MODULE: Principle of Marketing GROUP ASSIGNMENT: Report (Scanning Environment and Marketing Research based field Activity) COURSE INSTRUCTOR: Mr. Imran E a! SUBMITTED BY: ""##$ ""#%# ""#&" ""#"% ""#"' PROGRAM: M.com &(A
INTRODUCTION TO PEPSI
Pepsi-Co !) most commonly called Pepsi) is a *orld reno*ned brand. Pepsi is prod+cing ,ola for more than "-- years. It is a soft drink prod+ced by Pepsi,o *hich is sold *orld*ide in stores) resta+rants and vending machines. T"e #r!n$ %!s tr!$e&!r'e$ on .+ne "') "/-#) tho+gh the drink *as first made on A+g+st &$) "$/$) by pharmacist ,aleb 0radham. PepsiCo $ivisions oper!te in three ma or 1S and international b+sinesses2 beverages) snack foods) and resta+rants. T"e (orpor!tions in(re!sin) s+ccess has been based on high standards of performance) marketing strategies) competitiveness) determination) commitment) and the personal and professional integrity3honesty of their people) prod+cts and b+siness practices.
PEPSI IN PA,ISTAN
Pepsi has proven itself to be the 4o." soft drink in Pakistan. 4o* days Pepsi is recogni!ed as Pakistanis 4ational drink. In "/?") first plant of Pepsi *as constr+cted in M+ltan) and from there after Pepsi is going higher and higher. It is cons+med by all age gro+ps beca+se of its +ni7+e taste.
,ompared *ith other ,ola in the market) it is a bit s*eeter. ,ons+merBs s+rvey res+lts eCplain the same o+tcome and Pepsi has been declared as the most *anted soft drink of Pakistan. PepsiDs greatest rival is ,oca ,ola. ,oca ,ola has an international recogni!ed brand. ,okeBs basic strength is its brand name. 0+t Pepsi *ith its aggressive marketing planning and 7+ick diversification in creating and promoting ne* ideas and prod+ct packaging. In coming f+t+re Pepsi is also planning to enter into the field of fr+it drinks. ;or this p+rpose it has test marketed its mango +ice in >arachi for the first time. Ehen Pepsi *as introd+ced in Pakistan) it faced fierce competition *ith ?+p) lemon and lime drinks) *hich *as established d+ring "/'$) in M+ltan. Pepsi introd+ced its lemon and lime) F<eemF to compete *ith ?+p. It s+ccessf+lly) took over ?+p) and this enhanced PepsiDs profits and market share. In Pakistan) Pepsi *ith ?+p en oys ?-G of the market share *here as the coke +st has &-G markets share. Pepsi is operating in Pakistan) thro+gh its "& bottlers all over Pakistan. <hese bottlers are PepsiDs strength. Pepsi has given franchise to these bottlers. 0ottlers) prod+ce) distrib+te and help in promoting the brand. Pepsi also la+nched its fast food chain >;, i.e. F>ent+cky ;ried ,hicken.H <otal ann+al sale of soft drink in Pakistan -./ million cases. Pepsi ann+al sales in Pakistan 01 million. Market share of Pepsi 2134 ,ons+mption gro*th -40 3 per year 9o*ever they have prod+ced PEPSI ,I@A) MIRI46A) <EEM) ?1P) MI14<AI4 6EE) 6IE< ?1P) 6IE< PEPSI) @A5S) >1R>1RE) AA1A;I4A) PEPSI <EIS< A46 <RIPI,A4A .1I,ES(introd+ced in >arachi only) Pepsi maC diet Pepsi) b+t Pepsi <*ist *as the prod+ct *hich failed to capt+re market ho*) a brief look of Pepsi t*ist and ca+ses J effects are given belo*2
PEPSI T5IST
Pepsi <*ist *as introd+ced in the US in the s+mmer of &---. Pepsi had previo+sly prod+ced a lemon(flavored diet cola in the "/?-s and "/$-s in the US called Pepsi Li)"t. Pepsi la+nched Pepsi A(ha) *ith a lemon flavor in In$i!) in &--&. Pepsi <*ist *as marketed in P!'ist!n in &-"-. <he prod+ct failed to capt+re the market) b+t it is still available in some s+permarkets.
