1

MARKETING AND BRANDING STRATEGIES

OF

PEPSI

IN
INDIA
Submitted To:

Sayanti Banerjee

New Delhi Institution of Management

New Delhi

Submitted By:

DEVENDRA KUMAR SINGH

C-20

MBA 2009-11

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UNDETAKING

I here by declare that the research work on “The Marketing and Branding
Strategy of “PEPSICO” is done originally by me. The data used in the report is
obtained directly from the findings from the Questionnaire. The research work
is exempted from any piracy and plagiarism and the data collection, analysis
and preparation of the report is novel and original.

DEVENDRA KUMAR SINGH

M.B.A

2009-2011

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ACKNOWLEDGEMENT

I express my heartfelt gratitude to several people for their direct and indirect
assistance in the successful completion of my project. It is with the great
pleasure, privilege and humbleness that I express my sincerest gratitude to all
the people who, despite of their busy schedule, have happily rendered me
valuable help and guidance.

My special and sincere thanks to my seniors who guided me at

every step of the research work. It was from their regular assistance that I’m
able to get all the data and findings for the project.

I’m in-debited to Sayanti Banerjee, my guide who directed me to work

at different stages of the project and learning about Analysis of Options in
Indian Market that helped a lot in furnishing my knowledge of the concerned
topic.

Without these extended supports and co-operation, the project

wouldn’t have been the same.

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Content of Table

S.No. Title Page No.

I. Synopsis 5
II. Objective of the Research study 7
III. Introduction 9
IV. Research Methodology 11
V. Company Profile 13
VI. Marketing Strategy 25
VII. Branding Strategy of PEPSICO in India 34
VIII. Data Analysis & Findings 49
IX. Limitations 63
X. Recommendations & Conclusion 65
XI. Annexure 68
XII. Bibliography 70

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SYNOPSIS

TITLE :MARKETING & BRANDING STRATEGIES

OF PEPSICO IN INDIA

NAME OF COMPANY : PEPSICO (INDIA)

SPECIFIC OBJECTIVES :

 . To find out the marketing strategy of PEPSICO

 The quality prevailing in PEPSICO

 To find out the quality of PEPSICO in various areas and find out the
deficiency.

 The product quality of other players.

 To study the factors determining the choice of branding strategy in

market.
RESEARCH METHODOLOGY :

A) Primary data
1. Interaction with people in day to day life.
2. Data collected on the basis of questionnaire.
B) Secondary data
1. Newspapers
2. Relevant information form Website of PEPSICO
3. Other Websites.

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Objectives:

 To find out the marketing strategy of PEPSICO

 The product quality prevailing in PEPSICO

 To find out the product quality of PEPSICO in various areas and

find out the deficiency.

 The product quality of other players.

 To study the factors determining the choice of branding strategy in

market.

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INTRODUCTION

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American

multinational

corporation headquartered in Purchase, New York, with interests in

manufacturing and marketing a wide variety of carbonated and non-

carbonated

beverages, as well as salty, sweet and cereal-based snacks, and other foods.

Besides the Pepsi brands, the company owns the brands Quaker Oats,
Gatorade,

Frito-Lay, SoBe, Naked, Tropicana, Copella, Mountain Dew, Mirinda and

7 Up

(outside the USA).

Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since
2006.

During her time, healthier snacks have been marketed and the company is

striving for a net-zero impact on the environment.[3] This focus on healthier

foods and lifestyles is part of Nooyi's "Performance With Purpose"

philosophy

Today, beverage distribution and bottling is undertaken primarily by

associated companies such as The Pepsi Bottling Group (NYSE: PBG) and

Pepsi Americas (NYSE: PAS). PepsiCo is a SIC 2080 (beverage) company

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Research Methodology

Collection Method:

A) Primary Data
B) Secondary Data

C) Primary data
3. Interaction with people in day to day life.
4. Data collected on the basis of questionnaire.
D) Secondary data
4. Business Magazines
5. Newspapers
6. Relevant information form Website of Mc Donald’s
7. Other Websites.

