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how pepsi entered indian market and problem itfaced by

how pepsi entered indian market and problem itfaced by

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pepsi killing softly pepsi killing softly Presentation Transcript

  • Faculty : Dr. Archi Mathur
    Killing Softly
    Group Members :
    Harish Choudhary
    Preeti Nayak
    Priyanka Agnani
    Neeraj Paliwal
    Roll No-244,246,247,252
    CASE STUDY
  • Facts of the case
    Facts of case
  • THE INTERNATIONAL SCENARIO:
    • Rivalry between Coke and Pepsi and each trying to beat the other.
    • Coke outsells Pepsi.
    • In 1987 Coke & Pepsi have 40.3% & 30.2 % of the U.S market respectively.
    • Apart from Pepsi cola co. and Pepsi cola International, it had six other divisions.
    Pepsi was merged with Frito-Lay to constitute Pepsi co. International in 1965.
    Pepsi became the owner of the world’s largest restaurant chain which also includes Pizza hut and Tacco Bell with a total of nearly 16500 outlets in 1987.
    Pepsi had so far made inroads in 151 countries – 150 before India.
  • THE INDIAN SCENARIO:
    Limca was the largest selling brand, cola was the largest selling flavor .
    • In 1977 a change in government at a centre led to the exit of the Coca cola.
    • The first national cola drink to pop up was Double Seven.
    • In 1980 another cola drink, Thumps Up was launched by Parle .
    • Thrill by Mc Dowell's in mid eighties and by the late eighties there was Double cola .
    • The Indian soft drink industry was estimated to be 900 crores.
    • An additional dimension to the Indian soft drinks was fruit drinks
  • Pepsi in India
    • In 1985 a proposal with R.P. Goenka group was rejected by the then govt.
    • The proposal involved:
    • Export of fruit juice concentrates from Punjab in return for the import of cola concentrates.
    • The deal offered was 3:1 export import ratio.
    • Therefore second bid was widened to take in a food processing division.
    • Acceptance of the Pepsi Offer in India in 1990:
    • Export import ratio was finally fixed at 5:1
    • Cold drinks sale was fixed at 22.5% of total sales
  • Issue 1 : What were the elements of Indian market environment that Pepsi co. had to tackle? Elements of Micro Environment
  • COMPETITORS
  • Collabration
  • Suppliers
  • Customer
  • Macro environment
    • Political environment
    • Legal Environment
    • Economic Environment
    • Social Environment
    • Technological Environment
  • 1-Political Environment
  • 2-Legal environment
    Severe restrictions in equity .
    To show the results without the soft drink component.
    Closed economy
    3-Economic environment
    Cold drink industry was in nascent stage
    Foreign Exchange problem.
    Lack of adequate market for fruits cultivators
  • 4-Technological environment
  • 5-Social environment
  • Issue-2-How were these elements managed ?
    MICRO ENVIRONMENT.
    Competitors
    Partners / Collaborations
    Suppliers
    Customers
    MACRO ENVIRONMENT.
    Political
    Legal
    Economic
    Technological
    Social
  • A-Competitors
  • B-Partners /Collaboration
  • C-Suppliers
  • D-Customers
  • Political
    • Food processing was included in second proposal
    • Assurance on meeting export regulations
    • Employment -500-direct and 30000-additional were assured
    • In the revised deal
    • Equity stakes were revised
    • PAIC 40% Voltas -24% ,Pepsi-35%
    • EXIM ratio fixed at 5%
    • Indulged in political lobbying
    • Ensured the active participation of Punjab government.
  • Economic
  • -Technological
    • Assured availability of high end technology
    • Established collaborations for development of agriculture
    • LEGAL
    • Social
    • Ensured Indianization through Indian version of Pepsi
    Compliance with legal requirements
    Fighting out the cases inside as well as outside.
  • Issue-3-what is your learning about “managing the environment”?
    IDENTIFICATION
    APPRAISAL
    ANALYSIS
  • Flexibility –in changing offers .
    Operating on strength
    Brand name
    Soft drink.
    Going beyond requirement making it look like an initiative.
  • Issue-4-How do you see the emerging environment in the Indian soft drinks market ?
    Production
    Market
    Competition
    Promotion
  • Production
    Better & more efficient means of production
    Introduction of variety of flavours
    More choices available to the buyers in terms of prodcuts, brands & flovors
  • Market
    Growth in market size
    Spread of market of Pepsi
    Probable entry of Pepsi in fruit drinks
  • Competition
    Increase in the degree of competition
    Probable exit of Pure Drinks
    Consolidation of small players
    Incoming of more foreign players especially Coke
  • Promotion
    Exposure to new forms of strategies & techniques
    Increase in the budgetary allocation to advertisement & sales promotion
    More aggressive form of promotion to be observed in the market
  • THANK YOU