RESEARCH METHODOLOGY Secondary Data:

The Secondary information was majority collected from the internet and website of the PepsiCo. Some help was also taken from the Books. Some data was also available from Journals and Magazines.

Primary Data:
Questionnaire method is used to collect the primary data. The survey was conducted within the period of 12th July 2010 to 20th July 2010 to assess the customer preference regarding the Soft Drink.

Purpose of the study:

To learn the practical application of the strategies. To know the effectiveness of the strategies adopted in the particular situation.

LIMITATIONS:
This project provides comprehensive study of the marketing strategies and brief study of the financial strategies of the PepsiCo. Findings are based on the views expressed by the consumers. So it may suffer from biased prejudices. The company does not provide any financial assistance.

INDEX
Sr.No.
1 2 3 4 5 6 7 8 9 10 11

Contents
Soft Drink Industry- an overview. Profile of PepsiCo PEPSI ENTRY INTO INDIA- A GLOBAL LESSON MARKETING STRATEGIES RESEARCH METHODOLOGY SWOT ANALYSIS SURVEY FINDINGS & RECOMMENDATIONS CONCLUSION ANNEXURE BIBLIOGRAPHY

Page No.
06 09 11 13 32 34 36 43 46 47 52

LIST OF DIAGRAMS AND CHARTS Sr. No.

1 2 3 4 5 6 7 8

Title
Brands of PepsiCo Distribution Redefined Michael Porter's 5 force Model Survey - Brand Preference Survey - Preference of Soft Drinks in a day Survey - Users preferences Survey - Impact of advertising Survey - Advertisement Strategies Appreciated Survey - Preference of Health Juice Survey - Preference of Health Juice Brands

Page No.
14 22 23 36 37 38 39 40 41 42

9 10

EXECUTIVE SUMMARY
The Indian market is getting to be consumer oriented. This is the reason behind the exceptional boom in advertising. Below the line marketing activities, fast distribution system and more sophisticated consumer research. The problem that all marketers are facing is getting the maximum done in the minimum possible time. And with brand loyalty becoming a thing of the past, given the choice available to the consumer pull. Everywhere, there is a new thrust on marketing and advertising. The entries of multinational products in to the country are seeing more emphasis on world- class quality. The scene has moved beyond the threshold of global presence, inward and outward. In the modern urban culture consumption of soft drinks particularly among younger generation has become very popular. Soft drinks in various flavors and tastes are widely patronized by urban population at various occasions like dinner parties, marriages, social get together; birthday calibration etc. children of all ages and groups are especially attracted by the mere mention of the word soft drinks. With the growing popularity of soft drinks, the technology of its production, preservation, transportation and or marketing in the recent years has witnessed phenomenal changes. The so-called competition for this product in the market is from different other brands. Mass media, particularly the emergence of television, has contribute to a large extent of the ever growing demand for soft drinks the attractive jingles and sport make the large audience remember this product at all times. Through this project an attempt has been made to explain by means of the PepsiCo various strategies adopted and developed by them in order to satisfy the ever growing needs of the consumers and competitive advantage over its competitors

CHAPTER - 1
SOFT DRINK INDUSTRY: AN OVERVIEW
It all began in 1886, when a tree legged brass kettle in Hohn Styth Pembertons backyard in Atlanta was brewing the first P of marketing leg. Unaware the pharmacist has given birth to a caramel colored syrup, which is now the chief ingredient of the worlds favorite drink. The syrup combined with carbonated the soft drink market. It is estimated that this drink is served more than one thousand million times in a day. Pemberton & Robinson laid the first foundation of this beverage when an average nine drinks per day to begin with, upping volumes as sales grew. In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the 1950s Colas was a daily consumption item, stored in house hold freezes. Soon were born other non- cola variants of this product like orange & Lemon. Now, the soft drink industry has been dominated by three major player (1) The New York based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3) The united Kingdom based Cadbury Schweppes. Throughout the glove these major players have been battling it. Out for a bigger chunk of the ever-growing cold drink market. Now this battle has begun in India too. India is now the part of cold drink war. Gone are days of Ramesh Chauhan, Indias one time cola king and his bouts of pistol shooting. Expect now to hear the boon of cannons when the Coca Cola & Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By buying over local competition, the two American Cola giants have cleared up the arena and are packing all their power behind building the Indian franchisee of their globe girdling brands. The huge amount invested in fracture has never been seen before. Both players seen an enormous potential in his country where swigging a carbonated beverage is still considered a treat, virtually a luxury. In colas, Pepsi is already market leader and in certain cities like Delhi, Pepsi outlets are on one side & all the other colas put together on the other. While coke

executive scruff at Pepsis claims as well as targets, industry observers are of the view that Pepsi has definitely stolen a march over its competitor coke. Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image turnaround is no small achievements, considering that since it was established in 1989, taking the hardship route prior to liberalization and weighed down by export commitments. Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff competition between first two, both Pepsi and coke have started, sponsoring local events and staging frequent consumer promotion campaigns. As the mega event of this century has started, and the marketers are using this event world cup football, cricket events and many more other events. The success of soft drink industry depends upon 4 major factors viz.

Availability. Visibility. Cooling. Range.

Availability:

Availability means the presence of a particular brand at any outlet. If a product is now available at any outlet and the competitor brand is available, the consumer will go for that.

Visibility:

Visibility is the presence felt, if any outlet has a particular brand of soft drink sayPepsi cola and this brand is not displayed in the outlet, then its availability is of no use. The soft drink must be shown off properly and attractively so as to catch the attention of the consumer immediately.

Cooling:

As, the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the sales. The brand, which is available chilled, gets more sales then the one which is not, even if it is more preferred one.

Range:

This is the last but not the least factor, which affects the sale of the products of a particular company. Range availability means the availability of all SKU (Stock Keeping Units). 5

CHAPTER 2
Profile of PepsiCo MISSION:
PEPSI is continuously striving for synergy between technology, system and human resource to provide product and services that meets the quality, performance and price aspirants of customer. While doing so, it maintains the highest standards of ethics and societal responsibilities, innovates product and, processes and develop team that keep the momentum going to take the company to excellence in the new millennium.

