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PEPSI COLA PAKISTAN:FRANCHISING &PRODUCT LINE MANAGEMENT
GROUP MEMBERS :ANEES SHEHZAD
JASIM RASHEED
PEPSICO INC. Pepsi Cola International owned by Pepsico
Inc. Three markets: 1. Soft drinks-Pepsi Cola Company and Pepsi Cola International 2. Snack Foods- Frito Lay Inc. and Pepsico Foods International 3. Restaurants- Pizza Hut, Taco Bell, and KFC
7-UP International
PepsiCo bought 7-UP’s international division for $246 million.
7-UP was a leading producer in lemon-lime category.
Represented 15% of international soft drink
Foreign volume boosted by almost 20%.
In 1986, PepsiCo's U.S. market share was 29 percent, while The Coca-Cola Company's is 39 percent.
Competitive Analysis
Main competitor was Coca-Cola Company, both in United States and abroad.
In 1990, Coca Cola claimed 46% of international soft drink market.
Diversified from soft drink business into food-related lines as Frito Lay.
PEPSI COCA-COLA
International & Domestic Soft Drink Revenues
$6.5 billion $10 billion
International & Domestic Soft Drink Operating Profit
$767 million $1.4 billion
International & Domestic Soft Drink Growth 1989-1990
29% 8%
Percent of Revenue derived from International Soft Drink Sales
16% 55%
Percent of Operating Profit derived from International Soft Drink Sales
4% 80%
Pepsi cola in Pakistan
Irfan Mustafa joined 1990 as CEO of Pepsi cola
In West Asia division pepsi enter with 3 countries: Pakistan, Bangladesh, Sri lanka
PCI divided into five functional departments- franchising, marketing, bottlers, sales operation and finance
Market in Pakistan Pepsi’s marketing divide in two stages: first stage: PCI manufactured and sold it to
bottlers second stage: bottlers add carbonated
water and sweetener quantities and sold to retail store and other outlet
• Retail price was PKR 4 per individual consumption bottle i.e 25ml
• PKR 12 for 1 liter bottle
Cont..
• Market was divide into 2 segment on premise and take home
• Soft drink market grew between 1988 and 1990
• PCI market share was 58% in 1990 from 33%
Distribution Approximately 54000 retail outlet sold soft
drinks
But the brand loyalty was not there and PCI has to visit retailers
Rural area’s road condition was bad and the competitor can cover the market
So PCI started giving branded refrigerator to retail outlet to increase loyalty
Advertising and promotion PCI referred advertising as theme i.e long term
brand building and promotion as scheme by discount pricing, coupons, reward program for retailer
It’s main objective was to achieve volume growth and make a big brand
Media were television and newspaper for advertising while magazine and poster for promotion
Promotion like local event, incentives to sales force, social work
Advertising (Theme) For long term brand building
Promotion(Scheme) mechanisms for acquiring consumers
PCI allocated 15% budget for Advertising &Promotion, out of this 60% for Advertising &40% for Promotion
Objectives: To achieve volume growth & provide support to its brands
Social work Student scholarship
Health program
Arranging student visit to bottler plant
Fundraising charity
Television was most effective media for PCI products
Lahore, Islamabad, Karachi, Peshawar, Quetta where tv station located
Which reach upto 75 percent of pakistani population because they were main urban areas
Bottlers
Contract: to produce, bottle & sell Independent entities Included in decision making Powerful & affluent Cross- Franchising and ban Bottlers association & retail price Quality
Mustafa’s Priorities identified
Acquiring 7-Up bottlers
Cloudy Teem
Brand Portfolio & Marketing Plan
Acquiring 7-Up Bottlers
Objective: To gain more control & coordination among bottlers
Capacity expansion Bottlers were excited PCI concern: Increase in power of
bottlers 7-Up bottlers concern: Fear of facing
negligence
Cloudy Teem
Concept based on local drink Idea was to move Clear Team
consumers to Cloudy Team or 7-Up Six bottlers were not convinced to
replace Clear Teem being a strong brand
Introduction of Cloudy Teem planned
Brand portfolio [Approx][Sales contribution since acquisition of 7-Up]
Marketing Plan
Rural area: 68% population, low literacy &
disposable income Relied on less expensive radio and point-
of-sale campaign Promote Teem the local brand
Urban area: Media spend yielded higher returns Promote 7-Up
Conclusion
Tremendous future in Pakistan Consumers want:
Convenient location Right package
Way to exploit opportunities: Implementation of effective and
comprehensive marketing strategy Including brand portfolio and bottlers