comparative market analysis through each dealer survey aDocument Transcript
COMPARATIVE MARKET ANALYSIS THROUGH
EACH DEALER SURVEY AND WEAK OUTLET
Rajesh Kumar Singh
In the pursuit of greater knowledge, a greater understanding of the market & the
corporate world, distribution channels and the supply of Pepsi, I had to take some
precious time out of the busy schedules of our project guide & officials of the Company.
Without their help, such a thorough study would not have been possible. Thus I would
like to extend my thanks to the people concerned who have been the stepping stones to
I would firstly like to thank Mr. Nitin Bhandari & Mr. Rakesh Shukla, ADC’s
Lucknow for guiding me through the whole process and for being there at times when I
needed their support. They have enabled me to have a vision and the driving energy to
fulfill my aims.
TABLE OF CONTENTS
1. Objective of the Study
2. Limitation of the project
5. Pepsi’s Mission
6. Company Background
7. Market Share & Brand Ambassadors
8. Pepsi Logos
9. Pepsi’s History
10. Pepsi In India
11. Contents of Pepsi
12. Types Of Pepsi
13. Some Ads & Statistics
14. SWOT Analysis
15. Porter’s Five force model
16. EDS Format
17. WOP Data
18. WOP Summary
19. Problem sited during Route Survey and Dealer Survey
The title of the project is Comparative Market Analysis through Each Dealer Survey and
Weak Outlet Planning. As we know that there is a high competition in the market
between Pepsi and Coca-Cola in the market and none of the two want to loose
the opportunity in the market, this project of Each Dealer Survey is very important
keeping in view the competition in the market. Each Dealer Survey helps the company in
identifying the status of Pepsi and Coca Cola at various outlets in the market. It helps to
find out the relative share in the market and also the status of Cooling equipments and
Signage at the outlets. Weak Outlet Planning helps the organization in identifying the
Outlets in the market with low share and identifying the reason for low share. Before I
could start my project I had to go on some route drives to actually understand the soft
drink market. It also helped to know how Pepsi does its marketing and Sales.
The Project was divided into three Phases.
Under the 1st
phase I was given the task to work on the Each Dealer Survey Project as the
group leader along with twenty of my group members. Under the EDS Project we got
the task to prepare a Dealer survey report on all outlets in the city.
Under the 2nd
Phase of my project I was given the task to identify the weak outlets in the
market and then find out the reasons for low share at these outlets.
Under the third Phase I have to go to the market along with the respective Customer
Executive of the specified Route to improve the share at the outlet by solving the problem
of the outlet owners.
1. OBJECTIVES OF STUDY
Border objective of the project was to prepare an Each Dealer Survey Report and a
Report on Weak Outlet Plan which could help the organization in formulating the future
investment plan in the market.
EDS Report is the basic document on the basis of which the Company plans its
investment in different fields to improve the share in the market.
WOP Report is the identification of Weak outlets in the market where the share of Pepsi
is relatively less than its Competitors.
2 -LIMITATIONS OF THE PROJCT
Following were the major limitations of the project,
(1) Outlet owners not having exact information on there purchases during the year.
(2) Many outlets purchasing from Fat Dealers in the market at less rate than that of the
(3) Many outlets having Cooling Equipment problem.
(4).Lack of Signage at various outlets.
(A).We chose questionnaire method (EDS Sheet and WOP Sheet) for date collection.
(B). The data collected was primary in nature.
(B). Dealer Survey method for data collection.
(C). For analysis of data we used EXCEL.
Any drink that is not hard liquor can be referred to as a 'soft drink'; however, in this piece
'soft drink' refers to carbonated, sweetened beverages also known as soda or soda pop.
Why did people want to drink carbonated water? Well, because bubbling water was
equated with health; mineral baths had been popular at least since the times of the ancient
Romans. If the waters were good to soak in, the reasoning went, how much better for you
Scientists searched for the mysterious cause of these bubbles, and then, determining
carbon dioxide to be the answer, sought a way to infuse plain water with this gas. Thanks
to the efforts of such scientists as Joseph Priestley and John Nooth, this feat was
accomplished. Carbonated water was for sale by the end of the 1700s; this is how
pharmacies, which will prove important later, get into the picture, by being the supplier
of the health-inducing carbonated water.
The urge to flavor this sparkling water came quickly. And the ability to add flavors was
keeping pace; in 1784 citric acid was developed from lemon juice. By 1833, carbonated
lemonade was for sale in England. Forty years later, ginger ale became a popular drink;
clear, rather than cloudy like ginger beer, it was a more attractive beverage. Lemon's
Superior Sparkling Ginger Ale has the distinction of receiving the first US trademark
registration in 1871.
