INTRODUCTION

PEPSIco

PepsiCo, Inc. is currently one of the most successful consumer products company in the

world with annual revenues exceeding $30 billion and has more than 168,000 employees.

PepsiCo, one of the world’s largest food and beverage companies, has offered its

products through independent bottlers in Pakistan for more than 40 years. PepsiCo's

products are recognized and are most respected all around the globe. Currently, PepsiCo

divisions operate in three major US and international businesses: beverages, snack foods,

and restaurants. In each of these businesses, PepsiCo has attained a leadership position as

being the world leader in soft drink bottling, the world largest snack chip producer, and

the world largest franchised and company operated restaurant system. Similar case is in

Pakistan also. The corporations increasing success has been based on high standards of

performance, marketing strategies, competitiveness, determination, commitment, and the

personal and professional integrity of their people, products and business practices.

Today, Pepsi-Cola Company is a major division of PepsiCo's corporate structure. Pepsi-

Cola Company now produces and markets a wide range of beverages to retail, restaurants

and food services in more than 191 countries and territories around the world and brings

in annual revenue of $10 billion.

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Pepsi-Cola Company has introduced 9 beverages in Pakistan that wear the Pepsi-Cola

trademark. Five of Pepsi-Cola's brand names: Pepsi, Diet Pepsi, Mountain Dew, 7 UP,

and Miranda,.

In 2006 Pepsi-Cola Company’s number of employees, revenue, net income and operating

income were estimated which is given below

HISTORY OF PepsiCo

ORIGINS

Pepsi-Cola was first made in New Bern, North Carolina in the United States in the early

1890s by pharmacist Caleb Bradham. In 1898, "Brad's drink" was changed to "Pepsi-

Cola" and later trademarked on June 16, 1903.There are several theories on the origin of

the word "Pepsi".

Type ColaManufacturer PepsiCo, Inc.

Country of Origin  United StatesIntroduced 1903

Related productsCoca-ColaRC Cola

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The only two discussed within the current PepsiCo website are the following:

1. Caleb Badham bought the name "Pep Kola" from a local competitor and changed

it to Pepsi-Cola.

2. "Pepsi-Cola" is an anagram for "Episcopal" - a large church across the street from

Bradham's drugstore. There is a plaque at the site of the original drugstore

documenting this, though PepsiCo has denied this theory.

Another theory is that Caleb Badham and his customers simply thought the name

sounded well or the fact that the drink had some kind of "pep" in it because it was a

carbonated drink; they gave it the name "Pepsi".

As Pepsi was initially intended to cure stomach pains, many believe Bradham coined the

name Pepsi from either the condition dyspepsia (stomach ache or indigestion) or the

possible one-time use of pepsin root as an ingredient (often used to treat upset stomachs).

It was made of carbonated water, sugar, vanilla, rare oils, and kola nuts. Whether the

original recipe included the enzyme pepsin is disputed.

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented

warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was

sold in six-ounce bottles and sales increased to 19,848 gallons. In 1924, Pepsi received its

first logo redesign since the original design of 1905. In 1926, the logo was changed again.

In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads

as "A bully drink...refreshing, invigorating, a fine bracer before a race".

In 1929, the Pepsi-Cola Company went bankrupt - in large part due financial losses

incurred by speculating on wildly fluctuating sugar prices as a result of World War I.

Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years later, the

company went bankrupt again. Pepsi's assets were then purchased by Charles Guth, the

President of Loft Inc. Loft was a candy manufacturer with retail stores that contained

soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused

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to give him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-

Cola syrup formula.

MISSION AND VISION STATEMENT OF PepsiCo

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.

THE VISION STATEMENT

To be a leading house of FMCG products with local dominance, global prominence, the

strongest financial fundamentals and maximum efficiency

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LOGOS AND SLOGANS OF PEPSI.CO

1903 Exhilarating, Invigorating, Aids Digestion

1929 Here's Health!

1938 Join the Swing to Pepsi

1947 It's a Great American Custom

1969 You've Got a Lot to Live, Pepsi's Got a Lot to Give

1999 The Joy of Cola

2000-current

The Joy of Pepsi

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OTHER PRODUCTS

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RISE IN POPULARITY

During The Great Depression, Pepsi gained popularity following the introduction in 1934

of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was

slashed to 5 cents, sales went through the roof. With twelve ounces a bottle instead of the

six ounces Coca-Cola sold, Pepsi turned the price difference to its advantage with a slick

radio advertising campaign, featuring the jingle "Pepsi cola hits the spot / Twelve full

ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you,",

encouraging price-watching consumers to switch to Pepsi, while obliquely referring to

the Coca-Cola standard of six ounces a bottle for the price of five cents (a nickel), instead

of the twelve ounces Pepsi sold at the same price. Coming at a time of economic crisis,

the campaign succeeded in boosting Pepsi's status. From 1936 to 1938, Pepsi Cola's

profits doubled.

