(1) PepsiCo entered the Pakistani market in 1967 and is now the sixth largest global beverage market and leader in potato chips. (2) Macroenvironmental factors like demographics, economics, technology, and sociocultural norms influence PepsiCo's strategies and sales. (3) Key factors are Pakistan's large youth population, urbanization, hot climate suiting soft drinks, and increasing incomes boosting consumption.

1. Macro Environmental factors analysis of PEPSICO
Pakistan
by Alina Baber
alinababer@live.com
Every Marketer has a need to be the good at building relationships with customer, others in
company and external links and environment. To do this effectively they must understand the
major environmental forces and factors that surround all these relationships. By deep and
careful study of the environment, marketers can plan and adapt their strategies to meet new
market places, challenges and opportunities.
PepsiCo Company is the one of the famous international soft drinks company, the company
created and developed in 1893 and introduced as Brad's Drink, it was renamed as PepsiCola on August 28, 1898, then to Pepsi in 1961. PepsiCo entered Pakistan in 1967. Today,
Pakistan is considered PepsiCo's sixth largest global beverage market. With the introduction of
Frito-Lay in 2006, PepsiCo is also the country leader in the potato chip category, producing
products with local flavors like Lay's Masala, Kurkure Red Chilli Jhatka and Kurkure Chutney
Chuska. Pepsi and Lay's both rank as Top 10 Pakistan brands.
Some of the Macro environmental factors that affect the market trend of the PepsiCo are as
following:
• Demographic Factors:
Following are the Demographic factors contain age, population density and distributions
of targeted customers which is can effects the marketing of PepsiCo.
1. Age: PepsiCo should target that customer group that customer it the most and
make promotional strategies according to that particular group of consumer’s
behavior because the requirements of different age groups are different. The
potential customer of PepsiCo would be the age of 14 to 30 years. So their main
target is young generation. Soft drinks are one of popular project linked by our
youth.

2. 2. Education: Company has to plan promotional strategies to attract the customers.
If the targeted customer’s majority population is educated in a country then
through advertisements PepsiCo can be made well aware of their product and can
convey their message easily. Promotion and education has a direct relationship.
3. Population Distribution: Population distribution means how much [population
lives I urban areas and rural areas. In Pakistan 35 % population resides in urban
areas and 65% population lives in rural areas. PepsiCo targets on urban areas and
middle class to upper class as people there are more attract towards such beverage
while people in rural areas are more attracts to drink lassi and desi drinks.
4. Population Density:
PepsiCo sales their product more those cities and regions, which have the largest
population density. Karachi has the largest population density and Islamabad,
Lahore, Peshawar and Quetta has less population density in Pakistan. Pepsi sales
are more in Karachi as compared to the sales in Islamabad.
1. ECONOMIC FACTORS:
Following are the economic factors are also affect the product and market:
1. Income and Income per Capita:
If the income level or per capita income of the people increases, it will have a
positive effect on the consumption of Pepsi.
2. Inflation:
If the country faces inflationary trend in the market, the price of the Pepsi will
ultimately increase which will lower its demand.
3. Consumption Behavior
Pakistan is consumption oriented society. Due to demonstration effect the
people are more attract towards consumption than saving. So the people of
Pakistan spent heavily on food items. Hence Pepsi has a good market share in
the present circumstances.
4. Income Distribution:

3. 5. In Pakistan 10% rich people possess 93% of wealth and 90% people possess 7%
of wealth. If there is balanced distribution of income in the country, the
consumption of the people will increase hence increasing the sales of beverages
as well.
6. Payment Mod:
As the use of plastic money is increasing the consumption pattern of the people
are increasing. Although it will have a low effect on the consumption of Pepsi.
7. Employment Opportunities:
As employment opportunities increase the living standard of the people increase
and the people consume more.
8. Aggregate Demand:
In case of Pepsi, demand of the product increases in the season of summer as
the hot weather makes the consumers want to drink more.
9. Aggregate Supply:
In summer season to cope up with the increasing demand they have to increase
the aggregate supply of their product.
10. Economic Policies:
Some of the economic policies which can affect the market of Pepsi are
discussed below.
11. Fiscal Policy:
It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise
having negative affect on its consumption.
12. Monetary Policy:
Monetary policy is made to restrict or increase the supply of money in the
market. If policies are made to restrict the flow of money in the market, inflation
can be controlled hence increasing the real income of the people which will
ultimately affect the consumption of Pepsi.

