About PepsiCo India

PepsiCo entered India in 1989 and has grown to become the country’s largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India.

PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands.

PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched ‘Aliva’ savoury crackers. The company’s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets.

The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of making tomorrow better than today. PepsiCo’s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

SWOT Analysis PepsiCo

Strengths

Branding - One of PepsiCo’s top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it

ranked 26th amongst top 100 global brands. Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lay’s Potato Chips, Lipton Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist.

The strength of these brands is evident in PepsiCo’s presence in over 200 countries. The company has the largest market share in the US beverage at 39%, and snack food market at 25%. Such brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annual sales for the company

Diversification - PepsiCo’s diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCo’s arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes.This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates.

Distribution - The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.

Weaknesses

Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCo’s total net revenue. Wal-Mart is PepsiCo’s largest customer. As a result PepsiCo’s fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. Wal-Mart’s low price themes put pressure on PepsiCo to hold down prices.

Overdependence on US Markets - Despite its international presence, 52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and labor strikes. Large US customers could exploit PepsiCo’s lack of bargaining power and negatively impact its revenues.

Low Productivity - In 2008 PepsiCo had approximately 198,000 employees. Its revenue per employee was $219,439, which was lower that its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees.

Image Damage Due to Product Recall - Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.

Opportunities

Broadening of Product Base - PepsiCo is seeking to address one of its potential weaknesses; dependency on US markets by acquiring Russia’s leading Juice Company, Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles of its consumers.

International Expansion - PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales. In addition the company plans on major capital initiatives in Brazil and Mexico.

Growing Savory Snack and Bottled Water market in US - PepsiCo is positioned well to capitalize on the growing bottle water market which is projected to be worth over $24 million by 2012. Products such as Aquafina, and Propel are well established products and in a position to ride the upward crest.PepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from a growing savory snack market which is projected to grow as much as 27% by 2013, representing an increase of $28 million.

Threats

Decline in Carbonated Drink Sales - Soft drink sales are projected to decline by as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feel the impact of the projected decline.

Potential Negative Impact of Government Regulations - It is anticipated that government initiatives related to environmental, health and safety may have the potential to negatively impact PepsiCo. For example, manufacturing, marketing, and distribution of food products may be altered as a result of state, federal or local dictates. Preliminary studies on acrylamide seem to suggest that it may cause cancer in laboratory animals when consumed in significant amounts. If the company has to comply with a related regulation and add warning labels or place warnings in certain locations where its products are sold, a negative impact may result for PepsiCo.

Intense Competition - The Coca-Cola Company is PepsiCo’s primary competitors. But others include Nestlé, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.

Potential Disruption Due to Labor Unrest - Based upon recent history, PepsiCo may be vulnerable to strikes and other labor disputes. In 2008 a strike in

India shut down production for nearly an entire month. This disrupted both manufacturing and distribution.

Marketing Mix M a r k e t i n g M i x i s t h e s e t o f m a r k e t i n g t o o l s t h a t t h e f i r m u s e s t o p u r s u e i t s m a r k e t i n g o b j e c t i v e s . M a r k e t i n g m i x h a s a c l a s s i f i c a t i o n f o r t h e s e m a r k e t i n g t o o l s . T h e s e m a r k e t i n g a r e c l a s s i f i e d a n d c a l l e d a s t h e F o u r P s i . e . P r o d u c t , P r i c e , P l a c e a n d P r o m o t i o n . T h e m o s t b a s i c m a r k e t i n g t o o l i s p r o d u c t w h i c h i n c l u d e s p r o d u c t d e s i g n , q u a l i t y , f e a t u r e s , b r a n d i n g , a n d p a c k a g i n g .

A c r i t i c a l m a r k e t i n g t o o l i s p r i c e i . e . t h e a m o u n t o f m o n e y t h a t c u s t o m e r s p a y f o r t h e p r o d u c t . I t a l s o i n c l u d e s d i s c o u n t s , a l l o w a n c e s , c r e d i t t e r m s a n d p a y m e n t p e r i o d .

