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A Report on PepsiCo


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Corporate Citizenship(an overview)
CSR Activities
Crisis/Emergencies faced by coke

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A Report on PepsiCo

  1. 1. PR Report Group 5 SYBBA- ‘B’ Company: PepsiCo Name Roll No. Sarthak Bajaj B-005 Siddhartha Gupta B-015 Zoya Kazi B-025 Rohan Negi B-035 Jaineel Shah B-045 Keshav Viswanath B-055Page | 1
  2. 2. Table of Content:Sr.No Topic By: Page No.1. Introduction Keshav Viswanath 32. Events/Sponsorship/Promotions Siddhartha Gupta 63. Corporate Citizenship Jaineel Shah 94. CSR Activities Sarthak Bajaj 135. Crisis/Emergencies Rohan Negi 176. PR Agent/PRO Zoya Kazi 207. Social Audit 23 Page | 2
  3. 3. Introduction Keshav Viswanath B-055 BackgroundPepsi is a carbonated soft drink that is produced and manufactured by PepsiCo. Created anddeveloped in 1893 and introduced as Brads Drink, it was renamed as Pepsi-Cola on August28, 1898, and then to Pepsi in1961.During the typical hot and humid summer of 1898 in NewBern, North Carolina, a young pharmacist named Caleb Bradham began experimenting withcombinations of spices, juices and syrups to create a refreshing new drink to serve hiscustomers.He advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow,convincing him that he should form a company to market the new beverage.At first, he mixed the syrup himself and sold it exclusively through soda fountains. But soonCaleb recognized that a greater opportunity existed to bottle Pepsi so that people could drinkit anywhere. The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officiallyregistered with the U.S. Patent Office. That year, Caleb sold 7,968 gallons of syrup, using thetheme line "Exhilarating, Invigorating, Aids Digestion."He also began awarding franchises to bottle Pepsi to independent investors, whose numbergrew from just two in 1905, in the cities of Charlotte and Durham, North Carolina, to 15 thefollowing year, and 40 by 1907. By the end of 1910, there were Pepsi-Cola franchises in 24states.Pepsi-Colas first bottling line resulted from some less-than-sophisticated engineering in theback room of Calebs pharmacy. Building a strong franchise system was one of Calebsgreatest achievements. Local Pepsi-Cola bottlers, entrepreneurial in spirit and dedicated tothe products success, provided a sturdy foundation. They were the cornerstone of the Pepsi-Cola enterprise. By 1907, the new company was selling more than 100,000 gallons of syrupper year.Growth was phenomenal, and in 1909 Caleb erected a headquarters so spectacular that thetown of New Bern pictured it on a postcard. Famous racing car driver Barney Oldfieldendorsed Pepsi in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracerbefore a race."The previous year, Pepsi had been one of the first companies in the United States to switchfrom horse-drawn transport to motor vehicles, and Calebs business expertise capturedwidespread attention. He was even mentioned as a possible candidate for Governor. A 1913editorial in the Greensboro Patriot praised him for his "keen and energetic business sense."Pepsi-Cola enjoyed 17 unbroken years of success. Caleb now promoted Pepsi sales with theslogan, "Drink Pepsi-Cola. It will satisfy you."Then came World War I, and the cost of doing business increased drastically. By 1921, onlytwo plants remained open. After five owners and 15 unprofitable years, Pepsi-Cola was onceagain a thriving national brand.Page | 3
  4. 4. Pepsi through the 20th century1902-"Pepsi-Cola" was officially registered with the U.S. Patent Office.1903-Bradhams advertising praises his drink as "Exhilarating, invigorating, aids digestion."1905- A new logo appears, the first change from the original created in 1898.1909- Automobile racing pioneer Barney Oldfield becomes Pepsis first celebrity endorserwhen he appears in newspaper ads describing Pepsi-Cola as "A bully drink...refreshing,invigorating, a fine bracer before a race."1920- Pepsi appeals to consumers with, "Drink Pepsi-Cola. It will satisfy you."1939- A newspaper cartoon strip, "Pepsi & Pete," introduces the theme "Twice as Much for aNickel" to increase consumer awareness of Pepsis value advantage.1940- Pepsi makes advertising history with the first advertising jingle ever broadcastnationwide. "Nickel, Nickel". Eventually became a hit record and was translated into 55languages. A new, more modern logo is adopted.1943- The "Twice as Much" advertising strategy expands to include the theme, "BiggerDrink, Better Taste."1953- Americans become more weight conscious, and a new strategy based on Pepsis lowercaloric content is implemented with "The Light Refreshment" campaign, which later evolvesto incorporate "Refreshing Without Filling."1961- Pepsi further refines its target audience, recognizing the increasing importance of theyounger, post-war