
Balochistan Glass Mills

Approved by PepsiCo
4. Glass Bottles
China.
Tariq Glass Limited
Approved from
Carbonated
5. Pakistan Bottlers (Pvt) Ltd. PepsiCo U.A.E,
Water
Dubai.
C. COMPETITOR:
He is the person who is selling the same type of product in the market.
The marketing concept states that to be successful, a company must provide

greater customer value and satisfaction than its competitors do.
Pepsi has a tough competition with Coca Cola while it faces a little
competition with the local producers like RC Cola, Shandi Cola etc. The local
producers hardly affect the sales of Pepsi in the market.
There are different types of competitor in the market. Some of them in which
our product lies are discussed below:

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 Close Vs Distant Competitor
Pepsi and Coke are close competitors. It means that both have direct
competition in the market, their products are close substitutes for one
another. Both the products can influence the market share of one
another through effective strategies made to cope up with their
competitors.
Pepsi cola and Nestle juice are distant competitors of one another. It
means that their products satisfy the same want but they are in
indirect competition with one another.
 Strong Vs Weak:
Coca Cola and Pepsi are strong competitors. In Pakistan Pepsi is the
market leader and Coca Cola is its competitor. The Pepsi makes
defense strategies so that it can maintain its position in the market.
While Coca Cola is a challenger and it makes attack strategies so that
it can become the market leader.
Pepsi and Shandi Cola are weak competitors. Pepsi is the market
leader and Shandi Cola is the follower. Pepsi is not in direct
competition with the Shandi Cola. It means that Shandi Cola has little
effect on the sales of Pepsi.
D. DISTRIBUTOR:
Distributor maintains the image of the product and the sales in the market. If
items are not properly placed by the distributor, it will disperse the market.
CHANNELS OF DISTRIBUTION
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.

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Local Zone
These are 62 agencies distributing Pepsi Products (250ml Sd) 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
The factory vehicles operate on 45 direct routes in Lahore selling non-

returnable bottles Litter, Pet and Can.　　
PRE-MARKETING MIX
SEGMENTATION
It means that you divide the target market in to different groups. Market
consists of buyers and buyers differ in one or more ways. They may differ in
wants, resources, locations and buying practices. Through market
segmentation companies divide large, heterogeneous markets into smaller
segments that can be reached more efficiently and effectively with products
and services that match their unique needs.
Segmentation is done on basis of the previously mentioned external factors

and the following:
 Behavioral Base
It is how people perceive a specific product, in short psychological

analysis of a product. Pepsi all over the world is recognized as a quality
drink and therefore people drink it without any hesitation whenever
they are thirsty or otherwise. So marketers of Pepsi have made it a
drink for all people and for diabetic people they introduced diet Pepsi.
 Cognitive Base

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It pushes and pulls the consumer. If the outlook of Pepsi bottle is

desirable and it attracts the consumer, he will buy it even if he isn’t
thirsty.
TARGET MARKET
The market which is focused by the producer is called the target market.
Targeting is to focus on the target market to attract the customers.
CHARACTERISTICS OF TARGET MARKET
The target market should have some following features.
 Accessible
It means that the target market which is focused should be accessible

or easily approachable.
 Substantial
The target Market should be substantial. It should have a specific size

where strategies can be made and implemented.
 Measurable
One should be able to measure the demand in the market.
 Comparable
The producer should identify that needs of different customers are

different.
 Profitable
The target market should be profitable for the producer.

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MARKETING STRATEGIES
There are different marketing strategies which are applied in targeting.
Some of these strategies which Pepsi follows are discussed below:
 Mass Marketing
Big firms or companies say that everyone is their buyer whether they
belong to rural or urban area, big or small country, rich or poor, adults
and small children etc. Pepsi is mostly used by the young generation
but it claims that it is moving towards mass marketing.
 POSITIONING STRATEGY
It means that you try to give image to your product in the mind of the
customers. To give a true and positive picture of the product is the
best positioning. The company should promote its good points or
comparative advantage which it has over its competitors
DIFFERENTIATION STRATEGY
In order to serve your target market you introduce different things to your
product so that your product can be differentiated from other products.
 Basis of Differentiation
There are many bases on which a product can be differentiated but

Pepsi has differentiated its product on the following base:
 Product Differentiation
Pepsi differentiate its product from its competitors on the basis of

brand, quality and taste.
 Image Differentiation

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Logo is used for image differentiation. Logo is what establishes a brand

name in the consumer mind. It is the brands identification, signature
and image. Pepsi has kept on changing its logo from time to time.
Marketing Mix Strategies