Pepsi's success under Guth came while the Loft Candy business was faltering. Since he

had initially used Loft's finances and facilities to establish the new Pepsi success, the

near-bankrupt Loft Company sued Guth for possession of the Pepsi Cola company. A

long legal battle then ensued, with Guth losing. Loft now owned Pepsi, and the two

companies did a merger, then immediately spun the Loft company off

PEPSI COLA IN PAKISTAN :

Pepsi cola is also very popular in Pakistan that’s why its market share is about 90% in the

soft-drink market. Pepsi cola international, a remarkable name in the cola industry is

doing its business in Pakistan through franchising. Pepsi has developed following bottles

in Pakistan till now naubahar bottling company is the largest manufacturer and distributor

of Pepsi cola softdrink in Pakistan

There franchises are located in

Karachi

Lahore

Multan

HIERARCHY LEVEL

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EXPLANATION OF ORGANIZATIONALSTRUCTURE

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GENERAL MANAGER : General Manager is at the top most position in the Pepsi Company.

All the decisions are taken by the general manager

BUSINESS OPERATION MANAGER:

This manager looks after the five basic departments of Pepsi Company which are as

follows

1. marketing

2. production

3. finance

4. accounts

5. transportation

MARKETING DEPARTMENT

Marketing department looks after all the marketing strategies made in Pepsi Company

Marketing department looks after the duties performed by the

-Marketing Service Manager ,

-Regional Sales Manager

-Sales Manager

-Area Sales Manager

Marketing Service Manager is also responsible to look after the work of

Key Account Manager

Signboard Manager

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PRODUCTION DEPARTMENT

Production department looks after the production of various products of Pepsi

Company .Production Manager is responsible to look after the duties of

Production Manager

Quality control head

Quality control manager is responsible for the duties performed by

Quality control inspector

Line in charge

FINANCE DEPARTMENT

Finance department is responsible to look after the affairs related to finance.It look after

the duties performed by

Assistant finance

Accounts manager

ACCOUNTS DEPARTMENT

Accounts department is responsible for true and fair collection of accounts. It look after

the duties performed by

Assistant accounts

Account head office

Assistant head office

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TRANSPORTATION DEPARTMENT

Transportation department is responsible for overall transportation of the products

produced in Pepsi Company. It looks after the duties performed by

Transport supervisor

BOSTON CONSULTANT MATRIX (BCG)

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PEPSI TWIST

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STAR

In Star market share and industry growth are high. Mountain Dew lies in Star because its

demand is very high nowadays and we can make further investment for this product.

Mountain dew is very leading product in market now a days.

CASH COW

In Cash Cow market share is high and industry growth is low. In this case demands are

equal to supply. That’s why Pepsi lies in Cash Cow because they have equal supply and

demands. Pepsi is very popular drink right from the start so there is no further investment

for this product

QUESTION MARK

A question mark is a situation where market share is low and industrial growth is high.

Lays, Kurkure, Pepsi diet and Aquafina lies in this area because they are newly launch

products in Pakistan. It can be cash cow and star in future if they get more progress.

DOG

Twist was a less demanded product of Pepsi which lies in Dog because all Pepsi Products

are making development in the market except twist and now twist is no more in the

market of pepsico.

PORTER’S 5 FORCES:

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PORTER 5 FORCES ANALYSIS

Porter's 5 forces analysis is a framework for industry analysis and business strategy

development developed by Michael E. Porter in 1979 of Harvard Business School. It uses

concepts developed in Industrial Organization (IO) economics to derive 5 forces that

determine the competitive intensity and therefore attractiveness of a market.

Porter's Five Forces include three forces from 'horizontal' competition: threat of substitute

products, the threat of established rivals, and the threat of new entrants; and two forces

from 'vertical' competition: the bargaining power of suppliers, bargaining power of

customers.