generation. "Now its Pepsi, for Those who think Young" defines youth asa state of mind as much as a chronological age, maintaining the brands appeal to all marketsegments.1963-The post-war baby boom emerges as a social and marketplace phenomenon. Pepsirecognizes the change, and positions Pepsi as the brand belonging to the new generation-ThePepsi Generation. "Come alive! Youre in the Pepsi Generation" makes advertising history. Itis the first time a product is identified, not so much by its attributes, as by its consumerslifestyles and attitudes.1964- A new product, Diet Pepsi, is introduced into Pepsi-Cola advertising.1969- "Youve got a lot to live. Pepsis got a lot to give" marks a shift in Pepsi Generationadvertising strategy. Youth and lifestyle are still the campaigns driving forces, but with"Live/Give".1976-"Have a Pepsi Day" is the Pepsi Generations upbeat reflection of an improving nationalmood.Page | 4
  5. 5. 1983- The soft drink market grows more competitive, but for Pepsi drinkers, the battle iswon. The time is right and so is their soft drink. Its got to be "Pepsi Now!"1984- "Pepsi. The Choice of a New Generation" announces Michael Jackson, in the first twocommercials of the new campaign. The two spots quickly become "the most eagerly awaitedadvertising of all time."1987- After an absence of 27 years, Pepsi returns to Times Square, New York, with aspectacular 850-square foot electronic display billboard declaring Pepsi to be "AmericasChoice".1989- "The Choice of a New Generation" theme expands to categorize Pepsi users as "AGeneration Ahead!"1995- In a new campaign, the company declares "Nothing else is a Pepsi" and takes tophonors in the years national advertising championship.1998–1999: "It’s the cola" (100th anniversary commercial) The New Age2002- "Change the World" (Japan)2009–present- "Yeh hai youngistaan meri jaan"2011–present- "Change the game" (India, Bangladesh & Pakistan for the 2011 Cricket WorldCup)2012- "Change The Game"2013- "Oh Yes Abhi" (India)As of January 2012, 22 of PepsiCos product lines generated retail sales of more than$1 billion each, and the companys products were distributed across more than 200 countries,resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the secondlargest food & beverage business in the world. Within North America, PepsiCo is ranked (bynet revenue) as the largest food and beverage business.Page | 5
  6. 6. Events/Sponsorship/Promotions Siddhartha Gupta B-015 Promotion: Pepsi StuffPepsi Stuff was a major loyalty program launched by PepsiCo, first in North America onMarch 28, 1996 and then around the world, featuring premiums — such as T-shirts, hats,denim and leather jackets, bags and mountain bikes — that could be purchased with PepsiPoints through the Pepsi Stuff Catalog or online. Customers could acquire points fromspecially marked Pepsi packages and fountain cups. Additional points were sold both byPepsi and by consumers, the latter mainly enabled by eBay. The Pepsi Stuff promotion endedDecember 31, 2008.Points were distributed on 4 billion packages and billions of cups and millions of consumersparticipated. Pepsi Stuff continued to run throughout North America due to consumer andbottler demand, and was eventually expanded to include Mountain Dew and other drinks, andinto many international markets.Pepsi Stuff was one of the first major consumer promotions to feature a dedicated interactiveWeb site. Celebrities like Andre Agassi, David Beckham, Beyoncé, Britney Spears, and theSpice Girls appeared in TV, print, and Internet advertising promoting Pepsi Stuff. PepsiCoproduced over 200 million catalogs each year, billions of Pepsi points, and an extensive lineof free merchandise. This increased Pepsi’s sales significantly prompting people to purchasePepsi in order to get free merchandise. This was a very effective promotional campaign soonto be emulated by other companies.Different products had codes worth different point values; single bottles generally had onepoint while can 12-packs had two and 24-packs had four. Codes from Pepsi NFL Kickoff 12-packs were worth four points. Items available for redemption through the promotion rangedin value from 5 points (MP3 song download) to 175 points (Vintage Pepsi logo hoodiesweatshirt). Customers could also redeem points for entry in various sweepstakes..Page | 6