VISION:
"To build Indias leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people."

SUSTAINABILITY VISION:
"PepsiCos responsibility is to continually improve all aspects of the world in which we operate environment, social, economic creating a better tomorrow than today" Tomorrow better than Today

Company Profile
PepsiCo is one of the largest companies in the U.S. It figures amongst the largest 15 companies worldwide according to the number of employees hired. PepsiCo is a world leader in the food chain business. It consists of many companies amongst which the famous one is Pepsi-Cola, Frito-Lay and Pepsi Food International. The group is presently into two of the most profitable and profitable and growing industries namely, beverages and snack foods. It has scores of big brands available in nearly 150 countries across the globe. The group has established for itself once of the strongest brands in various segments of its operations. The beverages segment primarily markets its Pepsi, Diet Pepsi, Mountain Dew and other brands world wide and 7-UP outside the U.S. markets. These are positioned in close competition with Coca-Cola Inc. of USA. A point which is worth a mention is that Coca-Cola gets 80% of its profits for International operations while the same figure for PepsiCo stands at 6%. The segment is also in the bottling plants and distribution facilities and also distributes the ready to drink tea products of Lipton in North America. In a joint venture with orient spray juice products PepsiCo also manufactures and distributes fruit juices. The snack food division manufactures and distributes and markets chips and other snacks worldwide. The international operations of this segment extends to the markets of Mexico, the UK and Canada. Frito-Lay represents this segment of PepsiCo. The restaurant segment earlier primarily consists of the operations of the worldwide Pizza Hut, Taco Bell and KFC chains. Pepsi Cos restaurant distribution operation, supplies company owned and franchise restaurants in the U.S. The company ventured into restaurant business with Taco Bell, KFC, Pizza Hut ended last year when they were shinned off from the company. A packaged goods company comprised of Pepsi-Cola Company and Frito-Lay will continue to bear the PepsiCo name. The move should enhance both corporations ability to prosper with their fully dedicated structure and management team.

CHAPTER - 3
PEPSI ENTRY INTO INDIA- A GLOBAL LESSON.
In the late 1980s, India had a closed economy and government intervention in the corporate sector was quite high. However, multinational companies such as PepsiCo had been eyeing the Indian market for a long time for a host of reasons. As the major market for PepsiCo, the US, seemed to be reaching saturation levels, the option to expand on a global scale seemed to have become inevitable for the company. India was a lucrative destination since its vast population offered a huge, untapped customer base. During the late 1980s, the per capita consumption of soft drinks in India was only three bottles per annum as against 63 and 38 for Egypt and Thailand respectively. Even its neighbor Pakistan boasted of a per capita soft drink consumption of 13 bottles. PepsiCo was also encouraged by the fact that increasing urbanization had already familiarized Indians with leading global brands. Given these circumstances, PepsiCo officials had been involved in hectic lobbying with the Indian government to obtain permission to begin operations in the country. However, the company could not deny that many political parties and factions were opposed to its entry into the country. It had therefore become imperative for PepsiCo to come up with a package attractive enough for the Indian government.

The Promises That Helped Pepsi Enter.

In May 1985, PepsiCo had joined hands with one of India's leading business houses, the R P Goenka (RPG) group, to begin operations in the country. The company, along with the RPG group company Agro Product Export Ltd., planned to import the cola concentrate and sell soft drinks under the Pepsi label. To make its proposal attractive to the Indian government, PepsiCo said that the import of cola concentrate would essentially be in return for exporting juice concentrate from operations to be established in the north Indian state of Punjab. In its proposal submitted to the Ministry of Industrial Development, company sources said that the objectives of PepsiCo's entry into India revolved around 'promoting and developing the export of Indian agro-based products and introducing and developing PepsiCo's products in the country.' However, the government rejected this proposal primarily on two grounds: one, the government 8

did not accept the clause regarding the import of the cola concentrate and, two, the use of a foreign brand name (Pepsi) was not allowed as per the regulatory framework. The association with the RPG group too ended at this juncture. Not willing to sit quietly on the issue, PepsiCo put forward another proposal to the government a few months later. The company knew that the political and social problems4 that plagued Punjab were an extremely sensitive issue for India in the 1980s. PepsiCo's decision to link its entry with the development and welfare of the state was thus a conscious one, aimed at winning the government over. The fact that Punjab boasted a healthy agricultural sector (with good crop yields in the past) also played a role in PepsiCo's decision. Reportedly, the new proposal gave a lot of emphasis to the effects of PepsiCo's entry on agriculture and employment in Punjab. The company claimed that it would play a central role in bringing about an agricultural revolution in the state and would create many employment opportunities. To make its proposal even more lucrative, PepsiCo claimed that these new employment opportunities would tempt many of the terrorists to return to society.

India Liberalizes - A Boon for Pepsi

In the early 1990s, the Government of India was facing a foreign exchange crisis. The country was finding it extremely difficult to borrow funds from the international markets due to a host of problems on the political, economic and social fronts. Organizations like the International Monetary Fund agreed to help the Indian government deal with the financial crisis, on condition that it liberalized the Indian economy. As a result, the government decided to liberalize the economy. The removal of the numerous restrictions on foreign trade and the increased role of private equity in Indian markets were the two most prominent features of the government's new economic policy. Pepsi benefited from the economic changes in many ways. The removal of various restrictions meant that it no longer had to fulfill many of the commitments it had made at the time of its entry. The government removed the restrictions that bound Pepsi's investments in the soft drinks business to 25% of the overall investments and required it to export 50% of its production.

