pepsi coke project

7/30/2019 Pepsi Coke Project

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Saturday, 13 August 2011

Marketing Research Project on PEPSI and COKE

Pepsi Cola in PAKISTAN

Pepsi was found in 1892.

In 1959 Pepsi Cola was introduced in Pakistan but due to lack of awareness it was

unsuccessful therefore the headquarters decided to windup their business in Pakistan

1963 It came again with much revised Strategy, facing a lot of difficulties in promoting

there product and competing against COCA COLA which was a well established brand

here in Pakistan and for that reason Pepsi once again went back

1979 Pepsi had secretly promoted its diversified products and carter to all demographic

groups of Pakistan there for with in 5 years they emerged as a market leader, having72% of market share while COCO COLA had only 28% share. But now its market share

has decreased to 8%.

Marketing Strategies of Pepsi

The keys to reaching its goals are to concentrate its resources on growing its current

businesses and acquiring related companies to broaden its product line. An ongoing

battle for market share has existed for over 75 years. Company has tried a number of

strategies to gain a sustainable competitive advantage.

These strategies included:

Introducing new soft drink products

Diversification

Aggressive advertising campaigns

Pepsi must identify and implement the strategy best suited to gain the competitive

advantage in the soft drink industry on a world-wide basis.

Marketing Mix of Pepsi.

Product:

The main product of Pepsi Cola Company is Pepsi and its sub brands are Dew, Miranda,

7up, Aquafina, Pepsi Max. It also diversified into Lays.

Providing their consumers with easy-to-use, convenient and innovative containers are

one of their top priorities. Package introductions they've made over the years include the


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industry's first 1 liter bottle; Regular, Disposable; Can. Pepsi Co. was the first

company to respond to consumer preference with lightweight, recyclable, plastic bottles.

These bottles are made of polyethylene terephthalate or "PET plastic," which is a form of

polyester used to make strong, lightweight, shatter-resistant bottles.

Pepsi Products:

Pepsi (cola drink)

7UP (cola drink)

Miranda (soft drinks)

Dew (cola drink)

Slice (soft drinks)

Aquafina (Mineral Water)

Price:Pepsi prices its products similar to those of Coca-Cola in order to keep profits high.

Competition in the is based mainly on marketing skill rather than price to help avoid

costly price wars and keep profits stable. Since neither of the major manufacturers

would win a price war, it is unwritten rule that the companies will follow the pricing

structure of the market leader. While this amount to price fixing, there has not been any

major government actions to curtail the practice so it should continue in the future.PepsiCos current retail prices range depending on the convenience of the location in

which they are located and depending on the size of the soft drink container.

PRICES OF DIFFERENT BOTTLES

Size and Price of Pepsi (RS.)

Regular bottle 13

Non returnable or disposable bottle 30

1 liter bottle (glass) 35

1.5 liter bottle 70


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2.25 liter bottle 90

Pepsi can 40

Place (Distribution)

Manufacture -------------- Wholesaler---------------Retailer

Manufacturer -------- Company Warehouse-------------- Retailer

Distribution is an important aspect of success in the beverage industry. Since the cola

companies want to focus on making syrup and marketing, they need to have strong,

loyal bottlers. This is especially the case in foreign markets where the cola companies

fiercely battle for good bottlers.

The building of bottlers through joint ventures and the increased maintenance of

current bottler relationship should be the main focus of Pepsis international marketing.

One of Coca-Colas major strengths is its ability to build relationships with its bottlers.Coca-Cola is very methodical in making sure that its bottlers are happy, while Pepsi has

been known for neglecting its bottlers. This is one area that Pepsi must improve if it is

going to take market share away from Coca-Cola.

Product is distributed through PepsiCo distribution centers. The distributor delivers it

to the grocery retailers, vending companies, restaurants, and warehouse/club stores.

The distribution segments can be broken down into the following:

Convenience Stores and Gas Stations: 12% of the market

Restaurants: 25% of the market

Warehouse/Club Stores: 6% of the market Super Markets and Retail Stores: 57% of the market.