Marketers need to be good at b+ilding relationships *ith c+stomers) others in the company and eCternal links. <o do this effectively) they m+st +nderstand the ma or environmental forces that s+rro+nd all of these relationships. A companyBs environment consists of forces o+tside marketing that affect marketing managementBs ability to b+ild and maintain s+ccessf+l relationship *ith the target c+stomers. <he environment contin+es to change rapidly. 0y caref+lly st+dying the environment) marketers can adapt their strategies to meet ne* marketplace challenges and opport+nities. Some of the eCternal and internal environmental factors on that partic+lar company or prod+ct that affect the marketing trend of the company are as follo*s2
E7TERNAL EN8IRONMENT
<he macro environment consists of the larger common forces that affect the microenvironment. <he eCternal factors are not +nder the control of the marketers: they can +st observe them and make strategies in light of these factors. Some of these factors are given belo*2 ". 6emographic factors. a. Aging b. Ed+cation c. Pop+lation 6istrib+tion d. Pop+lation 6ensity
DEMOGRAP+IC *ACTORS
A)in)
People in the ma ority of co+ntries still appear to favor carbonated drinks d+e to health conscio+s s+ch as fr+it +ice and mineral *ater: *here as in the above fig+re it sho*s ho* aging factors contrib+te to*ards drinks. E$u(!tion Ed+cation is a factor that affects the company 3 prod+ct so company has to make promotional strategies keeping in vie* the c+stomer level. If the percentage of ed+cation is high in a co+ntry then thro+gh advertisements people can be made *ell a*are of their prod+ct and can convey their message easily. Promotion and ed+cation has a direct relationship. Popu !tion Distri#ution Pop+lation distrib+tion means ho* m+ch pop+lation lives in +rban areas and r+ral areas. In Pakistan #% G pop+lation resides in +rban areas and '%G pop+lation lives in r+ral areas. Pepsi is foc+sing on +rban areas as people there are more inclined to*ards s+ch beverage *hile people in r+ral areas are more inclined drinking lassi and desi drinks. Popu !tion Density It means n+mber of people in one s7+are km per area. >arachi has the largest pop+lation density and Islamabad has less pop+lation density in Pakistan. Pepsi sales are more in >arachi as compared to the sales in Islamabad.
ECONOMIC *ACTORS2
". Income and Per ,apita Income. &. Inflation
#. ,ons+mption 0ehavior. 8. Income 6istrib+tion. %. Aggregate 6emand. '. Aggregate S+pply. ?. Economic Policies. a. ;iscal Policy. b. Monetary Policy. c. Price Policy. d. Income Policy. In(o&e !n$ Per C!pit! In(o&e If the income level or per capita income of the people increases) it *ill have a positive effect on the cons+mption of Pepsi. In6 !tion If the co+ntry faces inflationary trend in the market) the price of the Pepsi *ill +ltimately increase *hich *ill lo*er its demand. Consu&ption Be"!vior Pakistan is a cons+mption oriented society. 6+e to demonstration effect the people are more inclined to*ards cons+mption than saving. So the people of Pakistan spent heavily on food items. 9ence Pepsi has a good market share in the present circ+mstances. In(o&e Distri#ution It means ho* m+ch is in the hands of rich and poor class. In Pakistan "-G rich people posses /#G of *ealth and /-G people posses ?G of *ealth. If there is balanced distrib+tion of income in the co+ntry) the cons+mption of the people *ill increase hence increasing the sales of beverages as *ell. A))re)!te De&!n$ In case of Pepsi) collective demand of the prod+ct increases in the season of s+mmer as the hot *eather makes the cons+mers *ant to drink more.
A))re)!te Supp y In s+mmer season to cope +p *ith the increasing demand they have to increase the aggregate s+pply of their prod+ct. E(ono&i( Po i(ies Some of the economic policies *hich can affect the market of Pepsi are disc+ssed belo*2 *is(! Po i(y It is the policy of taCes. If heavy taC is levied on Pepsi then its price *ill rise having negative effect on its cons+mption. Monet!ry Po i(y Monetary policy is made to restrict or increase the s+pply of money in the market. If policies are made to restrict the flo* of money in the market) inflation can be controlled hence increasing the real income of the people *hich *ill +ltimately affect the cons+mption of Pepsi. Pri(e Po i(y If price of Pepsi is increased its demand *ill decrease and vice versa. In(o&e Po i(y If income of the people *ill increase their p+rchasing po*er *ill increase and hence increasing the market share of Pepsi.
P+YSICAL *ACTOR:
". Region. &. ,ity Si!e. #. ,limate. 8. Infrastr+ct+re. Re)ion Pakistan is divided into different geographical regions. Marketing and sales of Pepsi is different in different geographical regions. In hot areas its demand is more. City Si9e
<he cities *hich are heavily pop+lated the cons+mption of Pepsi is more. C i&!te Pepsi is more s+itable for h+mid or hot *eathered co+ntries like Pakistan. It is a so+rce of refreshment *hen a person is thirty d+e to the hot *eather. In6r!stru(ture Roads are the basic need for transportation of Pepsi from one place to another. Pepsi cannot open factories in every city of Pakistan so it has to transport it to other cities *here Pepsi is demanded.
TEC+NOLOGICAL *ACTORS:
Rese!r(" !n$ Deve op&ent <hro+gh research and development 7+ality of the prod+ct can be improved or better techni7+es or machinery can be developed *hich can increase the prod+ction. Ehen technology is advance the s+pply of the prod+ct increase hence the company eCperiences gro*th in their b+siness.