PRODUCT
The soft drinks market in Pakistan enjoys dynamic growth in both volume
and value terms. Carbonated drinks have become part of the culture in
Pakistan and multinational companies have maintained standards over the
years to provide the nation with high-quality drinks. Rural areas of Pakistan
have driven sales of carbonated drinks to new heights as more than 60
percent of the population resides in rural areas and young consumers are
more attracted to advertising. Pepsi is the most popular and leader brand in
the Pakistani market and is consumed by children and adults alike. Pepsi is a
responsible corporate brand of Pakistan and have contributed a lot to the
economy.
In marketing, a product is anything that can be offered to a market that

might satisfy a want or need. Until unless the product of the company is not
strong in the market it can not survive in the longer run.
Pepsi has a product line comprised up of carbohydrate drinks, Lays and

many other products in Pakistan. Pepsi’s product line satisfies consumer
needs because Pepsi produces different types of soft drinks for different
consumers.
The most popular product of Pepsi is Pepsi Cola. Due to its good taste Pepsi
is a well-known product. Thus Pepsi Cola satisfies the consumer’s needs
efficiently by launching a desired product.
New product development by Pepsi
Pepsi is doing new product development on frequent interval of times. The

purpose of which is to refresh the brand. By new products and innovative
ideas consumers can easily be attracted.
In following ways Pepsi is doing new product development.
New product category

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Pepsi which is mainly a company of soft drinks after establishing a brand in

Pakistan Pepsi came into several new product categories. Lays, kurkuray and
aqua fina, fast food restaurants are the examples of new product category.
Product line extension
Mountain dew is the most recent addition in the product line of soft drinks
which is very popular especially among the youngsters.
However Pepsi launch its several variants with a minor difference on

frequent interval of time. There have been many Pepsi variants produced
over the years since 1903, including Diet Pepsi, Crystal Pepsi, Pepsi Twist,
Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi
Jazz, Pepsi X (available in Finland and Brazil), Pepsi Next (available in Japan
and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, Pepsi Ice
Cucumber and Pepsi White in Japan.
Line Filling
Pepsi claims that they are doing mass marketing but there was an unfilled
gap in the consumers. The diabetic patient can’t use the regular Pepsi
because of the sugar. So Pepsi had introduced diet Pepsi to fill the gap in
their drinks as of then onwards even diabetic people became their
consumers.
Incremental Improvement
Pepsi jumbo is an example of incremental improvement made by Pepsi. It

was 2.25 litter bottle introduced few years ago in Pakistan. The purpose of
this packing is to offer the Pepsi to a family for one or two time meals. Price
of this pack is also kept low so that is can be affordable easily by the
consumers.
PRODUCT line
SODA WATER CHIPS JUICES
Pepsi cola Aquafina Lays Tropicana

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Teem Kurkure
Mirinda
7up
Dew
Pepsi twist
P|L
R|E
O|N
D|G
U|T
C|H
T|
WIDTH
Different product line,
Soda
Diet soda
Purified water
Chips
Juices

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LENGTH
Length includes number of items produced by Pepsi under each appropriate

column of width. For example in column of soda drink marinda and team etc
comes in.
DEPTH
The variants that are offered by Pepsi in terms of size and quantity,
1. 175 ml Mini Bottle
2. 250 ml Regular Bottle
3. 300 ml Tin
4. 1000 ml Regular Liter Bottle
5. 1500 ml Disposable Bottle
BRANDING
Consumer view a brand name as an important part of the product and

branding can add value to the product. A name, term, sign, symbol or design
or a combination of these intended to identify the goods and services of one
seller or group of seller and to differentiate them from their competitors.
LOGO
Logo is what establishes a brand name in the consumer mind. It is the

brands identify, signature, image and more often it is a logo that makes of
breaks a product logo plays a very effective role to improve the product or
brand. Pepsi kept on changing its logo from time to time along with the trade
marks.
Evolution of Pepsi logo

1909-1939: Delicious and Healthful
1939-1950: Twice As Much For A Nickel Too
1950-1963: The Light Refreshment
1953-1961: Be Sociable
1961-1963: Now It's Pepsi For Those Who Think Young
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1963-1967: Come Alive! You're In The Pepsi Generation

1967-1969: Taste That Beats The Others Cold
1969-1973: You've Got A Lot To Live, Pepsi's Got A Lot To Give
1973-1975: Join The Pepsi People Feelin' Free
1975-1978: Have A Pepsi Day
1978-1981: Catch That Pepsi Spirit
1981-1982: Pepsi's Got Your Taste For Life!
1983-1983: Pepsi Now!
1984-now: Pepsi, The Choice Of A New Generation
2000 The choice of a new generation
2003 Zinda Dilon Ki Pehchan
2006 Generation next
PRICE
The amount of money charged for a product or service, or sums of the values
that consumers exchange for the benefits of having or using the product or
services. As price gives us the profit so this P is very important for business
price of product should be that which gives maximum benefit to the
company and which gives maximum satisfaction to the customer.
Following factors Pepsi kept in mind while determining the pricing strategy.
 Price should be set according to the product demand of public.