Four years later, in 1875, pharmacist Charles Hires and his bride spent their honeymoon
at a New Jersey farm, where they enjoyed an herb tea made largely of wild roots. The
next year, after experimenting with these flavors on his own, he offered his "Hires Root
Beer Extract" at the Philadelphia Fair. By 1886, it was available in bottles.
1886 is a key year for soft drink history for other reasons, too: Coca-Cola, Dr Pepper, and
Moxie were all introduced to the pharmacy-going public.
Jacob's Pharmacy of Atlanta, Georgia, became the debut site for Coca-Cola. Conceived
of as a headache remedy by pharmacist John Pemberton, the syrup was sold on a trial
basis to William Venable, the counterman at Jacob's. Venable added a shot of the syrup,
made in part from the leaves of the coca plant and the caffeine-laced juice of the kola nut.
In his first year of business, Pemberton made twenty-five dollars, which didn't quite pay
for the almost seventy-five dollars he spent in advertising.
Moxie, which rivals Coca-Cola in these early years, was the drink with a difference--the
main ingredient is not carbonated water, but rather, the herb gentian. It's an acquired
The Old Corner Drug Store in Waco, Texas, introduced the artificially flavored black
cherry drink called Dr. Pepper, the "King of Beverages, Free from Caffeine". (Caffeine
would be added later.) There are, according to the Dr. Pepper Museum, fifteen stories that
tell who developed it and how the drink was named. Most agree that either Robert
Lazenby, a chemist, or Wade Morrison, the pharmacy owner, created the drink. Whatever
the facts, the two quickly became partners in the beverage business. The name allegedly
Comes from Confederate Army doctor Charles Pepper, the man that refused to permit
Morrison to marry Miss Pepper.
A few years later, Clicquot Club Ginger Ale, named for famous Champagne, became the
first nationally advertised soft drink.
In 1903, Pepsi-Cola, created as a cure for dyspepsia, went into business. Royal-Crown
Cola debuted in Columbus, Georgia in 1905. Canada Dry Ginger Ale was introduced in
1908 by John McLaughlin. Its appeal was largely in its pale color; earlier ginger ales had
World War One nearly shut down this burgeoning industry; the US Food Administration
deemed it inessential, especially in the face of the severe sugar shortages. Prohibition
(1920-1933) gave it a big push, however. Once hard liquor was no longer legally
available, consumers that desired a flavorful drink increasingly chose these carbonated
beverages. In addition, the advent of six-packs of bottled sodas helped the drink find a
place at home, as opposed to only being consumed at the local pharmacy or restaurant.
The industry was dealt a double blow when Prohibition ends since the Depression was in
full swing. Many smaller companies west out of business. 7-Up, which had debuted in
1929 as Lithiated Lemon, began to advertise itself as a great mixer for hard liquor in
1933 when Prohibition ended. Canada Dry followed suit in 1936, weathering the crisis by
developing Tom Collins mix, tonic water, and club soda.
1933 saw other developments--Coca-Cola began marketing a new fountain mixer that
combines the syrup and water automatically, providing a uniformity of flavor that
individual soda fountains couldn't achieve. Pepsi-Cola began selling its beverage in 12-
ounce bottles, as opposed to the 6- and 8-ounce bottles preferred by the competition. In
1939, this lead to Pepsi's most famous 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.”
During World War II, the US Food Administration limited the access to soft drinks to the
general public. However, the soldier's morale wasn't allowed to suffer so their access to
the sweet drinks was guaranteed by the building of overseas plants.
The 1960's saw the beginnings of the diet drink industry. No-Cal Ginger Ale was the first
diet soft drink, and was created in 1952 by Kirsch Beverages of Brooklyn, New York.
Saccharine-sweetened, it was designed for diabetics, not dieters. Its distribution remains
local. In 1962, Diet-Rite Cola, from the Royal Crown Company, was the first drink sold
nationwide. It was sweetened with cyclamates. Coca-Cola introduces Tab the following
Year. Diet Pepsi went on the market in 1965. In the 1980s, manufacturers started using
aspartame, under the trade name Nutra-Sweet. Consumers liked the more 'natural' taste.
In the 1980s, caffeine-free versions of soft drinks became more popular as well. Jolt
Cola, in the late 1980s, reacted as a backlash movement, proclaiming that it has twice the
caffeine as regular colas. Despite popularity on college campuses, it never became the
household name that the more established companies enjoy. In the 1990s, clear versions
of popular soft drinks enjoyed a brief fad. Fruit juice based soft drinks began to be more
The soft drink industry has grown steadily since its beginnings, and has weathered
economic downturns, wars, and the health movement; through constant adaptation and
market research, they anticipate and meet the public's ever-changing taste.