P l a c e i s a n o t h e r k e y m a r k e t i n g m i x t o o l . A n d i t i n c l u d e s v a r i o u s a c t i v i t i e s t h e c o m p a n y u n d e r t a k e s t o m a k e t h e p r o d u c t a c c e s s i b l e a n d a v a i l a b l e t o t h e c u s t o m e r . S o m e f a c t o r s t h a t d e c i d e t h e p l a c e a r e t r a n s p o r t f a c i l i t i e s , c h a n n e l s o f d i s t r i b u t i o n , c o v e r a g e a r e a , e t c .

P r o m o t i o n i s t h e f o u r t h m a r k e t i n g m i x t o o l w h i c h i n c l u d e s a l l t h e a c t i v i t i e s t h a t t h e c o m p a n y u n d e r t a k e s t o c o m m u n i c a t e a n d p r o m o t e i t s p r o d u c t t o t a r g e t m a r k e t . P r o m o t i o n i n c l u d e s s a l e s p r o m o t i o n , a d v e r t i s i n g , s a l e s f o r c e , p u b l i c r e l a t i o n s , d i r e c t m a r k e t i n g , e t c . Product I n m a r k e t i n g , a p r o d u c t i s a n y t h i n g t h a t c a n b e o f f e r e d t o a m a r k e t t h a t m i g h t s a t i s f y a w a n t o r n e e d . I t i s o f t w o t y p e s : T a n g i b l e ( p h y s i c a l ) a n d I n t a n g i b l e ( n o n - p h y s i c a l ) . S i n c e s e r v i c e s h a v e b e e n a t t h e f o r e f r o n t o f a l l m o d e r n m a r k e t i n g s t r a t e g i e s , s o m e i n t a n g i b i l i t y h a s b e c o m e e s s e n t i a l p a r t o f m a r k e t i n g o f f e r s . I t i s t h e r e f o r e t h e c o m p l e t e b u n d l e o f b e n e f i t s o r s a t i s f a c t i o n s t h a t b u y e r s p e r c e i v e t h e y w i l l o b t a i n i f t h e y p u r c h a s e t h e p r o d u c t . I t i s t h e s u m o f a l l p h y s i c a l , p s y c h o l o g i c a l , s y m b o l i c , a n d s e r v i c e a t t r i b u t e s , n o t j u s t t h e p h y s i c a l m e r c h a n d i s e . A l l p r o d u c t s o f f e r e d i n a m a r k e t c a n b e p l a c e d b e t w e e n T a n g i b l e ( P u r e P r o d u c t ) a n d I n t a n g i b l e ( P u r e S e r v i c e ) s p e c t r u m . A p r o d u c t i s s i m i l a r t o g o o d s . I n a c c o u n t i n g , g o o d s a r e p h y s i c a l o b j e c t s t h a t a r e a v a i l a b l e i n t h e m a r k e t p l a c e . T h i s d i f f e r e n t i a t e s t h e m f r o m a s e r v i c e , w h i c h i s a n o n - m a t e r i a l p r o d u c t . T h e t e r m g o o d s i s u s e d p r i m a r i l y b y t h o s e t h a t w i s h t o a b s t r a c t f r o m t h e d e t a i l s o f a g i v e n p r o d u c t . A s s u c h i t i s u s e f u l i n a c c o u n t i n g a n d e c o n o m i c m o d e l s . T h e t e r m p r o d u c t i s u s e d p r i m a r i l y b y t h o s e t h a t w i s h t o e x a m i n e t h e d e t a i l s a n d r i c h n e s s o f a s p e c i f i c m a r k e t

o f f e r i n g . A s s u c h i t i s u s e f u l t o m a r k e t e r s , m a n a g e r s , a n d q u a l i t y c o n t r o l s p e c i a l i s t s .

A s e r v i c e i s a n o n - m a t e r i a l o r i n t a n g i b l e p r o d u c t - s u c h a s p r o f e s s i o n a l c o n s u l t a n c y , s e r v i n g , o r a n e n t e r t a i n m e n t e x p e r i e n c e .

