Project Name: PepsiCo and Its Products & Mountain Dew Presented by: Arshad Hussain (Project Leader) Maria Jameel (Project Assistant) Shahbaz Mazhar (Project Assistant)
Mission/Vision PepsiCo's overall mission is to increase the value of their shareholders' investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity
What is Pepsi:- Pepsi is a carbonated soft drink produced and manufactured by PepsiCo. The drink was first made in the 1890s by Pharmacist Caleb Bradham in New Bern, North Carolina America.
Pepsi-Cola trademark The original trademark application for Pepsi-Cola was filed on September 23, 1902 with registration approved on June 16, 1903. In the application's statement, Caleb Bradham describes the trademark as an, "arbitrary hyphenated word "PEPSI-COLA," and indicated that the mark was in continuous use for his business since August 1, 1901. The Pepsi-Cola's description is a flavoring-syrup for soda water. 2010 Today
RISE During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cents, sales increased substantially. Pepsi encouraged price-watching consumers to switch, obliquely referring to the Coca-Cola standard of six ounces per bottle for the price of five cents (a nickel), instead of the 12 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.
Niche marketing Walter Mack was named the new President of Pepsi-Cola and guided the company through the 1940s. Mack, who supported progressive causes, noticed that the company's strategy of using advertising for a general audience either ignored African Americans or used ethnic stereotypes in portraying blacks. He realized African Americans were an untapped niche market and that Pepsi stood to gain market share by targeting its advertising directly towards them.
Marketing In 1975, 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. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public. (continue…..)
Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is just one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing.
Rivalry with Coca-Cola According to Consumer Reports, in the 1970s, the rivalry continued to heat up the market. Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge". These tests suggested that more consumers preferred the taste of Pepsi (which is believed to have more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" across the nation. This became known as the "Cola Wars".
Competitor of Pepsi The Carbonated Soft Drink (CSD) industry in Pakistan fall into four main segments: Colas, Citrus segment, Lemon-lime segment & Orange segment . Please refer to the following table: Segment PepsiCo Products Competing Products Cola Pepsi Coca Cola Citrus Mountain Dew Sprite 3G Lemon Line 7up Sprite Orange Mirinda Fanta
Aquafina Flavor Splash
10. Kas Mas 11. Lipton Brisk 12. Lipton Lced Tea 13. Lipton Pureleaf 14. Manzanita Sol 15. Mirinda 16. Mug 17. Ocean Spray 18. Patio 19. Mountain Dew 20. AMP Energy 21. Propel 22. Slice 23. Sobe/lean/lifewater 24. Tazo 25. Tropicana Juice Drinks 26. Tropicana Twister Soda 27. Propel
Globally Introduction Mountain Dew, currently stylized as Mtn Dew , is a soft drink manufactured and distributed by PepsiCo. The formula was made and first marketed in Marion, VA, Knoxville and Johnson City, Tennessee, USA through the 1940s, then in Fayetteville, North Carolina by Barney and Ally Hartman. By 1964, it was being distributed across United States. The formula still used today was created by Bill (William) Jones. As of 2007, Mountain Dew was the 4th best selling carbonated soft drink in the United States, behind Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Mountain Dew's Diet version ranked 9th in sales. (continue…….)
On October 15, 2008, Mountain Dew's official logo was redesigned to "Mtn Dew", as a result of a PepsiCo rebranding of its core products. However, Other flavors of Mountain Dew, specifically "Code Red", "Voltage”, “Livewire", Caffeine Free Mountain Dew and Caffeine Free Diet Mountain Dew still use the old design Mountain Dew was originally released in the UK in 1996, then removed in 1998. Currently in the UK, a new drink called 'Mountain Dew Energy' has been introduced into the energy drink market.
Dew in Pakistan Mountain dew is the brand of PEPSI . It falls in the citrus segment of carbonated soft drink (CSD).it was first launched in Pakistan in the year 2001 but it was a failure . In the year 2003 it was re- launched along with massive promotional campaigns, it was a huge success . Mountain dew enjoyed the status of the only citrus carbonated soft drink in the beverage market until sprite 3g entered the market. The total market share of citrus CSD’s is 14% out of which 95% is held by mountain dew and the rest 5% by others. (Continue………)
Mountain dew is the fastest growing carbonated soft drink in Pakistan and it is also the fastest growing brand of Pepsi cola world wide. As of 2007, Mountain Dew was the fourth-best-selling carbonated soft drink in the United States, behind only Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Diet Mountain Dew ranked ninth in sales in the same year. In October 2008 , it was announced that Pepsi would be redesigning their logo and re-branding many of their products. SLOGAN Slogan of the brand is
Ingredients Mountain Dew lists its ingredients as: Carbonated water Sugar Citric acid Sodium benzoate (preserves freshness) Caffeine (55 mg per 12 oz. [approx 330ml]) Sodium citrate Emulsifiers Natural Flavors Ascorbic Acid Color (Tartrazine)
Product The product includes the liquid inside and the packaging also. Soft drink satisfies the need of thirst (core benefit). However, people are always different; some want more some want less. Therefore mountain dew has made allowances for that by providing many sizes. Mountain dew like its mother company Pepsi, seeks the image by focusing on individuals and also introversive people. Mountain dew targets male teenagers those who are ready to embrace excitement, adventure, fun, energy and enthusiasm. As the caffeine ratio is very high in mountain dew as compare to other CSD’s it caters the need of those who like to sleep less. It has gone through a design renaissance in the year 2008 .The appearance of the product is eye catching with bright yellow green color and semi opaque .As the product is associated with sports it is slightly larger, unlike its competitors, to offer more to the consumer. (Continue……..)