  7. 7. Event: World Water WeekWorld Water Week, 2012-Pepsi received Industry Water award.( PepsiCo was recognized forthe unparalleled steps it has taken to conserve water across its business operations andagricultural supply chain)Entering its twenty-second year, World Water Week in Stockholm attracts globalrepresentation from public, private and intergovernmental organizations that work to identifyresponses and potential solutions to changes impacting water and food security. Hosted bythe Stockholm International Water Institute (SIWI), the event is the leading global focal pointof water sustainability dialogue and exchange - creating a forum for advanced partnershipsand ideas. PepsiCo is excited to participate in World Water Week as a Gold sponsor andlaureate of the prestigious Industry Water Award.Aligned with the theme of World Water in 2012, Water and Food Security, PepsiCo isapplying a model of doing more, using less to the entire food chain from growingingredients with more crop per drop of water, to manufacturing with less waste, energy andwater use. Ultimately, we are striving for optimum productivity while operating as efficientlyas possible in a resource constrained world.In addition to sponsoring World Water Week in 2012 and receiving the 2012 Industry WaterAward, PepsiCo will host and participate in several events on subjects include water andenergy efficiency, farm verification programs, and food security. PepsiCo will alsoparticipate in dialogues during the Opening Plenary Session, Founders Business Seminar andworkshop on Governance for Water and Food Security among other program events.Page | 7
  8. 8. Sponsorship: IPL  PepsiCo won the rights to be title sponsor of the Indian Premier League for five seasons, commencing 2013.  The winning bid was for Rs 396.8 crores, followed by Airtel’s offer for Rs 315 crores.  “IPL will be called Pepsi IPL for the next five years. The winning bid is almost double than what earlier sponsor was giving. DLF were giving 40 crores per year.  Pepsi will be giving 79 crores per year on an average.” Deepika Warrier, Pepsi Foods marketing head, said: “We are delighted on getting the sponsorship rights to IPL. The event is the crowning glory of cricket in India. Pepsi has got a very long association with cricket for 20 years. We have always been game changers when it comes to the sport.”  The PepsiCo spokesperson, when asked whether the sponsor overvalued the IPL, said: “We really believe in this property and feel this is a big brand that the BCCI has been able to build. It’s a brand that rivals sporting brands across the world. I think it’s an absolutely game changing format.”She added: “The kind of viewership that the IPL gets in India and across the world is of greatinterest to us. The format is very entertaining and all the major international players want toplay in it. The format is going to get better and we are going to take it deeper, reach out moreand take it to schools.” The IPL is being telecast in over 192 countries, informed Shukla.With this wide reach offered by IPL, Pepsi can surpass their closest competitor Coke.Page | 8
  9. 9. Corporate Citizenship Jaineel Shah B-045 PepsiCo has made a promise to deliver sustainable growth by investing in a healthier future for our consumers, our associates, our communities & our planet. We deliver on this promise by striving to meet the goals & commitments we’ve made in four key areas: Performance, Human Sustainability, and Environment Sustainability & Talent Sustainability. 1. Environment Sustainability:PepsiCo’s Global Commitments & India’s Progress:- i. Water:  Respect the human right to water through world-class efficiency in our operations, preserving water resources and enabling access to safe water. ii. Climate Change:  Reduce the carbon footprint of our operations.Page | 9
  10. 10. iii. Land & Packaging:  Rethink the way we grow, source, create, package & deliver our products to minimize our impact on land. iv. Community:  Respect and responsibly use natural resources in our businesses & in the local communities we serve.Page | 10
  11. 11. 2. Human Sustainability As an industry leader in the food and beverage business, we have a responsibility to help deliver healthy, nutritious and tasty products to our consumers. We are doing this by enhancing our product portfolio to deliver products that offer improver nutritional and functional benefits. Our brands, which include Quaker Oats, Tropicana, Gatorade, Frito-Lay and Pepsi, are household names that stand for superior quality and great taste throughout the world. We have committed to reduce the average amount of added sugar, sodium and saturated fats per serving in key global brands in key countries, while increasing the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in our global product portfolio. Today, our portfolio includes several healthier options and some hydrating and nourishing products. We are also committed to responsible marketing and nutrition labelling to improve nutrition education and we support programmes that promote physical activity and a healthier lifestyle.  Following are the goals which we wish to accomplish in the near future: i. Increase the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in our global product portfolio. ii. By 2015, reduce the average amount of sodium per serving in key global food brands, in key countries by 25% compared to a 2006 baseline. iii. Reduce the average amount of saturated fat per serving in key global food brands, in key countries, by 15% by 2020, compared to a 2006 baseline. iv. Display calorie count and key nutrients on our food and beverage packaging by 2012(accomplished). v. Advertise to children under 12 only products that meet our global science-based nutrition standards. vi. Invest in our business and research and development to expand our offerings of more affordable nutritionally relevant products for undeserved and lower- income communities. vii. Expand PepsiCo Foundation and Pepsi Corporate contribution initiatives to promote healthier communities, including enhancing diet and physical activity programs.Page | 11