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COMPANY PROFILE

History

Headquartered in Purchase, New York, with Research and Development

Headquarters in Valhalla, The Pepsi Cola Company began in 1898 by a NC
Pharmacist and Industrialist Caleb Bradham, but it only became known as
PepsiCo when it merged with Frito Lay in 1965. Until 1997, it also owned KFC,
Pizza Hut, and Taco Bell, but these fast-food restaurants were spun off into
Tricon Global Restaurants, now Yum! Brands, Inc. PepsiCo purchased
Tropicana in 1998, and Quaker Oats in 2001. In December 2005, PepsiCo
surpassed Coca-Cola Company in market value for the first time in 112 years
since both companies began to compete. [2]

Corporate governance

Pepsi-Cola Venezuela

Current members of the board of directors of PepsiCo are Indra Nooyi C.E.O.,
Robert E. Allen, Dina Dublon, Victor Dzau, Ray Lee Hunt, Alberto Ibargüen,
Arthur Martinez, Steven Reinemund, Sharon Rockefeller, James Schiro,
Franklin Thomas, Cynthia Trudell, and River King.

On October 1, 2006, former Chief Financial Officer and President Indra Nooyi
replaced Steve Reinemund as chief executive officer. Nooyi remains the
corporation's president, and became Chairman of the Board in May 2007.Mike
White is the President of Pepsi-Co International Division.

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PEPSICO IN INDIA

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PepsiCo gained entry to India in 1988 by creating a joint venture with the

Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and

Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until

1991, when the use of foreign brands was allowed; PepsiCo bought out its

partners and ended the joint venture in 1994.[9] Others claim that firstly Pep

si was banned from import in India, in 1970, for having refused to release the

list of its ingredients and in 1993, the ban was lifted, with Pepsi arriving on the

market shortly afterwards. These controversies are a reminder of "India's

sometimes acrimonious relationship with huge multinational companies."

Indeed, some argue that PepsiCo and The Coca-Cola Company have "been

major targets in part because they are well-known foreign companies that draw

plenty of attention."[10]

In 2003, the Centre for Science and Environment (CSE), a non-governmental

organization in New Delhi, said aerated waters produced by soft drinks

manufacturers in India, including multinational giants PepsiCo and The C

oca-Cola Company, contained toxins, including lindane, DDT, malathion and

chlorpyrifos — pesticides that can contribute to cancer, a breakdown of the

immune system and cause birth defects. Tested products included Coke, Pepsi,

7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE found that the Indian-

produced Pepsi's soft drink products had 36 times the level of pesticide residues

permitted under European Union regulations; Coca Cola's 30 times.[11] CSE said

it had tested the same products in the US and found no such residues. However,

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this was the European standard for water, not for other drinks. No law bans the

presence of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their

products manufactured in India contained toxin levels far above the norms

permitted in the developed world. But an Indian parliamentary committee, in

2004, backed up CSE's findings and a government-appointed committee, is now

trying to develop the world's first pesticides standards for soft drinks. Coke and

PepsiCo opposed the move, arguing that lab tests aren't reliable enough to detect

minute traces of pesticides in complex drinks.

As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market

share of soft-drink sales in India.[12] PepsiCo has also been accused by the

Puthussery panchayat in the Palakkad district in Kerala, India, of practicing

"water piracy" due to its role in exploitation of ground water resources resulting

in scarcity of drinking water for the panchayat's residents, who have been

pressuring the government to close down the PepsiCo unit in the village.[13]

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-

Cola, had high levels of pesticides in their drinks. Both PepsiCo and The Coca-

Cola Company maintain that their drinks are safe for consumption and have

published newspaper advertisements that say pesticide levels in their products

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are less than those in other foods such as tea, fruit and dairy products.[14] In the

Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft

drinks, was banned by the state government in 2006,[15] but this was reversed by

the Kerala High Court merely a month later.[16] Five other Indian states have

announced partial bans on the drinks in schools, colleges and hospitals.[17]

Soft drinks market in India

India is one of the top five markets in terms of growth of the soft drinks market

. The per capita consumption of soft drinks in the country is estimated to be

around 6 bottles per annum in the year 2003. It is very low compared to the

corresponding figures in US (600+ bottles per annum). But being one of the

fastest growing markets and by the sheer volumes, India is a promising market

for soft drinks.