 Price should be that which gives the company maximum revenue.
 Price should not be too low or too high than the price competitor is
charging from their customers otherwise nobody will buy your product.
 Price must be keeping the view of your target market.
The price of Pepsi Cola, despite being market leader is the same as that of its
competitor Coca cola.
Some times, Pepsi places its customers into some psychological pricing
strategies by reducing a high priced bottle and consumers think that they
save a lot of money from this.
Prices of different bottles

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 Regular bottle e= rupees 15

 Non Returnable/disposable= rupees 25
 Liter Bottle=rupees 50
 1.5 Liter Bottle= rupees 75
 2.25 Liter Bottle= rupees 95
Analysis of the product in Pakistani market
According to a survey conducted by brand award association availability has

been declared as the second best contributing factor in the success of Pepsi
and it simply indicates that effectiveness of its distribution network which
ensures its availability in every far off corner of the country. Affordability has
been rated as the third best option and indicates consumer’s sensitivity to
prices of daily consumption items. Quality has been considered as the lowest
rated criterion and it is unusual. It indicates that counterfeit product is
getting prevalent in the market. There are more than ten COLAS in the
market and the popular acceptance of Pepsi is creating problems in its way
of success. Pepsi will have to make a strong drive to close all illegal
manufacturing and packing of cola carbonated drinks which has become
common now-a-days and counterfeit cola replacements can be seen in every
market
PRICING STRATEGIES
Competition based pricing approach
Pepsi has intense competition with the coca cola the largest soft drink
company world wide. So its pricing can’t exceed too much nor decrease too
much as compared to the price of coca cola. If price of the Pepsi exceed too
much from the coke people will shift to the coca cola and on the other hand
if the price of Pepsi decreases people might get the impression that quality
of the Pepsi is also low.
Promotional Pricing Policy
Pepsi has offered promotional prices very frequently. Especially on some

occasion Pepsi reduces its rates. Like in Ramazan Pepsi reduces its rate unto
5 Rs. on 1.5 litter bottle.

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Market Penetration Pricing Policy
Prices in beverage industry are determined by the

consumer. In an economy like that of Pakistan, consumers
tend to switch towards a low priced product. Pepsi
objective is to target every consumer of the country so
Pepsi has to set its prices at such a level which no one can
offer to its consumers. That is why Pepsi Cola charges the
same prices as are being charged by its competitors.
Otherwise, consumers may go for Coca Cola in case of
availability of Pepsi at relatively high price.
DISCOUNTS
Pepsi Cola offers various discounts to those retailers who have the maximum
sales of Pepsi products on daily, monthly and on seasonal basis. Same of the
main discounts given to the retailers are as follows:
Quality Discount
Following are discounts offered by Pepsi.
1/10 Discount
I.e. one case of Pepsi is free on buying 10 cases of Pepsi at one

time.
2/20 Discount
I.e. two cases of Pepsi are free on buying 20 cases of Pepsi at

one time.
Seasonal Discount
Following are discounts offered by Pepsi.
Pepsi also offers seasonal discounts schemes by reducing price

in Ramadan and on Eid. Pepsi also offers trade in allowance for
retailers.
3 B – F Discount

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I.e. some times, especially in the off-season duration, in order to

increase the sale of Mirinda and Teem, 3-BF discount is given
(i.e.) 3 bottles free on purchasing every case of Teem and
Mirinda.
INCENTIVES
Mainly two types of incentives are given by the Pepsi Cola:
Incentive to Retailers
Pepsi Cola provide various incentives to retailers on the best

sales and achieving the predetermined sales targets. These
incentives are in the shape of:
Deep Freezers
Return Tickets
Free Transportation Services.
Incentive to Dealers
The best dealer of the year is awarded with a brand new Suzuki
Pickup. The second best is awarded with Motor Cycle. The third
best is awarded with Return Ticket to Middle East.
Credit
There is no credit system in the beverage industry. Every single

bottle is sold on the cash basis.
Special Offers
Pepsi Cola gives special offers to consumers on special occasions

like Ramadan and Eid days instead of decreasing the price of the
products, some special packs like Pakkora Mix, Chat Massala, or
Free Drinks with Liter Bottles are offered.
PLACEMENT