Promotion Strategy

Pepsi promotes its products in a many ways, but focuses mainly on getting products

associated with entertainment icons that appeal to youth. The first major use of this

technique was the signing of Pakistan cricket team as celebrities.

Two other areas of entertainment that have been used by Pepsi to promote its brands

are sports and movies. Sports are a popular source of entertainment throughout theworld and is a using it to promote the brand is a main focus of Pepsi. Since sporting

events are seen many times by fans, it provides a good opportunity to increase brand

recognition. Movie stars are also popular throughout the world and are greatly admired

by people, so using them in advertising has a positive effect brand image.

Some of the ways in which Pepsi attract consumers are:

Free Samples ( New product DEW)


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Discounts ( RAMDAN Offers)

In-Store Displays Signs, banners etc.

Entertainment Games with free T-shirts, Pepsi points under the cap etc.

Sponsorship sports teams/clubs/events

SWOT ANALYSIS OF PEPSI COLA:

SWOT analysis is a situation analysis tool that helps the managers to identify internal

strengths and weaknesses, external opportunities, and threats and the potential impact

of these factors on the organizational performance.

Strengths

The biggest strength of the organization is the brand name of Pepsi, which is known

throughout the world for its excellence. Maintaining excellent quality by using latest

equipment in order to produce best hygienic product also strengthens the position of

Pepsi in the market .The easy availability of the product throughout the franchised area

also acts as strength for the organization. This is due to the excellent distribution

network that the organization has. It mostly follows Indirect Distribution

i.e. Manufacture -------------- Wholesaler---------------Retailer. However

in some places it also follows the direct distribution i.e., Manufacturer --------

Company Warehouse-------------- Retailer. The organization has a team of highly skilled

professionals as their sales force. These people are dedicated and motivated enough to

meet any level of demand and to fulfill the requirements of the organization. The

company enjoys Brand Loyalty, which is a plus point of the organization.

The market share captured by the organization also is a great strength for it. In order to

keep in touch with its target market, the organization uses heavy advertisements. These

advertisements not only entertain the viewers but also are very effective in delivering the

actual message of the advertisement, The frequency of announcing and introducing


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different and attractive packages is also very efficient and effective. The company has

been able to maintain a well-developed and highly equipped distribution network, which

is the basic factor behind the success of Pepsi especially in this particular region. The

marketing department of the organization is highly skilled and Quality is the main issue.

This approach used by the organization has been effective in producing the best results

ever. The organization also has a strong sponsorship.

Weaknesses:

A weakness is an internal characteristic that may undermine performance. Pepsi do

not have a lot of weaknesses but there are some areas that have been ignored by the

organization. These include the following weaknesses: The availability of packages issometimes difficult for the organization to maintain. So far the company has not been

able to access the rural areas and this provides an opportunity for the competitors.

Advertisement is another aspect in which the company lacks behind in the rural areas.

One perception that really hurts Pepsi is its image as a Jewish organization. It affects it

sales whenever there is an international incident that involves Muslims.

In one aspect in which PCI really needs to work on is the lack of innovation in

advertising. Pepsi for long holds the reputation of making attractive and innovative

advertising. However in recent years it has not been coming up to the reputation it has

set for itself. Not many new concepts are coming that could really attract the consumers

towards its products.

Opportunities:

Following are the opportunities available to the organization: The Company has

the opportunity to improve its services in the rural areas. Post mix operations can be

expanded from 160 machines to 500 machines in order to make the product available at

all times. New and innovative products have always acted as an opportunity for the

organization. Pepsi is bringing up one of its very famous brand Mountain Dew in

Pakistan. It is expecting it to do well in Pakistani market thus helping it to increase its


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Pakistan for the very first time. Since then, it operated in Pakistan as a franchise and

became the market leader as there was no competition then. Coca-cola leaded the

market for some 37 years but then its share succumbed to the fierce competition with

Pepsi-cola, another US based beverage and fast food selling company who started

operations in Pakistan in 1960.