The major players in the soft drinks market in India are PepsiCo and Coca-Cola

Co, like elsewhere in the world. Coca-Cola acquired a number of local brands

like Limca, Gold Spot and Thums Up when it entered Indian market for the

second time. Pepsi Co’s soft drink portfolio also consists of Miranda and 7Up

along with Pepsi. The market share of each of the company is more or less the

same, though there is a conflict in the estimates quoted by different sources [18]

The major ingredient in a soft drink is water. It constitutes close to 90% of the

soft drink content. Added to this, the drink also contains sweeteners, Carbon

dioxide, Citric Acid/Malic acid, Colors, Preservatives, Anti Oxidants and other

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emulsifying agents, etc.[18]

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STRATEGY OF PEPSICO IN INDIA

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: With the swinging fortunes of cricket stars, PepsiCo India is gearing up to

launch a brand new advertising campaign for Pepsi with out any star endorse

rs. Currently, PepsiCo India has twelve star endorsers from Bollywood and the

Indian cricket team.

“Pepsi’s new campaign will be a consumer–centric advertising campaign

without any celebrities,” informed industry sources. ‘Celebrities may come and

go but brands are forever,’ seems to be PepsiCo’s new motto.

Incidentally, PepsiCo has not yet renewed Sachin Tendulkar’s contract which

expired in May this year. According to industry sources, PepsiCo is now

shifting its marketing focus to MS Dhoni, the highest paid IPL player. “The

company will bring in MS Dhoni to the centre space from side lines. Of course,

PepsiCo will make Dhoni wear some decent clothes to erase his Lungi-clad

image,” said Prahlad Kakar, a leading ad film maker in Mumbai. Remember

Pepsi’ ads featuring Dhoni, captain of the Chennai Super Kings team?

Enthused by the response to Dhoni’s ‘Mind it’ ads, the company will now

project Dhoni as its brand icon in the next few months, predict industry

analysts. “Young cine stars Deepika Padukone and Ranbir Kapoor now star in

Pepsi Youngistan campaign. Very soon, we may see Dhoni sharing the screen

space with Shar Rukh Khan in Pepsi ads,” added analysts.When contacted by

FE, PepsiCo India declined to comment on its advertising plans.

On PepsiCo’s shift in strategy, Ramesh Narayan, veteran advertising

professional based in Mumbai said: “I think every brand needs to keep in mind

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its profile. And Pepsi has always stood for the youth. I do not think it is any

comment on Tendulkar as a player but they need to refresh their stable of sports

person with younger people.” In sync with its new strategy, PepsiCo has roped

in Ishant Sharma and Rohit Sharma to feature in its ‘Yeh hai Youngistan Meri

Jaan’-dumping cricket stars Dravid and Ganguly.

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Seven P’s Of Marketing

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Product:

It is the offering of a company in the market which is primarily for

 Use
 Consumption
 Further Processing.
A service or a product refers to an activity or activities that a marketers offers
to perform which result in satisfaction of a need or want of predetermined
target customers.

The product can be a

 Generic product: It is the product at basic level.

 Expected product: It is the customer’s minimum set of expectations from
a product or service.
 Augmented product: It is the offering in addition to what customer
expects.
 Potential product: It is doing every thing potentially feasible to hold &
attract customers.

Prices:

The second P in the formula is price. Develop the habit of continually

examining and reexamining the prices of the products and services you sell to
make sure they're still appropriate to the realities of the current market.
Sometimes you need to lower your prices. At other times, it may be
appropriate to raise your prices. Many companies have found that the

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profitability of certain products or services doesn't justify the amount of effort

and resources that go into producing them. By raising their prices, they may
lose a percentage of their customers, but the remaining percentage generates
a profit on every sale. Could this be appropriate for you?

