PEPSI COLA PAKISTAN:FRANCHISING &PRODUCT LINE MANAGEMENT

GROUP MEMBERS OF PREDATORS:SAUMIL TRIVEDI

AMAN HEGDE

RAHUL PAREKH

RUTVIJ RAJPUT

PEPSICO INC. Pepsi Cola International owned by Pepsico

Inc. Three markets: 1. Soft drinks-Pepsi Cola Company and Pepsi Cola International 2. Snack Foods- Frito Lay Inc. and Pepsico Foods International 3. Restaurants- Pizza Hut, Taco Bell, and KFC

7-UP International

PepsiCo bought 7-UP’s international division for $246 million.

7-UP was a leading producer in lemon-lime category.

Represented 15% of international soft drink

Foreign volume boosted by almost 20%.

In 2008, PepsiCo's U.S. market share is 30.8 percent, while The Coca-Cola Company's is 42.7 percent.

Competitive Analysis

Main competitor was Coca-Cola Company, both in United States and abroad.

In 1990, Coca Cola claimed 46% of international soft drink market.

Diversified from soft drink business into food-related lines as Frito Lay.

PEPSI COCA-COLA

International & Domestic Soft Drink Revenues

$6.5 billion $10 billion

International & Domestic Soft Drink Operating Profit

$767 million $1.4 billion

International & Domestic Soft Drink Growth 1989-1990

29% 8%

Percent of Revenue derived from International Soft Drink Sales

16% 55%

Percent of Operating Profit derived from International Soft Drink Sales

4% 80%

Pepsi cola in Pakistan

Irfan Mustafa joined 1990 as CEO of Pepsi cola

In West Asia division pepsi enter with 3 countries: Pakistan, Bangladesh, Sri lanka

PCI divided into five functional departments- franchising, marketing, bottlers, sales operation and finance

Market in Pakistan Pepsi’s marketing divide in two stages: first stage: PCI manufactured and sold it to

bottlers second stage: bottlers add carbonated

water and sweetener quantities and sold to retail store and other outlet

• Retail price was PKR 4 per individual consumption bottle i.e 25ml

• PKR 12 for 1 liter bottle

Cont..• Market was divide into 2 segment on

premise and take home

• Soft drink market grew between 1988 and 1990

• PCI market share was 58% in 1990 from 33%

Products There are 3 flavors : cola, orange and lemon lime

Like 7 up, slice, mountain dew, mirinda, tropicana.

Lays, quaker are also products of Pepsi

Distribution Approximately 54000 retail outlet sold soft

drinks

But the brand loyalty was not there and PCI has to visit retailers

Rural area’s road condition was bad and the competitor can cover the market

So PCI started giving branded refrigerator to retail outlet to increase loyalty

Advertising and promotion PCI referred advertising as theme i.e long term

brand building and promotion as scheme by discount pricing, coupons, reward program for retailer

It’s main objective was to achieve volume growth and make a big brand

Media were television and newspaper for advertising while magazine and poster for promotion

Promotion like local event, incentives to sales force, social work

Social work Student scholarship

Health program

Arranging student visit to bottler plant

Fundraising charity

Television was most effective media for PCI products

Lahore, Islamabad, Karachi, Peshawar, Quetta where tv station located

Which reach upto 75 percent of pakistani population because they were main urban areas

Bottlers

Contract: to produce, bottle & sell Independent entities Included in decision making Powerful & affluent Cross- Franchising and ban Bottlers association & retail price Quality

Priorities identified

Supervising remaining acquisition and managing resulting integration

Determining role of each brand in portfolio

Expansion of Cloudy Teem

Acquiring 7-Up Bottlers

Objective: To gain more control & coordination among bottlers

Capacity expansion Bottlers were excited PCI concern: Increase in power of

bottlers 7-Up bottlers concern: Fear of facing

negligence

Cloudy Teem

Concept based on local drink Idea was to move Clear Team

consumers to Cloudy Team or 7-Up Six bottlers were not convinced to

replace Clear Teem being a strong brand

Introduction of Cloudy Teem planned

Brand portfolio [Approx][Sales contribution since acquisition of 7-Up]

Marketing Plan

Rural area: 68% population, low literacy &

disposable income Relied on less expensive radio and point-

of-sale campaign Promote Teem the local brand

Urban area: Media spend yielded higher returns Promote 7-Up

Conclusion

Tremendous future in Pakistan Consumers want:

Convenient location Right package

Way to exploit opportunities: Implementation of effective and

comprehensive marketing strategy Including brand portfolio and bottlers