MARKETING PLAN OF PEPSI

Assignment Submitted To:

Dr. Samar Rahi

Assignment Submitted by:

Muhammad Sheraz

(M16BBA042)

Subject:

Marketing Research

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MARKETING PLAN OF PEPSI

Contents

 Marketing Plan Title

 Executive Summary
 Current Marketing Situation
 Product Review
 Competitive Review
 Channels and Logistic Review
 SWOT Analysis
 Objectives
 Marketing Strategy
 Action Program
 Budget
 Controls

MARKET PLAN TITLE (Product)

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 MARKETING PLAN OF PEPSI

PEPSI (PepsiCo)

Executive Summary

Pepsi is the world renowned brand. It is a very well organized multinational company, which
operates almost all over the world. In Pakistan It also has proved itself to be the No.1 soft drink
Pepsi has a significant market share 65% in the Pakistan and dominated as a market leader while
Coke is having a 35% market share. Whereas in Gujranwala, Coke is having a
49% market share and Pepsi is having a 51% market share. This rate shows
that Pepsi is having more market share than Coke in Pakistan till the period of 20th
February 2020.But Pepsi has lost market share due to Coca-Cola sponsorship of Coke Studio,
previous Pepsi market share is almost 75% that’s why management changed marketing technique
and Pepsi associate with music and sponsor a music show.

Now Pepsi launch a new soft drink and the name is “PEPSI PERFECT “ a vitamin-enriched
Pepsi, with 50% less sugar than regular Pepsi, and black in color and flavor stronger than regular

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 MARKETING PLAN OF PEPSI

Pepsi. Pepsi Perfect target market is generally anyone between the ages of 15 to 50 , specially
those peoples they are health concious and those they want to purachase novelty things. They
advertise heavily in Universities and Schools surroundings , TV channels, Promotions, Sign
boards and restaurants. As far as packaging and distribution concern, packaging is different from
the previous one’s in which staw is built-in in the bottle and distribute this product through it’s
08 bottler in Pakistan. These bottlers are Pepsi's strength. Pepsi has given franchise to these
bottlers. Bottlers, produce, distribute and help in promoting the brand.

Everything pepsi do is driven by an approach it call Winning with Purpose. Winning with
Purpose is guide for achieving accelerated, sustainable growth that includes its mission, to Create
More Smiles with Every Sip and Every Bite; Pepsi vision, to Be the Global Leader in
Convenient Product by Winning with a Purpose.

Current Marketing Situation

According to Consumer Reports, in the 1970s, the rivalry continued to heat up the market. Pepsi
conducted blind taste tests in stores, in what was called the "Pepsi Challenge". These tests
suggested that more consumers preferred the taste of Pepsi (which is believed to have more
lemon oil, and less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of Pepsi
started to climb, and Pepsi kicked off the "Challenge" across the nation. This became known as
the "Cola Wars".

In 1985, The Coca-Cola Company, amid much publicity, changed its formula. The theory has
been advanced that New Coke, as the reformulated drink came to be known, was invented
specifically in response to the Pepsi Challenge. However, a consumer backlash led to Coca-Cola
quickly reintroducing the original formula as "Coca-Cola Classic". In 1989, Billy Joel mentioned
the rivalry between the two companies in the song "We Didn't Start the Fire". The line "Rock &
Roller Cola Wars" refers to Pepsi and Coke's usage of various musicians in advertising
campaigns. Coke used Paula Abdul, while Pepsi used Michael Jackson. Both companies then
competed to get other musicians to advertise its beverages.
According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S. market
share is 30.8 percent, while The Coca-Cola Company's is 42.7 percent.[33] Coca-Cola outsells

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 MARKETING PLAN OF PEPSI

Pepsi in most parts of the U.S., notable exceptions being central Appalachia, North Dakota, and
Utah. In the city of Buffalo, New York, Pepsi outsells Coca-Cola by a two-to-one margin.

