Internship Report on Pepsi Cola

Pepsi An Introduction
Introduction
PepsiCo, Inc., major producer of carbonated soft drinks, other beverages, and snack foods. Its
beverage division, Pepsi-Cola Company, bottles and markets several popular brands of soft drinks in
the United States and throughout the world. PepsiCo also owns Frito-Lay Company, the leading
snack-food maker in the United States. PepsiCo is based in Purchase, New York.
PepsiCos soft drink products include Pepsi, Diet Pepsi, and Mountain Dew. Other beverages include
Lipton Brisk and Liptons Brew iced teas, All Sport athletic drink, and Aquafina bottled water. Frito-Lay
products include Lays and Ruffles Potato Chips, Fritos and Doritos Corn Chips, Chee-tos Cheese
Snacks, Tostitos Tortilla Chips, Rold Gold Pretzels, and Grandmas Cookies.
Early History
PepsiCo traces its origins to 1898 when Caleb Bradham, a pharmacist in New Bern, North Carolina,
created a curative drink for dyspepsia called Pepsi-Cola. Pepsi-Cola, later referred to simply as Pepsi,
was a mixture of carbonated water, cane-sugar syrup, and an extract from tropical kola nuts. To sell
his product, Bradham formed the Pepsi-Cola Company in 1903. In addition to selling the drink at
drugstore counters, Bradham bottled Pepsi for sale on store shelves. At this time, bottling was a new
innovation in food packaging.
However, due to major increases in the price of sugar, Bradham began to lose money on Pepsi, and
in 1923 he filed for bankruptcy. The Craven Holding Company of Craven County, North Carolina,
purchased the companys assets. In 1931 Charles G. Guth of the Loft Candy Company in New York
City purchased Pepsi-Cola from the holding company. Guth had difficulty getting the business going
again, but he increased sales by selling larger bottles at an unchanged price. By 1933 Pepsi-Cola
was sold by 313 franchised U.S. dealers; bottled in the United States, Cuba, and England; and sold in
83 countries.
PepsiCos snack-food business dates from 1932 when ice-cream seller Elmer Doolin of San Antonio,
Texas, developed a business idea after eating a package of Mexican-made fried corn chips. He
purchased a recipe for the chips and established the Frito Company in 1932. Originally, Doolin
produced Fritos corn chips in his mothers kitchen. He later mechanized production and moved
operations to Dallas, Texas, in 1933. Around the same time, Herman Lay of Nashville, Tennessee,
developed a business distributing potato chips made by an Atlanta manufacturer. In 1938 Lay bought
the manufacturing company, renaming it H. W. Lay & Company. The company prospered, becoming
one of the largest producers and distributors of snack foods in the southeastern United States. The
company made and sold many snack foods, but its best-seller was its brand of potato chips, known as

Lays. In 1945 the Frito Company gave H. W. Lay & Company exclusive Southeast distribution rights
for Fritos corn chips, a market both companies hoped to expand nationwide. After continuing their
close business association for over 15 years, the two companies merged in 1961 to become FritoLay, Inc., with headquarters in Texas.
Growth
The Pepsi-Cola Company, meanwhile, had changed hands several times and grown greatly since
1933. The Loft Candy Company merged with the company in 1941, keeping the Pepsi-Cola name.
About this time, Pepsi became the second-best selling soft drink in America behind its chief market
rival, Coca-Cola (popularly known as Coke). In 1948 the Pepsi-Cola Company began canning drinks
in addition to selling them in bottles. Alfred Steele, formerly an executive with the Coca-Cola
Company, became president of the Pepsi-Cola Company in 1950. Former amateur boxer Donald
Kendall took over as company president and chief executive officer (CEO) in 1963 and began
marketing Pepsi to young people in an advertising campaign called The Pepsi Generation. The
company acquired another popular soft drink, Mountain Dew, in 1964. In 1965 the Pepsi-Cola
Company merged with Frito-Lay, Inc., to become PepsiCo, Inc., based in New York City. As president
and CEO of the newly merged company, Kendall later moved the corporate headquarters to its
current home in Purchase, New York.
In 1972 PepsiCo struck a deal with the Union of Soviet Socialist Republics (USSR), allowing the
company to distribute Stolichnaya vodka in the United States and to build soft-drink bottling facilities
in the USSR. Pepsi thus became one of the first American products to be made and sold in the Soviet
Union. In the late 1970s the company began to purchase fast-food chains. It acquired Pizza Hut in
1977, Taco Bell in 1978, and Kentucky Fried Chicken (later named KFC) in 1986.
The Cola wars
PepsiCos leading soft drink, Pepsi-Cola, and its chief rival, Coke, have dominated the soft-drink
market for decades, although Pepsi has traditionally remained behind Coke. In 1950 Coke outsold
Pepsi by 500 percent worldwide. But Pepsis aggressive advertising campaigns aimed at young
consumers and major bottling and marketing deals made Pepsi a close rival to Coke by the 1980s.
PepsiCo has also enjoyed great success with its canned and bottled Lipton brand iced teas, earning
higher sales than the Coca-Cola Companys Nestea products. Also, in the United States, Pepsi had
virtually an even market share with Coke in the mid-1980s, when the Coca-Cola Company changed
the formula for Coke. (It later reintroduced the original formula under a new name, Coke Classic.)
However, as Coke regained popularity worldwide in the late 1980s and into the 1990s, it again
became the global soft-drink leader. In 1996 Pepsi-Cola International, PepsiCos international
beverage production and marketing division, suffered difficulties in Latin America, one of its most
important markets. The company was particularly hurt by the loss of a bottling plant to the Coca-Cola
Company in Venezuela.

Snack food Market Dominance

Many of PepsiCos other products continued to dominate their markets in the 1990s. Sales of FritoLay products accounted for about 40 percent of PepsiCos total profits. By the mid-1990s Frito-Lay
products made up more than half of the U.S. market for snack chips, and the company owned eight of
the top ten chip brands. In 1995 U.S. consumers bought the companys original potato chip brand,
Lays, at a rate of 4.5 kg (10 lb) a second. The companys leading product, Doritos tortilla chips, was
the best-selling salty snack (packaged) food in America in the mid-1990s. Salty snack foods include
chips, pretzels, and nuts, as opposed to nonsalty snack foods such as cookies and cakes. In 1994
Frito-Lay began producing several baked and low-fat versions of some of their snack foodssuch as
Baked Lays potato chips and Baked Tostitos tortilla chipswhich soon dominated the companys
sales growth.
Recent Developments
By the mid-1990s PepsiCos restaurant business consisted of 28,000 outlets worldwide, more than
were owned by any other company. The company also supplied its own restaurants through a
separate division, PepsiCo Food Systems (PFS). In 1997 PepsiCo sold PFS. Also that year, PepsiCo
spun off its restaurant chains to form a new company. The move enabled PepsiCo to focus on its
beverages and snack foods. In 2001 PepsiCo acquired The Quaker Oats Company, a food and
Beverage Company.
Pepsi cola in Pakistan
In Pakistan, there have been consumed different types of soft drinks but Pepsi is the most frequently
consumed soft drink. It is very much popular in the consumer; it has got big target market and is
competing with the other companies of soft drinks. 10 units of Pepsi cola have been installed, in the
different places of Pakistan i.e., Lahore, Multan, Gujranwala, etc., and working with the best utilization
of their resources in the optimum way. Each of these units is owned by the different parties, which are
strictly following the rules of the parent company. The company to made production has licensed each
unit. These units have their own areas of selling and have different target markets. All these units are
considered as separate firms, which are the franchisees of Pepsi cola international.
Pepsi in Multan
Shamim & Company
History
SHAMIM & Co. was established in 1967 as a private limited company. It started its business in 1968.
Allah Nawaz Khan Tareen (Ret. DIG) got license of 7-up franchise and was producing only one
product, 7-up. But in 1973, it became Pepsi Cola franchise. Now a day MD of SHAMIM & Co. is
Alamgeer Khan Tareen son of Allah Nawaz Khan Tareen.

