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Project Name:PepsiCo and Its Products

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Mountain DewPresented by:

Arshad Hussain (Project Leader)Maria Jameel (Project Assistant)

Shahbaz Mazhar (Project Assistant)

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Mission/Vision  PepsiCo's overall mission is to increase the value of their shareholders' investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity

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What is Pepsi:-Pepsi is a carbonated soft drink produced and manufactured by PepsiCo.The drink was first made in the 1890s byPharmacist Caleb Bradham in New Bern, North Carolina America.

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Pepsi-Cola trademarkThe original trademark application for Pepsi-Cola was filed on September 23, 1902 with registration approved on June 16, 1903. In the application's statement, Caleb Bradham describes the trademark as an, "arbitrary hyphenated word "PEPSI-COLA," and indicated that the mark was in continuous use for his business since August 1, 1901. The Pepsi-Cola's description is a flavoring-syrup for soda water.

20102010TodayToday

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RISEDuring the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cents, sales increased substantially. Pepsi encouraged price-watching consumers to switch, obliquely referring to the Coca-Cola standard of six ounces per bottle for the price of five cents (a nickel), instead of the 12 ounces Pepsi sold at the same price. Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. From 1936 to 1938, Pepsi-Cola's profits doubled.

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Niche marketingWalter Mack was named the new President of Pepsi-Cola and guided the company through the 1940s. Mack, who supported progressive causes, noticed that the company's strategy of using advertising for a general audience either ignored African Americans or usedethnic stereotypes in portraying blacks. He realized African Americans were an untapped niche market and that Pepsi stood to gain market share by targeting its advertising directlytowards them.

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MarketingIn 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public.

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Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is just one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing.

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Rivalry with Coca-ColaAccording to Consumer Reports, in the 1970s, the rivalry continued to heat up the market. Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge". These tests suggested that more consumers preferred the taste of Pepsi (which is believed to have more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" across the nation. This became known as the "Cola Wars".

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Competitor of Pepsi The Carbonated Soft Drink (CSD) industry in Pakistan fall into four main segments: Colas, Citrus segment, Lemon-lime segment & Orange segment. Please refer to the following table:

Segment PepsiCo Products Competing ProductsCola Pepsi Coca ColaCitrus Mountain Dew Sprite 3GLemon Line 7up SpriteOrange Mirinda Fanta

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1. PEPSI2. Aquafina3. Aquafina Flavor Splash4. Aquafina Sparkling5. Dole Juice6. Fiesta Mirinda7. Fruitworks8. Gatorade9. G2

10. Kas Mas11. Lipton Brisk12. Lipton Lced Tea13. Lipton Pureleaf14. Manzanita Sol15. Mirinda16. Mug17. Ocean Spray18. Patio

19. Mountain DewMountain Dew20. AMP Energy21. Propel22. Slice23. Sobe/lean/lifewater24. Tazo25. Tropicana Juice Drinks26. Tropicana Twister Soda27. Propel

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Globally Introduction

Mountain Dew, currently stylized as Mtn Dew, is a soft drink manufactured and distributed by PepsiCo. The formula was made and first marketed in Marion, VA, Knoxville and Johnson City, Tennessee, USA through the 1940s, then in Fayetteville, North Carolina by Barney and Ally Hartman. By 1964, it was being distributed across United States. The formula still used today was created by Bill (William) Jones. As of 2007, Mountain Dew was the 4th best selling carbonated soft drink in the United States, behind Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Mountain Dew's Diet version ranked 9th in sales.

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On October 15, 2008, Mountain Dew's official logo was redesigned to "Mtn Dew", as a result of a PepsiCo rebranding of its core products. However, Other flavors of Mountain Dew, specifically "Code Red", "Voltage”, “Livewire", Caffeine Free Mountain Dew and Caffeine Free Diet Mountain Dew still use the old design Mountain Dew was originally released in the UK in 1996, then removed in 1998. Currently in the UK, a new drink called 'Mountain Dew Energy' has been introduced into the energy drink market.