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Placement is accomplished through efficient and sufficient channels of

distributions. These channels constitute systems of economic institutions
through which producers deliver goods and services into the hands of their
users. There are various channels through which Pepsi distributes its output.
PRODUCT OUTFLOW
Pepsi Cola International has given franchises all over Pakistan. These
companies have installed their plants in different parts of Pakistan with these
specified areas and names e.g.
City Name of Franchise
Karachi Pakistan Bottlers
Lahore Riaz Bottlers
Faisalabad Punjab Beverage
Pepsi Cola provides consumers place utility which is, where ever and when
ever you want it, you get it! Pepsi’s channel of distribution is very aggressive
according to the consumers, manufacturers and distributors. Pepsi has 12
different units in different areas of Pakistan, which make the Pepsi easily
available all over the country.
The cities in which the Pepsi units are:
Lahore
Sukkur
Karachi
Multan
Dera Ghazi Khan
Islamabad
Faisalabad

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Quetta
Hyderabad
Sahiwal
Hattar
Pepsi is an international brand so it also has other units in other countries of

the world like America, Europe, Afghanistan, Middle East and Central Asia.
The big advantage for Pepsi in Pakistan is that it distributes the product
through bottlers. So bottlers’ effort also contributes in the promotion of
Pepsi.
CHANNELS OF DISTRIBUTION
Direct Distribution
Indirect Distribution
Local Zone
Outside Zone
Direct Routs – 45

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Authorized Dealers - 17
Agencies – 62
CHANNELS
 OF DISTRIBUTION
The Pepsi uses the following two channels for the distribution of
their products.
1. 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.

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2. Direct Distribution
The factory vehicles operate on 45 direct routes in Lahore

selling non-returnable bottles Litter, Pet and Can.
SPECIAL
 POINTS
Other than these some special points are also being looked after
by direct sales vehicles such hotels restaurants, public parks, big
and reputed super stores etc. At Avari, Pearl continental, village,
Seas magnificence etc. Pepsi Cola directly distributes the
products.
Promotional Strategies
In Pakistan Pepsi is the most liked soft drink especially by young generation
so the Pepsi cola company has devised such marketing strategy which
attracted them. For this reason they started monitoring the habits of the
generation. What they saw was that the students were crazy about cricket
and usually liked to idealize them so in order to increase their sales the Pepsi
cola company paid high amounts of money to the cricketers to act as their
spokes men.
Some of the most famous cricketers in the modern era have acted as spoke
persons also film stars have been acting as spoke persons.
The Pepsi cola company has after doing research also has introduced
different size of bottles offered at lower prices so that every one can afford
them. Also Pepsi Company has introduced other soft drinks including
mountain dew, seven up and marinda. Pepsi company has introduced other
flavors such as Pepsi twist, Pepsi max diet Pepsi.
Pepsi Cola Company has also become official sponsors of Pakistan cricket
and has sponsored a number of series.
Also Pepsi has donated a lot to the earth quake victims and has launched a
number of prize schemes to attract new customers

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As a result of this marketing strategy Pepsi has become the largest seller of
soft drinks in Pakistan and is slowly forming a monopoly in drinks market.
Although many soft drinks like Pepsi have been introduced such as Amrit
Cola, Quibla Cola offered at lower prices but none of these drinks have been
able replace it.
Following are the strategies:
Comparative Parity Method:
As we have already discussed Pepsi pricing strategy is determined y

consideration the strategy of coca cola so in this case also Pepsi ads are
telecasted with the competition in coca cola which is its direct competitor.
Objective and task methods
When Pepsi introduced any new variant they have advertised it heavily.
Objective of which is to make a space for new product in the market. We
have seen the heavy advertisement of Pepsi max in previous days.
Seasonal advertisement:
Frequency of the Pepsi ads varies from time to time. When the season is on
Pepsi do heavy advertisement especially in ramzan days or eid occasions but
this advertisement not remain consist. We can hardly see the ads of Pepsi
now as there is winter season.
CONCLUSION
Pepsi is a well renowned company and it has maintained its position well by
understanding the client psychology, by ensuring quality, by introducing
ingenuity in products, by enlarging its product base, by keeping economic
factors in view and by intense and jazzy advertisements.
Whenever and where ever there is a spotlight event, Pepsi must figure in,
like the one day international cricket matches between India and Pakistan
many other such occasions. The key word for success in the Marketing World
is to “remain in the spotlight” and that is what Pepsi is doing.