5- PEPSI’S MISSION
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
community in which we operate and in everything we do, we strive for honesty, fairness
6- PEPSI’S BACKGROUND
Pepsi-Cola was first made in New Bern, North Carolina in the United States in the early
1890s by pharmacist Caleb Bradham. On August 28, 1898, "Brad's drink" was changed
To "Pepsi-Cola" and later trademarked on June 16, 1903. As Pepsi was initially intended
to cure stomach pains, Bradham coined the name Pepsi from the condition dyspepsia
(Stomachache or indigestion). 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 1905, Pepsi received its
first logo redesign since the original design of 1898. In 1906, the logo was changed again.
In 1909, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads
as "A bully drink...refreshing, invigorating, a fine bracer before a race". In 1923, PepsiCo
went bankrupt due to high 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, resulting in a reformulation of the Pepsi-Cola syrup formula. In the
Following years, the drink gained in popularity and in 1934, debuted the 12-ounce drink.
In 1964, the Diet Pepsi variation of the drink debuted, being the United States's first
national diet soft drink.
In 1980, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up
a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the
majority of participants picked Pepsi as the better tasting of the two soft drinks. Pepsi
took great advantage of the campaign with television commercials reporting the test
results to the public.
In the mid-1990s, Pepsi launched the highly successful Pepsi Stuff strategy, its largest
marketing program ever. In its first year, Pepsi Stuff significantly outperformed Coke's
much-anticipated Atlanta Olympic Summer with growth 3 times larger than Coke's and 2
points of share gained by Pepsi. Pepsi Stuff built consumer brand loyalty by allowing
people to collect Pepsi Points from packages and cups and redeem them for high-quality
merchandise and unique experiences. Based on Pepsi Stuff's success, the company
expanded it to include Mountain Dew and into many international markets. PepsiCo
continued and expanded Pepsi Stuff for many years. Promo Magazine listed 16 "Ageless
Wonders" campaigns that "helped redefine promotion marketing." Included for 2002 is
While some claim that Pepsi tastes identical to Coca-Cola, others say they can detect a
difference. In the past, the difference in taste between Pepsi and Coca-Cola's Coke was
even greater than it is today. When the Pepsi taste became more popular, Coca-Cola
adapted their drink to be closer to the American taste of Pepsi (New Coke). Although
Pepsi claimed this a victory for their brand of cola, Coca-Cola soon reverted because,
while testing showed the taste of the new Coke was better, consumers preferred Coca-
Cola to stay the same. Coke outsells Pepsi in the US overall because Coke is sold
exclusively in more locations, such as restaurants that sell Coke, but not Pepsi. In
locations where Pepsi and Coke are sold side-by-side (such as Supermarkets and
Convenience Stores), Pepsi generally outsells Coke in the US.
7- MARKET SHARE & BRAND AMBASODARS IN INDIA
One of the most visible battle fronts in India's cola wars is celebrity endorsements, and
Pepsi and Coke have rolled out the biggest categories of celebrities in the country, film
stars and cricketers, signed up as brand ambassadors at humongous cost. Their well-
known faces are splashed on billboards and newspaper
pages, even as television spots roll out by the dozens featuring the stars. The Coke-Pepsi
rivalry is so intense that there is a fight to win ad space at every shop, bus-stop stall and
roadside eatery. Each transnational company marks out its territory in either bright red or
blue, the colors associated with the two brands. The prize they strive for is large, and
growing: India's soft-drink market is estimated to be worth more than US$6 billion.
Top film stars Kareena Kapoor, Shahrukh Khan, Aishwarya Rai, Amitabh Bachchan,
Rani Mukherjee, Priyanka Chopra, Akshya Kumar, Aamir Khan and cricketers Rahul
Dravid, Sachin Tendulkar, Virender Sehwag, Irfan Pathan and many more have been
offered contracts that are sometimes worth more than their earnings from films or cricket.
According to reports, Aamir Khan's contract for Coca-Cola is worth more than $4 million
over three years. For that money, Aamir sets aside a few days every year for the
commercials. Shahrukh Khah, who rivals Aamir in the movies, charges a similar amount
for Pepsi, while among the ladies, Aishwarya Rai leads with more than $2 million.
Coca-Cola is reported to have roped in the maximum number of 15 celebrities, followed
by eight for Pepsi. Other brands such as Thums Up (Coca-Cola's local brand) have three,
while 7Up (a Pepsi brand) has Yana Gupta and, this year, the hot Mallika Sherawat.
The health-drinks business is also witnessing plenty of churn, with the segment growing
at a robust 20-25% in the past few years, compared with less than 8% for carbonated
drinks in the past couple of years. The non-carbonated beverage market is estimated to be
worth more than $250 million (in urban areas). According to a recent ACNielsen study,
among fruit juices, Dabur's Real is the market leader with 60% share, followed by Pepsi's
Tropicana (33%). In the fruit-based drinks category, Coca-Cola's Maaza is the leader,
followed by Parle's Frooti and PepsiCo's Slice. According to reports, Coca-Cola may
soon test-market its global fruit-juice brand Minute Maid, as the diet versions of the fizzy
drinks have not taken off.