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Dew in PakistanDew in Pakistan Mountain dew is the brand of Mountain dew is the brand of PEPSIPEPSI. It falls in the . It falls in the citrus citrus segment of segment of carbonated soft drinkcarbonated soft drink (CSD).it was (CSD).it was first launchedfirst launched in Pakistan in the year in Pakistan in the year 20012001 but it was a but it was a failurefailure. In the year . In the year 20032003 it was it was re- launchedre- launched along with along with massive promotional campaigns, it was a huge massive promotional campaigns, it was a huge successsuccess. . Mountain dew enjoyed the status of the only citrus Mountain dew enjoyed the status of the only citrus carbonated soft drink in the beverage market until carbonated soft drink in the beverage market until sprite sprite 3g3g entered the market. The total entered the market. The total market sharemarket share of citrus of citrus CSD’sCSD’s is is 14%14% out of out of which 95%which 95% is held by is held by mountain mountain dewdew and the rest 5% by others. and the rest 5% by others.

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Mountain dew is the Mountain dew is the fastest growingfastest growing carbonated soft drink in carbonated soft drink in Pakistan and it is also the fastest growing brand of Pepsi cola Pakistan and it is also the fastest growing brand of Pepsi cola world wide. As of world wide. As of 2007,2007, Mountain Dew was the Mountain Dew was the fourth-best-fourth-best-selling selling carbonated soft drink in the United States, behind only carbonated soft drink in the United States, behind only Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Diet Mountain Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Diet Mountain Dew ranked ninth in sales in the same year. In Dew ranked ninth in sales in the same year. In October 2008October 2008, , it was announced that Pepsi would be redesigning their logo it was announced that Pepsi would be redesigning their logo and re-branding many of their products.and re-branding many of their products.

SLOGANSLOGANSlogan of the brand isSlogan of the brand is

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Ingredients Mountain Dew lists its ingredients as:

Carbonated water

Sugar

Citric acidSodium benzoate (preserves freshness)

Caffeine (55 mg per 12 oz. [approx 330ml])

Sodium citrate

Emulsifiers

Natural FlavorsAscorbic Acid

Color (Tartrazine)

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MARKETING MIXMARKETING MIX

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ProductProductThe product includes the liquid inside and the packaging also. Soft The product includes the liquid inside and the packaging also. Soft drink satisfies the need of thirst (core benefit). However, people are drink satisfies the need of thirst (core benefit). However, people are always different; some want more some want less. Therefore always different; some want more some want less. Therefore mountain dew has made allowances for that by providing many sizes.mountain dew has made allowances for that by providing many sizes.Mountain dew like its mother company Pepsi, seeks the image by Mountain dew like its mother company Pepsi, seeks the image by focusing on individuals and also introversive people. Mountain dew focusing on individuals and also introversive people. Mountain dew targets male teenagerstargets male teenagers those who are ready to embrace excitement, those who are ready to embrace excitement, adventure, fun, energy and enthusiasm. As the adventure, fun, energy and enthusiasm. As the caffeinecaffeine ratio is very ratio is very high in mountain dew as compare to other CSD’s it caters the need of high in mountain dew as compare to other CSD’s it caters the need of those who like to sleep less. It has gone through a those who like to sleep less. It has gone through a design design renaissancerenaissance in the year 2008 .The in the year 2008 .The appearanceappearance of the product is eye of the product is eye catching with bright yellow green color and semi opaque .As the catching with bright yellow green color and semi opaque .As the product is associated with sports it is slightly larger, unlike its product is associated with sports it is slightly larger, unlike its competitors, to offer more to the consumer. competitors, to offer more to the consumer.

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The The qualityquality of the soft drinks is needed to be regularly high. of the soft drinks is needed to be regularly high. mountain dew strictly meets the mountain dew strictly meets the I.S.OI.S.O standards and these standards and these standards set by Pepsi cola international .It has also been standards set by Pepsi cola international .It has also been given monthly award held by “given monthly award held by “H.S.EH.S.E”*. Apart from this the ”*. Apart from this the company have hired specially trained employees who are company have hired specially trained employees who are always involved in the always involved in the quality checkingquality checking of the product of the product throughout the Manufacturing process. The product is throughout the Manufacturing process. The product is convenient i.e. just purchase it and consume it. The bottles convenient i.e. just purchase it and consume it. The bottles are are lightlight, with flexible packaging, so they won’t crack of leak, , with flexible packaging, so they won’t crack of leak, and are not too heavy to causally walk around. The canes are and are not too heavy to causally walk around. The canes are also light and safe. The brand is not going through extension in also light and safe. The brand is not going through extension in Pakistan because it is growing stage and the economic Pakistan because it is growing stage and the economic conditions are not very favorableconditions are not very favorable

