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INTRODUCTION TO THE COMPANY:
Pepsi is the world renowned brand. It is a very well organized
multinational company, which operates almost all over the world.
They produce, one of the best carbonated drinks in the world. Pepsi is
a symbol of quality and service, all over the world. Pepsi is producing
Cola for more than 100 years and it has dominated the world market
for a long time.
PepsiCo Inc. is an American multinational food, snack and beverage corporation headquartered in Purchase,
New York, United States, with interests in the manufacturing, marketing, and distribution of grain-based
snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the PepsiCola
Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a
broader range of food and beverage brands, the largest of which includes an acquisition of Tropicana in
1998 and of Quaker Oats in 2001, which added the Gatorade brand to its portfolio.
As of January 26, 2012, 22 of PepsiCo's brands generated retail sales of more than $1 billion apiece, and the
company's products were distributed across more than 200 countries, resulting in annual net revenues of
$43.3 billion. Based on net revenue, PepsiCo is the second largest food and beverage business in the world.
Within North America, PepsiCo is the largest food and beverage business by net revenue.
Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. The
company's beverage distribution and bottling is conducted by PepsiCo as well as by
licensed bottlers in certain regions. Approximately 274,000 employees generated $66.415
billion in revenue as of 2013.
OBJECTIVES OF THE STUDY
1. To study about the marketing strategies used by the PepsiCo.
2. To study the about the competitors and their strategies and how the PepsiCo deal with their strategies.
3. To study the various factors that affect the environment to adopt marketing strategies.
1.3 SCOPE OF THE STUDY
Today’s business world is growing faster and faster and there are lot of competition among businesses. To
survive in this competition every organisation has to adopt some specific marketing strategies. If the
company is not alert in designing the strategies then that company will not be able to survive this
competitive race. So this study has a scope to provide certain rays about the strategies to be implemented.
1.4 RELEVANCE OF THE STUDY
The present study is based on the secondary data collection. The outcome of the study will definitely useful
in the field to take appropriate marketing decisions.
The study of on marketing strategies adopted by PepsiCo will help to understand the strategies to be
implemented by various companies. The study has relevance from the point of view of marketer as it clearly
gives the picture of marketing strategies.
Origins
The recipe for the soft drink Pepsi was first developed in the 1880s by Caleb Bradham, a pharmacist
and industrialist from New Bern, North Carolina. He coined the name
"Pepsi-Cola" in 1898.
In 1902, as the cola developed in popularity, he created the Pepsi-Cola
Company and registered a patent for his recipe in 1903.
In 1919, the Pepsi-Cola Company was first incorporated in the state of
Delaware.
In 1931 the company went bankrupt and on June 8 of that year, the
trademark and syrup recipe were purchased by Charles Guth who owned a syrup manufacturing
business in Baltimore, Maryland. Guth was also the president of Loft, Incorporated, a leading candy
manufacturer, and he used the company's labs and chemists to reformulate the syrup. He further
contracted to stock the soda in Loft's large chain of candy shops and restaurants, which were known for their soda fountains, used Loft resources to promote Pepsi, and
moved the soda company to a location close by Loft's own facilities
in New York City.
In 1935, the shareholders of Loft sued Guth for his 91% stake of
Pepsi-Cola Company in the landmark case Guth v. Loft Inc. Loft
won the suit and on May 29, 1941 formally absorbed Pepsi into Loft, which was then re-branded as
Pepsi-Cola Company that same year. Loft restaurants and candy stores were spun off at this time.
In the early 1960s, Pepsi-Cola's product lines expanded with the creation of Diet Pepsi and purchase
of Mountain Dew.
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc.. At the time
of its foundation, PepsiCo was incorporated in the state of Delaware and headquartered
in Manhattan, New York. The company's headquarters were relocated to their present location
of Purchase, New York in 1970, and in 1986 PepsiCo was reincorporated in the state of North
Carolina.
Between 1990 and 1995, PepsiCo funded The McNeil/Lehrer News Hour on public television.
1.5.2 Acquisitions and Divestments
Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside of its
core focus of packaged food and beverage brands; however it exited these non-core business lines largely in
1997, selling some, and spinning off others into a new company named Tricon Global Restaurants, which
later became known as Yum! Brands, Inc. PepsiCo also previously owned several other brands that it later
sold so it could focus on its primary snack food and beverage lines, according to investment analysts
reporting on the divestments in 1997. Brands formerly owned by PepsiCo include: Pizza Hut, Taco
Bell, KFC, Hot 'n Now, East Side Mario's, D'Angelo Sandwich Shops, Chevys Fresh Mex, California Pizza
Kitchen, Stolichnaya (via licensed agreement), Wilson Sporting Goods and North American Van Lines,
The divestments concluding in 1997 were followed by multiple large-scale acquisitions, as PepsiCo began to
extend its operations beyond soft drinks and snack foods into other lines of foods and beverages. PepsiCo
purchased the orange juice company Tropicana Products in 1998, and merged with Quaker Oats Company in
2001, adding with it the Gatorade sports drink line and other Quaker Oats brands such as Chewy Granola
Bars and Aunt Jemima, among others.
