Sejal : About Pepsi

In 1965, Donald Kendall, the CEO of Pepsi-Cola, and Herman Lay, the CEO
of Frito-Lay, recognized what they called “a marriage made in heaven,” a
single company delivering perfectly-salty snacks served alongside the best
cola on Earth. Their vision led to what quickly became one of the world's
leading food and beverage companies: PepsiCo. PepsiCo, Inc. is an
American multinational food, snack, and Beverage Corporation. The
Headquarters is located in Harrison, New York. The company employs
around 274000 people worldwide. PepsiCo Inc. (PEP) is a leading food
and beverage company that manufactures and distributes its products in
more than 200 countries.

Food products that PepsiCo manufactures include chips, flavoured snacks,

cereals and dairy-based products. The company’s beverage product
portfolio includes carbonated soft drinks, juices, ready-to-drink tea and
coffee, sports drinks, and bottled water. PepsiCo grew bigger with the
1998 acquisition of Tropicana and the 2001 merger with Quaker Oats. The
combination of these companies made PepsiCo a strong diversified
consumer staples firm. PepsiCo generated more than $70 billion in net
revenue in 2020, driven by a complementary food and beverage portfolio
that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana, etc.

Tanmay : What was the Problem?

Unfortunately, the company has faced several issues in the quality that
resulted in great losses in terms of the reputation of the brand. The basic
reason behind the problem was mismanagement in the quality control
and inspection department of the company. Pepsi today stands as one of
the most popular and well reputed brand but still such a well reputed and
quality conscious brand failed to manage the quality of its famous brand
Cadbury as there were several quality issues in the products of Cadbury.
Few years back, there was breaking news regarding PepsiCo that told the
public that Pepsi was contaminated with pesticides that were dangerous
for human health. The news was so shocking that it spread like a fire in
the jungle.

The company had to bear significant monetary loss and loss with respect
to brand image and brand trust as well. Finding pesticides in Pepsi was
shocking and as a result of this, Pepsi was banned in most of the
countries globally. In addition to that, stocks in factories were seized.
These issues questioned the current management and practices that have
been followed in the quality control and inspection department in Pepsi.
The Cola Wars refer to the long-time rivalry between soft drink producers
The Coca-Cola Company and PepsiCo, who have engaged in mutually-
targeted marketing campaigns for the direct competition between each
company's product lines, especially their flagship colas, Coca-Cola and
Pepsi.

Prasad : Reasons for the Problem

Some of these issues are symptoms of serious underlying problems,

which may be a threat to the survival of this company. One of the issues
that have emerged in the firm’s recent operations is the reduced
revenue. The company’s books of account reveal that the revenue of the
company in 2016 was $ 62.799 billion, which is a drop when compared to
that of the previous year. The dropping revenue is an indication of
problems in the market that needs to be addressed. Another problem is
that the company has been subject to criticism from environmentalists,
especially in India, United States, and United Kingdom. Many of these
environmental groups have raised concerns about the massive amounts
of water used by the company in complete disregard to the basic water
needs of the locals in the areas where it operates.

It has also faced criticism regarding the massive pollution caused by the
plastic bottles used in packaging its products. Health experts have also
raised concerns about the possible health consequences related to
regular use of most of the cola products sold by this company. Coca-
Cola's creation of "Diet Coke," and later on, "New Coke," both of which
led to a major shifting point in the Cola Wars. These issues may have a
significant impact on the ability of PepsiCo to remain sustainable in its
global operations

Mitesh : Strategies used by the company

1. PepsiCo spent 2.4 billion solely on the advertising. They became more
quality conscious than before. Customer feedback was given more weight
age i.e. customer oriented.

2. Package designs which were dull were made more attractive. Designs
were improved based on customer demands & expectations.

3. #HarGhoontMeinSwag was an instant hit among the people especially

the youths. Sales got a huge boost due to their marketing campaigns.

4. PepsiCo targeted Sports Icons are signed deals with them which gave
them immense popularity. They targeted global events like IPL, Cricket
World cup, UEFA Champions League, etc. Popular cricketers & footballers
featured in their Television ads.

5. The quality of their product which was then criticized improved and
new healthy products were brought in the market. Innovations were
made to the product to make it look better than before.

6. Social media such as Facebook, Instagram, Twitter, etc were used to

promote PepsiCo products which brought it under the notice of every
household.

Janhavi : End result - Current Scenario

PepsiCo is the second biggest player in the global food and beverage
industry. The company offers a diverse array of products. PepsiCo’s
generic competitive strategy is based on the need to address market
pressure coming from its biggest rivals, including the Coca-Cola Company.
A firm’s generic strategy (based on Porter’s model) defines the basic
strategy used to maintain competitive advantage. On the other hand,
PepsiCo’s intensive growth strategies are a response to the evolving
global food and beverage market conditions. Intensive growth strategies
outline how firms support their growth. PepsiCo’s generic strategy for
competitive advantage matches its intensive strategy to ensure long-term
growth.

PepsiCo implements market penetration as its primary intensive growth

strategy. This intensive strategy supports business growth through
increased sales, such as from a bigger market share. PepsiCo’s secondary
intensive growth strategy is product development. This intensive strategy
requires offering new products to capture more consumers.  PepsiCo
applies market development as its supporting intensive growth strategy.
This intensive strategy supports business growth by capturing new
markets or market segments. 

Neela : Our suggestion to cope up with the same problem

Historically, people have recognised six core emotions: Happy, surprised,

afraid, disgusted, angry and sad. However, in 2014, the Institute of
Neuroscience and psychology published research stating that the
distinction between 4 of these emotions was based on social interaction
and constraints. Instead, human emotion is based on 4 basic emotions:
happy, sad, afraid/surprised and angry/disgusted. Based on these 4
categories let’s look at how brands are using emotions to drive
connection and awareness:

(a) Happy – Brands wants to be associated with smiling, laughing, happy

customers and positivity has been shown to increase sharing and
engagement. A study in 2010 of most-emailed New York Times articles
found that emotional articles were shared more often, and positive posts
were shared more often than negative one. The most shared ad of last
year and of all time was Android’s friends Fur eve, showing clips of
unlikely and undeniable cute animal friends.
When Coca-Cola recently changed its tagline from “open happiness” to
“taste the feeling”, it maintained its focus on happy images of people
connecting and engaging one another..... (more)

Pranali : Conclusion and recommendations:

Hereby we conclude that - Overall PepsiCo is a successful company with

substantial revenue, and a large footprint in the marketplace. PepsiCo
should continue to expand their growth and take advantage of potential
opportunities by continuing to improve on areas at the corporate top
level, in the markets that they currently are in, and in new markets and
market segments that they wish to expand into and at last PepsiCo should
become more proactive in the health food/product market place rather
than being reactive to the market trends. They need to improve their
responsiveness and future projections to market trends and changes that
can therefore allude to different product segments and target markets.

PepsiCo provides 360-degree support to the farmer through assured buy

back of their produce at pre agreed prices, quality seeds, extensive
service, disease control packages, bank loans. Coke’s basic strength is its
brand name. But Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product
packaging, is successfully maintaining is No.1 position. In coming future
Pepsi is also planning to enter into the 2 field of fruit drinks.

Thank you!!