In 1996, coca-cola started operating as a multinational in Pakistan and took over all the

franchise business prevailing since its inception. Since then, maintaining its share in the

market became a nightmare for coca-cola. Being a multinational, it has to pay millions

as taxes to the government i.e. almost 3 times as much as Pepsi pays. Pay scales at coca-

cola are much higher than that at Pepsi; the difference is about 30%. There is a lot of

commission being paid to the retailers, the setup appliances includes a refrigerator and

a fridge which costs around Rs.68000 per setup. Being a multinational, decision makingis slow because of organizational structure and hierarchy. It takes three years to regain a

contract with a retailer if lost once.

Marketing Strategies of Coke:

The Company is guided by six strategic priorities and four principles of citizenship.

Their strategic priorities outline how they seek to create value as they continue to pursue

growth.Their six strategic priorities are:

Accelerated soft drink growth, led by the coca cola

Selectively broaden their family of beverage brand drive to profitable growth

Growth system profitability and capability together with their bottling partners

Serve customers with creativity and consistency to generate growth across all channels

Direct investment to highest potential area across market

Drive efficiency and cost effectiveness every where.

MARKETING MIX OF COCA COLA

Marketing decisions generally fall into the following controllable categories:

Product

Price

Place (distribution)


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Promotion

PRODUCT STRATEGY OF COCA COLA

Product: Anything that can be offered to a market for attention, acquisition, use or

consumption that might satisfy a want or need.

LEVELS OF COKE AS A PRODUCT

CORE PRODUCTCore benefit is that it fulfills the thirst.

ACTUAL PRODUCT:

Design: Pet bottles, returnable glass bottles, economy packs.Quality: Quality differs with respect to country for example. Coca-Cola Can quality that

is available in Middle East is certainly different as compared to Coke Can available inPakistan.

PRODUCT CLASSIFICATIONS

Coke is categorized as a convenience product, because the purchasing rate is very highand this is the product that is bought very frequently.

Coke Products:

Coke (cola drink)

Mazza (soft drinks)

Sprite (cola drink)

Fanta (soft drinks)

PRODUCT LINE DECISIONS

PRODUCT LINE LENGTHIt means the number of products that company is offering. For example Coke, Diet

Coke, Fanta, Sprite etc.

PRODUCT LINE FILLINGProduct line filling means that earlier when Coca-Cola started it had only one flavor ofCoke available and that is classic coke but with the passage of time company filled theproduct line by adding diet coke, diet lemon etc.

PRICING STRATEGY OF COCA COLA


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The amount of money charged for a product or service, or sum of the values thatConsumers exchange for the benefits of having or using the product or services. As pricegives us the profit so this P is very important for business price of product should be thatwhich gives maximum benefit to the company and which gives maximum satisfaction to

the customer.

Following factors Coca Cola kept in mind while determining the pricingstrategy.

Price should be set according to the product demand of public.

Price should be that which gives the company maximum revenue.

Price should not be too low or too high than the price competitor is charging fromtheir customers otherwise nobody will buy your product.

Price must be keeping the view of your target market.

The price of Coca Cola, despite being market leader is the same as that of its competitorPepsi Cola. Sometimes, Pepsi places its customers into some psychological pricingstrategies by reducing a high priced bottle and consumers think that they save a lot ofmoney from this.

PRICES OF DIFFERENT BOTTLES:

Size of Coca Cola Price of Coca Cola (RS.)

Regular bottle 13Non returnable or disposable bottle 30

1.5 liter bottle 702.25 liter bottle 90Coca Cola can 40

PRICING STRATEGIES:

COMPETITION BASED PRICING APPROACH

Coca Cola has intense competition with Pepsi so its pricing cant exceed too much nordecrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola

exceed too much from the Pepsi then people will shift to the Pepsi Cola and on the otherhand if the price of Coca Cola decreases people might get the impression that its qualityis also low.

PROMOTIONAL PRICING POLICYCoca Cola has offered promotional prices very frequently. Especially on some occasionCoca Cola reduces its rates like in Ramzan Coca Cola reduces its rate unto 5 Rupees on1.5 liter bottle.