In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its products in North
America: Pepsi Bottling Group and PepsiAmericas. In 2010 this acquisition was completed, resulting in the
formation of a new wholly owned subsidiary of PepsiCo, Pepsi Beverages Company. In February 2011, the
company made its largest international acquisition by purchasing a two-thirds (majority) stake in Wimm-BillDann
Foods, a Russian food company that produces milk, yogurt, fruit juices, and dairy products. When it acquired the remaining 23% stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest
food and beverage company in Russia.
In July 2012, PepsiCo announced a joint venture with the Theo Muller Group which was named Muller
Quaker Dairy. This marked PepsiCo's first entry into the dairy space in the US.
1.6 MISSION STATEMENT:
“To be the world's premier consumer Products Company focused on convenient foods and beverages. We
seek to produce healthy financial rewards to investors as we provide opportunities for growth and
enrichment to our employees, our business partners and the communities in which we operate. And in
everything we do, we strive for honesty, fairness and integrity.”
1.7 VISION STATEMENT:
"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate –
environment, social, economic – creating a better tomorrow than today." “Our vision is put into action
through programs and a focus on environmental stewardship, activities to benefit society, and a commitment
to build shareholder value by making PepsiCo a truly sustainable company.”
The structure of PepsiCo's global operations has shifted multiple times in its history as a result of
international expansion, and as of 2010 it is separated into four main divisions: PepsiCo Americas
Foods, PepsiCo Americas Beverages, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. As of
2009, 71 percent of the company's net revenues came from North and South America, 16 percent from
Europe and 13 percent from Asia, the Middle East and Africa. Approximately 285,000 people are employed
by PepsiCo worldwide as of 2010.
PepsiCo Americas Foods
PepsiCo Americas Foods consists of the company's food and snack operations in North and South America.
This operating division is further segmented into Frito-Lay North America, Quaker Foods &
Snacks, Sabritas, Gamesa, and Latin America Foods. Food and snack sales in North and South America
combined contributed 48 percent of PepsiCo's net revenue in 2009. Until November 2009, Christopher
Furman, President of Ventura Foods Inc., occupied the position of Food Services CEO.
Frito-Lay North America, the result of a merger in 1961 between the Frito Company and the H.W. Lay
Company, produces the top selling line of snack foods in the U.S. Its main brands in the U.S., Canada and
Mexico and include Lay's and Ruffles potato chips, Doritos tortilla chips, Tostitos tortilla chips and
dips, Cheetos cheese flavored snacks, Fritos corn chips, Rold Gold pretzels, Sun Chips and Cracker
Jack popcorn. Products made by this division are sold to independent distributors and retailers, and are
transported from Frito-Lay's manufacturing plants to distribution centers, principally in vehicles owned and
operated by the company.
Quaker Foods North America, created following PepsiCo's acquisition of the Quaker Oats Company in
2001, manufactures, markets and sells Quaker Oatmeal, Rice-A-Roni, Cap'n Crunch and Life cereals, as
well as Near East side dishes within North America. This division also owns and produces the Aunt
Jemima brand, which as of 2009 was the top selling line of syrups and pancake mixes within this region.
Sabritas and Gamesa are two of PepsiCo's food and snack business lines headquartered in Mexico, and they
were acquired by PepsiCo in 1966 and 1990, respectively. Sabritasmarkets Frito-Lay products in Mexico,
including local brands such as Poffets, Rancheritos, Crujitos and Sabritones. Gamesa is the largest
manufacturer of cookies in Mexico, distributing brands such as Emperador, Arcoiris and Marías Gamesa.[38]
PepsiCo's Latin America Foods (Spanish: Snacks América Latina) operations market and sell primarily
Quaker- and Frito-Lay-branded snack foods within Central and South America, including Argentina, Brazil,
Peru and other countries in this region. Snacks América Latina purchased Peruvian company Karinto S.A.C.
including its production company Bocaditas Nacionales (with three production facilities in Peru) from the
Hayashida family of Lima in 2009, adding the Karito brand to its product line, including Cuates, Fripapas,
and Papi Frits.
PepsiCo Americas Beverages
This division contributed 23 percent of PepsiCo's net revenue as of 2009, and involves the manufacture (and
in some cases licensing), marketing and sales of both carbonated and non-carbonated beverages in North,
Central and South America. The main brands distributed under this division include Pepsi, Mountain
Dew, Gatorade, 7Up (outside the U.S.), Tropicana Pure Premium orange juice, Sierra Mist, SoBe Life water,
Tropicana juice drinks, AMP Energy, Naked Juice and Izze. Aquafina, the company's bottled water brand, is
also marketed and licensed through PepsiCo Americas Beverages.