  12. 12. 3. Talent Sustainability Our commitment to talent sustainability means we’re continually working to identify, develop and retain exceptional people. Our people are our greatest strength. They are the ambassadors of our culture and living examples of our values and commitment to deliver ‘Performance with Purpose’. Our ability to grow year after year is driven by our ability to attract, develop and retain world-class people. Our talent sustainability promise is to invest in our associates to help them succeed and develop the skills needed to drive the company’s growth, while creating employment opportunities in the communities we serve. We owe our success to the work of our people in India, who drive our business by nourishing and delighting our Indian consumers’ every day. We believe in nurturing and inspiring our employees by giving them opportunities to further develop their skills through focused training and learning interventions. We promote a safe, caring and supportive working environment. Our Talent Sustainability commitments help guide our strategy and initiatives to develop our associates and contribute to better living standards in our communities. Following are the measures undertaken by PepsiCo: i. Ensure high level of associate engagement and satisfaction as compared with other Fortune 500 companies.  ‘One Simple Thing’ (OST) – it is a special initiative to support work-life balance launched in 2010. This initiative provides an opportunity for employees to discuss with their manager and implement solutions that help improve work-life balance. ii. Foster diversity and inclusion by developing a workforce that reflects local communities.  A national safety audit for women was conducted in 2010. The women’s help line ‘Sakhi’ was rolled out to all female employees and safety cards were provided. iii. Encourage our associates to lead healthier lives by offering workplace wellness programmes globally.  We continue to introduce new and innovative programmes under our employee wellness programme. In 2010, we introduced 2 new programmes which covered 1600+ associates. iv. Ensure a safe workplace by continuing to reduce lost time injury rates, while striving to improve other occupational health and safety metrics through best practices. v. Support ethical and legal compliance through annual training in our Code of Conduct, which outlines PepsiCo’s unwavering commitment to its human rights policy to treat every associate with dignity and respect. Page | 12
  13. 13. Core CSR Activities – PepsiCo Sarthak Bajaj B-005 Pepsi’s CSR Activities are divided into 4 parts. 1. Replenishing Water Conserving the worlds most precious asset: Water PepsiCo India has pioneered several major initiatives to replenish water in communities. Our goal is to conserve, replenish and thus offset the water used in our manufacturing process through community water recharge projects and water conservation projects in agriculture. 2009 was a year of immense joy & pride for PepsiCo India. We were able to give back more water than we consumed, through our various initiatives of recharging, replenishing & reusing water. 2. PepsiCo Solid Waste Management Programme PepsiCo India continues to strengthen its Solid Waste Management initiatives in partnership with Exnora, an environmental NGO. This award winning, income generating partnership provides a clean environment to more than 450000 people across Pammal, Chennai, Nagapattinam, Tenkasi and Cuddalore in Tamil Nadu, Sangareddy in Andhra Pradesh and Panipat, Haryana.  Unique income generating partnership with leading environmental NGO, Exnora, a pioneer in waste management.  Community members enjoy the benefits of a clean environment and are educated on how to recycle waste, not just relocate it.  Households segregate their bio-degradable waste from their recyclable waste. Bio-degradable waste is then converted into organic manure through the process of vermi-culture. Recyclable waste such as PET and plastics, waste paper and tetra packs are recycled. Community awareness programme includes door-to-door campaigns and street plays to motivate people to segregate organic and inorganic garbage at source to enable recycling. Every aspect of programme built around Community and Government participation to help programme evolve into a self sustaining model Awards  The unique PepsiCo-Exnora initiative in Pammal was awarded the environmental Golden Peacock Award for Innovation in 2006.  Zero Solid Waste Centre in Pammal was recognized as a model project by UNICEF in 2007.  PepsiCo- Exnora Waste to Wealth program won the BSE NASSCOM Social and Corporate Governance Award 2008. Page | 13