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PORTERS FIVE FORCES ANALYSIS OF PEPSI

MARKET CONCENTRATION AND COMPETITION :

The beverage industry is highly concentrated. in the carbonated soft drink sector, the top

three companies(Pepsi, Coca Cola, and Cadbury Schweppes)account for 90% of the retail

sale and in the non carbonated market, the same three companies account for over 75% of

all sales.

Both markets have a high HHI (herfindahl-hirschman index) which suggest a very

concentrated market. Competition in this industry is fierce, especially between Coca-Cola

and Pepsi.

BARRIERS TO ENTRY :

The industry’s main barrier to enter is with respect to advertising the incumbent firms

have spent billions of dollars to create brand loyalty with consumers. The cumulative

effects of advertising create an absolute cost advantage for the incumbent firms, thus

entrants must overcome not only current advertising efforts, but also the lingering impact

of past marketing campaigns .High sunk cost also act as a barrier to entry. Sunk costs in

this industry include establishing channel of distribution, advertising expenditure and

research and development cost all these factors create difficult barriers to entry for a new

firm entering the market and an advantage for success first movers such as Pepsi.

SUPPLIER POWER:

The principal ingredients Pepsi needs to create their products are corn sweeteners,

sugar ,aspartame oranges grapefruit vegetable oils potatoes corn

and flour An increase in the

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price of these inputs or shortage of a commodity may lead to the significant losses for

Pepsi because often they cannot pass the cost to consumers due to the competitive pricing

environment in which they operate .Pepsi manages this risk primarily through the use of

fixed price purchases order, pricing agreement, geographic diversity and future contracts.

They “use future contact to hedge fluctuation in price of a portion of anticipated

commodity purchases primarily oil corn fuel and juice concentrates”.

BUYER PRODUCT :

End consumers have a strong buyer power because of the availability of substitutes ,both

generic and name brand .It is easy for a consumer to purchase a nearly identical product

for a lower price .This gives consumers a great deal of leverage and leads Pepsi to spend

millions of dollars to create product differentiation.

Retail stores have significant buyer power due to their ability to change high fees for

shelf space, which is important channel of distribution for Pepsi .Pepsi has worked hard

to build strong relationship with these retailers to minimize this affect.

SUBSTITUTE:

Many of the products that Pepsi produces have a relatively elastic demands , due to the

closeness of substitutes. Most people consider Pepsi and coke perfectly suitable goods

along with Lay’s Potato Chips and a generic store-branded potato chip. generic labels

may pose the greatest threat to Pepsi due to lower prices. These private- labels have been

gaining market share in the past few years.

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SWOT ANALYSIS OF THE COMPANY:

STRENGTH:

WELL DEVELOPED MARKET :

The beverages industry of Pakistan like Pepsi has edge over other industries that have

well developed market. People use beverages at their home, offices, and recreational

places and at occasions.

PLANT

The plant installed at Riaz Bottlers Lahore is more modernized and hi-tech as compared

at that of its main competitor COKE (Rehman Beverage in Lahore).

LOCATION OF PLANT

The location of Pepsi plant is utilized that all major markets of Lahore are within the

reach of the Pepsi plant within 30-45 minutes.

ADVERTISINIG

Pepsi Cola has better advertising campaigns.

SALES PROMOTION

Pepsi Cola generates aggressive sales promotion activities.

COMPENSATION PLAN

Pepsi Cola has good compensation policy. Bonuses are given on the achievements of the

targets.

SPONSORSHIP

Pepsi Cola has sponsoring scheme walks.

TRAINING & DEVELOPMENT

The company provides training to supervisors and employees for better performance.

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FLAVOURS

The beverages industry provides the beverages in different flavors. Usually the

carbonated drinks are in three flavors i.e., black soda, lemon, oranges. This variety of

flavors has made very deep mark in consumer’s mind about strong appeal of carbonated

drinks like Pepsi, coke, RC Cola.

WELL DVELOPED DISTRIBUTION NETWORK:

Carbonated drink due to its extensive use has successfully made wide network of

distribution. the market giant of beverages industry such as Pepsi have their own trucks

and vehicles to distribute their products.

EXTENSIVE MARKET :

Usually the beverage industry of Pakistan is taken as trend setter in advertisement

industry. Pepsi started sponsoring cricket team, athlete’s way before when there was no

customs so spending money on such activities. Now pepsi industry hires celebrities from

all over the world for their product.

WEAKNESS

SALES STAFF

The appointed sales staff by dealers is not properly trained.