4. 13. Price Policy:
If price of Pepsi is increased its demand will decrease and vice versa.
14.Income Policy:
If income of the people will increase their purchasing power will increase and
hence increasing the market share of Pepsi.
1. NATURAL FACTOR:
Due to natural factors, such as disasters and some shortage by the marketers and suppliers
so it’s affects the product and market too.
1. Region:
Pakistan is divided into different geographical regions. Marketing and sales of
Pepsi is different in different geographical regions. In hot areas its demand is
more.
2. City Size:
The cities which are densely populated the consumption of Pepsi is more.
3. Climate:
Pepsi is more suitable for humid or hot weathered countries like Pakistan. It is a
source of refreshment when a person is thirty due to the hot weather.
4. Infrastructure:
Roads are the basic need for transportation of Pepsi from one place to another.
Pepsi cannot open factories in every city of Pakistan so it has to transport it to
other cities where Pepsi is demanded.
Electricity is the basic necessity for production of any product. Constant load
shedding slows down the process of production which leads to less production
and low market share.
1. TECHNOLOGICAL FACTORS:

5. 1. Research and Development
Through research and development quality of the product can be improved or
better techniques or machinery can be developed which can increase the
production. When technology is advance the supply of the product increase
hence the company experiences growth in their business. There is a huge
investment from the government to develop the infrastructure, opportunities
and the creation of new products such as new advanced formulae, new
technological factors changed so that it is very much effected by their product.
• POLITICAL AND LEGAL FACTORS:
Pakistan is a politically stable economy; foreign investors are attracted to Pakistan. The Pakistani
government is improving business with trade and investment.
1. Political Stability:
Whenever the government is considered to be stable, the business will
flourish. If there is political stability in the country the policies and strategies
made by Pepsi can be consistent to be implemented. Foreign companies are
also keen to invest in those countries which are politically stable where they
have no fear of decline in their market share or shut down due to sudden
change of government.
2. Mixed Economy
In mixed economy government and private sector both plays their role in
developing the economy of the country. Investment by foreign companies like
Pepsi is more likely to flourish in mixed economy.
3. Laws Formulation
Government has given copy rights to Pepsi so that another company cannot
sell their product by the name of Pepsi. The countries where laws are
formulated, the strategies and activities of the company are different.

6. 4. Social Responsibility
Pepsi's social responsibility is to provide its customers with clean and hygienic
product so to do this they have increased the use of disposable bottles.
1. SOCIAL AND CULTURAL FACTORS:
Following are the cultural and social factors are also affect the product and market:
1. Psychographic
It is a combination of demographic and psychological factors. Psychological
attributes mean how you perceive things. The company will focus on the
behavior of consumers and make different changes in their product quantity or
quality and in promoting their product so that they can attract the customers.
Keeping in view that the behavior of different consumers is not alike they have
to make their marketing strategies in accordance with their requirements so
that they are convinced to buy the product.
2. Religious:
Due to Islamic cultural values customer of Pakistan prefer to use Halal products.
3. And Religious factors can influence the market sales of Pepsi as it happened in
2003 when the U.S-led attack on Iraq, wide sections of society in Pakistan has
banned American multinationals Coke and Pepsi.
4. Social Status:
Pepsi is a well renowned brand. People who are brand conscious will not drink
beverages of lesser known brands such as Amrat cola. They will try to show
their status by drinking Pepsi which is known to all as a quality drink.
5. Media:
It is a very important factor for marketing. Media these days is a very effective
way of inspiring people to buy a specific product. A good promotion can boast
up sales to a great extent.