CHAPTER - 4
MARKETING STRATEGIES
Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives. Marketing mix has a classification for these marketing tools. These marketing are classified and called as the Four Ps i.e. Product, Price, Place and Promotion. The Four Ps represents the sellers view of the marketing tools available for influencing buyers. From the buyers point of view, each marketing tool is designed to deliver a customer benefit. The most basic marketing tool is product which includes product design, quality, features, branding, and packaging. A critical marketing tool is price i.e. the amount of money that customers pay for the product. It also includes discounts, allowances, credit terms and payment period. Place is another key marketing mix tool. And it includes various activities the company undertakes to make the product accessible and available to the customer. Some factors that decide the place are transport facilities, channels of distribution, coverage area, etc. Promotion is the fourth marketing mix tool which includes all the activities that the company undertakes to communicate and promote its product to target market. Promotion includes sales promotion, advertising, sales force, public relations, direct marketing, etc.

PRODUCT
In marketing, a product is anything that can be offered to a market that might satisfy a want or need. It is of two types: Tangible (physical) and Intangible (nonphysical). Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes, not just the physical merchandise. All products offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service) spectrum.

10

A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product. The term goods are used primarily by those that wish to abstract from the details of a given product. As such it is useful in accounting and economic models. The term product is used primarily by those that wish to examine the details and richness of a specific market offering. As such it is useful to marketers, managers, and quality control specialists. A service is a non-material or intangible product - such as professional consultancy, serving, or an entertainment experience.

Pepsi - Brands
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 no caffeine. Some of the different and varied brands of Pepsi are as follows:

Pepsi version of dark cola which is the major primary competitor to Coke.

Mo u n t a i n De w MDX i s a n e ne r gy dr i n k ma nu f a c t u r e d a n d d i s t r i b u t e d b y Pe ps i C o u n de r t he Mo u n t a i n De w b r a n d . I t wa s i nt r o du c e d i n 200 5 .
11

Ga t o r a d e i s a n on - ca r b on a t e d s po r t s dr i n k ma r ke t e d b y Qu a k e r Oat s Co m p a n y , a d i vi s i o n of P ep s i C o. Or i g i n a l l y ma d e fo r at hl e t e s , i t i s no w of t e n c o n s u m e d a s a s na c k b e ver a ge .

7 Up is a brand of a lemon-lime flavored soft drink.

T r o p i c a n a P r o du c t s i s a n A me r i c a n c om p a n y ba s e d i n B r a d e n t o n , F l o r i d a , US A , wh i c h i s o ne o f t h e wor l d 's l a r g e s t p r o d u c e r s a nd m ar ke t e r s o f or an ge j u i c e . It h a s b e e n o wn e d by Pe ps i C o , I nc . s i nc e 1998.

Di e t Pe p s i i s a l ow- ca l o r i e c ar bo n a t e d co l a . I t was i n t r o d u c e d i n 1964 as a va r i a n t o f Pe ps i - Co l a wi t h n o s u ga r .

12

Aquafina is non-carbonated bottled water produced by PepsiCo.

Mi r i n d a i s a b r a nd of s of t dr i n k. Mi r i n d a i s own e d by PepsiCo.

Pepsi Blue is a soft drink made by PepsiCo and launched in mid2002.

P e p s i C o i n t r o d u c e d S l i c e - a f r u i t fl a vou r e d s of t dr i n k in 1984.

Packaging:
Packaging is defined as all the activities of designing and producing the container for a product. Well-designed packages can build brand equity and drive sales. The package is the buyers first encounter with the product and is capable of turning

13

the buyer on or off. Packaging also affects consumers later product experiences. Packages contribute to instant recognition of the company or the brand. Carbonated Soft Drinks (CSD) or Soft Drinks as they are popularly known are one of the largest FMCG market in the whole world with the total annual sales around $40 billion. This product is generally available in four kinds of packing. Pepsi is supplied in Returnable glass bottles (200 ml, 250 ml, 300 ml) which is supplied in molded plastic shells. 1.5 liter, 2 liter PET bottles, 330 ml, 200ml of cans, Tetra packs

Glass Bottles and Cans.

One of the standard packages that one is likely to see in the coming years is buying more at lower price. Pepsi introduced 200 ml bottles of Pepsi at the price of Rs.6. It was an instant hit while packages of those kinds are also being worked out keeping in view of the rural market. But it could also lead to the killing of the standard 300 ml size bottles that is in vogue now. The consumer would get a choice of soft drink at a cheaper and an affordable price - even if it means breaking of certain standards shapes and sizes of the packages. The broad strategies of both penetrating the market are still being made.

Pet Bottles.
And the amount of thought that is going into it can be made out from the very fact that the manufacturers are thinking of such innovations as the picnic packages of the brand for those on holiday trip. The battle will be engrossing as packages will be brought to the market and be pulled by the competing rivals. There would be price wars and competitions on qualities.

PRICE
14

In economics and business, the price is the assigned numerical monetary value of a good, service or asset. Price is also central to marketing where it is one of the four variables in the marketing mix that business people use to develop a marketing plan. Pricing is a big part of the marketing mix. Choosing the right price and the right pricing strategy is crucial to the marketing process. The price of the product is not something that is fixed. On the other hand the price of the product depends on many other factors. Some times the price of the product has got nothing to do with the actual product itself. The price may act as a way to attract target customers. The price of the product is decided keeping many things in mind. These things include factors like cost incurred on the product, target market, competitors, consumer buying capacity etc.

Pepsi Price
Pepsi again decides it price on the basis of competition. The best think about the company Pepsi is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. But this risk taking attitude has also earned Pepsi losses. Though lowering the price would attract the customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier but now Pepsi is a full-fledged and growing company. It has covered all its losses and is now growing at a rapid rate. The industry sales growth is largely driven by population growth as well as the amount of advertising and product innovation taking place in the industry. Given the mature nature of the market, both Pepsi and Coca Cola have resorted to pricing discrimination strategies to maximize the value of consumer demand.