Total production of that plant was 600 crates per 24 hours. Now Factory has 5 plants, which can
produce 110,000 crates per 24 hours.
In start Pepsi in Multan imported the material from USA & Ireland but due the problems of shipment,
time and availability, Pepsi Pakistan made the plant in HariPur Hadar where they import the material
from USA & Ireland. And now Pepsi in Multan takes Pepsi Concentrate from the HariPur plant.
Along with the concentrate, Pepsi in Multan also imports the Sugar from Sheikho Sugar mill & from
Shaker Kunj. The bottles are manufactured by Tariq Glass in Lahore under licensed by PEPSI
Pakistan. The gases which are used in PEPSI are made by Multan Factory itself but in case of
shortage Factory buys it from Supreme Gas & Pak Gas. The caps and crowns are imported from
Imran Cork, Mehran Karachi and Wincloa Lahore.
Introduction
In Pakistan, at present SHAMIM & Co. is the largest production unit out of 11 franchisees. SHAMIM &
Co. covers the area of Southern Punjab which consists of Multan, Bahawalpur, Bahwalnagar, Dera
Ghazi Khan, Sahiwal, Khanewal, Rajan Pur, Taunsa, Okara, Rahimyar Khan and Layyah. The
company is properly serving all these areas with quality products.
Honors
In Pakistan, SHAMIM & Co. is in the list of top three out of eleven showing financial and sales growth
according to their relative volume size basis. When franchise cross a certain volume, plant is
classified as, Mega Plant Status. SHAMIM & Co. has achieved this status in 2000 and 2001. Also it
has ISO 9002 Certification and for year 2005 Shamim and Company won the award of best quality
unit among the eleven 11 units in Pakistan.
Mission Statement
To earn profit by meeting the customers needs with quality products.
Organization
Managing Director
He is the owner of this company and final operational authority to manage all departments of the
company. All departments heads are responsible to report him all about their performances and
matters.
General Manager Sales

G. Manager Sales is responsible for the performance of his department and to achieve the objectives
assigned to him such as marketing, sales, distribution. To carry out his duties more efficiently he has
four Regional Managers, 15 Area Sales Managers.
General Manager Operation
He is responsible for the whole administrative, shipping, workshop related activities to smooth on the
factory operations without any hindrances.
General Manager Technical
He is unlike Sales department performs key role as to manage Production Department producing
quality Products as per need of the sales department. Quality Control Department also works under
him.
G. Manager Finance
Finance, Accounts and MIS departments work under his control. He is responsible to make major
company financial policies to meet the needs of the each and every department regarding budgets
etc.
Organizational Chart
Global strategy
Pepsi has divided the total international market on the basis of taste constituting into three zones.
* Asian zone
* European zone
* African zone
Pepsi is using the licensing strategy to go abroad. SHAMIM & Co. is also a Licensee.
Competitive priorities
The competitive priorities are the operating advantages that firms processes must possess to
outperform its competitors.
Shamim & Co. has the competitive priorities of high-performance design and consistent quality.
High-Performance design
Actually Pepsi is getting the competitive edge in our region on the basis of its quality and the quality is
its taste. Through a complete marketing research they found that sweet taste is liked more by this

region. Thats why in Pakistan Pepsi is dominant soft drink and it has almost 75% shares in this
market. On the other hand when we look internationality then Coca Cola is the leading company. So
Pakistan is a big market for the Pepsi, where Pepsi is generating a lot of revenues.
Consistent Quality
Another major and the strong aspect of the Pepsi in Multan is that they are producing a consistent
quality according to the PCI standards. The low quality bottles and the damaged bottles are not
dispatched towards the market. Pepsi has a lot of checks and balances on its output level.
MANUFACTURING AND SERVICES STRATEGIES
Make-To-Stock Strategy
In Pepsi, Make-To-Stock manufacturing strategy is used. Bottles are produced in a standardized
process because the competitive priority is consistent quality. Firstly, marketing department forecasts
the demand then according to this forecasting MPS is made and after making bottles Pepsi distribute
these bottles to the market.
DEPARTMENTALIZATION
As it is a formalized company therefore there is a hierarchy of employees and the division of
departments in the organization. Following are the departments working in the organization.
* Production Department
* Administration and Personnel department
* Sales/ marketing Department
* Finance Department
* Shipping Department
* Purchase Department
* Excise Department
* Computer Department
Each manager of a department is responsible for overall working of the department. A manager has
an assistant manager and after this there are shift in charge in production and supervisors in sales.
They control the activities of operatives.
Brief introduction of the working of these major departments

Production department
As we can see with the name of the department the working of this department is to control the
production process i.e., to get raw material and process them and convert them into finished goods.
Administration department
The major function of this department is to manage the employees and to made recruitment of new
employees. Assign them their according jobs. And government affairs if employees are working
effectively or not and what are the government recent policies
And what is the impact of these policies on the organization. These are the few matters where
administration plays its role.
Publicity problems
Some government policies directly affect organizational expenses like the tax on different campaigns
that is tax on cap, banners, shirts, and as many taxes on different publicity methods about which
organization come tow know at the end of the year.
Sales/marketing department
The marketing department of this organization is assigned to make public dealing. The marketing
department is responsible to make advertisements of the company products and get them sold.
Advertise through road site Painting, Wall Chalking, Billboard, TV adds etc. They are given yearly
sales targets and they are liable to achieve that. They use different schemes and offer different
discounts etc. to achieve those targets. Schemes like:
Prize Winning Schemes
Pepsi Ramzan Offer
Haj scheme
Omera scheme
And many more schemes
Finance department
This is one of the most important departments of this organization. This department makes the
financial plans of the organization; they analyze their resources and then compile other reports and
give the whole budget the organization can afford. Another job of this department is to make the
complete record all financial and non-financial transactions made inside as well as outside the
organization.

Purchase department
The whole processing of production department is based on the availability of raw material and all the
dealing regarding raw material is under purchase department. They made purchases from their
contractors i.e., bottles, caps ingredients etc.
Computer department
Pepsi-Cola uses a software package (Road Net) to facilitate the design of efficient routes and
schedules for the delivery of bottled and canned products to customers assigned to a given location.
In order for automated routing and scheduling to achieve maximum benefit, however, the set of
customers assigned to each warehouse and bottling facility must be appropriate. During the course of
this project the students developed a procedure based on cluster analysis to assign customers to
bottling facilities and integrated this analysis into a Geographic Information System.
PRODUCTION PROCESS
Water Treatment Plant
PEPSI Bottles Filling Process
Purchasing and washing of bottles
First step regarding the production is the purchasing and washing of bottles. Mainly company use the
bottles returned from the market but if it needed more bottles, then these are purchased from the
glass company, Lahore.
These bottles are placed on conveyer and washed through an automatic plant. Caustic Soda and
boiled water is used for washing of bottles.
Water Traeatment
Raw water is treated to remove its hardness. Here raw water with the Lime, Feso4, and Chlorine
comes to the Coagulation Tank where the initial sludge is removed then this water is moved to Buffer
Tank where it is kept for a certain period in order to stable it. Then this water comes to the Sand Filter
and passes through the Sand and Gravel bed, and then this half treated water comes to the Carbon
Filter and passed through the Carbon and Gravel bed for more purification. After that it is moved to
the Purifix Carbon Filter and then to the Spool Polisher where the filter papers are used to remove the
sludge and then to Water Polisher and then to Ultra Violet Filter where Ultra Violet rays passes
through the water in order to eliminate the future growth of bacteria and lastly this treated water
passed through the Thread Type Filter. After passing through this complex process water is
completely free from sludge and bacteria and other hazardous waste.