The quality of the soft drinks is needed to be regularly high. mountain dew strictly meets the I.S.O standards and these standards set by Pepsi cola international .It has also been given monthly award held by “ H.S.E ”*. Apart from this the company have hired specially trained employees who are always involved in the quality checking of the product throughout the Manufacturing process. The product is convenient i.e. just purchase it and consume it. The bottles are light , with flexible packaging, so they won’t crack of leak, and are not too heavy to causally walk around. The canes are also light and safe. The brand is not going through extension in Pakistan because it is growing stage and the economic conditions are not very favorable
PROMOTION All the factors mentioned before are part of the product from the drink to the image. Through promotion mountain dew aims to create attractiveness for this. Brand uses both ATL (media) and BTL ( consumer related ) activities for promotion. At the time of its re -launched mountain dew conducted massive sampling to create brand awareness in the year 2003 , as per their rough estimation, they reached approximately 2 million in Pakistan with their different samples of green bags, green T-shirts, key chains, caps etc.As per their statement people still remember their massive sampling techniques to set their roots strongly in CSD market in Pakistan.
Mountain dew uses “ PULL STRATEGY ”* in their promotion. For example they pay “ slotting allowances ”*in the supper store. Mountain dew is strongly involved in the sponsorship of programs that exactly match the theme and concepts of their products and which their consumers love to watch. For example mountain dews sponsoring “ living on the edge ” on the Musik channel featuring DJ Waqar who is an icon for teenager and is himself an aggressive enthusiastic entertainer. Previously they were sponsoring “survivor series” they also conduct events like rock concerts in which teenagers participate with full energy, patience and enjoy with there full potential. Half of the total cost is promotional cost. (continue…..)
PLACEMENT Mountain dew is using “direct distribution” *method. Mountain dew floods all possible retail stores with there product. They use 1.5 formulas i.e. if there is a need of 10 bottles in a shop they provide 15 bottle to that shop. The “numeric availability” is 87%. The brand has also developed “marketing relationship”. It gives its big customer calendars and certificates. There is a complaint cell and feedback f rom customer is regularly taken. Company uses its own fleet of vehicles & warehouses. The cost of logistic is high but it is compensated in off season by merging of routes .In order to avoid channel conflicts exclusivity funds are given to the customer .The distribution cost is 8-9% of the total cost including the salaries of sales department.
PRICING Pricing strategy is the last area of marketing mix. The brand uses “ value based pricing ”. It means that when consumer is buying mountain dew they are not just buying the beverage but also the image which goes with it. Prices usually don’t fluctuate but they may suffer sometimes due to the prices of competitors or increase in the prices of raw material. Trade offers like price off and free products are given to the retailers. Final consumers are also given discount on special occasion like Eid, Ramadan etc.UTC ( under the crown ) schemes are usually launches on these events; e.g final consumers are given discounts.
SWOT ANALYSIS OF MNT. DEW
Strength Since the mother brand is so strong, it helped mountain dew a lot in creating its name in beverage market. It also increased the creditability of the mother product. The primary and key strength of mountain dew is that it is the brand of one of the strongest and globally recognized company that is Pepsi . Since, the mother brand is so strong, it helped mountain dew a lot in creating its name in the beverage industry.
Weakness The increasing inflation rate in Pakistan may result in an upcoming weakness for Mountain Dew. Secondly, fragmentation in the beverage industry of Pakistan is another weakness. Thirdly, and most importantly, Mountain Dew’s fame can hurt the credibility of the mother brand, Pepsi. Brand extension is not there
Opportunity One of the best opportunity for mountain dew is that the people are now fed up of ordinary cola’s and other existing CSD’s, hence strongly moving their interest towards the citrus segment like mountain dew.
Threats The biggest threat for mountain dew is form its competitors Sprite 3G and other energy drinks like red bull etc. Before Sprite 3G, Mountain Dew enjoyed the monopoly in the citrus segment of CSD’s industry. Now, the competition is very high between the two brands. Secondly, from the Pepsi’s perspective, Mountain Dew can be a threat for the mother brand.
*Slotting allowances A one-time payment by a manufacturer or vendor to a retailer in order to ensure shelf space in the retailer's store(s) or in its warehouses. Slotting allowances are controversial and play a major role in new product introductions *Pull strategy .“Pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. * H.S.E Health and safety environment *Marketing relationship Relationship with customers, suppliers and distributers *Direct distribution In direct distribution channel, there are no middle-men or intermediaries. The sequence of direct distribution channel is as follows: Producer – Retailer – Consumer (P-R-C)