“PEPSI MARKETING MIX”

BY: JUILEE DESHMUKH

INTRODUCTION:

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 Pepsi-Cola 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.

COMPETITION:

The Coca-Cola Company has historically been considered PepsiCo's primary competitor in the beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in market value for the first time in 112 years since both companies began to compete. In 2009, The Coca-Cola Company held a higher market share in carbonated soft drink sales within the U.S. In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage market, however, reflecting the differences in product lines between the two companies. As a result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business has shifted to include a broader product base, including foods, snacks and beverages.

The majority of PepsiCo's revenues no longer come from the production and sale of carbonated soft drinks. Beverages accounted for less than 50 percent of its total revenue in 2009. In the same year, slightly more than 60 percent of PepsiCo's beverage sales came from its primary non-carbonated brands, namely Gatorade and Tropicana.

PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food market, accounting for approximately 39 percent of U.S. snack food sales in 2009. One of PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in the same year held 11 percent of the U.S. snack market share. Other competitors for soda are RC Cola, Cola Turka, Kola Real, Inca Kola, Zamzam Cola, Mecca-Cola, Virgin Cola, Parsi Cola, Qibla Cola, Evoca Cola, Corsica Cola, Breizh Cola, Afri Cola.

In November 2007, PepsiCo announced a restructuring initiative to split the company into three units, one for food in the US, one for beverages in the US and one for food and drinks abroad.

PRODUCT:•Beverage Products – Diet Pepsi, Gatorade, Mountain Dew, Thirst Quencher, Tropicana, Aquafina Bottled Water, Sierra Mist.

•Savory Food Snacks – Fritos Corn chips, Cheetos, Ruffles Potato Chips, Lays Potato Chips, Tostitos, Doritos.

•Other Food Products – breakfast cereals, cakes and cake mixes.

•PepsiCo recently created Baked Snacks North America Business Unit to meet consumer’s interest in more nutritious snacks and foods.

PRICE:

•Expenses related to transportation, ingredients and labor continue to pressure the beverage industry toward price increases.

•PepsiCo’s drink pricing strategies may be heavily influenced by its working relationship with Wal-Mart whose low price themes put pressure on PepsiCo to hold down prices.

•The company strives to cut or maintain current prices by cutting overhead and re-engineering the manufacturing process.

•PepsiCo is expanding its use of inexpensive and recyclable plastic bottles; nevertheless the company has instituted some price increases in recent years, specifically in its overseas markets such as New Delhi and Duba.

PLACE:

•PepsiCo is primarily a US based company with approximately 52% of its revenues located in the states.

•PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales.

•In addition the company plans on major capital initiatives in Brazil and Mexico.

•The company is also acquiring Russia’s leading Juice Company, Lebedyansky, and V Water located in the United Kingdom.

In 1965 Herman W. Lay of the Frito-Lay Company and Donald Kendall of Pepsi-Cola formed PepsiCo. In 1986 operations were combined under PepsiCo Worldwide Foods and PepsiCo Worldwide Beverages. In 2001 PepsiCo merged with Quaker Oats to form a $25 billion company. PepsiCo restructured in 2007 dividing the company into three units’ food in the US, Drinks concentrated in the US and Food and Drinks marketed abroad.

PROMOTION:

•PepsiCo instituted a so called Pepsi Stuff promotion whereby customers could accumulate Pepsi Points from buying various products these points could be used to by other products, most recently AmazonMP3.

•A recent promotion involving the NY Yankees was not well received when not enough free tickets were made available.

•In 2008 PepsiCo employed Tiger Woods to promote a Gatorade brand called Gatorade Tiger.

•PepsiCo continues is promotional association with the NFL and the Super Bowl specifically marketing Pepsi and Doritos.

•In 2009 Pepsi launched its “Pepsi Throwback” campaigned offering a drink with the sugar content of its original product.

PEOPLE:•Indra K. Nooyi is the President of PepsiCo in addition to the company’s CFO

•Recently the Board of Directors elected Steven S Reinemund chairman of the board and chief executive officer.

•PepsiCo fosters a corporate culture that values employees and emphasized diversity in the workplace.

•PepsiCo is named to the ‘Best Companies for Multi Cultural Women’ list by Working Mother magazine

•PepsiCo is recognized at two events for its dedication to Talent Sustainability and dedication to Asian American employees—2009 Best Companies for Asian Pacific Americans from Asian Entrepreneur, Top 10 Companies for Asian Americans from AMBA

•PepsiCo has won  the ‘Workplace Excellence’ Award at Out & Equal Workplace National Summit

•PepsiCo is listed in the top 20 ‘Ideal Employer MBA Ranking’ in Fortune magazine.

PHYSICAL EVIDENCE:

•PepsiCo’s website provides a wealth of information about the company including the firm’s rich history and manufacturing process.

•PepsiCo is an industry leader in packaging – helping to promote and implement standards for sustainable packaging.  

•PepsiCo has a packaging philosophy: reduce, reuse, recycle, remove and renew.

PROCESS:

•PepsiCo is in the process of removing high fructose corn syrup (HFCS) from both the traditional.

•The Frito-Lay department will soon produce  Lay’s Kettle with natural flavors, and to boost the whole grain and fiber content, respectively, of its Tostitos and Sun Chips brands.

•Flavor concentrates are shipped from special Pepsi-Cola manufacturing plants, The bottles and cans that will eventually be filled with Pepsi are manufactured elsewhere, and shipped to Pepsi plants wrapped and sealed for protection, Labels, cartons, caps, the carbon dioxide used to carbonate soft drinks and other supplies are also produced for Pepsi by other companies, Once on the belt, cans are part of an enclosed, controlled environment that keeps them sanitary and helps ensure quality throughout the filling process.

Pepsi-Cola takes special care to purify the water it uses – a procedure that involves careful treatment, filtration and purification, Pepsi-Cola flavor concentrate is carefully combined with sweeteners and other ingredients in large stainless steel mixing tanks. Quality control audits performed by specially trained technicians are a critical part of the manufacturing sequence, In the last step of the manufacturing process, as the now-rinsed cans reach the filler, they’re reinverted, immediately filled and the lid is applied – at an average speed of 1,200 cans per minute.

THANK YOU!!!