Sometimes you need to change your terms and conditions of sale. Sometimes,
by spreading your price over a series of months or years, you can sell far more
than you are today, and the interest you can charge will more than make up
for the delay in cash receipts. Sometimes you can combine products and
services together with special offers and special promotions. Sometimes you
can include free additional items that cost you very little to produce but make
your prices appear far more attractive to your customers.

In business, as in nature, whenever you experience resistance or frustration in

any part of your sales or marketing activities, be open to revisiting that area.
Be open to the possibility that your current pricing structure is not ideal for the
current market. Be open to the need to revise your prices, if necessary, to
remain competitive, to survive and thrive in a fast-changing marketplace.

Promotion

The third habit in marketing and sales is to think in terms of promotion all the
time. Promotion includes all the ways you tell your customers about your
products or services and how you then market and sell to them.

Small changes in the way you promote and sell your products can lead to
dramatic changes in your results. Even small changes in your advertising can
lead immediately to higher sales. Experienced copywriters can often increase
the response rate from advertising by 500 percent by simply changing the
headline on an advertisement.

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Large and small companies in every industry continually experiment with

different ways of advertising, promoting, and selling their products and
services. And here is the rule: Whatever method of marketing and sales you're
using today will, sooner or later, stop working. Sometimes it will stop working
for reasons you know, and sometimes it will be for reasons you don't know. In
either case, your methods of marketing and sales will eventually stop working,
and you'll have to develop new sales, marketing and advertising approaches,
offerings, and strategies.

Place

The fourth P in the marketing mix is the place where your product or service is
actually sold. Develop the habit of reviewing and reflecting upon the exact
location where the customer meets the salesperson. Sometimes a change in
place can lead to a rapid increase in sales.

You can sell your product in many different places. Some companies use direct
selling, sending their salespeople out to personally meet and talk with the
prospect. Some sell by telemarketing. Some sell through catalogs or mail order.
Some sell at trade shows or in retail establishments. Some sell in joint ventures
with other similar products or services. Some companies use manufacturers'
representatives or distributors. Many companies use a combination of one or
more of these methods.

In each case, the entrepreneur must make the right choice about the very best
location or place for the customer to receive essential buying information on
the product or service needed to make a buying decision. What is yours? In
what way should you change it? Where else could you offer your products or
services?

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Packaging

The fifth element in the marketing mix is the packaging. Develop the habit of
standing back and looking at every visual element in the packaging of your
product or service through the eyes of a critical prospect. Remember, people
form their first impression about you within the first 30 seconds of seeing you
or some element of your company. Small improvements in the packaging or
external appearance of your product or service can often lead to completely
different reactions from your customers.

With regard to the packaging of your company, your product or service, you
should think in terms of everything that the customer sees from the first
moment of contact with your company all the way through the purchasing
process.

Packaging refers to the way your product or service appears from the outside.
Packaging also refers to your people and how they dress and groom. It refers
to your offices, your waiting rooms, your brochures, your correspondence and
every single visual element about your company. Everything counts. Everything
helps or hurts. Everything affects your customer's confidence about dealing
with you.

When IBM started under the guidance of Thomas J. Watson, Sr., he very early
concluded that fully 99 percent of the visual contact a customer would have
with his company, at least initially, would be represented by IBM salespeople.
Because IBM was selling relatively sophisticated high-tech equipment, Watson
knew customers would have to have a high level of confidence in the
credibility of the salesperson. He therefore instituted a dress and grooming
code that became an inflexible set of rules and regulations within IBM.

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As a result, every salesperson was required to look like a professional in every

respect. Every element of their clothing-including dark suits, dark ties, white
shirts, conservative hairstyles, shined shoes, clean fingernails-and every other
feature gave off the message of professionalism and competence. One of the
highest compliments a person could receive was, "You look like someone from
IBM."

Positioning

The next P is positioning. You should develop the habit of thinking continually
about how you are positioned in the hearts and minds of your customers. How
do people think and talk about you when you're not present? How do people
think and talk about your company? What positioning do you have in your
market, in terms of the specific words people use when they describe you and
your offerings to others?