  14. 14. 3. Partnership with Farmers PepsiCo India continues to strengthen its partnerships with farmers across the country to boost their productivity and income. The plan is to strengthen farmer connect from 21,000 in 2009 to 50,000 by 2012. Helping farmers improve yield and income The companys vision is to create a cost-effective, localized agro supply chain for its business by:  Strengthening farmer connect from 21,000 in 2009 to 50,000 by 2012.  Building PepsiCos stature as a development partner by helping farmer grow more and earn more.  Introduction of new high yielding varieties of Potato, Oats, Citrus and others.  Introduction of sustainable farming methods and contract farming.  Making world class agricultural practices available to farmers.  Working closely with farmers and state governments to improve agri sustainability, crop diversification and enhance farmer incomes.  Helping farmers refine their farming techniques and raise farm productivity.  Customized solutions to suit specific geographies and locations.  Facilitate financial and insurance services so as to de-risk farming.a) High Quality Seed Program In order to provide its farmers "The best quality potato seeds", PepsiCo collaborated with the Thapar Institute of Technology to develop quality potato mini-tubers. PepsiCo has also made an investment in a world class potato mini-tuber facility at Zahura in Punjab which helps getting robust and disease-free seeds to its contract farmers. Page | 14
  15. 15. b) Contract Farming Partner In Progress Model PepsiCo has pioneered the concept of contract farming under which the company transfers agricultural best practices and technology and procures the produce at a pre-agreed price.  A 27-acre research and demonstration farm was set up in Punjab to support the initiative to conduct farm trials of new varieties of potato, chilli, corn, peanut and other crops.  PepsiCo Indias technical team implemented a high quality seed programme to deliver early generation and disease-free seeds to farmers.c) Potato Farming The Impact  World class, top quality, high-yielding potato varieties introduced.  High yielding potato seeds have enabled farmers to produce world class potatoes and procure higher returns.  PepsiCo India has partnered with more than 11,000 farmers working across Punjab, U.P., Karnataka, Bihar, West Bengal, Gujarat and Maharashtra for the supply of world class chip-grade potatoes.  Partnered with State Bank of India to get soft loans to all its contract farmers to reduce their cost of cultivation and save them from the clutches of money lenders (higher interest rates). PepsiCo India has also partnered with 1,200 farmers in Rajasthan to cultivate barley in a tie- up with the United Breweries Group.d) PepsiCo Citrus Project The PepsiCo and PAGREXCO (Punjab Agri Export Corporation) partnered to start a Citrus Development initiative in 2002, marked a step forward in PepsiCos commitment to diversification of agriculture and improvement in quality of life for farmers. The Impact  Initiative has emerged as one of the most successful models of public-private partnerships in Indian agri-business and would create a localized supply base for citrus juice for Tropicana business.  Project played a significant role in introducing a less water intensive alternative to crops such as paddy.  Today, farmers can choose from 16 varieties of rootstock and 34 varieties of citrus, largest collection at a commercial nursery.  Technical support and expertise were extended to the Punjab Government to set up two fruit processing plants in Hoshiarpur and Abohar - prime citrus growing areas in Punjab.  Each plant is capable of processing multiple fruits and capable of acting as a catalyst for farmers to adopt horticulture. Page | 15