As of 20th February 2020,In Pakistan Coke is having a 35% market

share while Pepsi is having 65% Market share  this is due to some reasons. Whereas
in Gujranwala, Coke is having a 49% market share and Pepsi is having a 51% market
share. This rate shows that Pepsi is having more market share than Coke in Pakistan.

Product Review

Pepsi enhanced its product value and sale by entering different features which
includes the following:
 Pepsi provides refreshment through strong carbonation and strong caffeine.

 On top of its basic flavor design and unique selling point: “Strong Impact” and
Refreshment through Strong Carbonation and Strong Caffeine.

 Pepsi Strong Zero delivers a crisp taste with a careful balance of spices.

 The packaging features the basic black key note, which is associated with zero
calorie colas, and the Pepsi logo accompanied with the words “Strong Zero,”
which emphasizes the newness of the brand and will be intuitively associated
with “Strong Impact” that provides refreshment.

 In addition, Pepsi Strong has the great taste of a regular cola and achieve a great
balance between sweetness and drinkability, which explains the Launch of Pepsi
Strong.

 PEPSI has a distinguished taste and never disappoints and a great taste, is accessible, you
can buy practically anywhere in the world.

 
 Pepsi is a family drinks all the time. it's an original drink and would suggest it to anyone
who likes soft drinks

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 MARKETING PLAN OF PEPSI

Competitive Review
The marketing concept states that to be successful, a company must provide greater customer
value and satisfaction than its competitors do.
The Coca-Cola Company is primary competitor of Pepsi. Other juice and soft drinks competitors
include, but are not limited to, Campbell Soup Company, Conagra Brands, Inc., Kellogg
Company, Keurig Dr Pepper Inc., The Kraft Heinz Company, Link Snacks, Inc., Mondel z
International, Inc., Monster Beverage Corporation, Nestlé S.A. and Red Bull GmbH at
international level and in Pakistan no bigger competitor for both drinks.
Pepsi has a tough competition with Coca Cola while it faces a little competition with the local
producers etc. The local producers hardly affect the sales of Pepsi in the market. There are
different types of competitor in the market.
Close Competitor:
Pepsi and Coke are close competitors. It means that both have direct competition in the market,
their products such as PEPSI PERFECT & VITAMIN WATER are slightly substitute for one
another. Both the products can influence the market share of one another through effective
strategies.
Distant competitors:
Pepsi, cola and Nestle juice are distant competitors of one another. It means that their products
satisfy the same want but they are in indirect competition with one another.
Strong Vs Weak:
Coca Cola and Pepsi are strong competitors. In Pakistan Pepsi is the market leader and Coca
Cola is its competitor. The Pepsi makes defense strategies so that it can maintain its position in
the market. While Coca Cola is a challenger and it makes attack strategies so that it can become
the market leader. Pepsi and Pakola are weak competitors. Pepsi is the market leader and Pakola
is the follower. Pepsi is not in direct competition with the Pakola. It means that Pakola has little
effect on the sales of Pepsi.
Market Share Comparison:
As of 20th February 2020,In Pakistan Coke is having a 35% market share while Pepsi is having
65% Market share which is decline compare to previous year is 75%, this is due to some reasons.

Channels and Logistics Review

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With the three main brands now owned by Coca Cola and PepsiCo, there is a huge hole in the
independent distributor system. Pepsi will be distributed through an independent distributor to a
network of retailers all over the world and in Pakistan. This Strategy will avoid some of the head
on competition for shelf space with the Coca Cola and other Soft Drinks brands and will also
directly target likely Pepsi customers. As with the rollout of the core chill soda brand and Nestle
brand, this strategy will focus on placing coolers in retail locations that will hold Pepsi. These
retailers includes :
 Grocery Units
 Food Stores
 Hotels
 Cafes
 Fitness centers
AS the brand gains acceptance, channels will expand into larger grocery chains,
convenience stores and unique locations relevant to the target customer segment.