Surprisingly, perhaps, one of the biggest beneficiaries of this growth is the Indian farmer,
because of the integration of backward linkages by cola companies to purchase processed
fruit. While Coca-Cola is working with farmers in Andhra Pradesh and Maharashtra,
PepsiCo has tied up with Punjab Agri Export Corp, a state-owned enterprise, to cultivate
citrus fruits, particularly oranges, for its Tropicana brand.
The expansion potential for this business is immense, given that India is the second-
largest producer of fruit in the world, but only 4% is processed because of storage and
yield problems. In Brazil and the United States, 70% of produce is processed, while 50%
is in Israel and 83% in Malaysia. Structural changes in agriculture are imperative, as
more than 60% of India's billion-plus population depend on farm produce for their
livelihoods, while the contribution of the sector to gross domestic product is less than
As far as marketing is concerned, however, the real action is undoubtedly among the
carbonated drinks. Commercials costing more than $250,000 are shot overnight to
convey the right message. For example, the lemon-lime soft drink Sprite, a Coca-Cola
product, released a spoof of a Pepsi campaign within an hour, while Pepsi hit back within
a week with its takeoff on Coke's "Thande ka Tadka" commercials featuring Aamir.
According to some reports, the fizzy drinks have splurged more than $10 million on
advertising campaigns in one month, though the companies deny such expenditures. It is
usual for cola companies to spend $2 million to $3 million for a new campaign. Three
years back, a fierce price battle ensued when Coca-Cola India launched small 200-
milliliter cans priced at Rs5 (11 cents). Pepsi responded by lowering the price of its
300ml can from Rs8 to Rs6.
The cola companies have reason to feel that the Indian market remains largely untapped.
India's per capita consumption of cola is quite low at 10 servings per year, while
Pakistanis and Sri Lankans drink 25 and 30, respectively.
The advertising strategies have changed over the years, moving on from print ads to TV
commercials to promotions at restaurants, events, the Internet, contests, and tie-ups with
shops and movie theaters. India's total advertising market (print plus TV) is more than
$2.5 billion, with print ads accounting for 45% of the total.
According to the Adex India Report, in terms of TV advertising the carbonated-soft-
drinks category grew by 50% in 2005 over 2004, with the major share going to Pepsi.
However, print advertising in 2005 dipped by 23% from 2004. Pepsi continued to be the
highest spender, followed by Thums Up, Coca-Cola, Diet Pepsi and Mirinda Lemon (a
PepsiCo brand). On television as well, Pepsi is the highest spender, followed by Coca-
Cola, Mountain Dew, Thums Up, 7Up, Mirinda Orange, Sprite, Diet Pepsi, Limca (Coca-
Cola brand) and Mirinda Batman Blast. Thums Up was the largest spender in restaurants.
While Pepsi has shown a preference for promotional commercials linked to sponsored
programs, Coca-Cola has stuck more to pure ads. Online campaigns are picking up, too.
For Pepsi's Oye Bubbly promotion, Yahoo charged $25,000 for two days of online
The cola brands have soldiered on despite charges by a prominent environmental
organization, the Center of Science and Environment, that Pepsi and Coca-Cola sold in
India contain pesticide residues in amounts 40-50 times the prescribed European Union
norms, and assorted other controversies such as allegations of excessive levels of
cadmium in waste from a Coke factory. Any anti-cola story has a bandwagon effect, as it
is politically correct in India to be anti-multinational-corporation and anti-American.
In fact, the problem of pesticide contamination of foodstuffs is hardly limited to Pepsi
and Coke: virtually everything that Indians eat and drink, from vegetables to eggs to
milk, carries undesirable chemicals at equal or greater concentrations, because of
uncontrolled use of fertilizer and pesticide by farmers.
This problem will take decades to solve, but with India's most beloved film stars
endorsing carbonated drinks, keeping Indians off them may well be impossible.
Coke still outsells Pepsi in almost all areas of the world. Saudi Arabia and the Canadian
provinces of Prince Edward Island, Newfoundland and Labrador, Ontario and Quebec are
some of the few exceptions.
By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left India
after a new government ordered the company to turn over its secret formula for Coca-
Cola and dilute its stake in its Indian unit as required by the Foreign Exchange
Regulation Act (FERA). In 1988, Pepsi gained entry to India by creating a joint venture
with the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and
Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when
the use of foreign brands was allowed; Pepsi bought out its partners and ended the joint
venture in 1994. In 1993, Coca-Cola returned in pursuance of India's Liberalization
policy. In 2005, Coca-Cola and Pepsi together held 95% market share of soft-drink sales
in India. Coca-Cola India's market share was 60.9%. Others claim that due to rumors of
the use of cocaine, Coke was banned for a long time in India and recently the ban was
lifted, however, Pepsi had maintained a commanding market share.