After that this water comes to the Water Softer Tank and passed thorough the Gravel Bed and this
soft water is used for the syrup making.
Preparation of Simple Syrup
In the sugar weight room sugar is weighted for different brands, because each brand requires
different quantity of sugar, then this weighted sugar is passed to the syrup storage room, where the
sugar and water in equal quantity processed in Pasteurizer Tanks, and heated up to 85 C where
Activated Carbon is used to remove the bacteria, and Chlorine and TSP (Tri Sodium Phosphate) used
to remove the smell and color of the sugar. Chlorine and TSP is also stored in different tanks. After
that this mixture of water and sugar is cooled down up to 20C in order to prevent from the further
growth of bacteria, after that in this mixture Concentrate of each brand is added as per requirement.
Washing of Bottles
The empty bottles that come from the market are brought into the washing room of bottles where
different employees first check the initial damages to the bottles. Damaged bottles are screened out
from the lot. Only the acceptable lot is allowed going towards the bottle washer machine. The bottles
remain 45 minute in this washer machine so that only the good quality bottles that are free from
sludge and breakage can be passed to the filling room.
Filling of Bottles
Mixing of CO2 Gas in Syrup
Syrup is sent to carbon coolers, Ammonia, Carbon Powder and Carbon Granular are mixed in the
syrup.
In the filling room the syrup and CO2 comes from syrup and CO2 room. From Carbon cooler syrup
goes to the filler and from other side empty bottles and then crown cock or cap cocks are fixed on the
bottles. Here operator looks after the production process.
Filled bottles are then passed thorough light room where quality of bottles is checked. Here under
filled or, over filled bottles or dirty bottles are separated. There are two light rooms and in each room
one employee is placed to trace out the dirty bottles.
After passing through light room the code is printed on the bottles, which contain the manufacturing
date, machine number and time of manufacturing and the batch number.
After all this checking process bottles are placed in the crates. The whole process of production is
automatic. Only supervision is required. Then these crates are sent to the output warehouse.
QUALITY CONTROL

It has become crystal clear that high quality products have a distinct advantage in the market place,
that market share can be gained or lost over the quality issue. Therefore quality is a competitive
priority.
Quality is important due to the following reasons:
Cost and market share
Companys reputation
Product liability
International implications
SHAMIM & COMPANY (PVT) LTD takes effective measures for the quality control. Production of the
company is according to the standards set by PCI. So the company is very much concerned about
quality. Quality of raw material as well as of end product is checked.
Following are the main steps taken by the company for quality control.
Testing of Raw Material
Raw material used in production, comprises of the following items.
Concentrate
Sugar
Treated Water
Empty Bottles
Carbon Dioxide
Crown
From the above items, previously the franchiser from USA provided concentrate. Now it has plant at
Haripur and SHAMIM & COMPANY (PVT) LTD purchase the concentrate from there. Because the
franchiser provides concentrate, so there is no question about its quality. All other raw material
purchased by the company itself.
Sugar Testing
The company from sugar mills purchases sugar. After the arrival of sugar at the plant, it has to pass
through a strict quality check. It should be free from moisture.

First of all supervisor checks the quality of sugar. After this checking, a randomly selected sample
from sugar bag is sent to laboratory for testing. After this testing, if the quality of sugar is according to
the standards, then this sugar is stored for further processing. If the sugar quality is not up to the
mark, then it is sent back to the sugar mill.
Water Treatment Testing
The company has four containers to meet the requirement of water. The water is treated for the use in
final processing. At different stages, different treatment tests are done.
These tests include:
Upper top test
Sand filter and carbon purifier test
Water softness test
Company also keeps the record of these tests. If some abnormality is observed by the shift in charge,
then he stops the supply of water from the container. The supply of water is made from other
container. These containers are also washed at regular basis.
Syrup Testing
Mixing of sugar and water into concentrate produces syrup. This mixture is treated at 90oc and then it
is stored in the tanks. This is called simple syrup. This syrup is also tested in the lab. Then carbon
dioxide and ammonia are mixed into the syrup. Now this is final syrup this is also tested in the lab. If
this syrup is not according to standards, then new syrup is prepared for production.
Finished Product Testing
When bottles are filled, a chemist also takes the sample and checks the quality. Here preservation
and ingredients ratios are also checked. If any deviation from the standard is found, the whole batch
is drained before going in market.
These finished bottles are also passed through light room to control the quality. Here if the bottle is
low filled or dirty, then it is sorted out. The quality of glass, size of neck and size of bottom should be
according to the given standards.
Internal Audit
The firm has hired an internal audit team. And the purpose of this audit team is to make periodic
inspection of output after every 30 minuets. And if they find any laziness from the employees side
they immediately inform to the operation manager, so that right action can be taken.

External Audit
Similarly there are some external auditors from Dubai, they take the random sample of bottle from
market and check the quality of beverages according to their standards. In the past 4 to 5 years the
Pepsi Multan has proved good quality and got a lot of reward from international auditors.
Pepsi cola international also plays an important role in maintaining the quality. Sample from different
markets at different selling points at different times, are collected and quality of these samples are
checked.
Coding is also done on the caps of the bottles. In this coding manufacturing date, machine number
and time is printed. So from the above testing, we can conclude that the company has very rigid
quality control system.
Capacity
Capacity is the limiting capability of a productive unit to produce within a stated time period, normally
expressed in terms of out put units per unit of time.
This is actually the intensity with which a facility is used. This intensity is increased through overtime.
Other way of increasing the capacity is to engage in subcontracting when it is feasible.
In Pepsi, the capacity measure in out put form is the number of crates produced. There are two
production units having different lines. The first unit contains 3 lines and allocated for 250 ml. Pepsi,
7UP, Dew & Marinda. The second unit contains 2 lines and produces 1 & 1.5 litre bottles. These lines
are flexible in a sense that through one line you can produce multiple brands having a set-up time of 2
hrs. They are not fully utilized. The capacity of one line is 1100 bottles per minute but it is being
operated at 800 to 900 bottles per minute. The reason is that, the bottles move very fast that may
cause serious accidents by breaking into small pieces. There are 3 shifts working in Pepsi cola. The
total capacity of 5 lines is 160,000 crates per day. But the average utilization of 5 lines is 100,000
crates per day in peek season.
Planning Strategies
Chase Strategy
A chase strategy matches demand during the planning horizon by varying either (1) the workforce
level or (2) the output rate.
Pepsi is also following the Chase policy. When higher production is required in the peak season,
company hires the new workers, and during low production the workers are fired from the company to
prevent from unnecessary cost. Company also tries to increase demand through advertising, price
cuts and by giving different incentives.]

FORECASTING
Planning and control for operations requires an estimate of the demand for the product or the service
that an organization expects to provide in the future. Since forecasting should be an integral part of
planning and decision making, the choice of a forecasting horizon (a week or a month, for example), a
forecasting method with desired accuracy, and the unit of forecasting (dollar sales, individual product
demand.) should be based on a clear understanding of how the output of the forecast will be used in
the decision process.
SHAMIM & COMPANY (PVT) LTD uses the historical data for forecasting demand. As the company
has seasonal business so the demand is high in the month of March, April, May, June, July, August
and September. Sixty percent sale of the company takes place in these months. This is the peak
season for the company.
Company makes the sales forecast on the basis of historical data. For example, if a company wants
to forecast the sale for June 2005. They will take the data of last five year in order to forecast the sale
for June 2005. They also take into account the current trend factor.
Level of Forecast
The Pepsi cola forecast the demand for their products on aggregate level. Then they forecast demand
for Pepsi, 7up, Mountain Dew and Miranda individually.
Unit of measurement
They forecast the demand in crates instead of bottles. Pepsi normally forecast the demand in 250ml.
Forecasting error
It is difficult to reduce the error of forecast demand. They say that the six to eight months are required
to install a new plant. And they lose the market for this particular period.
Inventory Management
Inventory is very important to every company because it helps the company to respond quickly to
customer demand, which is an important element of competitive strategy. The more effective a
companys inventory system is helped full in manage the companys resources.
In SHAMIM & COMPANY the inventory is divided in to two main categories:
* Critical material
* Non-critical material
Critical Material