SWOT Analysis

Strengths:

 Strong brand image:

A strong brand image is one of the biggest strengths of Pepsico. The brand is famous all over the
world and its products are popular in more than 200 countries.  Currently, Pepsi has only one
major rival in the world, Coca Cola. However, its strong image and reputation have helped it
manage the competitive pressure very well. Moreover, the brand invests a lot in marketing as

well as reputation management. Apart from advertising and marketing, it also invests in CSR and
sustainability to retain its popularity and trust.

 Strong financial performance –

Strong financial performance is also a key strength of Pepsi. In 2019, its net organic revenue
grew by more than 4%. This performance was based on the last five years of efforts and
investments it made into marketing, digitization and other areas.   Its net revenue grew to $67.15
billion dollars. High level of net revenue and income allows the brand to spend more on
marketing as well as Research and Development.

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o Global presence supported by a strong supply chain and distribution network –

Another major strength of Pepsi is its well managed global supply chain and
distribution network. It further extended its foodservice partnerships that allowed it
to extend its distribution and market share. The brand brings its products to the
market mainly through direct store delivery, customer warehouses and distributor
networks. Depending upon the customer needs as well as local trade practices and
product characteristics, the company decides which distributor network to use. It has
a large list of suppliers that are spread throughout the world in various countries
which allows it to source raw materials efficiently as well as at low prices.
o Strong marketing capabilities – Strong marketing capabilities of the brand are also
one of its major strengths. Pepsi invests a very large sum in marketing. It has spent a
lot on improving its digital capabilities over the last 4 years. Its digital campaigns
have been very successful in the recent years. The ‘Bring Home Happiness’
campaign launched in Greater China was highly successful and garnered more than
1 billion views for its 20 minute long video. Similar, digital and other marketing
campaigns run by the brand have also been highly successful.
o Large and varied product portfolio – Another key strength of the brand is its large
and varied product portfolio. The brand has more than 22 billion dollar brands in its
product portfolio each of which fetches more than a billion dollar per year in
revenue. During the recent years, the brand has innovated its product portfolio a lot
adding more of nutritious and healthy products in both snacks and beverages
categories. It is continuously investing in making its production and supply chain
more agile as well as research and development to make its supply chain more
sustainable as well as products healthier.

#Weaknesses –

 Overdependence on the US market:

Despite everything the brand still depends on the US market for a major part of its
revenue. In 2019, Pepsi earned more than 58% of its revenue from US and only 42% from
outside US. To reduce its dependence on the US market, it would need to release more
suitable products into the local markets internationally and particularly Asia. However, the
brand has also felt the bite from a stronger dollar.

 Reduced Net revenue in Middle East :

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The brand’s net revenue in the Middle East has fallen in the year 2017 and 2018 but now follow
their actual position gradually. The fall was due to weakening Egyptian currency. Fluctuations in
the international currency exchange rates have a negative effect on the revenue of Pepsi from
time to time.

#Opportunities:

 Technological innovation down the distribution network: The brand has a lot of
opportunities that can help it grow its brand and businesses. Technological innovation and
digitization offer the brand growth opportunities in several areas from supply chain
management to production as well as marketing and distribution network. Both digitization
and IoT offer major opportunities of growth and can help its distribution network expand
and become more efficient. Investing in R&D as well as digital innovation offers easier
opportunities of growth and market expansion for Pepsi.
 CSR and water recycling: Investing in CSR and water recycling is also an opportunity
that the brand can very well exploit for market and business growth. While it has already
invested a lot in these two areas, there is opportunity for more. Investing in CSR
specifically is very important for the purpose of image and reputation management. It is
because in past, Pepsi has faced severe protest over being a cause of water crisis in several
regions.
 Partnerships with related businesses: The brand can also find faster growth through
partnerships with related businesses. It entered into a partnership with Starbucks some
years ago to sell ready coffee beverages. It can enter similar partnerships with other fast
food and beverages brands to increase its sales as well as revenue.
 Growth through acquisitions: The brand can also find faster growth through acquisitions
and by acquiring smaller and related brands.