According to Consumer Reports, in the 1970's, the rivalry continued to heat up the
market. Research proved that Pepsi is preferred over Coke. The way that they proved this
was by blind taste tests that were conducted in stores. These tests were called "Challenge
Booths." The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" across
More importantly, Pepsi outsells its rival in grocery and convenience stores in the U.S.
(regarded as an indicator of consumer preference), with Coca-Cola's dominance in
exclusive restaurant, movie theater, amusement park, college, and stadium deals giving
Coke the overall sales advantage. In the U.S., Pepsi's total market share was about 31.7
percent in 2004, while Coke's was about 43.1 percent.
In Russia, Pepsi once had a larger market share than Coca-Cola. However, Pepsi's
dominance in Russia was undercut as the Cold War ended. Pepsi had made a deal with
the Soviet Union for scale production of Pepsi in 1974. When the Soviet Union fell apart,
Pepsi, was associated with the old Soviet system, and Coca Cola, just newly introduced
to the Russian market in 1992, was associated with the new system. Thus, Coke rapidly
captured a significant market share away from Pepsi that might otherwise have needed
years to build up. By July 2005, Coca-Cola enjoyed a market share of 19.4 percent,
followed by Pepsi with 13 percent.
According to Consumer Reports, the overall advertising of the two companies still
involve TV commercials that endorse the image of youth, beauty, family togetherness,
fun, pleasure, celebrity and patriotism. These components are expected to bring positives
to the company so that the rivalry will continue on.
8- PEPSI LOGOS
(From 1906-1939) (From 1991-1998.)
(From 1998-2006). (Pepsi Stuff represented a major assault in the Cola Wars)
9-PepsiCo's History Timeline
10-Pepsi in India
By most accounts, Pepsi gained entry to India in 1988 by creating a joint venture with the
Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India
Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of
foreign brands was allowed; Pepsi bought out its partners and ended the joint venture in
1994. Others claim that firstly Pepsi was banned from import in India, in 1970, for
having refused to release the list of its ingredients and in 1993, the ban was lifted, with
Pepsi arriving on the market shortly afterwards. These controversies are a reminder of
"India's sometimes acrimonious relationship with huge multinational companies." Indeed,
some argue that Coke and Pepsi have "been major targets in part because they are well-
known foreign companies that draw plenty of attention."
In 2003, the Centre for Science and Environment (CSE), a non-governmental
organization in New Delhi, said aerated waters produced by soft drinks manufacturers in
India, including multinational giants PepsiCo and Coca-Cola, contained toxins including
lindane, DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer, a
breakdown of the immune system and cause birth defects. Tested products included
Coke, Pepsi, Seven Up, Mirinda, Fanta, Thumbs Up, Limca, Sprite. CSE found that the
Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues
Permitted under European Union regulations; Coca Cola's 30 times. CSE said it had
tested the same products in the US and found no such residues. However, this was the
European standard for water, not for other drinks. No law bans the presence of pesticides
in drinks in India.
Coca Cola and PepsiCo angrily denied allegations that their products manufactured in
India contained toxin levels far above the norms permitted in the developed world. But an
Indian parliamentary committee, in 2004, backed up CSE's findings and a government-
appointed committee is now trying to develop the world's first pesticide standards for soft
drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough
to detect minute traces of pesticides in complex drinks. On December 7, 2004, India's
Supreme Court ruled that both Pepsi and competitor Coca-Cola must label all cans and
bottles of the respective soft drinks with a consumer warning after tests showed
unacceptable levels of residual pesticides.
Both companies continue to maintain that their products meet all international safety
standards without yet implementing the Supreme Court ruling. As of
2005, Coke and Pepsi together hold 95% market share of soft-drink sales in India.
Pepsi has also been alleged to practice "water piracy" due to its role in exploitation of
ground water resources resulting in scarcity of drinking water for the natives of
Pudussery panchayat in the Palakkad districts in Kerala, India. Local residents have been
pressuring the government to close down the Pepsi unit in the village.