Coke -Product The Coca-Co la fo rmu la i s The Coca-Co la Company 's sec re t rec ipe fo r Coca-Co la . As a pub l i c i t y marke t ing s t ra tegy s ta r ted by Rober t W. Woodru f f , t he company p resen ts the fo rmu la as one o f t he mos t c lose ly he ld t rade sec re ts eve r and on ly a few emp loyees know o r have access to . T h i s C o c a - C o l a f o r m u l a a p p e a r s t o b e t h e o r i g i n a l f o r m u l a t o C o c a - C o l a . I t i s f r o m t h e b o o k “ F o r G o d , C o u n t r y a n d C o c a - C o l a ” .

T h e c o m p a n y C o c a - c o l a i s a m u l t i n a t i o n a l a n d i t i s n o t l i m i t e d t o o n e p r o d u c t . T h r o u g h t h e y e a r s t h e y h a v e i n v e n t e d a n d i n t r o d u c e d m a n y p r o d u c t s t h a n t h e i r m a i n c o l a d r i n k s . T h e l i s t o f C o c a - c o l a b r a n d s a r e a s f o l l o w s :

1 . A p p l e t i s e r 2 . A q u a r i u s 3 . B P M E n e r g y 4 . B a r q ' s 5 . B e a t s o d a 6 . B e v e r l y7 . C a n n i n g s8 . C h e e r s9 . C i e l1 0 . C o c a - C o l a B l a c k C h e r r y V a n i l l a 1 1 . C o c a - C o l a B l a k1 2 . C o c a - C o l a C 21 3 . C o c a - C o l a C h e r r y1 4 . C o c a - C o l a C i t r a1 5 . C o c a - C o l a M 51 6 . C o c a - C o l a Z e r o1 7 . C o c a - C o l a 1 8 . C o c a - C o l a w i t h L e m o n 1 9 . C o c a - C o l a w i t h L i m e 2 0 . D a s a n i 2 1 . D e l a w a r e P u n c h 2 2 . D i e t C o k e 2 3 . F a n t a 2 4 . F a n t a C i t r u s 2 5 . F i o r a v a n t i2 6 . F r e s c a2 7 . F r i s c o2 8 . F r u i t o p i a2 9 . F r u t o n i c3 0 . F u l l T h r o t t l e 3 1 . G e o r g i a3 2 . H i - C3 3 . H i t3 4 . K i a - O r a3 5 . K i n l e y

3 6 . L e m o n & P a e r o a 3 7 . L i f t 3 8 . L i f t p l u s 3 9 . L i l t 4 0 . M a n z a n a L i f t 41 .Mare Rosso 42 .Me l lo Ye l lo 43 .Mezzo M ix 4 4 . M i n u t e M a i d 4 5 . N e s t e a 4 6 . N e w C o k e4 7 . N o r d i c M i s t4 8 . O K S o d a4 9 . P i b b X t r a5 0 . P o w e r a d e 5 1 . Q o o 5 2 . R a s p b e r r y C o k e 5 3 . R e l e n t l e s s5 4 . S a r s i5 5 . S e n z a o5 6 . S i m p l y O r a n g e 5 7 . S m a r t5 8 . S p a r k l e5 9 . S p r i t e6 0 . S p r i t e I c e6 1 . S p r i t e R e m i x6 2 . S p r i t e Z e r o63 .Surge 6 4 . S w e r v e 65 .Tab 66 .TabClear67 .TabEnergy68 .Tab X-T ra69 .T iky 70 .Vau l t

Pepsi -Product The Peps i -Co la d r ink con ta ins bas ic i ng red ien ts found in mos t o the r s im i la r d r inks inc lud ing ca rbona ted wa te r , h igh f ruc tose co rn sy rup , sugar , co lo r ings , phosphor i c ac id , ca f fe ine , c i t r i c ac id and na tu ra l f l avo rs . The ca f fe ine f ree Peps i -Co la con ta ins the same ing red ien ts bu t no ca f fe ine . S o m e o f t h e d i f f e r e n t a n d v a r i e d b r a n d s o f P e p s i a r e a s f o l l o w s :