TIN PACKS, 2.50 ml

Tin pack, 2.50 ml don’t reach the market in time because the manufacturing plant of

these products is situated at Gadoon Amazai and one of the drawback of tin cans is that

they are not being purchased by the retailers because the retailers want to earn more

profit, therefore, they purchased expired cans from Dubai.

CHECK ON RETAILERS

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The bottlers don’t have proper check on the retailers who are misusing the merchandising

tools.

MISHANDLING

There is a lot of mishandling in the factory yard during the transportation and at the

warehouse which results in a lot of breakage.

SEASONAL JOBS

As most of the hiring for low level jobs done in the on season duration, the seasonal

workers are laid off immediately when the season closes.

CONFLICT AND POLITICS :

After 9-11 scenario and Iraq war, majority Pepsi consumers turned towards other

beverages due to sentimental point of view. This sudden shift harmed the market giants

for a while but now shift is swiftly moving back towards Pepsi,

SEASONAL

The beverage industry is mostly seasonal. Usually its sales increase in summer but in

winter its sales decreases drastically .This seasonal variation usually brings

mismanagement of target allocation for future.

OPPURTUNITIES:

SUBSIDIARIES

“Pizza Hut” and “KFC” are the subsidiaries of Pepsi Cola currently established at

Karachi but company plants to extend the chain throughout the country.

SALES PROMOTION

Increased interest of people in musical groups, cultural shows and sports ahs provide an

opportunity for Pepsi to increase its sales through them

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VENDING, MACHINE

The company is planning to install vending machines at shopping malls, big restaurants

and departmental stores.

PENETRATING MARKET WOULD MOTIVATE CONSIDERABLE

SALES GROWTH:

Quality, innovation and responsiveness of beverages like Pepsi to customers, can help

them to achieve a competitive advantage by lowering the cost of creating values or by

adding value above and beyond that offered by competitor.

EXISTING CUSTOMER BASE IS HIGH :

Pepsi industry strives to create value for their consumers, customers, bottlers and the

community. They believe their success depends on their ability to satisfy their beverage

consumption demands and their ability to add value for their customer’s .nevertheless,

attaining efficiency, quality, innovation and responsiveness to customers require a

strategic plan.

THREAT:

COKE

Coke is in a race to hire marketing expects in order to increase its sale.

FAKE BOTTLERS

Fake Bottlers resembling Pepsi Cola are being sold in the market which is major threat

for the company in respect of quality.

SMUGGLED CANES

There is also a very big threat for Pepsi Cola because the retailers are purchasing expired

cans from Dubai at low rates. Therefore, the manufacturing of local Pepsi Cans is not

preferred.

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NON BRANDED BEVARAGES:

Due to so many non branded beverages in the industry there is consistent threat to

reputed companies. Usually these small non branded companies are unregistered and use

unhygienic processes to produce carbonated and non carbonated drinks. This unhygienic

drink may put the beverage industry of Pakistan like pepsi into some stereotype which

can make its consumer to become reluctant to use beverage or decrease the cycle of

buying

CORPORATE SOCIAL RESPONSIBILITY OF PEPSI IN

PAKISTAN

Help Save the Children "Make A Difference Together!" By participating in Save the

Children’s Matching Gift Program employees’ gifts can be matched at a single, double or

even triple match. A great example of this is the PepsiCo Foundation. Since 1997

PepsiCo employees have been generously contributing to Save the Children and

increasing their personal contributions through the company’s Matching Gifts Program.

In 2005 the PepsiCo Foundation generously contributed $100,000 to support Save the

Children's response to the food crisis in West Africa and $200,000 to support relief in

Pakistan. We commend PepsiCo for their significant involvement and dedication to

helping children around the world!

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PEPSICO WILL DONATE $2 MILLION TO ASSIST

PAKISTAN EARTHQUAKE VICTIM

PepsiCo announced it will contribute U.S $2 million (Rupees 120 million) to assist

victims of last week’s earthquake in Pakistan.

The contributions, which will come from both PepsiCo and the PepsiCo Foundation, will

include a donation of $1 million to the President’s Relief Fund for Earthquake Victims,

established by Pakistan President Pervez Musharraf, and an additional $1 million

contribution to support recovery and rebuilding efforts carried out by other relief

organizations

“The earthquake has had tragic consequences for hundreds of thousands of individuals

and families, said Mike White, PepsiCo International chairman and chief executive

officer. “As a company with a longstanding commitment to Pakistan we appreciate the

opportunity to provide some assistance to the victims at this very difficult time.”