  16. 16. 4. Healthy Kids PepsiCos Get Active & a Good Nutrition and Active Lifestyle Program for Children -has seen robust growth and implementation. Designed and supported by the PepsiCo Health & Wellness team, the programs have been implemented in schools in collaboration with prominent NGOs & Hriday, Swashrit and the Indian Medical Association.Get Active programs have a central objective: to raise awareness on the importance ofbalanced nutrition and regular physical activity for a healthy lifestyle among school children.Starting with a Breakfast Makes Me Smart module in 2008 that emphasized the importanceof healthy breakfast to the My Pyramid module launched in April 2009, Get Active schoolprograms promote learning nutrition through active engagement.Get Active believes in combining simplicity and enjoyment. The basic principle is simple &to establish the fundamentals of Calories In = Calories Out.The programs have yielded great results. A look at the Highlights:2008  Get Active reached 250,000 children across 6 metros and 240 schools in 2008 - a significant 150% rise over 100,000 children across 2 metros in 2007  Partnerships with key NGOs and organizations & Swashrit, Hriday Shan and the Indian Medical Association  Participation in School/Institutions Fests and Events  Prestigious schools like Modern School, Delhi organized a program to enhance nutrition awareness and the importance of Power Breakfast among children - a first for the school. Scottish High School and Rotary Club also organized similar events  The Healthy Lifestyle Exhibition gave visibility to 1000 children from Delhi2009  Get Active reached 300,000 children across 10 cities and 350 schools in 2009Page | 16
  17. 17. Crisis/Emergencies Faced by PepsiCo Rohan Negi B-035 1. Syringe in My Pepsi Introduction In 1993, PepsiCo (Pepsi), the leading beverage company in the world, faced a crisis in the US market, which could have put the future of the company and its brand Diet Pepsi in jeopardy. On July 10, a Seattle TV channel reported that a man and his wife in Tacoma, Washington, had found a syringe in a can of diet Pepsi. This was soon followed by a spate of reports that claimed that consumers had found objects such as a wood screw, a bullet, a cracked vial, and a broken sewing needle in the Diet Pepsi cans. Within no time, 52 such cases were reported from 23 states in the US. Problem Statement: PepsiCo was entering their peak sales season when the tampering incidents were reported. The news media was creating panic among PepsiCo’s constituencies by frequently displaying a visual of a Diet Pepsi can with a hypodermic needle next to it, bringing to mind “AIDS or hepatitis… and that’s pretty scary,” according to Ann Ward, Pepsi’s Manager of Public Relations (Magiera, “What Went Right”). PepsiCo was confident that their product was safe. (The PR response for the same will be seen further in the presentation) The result:The rumors fizzled out within two weeksfollowing multiple arrests by the FDA forfiling false reports. Diet Pepsi sales fell by2% during the crisis. The scare cost Pepsisome $25 million in lost sales and highermarketing costs, and another $10 million inincreased coupon. The situation required anaggressive defense because PepsiCo hadntdone anything wrong. If the companyremained quiet & complacent the damagecould have been far worse. Page | 17
  18. 18. 2. Pepsi: Mouse in my Mountain Dew  Mountain Dew, a yellow drink that is packed with caffeine, is consumed by thousands of people each day.  The drink’s manufacturer is PepsiCo which was sued by Ronald Ball of Wisconsin. Ball claims in a lawsuit back in 2009 that when he opened a can of Mountain Dew that he purchased from a vending machine, something inside the can did not taste right. Ball then claims that he spit out a dead mouse.  The lawsuit documents show that Ball is seeking damages of $50,000 or more. The lawsuit also says that Ball sent the mouse to Pepsi, which ultimately destroyed it.  Pepsi dismissed the case based on testimony from an expert who claimed that the acid used to bottle the drink would have caused the body of the mouse to become jelly. The expert, Lawrence D. McGill, who holds a PhD. in veterinary pathology said “if a mouse is submerged in a fluid with the acidity of Mountain Dew, after 4 to 7 days in the fluid the mouse will have no calcium in its bones and bony structures, the mouse’s abdominal structure will rupture, and its cranial cavity (head) is also likely to rupture… By 30 days of exposure to the fluid, all of the mouse’s structures will disintegrate to the point where the structures (excepting possibly a portion of the tail) will not be recognizable and, therefore, the animal itself will not be recognizable. Instead, after 30 days in the fluid, the mouse will have been transformed into a ‘jelly- like’ substance.”  The expert also indicated the mouse he examined was no older than four weeks old at the time of death.  Another ingredient used in Mountain Dew is brominated vegetable oil (BVO), which is banned from use in Japan and Europe, but allowed in small quantities of beverages like Squirt, Fanta Orange, and Mountain Dew., "If a mouse is submerged in a fluid with the acidity of Mountain Dew," the mouse would "between four days to at most seven days in the fluid, the mouse will have no calcium in its bones and bony structures." The result:The case gained attention only for abrief period of time but has madesceptics over the years questionsPepsiCo’s expert’s claims.PepsiCo damaged its own image withthe pathologist’s statements but noconsiderable losses in sales wereexperience by it across its various Colabrands.Page | 18