#Threats:

o Legal and regulatory threats: Legal and regulatory threats pose a major risk to big
businesses like Pepsi. Compliance risks can sometimes result in major fines and lead
to losses. It is why big bands like Pepsi focus especially on compliance and have
compliance teams that take care of legal and regulatory risks. Noncompliance can
cause losses that can run into billions.
o Competitive pressures: Competitive pressures also pose major risks to the brand
and its business. Coca Cola is its biggest competitor and the two brands remain
engaged in very tight battle which keeps raging and getting intenser. Both brands
invest heavily in marketing and if any of Pepsi’s new products flops, then it can lead
to losses as well as increased competitive pressure.
o Stronger dollar and fluctuation in foreign currency exchange rates: A stronger
dollar and fluctuation in the foreign currency exchange rates causes losses for Pepsi.

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For past few years, the US dollar has kept growing stronger internationally leading
to reduced revenue from Pepsi’s international business.

Objectives

In view of intensifying competition in soft drink market, it is imperative thata

brand keeps a constant tab on dynamics of market and responds promptlyin
order to capture greater market share. In view of this fact the present
studyhas been taken for “PEPSICO” The objective of the study is to do an
EDS(Every Dealer Survey) and tohave a comparative study of the
availability of the pepsi brands as well as itscompetitor brand coke and also
keep looking up for new sources where wecan crack new markets so that
pepsi will be everywhere in the chandigarh. Iam covering all the outskirts
areas of chandigarh for this study.

Primary objective

•To know about the stock position of pepsi brand and its competitor “coke”.

•To study about the availability of the pepsi brands to the retailers andthe
supply condition in the market.

•To find out the loopholes and the dissatisfaction in the distributionnetwork

Secondary objective:

•To estimate the market share of pepsico in respect of the industry.

•To identify the retailers opinion towards pepsi products.

•To know the problems of retailers and to offer the suggestion for improving
in sales.

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•To know the promotional activities of sales promotion, advertisingand public

relations.

•To know the strategy of pepsi and its competitor regarding themarketing
mix.

Marketing Strategy of Pespi

Market Positioning and segmentation:

Before moving on to the details of Pepsico’s marketing strategy, take a look upon how it has
positioned its brand and products in the market. It has positioned itself as a snacks and beverages
brand that include nutritious and low calorie choices apart from normal soda products. There are
22 iconic  billion dollar brands in its portfolio. Pepsi is positioned as a brand that reflects young
energy and this is also a key theme across its advertising and marketing campaigns. The
customers of Pepsi are mainly from the 13 to 35 age group. In other words you can say, it is a
brand for the millenials.  Pepsi has maintained a pricing strategy that has made it an affordable
brand. Its customers are from all income segments including lower middle class to upper class.

Large Investment in Marketing

Pepsico has traditionally relied heavily on marketing for driving sales and market growth. Like
Coca Cola it too spends heavily on marketing and promotion. In 2017, its marketing budget was
4.1 billion dollars, in 2018 the budget was 5.8 billion dollar, in 2019 the more than 6.2 billion
dollar and that of Coca Cola was 3.9 Billion dollars.  Pepsi spent 2.4 billion dollars solely on
advertising . However, the world of marketing has changed a lot with the rise of the digital
technology. A large part of Pepsi’s marketing budget goes to digital marketing and advertising.
Apart from that a large sum is also spent on television advertising and other traditional methods
of advertising. Any leading brand is investing heavily in digital technology for marketing and
better customer experience.  Since the rise of social media, brands are connecting with their
customers in real time with promotional campaigns. On the one hand, social media has helped
the brands with marketing to allow them to connect with millions of customers globally in an
instant and without any financial investment. On the other hand, it has also made the brands
more conscious regarding product quality and innovation because any comment or news shared
on social media goes viral in a second.