Direct Price Discrimination:

15

The simplest form of extracting customer surplus is charging customers with different prices based on their location and purchasing power. This is evident in the International Operations of Pepsi. Cola prices in Mexico, Brazil and Eastern Europe are lower than prices in the ASIA, even though the cost of the concentrate is practically the same. Domestically, direct price discrimination is based on distribution channel segmentation. Restaurant fountain drinks, single drinks at gas Stations and take-home packs at supermarkets have all different prices on a perunit basis even though their costs adjusted for packaging and distribution would not warrant such a discrepancy. Obviously, such segmentation helps situationalbased pricing differences: the most price insensitive consumers seem to be restaurant customers who need a drink to go with their meal. Also, single-drink buyers at gas stations are more likely to be impulse buyers and therefore have less price sensitivity than weekend family shoppers at supermarkets who purchase 12packs for home consumption.

Indirect Price Discrimination:

Quantity discounts along with price coupons used in supermarkets are obvious indirect price discrimination tools Pepsi can use. However, the most effective indirect price discrimination tool Pepsi has is in fact its brand name. The Pepsi brand equity actually allows the company to maintain its pricing power. Its product image translates into perception for higher quality vis--vis private labels and other substitute drinks. Also, for both supermarkets and convenience stores the CSDs represent the number one and number three top-selling items 5. Retailers use this product category to induce store traffic and create additional sales, which in turn reduces their power relative to Pepsi. Given the 80% margin on concentrate, it is easy to see why Wal-Mart and other discount retailers can undercut Pepsis pricing with private labels, but still they will be ineffective in stealing Pepsi customers as long as Pepsis brand maintains high customer loyalty. Pepsi may enhance its price discrimination capability though creating bundle offers to restaurants and convenience stores. If Pepsi bundles snacks with soft drinks as part of its pricing strategy aimed at fast food restaurants it may be able to increase sales and obtain better shelf space from retailers. This may prove a very important tactic in trying to re-claim share in the fountain drink segment.

PLACE

16

Place is a term that has a variety of meanings in a dictionary sense, but which is principally used in a geographic sense as a noun to denote location, though in a sense of a location identified with that which is located there. In marketing, place refers to one of the 4 P's, defined as "the market place". It can mean a geographic location, an industry, a group of people (a segment) to whom a company wants to sell its products or services, such as young professional women (e.g. for selling cosmetics) or middle-aged family men (e.g. for selling family cars).

Pepsi Place.
Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone but it looks for partners and mergers. Till now Pepsi has collaborated with companies like Quaker Oats, Frito-lays, Lipton, Starbucks, etc. Pepsi has spread all over the world. It is because of this worldwide spread that now it is coming up with Advertisements which can be broadcasted in the different nations in the world. The recent example with would be the Pepsi advertisements having David Beckham as it brand ambassador.

Distribution Strategies:
A Company can choose any of the following distribution types: Exclusive Distribution Selective Distribution Intensive Distribution

PEPSI HAS ADOPTED THE INTENSIVE DISTRIBUTION STRATEGY.

Intensive Distribution:
17

A Strategy of intensive distribution is characterized by placing the goods or services in as many outlets as possible. When the consumer requires a great deal of location convenience, it is important to offer greater intensity of Distribution. This strategy is generally used for convenience items such as Tobacco, gasoline, and soap, snack foods & bubblegum. Manufactures are constantly tempted to move from exclusive or selective distribution to more intensive distribution to increase their coverage and sales and you could find Pepsi in nursing homes, confectionery shops, departmental stores; you name it & Pepsi is available there.

Distribution Channel Redefined:

Pepsi has redefined distribution to strengthen their competitive advantage in the emerging consumer and market scenario. Their earlier focus was to drive wide availability and enable easy access to their brands for consumers. Now they seek to go well beyond this distribution paradigm. Their new approach is more holistic touching consumers in multiple ways at the point of purchase and more importantly, creating opportunities for customers to receive brand message and experience our brands. They are proactively addressing these emerging trends by approaching distribution and channels in a much broader way. They are shifting emphasis from mere reach or availability expansion to touching consumers with a 3- way convergence- of product availability, brand communication and higher level of brand experience. They are thus going beyond delivering products and creating greater engagement and interaction around the purchasing experience.

DISTRIBUTION REDEFINED
18

Product Availabilit y

Point Of Purchase Brand Communicatio n

Brand Experience

Pepsis reinvention of distribution is built on an understanding of emerging consumer trends, the retail environment and the growth drivers of our brands. Pepsis distribution system is a key external resource. Normally it has taken years to build and cannot be easily changed. It ranks in importance with key internal resources such as manufacturing, research, engineering and field sales personals. It represents significant corporate commitment to set policies and practices that constitute the basic fabric on which is woven an extensive set of long run relationship.

Channel Function and Flows:

19

Marketing channel perform the following functions To gather the information about potential and current customers, and competitors. To reach agreements on Price To list orders with manufacturers. They provide the successive storage and movement of physical products. It can be defined as backward and forward integration i.e. starting from supplier of the raw material to the end customer.

20

MICHAEL PORTER MODEL FOR PEPSI

POTENTIAL BUYERS

ENTRANTS

INDUSTRY

COMPETITORS

SUPPLIERS
Entrants:

SUBSTITUTES

Two soft drink giants i.e. Pepsi, Coke, are already here, no other company plans to enter in this capital-intensive industry at the moment. The investment in this industry is more than Rs.100 per crate. This leaves no scope for small players who cannot match the might of the two multinational giants. Thus at the moment there are no potential entrants.

Suppliers:

21

The bottling is done either by franchises or by company owned bottling plants. The empty glass bottles and shells are sourced from local manufacturers. The ingredients for the concentrate are sourced and manufactured locally. There is abundant supply of water and sugar. Thus on the suppliers side Pepsi does not have a problem. Presently the cans are imported and filled locally near Pune in Maharashtra. Seeing the potential, various local manufacturers are setting up plants for manufacturing cans in India. Soon this problem will also be resolved.

Buyers:
The following are the various market segments o On-premise market. o Home market. o At work market. o Youth market. o Special events market.