  19. 19. 3. Pepsi- Toxic CocktailIn 2003, a Delhi-based public interest research institution, the Centre for Science andEnvironment (CSE), alleged that about a dozen popular soft drinks brands, including Pepsi,contained dangerously high levels of pesticides and insecticides. At a press conference heldin New Delhi, the CSE claimed that tests carried out at its test centres revealed presence offour extremely toxic pesticides and insecticides - lindane, DDT, malathion and chlorpyrifos— in various brands of cola majors.The NGO found Pepsi contained 36 times the amount of pesticides considered acceptable bythe European Economic Commission (EEC). CSE is the same agency that earlier had exposedthe presence of pesticides in popular brands of bottled water. The Food Products Order andPrevention of Food Adulteration doesn’t have any provision addressing the issue of standardsfor non-alcoholic beverages or soft drinks, the CSE said.The study found that the total pesticides in PepsiCo brands on an average were 0.0180milligrams per litre. This is 36 times higher that the EEC limit for pesticides (0.0005 mg/l).The NGO tested one bottle of Pepsi bought in the US. It was found to be free of suchcontaminants.PepsiCo held a joint press conference with Coke to refute CSE’s claims as well as to threatenlegal action against the centre. They not only disputed CSE’s findings but asserted that thecentre didn’t have the wherewithal to carry out proper tests on soft drinks.Pepsi was willing to get their products tested by an independent internationally accreditedlaboratory.Effect of this Controversy: The Company has decided to stamp a quality assurance sealwhich reads: One Quality Worldwide across all its product labels, a first for a soft drinkgiant anywhere in the world. The quality seal will appear on labels of its carbonatedbeverages, non-carbs, flavors, Tropicana juices, sports drink Gatorade and Aquafina water.PepsiCo is also in discussions with its snack foods arm Frito-Lay India to put the same sealon its snack foods labels. The quality seal seeks to assure Indian consumers that the quality ofPepsiCos products sold in the country is the same as those sold in the US and other parts ofthe world. Result: Speaking to ET(2007), PepsiCo Indias executive director (marketing) Punita Lal said: "Since the controversy hit only India, no other country needs such a quality assurance. The pesticide issue left the consumer questioning our quality."Colas (Pepsi in this case), which used to account for 60% of PepsiCo Indias volumes before the pesticide issue, now contribute about 40% to the companys total volumes. Marketing spends on colas, too, are down from 80% of its annual budgets a couple of years ago, to 60% at present.Page | 19
  20. 20. PR AGENT/PRO Zoya Kazi B-025PepsiCo has a strategic alliance with two major public relations agencies -Edelman and Weber Shandwick.Internal Public Relations of PepsiCoPepsiCo believes that there should be a mutual trust between the employees and thecompany. They found that conversations with employees remain one of the most crediblesources of information about a company - ahead of news coverage, online search oradvertisements.Pepsi considers its employeesas social ambassadors. Pepsihas made selected internalnewsletter articles available topost externally which providesthe employees an opportunity toshare something unique aboutthe place they work on socialnetwork. Since the newsletter ispublished daily by email, itgenerates a lot of sharablecontent. Employees can alsoshare articles as the one onChief Executive Magazineranking PepsiCo #7 among thebest companies for leaders or another about mobile phone vending machine integration atPepsiCo’s operations in Turkey. PepsiCo is also very careful to focus on making it easy foremployees to share articles they want to share on their own initiative, rather than pushingthem to share on behalf of the company.Page | 20
  21. 21. Crisis Management by Public Relations Agency Crisis The Pepsi Corporation faced a crisis in 1993 which started with claims of syringes being found in cans of diet Pepsi. Pepsi urged stores not to remove the product from shelves while it had the cans and the situation investigated. Targeted public The public that Pepsi was targeting was both internal and external. The internal public would consist of all Pepsis employees. It is important that the employees of Pepsi be confident in the product they their employer is trying to sell. The external public targeted would consist of any individual or organization who drinks or purchases soda and the press. The press needed to be targeted in order for Pepsi to maintain a positive outlook through the media. Public Relations Campaign Pepsi was able to communicate with its public effectively because of its PR campaign. Pepsis PR