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Product and Packaging Innovation:

Pepsi has continued to invest in product quality and packaging to stay the customers’ first choice.
However, apart from these things it has continued to diversify its product portfolio bringing new,
healthier and more nutritious choices for its customers. Behind its excellent marketing strategy
there is a diverse and rich product portfolio filled with a large variety of flavors and nutritious
and tasty choices. Product quality and packaging are very important elements of Pepsi’s
marketing strategy where it has continued to innovate whether in terms of product quality,
variety as well as packaging. Its reward winning design team has continued to innovate with
package design. Package design can be a primary attraction making products appealing in the
eyes of the customers. Attractive packages can also drive sales higher and it is why Pepsi has
continued to innovate the packaging style and sizes based on consumer demand and
expectations. With time, people’s taste and choice of flavors has changed a lot. They are looking
for healthier products and product innovation helps churn demand. However, apart from
investing in product quality and design it is equally important to invest in marketing and Pepsi
promotes its brand through both digital and traditional channels.

Digital Marketing Campaigns and Big Data:

Digital strategy is a very important part of its marketing campaigns. Effectiveness of Pepsi’s
digital campaigns is also an important determinant of its sales and profits. Popularity of these
digital campaigns affects its level of sales and profits directly. Some of its digital campaigns

have enjoyed immense popularity like the ‘Bring Home Happiness’ campaign containing a 20
minutes long video. This video grew so popular that people watched it more than one billion
times. It leveraged the power of social media to run the campaign. The brand is using digital
technology in other aspects of business too but in the area of marketing, the role of digital
technology and that of social media is especially very important. Since a very large number of
customers are now found online and can be reached through social media and other digital
channels, digital marketing has become the central focus of Pepsi in terms of marketing. Apart
from promoting its brands separately Pepsi also uses digital marketing for creating higher loyalty
and higher customer engagement. Its another promotional campaign titled ‘Made for This’
targeting the millennial generation and featuring High school athletes was also highly popular.

Pepsi Social Media Marketing:

Marketing is not complete in the 21st century without social media. Facebook to Twitter and
YouTube and even Instagram, all of these are the most favorite stops of the leading brands. Both
Coca Cola and Pepsi have maintained an impressive social media presence that works to drive
user engagement high and create higher level of customer loyalty. Most of the video campaigns

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run by Pepsi have become so successful because it could leverage the power of social media
channels. One of its campaigns in Greater China garnered more than a billion views. Its other
campaigns on social media have also been liked by people. Video campaigns can be run through
YouTube as well as Facebook and Twitter. Moreover, the Facebook and Twitter accounts can be
used to keep fans and followers updated. Let’s have a look over how Pepsi has connected with its
fans and followers through social media.

Pepsi Business Growth Strategy

Pepsi’s soft drinks are popular because of their diverse flavors. Its snacks and beverages are
popular in more than 200 countries.  Apart from developing new ingredients, flavors and
products, the brand has continued to invest in reformulation to improve the quality of existing
products. While the brand is quite popular and sells in more than 200 countries, it is facing
intense competition from Coca Cola. Moreover, consumers’ tastes and expectations have kept
changing which also require change in business strategy for remaining competitive and for
continuous growth.   This makes it essential for brands to continuously track consumer demand
and accordingly adjust its strategic course for business performance. Pepsi has continued to
innovate its marketing and business growth strategy over time so as to retain its popularity and
increase demand.

Product Innovation for Market Growth:

This era has seen a major change in consumers’ preferences. Consumers want more healthy and
nutritious beverages that suit their health. It is because a very large segment of the world
population has grown highly health conscious. In order to respond to the changing preference of
the consumers, the brand has released a large range of health friendly products that contain less
sugar or have high nutritional value.  However, its commitment of health and excellence has
served the brand well in 2019 when it again delivered strong operating performance. The brand
added several health friendly and nutritious products to its customers.

R&D and Packaging Innovation:

Business growth in a highly competitive industry like the soda industry depends on several
factors and it is why brands have to invest in research and development to find faster business
and market growth. In 2017, 2018 and 2019, Pepsi invested $737, $745 and $755 million in
Research and development [1]. However, this investment excludes the cost of consumer
research. Consumer research is an essential part of the brand’s growth strategy where it studies
the consumers’ expectations and preferences.  Product innovation becomes essential because of
continuously evolving tastes of the consumers and there are other factors too that necessitate

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continuous changes across the product spectrum. The brand is engaged in a very wide variety of
research and development activities globally with the purpose of matching consumer demand as
well as finding sustainable growth. These activities include:

 Developing new products and ingredients as well as flavors and products.