Coca-Cola controlled the Indian market until 1977, when the Janata Party beat the
Congress Party of then Prime Minister Indira Gandhi. To punish Coca-Cola's principal
bottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata government
demanded that Coca-Cola transfer its syrup formula to an Indian subsidiary (Chakravarty,
43). Coca-Cola backed and withdrew from the country. India, now left without both
Coca-Cola and Pepsi, became a protected market. In the meantime, India's two largest
soft-drink producers have gotten rich and lazy while controlling 80% of the Indian
market. These domestic producers have little incentive to expand their plants or develop
the country's potentially enormous market . Some analysts reason that the Indian market
may be more lucrative than the Chinese market. India has 850 million potential
customers, 150 million of whom comprise the middle class, with disposable income to
spend on cars, VCRs, and computers. The Indian middle class is growing at 10% per
year. To obtain the license for India, Pepsi had to export $5 of locally-made products for
every $1 of materials it imported, and it had to agree to help the Indian government to
initiate a second agricultural revolution. Pepsi has also had to take on Indian partners. In
the end, all parties involved seem to come out ahead: Pepsi gains access to a potentially
enormous market; Indian bottlers will get to serve a market that is expanding rapidly
because of competition; and the Indian consumer benefits from the competition from
abroad and will pay lower prices. Even before the first bottle of Pepsi hit the shelves,
local soft drink manufacturers increased the size of their bottles by 25% without raising
From Joint Venture to Fully-Owned Subsidiary :
Pepsi is no longer a joint venture company with its Indian partners. Taking full advantage
of liberalised policies, it has taken full control of Pepsi Foods. In 1994, Pepsi made a
offer to both Voltas and PAIC to buy their equity at 'attractive' terms. Voltas sold all its
shares to Pepsi while PAIC, being a public enterprise, was forced to pull out and now it
holds less than 1 percent of the total equity in Pepsi Foods Ltd. Instead of taking strict
action against Pepsi for not following its commitments, the Indian government has given
more concessions to it in the post-liberalisation period. For instance, it has allowed Pepsi
to increase its turnover of beverages component to beyond 25 percent, and Pepsi is also
no longer restricted by its commitment to export 50 percent of its turnover. Recently the
government also allowed PepsiCo to set up a new company in India called PepsiCo India
Holdings Pvt.Ltd, a wholly owned subsidiary of PepsiCo International. Surprisingly, the
new company is also engaged in beverage manufacturing, bottling and exports activities
as Pepsi Foods Ltd. All the new investments by the PepsiCo International have been
channelised through this new venture. It now handles 28 bottling plants with a sales
turnover of Rs 500 crores which is higher than Pepsi Foods's turnover of Rs.375 crore in
1996. (The Financial Express, April 21, 1997). Although the financial performance of
both these companies in India has not been creditable so far, with total accumulated
losses close to Rs.350 crore (except small surplus in 1996), yet it has been successful in
achieving significant market share and brand royalty in India. The company in recent
years has not only bought over bottlers in different parts of India but also bought Dukes,
a popular soft-drink brand in western India to consolidate its market share. It has also
shrewdly consolidated its position through aggressive marketing and advertising in India.
According to surveys conducted by many market research agencies, Pepsi now holds
over 40 percent share in Indian soft drink market. In 1995 alone, the company's beverage
business grew 50 percent, well ahead of the market which expanded by 20 percent.
Another important recent shift in Pepsi's marketing strategy has been its focus on Cola
over other non-Cola brands. "We have single- mindedly focused on brand Pepsi" admits
Rishi, Vice-President, Marketing, and Pepsi. (Business India, January 15-28, 1996). At
the international level, PepsiCo International has been focusing more on India where the
consumption of soft drinks is expected to increase many-fold which is only three ounces
per person now as compared to 200 ounces in Europe and over 300 ounces in North
America. But, at the same time it is not realized that there is a vast difference between the
purchasing power of an average Indian and North American as it takes an Indian 1.5
hours of work to be able to buy a bottle of Pepsi whereas for a North American, it takes
less than 5 minutes. This experience of eight years clearly shows that Pepsi, totally
preoccupied with selling soft drinks in India, has broken promises. The responsibility of
implementation of commitments cannot be left to Pepsi alone. One should expect the
state machinery to intervene and enforce these commitments on Pepsi. Surprisingly, there
is a total silence on the part of state machinery.
11-Contents of Pepsi
The Pepsi-Cola drink contains basic ingredients found in most other similar drinks
Including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid,
caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains the same
ingredients but does not include any caffeine.
12-TYPES OF PEPSI
(1)Crystal Pepsi: Discontinued clear version
(2)Diet Pepsi: Low-calorie version of Pepsi
(3)Pepsi AM: Contains more caffeine than a regular Pepsi and marketed as a morning
drink. No longer produced.
(4)Diet Pepsi AM: Sugar-free version of Pepsi AM, and introduced in 1987. No longer
(5)Pepsi Blue: a blue colored, fruity variety
(6)Pepsi Cappuccino: Cappuccino flavored sold in Eastern Europe.
(7)Pepsi Edge: contains half the carbohydrates, calories and sugars of a normal Pepsi,
is flavored by Splenda. Introduced in 2004, and discontinued in 2005. It was featured on
an episode of The Apprentice 2 in which teams had to design a prototype bottle.