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MARKET PENETRATION PRICING POLICY

Prices in beverage industry are determined by the consumer. In an economy like that ofPakistan, consumers tend to switch towards a low priced product. Coca Colas objective

is to target every consumer of the country so Coca Cola has to set its prices at such alevel which no one can offer to its consumers. That is why Coca Cola charges the sameprices as are being charged by its competitors. Otherwise, consumers may go for PepsiCola in case of availability of Coca Cola at relatively high price.

DISTRIBUTION CHANNELS

Coca Cola Company makes two types of selling

Direct selling

Indirect selling

DIRECT SELLINGIn direct selling they supply their products in shops by using their own transports. Theyhave almost 550 vehicles to supply their bottles. In this type of selling company havemore profit margin.

INDIRECT SELLINGThey have their whole sellers and agencies to cover all area. Because it is very difficultfor them to cover all area of Pakistan by their own so they have so many whole sellersand Agencies to assure their customers for availability of Coca Cola products.

PROMOTION STRATEGIES OF COCA COLA

GETTING SHELVESThey get or purchase shelves in big departmental stores and display their products inThose shelves in that style which show their product clearer and more attractive for theconsumers.

EYE CATCHING POSITION

Salesman of the Coca Cola Company positions their freezers and their products in eyecatching positions. Normally they keep their freezers near the entrance of the stores.

SALE PROMOTION

Company also does sponsorships with different college and schools cafes and sponsorstheir sports events and other extra curriculum activities for getting market share.

UTC SCHEME


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UTC mean under the crown scheme, coca cola often do this type of scheme and theyoffer very handy prizes in it. Like once they offer bicycles, caps, TV sets, cash prizes etc.This scheme is very much popular among children.

SWOT ANALYSIS COCA-COLA CO.

STRENGTH

COKE extremely recognizable company. Popularity is one of its superior strength that isvirtually comparable. Coke is known very well world wide. Its branding is obvious andeasily recognize. Without a doubt, no beverage company compare to the coca colassocial popularity status. Some people buy coke, not only because of its taste, but becauseit is widely accepted and they feel like they are part of something big and unifying. Onthe other hand individuals choose not to drink, based solely on rebelling from theworlds idea that coke is something of such great power. It is scary to think it popularityhas constantly growing over the year and possibility that there is still room to grow. Ifyou speak coca cola it would definitely be recognized all over the world, money isanother thing that is the strength of the company. the money they are earning issubstantially better than other beverage companies, and with that money they put backin their own company so that they can improve.Another strength that is very important to coca cola is customer loyalty. The 80/20 rulecomes into effect in this situation. Eighty percent of their profit comes from 20% of theirloyal customers. Many people/families are extremely loyal to coca cola. It seems thatsome people would drink coke religiously like some people drink water and milk. Withcoca colas ability to sell their product all over the world, customers will continue to buywhat theyknow and what they likeCoca cola products.

WEAKNESSES

Coca cola is very successful company with limited weaknesses. however they do have avariety of weaknesses that need to be addressed if they want to rise to the next level.Word of mouth is probably a strength and weakness of every company. Word of mouthis something that is very difficult to control. While people will have their own opinions,you have try to sway their negative views.If bad comments and views are put out to people who have yet to try coca cola products,then could produce lost customer which why word of mouth is weakness.

Another aspect that could viewed as a weakness is lack of popularity of Coco colasdrinks. Another weakness of Coca cola is its sub brands (3G-sprite, Fanta) are less

popular than Pepsi(Dew and Miranda). Another weakness is that has been greatlypublicized is health issue that surrounds some of their products. It is known that thepopular product like coke is not beneficial for your body and health. New focus onweight and health could be a problem for the product.

Opportunity


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Coca cola has a few opportunities in its business. It has many successful brands that itshould continue to exploit and peruse. Coca cola has the opportunity to advertise itsless popular product. With a large income it has the available money to put some ofthese other beverages on the market. This could be very beneficial to the company theycould start selling these other products to the same extent that they do with their main

products. Another opportunity is the ability for coca cola to buy out their competition.This opportunity is rarely present itself in the world of business. Brand recognition isthe significant factor affecting cokes competitive position. Coca cola is known wellthroughout 90% of the worlds population. Now coca cola wants to get their brand nameknown even better and possibly get closer and closer to 100%. Coca cola has anopportunity to continue to widen the gap between them and their competitors.