Critical material is that which is directly related to the production so management gives full
concentration to critical material to avoid irregularity in operation. The critical materials include:
* CONCENTRATE
* SUGAR
* CO2 GAS
* EMPTY BOTTLES
* CROWN CORK
* CAUSTIC SODA
The store provides a daily stock report of critical material with balance. If that material is reach at
reorder point then they write that material in the daily stock in the column of urgent. If any material is
going to be reordered, it is highlight with red pen. The procurement manager physically checks the
stock and place order. They are managing high inventory in which order for concentrate is placed for
3 months and the order for the rest of the material is placed for 1 month.
The reason for maintaining high inventory is;
* Customer satisfaction, to prevent from stock-outs and back-order situation
* Low ordering cost
* Labor and equipment utilization
* Low transportation cost
Non-Critical Material
In Pepsi cola the non-critical material are those material which is not directly related to the production.
The storekeepers inform the procurement manager. When there is need. The non-critical material
consists of stationery, Greece, and supplies etc.
Selection of Supplier
The co. purchase material from those suppliers, which provide the material at least cost, on time
delivery and meets the specification of the quality control department
In start Pepsi in Multan imported the material from USA & Ireland but due the problems of shipment,
time and availability, Pepsi Pakistan made the plant in HariPur Hadar where they import the material
from USA & Ireland. And now Pepsi in Multan takes Pepsi Concentrate from the HariPur plant.

Along with the concentrate, Pepsi in Multan also imports the Sugar from Sheikho Sugar mill & from
Shaker Kunj. The bottles are manufactured by Tariq Glass, Toynasic and BGL under licensed of
PEPSI Pakistan. The gases which are used in PEPSI are made by Multan Factory itself but in case of
shortage Factory buys it from Supreme Gas & Pak Gas. The caps and crowns are imported from
Imran Cork, Mehran Karachi and Wincloa Lahore.
Distribution
In Shamim & company, major item of inventory is finished product. There are two ways to distribute
that finish inventory, the first method is direct and second is indirect method. In direct method they
provide crates of bottles to their dealers at the required destination through their own transport, in
indirect method the dealers have their own transport for distribution.
PEPSI is just one link in a customer value delivery system that includes thousands of dealers. It is a
winner in this part of the world because they have superior dealer networks. Also the wholesalers and
retailers involved are doing well because PEPSI supplies superior beverages. PEPSI also focuses on
placement of their product such that the consumer can buy a PEPSI from nearby location. PEPSI also
takes immediate action in delivering its products to market. Overall PEPSI is focusing on fastest
delivery and great assortment.
PEPSI Multan is obtaining strong trade cooperation and support from resellers. The marketing
department commands unusual cooperation from resellers regarding displays, shelf space,
promotions and price policies.
Benchmarking
The bench marking is a continuous process of comparing a companys strategy, products and
processes with those of world leaders and in best-in-class organizations in order to learn how they
achieve excellence and then setting out to match and even surpass it.
Comparative analysis of Pepsi & Coca-Cola
We will compare these two companies in regard of shares. The shares can be described in two ways:
Market shares
Volume shares
Market Shares
The market share of a company represents the portion of accounts that the company holds from the
100% accounts of the market. The market share distribution of Pepsi and Coca-Cola is more than
80% and remaining respectively. For Instance if the total market comprises of 100 consuming
accounts then 80 accounts are being served by Pepsi and rest are being server by Coca-Cola and

others. Pepsi has been focusing to increase its market share, which represents the long-term
approach of organization because majority of the customers of the Pepsi are low volume purchase
and if someone will switch towards the other brand then it would not be a big loss for the firm. But on
the other hand Coca cola is focusing on the short-run approach, it is dealing with the institutional
customers, which are high volume purchaser. But the major disadvantage of this approach is that if
Coca-Cola will lose any one customer among these 20 then it would be a great loss for the firm but in
case for it.
Volume Shares
The volume share of a company represents the portion of sales volume that the company holds form
the 100% sales volume of the market. The volume share distribution of Pepsi and Coca Cola is 65%
and 34% respectively. For instance if total market demand is 100 units then Pepsi is supplying 65
units while Coca-Cola is supplying 34 units and remaining 1 unit is supplied by other beverages
companies of Pakistan.
Benchmarking in Pepsi
In 1970s Pepsi was the follower and Coca-Cola was the leader here in Pakistan as well. At that time
Pepsi used to benchmark the Coca-Cola in order to prosper and progress. But after 1970s Pepsi
stopped benchmarking strategies and procedures of Coca-Cola and adopted an idea ofOut-of Box
thinking.
Thinking Outside The Box
Thinking Outside the Box means thinking beyond the parameters of human consciousness and
experience - to see beyond the norm - to be a visionary - to activate your DNA. We exist inside the
box - the physical plane - but we soon evolve our conscious awareness back to its source of creation
- outside the box.
Are you trapped inside the box - the emotions of the game?
Thinking 'outside the box' means balancing lower frequency emotions - fear, anger, etc.
With higher frequency emotions and therefore not being controlled by your emotions.
Let it all go ... it's just an illusion in time.

Humanity is evolving out of the box and into the light of creation.
What PEPSI found out from out-of-box thinking?

Pepsi got following findings from this idea:

Cricket is the most Popular game in Pakistan.
Pakistan is an immature market.
The tactics that Pepsi derived from above ideas are:
1. Contract with PCB
It is an admitted fact that there is a craze of cricket in Pakistani Nation irrespective of age factor. So
the Pepsi thought to take the benefit from it and made a contract with PCB in mid 70s. This created a
fantasy in the minds of people and market shares of Pepsi Cola started increasing. It gave real boost
up to repute of Pepsi in world-cup 1992 and in very short span of time; Pepsi was able to double its
sales.
2. Extensive advertisement and Penetration
In view of the lack of knowledge and immature market of Pakistan Pepsi adopted the aggressive
strategies of distribution and advertisement. This also was proved to be an effective move towards the
growth of the company. They are using almost all modes of advertisement and are using them
extensively right now such as:
Electronic Media
Print Media
Display Media
It is the task of the sales and marketing officer of Pepsi Cola that whenever and wherever a
departmental store will open they have to capture it and have to convince the shopkeeper to make an
agreement by meeting his requirements.
Benchmarking PCI
As we already mentioned that in sub-continent Pepsi is the leader so here in Pakistan Pepsi is not
benchmarking Cola-Colas standards rather Coca-Cola is benchmarking Pepsi here such as in
pricing, advertisement (Celebrity Hiring) and aggressive distribution. Pepsi benchmark its parent
company for technical, quality and for human resource considerations.
Quality issues
Shamim & Company infect adopt the standards of PCI such as about the proportion of ingredients.
Such as the standard for CO2 in 7up was set 3.5 to 3.9 but to become more efficient in quality issues
the Shamim and Company redefined it as 3.6 to 3.8. However the ideal standard for CO2 is 3.7.