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PROMOTIONPROMOTION  All the factors mentioned before are part of the product from the All the factors mentioned before are part of the product from the drink to the image. Through promotion mountain dew aims to drink to the image. Through promotion mountain dew aims to create attractiveness for this. Brand uses both ATL create attractiveness for this. Brand uses both ATL (media)(media) and and BTL (BTL (consumer relatedconsumer related) activities for promotion.) activities for promotion.At the time of its re -launched mountain dew conducted massive At the time of its re -launched mountain dew conducted massive sampling to create brand awareness in the year sampling to create brand awareness in the year 20032003, as per their , as per their rough estimation, they reached approximately rough estimation, they reached approximately 2 million2 million in in Pakistan with their different samples of Pakistan with their different samples of green bags, green T-green bags, green T-shirts, key chains, capsshirts, key chains, caps etc.As per their statement people still etc.As per their statement people still remember their massive sampling techniques to set their roots remember their massive sampling techniques to set their roots strongly in CSD market in Pakistan.strongly in CSD market in Pakistan.

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Mountain dew uses “Mountain dew uses “PULL STRATEGYPULL STRATEGY”* in their promotion. For ”* in their promotion. For example they pay “example they pay “slotting allowancesslotting allowances”*in the supper store. ”*in the supper store. Mountain dew is strongly involved in the sponsorship of programs Mountain dew is strongly involved in the sponsorship of programs that exactly match the theme and concepts of their products and that exactly match the theme and concepts of their products and which their consumers love to watch. For example mountain dews which their consumers love to watch. For example mountain dews sponsoring “sponsoring “living on the edgeliving on the edge” on the Musik channel featuring DJ ” on the Musik channel featuring DJ Waqar who is an icon for teenager and is himself an aggressive Waqar who is an icon for teenager and is himself an aggressive enthusiastic entertainer.enthusiastic entertainer.Previously they were sponsoring “survivor series” they also conduct Previously they were sponsoring “survivor series” they also conduct events like rock concerts in which teenagers participate with full events like rock concerts in which teenagers participate with full energy, patience and enjoy with there full potential. energy, patience and enjoy with there full potential. Half of the total cost is promotional cost.Half of the total cost is promotional cost.

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PLACEMENTPLACEMENT    Mountain dew is using Mountain dew is using “direct distribution”“direct distribution” *method. *method. Mountain dew floods all possible retail stores with there Mountain dew floods all possible retail stores with there product. They use product. They use 1.51.5 formulas i.e. if there is a need of formulas i.e. if there is a need of 10 10 bottlesbottles in a shop they provide in a shop they provide 15 bottle15 bottle to that shop. The to that shop. The “numeric availability” is 87%.“numeric availability” is 87%.The brand has also developed “marketing relationship”. It The brand has also developed “marketing relationship”. It gives its big customer calendars and certificates. There is a gives its big customer calendars and certificates. There is a complaint cell complaint cell and and feedback ffeedback from customer is regularly rom customer is regularly taken. Company uses its own fleet of vehicles & taken. Company uses its own fleet of vehicles & warehouses. The cost of logistic is high but it is warehouses. The cost of logistic is high but it is compensated in off season by merging of routes .In order to compensated in off season by merging of routes .In order to avoid channel conflicts exclusivity funds are given to the avoid channel conflicts exclusivity funds are given to the customer .The distribution cost is customer .The distribution cost is 8-9%8-9% of the total cost of the total cost including the salaries of sales department.including the salaries of sales department.

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PRICINGPRICING

  

Pricing strategy is the last area of marketing mix. The brand uses Pricing strategy is the last area of marketing mix. The brand uses

““value based pricingvalue based pricing”. It means that when consumer is buying ”. It means that when consumer is buying

mountain dew they are not just buying the beverage but also the mountain dew they are not just buying the beverage but also the

image which goes with it. Prices usually don’t image which goes with it. Prices usually don’t fluctuatefluctuate but they but they

may suffer sometimes due to the may suffer sometimes due to the prices of competitorsprices of competitors or or

increase in the prices of increase in the prices of raw material.raw material.