PepsiCo also has formed partnerships with several beverage brands it does not own, in order to distribute or
market them with its own brands. As of 2010, its partnerships include: Starbucks (Frappuccino, Double Shot
and Iced Coffee), Unilever's Lipton brand (Lipton Brisk and Lipton Iced Tea), and Dole (licensed juices and
drinks).
The company started a new market strategy to sell their Pepsi Cola product in Mexico, stating that about one
third of the population has difficulty pronouncing "Pepsi". They started manufacturing and selling their
product under the label 'Pécsi', the advertisement campaign features the Mexican soccer
celebrity Cuauhtémoc Blanco. This is not the first time it has happened, back in 2009, PepsiCo used the
same strategy successfully in Argentina.
PepsiCo will market and distribute Starbucks products in several Latin American countries for 2016.
PepsiCo Europe
PepsiCo began to expand its distribution in Europe in the 1980s, and in 2009 it made up 16 percent of the
company's global net revenue. Unlike PepsiCo's Americas business segments, both foods and beverages are
manufactured and marketed under one umbrella division in this region, known as PepsiCo Europe. The
primary brands sold by PepsiCo in Europe include Pepsi-Cola beverages, Frito-Lay snacks, Tropicana juices
and Quaker food products, as well as regional brands unique to Europe such as Walkers crisps, Copella, Paw
Ridge, Snack-a-Jack, Duyvis and others. PepsiCo also produces and distributes the soft drink 7UP in Europe
via license agreement.
PepsiCo's European presence expanded in Russia in 2009 as the company announced a $1billion investment
and with its acquisition of Russian juice and dairy product brand Wimm-Bill-Dann Foods in December 2010
and Lebedyansky juice producer in March 2008.
PepsiCo Asia, Middle East & Africa
The most recently created operating division of PepsiCo covers Asia, the Middle East and Africa. In
addition to the production and sales of several worldwide Pepsi-Cola, Quaker Foods and Frito-Lay beverage
and food product lines (including Pepsi and Doritos), this segment of PepsiCo's business markets regional
brands such as Mirinda, Kurkure and Red Rock Deli, among others. While PepsiCo owns its own manufacturing and distribution facilities in certain parts of these regions, more of this production is
conducted via alternate means such as licensing (which it does with Aquafina), contract manufacturing, joint
ventures and affiliate operations. PepsiCo's businesses in these regions, as of 2009, contributed 13 percent to
the company's net revenue worldwide. In August 2012, PepsiCo signed an agreement with a local Myanmar
distributor to sell its soft drinks after a 15-year break to re-enter the country.
1.9 DATA COLLECTION
The data collected for this project is purely secondary data as it is adopted from internet sources.
PRODUCT DETAILS
Aquafina
Aquafina® bottled water goes through a state-of-the-art purification process so that you get the
refreshment your body craves in its purest form
Cheetos
CHEETOS® Snacks are the playfully mischievous cheesy crunch that add a little lighten-up
moment to any day. Proof positive, you simply can’t eat a Cheetos Snack without smiling. The
CHEETOS® brand strives to provide consumers with fun times every step of the way.
Lay's
Wherever smiles happen and happiness is celebrated, you’ll find LAY'S® potato chips. From
backyard BBQs and birthday parties to 4th of July picnics, LAY'S® chips are there to share
the moment. It’s no wonder these deliciously fresh-tasting and perfectly crispy potato chips
have been America’s..
IM – Marketing Strategies of PespiCo 2015-16
M.COM.II (SEM III) MANAGEMENT ST. JOSEPH COLLEGE, SATPALA Page 8
Lipton
Made with natural ingredients, new 100% Natural Lipton Iced Tea unlocks the natural
goodness of tea, blending it with delicious flavours’ to hydrate and refresh you.
Tropicana
Tropicana, the strongest name in juices, extend the PepsiCo portfolio of brands with plenty of
nutritious, high-quality flavours. Tropicana Products, Inc. is the leading producer and marketer
of branded fruit juices. Its products are marketed in the U.S. under a variety of brand names,
including... Pepsi, Mountain Dew.
Mountain Dew
Mountain Dew exhilarates and quenches extends with its one of a kind great taste.
Pepsi - the bold, refreshing, robust cola.
Quaker Oats
Quaker Oats is a 100% wholegrain and natural source of carbohydrates and dietary fibre. It has
strong heart health benefits, which is scientifically proven to help reduce cholesterol.
7UP
7UP, the refreshing clear drink with a natural lemon and lime flavour was created in 1929. It
was launched in India in 1990 and its international mascot Fido Dido was used for advertising
in 1992, to position the brand as a cool drink for youngsters. 7UP's lemon refreshment picks
you up and leaves you feeling upbeat. Its sparkling, crisp lemon and lime flavour keeps you
positive against all odds.
Gatorade
Gatorade, the World’s No.1 Sports Drink, was born on the field of sport! Gatorade was
launched in India in 2004. Gatorade is an optimal mix of water, carbohydrates and essential
mineral salts that get absorbed instantly to rehydrate, replenish and refuel like no other
beverage can.