(8)Pepsi Advantage: the French name for Pepsi Edge, sold exclusively during 2005 in
province of Quebec.
(9)Pepsi Fire: a limited edition variety which is sold in Guam and Malaysia. Pepsi Fire is
a cinnamon flavored cola. (see also the Pepsi Max Punch cinnamon edition for Christmas
(10)Pepsi Free (now known as Caffeine-Free Pepsi)
(11)Diet Pepsi Free (now known as Caffeine-Free Diet Pepsi)
(12)Pepsi Holiday Spice: a limited edition variety which the company began selling
November 1, 2004 in the U.S.A. for an eight-week period (it has not been sold since). It
is flavored with a seasonal finish of ginger and cinnamon.
(13)Pepsi Ice Pepsi with an Icy Mint flavor. Sold in Guam and Malaysia.
(14)Pepsi Ice Cream (only available in Russia) Known as "Pepsi Vanilla" in the US
(15)Pepsi Kona: a short-lived product that was market tested in the Lehigh Valley and
Philadelphia, Pennsylvania areas between 1994 and 1996. A mix of Pepsi-Cola and
coffee, it is said to have tasted more like coffee than cola.
(16)Diet Pepsi Kona
(18)Pepsi Light: Lemon-flavored Diet Pepsi sold in the 1980s
(19)Pepsi Lime: with lime flavor added, introduced onto the market in the spring of
(20)Diet Pepsi Lime
(22)Pepsi Max Cappucino: Only available in France, Finland, Norway and the UK.
(Marketed as Pepsi Max Coffee Cino in the UK.)
(23)Pepsi Max Cool lemon
(24)Pepsi Max Punch (a dark red Pepsi cola with Cinnamon and Ginger - limited
edition in the UK market for Christmas 2005 - available September to December)
(25)Pepsi Max Twist
(26)Pepsi Max Coffee Cino (a cappuccino flavored varient currently being sold in the
(27)Pepsi NEX: A zero calorie Pepsi (sold in Japan).
(28)Pepsi ONE: An alternative to Diet Pepsi, with one calorie.
(29)Pepsi Raging Raspberry
(30)Pepsi Samba: Pepsi with troptical flavors
(32)Pepsi Strawberry Burst
(33)Pepsi Tarik: a mix between coffee and cola. Currently, it's only available in
for MYR 1.70 a bottle.
(34)Pepsi Tropical Chill
(35)Pepsi Twist: a lemon flavored variety
(36)Diet Pepsi Twist
(37)Pepsi Twistão and Diet Pepsi Twistão Sold during summertime in Brazil, it's a
with a lemon flavor stronger than regular Pepsi Twist. "Twistão", in portuguese, is the
aumentative of "Twist".
(38)Pepsi Vanilla: Released in the U.S. in 2003, it is Pepsi's answer to Vanilla Coke.
Contains vanilla extract as well as both natural and artificial flavors.
(39)Diet Pepsi Vanilla
(40)Pepsi Wild Cherry: a cherry flavored variety, introduced in 1988. Originally called
"Wild Cherry Pepsi", its name was changed along with the formula in 2005.
(41)Diet Pepsi Wild Cherry
(42)Pepsi X: contains more caffeine than regular Pepsi, and also contains guaranine. It is
similar to other energy drinks on the market (Red Bull, V, etc.)
13-SOME ADS & STATISTICS
Shahrukh Khan “The King of Bollywood” is one of the brand ambassadors of Pepsi India
SWOT analysis is a basic, straightforward model that provides direction and serves as a
basis for the development of marketing plans. It accomplishes this by assessing an
organizations strengths (what an organization can do) and weaknesses (what an
organization cannot do) in addition to opportunities (potential favorable conditions for an
organization) and threats (potential unfavorable conditions for an organization). SWOT
analysis is an important step in planning and its value is often underestimated despite the
simplicity in creation. The role of SWOT analysis is to take the information from the
environmental analysis and separate it into internal issues (strengths and weaknesses) and
external issues (opportunities and threats). Once this is completed, SWOT analysis
determines if the information indicates something that will assist the firm in
accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that
must be overcome or minimized to achieve desired results (weakness or threat)
(Marketing Strategy, 1998).