Trade offers like price off and free products are given to the Trade offers like price off and free products are given to the

retailers. Final consumers are also given discount on special retailers. Final consumers are also given discount on special

occasion like Eid, Ramadanoccasion like Eid, Ramadan etc.UTC (etc.UTC (under the crownunder the crown) schemes ) schemes

are usually launches on these events; e.g final consumers are given are usually launches on these events; e.g final consumers are given

discounts.discounts.

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SWOT ANALYSIS OF MNT. DEWSWOT ANALYSIS OF MNT. DEW    

StrengthsStrengths

WeaknessWeakness

OpportunityOpportunity

ThreatsThreats

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StrengthStrength  

Since the mother brand is so strong, it helped mountain Since the mother brand is so strong, it helped mountain

dew a lot in creating its name in beverage market. It also dew a lot in creating its name in beverage market. It also

increased the creditability of the mother product. The increased the creditability of the mother product. The

primary and key strength of mountain dew is that it is the primary and key strength of mountain dew is that it is the

brand of one of the strongest and globally recognized brand of one of the strongest and globally recognized

company that is company that is PepsiPepsi. Since, the mother brand is so . Since, the mother brand is so

strong, it helped mountain dew a lot in creating its name strong, it helped mountain dew a lot in creating its name

in the beverage industry.in the beverage industry.

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WeaknessWeakness  

  The The increasing inflationincreasing inflation rate in Pakistan may result rate in Pakistan may result

in an upcoming weakness for Mountain Dew. in an upcoming weakness for Mountain Dew.

Secondly, Secondly, fragmentationfragmentation in the beverage industry of in the beverage industry of

Pakistan is another weakness. Thirdly, and most Pakistan is another weakness. Thirdly, and most

importantly, Mountain Dew’s fame can hurt the importantly, Mountain Dew’s fame can hurt the

credibility of the mother brand, Pepsi. Brand credibility of the mother brand, Pepsi. Brand

extension is not thereextension is not there

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OpportunityOpportunity    

One of the best opportunity for mountain dew is that the One of the best opportunity for mountain dew is that the

people are now fed up of ordinary cola’s and other people are now fed up of ordinary cola’s and other

existing CSD’s, hence strongly moving their interest existing CSD’s, hence strongly moving their interest

towards the citrus segment like mountain dew.towards the citrus segment like mountain dew.

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ThreatsThreats

The biggest threat for mountain dew is form its The biggest threat for mountain dew is form its

competitors competitors Sprite 3GSprite 3G and other energy drinks and other energy drinks

like red bull etc. Before Sprite 3G, Mountain like red bull etc. Before Sprite 3G, Mountain

Dew enjoyed the monopoly in the citrus Dew enjoyed the monopoly in the citrus

segment of CSD’s industry. Now, the segment of CSD’s industry. Now, the

competition is very high between the two competition is very high between the two

brands. Secondly, from the Pepsi’s perspective, brands. Secondly, from the Pepsi’s perspective,

Mountain Dew can be a threat for the mother Mountain Dew can be a threat for the mother

brand.brand.

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*Slotting allowances*Slotting allowancesA one-time payment by a manufacturer or vendor to a retailer in order to A one-time payment by a manufacturer or vendor to a retailer in order to ensure shelf space in the retailer's store(s) or in its warehouses. Slotting ensure shelf space in the retailer's store(s) or in its warehouses. Slotting allowances are controversial and play a major role in new product allowances are controversial and play a major role in new product introductionsintroductions  *Pull strategy*Pull strategy.“Pull” selling strategy is one that requires high spending on advertising .“Pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.and consumer promotion to build up consumer demand for a product. *H.S.EHealth and safety environment *Marketing relationship  Relationship with customers, suppliers and distributers *Direct distribution*Direct distribution In direct distribution channel, there are no middle-men or intermediaries. The sequence of direct distribution channel is as follows: Producer – Retailer – Consumer (P-R-C)

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