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SUGGESTIONS
The marketing world is full of surprises. Who could imagine that Coca Cola
would be overtaken by Pepsi? If Coke could be overrun by Pepsi, it would be
no wonder that Pepsi might be overtaken by some other beverage. The need
then is to combine quality with ingenuity. Along with that, the reputation of
the company has to be kept robust.
Today we live in a fast moving world where novelty and newness count a lot.
One cannot rest on one’s laurels. Fresh efforts, newness of approach must
remain the cardinal principles of a well orchestrated marketing strategy and
the campaign must be relentless. A continuous bombardment in
advertisement would convince the clients that Pepsi is a part of their lives. In
order to live with style, Pepsi ought to be an essential ingredient of one’s life.
The Pepsi is at its maturity stage and the sales of company are not growing
very rapidly. Company is doing a lot of promotional activities to let the
product remain in the market. It holds a large share of the market and
whenever the sales state declining, the company can improve it by different
promotional activities.
Marketers of Pepsi can try to improve sales by improving one or more

marketing mix elements. They can cut prices to attract new users and
competitor’s customers. They can also launch a better advertising campaign
or use aggressive sales promotion to improve the sales. Thus, Pepsi is at its
maturity stage.

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Strategic Marketing of Pepsi 201

We owe our gratitude to Allah Almighty whose shower of

We are indebted to our respected teacher Mr. Shahid Yaqoob

BBA (MBA) Morning

Department of Management Sciences

The Islamia University of Bahawalpur,

1 The Islamia University of Bahawalpur, Rahim Yar Khan

Purpose of this project is to study the strategies which Pepsi is

Now days Pepsi is recognized as Pakistanis National drink Pepsi's

We also did analysis of the soft dink industry in Pakistan and

2 The Islamia University of Bahawalpur, Rahim Yar Khan

2. Mission and vision statement 01

3. Facts about company 02

5. Product in spot light 09

6. Market analysis of soft drinks 10

7. Pakistani soft drink industry 13

8. Industrial SWOT analysis 14

9. External Environmental factors 16

10. Internal Environmental factors 21

11. Pre-marketing Mix 25

12. Marketing Mix strategies 27

3 The Islamia University of Bahawalpur, Rahim Yar Khan

INTRODUCTION TO THE COMPANY

“To increase the value of their shareholder’s investment through sales

FACTS ABOUT THE COMPANY

6) PepsiCo purchased Kentucky Fried Chicken, the leader in the quick

Mr. Richard Goodman

Mr. John Compton

Ms. Cynthia M. Trudell

Mr. Donald M. Kendall

5 The Islamia University of Bahawalpur, Rahim Yar Khan

FOUNDERS OF THE COMPANY

6 The Islamia University of Bahawalpur, Rahim Yar Khan

Mr. Akbar Akhtar Khan (Chairman)

Mr. Haroon Akhtar Khan (Chief Executive)

Mr. Gazi Akhtar Khan

Mst. Rasheeda Begum

Mrs. Mudina Akbar Khar

Mr. Saifullah Khan Paracha

Mr. Saeedullah Khan Paracha

Mr. Amjad Jhanzeb Khan

Allied Bank of Pakistan Ltd.

The Bank of Punjab

Cornehus, Lane & Mufti,

4-Shahrah-e-Fatima Jinnah, LHR.

Taseer Hadi Khalid & Co.

VARIOUS PRODUCTS IN PAKISTANI MARKET

FINANCIAL SUMMARY OF THE COMPANY AND

Kurkuray, Pepsi twist, Pepsi, Mountain dew

PRODUCT IN SPOTLIGHT: PEPSI

9 The Islamia University of Bahawalpur, Rahim Yar Khan

Market Analysis of Soft drinks

10 The Islamia University of Bahawalpur, Rahim Yar Khan

Market share of soft drinks in beverage industry

Age factor affecting the sales

Pakistani soft drink industry

 Total annual sale of soft drink in Pakistan 120 million cases

11 The Islamia University of Bahawalpur, Rahim Yar Khan

Industrial SWOT analysis

12 The Islamia University of Bahawalpur, Rahim Yar Khan

SWOT Analysis of PEPSI

 Demand of Pepsi is more than its competitors.

 Pepsi has a very vast distribution channel and it is easily

 Company may start entering rural areas also.