Substitutes:
Any drink, which quenches thirst, is a substitute. Thus this industry is highly competitive as even water is substitute and almost a dozen products are launched every year. Recently Dabar India Ltd. has launched Real - fruit juices and the makers of Frooti have launched Jolly Jelly. But nowadays, people prefer carbonated drinks because of the taste, fizz and the fun element attached with it.

Competition:
The other two major players in this industry are Coca Cola and Cadbury Schweppes. The real competition is between Pepsi and Coke. Presence of competition will ensure expansion of the market by collective efforts, which is growing at a rate of 25% annually. There is tremendous potential considering the per capita consumption of India, which is a measly 0.6 liters as compared to US where it is 83.5 liters. Presently Pepsi has stolen a march over its rival because of its marketing efforts. 22

PROMOTION
Promotion stands for activities that communicate the merit of the product and persuades target consumers to buy it. Strategies are needed to combine individual methods such as advertising, sales promotion and publicity into a coordinated campaign. Promotion is one of the four aspects of marketing. Promotion comprises three subcategories: Advertising: Sales promotion. Publicity and Public Relation.

Advertising:
Advertisement reaches geographical dispersed buyers. It can build up a long-term image for the product like Pepsi ads. Advertisements are cost effective means to communicate messages and ideas to build brand preferences and awareness and it is one of the most important tools which a company uses to direct persuasive communication to directive buyers in public or to educated people to avoid hard drink and so on. Media planning is a very important part of advertising is to decide the medium of advertising and how much to spend in each media:-Newspaper & Magazines, Radio, TV, Hoarding. Advertising is one of the important factors which all put together results sales. It has to be backed by the distribution network, effective servicing, dealer, goodwill and so on. Thus advertising has to be very carefully woven with the entire demands of marketing. Celebrities signed by the Pepsi are as follows: Cricketers:Sachin Tendulkar. Rahul Dravid. Zaheer Khan. 23

M.S. Dhoni Cine Stars:Ranbhir Kapoor. Shahrukh khan. Amitabh Bachhan.

Sales promotion:
Companies use sales promotion tools to draw a stronger and quicker buyer response, including short-run effects such as highlighting product offers and boosting sagging sales. Sales promotion tools offer three distinctive benefits: Communication: They gain attention and may lead the consumer to the product. Incentive: They incorporate some concessions or contribution that gives value to the consumers. The tools used by for fulfilling the various purposes of its sales promotional activities are the following:1) Point of sale display. 2) Dealers sales contest. 3) Sales promotion through special event market. 4) Incentives. 5) Games.

1)

Point of Sale Display:

A sensible man does not have to go far to find out whatever a common panwala knows that people buy with their eyes. Every item on sale in a shop is displayed in front where people can see it at first sight. It is the same with all the shops and vendors in towns either selling consumer or selling soft drinks. Rather in selling a product like PEPSI display is more than help, it is an essential element because soft drink is bought on impulses on the 24

spur of the movement. Thus the product is tested when it is brought at peoples attention. 2) Dealers sale contest: Another method of sales promotion being used by the PepsiCo, through its distributors is to conduct dealers sales contest during the peak seasons i.e. during April to July. In it the dealers are given prize in the form of cases of soft drinks. In the contest at first his or her respective distributors according to there categorize each dealer. And then each distributor fixes a target of minimum sale for each category to which every dealer according to his or her category has to achieve during the contest period. The dealers achieving highest sales over and above the target set is giving the awards as under, the order of prizes announced are first prize, 2nd prize, and 3rd prize in terms of number of free cases of soft drinks.

3)

Special event market:

Sponsoring events provides companies with opportunities to obtain wider exposure for their brands, and in influencing attitudes towards brands. Sponsorship of cricket is a big business in South Asia. By associating with popular sports in India, brands get visibility amongst youngsters and the cricketloving public. In business-to-business context also, sponsorship is important to obtain visibility and positive word of mouth. The dealers at special event sports place the banners and stall of Pepsis product like picnic fates cricket test match, social are also used to cater the people. It helps in promoting the sale as well as in creating an image product.

4)

Sales man contest:

Sales man contest are held to motivate the sales man. Sales man contest are held to motivate the sales man. Under the scheme salesmen are given monetary incentive on the basis of sale made in their given route.

Publicity and public relations:

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Public Relation includes a variety of program to promote or protect a companys image or individual products. Many companies are turning to marketing public relations (MPR) to support corporate or product promotion and image making. The old name for MPR was publicity, the task of securing editorial space and broadcast media to promote or hype a product or organization. MPR goes beyond simple publicity and plays an important role in the following task: Building interest in product category. Influencing specific target groups. Defending products that have encountered with public relation. Building the corporate image in a way that reflects favorably on its products.

Change In Focus From Aerated Drinks To Healthy Juices:

The recent pesticides in colas controversy may prove to be a shot in the arm for a growing juices and health drinks market, as consumers stay away from beverage market-dominating colas and shift to healthier alternatives. The juice market, already clipping along at a healthy 25-30%, could grow faster as a result. India, according to industry insiders, consumes about 550 million cases of soft drinks annually, but the cola market has been shrinking by 1% for the past two years. Cola off take is expected to dip further in the coming weeks, however, companies decline the estimated fall. Temporary blips dont affect sales. And, in any case, the business we do in schools is miniscule, says a cola company official. A similar downtrend in sales of carbonated drinks is been witnessed in India over the last couple of years for a variety of reasons. In India, beverage companies claim that sales of carbonated beverages have bounced back in the first quarter this year in India. At the same time, these companies are expanding their portfolio by adding on juices and juice drinks, and other non-carbonated drinks For beverage companies, going local seems to be the new mantra. While Pepsi India is planning to launch localised product offerings such as nimbu pani The action is expected to be in branded juice segment, which already has quite a few players like Coke, Pepsi and Dabur Foods 26

The growth in demand for juices is driven by health-conscious customers, says Geetu Verma, VP, new business market unit, PepsiCo India. She adds, One of the factors that has triggered this trend is the emergence of the mass luxury segment and increasing health consciousness among consumers. We see this trend growing rapidly.