Similarly for the Marinda they refined the standard for getting much and much closer to the ideal
standard.
Technology
Pepsi in Pakistan always benchmarks its parent Company for the sake of technology improvement.
For instance they are going to start a new plant in Lahore, which would have the capacity to fulfill the
total demand of Lahore district. And it would require only 3 operatives to operate this plant.
Celebrity Hiring:
In our culture cricketers and film stars have much influence on people. Pepsi is using both the
vehicles to advertise its brands. It has established the contract with prominent film star Reema as a
brand representative for Pepsi. Similarly contracts have been established with Inzamam-ul-Haq and
other cricketers.
Employee policies
Earlier Pepsi was not focusing too much on employees benefits and facilities. Then it adopted the
idea that result and rewards have a positive co-relation. Shamim & Company took this idea from PCI
that if employees and satisfied and motivated towards the achievement of the Goals only then
organization can better grow. In early 90s Pepsi adopted a new benefit plan for its employees and
management. Now in employee in the marketing department has a car, having the medical facilities,
insurance and a good compensation. So these policies regarding the employees helped the
organization to achieve its target related to sales, growth and image of highly committed organization.
Collecting Feedback from customers
Actually, Pepsi is using two ways to collect the feedback from its customers.
Direct Method
Indirect Method
Direct Method
In direct method they collect feedback from its distributors, business customers and retailers about
demand, market situation, consumer behavior and on other issues through its Sales Information
System (SIS). For example they take vehicle plan from the distributors.
And Pepsi measures the performance of its distributors and other customers through collecting the
data about
* Targets

* Inventory Level
* Repute
* Daily, monthly and yearly sales Report
Indirect Method
This method is specifically used to judge the consumer behavior. In this method Pepsi uses the
services of ACNELSON Company, which is basically a biggest and authentic most research
organization in Pakistan.
Vehicle to change organizational culture
They use two vehicles focus and employees policies to incorporate the quality culture. For the urgent
and most important issues they make employees policies and make sure these policies are being
followed with considerate supervision. And for less urgent issues they use focus strategy and arrange
lectures, presentations, conferences and excessive training programs.
Agreement with the Competitors
Pepsi has NO agreement with Coca-Cola on pricing and other strategic issues. And the major reason
of recent increase in prices has been reported to be the revision of tax policy of the Government.
ISO 9000
Now the situation has been changed. Products of low standards are not acceptable in international
markets. These standards are ISO-9000 i.e., International Standard Organization. Now as the world
has become a global village, therefore, there is a very tough competition among the companies.
Especially for the companies of developing countries, they have to do much more smart work than the
companies of developed countries because they have strong economy and their products are widely
acceptable in the international market. For this purpose almost all organizations are doing struggle for
getting ISO-9000 certificate. Shamim & Company (PVT) Ltd is one of those Pakistani organizations
that struggled for ISO-9000 and awarded. They have been awarded ISO-9002 certificate.
The management and labor of Pepsi is committed with their responsibilities. The evidence of this the
company has certified as international standard organization. They had to fulfill the 20 clauses of ISO
9000. In this way they got ISO 9002 certificate. The company is franchisee so; they have no authority
to design a product.
They up date their records on daily basis. In Pakistan no one have authority for inspection for ISO
9000. The company has selected SGS Malaysia for inspection of their records. This is a continuous
process the auditors come after six month and check the records.

SWOT Analysis
1- Strength
Activities the firm does well or resources it controls are called strength. Resources that a company
contains, size of organization, size of market, loyalty of the organizations products, sales point of
product of the company shows the company strength.
The strength of PEPSI lies in the loyalty of the product, their market share, size of market, having
numerous sales points and efficient delivery system.
2- Weaknesses
Activities the firm does not do well or resources it needs but does not possess. Such activities that a
firm does not perform or not have some resources those other competitors have.
Locally, PEPSI is enjoying its position in the market. Internationally, PEPSI faces some tough
competition from Coca-Cola. Their weakness is the lack of relationship marketing in some parts of the
world. And also in Pakistan they are facing some serious problems in building the relationship with
institutional customers.
3- Opportunities
A combination of favorable circumstances or situations for organizations product/s such as loyalty of
customer about your products, social environment, size of target market, size of organization,
advantages over other competitors etc.
Opportunities are coming in the market day by day in the shape of new retailers. PEPSI has a big
research department; they try to capture each new retailer who comes in the market. Pakistan
population size is rapidly increasing with the passage of time so opportunities are there for Pepsi to
enhance its sales volume more than others.
4- Threats
Unfavorable circumstances that a company faces time by time to achieve its goals are called threats.
Some times small companies introduce the same products with low quality and low price that the
company did not produce.
Locally, PEPSI stands second to none. Internationally, Pepsi is facing heavy competition from its rival
Coca-Cola. Coca-Cola is focusing global market while PEPSI is somehow lagging behind. The
situation can become a serious threat to PEPSI globally.

Case Analysis Pepsi

marketing management |
PEPSI COLA PAKISTAN INC |
CASE STUDY ANALYSIS |
|
GROUP 1:
MUSA TANVEER
SARMAD AFZAL
SHARYAR CH
AHMED IBRAR
HAROON SHAUKAT
This case is about PEPSI CO and the Problems CEO facing. He is facing various problems after the
acquisition of 7-UP by PEPSI CO .Teem was the lemon and lime soft drink of Pepsi co which was
competing 7-UP but after the acquisition of 7-UP it is becoming difficult for them to separate both
products in market. Basically the CEO is worried about the local market share of 7-up which he want
to increase and on the other hand without effecting the share of TEEM which is a quite difficult job .
Acquisition of 7-up has made two bottlers of PCI to merge with 7-UP bottlers and it is clearly
understandable that TEEM operations cannot be further performed by these bottlers because now
they are dealing with 7-UP, So what PCI has done is that they have launched a new flavor of cloudy
Teem in this area with distinct characteristics of fresh lime to not effect 7-up and in other areas TEEM
is still dealt with PCI bottlers which are not the part of merger . So CEO Mr. Irfan had to develop a
plan to promote the two flavors of TEEM locally and nationally .Moreover he also has to achieve a
task which is to convince the 7-up bottlers to sell their plants to PCI bottlers and after the success of
this task he has to ask the PCI bottlers to introduce cloudy Teem, abandoning TEEM and promote 7UP.
To overcome with existing problems, the CEO has to thoroughly revise the marketing plan for these
three products .Starting off with the positioning statement. Positioning is not what you think it is
basically what the consumer perceive your product .Teem and 7-up are the best brands and they
have been positioned quite well , Teem is at its maturity stage as seen its growth rate .7-up is also a
mature brand but company is not giving much attention towards the factor that it still has the potential
to grow because if we see the statistics (Exhibit 6) its growth is stagnant without any promotion and
advertisement, moreover both products are positioned as a element of joy and refreshness which

already categorize them as well positioned brands according to the demand and perception
characteristics of the consumer and target market . Well cloudy TEEM is totally a new product at
introduction stage which is required to be positioned. Because of its distinctive characteristic of fresh
lime it is best to position it as a Natural thirst quencher soft drink. Because fresh lime is an element of
freshness and thirst quencher.
ADVERTISEMENT
Coming towards the advertisement, characteristics show that promotion and advertisement of TEEM
is somehow same as of Pepsi but 7-up is not being promoted among the consumers and its
advertising budget is kept very low(Exhibit 7). Teem is being advertised highly in the peak season of
summer whereas 7up is just being advertised in two months compared to the five months for Teem .
Because of this reason growth rate of 7-up(Exhibit 6) has been stagnant from the last two years. So
7-up advertisement budget requires amendments. On the other hand CEO is required to solve this
issue keeping the same market share for teem , keeping this in mind company would have to increase
overall advertising and promotion budget from 50 to 60 percent , because to keep the TEEM alive
with same market share. But percentage of 7-up advertisement should increase , as it is already a
well known brand so it needs high advertising to remind the consumers of the brand and to make
them feel that it exists widely rather than promotion , keeping in view its stagnant growth rate .so
advertising and promotion should share 50 ,50 for 7-UP. Coming towards the cloudy teem as it is
totally a new product, to increase its market share and to get the brand more attractive its promotional
budget should be increased and its percentage should be kept higher than the advertisement
because it is in introduction stage .Budget for Teem should be the same figures given in (exhibit 7)
but the figures for 7-up should be the same as teem and cloudy teems budget should be higher than
figures of both. Sales objective for 7-up and cloudy Teem should be higher because 7-up has the
potential to grow , the thing it only needs is more advertising and promotion . And for cloudy teem it is
required to expand it to other areas for that sales objective must be higher to achieve the goal of its
expansion very broadly.
PROMOTION
First looking at the promotion strategy , promotion is always very important , the trend we have
seen(Exhibit 7) is that promotions are only given in the peak season, where as our point of view is
different , soft drinks are not only for the purpose of refreshment but they do have the element of joy
which dont require any specific season . So not very high but a little promotion campaigns should be
run in the off seasons too. Now if we look cricket world cup is near and its a great opportunity for the
company to increase its sale by promoting the brands in context and theme of cricket .Promotions can
include Open the tap and meet your super heroes which may include (Posters , picture ,post cards ,
stickers ) of cricketers written under the tap which consumer can get right away from the shopkeeper.
Moreover cash discounts must be given with cloudy teem to boost up its sales. On the other hand to
keep teem market share the same high promotions should be given with it, which may include return