THREATS

Despite the facts that Coca Cola dominates its market, it has still to deal with manythreats. Even though Coca Cola and Pepsi control nearly 40% of entire beveragemarket, the changing the health consciousness attitude the market could have a seriousthreat of Coca Cola. The definitely need to be viewed as a dominant threat. In todaysworld, people are constantly trying to change their eating and drinking habits. Thiscould directly effect the sale of Coca Colas products. Another possible is the legal sideof things. There are always issue with a company of such supreme wealth andpopularity. Somebody is always trying to find fault with the best and take them down.Coca cola has to be careful with lawsuits. Health minister could also be looked as athreat. Again some people may try to exploit the unhealthy side of coca colas productsand could threaten the status and success of sales. Other threats are of course thecompetition. Coca colas main competitor being Pepsi sells a very similar drink. Cocacola needs to be careful that Pepsi does not grow to be a more successful drink. Otherproducts such as milk, juice, and coffee are threats

Research Objectives

Comparative study to find out the marketshare of the Products in Faisalabad

To study the effect of Advertisement on the buying decision of the Consumer.

To Study the Consumer Perception about the taste and availabilityof products

METHODOLOGY

I have done Descriptive research to find out our objectives. In descriptive research we use the

primary and secondarydata.


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Research methodology is the way to systematically solve the research problem. The method used

for the research is Descriptive Research to find out our objectives.

In descriptive research we use the primary and secondary both data, Sample Design for primarydata have been collected through probability sampling. In which I have used convenient

sampling.

Data is Collected through Market survey in university retail stores, consumers and other users of

both the products in Faisalabad.

Data Collection Instrument: - Well prepared structured questionnaires were used in this

study, which includes both closed-ended and few open-ended questions to get information basedon the objective of the research process.

SOURCE OF COLLECTION OF DATA

All the useful data which were require for this research has been collected through Primary and

secondary date.

Primary data collected through Questionnaire.

Secondary data collected through Internet, Magazines and Newspapers.

ASSUMPTIONS

It is assumed that the chosen sample is the representation of whole population.
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It is assumed that information provided by the samples is accurate and best of their knowledge.

DATA REPRESENTATIONRATIO OF MALE & FEMALE RESPONDENT

Total respondent were 100

Gender Number

Male 57

Female 43
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Profile of Respondent


Profile Number

Student 41

Professional 20

others 3

MARKET SHARE OF PEPSI & COKE

Total respondent 100

Company No of respondent

Pepsi 37

Coke 63

DISTRIBUTION CHANNEL OF PEPSI IS STRONG THAN COKE


Respond No of Respondent

Strongly Agree 45

Agree 25

Somewhat Agree 15

Disagree 11

Strongly Disagree 4

TASTE OF COKE IS BETTER THAN PEPSI



Strongly Agree 11

Agree 47
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Somewhat Agree 21

Disagree 13

Strongly Disagree 8

QUALITY OF COKE IS BETTER THAN PEPSI



Strongly Agree 55

Agree 22

Somewhat Agree 13

Disagree 8Strongly Disagree 2

ADVERTISMENT OF PEPSI IS MORE ATTRACTIVE THAN COCA COLA


Influence of Advertisements No of Respondent

Strongly Agree 50

Agree 35

Somewhat Agree 7

Disagree 5

Strongly Disagree 3

WHICH COMPANY OFFERS MORE SCHEMES?