Post-pesticide, Pepsi ups social responsibility ante.

Ratna Bhushan & Jayanta Ghosh, TNN, Jul 20, 2004, 06.40am IST In the backdrop of the cola-pesticide controversy and also in line with the global trend of MNCs working closely with governments and NGOs, soft drink firm PepsiCo India Holdings is now taking forward its corporate responsibility projects to a national footprint. The image building exercise, after pesticide controversy, is being intensified and carried forward in association with state governments (like Gujarat) and institutions like Teri. While stating that the exercise is aimed at enhancing the firm's corporate social responsibility (CSR) image, PepsiCo Chairman Rajeev Bakshi says that it's not delinked from the pesticide issue which rocked the Rs 7,000-crore soft drink industry last year. The image building exercise is supplemented by the introduction of Gatorade, PepsiCo's hi-decibel US $2 billion energy drink. Gatorade is being seeded in Delhi and Mumbai next month. To be priced at Rs 40 per PET bottle, PepsiCo will utilize Tropicana's distribution channel for Gatorade. PepsiCo's social responsibility projects with NGOs, institutions and state governments involve rain water harvesting, transfer of agricultural technology and rural development, developing local sources of raw materials. Pepsi is also taking a fresh call on the Rs 5 strategy, one-and-a-half years after the price point became the benchmark for soft drink firms to boost per capita consumption. Says Bakshi, "We are questioning the Rs 5 price strategy. It will figure in the annual review for Summer 2005, scheduled in the next few weeks." While the Rs 5 pricing gave cola firms healthy 10-15% growth rates, pressure on margins, and the dent on profitability, has been mounting. Bakshi says that last year about 60% of PepsiCo's growth came from existing consumers. He adds that even if Coke doesn't follow suit, PepsiCo will hike price points selectively.

Conclusion:
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The specification of these three variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.

SOCIAL MEDIA MARKETING:

It refers to the design, implementation, and control of programs seeking to increase the acceptability of a social ideas, cause, or practice among a target group. Social media marketing programs usually center on efforts to create content that attracts attention, generates online conversations, and encourages readers to share it with their social networks. The message spreads from user to user and

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presumably resonates because it is coming from a trusted source, as opposed to the brand or company itself. Social media has become a platform that is easily accessible to anyone with internet access, opening doors for organizations to increase their brand awareness and facilitate conversations with the customer. Additionally, social media serves as a relatively inexpensive platform for organizations to implement marketing campaigns. Organizations can receive direct feedback from their customers and targeted markets

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RESEARCH METHODOLOGY
Research Methodology is a method to solve the research problem systematically. It involves gathering data, use of scientific research, interpretations and drawing conclusions about the research data. It is the pursuit of truth with the help of study observation, comparison & experiment.

DEVELOPING RESEARCH PLAN:

After deciding the objective of marketing research the next step is deciding Research plan for gathering effective information related to this research project. The research consists of following steps, which are discussed subsequently.

RESEARCH DESIGN:
Research design is one of the important steps in marketing research. It helps in establishing the manner researchers go about to achieve the objective of the study. I followed survey technique for collecting the data. In my research process, I had collected the information from the consumers. Methods of surveying like I had chosen my classmates because of higher response rate & meaningful responses this helped me to get the general feedback in Pepsi, etc.

Descriptive Research:
Descriptive research deals with the demographic characteristics of the consumers. The main purpose of descriptive research is to describe the state of view as it exists at present. It is a fact finding investigation. This type of research tries to describe the characteristics of the respondent in relation to a particular product or a brand. In my market survey, descriptive research process was carried out to describe the consumer preference, consumer profiles, distribution strategies, and market potential.

DATA SOURCE:
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During project study I have included both primary as well as secondary data source. For primary data collection I have interviewed various consumers & for secondary data I went through Books, Journals & Internet. The information collected is relevant, correct & unbiased.

RESEARCH INSTRUMENT:
The research instrument used was Questionnaire. Here, questions are structured so as to obtain facts. For this I have interviewed a set of consumers to know their preference according to the availability, advertisement etc. In my research process I have used closed ended & open-ended questionnaire where respondents could answer in their own manner. Through this I was able to extract information from the respondents about Pepsis products & the competitors.

SAMPLING PLAN:
In designing the sampling plan following points were considered:

Sampling Unit:

Individuals who are to be contacted are the sampling unit. In my research consumers of the soft drinks are the sampling unit.

Sampling Size:

This means we need to decide how many elements of the target population are to be chosen? I have surveyed about 60 consumers.

METHOD OF DATA INTERPRETATION:

In this market study I have used pie chart for data analysis & interpretation because pie chart is most comprehensive medium for presentation of data.

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CHAPTER - 6
SWOT ANALYSIS Strength:
Pepsi has a broader product line and outstanding reputation. Record revenues and increasing market share. Lack of capital constraints (availability of large free cash flow). Great brands, innovative capabilities. One of the leaders in the industry. R&D for the improvement of products, technology innovation in the production process is the major strength of PEPSICO Economics of scale and economies of scope through large size and diversification. Distribution Network is also one of the biggest strength. Pepsis promotional schemes are far better than its competitors.

Weakness:
Competitive disadvantage of having single cola product against Coke. In some cases price matters a lot.

Opportunity:
Noncarbonated drinks are the fastest-growing part of the industry. There are increasing trend toward healthy foods. Focus on most important customer trend - "Convenience". Income level of customers are rising there by their purchasing power also rising. Population of India is the greatest of opportunity for the industry.

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Threats:
F&B industry is mature. Pepsi is blamed for pesticide residues in their products in one of their most promising emerging market India. PepsiCo now competes with Coca-Cola, and Kraft foods (because of broader product line) which are well-run and financially sound competitors. Size of company will demand a varied marketing program; Social, cultural, economic, political and governmental constrains. Large and small beverage companies, including bottled water firms. Somewhere the price of substitute product matter. The frequent article in news paper about harmful effects of carbonated soft drinks.