five caps of teem bottle and get a free bottle. For 7-up the known cartoon personality FIDO DIDO
concerned little gifts should be given with bottles .Like sticker of Fido dido with every bottle and with
bulk buying such as with four bottles get a key ring of Fido dido , as the bulk percentage increase gifts
must be bigger can include t-shirts also .
Now looking towards the advertisement .Statistics (Exhibit 7) again show that for teem advertising
budget has been good but for 7-up it is very low .Importantly 7-up market share is required to increase
(Exhibit 6). So high advertisement should be run of 30 seconds spot ,as seen 7-up spot has been of
20 seconds as compared to the 30 seconds of other brands (Exhibit 7).Ads must be run on all nation
networks because statistics show that in some areas Pepsi co share is less than the Coca cola
(Exhibit 5) . For cloudy teem number of ads should be higher than the 7-up and teem because it is at
introduction stage. For teem ads should be less as compared to 7-up and cloudy teem .Ratio must be
like (2(teem):3(7-up):5(cloudy)).As media advertising contains 80 percent of the total , but other
advertisement medium should also be considered including news paper , sports magazines , bill
boards . Cloudy teem must have the highest percentage in every advertising medium as compared to
teem and 7-up because cloudy teem needs an expansion and for that it has to be broadly catered to
remain in consumer sights. Ads must be run during the peak times of watching and importantly during
fun, adventure programs and during matches because during that time maximum viewers watch the
TV. By following the recommendations above for the advertisement and promotion and the
recommended ratios, CEO can achieve its goal of increasing the market share of 7-up by not affecting
the share of teem and also the expansion of cloudy teem on other areas.

Pepsico
TABLE OF CONTENTS
1- EXECUTIVE SUMMARY
2
2- HISTORY OF PEPSI COLA INTERNATIONAL
3
3- VISION STATEMENT.
4
4- MISSION STATEMENT.

5
5- IMPROVED MISSION STATEMENT.
5
STAGE 1 (INPUT STAGE)
6- SWOT ANALYSIS
6
7- EXTERNAL ENVIRONMENT ANALYSIS.
10
8- KEY EXTERNAL FACTOR ANALYSIS .
14
9- KEY INTERNAL FACTOR ANALYSIS ..
15
10- ANALYSIS OF COMPETITORS PROFILE...
16
STAGE 2 (MATCHING STAGE)
11- TOWS MATRIX
17
12- SPACE MATRIX..
18
13- IE MATRIX
20
14- GRAND MATRIX
22
STAGE 3 (DECISION STAGE)

15- QSPM OF PEPSICO

23
16- RECOMMENDATIONS & CONCLUSION.
25
Growth, Balance, and aWorld of Fun
[pic][pic]
4
ACKNOWLEDGEMENT
We are thankful to Almighty ALLAH most beneficent and the most Merciful Who
made us able to complete our given project successfully and for giving us much
cooperation and supporting parents who has given us this opportunity to study here. we
would like to thank SIR SHAHID TUFAIL for giving us the confidence and
opportunity to prove ourselves.
EXECUTIVE OVERVIEW
Strategic

management

process

consists

of

three

stages:

strategy

formulation,

strategy

implementation
and strategyevaluation. The scope of the project is to discuss the strategies adopted and applied by

Moreover the project also discusses the analysis of competition, market growth and trend, opportunity

Purpose of this project is to study the strategies which Pepsi is doing in Pakistan market for its
products. Pepsi International is a world renowned brand. It is a very well organized multinational
company, which operates almost all over the world. In Pakistan It also has proved itself to be the No.1
soft drink.
Now a days Pepsi is recognized as Pakistanis
Coca Cola

aggressive marketing planning and quick diversification in creating and promotingnew ideas and
product packaging, is successfully maintaining at No.1 position in Pakistan.
PepsiCo. At stage 1 in EFE, IFE have aggressive responses as well as strong competitive position as
compare to Coca Cola and Gourmet Cola that also indicate that the PepsiCo. Is a market leader.
PepsiCo. At stage 2 in TOWS, SPACE, IE and GRAND strategy Matrix again have an aggressive
response
which helps and identifies different strategies to choose and implement.
PepsiCo. At stage 3 in SPACE Matrix is good in for choosing the strategy of market penetration that is
to increase its market share through tie up with Major Showrooms, Computer Centers & Restaurant
and clubs.
History of Pepsi Cola Pakistan
The market in Pakistan is surely dominated by Pepsi. It has proves itself to be the No.1 soft drink in
Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971, first plant of Pepsi was
constructed in Multan, and from their after Pepsi is going higher and higher. Pepsi is the choice soft
drink ofevery one. It is consumed by all age groups because of its distinctive taste. Compared with

survey resultsexplain the same outcome and Pepsi has been declared as the most wanted soft drink
of Pakistan.

strength is its brandname. But Pepsi with its aggressive marketing planning and quick diversification
in creating and promotingnew ideas and product packaging, is successfully maintaining is No.1
position in Pakistan. In coming future Pepsi is also planning toe nter into the field of fruit drinks. For
this purpose it has test marketed its mango juice in Karachi for the first time.
WhenPepsi was introduced inP aki stan, it faced fiercecom petition with 7up, lemonand limedrinks,

compete with 7up. It successfully, after some years, took over 7u

and market share. In Pakistan, Pepsi with 7upenjoys 70% of the market share where as the coke just
has 20% markets share. Now a days PepsiCo. Is focusing on youngsters best choice Mountain Dew
as ae nergatic soft drinks.

strength. Pepsi has given franchise to these bottlers

VISIoN
erate environment, social, economic Pepsi cola international 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.
MISSIoN STATEMENT

and
beverages.We seek to produce financial rewards to investors as we provide opportunities for growth
ande nrichment to ouremployees, our business partners and the communities in which we operate.
And
in everything we do, we strive for honesty, fairness and integrity
REVIEW OF MISSION STATEMENT
To be a result oriented and profitable Company by consistently improving market share, quality,
diversity, availability, presentation, reliability and customer acceptance.
Toe nsure cost consciousness in decision making and operations without compromising the
commitment to quality.
To set up highlyethical business standards and be a good corporate citizen, contributing
towards the development of the nationaleconomy and assisting charitable causes.
To adopt appropriate safety rules ande nvironment friendly policies.
SWOT ANALYSIS OF PEPSI COLA
STRENGTHS:

Pepsi cola has a brand name that holds its own prestige in the world market. The multinational entity
of the Pepsi Cola Pakistan gives it an edge upon other competitors. The management of this
beverage company comprises of one of the most professional people and the strong financial
firmness

and is famed for its internationally wellimproved due to upgraded quality of packaging and the ameliorated liquid in comparison to its

also the improvement in packaging and the commencement of plastic shells has received a favorable
Response from the dealers and the loaders. The regular supply of the products is another strength of
the company. The products are regularly supplied to the dealers through proficient means of
delivering and distribution has given Pepsi Cola Pakistan an added Advantage. Pepsi Cola trucks
supply the products regularly and always have the desired products for the dealers. Its marketing
strategy is very aggressive which aids it in further and incessant production and distribution of its
products. It gives trade offers to its dealers for storing more and more Pepsi Cola products and the
signage strategies and agglomeration of all the marketing strategies proves that it has a very
aggressive marketing Strategy. This will help Pepsi Cola Pakistan in strengthening its integrity in the
market. The location of the Pepsi plant is utilized that all major markets of Punjab are within the reach
of the Pepsi Plant within 30-45 minutes.
WEAKNESS:
PepsiCo. Does not enjoy the number one position at international level and is far away from leader
Coca-cola
in the international market. Pepsi target only young customers in their promotions not focusing
different age
groups social classes.
One of the major weaknesses as in majority of companies is the lack of co-ordination between the
management and the worker. In short there is a weak point in their Human Resource management.
Workers feel that they are being exploited and are not given the remuneration that they deserve.
The decision making process in the company is highly centralized and the workers feel that there
exists no proper authority existing in the firm. The salesmen feel Dissatisfied for they are totally
powerless to make any decisions themselves In dealing with their buyers they have not the
slightest authority to allow them any credit or discount.

OPPORTUNITY:
Company has brand equity in the eyes of customers, so its new Products can easily penetrate in the
market. The company may also diversify its business in some other potential business. PepsiCo May
tie up or liaison with major showrooms, computer centers &Restaurant.
Noncarbonated drinks(Often a substitute for water) are the fastest-growing part of the industry
Catering to Health Consciousness of People. There is Lower entry barriers due to presence of highly
distribution system for other Pepsi products.
PepsiCo may focus on technological advancement & utilization of Internet promotion such as banner,
ads and keywords can increase their sales, and more computerized Manufacturing and ordering
processes can increase their efficiency.
THREATS:
Fake beverages by the name of PepsiCo are being supplied by unknown people. Such activities really

almost similar to the taste of the original PepsiCo. brand and not everyone can decipher the
difference between the original and the fake product. This is in fact a great threat to PepsiCo. for
unworthy people is taking advantage of its brand name and spoiling its good name in the market
The greatest affect is on the revenue from the rural areas where mango drinks take over. However
this is one factor that PepsiCo cannot do anything about for it is not in their hands. If the mango
season is to come then it will and nothing can be done about it.
The main competitor of the company is the Coca Cola. At the international level, PepsiCo. has a very
strong competition with Coke. Coke has started its advertisements more effectively to increase their
demand and it is a very strong threat for Pepsi. Cola drinks are not good for the health so the
awareness level of the people is in creasing which is a big threat to the company
SW oT
STRENGHTS:
Strong Multinational (Brand Equity)
Strong & Vast Distribution Channels
Lack Of Capital Constraints
Record Market Share
Strong Brand Portfolio

Aggressiveness In The Market (Market Leader)

Brand Promotion & Sponsorship
WEAKNESS:
Targeting Only Young Customers
Political Franchises
Centralized Decision Making
Decline In Taste
Motivational Factor
Not All Products Bear The Company Name
OPPORTUNITY:
PepsiCo New Products Can Easily Penetrate In The Market.
Noncarbonated Drinks Are The Fastest-Growing Industry
Demand Of Pepsi Is More Than Of Competitor
Changing Social Trends (Fast Foods)
Internet Promotion And Ordering Processes
May Tie Up or Liaison With Major Showrooms, Computer Centers &Restaurant
THREATS:
Non-Carbonated Substitutes (The Mango Season)
Beverage Industry Is Mature
Fake Products (Imitators)

Strong Competition With Coca-Cola Company

EXTERNAL ENVIRONMENT
The macroenvironment consists of the larger societal forces that affect the microenvironment. The

external factors are not under thecontrol of thest rategists; they can just observethem and make
strategies in light of these factors. Some of these factors are given below:
Demographic Factors:
Age
The requirements of different age groups are different. PepsiCo. should target that age group that
consumes it the most and make promotional strategies according to their behavior. So their main
target is the young generation.
Education
A company has to make promotional strategies keeping in view the customer level. If the percentage
of
education is high in a country then through advertisements peoplecanbem adewell aware of their
product and can convey their message easily. Promotion andeducation has a direct relationship.
Population Distribution
Population distribution means how much population lives in urban areas and rural areas. In Pakistan
35 % population resides in urban areas and 65% population lives in rural areas. PepsiCo. is focusing
on urban areas as people there are more inclined towards such beverage while people in rural areas
are more inclined drinking lassi and desi drinks.
Population Density
It meansnumber of people in one square km per area. Punjab has the largest population density as
compare to other. Pepsi sales are more in Punjab as compared to the sales in other provinces.
Economic Factors:
Income and Income per Capita
If the income level or per capita income of the people increases, it will have a positive effect on the
consumption of Pepsi.
Inflation
If the country faces inflationary trend in the market, the price of the Pepsi will ultimately increase
which

will lower its demand.

EconomicPolicies
Some of the economic policies which can affect the market of Pepsi are discussed below:

It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise havingnegative affect
on its consumption.

Monetary policy is made to restrict or increase the supply of money in the market. If policies are made
to restrict the flow of money in the market, inflation can be controlled hence increasing the real
income of the people which will ultimately affect the consumption of Pepsi.

If price of Pepsi is increased its demand will decrease and vice versa.

If income of the people will increase their purchasing power will increase and hence increasing the
market share of Pepsi.
Technological Factors:
Research and Development
Through research and development quality of the product can be improved or better techniques or
machinery can be developed which can increase the production.When technology is advance the
supply of the product increase hence the companyexperiences growth in their business.
Political And Legal Factors
POLITICAL STABILITY
Whenever theg overnment is considered to bes ta ble, thebusiness will flourish. If there is political
stability in the country the policies and strategies made by Pepsi can be consistent to be
implemented. Foreign companies are also keen to invest in those countries which are politically stable
where they have no fear of decline in their market share or shut down due to sudden change of
governmen

Mixed Economy
In mixedeconomy government and private sector both plays their role in developing the economy of
the country. Investment by foreign companies like Pepsi is more likely to flourish in mixedeconomy.
Laws Formulation
Government has given copy rights to Pepsi so that another company cannot sell their product by the
name of Pepsi. Thecountries where laws areform ul ated, thes trategiesand activities of thecom pany
are different.
Social Responsibility

they
have increased the use of disposable bottles.
Social And Cultural Factors:
Psychographic
It is a combination of demographic and psychological factors. Psychological attributes mean how you
perceive things. The company will focus on the behavior of consumers and make different changes in
their product quantity or quality and in promoting their product so that they can attract the customers.
Keeping in view that the behavior of different consumers isnot alike they have to make their marketing
strategies in accordance with their requirements so that they are convinced to buy the product.
Religious
Religious factors can influence the market sales of Pepsi as it happened in 2003 when the U.S-led
attack
on Iraq, wide sections of society in Pakistan have banned American multinationals Coke and Pepsi.
Social Status
Pepsi is a well renowned brand. People who are brand conscious willnot drink beverages of lesser
known brands such as Amrat cola. They will try to show their status by drinking Pepsi which is known
to all as a quality drink.
Media

It is a very important factor for

External Factor Evaluation (EFE) Matrix
[pic]
Scoring Method:
List The Key External Factor
Assign Weight To Each (0 To 1.0)
y Weight InResponse To Importance Of A Factor For A Particular Industry
um Of AllWeights = 1.0
Assign 1-4 Rating To Each Factor
y

To The Factor: HowWell Firms Response To These

Factors (Effectiveness Of The Firm).