Products No of RespondentPepsi 61

Coca Cola 39

REASON BEHIND CHOOSING COCA COLA


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Total respondent 63

Preferences No of Respondent

Taste 43

Advertisements 8

Schemes 2

Easy availability 10

REASON BEHIND CHOOSING PEPSI

Total respondent 37


Taste 14

Advertisements 9

Schemes 2


YOU WILL BUY OTHER BRAND IF YOUR REQUIRED BRAND IS NOT

AVAILABLE



Strongly Agree 32

Agree 43

Somewhat Agree 11

Disagree 9

Strongly Disagree 3



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Gender Number

Male 57

Female 43


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Profile Number

Student 41

Professional 20

others 3




Pepsi 37

Coke 63




Strongly Agree 45

Agree 25

Somewhat Agree 15

Disagree 11

Strongly Disagree 4




Strongly Agree 11

Agree 47


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Somewhat Agree 21

Disagree 13

Strongly Disagree 8




Strongly Agree 55

Agree 22

Somewhat Agree 13





Strongly Agree 50

Agree 35

Somewhat Agree 7

Disagree 5

Strongly Disagree 3




Coca Cola 39



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Total respondent 63


Taste 43

Advertisements 8

Schemes 2



Total respondent 37


Taste 14

Advertisements 9

Schemes 2



AVAILABLE



Strongly Agree 32

Agree 43

Somewhat Agree 11

Disagree 9

Strongly Disagree 3



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Gender Number

Male 57

Female 43


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Profile Number

Student 41

Professional 20

others 3




Pepsi 37

Coke 63




Strongly Agree 45

Agree 25

Somewhat Agree 15

Disagree 11

Strongly Disagree 4




Strongly Agree 11

Agree 47


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Somewhat Agree 21

Disagree 13

Strongly Disagree 8




Strongly Agree 55

Agree 22

Somewhat Agree 13





Strongly Agree 50

Agree 35

Somewhat Agree 7

Disagree 5

Strongly Disagree 3




Coca Cola 39



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Total respondent 63


Taste 43

Advertisements 8

Schemes 2



Total respondent 37


Taste 14

Advertisements 9

Schemes 2



AVAILABLE



Strongly Agree 32

Agree 43

Somewhat Agree 11

Disagree 9

Strongly Disagree 3

INTERPRETATION

On the basis research the facts which have come out are:

Coke is leading the market with 63% market share in Faisalabad, while Pepsi is covering

only 37%.

The distribution channel of Pepsi is strong than Coca Cola.


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The taste of coke is better than Pepsi.

The quality of coke is better than Pepsi.

The advertisement of Pepsi is more attractive than Coke.

Pepsi offers more schemes than coke.

People buy coke due to its taste.

Pepsi is being purchased due to its strong distributional channel.

Most of people are not brand conscious, so they purchase product which is easily

available.

Suggestions & Recommendations:

Though the coke is enjoying about 63% of the total market share according to our

research. While with the 37 % market share Pepsi is on the second step.If we are analyzing properly then we find Pepsi is small product portfolio than coke,

which is responsible for its second position.

Pepsi should focus on the taste of the product because 67% population is influenced by

taste only.

Young generation is the potential consumer so companies should more focus on them.

Marketing team should try to increase the availability of Coke in rural areas.

Like Pepsi, Coke should offer more schemes and sponsorships.

Coca cola should provide 1liter in plastic bottle.

Like Pepsi, Coca Cola should diversify in potato chips.

Both brands should prohibit their black marketing.

Both brands should compromise to decrease the price so that the people belonging to

lower class may also purchase it.

Research Findings
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As it was 1st research Project of our life, so it gave my lot of experience which will be very

helpful in our life.

On the basis of that research we find that in case of beverages people are much

influenced by taste rather than Advertisements and other things.

I come to know that Young generation is the biggest consumer of cold drinks than any

other.

Frequency of consume to cold drinks is higher of male than female.

If the Buying decision of consumer is rated -

1st preference will go to Taste, 2nd will go to Quality,

3rd preference will go to schemes, 4th preference will go to

Advertisement,

ConclusionAfter the completion of project we have seen the different aspects ofMarketingResearch Project.Also we have gained some new experience about the consumerresearch. While surveying, we have met a large number people, with differentperceptions, with different nature, and as a result of this we have learnt a lot of thingslike how to talk with the different people with different behavior. We are benefited a lotand this will definitely help us a lot in the future.

pepsi coke project

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