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CHAPTER - 7
SURVEY
BRAND PREFERENCE
PARTICULARS Pepsi Coke % 60 40

FIGURE-1

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PREFERENCE OF SOFT DRINKS IN A DAY

PARTICULARS
Once a day Twice a day Once a week Other

%
25 20 5 50

FIGURE-2

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USER GIVE PREFERENCE TO PARTICULARS

Availability Packaging Taste Price

%
50 10 30 10

USERS PREFERENCES
Availability Packaging 10% 30% 50% Taste Price

10%

FIGURE-3

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IMPACT OF ADVERTISEMENT ON PURCHASE

PARTICULARS
Yes No

%
85 15

FIGURE-4

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ADVERTISEMENT STRATEGIES APPREICIATED

PARTICULARS
Youngistan Ka Wow Others

%
85 15

ADVERTISEMENT STRATEGIES APPRECIATED

Youngistaan ka Wow 10% Other

90%

FIGURE-5

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PREFERENCE TO HEALTHY JUICES

PARTICULARS
Yes No

%
25 75

FIGURE-6

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PREFERENCE TO HEALTHY JUICES BRANDS.

PARTICULARS
Tropicana Real Fruit Juices

%
45 55

FIGURE-7

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CHAPTER - 8
FINDINGS:
Pepsis main target is obviously to be the market leader and leave its nearest competitor, Coca-Cola, far behind. To achieve this Pepsi seems to be relying on mass advertising Pepsi has followed aggressive marketing strategies making they get into the minds of the consumer by being visible inside and outside the consumers home by way of television, Newspapers, hoarding, sales-promotion schemes, etc. In all about 60 consumers were interviewed. The findings that I have drawn from these answers provided by the consumers showed that marketing activities do form a major part of the decision. Major number of people found television advertising to be the most effective. Young and the old, all liked to watch the advertisements on television. Sponsoring events, outdoor advertising and sales promotion schemes were second choice of the consumers. Under television advertising, Pepsi came in as the number 1 favorite of the people the advertisement of Youngistan ka Wow. Their new advertisement of Mirinda, Nimbooz is also lifted by the people. These, advertisement remained most in the minds of the people. One thing that was common amongst all the consumers who preferred soft drinks once a day or once a week. The number one factors the influences a customer while buying a soft-drink was availability. Pepsi drinks are available in almost the whole of India, this shows the importance paid to distribution. The reason given for choice of favorite soft drink was taste and easy availability. Only if the consumer liked the taste of drink, he would have it again. Most of the consumers felt that marketing strategies of the company did affect the sales of their soft-drink. Pepsis core market is the younger generation and Pepsi is taking great measures to change the perception of this young. Pepsi wants that these consumers should associate all colas as Pepsi, the brand Pepsi and cola should be 41

synonymous with each other. This they are trying to do by getting the heroes of these consumers to endorse their product e.g. Sachin Tendulkar, Ranbhir Kapoor and also by advertising for and by youngsters. Youngsters were more acceptable to change. They tried different drinks, Cola and non-Cola. But, the company is witnessing a shift from aerated drinks to healthy juices like Tropicana, Real Fruit juices etc. because of the recent pesticide controversy faced by the Pepsi Company.

RECOMMENDATIONS:
Innovations increase sales of company. Thus the companies should constantly come out with innovative ideas. Example-300 ml, 250ml plastic bottles, which the consumer can take with him, unlike the glass bottles, which he has to return. Plastic bottles can even be used again by households for various purposes. The companies should conduct studies to get to know about consumer habits. If the company knows all this and more about Indian consumer behavior, it could tell them how to sell their drinks, so as to increase sales. It is seen In India, that people prefer having their drinks with or after food. Companies could have commercials which show people enjoying their drink with a good meal, so that consumers associate drinking soft drinks while having food. Companies should try to educate the consumer about the health related subject. Television advertising seems to make an impact on the consumers (based on questionnaire answers) so companies should concentrate more on television advertisements. Sales promotion tools create a stronger and quicker response. Thus sales promotion tools such as coupons, contests, premiums and the like should be used to dramatize product offers and to boost sales. The Company should also focus on brand awareness regarding their Healthy juices because consumers have felt the need but they likely to prefer Real Fruit 42

juices. With effective advertisement and Sales Promotion Pepsi should try to create brand recognition in the minds of the consumers.

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CONCLUSION:
Pepsi is the market leader in terms of soft drinks in India nd leave its nearest competitor, Coca-Cola, far behind. To achieve this Pepsi seems to be relying on mass advertising.

Pepsis core market is the young adult and Pepsi is taking great measures to change the perception of these young-adults., Pepsi wants that these consumers should associate all colas as Pepsi, the brand Pepsi and cola should be synonymous with each other. This they are trying to do by getting the heroes of these consumers to endorse their product e.g. Sachin Tendulkar and also by advertising for and by youngsters like M.S.Dhoni, Ranbhir Kapoor. Pepsi drinks are available in almost the whole of India, this shows the importance paid to distribution. Brand loyalists are very few in the market. Thus the drink should be easily available, so that consumers cannot shift their preferences.