Poor Response 1
Ave rage Response 2
Above Ave range Response 3
Superior Response 4
Multiply Each Factors Weight by Its Rating
Produces a Weighted Score
Sum the Weighted Scores for Each
Determines the Total Weighted Score for The Organization
Result:
Above Average Response 2.77 (Aggressive)
Internal Factor Evaluation (IFE) Matrix
[pic]
Scoring Method:

yWeight InResponse To Importance Of A Factor For A Particular Industry

-4 Rating To Each Factor

Current Strategies Response To The Factor: HowWell Firms Response To These Factors
(Effectiveness Of The Firm).

y Produces AWeighted Score

y Determines The TotalWeighted Score For The Organization

Result:
Score > 2.5 Aggressive
Score < 2.5 Defensive
2.79 (Aggressive)
COMPETITIVE PROFILE MATRIX (CPM)

[pic]
Scoring Method:
External Critical Success Factors

yWeight InResponse To Importance Of A Factor For A Particular Industry

-4 Rating To Each Factor

wWell Firms Response To These Factors
(Effectiveness Of The Firms).

y Produces AWeighted Score

ch
y Determines The TotalWeighted Score For The Organization
Result:

The Strengths-Weakness-Opportunities-Threats (TOWS) Matrix

TOWS Matrix Strenghts Weakness

1- Branch promotion & sponsorship 1-Declare the taste
2- Strong multinational brand equity 2-Targetting only young
3- Record market share customers.
4- Strong & vast distribution channels 3-Not all products bear
5- Lack of capital constraints the company name.
6- Aggressivenes the market leader. 4-Motivational factor.
(Market leader) 5-Political franchise
7- Strong brand portfolio. 6-centrized decision
making.
Opportunities.
can easily penetrate in
the market.

Case Analysis Pepsi

marketing management |
PEPSI COLA PAKISTAN INC |
CASE STUDY ANALYSIS |
|
GROUP 1:
MUSA TANVEER
SARMAD AFZAL
SHARYAR CH
AHMED IBRAR
HAROON SHAUKAT
This case is about PEPSI CO and the Problems CEO facing. He is facing various problems after the
acquisition of 7-UP by PEPSI CO .Teem was the lemon and lime soft drink of Pepsi co which was
competing 7-UP but after the acquisition of 7-UP it is becoming difficult for them to separate both
products in market. Basically the CEO is worried about the local market share of 7-up which he want
to increase and on the other hand without effecting the share of TEEM which is a quite difficult job .
Acquisition of 7-up has made two bottlers of PCI to merge with 7-UP bottlers and it is clearly
understandable that TEEM operations cannot be further performed by these bottlers because now
they are dealing with 7-UP, So what PCI has done is that they have launched a new flavor of cloudy
Teem in this area with distinct characteristics of fresh lime to not effect 7-up and in other areas TEEM
is still dealt with PCI bottlers which are not the part of merger . So CEO Mr. Irfan had to develop a
plan to promote the two flavors of TEEM locally and nationally .Moreover he also has to achieve a
task which is to convince the 7-up bottlers to sell their plants to PCI bottlers and after the success of
this task he has to ask the PCI bottlers to introduce cloudy Teem, abandoning TEEM and promote 7UP.
To overcome with existing problems, the CEO has to thoroughly revise the marketing plan for these
three products .Starting off with the positioning statement. Positioning is not what you think it is
basically what the consumer perceive your product .Teem and 7-up are the best brands and they
have been positioned quite well , Teem is at its maturity stage as seen its growth rate .7-up is also a
mature brand but company is not giving much attention towards the factor that it still has the potential
to grow because if we see the statistics (Exhibit 6) its growth is stagnant without any promotion and
advertisement, moreover both products are positioned as a element of joy and refreshness which

already categorize them as well positioned brands according to the demand and perception
characteristics of the consumer and target market . Well cloudy TEEM is totally a new product at
introduction stage which is required to be positioned. Because of its distinctive characteristic of fresh
lime it is best to position it as a Natural thirst quencher soft drink. Because fresh lime is an element of
freshness and thirst quencher.
ADVERTISEMENT
Coming towards the advertisement, characteristics show that promotion and advertisement of TEEM
is somehow same as of Pepsi but 7-up is not being promoted among the consumers and its
advertising budget is kept very low(Exhibit 7). Teem is being advertised highly in the peak season of
summer whereas 7up is just being advertised in two months compared to the five months for Teem .
Because of this reason growth rate of 7-up(Exhibit 6) has been stagnant from the last two years. So
7-up advertisement budget requires amendments. On the other hand CEO is required to solve this
issue keeping the same market share for teem , keeping this in mind company would have to increase
overall advertising and promotion budget from 50 to 60 percent , because to keep the TEEM alive
with same market share. But percentage of 7-up advertisement should increase , as it is already a
well known brand so it needs high advertising to remind the consumers of the brand and to make
them feel that it exists widely rather than promotion , keeping in view its stagnant growth rate .so
advertising and promotion should share 50 ,50 for 7-UP. Coming towards the cloudy teem as it is
totally a new product, to increase its market share and to get the brand more attractive its promotional
budget should be increased and its percentage should be kept higher than the advertisement
because it is in introduction stage .Budget for Teem should be the same figures given in (exhibit 7)
but the figures for 7-up should be the same as teem and cloudy teems budget should be higher than
figures of both. Sales objective for 7-up and cloudy Teem should be higher because 7-up has the
potential to grow , the thing it only needs is more advertising and promotion . And for cloudy teem it is
required to expand it to other areas for that sales objective must be higher to achieve the goal of its
expansion very broadly.
PROMOTION
First looking at the promotion strategy , promotion is always very important , the trend we have
seen(Exhibit 7) is that promotions are only given in the peak season, where as our point of view is
different , soft drinks are not only for the purpose of refreshment but they do have the element of joy
which dont require any specific season . So not very high but a little promotion campaigns should be
run in the off seasons too. Now if we look cricket world cup is near and its a great opportunity for the
company to increase its sale by promoting the brands in context and theme of cricket .Promotions can
include Open the tap and meet your super heroes which may include (Posters , picture ,post cards ,
stickers ) of cricketers written under the tap which consumer can get right away from the shopkeeper.
Moreover cash discounts must be given with cloudy teem to boost up its sales. On the other hand to
keep teem market share the same high promotions should be given with it, which may include return

five caps of teem bottle and get a free bottle. For 7-up the known cartoon personality FIDO DIDO
concerned little gifts should be given with bottles .Like sticker of Fido dido with every bottle and with
bulk buying such as with four bottles get a key ring of Fido dido , as the bulk percentage increase gifts
must be bigger can include t-shirts also .
Now looking towards the advertisement .Statistics (Exhibit 7) again show that for teem advertising
budget has been good but for 7-up it is very low .Importantly 7-up market share is required to increase
(Exhibit 6). So high advertisement should be run of 30 seconds spot ,as seen 7-up spot has been of
20 seconds as compared to the 30 seconds of other brands (Exhibit 7).Ads must be run on all nation
networks because statistics show that in some areas Pepsi co share is less than the Coca cola
(Exhibit 5) . For cloudy teem number of ads should be higher than the 7-up and teem because it is at
introduction stage. For teem ads should be less as compared to 7-up and cloudy teem .Ratio must be
like (2(teem):3(7-up):5(cloudy)).As media advertising contains 80 percent of the total , but other
advertisement medium should also be considered including news paper , sports magazines , bill
boards . Cloudy teem must have the highest percentage in every advertising medium as compared to
teem and 7-up because cloudy teem needs an expansion and for that it has to be broadly catered to
remain in consumer sights. Ads must be run during the peak times of watching and importantly during
fun, adventure programs and during matches because during that time maximum viewers watch the
TV. By following the recommendations above for the advertisement and promotion and the
recommended ratios, CEO can achieve its goal of increasing the market share of 7-up by not affecting
the share of teem and also the expansion of cloudy teem on other areas

http://www.slideshare.net/avkoo7/pepsi-cola-pakistan

http://www.slideshare.net/narechania/pepsi-14991822