The contribution to the President’s Relief Fund is expected to be presented next week in

Islamabad by Saad Abdul-Latif, president of PepsiCo’s Middle East and Africa Region.

In addition to the $2 million provided by PepsiCo and the PepsiCo Foundation,

independent Pepsi-Cola bottlers in Pakistan have made financial contributions as well as

donations of truckloads of water and PepsiCo beverages. In addition to the $2 million

provided by PepsiCo and the PepsiCo Foundation, independent Pepsi-Cola bottlers in

Pakistan have made financial contributions as well as donations of truckloads of water

and PepsiCo beverages.

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PepsiCo, one of the world’s largest food and beverage

companies, has offered its products through independent

bottlers in Pakistan for more than 40 years.

DECISION MAKING STYLE

There are four types of decision making styles which are adopted by the manager when

making a particular decision.

1.DIRECTIVE STYLE

A decision making style characterized low tolerance of ambiguity and a rational way of

thinking.

2.ANALYTICAL STYLE

A decision making style characterizes by a high level tolerance for ambiguity and a

rational way of thinking.

3.CONCEPTUAL STYLE

A decision making style characterized by high tolerance of ambiguity and intuitive way

of thinking.

4. BEHAVIORAL STYLE

A decision making style characterized by a low tolerance for ambiguity and an intuitive

way of thinking.

DECISION MAKING STYLE ADOPTED BY PEPSI

COMPANY:

Directive style is adopted by the Pepsi Company in making decisions. Because they make

their decision at a time and have low tolerance of ambiguity and a rational way of

thinking .They take all there decisions in short run.their decision making style is directive

and decision flow is top to bottem.top level managers and directors orders the middle

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level and front line managers and labour to act upon the rule prescribe by the company

directors.

CULTURAL TRAITS

Due to the incentive competition and high professionalism, Pepsi cold has adopted new

ways of promotion Pepsi Cola is arranging. The cultural programs like musical concerts.

They specially arrange free programme. In these shows they also distribute prizes

When Pepsi launched in Pakistan, it saw the whole environment, culture and traditions of

Pakistan. They changed their Pepsi according to Pakistan’s culture and society. Because

Pakistan is a Muslim State. So Pepsi adopted and learned the culture of Pakistan and as

well as the other countries cultures. Because Pepsi is available whole of the world they

have different strategies according to their culture.

Pakistan Pespi is used in following occasions:

Marriages

Birthdays

Invitations

Any movement of life

Pepsi always keeping in mind the values of cultural life.

Individual value

Equality

Activity

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Progress and achievements

Efficiency and practicality

Mastery over environment

CRITICAL ANALYSIS

FUTURE OUTLOOK OF PEPSI-COLA:

.Pepsi will introduce ONE-CALORIE PEPSI-COLA in the market. This

product is though found in U.A.E, but is not available here in Pakistan. It can

meet the needs of extremely weight - conscious people.

300-ml PEPSI-COLA bottles are though available in Karachi, but are not

found in Lahore. They will soon be introduced here.

They are planing to enhance the distribution of their visi coolers.

.PEPSI-COLA is trying to enhance its transportation facilities.

They are about to change their logo

DRAW BACK IN SYSTEM

There is no drawback in the system of Pepsi co because it is an international company

and has introduced a number of products all over the world internationally and locally.

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CONCLUSION & SUGGESTIONS

CONCLUSION

In today’s fast moving, dynamic and competitive business – world, and organization can

seek survival only if its marketing activities are properly timed and the 4P’s i.e. products,

price, place, promotion are intelligently designed according to the prevailing conditions.

Pepsi Cola is one of the largest soft drink producing company if the company has

achieved tremendous success through intelligent use of 4P’s.

Pepsi Cola has got competitive advantage through installing high – tech and modernized

plant. Better distribution channels and strong promotion has made Pepsi Cola a market

leader in the soft drinks industry.

SUGGESTIONS

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Through Pepsi Cola has gone a long way showing a remarkable progress Pakistan and

has developed and modernized itself with the passage of time. Yet there is always a room

for improvement.

First of all, Pepsi Cola should evaluate all the causes due to which its previous

brands flopped.

Overcome all the weaknesses which occur during

the time of launching a new brand.

Pepsi Cola should also minimize problems faced

during the transportation of the product and also the

storage in the warehouse

Sales Staff.

Disposable bottle at cheaper rate.

Check on the retailers.

They should try to approach local restaurants to maximize their sales.

They should launch single product to compete the taste of COKE.

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