In the famous book by Al Reis and Jack Trout, Positioning, the authors point
out that how you are seen and thought about by your customers is the critical
determinant of your success in a competitive marketplace. Attribution theory
says that most customers think of you in terms of a single attribute, either
positive or negative. Sometimes it's "service." Sometimes it's "excellence."
Sometimes it's "quality engineering," as with Mercedes Benz. Sometimes it's
"the ultimate driving machine," as with BMW. In every case, how deeply
entrenched that attribute is in the minds of your customers and prospective
customers determines how readily they'll buy your product or service and how
much they'll pay.

Develop the habit of thinking about how you could improve your positioning.
Begin by determining the position you'd like to have. If you could create the
ideal impression in the hearts and minds of your customers, what would it be?
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What would you have to do in every customer interaction to get your

customers to think and talk about in that specific way? What changes do you
need to make in the way interact with customers today in order to be seen as
the very best choice for your customers of tomorrow?

People

The final P of the marketing mix is people. Develop the habit of thinking in
terms of the people inside and outside of your business who are responsible
for every element of your sales and marketing strategy and activities.

It's amazing how many entrepreneurs and businesspeople will work extremely
hard to think through every element of the marketing strategy and the
marketing mix, and then pay little attention to the fact that every single
decision and policy has to be carried out by a specific person, in a specific way.
Your ability to select, recruit, hire and retain the proper people, with the skills
and abilities to do the job you need to have done, is more important than
everything else put together.

In his best-selling book, Good to Great, Jim Collins discovered the most
important factor applied by the best companies was that they first of all "got
the right people on the bus, and the wrong people off the bus." Once these
companies had hired the right people, the second step was to "get the right
people in the right seats on the bus."

To be successful in business, you must develop the habit of thinking in terms of

exactly who is going to carry out each task and responsibility. In many cases,
it's not possible to move forward until you can attract and put the right person
into the right position. Many of the best business plans ever developed sit on

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shelves today because the [people who created them] could not find the key
people who could execute those plans

SEVEN P’S OF PEPSICO

Product: PEPSICO continually review and improve quality offerings to make

sure that PEPSICO not only meet their customers’ expectations, but also
exceed them. As a result, PEPSICO have introduced a series of ongoing value
options to enable their customers to appreciate this aspect of the brand even
more strongly.

Price

PEPSICO prices its products in such a way that a very large cross section of the
Indian population can afford it. Pepsi does not sacrifice quality for value –
rather Pepsi leverages economies of scale to minimize costs while maximising
value to customers. Pepsico definition of value is broader than most cold dinks
of its kind – it is more than even the price.

Place:

PEPSICO and its international supplier partners worked together with local
Indian Companies to develop products that meet Pepsico rigorous quality
standards. These standards also strictly adhere to Indian Government
regulations on food, health and hygiene. Part of this development involves the
transfer of state-of-the-art food processing technology, which has enabled
Indian businesses to grow by improving their ability to compete in today’s
international markets.

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Promotion:

Attribute

A clean fast food brand which tastes the same any where you drink in the
world

Values

The world leader in cold drinks.

Culture

The brand represents culture of social gathering for families and groups.

Personality

The world leader, A giant p.

User

All kinds of consumers buy Pepsico products irrespective of age, sex all over
the world.

People:

Pepsico worldwide is well known for the high degree of respect to the local
culture.
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Packaging:

Pepsico India serves only the highest quality products. Pepsico India has
established close relationships with local suppliers who provide Pepsico with
the highest quality, freshest ingredients to make its products.

Positioning:

The value initiative at Pepsico is all-pervasive. Our strategy is to achieve best

value by enhancing experience (offering best quality), while keeping prices
reasonable. This applies to products they serve their customers and to every
other aspect of the way theydo business. At Pepsico costs are kept low by
increasing efficiency and cutting wastage at all levels. This is possible by
advanced operations, management and human behaviour skills tested over
time in around 120 countries across the world. It is important to understand
that delivering highest quality doesn’t come easily.