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ANNEXURE
Pepsi invites consumers to play 'The Game'
Mumbai, March 26, 2010.
Pepsi, in yet another effort to woo youngsters, had launched the 'Youngistaan ka wow' campaign on March 1, with a commercial that had brand endorser, Ranbir Kapoor tricking some security officials and drinking Pepsi meant for the president. To further the 'Youngistaan ka wow' positioning, the soft-drink major is out with an initiative called The Game -- a contest of sorts The Game involves a young boy in search of his Pepsi -- namely Ranbir Kapoor -and some tests he has to pass in order to seize his drink. Enter a 'Game Master' -Sanjay Dutt -- who would pose questions to Kapoor, pertaining to Pepsi and Youngistaan. The Game is set in a fantasy world, and all the action takes place in a castle owned by the Game Master, who 'challenges' youngistaani Kapoor to get his Pepsi from his lair. Kapoor has to pass three levels of questioning, after which he would win the drink. The questions and the whole setting will be unveiled to consumers in the form of television commercials. Consumers have to help Kapoor select the right answers from the choices provided, thereby getting him closer to his Pepsi. The payoff for one lucky viewer (chosen by lucky draw amongst those who gives correct answers) is a prize of Rs 50 lakhs; scores of other participants can avail prizes including free talk-time, song downloads and ring tones. Those who answer correctly at all levels stand a chance to win Rs 50 lakhs, by succeeding in the final tie-breaker slogan challenge. The Game is played over five films with three levels, each ending with a brainteaser. Three options are given for each riddle; and to play, one has to call/SMS 'game' to 09327272727 or log on to www.youngistaan.com. A teaser film, which will be released on March 27, attempts to create buzz around the five-week activity. It will feature Kapoor and Dutt, along with Dutt's muse, Jacqueline Fernandes (who essays the character of the 'Wow Girl'). 45

The actual 'game' will commence on March 31 during the IPL matches. Thereafter, every Thursday, a new question will be provided for consumers to solve (during the matches), to help get Kapoor closer to his drink. The grand reveal is on April 27 (the fifth commercial), when Kapoor will finally get his drink, while the winners of the contest will also be declared. Sandeep Arora, executive vice-president, marketing, PepsiCo India, tells afaqs!, "This is one more way for us to reinforce our brand proposition of 'Youngistaan ka wow', a thought that captures the zest and drive of the go-getter young generation. It is an effort to build participation, to entertain, engage and involve consumers, and to shift from the regular passive advertising one sees on television into the area of brand engagement." According to Punita Lal, executive director, marketing, PepsiCo India, with The Game, Pepsi brings together gaming to TV advertising and thereby, forges connections with the youth. "We are confident that The Game will not only attract eyeballs owing to its entertainment value, but also drive participation amongst youngsters, due to the concept and thrill it promises to deliver," she says. The commercials will feature magical sets, action-sequences and special effects. Special effort has also gone into creating the looks of the characters. While Kapoor sports an active, cool look; Dutt as the Game Master will be seen in a costume and hairstyle straight out of a video game. Apart from the TV commercials, there will be a big thrust on online media, including social networking sites. The initiatives include live chat with Kapoor on Facebook on April 2, 2010, and a customised The Game skin on the Orkut page on March 31. Furthermore, download items and other information will be made available on www.youngistaan.com.

Case study:
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How Pepsi got it right on Facebook and Twitter. January 31, 2010

Social media marketing campaigns are proving to be goldmines rich with customer engagement and insight that companies wouldnt likely have otherwise. Companies like PepsiCo are going to extensive lengths to foster this type of collaboration with fans, and the payoff has been big. Using social networking on Facebook and Twitter as well as other social network sites, Pepsis Mountain Dew division is several stages into its campaign to launch a new Mountain Dew flavor with the publics involvement at all levels of the process. PepsiCo also just launched the Pepsi Refresh Project on January 13th. Rather than spending money on Super Bowl television ads this year, the company is spending $20 million dollars on a social media campaign. The Pepsi Refresh Project and the Mountain Dew campaigns are part of a crowd sourcing effort thats part of the larger PepsiCo plan to more closely integrate consumers with the brand. Driving consumer interest and engagement takes imagination and often a certain amount of reinvention, so its fair to say were rethinking everything we do from product development to marketing campaigns across our entire portfolio, said Bart Casabona, a Mountain Dew spokesman. Every part of the campaign involves our Facebook fans and Twitter followers. Consumers have participated in everything from picking flavor names, to voting on the best user-submitted ad campaign said Casabona. PepsiCo looks at DEW mocracy, which has literally been driven by word of mouth, as a way of doing business rather than an ad campaign and the most important thing to recognize is the passion consumers feel for Mountain Dew, is like nothing thats out there. PepsiCo looks at social media as the best way to get direct dialog with their fans and for the company to hear from those fans without filters. Its been great for us to have this really unique dialogue that we normally wouldnt have. Business decisions are now based solely on customer feedback

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Case study: Pepsi bottlers' shareholders approve merger

Wed Feb 17, 2010
More than 81 pct of Pepsi Bottling shares voted yes About 86.5 pct of PepsiAmericas shares voted yes Pepsi still sees deal closing by end of February

PepsiCo Inc said on Feb 17 that shareholders of both Pepsi Bottling Group Inc PBG.N and PepsiAmericas Inc PAS.N approved its proposed merger, paving the way for the snack and soft-drink maker to acquire its two largest bottlers. More than 81 percent of the combined voting power of Pepsi Bottling common and Class B shares voted in favor of the merger, while 86.5 percent of PepsiAmericas votes were in favor of the merger, PepsiCo said. The maker of Pepsi-Cola and Frito-Lay snacks said it hoped to close the deals by the end of February. Also on Wednesday, PepsiCo said it signed a consent decree with the Federal Trade Commission that provides for the confidentiality of information obtained from Dr. Pepper Snapple Group Inc

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Questionnaire :
Name: Address: Contact no.:

W h en y o u t a l k a b o u t s o f t d r i n k s w h i c h b r a n d c o m e s t o your mind? PepsiCokeYour preference of soft drinks in a day? Once a dayOnce a weekTwice a dayOthersWhich aspect soft drink? AvailabilityTastePackagingPriceinspired you to buy this Yes-

Does

advertisement have an impact on purchase of soft drinks? No-

If yes, advertisement you the most?

which inspired

Do you p r ef e r Healthy juices over soft brinks? YesNo If yes, which brand?

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BIBLIOGRAPHY: Websites:
www.icmrindia.org www.pepsiindia.co.in www.youngistaan.com www.timesofindia.com

Journals:
A New Internationalist Magazine Article, commenting on Pepsi's struggle to enter India, in August 1988.

Books:
Marketing Management. Philip Kotler. Business Research Methods. S.N.Murthy.

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