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Pepsi Cola Pakistan
Pepsi Cola Pakistan
PEPSICO INC.
In 1990 150 countries Soft Drinks : Pepsi Cola Company : Pepsi Cola International Snack Foods : Frito Lay Inc. : PepsiCo Foods International
COMPETITIVE ANALYSIS
In 1990, Soft Drink Market Share
INTERNATIONAL
50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 46.00% 20.00% 15.00% 10.00% 15.00% 5.00% 0.00%
Coca-Cola Company
Series1
PepsiCo
45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 40.40%
UNITED STATES
Series1 31.80%
8.90%
Coca-Cola Com[pany
PepsiCo
7-Up/Dr. Pepper
In 1990 International & Domestic Soft Drink Operating Profit International & Domestic Soft Drink Revenues
$1.40 billion
Coca-Cola
$10 billion
$0.767 billion
Pepsi
$6.50 billion
Coca-Cola focused solely on beverages PepsiCo had diversified from the soft drink business into other food-related lines A very high-stakes struggle for brand loyalty
In 1991, the per capita consumption of soft drinks in Pakistan was 12 eight-ounce bottles/year Lowest in the world
Reason:
250 ml bottle price was PKR 4 1 liter bottle price was PKR 12 Average disposable personal income was PKR 682 Average per year spending for soft drinks =12*225 ml (1 eight-ounce bottle=225ml bottle)*12/1000 = PKR 32.4 Disposable personal income was low
PCIs line of products in Pakistan prior to 7-Up acquisition: Pepsi Cola(cola) Mirinda (orange) Teem (lemon-lime) Coca-Colas line of products in Pakistan: Coca-Cola (cola) Fanta (orange) Sprite (lemon-lime)
Market segments: On-premise Restaurants, Cinemas, Snack bars, Parks, Airlines Accounted for 85% of total Pakistani soft drinks market Take-home Accounted for 15% of total Pakistani soft drinks market
DISTRIBUTION
54000 small retail outlets sold soft drinks Key Factors Soft drinks were highly substitutable Maintaining cold chain is important PCI branded refrigerators was one way to maintain cold chain & it encouraged retail outlet loyalty
Trade promotion: point-of-purchase displays, incentives to sales force, local events, social work, government campaign-related programs Consumer promotion: price-off discounts, free items with purchase of products, collecting bottle caps to win
BOTTLERS
Pepsi Cola to expand distribution with low investment began using Franchise System Franchise systems main components: Bottlers get exclusive rights to produce, bottle, price, & sell the product in a designated area. 10 years tenure with option to renew for a period of 5 year
Bottlers could distribute other beverages that didnt compete with pepsi products Bottlers didnt have to carry secondary products of producer
Brand Portfolio & Marketing Plan Pepsis advertising & promotion budget focused on maintaining market share 7-Ups advertising & promotion budget focused on building market share Mirindas advertising & promotion budget focused on hold share strategy.