The internal and external situation analysis can produce a large amount of information,
much of which may not be highly relevant. The SWOT analysis can serve as an
interpretative filter to reduce the information to a manageable quantity of key issues. The
SWOT analysis classifies the internal aspects of the company as strengths or weaknesses
and the external situational factors as opportunities or threats. Strengths can serve as a
foundation for building a competitive advantage, and weaknesses may hinder it. By
understanding these four aspects of its situation, a firm can better leverage its strengths,
correct its weaknesses, capitalize on golden opportunities, and deter potentially
Internal Analysis - The internal analysis is a comprehensive evaluation of the internal
environment's potential strengths and weaknesses. Factors should be evaluated
across the organization in areas such as:
• Company culture, image
• Organizational structure
• Key staff
• Access to natural resources
• Position on the experience curve
• Operational efficiency, capacity
• Brand awareness
• Market share
• financial resources
• Exclusive contracts
• Patents and trade secrets
The SWOT analysis summarizes the internal factors of the firm as a list of strengths and
External Analysis - An opportunity is the chance to introduce a new product or service
that can generate superior returns. Opportunities can arise when changes occur
in the external environment. Many of these changes can be perceived as threats
to the market position of existing products and may necessitate a change in
product specifications or the development of new products in order for the firm
to remain competitive. Changes in the external environment may be related to:
• Market trends
• Social changes
• New technology
• Economic / Political environment
The SWOT analysis summarizes the external environmental factors as a list of
opportunities and threats.
SWOT PROFILE OF PEPSI
1.Strong team of Brand Ambassadors ,who
are having tremendous mass appeal.
2.Many variants (Mirinda ,7 UP, Sprite,
3.Strong sales and distribution network.
4.Strong brand image.
5.Dynamically continuous innovation of
the product and brand rejuvenation – new
variants (They launched Cappuccino last
7.Perceived to have quality & world
renowned products (strong brand
promotion but relatively lower price which
is a winning combination )
8.They are having good relation ships with
9.Very strong muscles power in terms of
1. Consumption of 2 Lts bottles is limited
(Consumed by upper & middle level people
2.Usage rate depend on the weather
condition, usually it goes down during
3.Some variants like the Capacciono did
not do well in the market
4.Certain advertisements like the recent one
“Pepsi TV” resulted in controversial
interpretations of the message of the
advertisement and lead to some loss of
focus (of message of the advertisements)
5.Stock out problems - replenishment time
is high in semi-urban/rural areas
1.They may tap the untouched market
2. There is huge potential in Indian juice
market. Market leader in this field is
3.More promotions like price-offs and
samples, to attract new customers who still
prefers tea or lassi than Pepsi.
4.Diet Pepsi is not available in semi urban
and rural areas , availability of which may
further enhance the sales.
5. Pepsi can provide better schemes to
Retailers with the help of market survey.
1.Major threat is Coke, which continuously
attacks on Pepsis Ads.
2.High internal competition
3. Indian fruit drink market is also
snatching the customers after pesticides
4.Indian mothers are also big threats to
Pepsi, because they do not allow their kids
to drink Pepsi. So Pepsi should make
advertisements to attract Indian females
and should convince them that its not bad
5. Last but not the least Swami Ramdev.
15-PORTER’S FIVE FORCES MODEL
(A) Coca-Cola is Pepsi’s is main rival
(B) In fruit juices Pepsi’s main rivalry is with Dabur.
(B) Pepsi prevailed from the “Cola Wars”Pepsi has one of the top three soft
– Coca-Cola (1)
– Pepsi (#2)
– Diet Coke (#3)
(A) Pepsi faces no significant threats in this area
(B) Within U.S., Pepsi uses high fructose corn syrup as a raw material.
(C)Outside U.S., Pepsi uses sucrose
(D)Both are readily available therefore restricting supplier power.
Threat of Substitutes
(A) Pepsi has successfully differentiated their product.
(B) Loyal Pepsi patrons do not see Coke as a conceivable substitute.
(C)Tremendous brand loyalty minimizes threat of substitutes.
Threat of New Entrants
(A) Pepsi enjoys significant economies of scale.
(B) Pepsi has huge market share.
(C) Pepsi has tremendous brand loyalty.
(D) These factors minimize the threat of new entrants into the soft drink industry
(A) Buyer does not have any bargaining power in case of Pepsi
19- Problems Sited During Route Survey & Dealer Survey
1. Coca cola is providing far better schemes than Pepsi hence Retailers prefer
2. Few retailers are getting Pepsi directly from wholesalers hence conflict is arising
(a) Among retailers (B) Between retailers and distributors.
3. At number of shops there is no visual display of Pepsi at POP.
4. Few retailers are demanding for larger fridge since last few months but no action
has been taken place. Also the servicing of fridge is not up to the mark.
5. Expired bottles are still in the stocks ‘coz Pepsi is not taking them back.
6. Monopoly form should be signed in the beginning of the year, but it has been
done late due to which many outlets have taken the monopoly of Coca Cola..
1. Sales Force needs motivation to work in the market.
2. Scheme needs to be given in all routes from time to time.
3. Management needs to track the problems of retailers very quickly in order to increase
4. Daily Service should be available to all outlets.
5. The Scheme available in the market should be available to all purchasers.