campaign involved four principles, putting the public safety first, establishing and fixing the crisis, communicating with the internal and external public on a regular basis, and taking responsibility for fixing the crisis. The companys strategy was to reassure the public that this was not a manufacturing crisis. The PR team used specific PR communication tools to accomplish these principles. The PR coordinator Madeira, used specific techniques to inform, influence, and motivates the public such as video news releases (VNR), press releases, charts, audio tapes, diagrams of the production process and photos for external and internal distribution. The benefit of the VNR was that it proved to be the most effective approach to communicating with the public. The VNR was the quickest and most efficient way to communicate Pepsis message with the public. Vice President of Public Affairs, Becky Madeira was able to address the news media, customers, consumers, and employees as well as local Pepsi-Cola bottle with its "One Clear Voice" approach, which informed the public of proper facts and any new updates as they arose. This case showed that Pepsi has an effective crisis management team who did their job. This was displayed through the fact that they earned the respect of their clients and employees through effective communication.Page | 21
  22. 22. Role of Public Relations Agency in Corporate CommunicationPepsi Refresh Project – Role of Weber Shandwick & EdelmanObjective :- The Project drives conversation and builds credibility in the social enterprise and innovation arenas through a dynamic, real time “campaign” which democratizes the process of turning ideas into reality, earning more than 3 billion audience impressions to- date positively enhancing the Pepsi brand. The Pepsi Refresh Project was designed to give away more than $20 million in the U.S. to fund good ideas, big and small, that move communities forward. With roles clearly defined by the client, Edelman & Weber Shandwick collaborated closely& formed a nearly seamless team to support implementation and meet the communication objectives of the Pepsi program. Each month, Pepsi invites individuals and organizations to submit ideas that they believe will move communities forward and the public votes to decide who wins.STRATEGY AND IMPLEMENTATION Edelman and Weber Shandwick worked with Pepsi and agency partners to create a strong communications plan to drive media and voting around the launch of PRP:- • Casted a national spotlight on the implementation of ideas for refreshing change by announcing the diversion of funds to implement the Project. • Collaborated with employees, bottling and retail partners to generate local news angles and to drive awareness. • Raised awareness and increased participation at grassroots level through Hispanic and English language press. • Promoted Refresh as the online destination, encouraged individuals to submit ideas and vote. • Encouraged online engagement with the Project on Facebook or on Twitter. • Developed national partnerships to raise broad awareness of the Project to tell stories of Project impact and reach.Page | 22
  23. 23. Social Audit: SurveyIn a survey answered by 46 randomly selected people, all within the age bracket of 18-25, thefollowing questions were asked:1. How often do you drink Pepsi?2. Which is your favourite brand of soft drinks?3. What factors influence your choice of beverage?4. Do you feel Pepsi Co is socially responsible?5. Does it influence your buying behaviour?6. Are they Proactive or Reactive in terms of their CSR Campaigns?7. What campaigns by Pepsi are you aware of?8. Can you think of any controversies involving Pepsi Co.?Analysis: 1. Around 19.5% of the randomly selected people never drink Pepsi. 2. Approximately 35% of the people picked Thumbs Up as their favourite as compared to only 26% who picked Pepsi.Page | 23
  24. 24. 3. To 87%, taste is the most important factor when choosing a particular brand of soft drink. 4. When asked if they thought Pepsi was socially responsible, only a mere 13% actually felt they are, though 47% felt that Pepsi might be. 5. 57% of the people don’t care if Pepsi is socially responsible or not, when they buy soft drinks.Page | 24
  25. 25. 6. The intention of this question was to understand what consumers felt about Pepsi’s CSR in terms of them being Proactive or Reactive. Though majority doesn’t know, of the remaining, majority feel that Pepsi’s CSR campaigns are Reactive. Meaning that the company creates campaigns and makes efforts as a means of countering or reacting to events in its external environment. 7. When asked what campaigns they were aware of, some of the most common responses were: - Dil maange more -Youngistan -Oh yes abhi -Change the game 8. The only controversial issue that people seemed to know about was about Pepsi containing pesticides. Thank You Page | 25