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Strengths: one of the leaders in the industry

Weaknesses: not diversified offerings
Opportunities: Sponsorship, global presence including building facilities in new markets
Threats: large and small beverage companies, including bottled water firms
Swot Analysis Of Pepsi Co.
Strength
• Pepsi has a broader product line and outstanding reputation.
• Merger of Quaker Oats produced synergy across the board.
• Record revenues and increasing market share.
• Lack of capital constraints (availability of large free cash flow).
o Great brands, strong distribution, innovative capabilities
o Number one maker of snacks, such as corn chips and potato chips
• PepsiCo sells three products through the same distribution channel.
For example, combining the production capabilities of Pepsi, Gatorade and Tropicana is a
big opportunity to reduce costs, improve efficiency and smooth out the impact of
seasonal fluctuations in demand for particular product.
Weakness
• Pepsi hard to inspire vision and direction for large global company.
• Not all PepsiCo products bear the company name
• PepsiCo is far away from leader Coca-cola in the international market - demand is
highly elastic.
Opportunity
• Food division should expand internationally
• Noncarbonated drinks are the fastest-growing part of the industry
• There are increasing trend toward healthy foods
• Focus on most important customer trend - "Convenience".
Threats
• F&B industry is mature
• Pepsi is blamed for pesticide residues in their products in one of their most promising
emerging market e.g in India
• Over 50 percent of the company's sales come from Frito-Lay; this is a threat if the
market takes a downturn
• PepsiCo now competes with Cadbury Schweppes, 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.
Strategies
The purpose of the strategy is to increase the EPS by 15% per annum and increase
PepsiCo's...

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SAMPLING PLAN

1) Sampling Unit: Who is to be surveyed?

· Urban Retailers

2) Sample Size: How many people to be surveyed?

· All retailers in the area (of all age groups)

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3) Sampling Procedure:

We have taken sample from All over Delhi

Total Number of Shops In The Area - 246

Warm Stock-15543 units

Cold Stock in Refrigerator-6743 units

Total Stock- 22286 Units

Retailers’ preference (On the basis of the stocks they

have in the shop)

Pepsi 65%

Coca-cola 35%

Pepsi
coca-cola
35%

65%

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Sign Board on Shop

114 shops has signboards of any company

Pepsi 81% (75 Shops)

Coca-cola 19% (39 shops)

19% sign board pepsi

81% sign board coca-

cola

Refrigerator in Shop-

80 shops has refrigerator

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Pepsi-73% (58shops)

Coca-cola-27% (22 Shops)

27%

Visi Pepsi
Visi Coca-Cola

73%

Warm Stock-

Pepsi-59%(9170 units)

Coca-Cola- 41%(6372 units)

warm Stock
Pepsi
41%
warm Stock
Coca-Cola
59%

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Cold Stock-

Pepsi-55% (3708 units)

Coca-Cola-45% ( 3034 units)

45%
Cold Stock
Pepsi
55% Cold Stock
Coca-Cola

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Limitations/ Problems in conducting the survey

 Some Retail Owners ( Branch Owner) refuse to give information.

 Due to festival season during market survey eve they was a great rush and
every one was in hurry.
 Illiteracy among some customers is reflected as far as filling questionnaire
is concerned.
 Less cooperation from the customers due to busy modern life.
 Since the survey is conducted only on 45 customers therefore, analysis
cannot be made accurately.

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My Project gives me the true knowledge of customer relationship concepts &

also helped to understand the working environment of the Pepsico.
The major thing, which I found in my whole project, is as follow:

 The market share of Pepsico is more than Coke

 The distribution channel of both company is very bad.
 Advertising policy of Pepsi is better than Coca Cola.
 Retailers are highly dissatisfied with salesmen behavior.
 Company relation with retailers is credit based.
 There are very less effort for promoting sales.
 There are no direct communication between retailers and company.
 There are no any route incharge.

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 Retailers are not aware about company scheme and product

development.
 Scheme is not distributed honestly among retailers.

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