 Reformulating existing products to improve their quality and appeal.
 Improving and modernizing manufacturing processes for cost reduction.
 Improving product quality as well as safety and integrity.
 Developing or making improvements to dispensing equipment and packaging technology.
 Developing or making improvements to package design and portion sizes.
 Identifying opportunities to grow, transform and broaden its product portfolio.
 Development of products with better nutrition profiles that reduce added sugars, sodium
or saturated fat using sweetener alternatives or flavour modifiers.
 Offering more products with higher nutritional value whole grains, fruits and vegetables,
dairy, protein and hydration.
 Investing in capabilities that support global ecommerce and sustainability efforts [1]

This is how Pepsi invests in R&D for continuous product innovation and for finding faster
growth. Continuous product and process innovation helps at reducing costs as well as improving
product quality and catering to customer demand better. Its R&D centers are located throughout
the world from US and UK to Brazil, China, India and Ireland. In terms of packaging too the
brand is focusing on developing sustainable packaging material. It teamed up with leading

universities as well as governments and innovators in 2017 to develop biodegradable film resins
that help it meet its sustainable packaging needs. All these things are essential for business
growth from reducing production costs to increasing the efficiency of business processes.

Digital technology and e-commerce for business expansion:

Pepsi is a global brand. However, to achieve superior growth and remain competitive it is also
investing in digital technology and e-commerce that does not just improve its reach but also
helps the brand create better customer experiences. It is already using big data to understand
customer demand and consumption patterns based on which it can serve better products as well
as marketing campaigns. Digital innovation is one of the megatrends that has affected Pepsi’s
business growth globally. Value chain automation as well as internet enabled services, big data
and social media are all affecting how Pepsi connects with its consumers and finds business
growth. The brand has invested in digital technology down the supply chain to find greater
agility and efficiency which has led to higher productivity. Digitalization has helped Pepsi
respond faster and better to the customer demand. Growing e-commerce in US and China was
one of the primary factors driving business growth in these markets. Its e-commerce is already
supported with big data and predictive analytics that are used to create real time marketing
messages.

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Action Program
Action step of Pepsi Cola as per 2019:

Step 1: Do research on customer needs, wants, and demands

Step 2: Create new flavors with more design of packaging -

health

Step 3: Provides more credit facility to the new and old

wholesalers in order to expand Pepsi’s brand to rural area

Step 4: Start to build more partners with local brands to

offer our Pepsi products only

Step 5: Start to do more sponsors with government, NGOs, or other events

Marketing and R&D Budget

Pepsico has traditionally relied heavily on marketing for driving sales and market growth.
Like Coca Cola it too spends heavily on marketing and promotion. In 2017, its marketing
budget was 4.1 billion dollars, in 2018 the budget was 5.8 billion dollar, in 2019 the more
than 6.2 billion dollar and that of Coca Cola was 3.9 Billion dollars.  Pepsi spent 2.4
billion dollars solely on advertising. . In 2017, 2018 and 2019, Pepsi invested $737, $745
and $755 million in Research and development.

Controls

If the actions of pepsi are not going according to the plan than it should corrective
measures by:

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MARKETING PLAN OF PEPSI

 Establish performance Standards

 Evaluate actual performance and compare to standards
 Take corrective actions if necessary
 If local brands reject to become our partnership, we will talk with them again by providing
commission

Recommendation:

 Since there are older people and Pepsi has been traditionally a young people’s
drink, Pepsi will have to stimulate consumption by older members of society
 Pepsi uses Plastic bottles and cans which can be harmful for society. So Pepsi
should be produced more in recyclable bottle
 Need to improve PR activities in urban areas
 In our country, with brand name people prefer Pepsi less compare to without brand
name. So need to improve its brand value.
 Should increase promotion strategy to introduce new product line like Pepsi next,
Pepsi zero etc.

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