=overnment has given copy rights to Pepsi so that another company cannot sell their prod+ct by the name of Pepsi. <he co+ntries *here la*s are form+lated) the strategies and activities of the company are different. So(i! Responsi#i ity PepsiBs social responsibility is to provide its c+stomers *ith clean and hygienic prod+ct so to do this they have increased the +se of disposable bottles.
INTERNAL EN8IRONMENT
CUSTOMERS: <here are three types of c+stomers ". ,ons+mer &. 0+siness #. =overnment Pepsi main foc+s is the cons+mers *hich are the end +sers. Pepsi has to make its marketing strategies keeping in vie* the cons+mer b+ying behavior. <o forecast the behavior of the cons+mer is a b+siness problem. Physical aspect of the cons+mer can be satisfied b+t it is diffic+lt to satisfy the cons+mer psychologically. ,ons+mer b+ying behavior is affected by certain factors like ,+lt+ral factors) Social factors) Personal factors and Psychological factors. So the prod+cer sho+ld keep these factors in Mind *hile promoting their prod+ct so that they can ac7+ire the c+stomer and increase their market share. <here are different cons+mers in a society *hose behavior is not the same. Every cons+mer has a different perception of different prod+cts. Some cons+mers are impressed by one 7+ality of the prod+ct *hich may be in the vie* of other cons+mer not that impressive. So to deal *ith different cons+mers in a society one sho+ld kno* abo+t the cons+mer b+ying behavior process *hich may help in making a tr+e pict+re of their prod+ct in the mind of the cons+mers.
Pepsi spends a lot of b+dget on its advertising. Pepsi has a very vast distrib+tion channel and it is easily available every*here. Employees are also motivated. Pepsi offers many disco+nt schemes for c+stomers time to time. Pepsi ,ola is sponsoring sports) m+sical concerts) *alks. <he location of the Pepsi plant is +tili!ed that all ma or markets of @ahore are *ithin the reach of the Pepsi plant *ithin #-(8% min+tes.
Pepsi does not offer any sort of incentive or disco+nt to its retailers. Pepsi target only yo+ng c+stomers in their promotions. ,ro*n of the disposable bottle is not good. 6emand of disposal bottle is declining. Pepsi tin pack is not available in far off r+ral areas. Pepsi is not considering many potential o+tlets like hotels) college canteens etc.
,ompany may start entering r+ral areas also. <he company may also branch o+t its b+siness in some other potential b+siness. Increased interest of people in m+sical gro+ps) c+lt+ral sho*s and sports has provided an opport+nity for Pepsi to increase its sales thro+gh them.
<he main competitor of the company is the ,oca ,ola. At the international level) Pepsi has a very strong competition *ith ,oke. ,oke has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi.
,ola drinks are not good for the health so the a*areness level of the people is increasing *hich is a big threat to the company.
'. Peoples eCperience of Pepsi t*ist /.% G very pleasant) &'.& G some*hat pleasant) ##.# G neither pleasant nor +npleasant) &".8 G some*hat +npleasant and /.% G very +npleasant. ?. Peoples satisfaction regarding Pepsi <*ist "'.? G highly dissatisfied) &".8 G dissatisfied. 8?.' G average) ?." G Satisfied) ?." G highly satisfied. $. ,ompared to F,itr+s ;antaF (,oca(,ola) Pepsi <*ist is "8.# G m+ch better) "'.? % some*hat better) ##.# G some*hat *orse) ?." G m+ch *orse. /. If Pepsi <*ist came back to market) *ill yo+ +se it again "8.# % says definitely) %&.8 G are not s+re) ##.# G says never.
CONCLUSION
Pepsi is a *ell reno*ned company and it has maintained its position *ell by +nderstanding the client psychology) by ens+ring 7+ality) by introd+cing creativity in prod+cts) by enlarging its prod+ct base) by keeping economic factors in vie* and by strong and smart advertisements. Ehenever and *here ever there is a spotlight event) Pepsi m+st fig+re in) like the one day international cricket matches bet*een India and Pakistan many other s+ch occasions. <he key *ord for s+ccess in the Marketing Eorld is to Kremain in the spotlightH and that is *hat Pepsi is doing. 0+t *hy Pepsi <*ist ;ailed may be idea may be =ood b+t company may overestimate the market si!e) Act+al prod+ct may be poorly designed) It may incorrectly positioned) @a+nched at *rong time) <oo 9igh Price) Poor Advertising.
SUGGESTIONS
<he marketing *orld is f+ll of s+rprises. Eho co+ld imagine that ,oca ,ola *o+ld be overtaken by PepsiL If ,oke co+ld be filled by Pepsi) it *o+ld be no *onder that Pepsi might be overtaken by some other beverage. <he need then is to combine 7+ality *ith creativity. Along *ith that) the rep+tation of the company has to be kept strong. <oday *e live in a fast moving *orld *here innovation and ne*ness co+nt a lot. Ine cannot rest on oneBs s+ccess. And companies are doing a lot of promotional activities to let the prod+ct remain in the market. It holds a large share of the market and *henever the sales state declining) the company can improve it by different promotional activities.
9o*ever marketers of Pepsi <*ist sho+ld improve sales by improving marketing strategies e.g. they can c+t prices to attract ne* +sers and competitorBs c+stomers) can also la+nch a better advertising campaign or +se aggressive sales promotion to improve the sales. <he re7+irements of different age gro+ps are different. Pepsi sho+ld target that age gro+p that cons+mes it the most and make promotional strategies according to their behavior. 0eca+se cons+mer vie* a brand name as an important part of the prod+ct. 0randing can add val+e to the prod+ct. A name) term) sign) symbol or design or a combination of these intended to identify the goods and services of one seller or gro+p of seller and to differentiate them from their competitors.
QUESTIONNAIRES
You are kindly requested to complete this questionnaire by encirclin bullets so that !e can et your perspecti"e #or our kno!led e$ 1NAME _______________________ 2 2 3 AGE 20 to 30 to 40 to 50 to 30. 40. 50. above.
Gender. Male. Female. What categor e! be!t de!cr be! "o#r $ob% &'' cer() rector(Manager(*#+erv !or. Gro#+ ,eader. -#!tomer *erv ce!. *ale! .e+!.
*t#dent. &ther. Ed#cat on. /r mar"(Matr c#lat on. 0ntermed ate. 1achelor!. Ma!ter(M /h l. &ther. n
%( -om+an" bene' t ! a 'actor that +la"! a ! gn ' cant role em+lo"ee t#rnover. Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree.
2*alar" ! an m+ortant negot ator b#t b" handl ng t 3rong "o# can blo3 the 4ob o''er or go to 3or5 at 'ar le!! than "o# m ght have gotten% Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree. 6/er'ormance rev e3 ! one o' the 'actor! that lo3er! the morale(con' dent or contr b#te! to 'actor! lead ng em+lo"ee t#rnover% Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree. 7)o !en or! enco#rage and allo3 3or5 ng to the be!t o' o#r ab l t e!% Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree.
8Mot vated em+lo"ee! al3a"! loo5 'or the better 3a" to do $ob and are more 9#al t" or ented and +rod#ct ve('r# t'#l% Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree.
10*el'-5no3ledge ! one common goal that 3 ll hel+ ever"one ach eve +er!onal !#cce!! :E*. N&. 110! t +o!! ble 'or an em+lo"ee to ;'a!t trac5; or ' nd !hort c#t to ach eve +romot on #no'' c all"% :E*. N&. 12E''ect ve em+lo"ee management and leader!h + allo3 "o# to ca+ tal <e on the !trength! o' other em+lo"ee! and the r ab l t" to contr b#te to the accom+l !hment o' 3or5 goal!. Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree. 13-
%O& '(ARA'TERISTI'S *5 ll Aar et" @a!5 0dent t" B @a!5 * gn ' cance A#tonom" B Feedbac5 0m+act
'or the
to to to to
14Man" b#! ne!!e! ' nd the over 20>! age gro#+ hard to reach 3 th trad t onal mar5et ng and advert ! ng? b#t *en or! 1#! ne!! ) !co#nt -ard !cheme ma5e! t ea!". 15 Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree. All +o! t on! and all em+lo"ee! are not e9#all" 5e". Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree.
12@he 9#al t" and var et" o' the em+lo"ee tra n ng "o# +rov de ! 5e" 'or mot vat on. Agree. *trongl" Agree.
16@eam3or5 nvolve! 3or5 ng con' dentl" 3 th n contr b#t ng "o#r o3n dea! e''ect vel"? ta5 ng a re!+on! b l t". Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree.
17/eo+le o''er ng ncent ve! are o'ten #nable to +red ct all o' the 3a"! that +eo+le 3 ll re!+ond to them Agree. *trongl" Agree. Ne#tral. ) !agree. *trongl" ) !agree. Thank you for giving your precious time.
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CONCLUSION So a Prod+ct may go to 6ecline Stage if <aste is not according to ,+stomer 4eed An Idea may be =ood b+t company may overestimate 3 +nderestimate the market si!e. Act+al prod+ct may be poorly designed. It may incorrectly positioned @a+nched at *rong time <oo 9igh Price Poor Advertising In ,ase of Pepsi <*ist it *as ;ailed d+e to
Poor <aste (%/.% G ) Availability (&'.$ G) A+ality (Inly 8.$ G o+t of "--) 6+e to ,itr+s ;anta of ,oke