1 . A l l S p o r t 2 . A q u a f i n a 3 . C a f f e i n e - F r e e P e p s i4 . C r y s t a l P e p s i5 . D i e t P e p s i6 . G a t o r a d e7 . I z z e8 . J a z z9 . J o s t a1 0 . K a s 1 1 . M a n z a n i t a S o l 1 2 . M i r i n d a 1 3 . M o u n t a i n D e w 1 4 . M o u n t a i n D e w A M P 1 5 . M o u n t a i n D e w L i v e W i r e1 6 . M o u n t a i n D e w M D X1 7 . M u g R o o t B e e r

1 8 . P e p s i 19 .Peps iB lue20 .Peps iCappucc ino21 .Peps iMax22 .Peps iONE23.Peps iSamba24 .Peps iTar i k25 .Peps iTw is t26 .Prope l F i tness Wate r27 .S ie r ra M is t2 8 . S l i c e2 9 . S o B e3 0 . S t o r m31.Teem 32 .T rop icana Produc ts 33 .T rop icana Tw is te r

Coke Pepsi-Product A s s e e n a b o v e b o t h t h e c o m p a n i e s C o k e a n d P e p s i h a v e a n u m b e r o f p r o d u c t s . M a n y o f t h e s e p r o d u c t s a r e i n n o v a t i o n s b u t t h e r e a r e

a l s o m a n y p r o d u c t s w h i c h a r e b r o u g h t o u t j u s t a s a c o m p e t i t i v e p r o d u c t f o r t h e o t h e r c o m p a n i e s . S o m e o f t h e s e p r o d u c t s t h a t a r e b r o u g h t i n t h e m a r k e t b y b o t h t h e c o m p a n i e s t o c o m p e t e a g a i n s t e a c h o t h e r a r e a s f o l l o w s :

Price I n e c o n o m i c s a n d b u s i n e s s , t h e p r i c e i s t h e a s s i g n e d n u m e r i c a l m o n e t a r y v a l u e o f a g o o d , s e r v i c e o r a s s e t .

P r i c e i s a l s o c e n t r a l t o m a r k e t i n g w h e r e i t i s o n e o f t h e f o u r v a r i a b l e s i n t h e m a r k e t i n g m i x t h a t b u s i n e s s p e o p l e u s e t o d e v e l o p a m a r k e t i n g p l a n .

P r i c i n g i s a b i g p a r t o f t h e m a r k e t i n g m i x . C h o o s i n g t h e r i g h t p r i c e a n d t h e r i g h t p r i c i n g s t r a t e g y i s c r u c i a l t o t h e m a r k e t i n g p r o c e s s .

T h e p r i c e o f t h e p r o d u c t i s n o t s o m e t h i n g t h a t i s f i x e d . O n t h e o t h e r h a n d t h e p r i c e o f t h e p r o d u c t d e p e n d s o n m a n y o t h e r f a c t o r s . S o m e t i m e s t h e p r i c e o f t h e p r o d u c t h a s g o t n o t h i n g t o d o w i t h t h e

a c t u a l p r o d u c t i t s e l f . T h e p r i c e m a y a c t a s a w a y t o a t t r a c t t a r g e t c u s t o m e r s .

T h e p r i c e o f t h e p r o d u c t i s d e c i d e d k e e p i n g m a n y t h i n g s i n m i n d . T h e s e t h i n g s i n c l u d e f a c t o r s l i k e c o s t i n c u r r e d o n t h e p r o d u c t , t a r g e t m a r k e t , c o m p e t i t o r s , c o n s u m e r b u y i n g c a p a c i t y e t c . Coke - Price

C o k e w a s a c o m p a n y r u l i n g t h e m a r k e t s b e f o r e P e p s i e n t e r e d . E a r l i e r t h e p r i c e o f c o k e w a s c o s t b a s e d i . e . i t w a s d e c i d e d o n t h e c o s t w h i c h w a s s p e n t o n m a k i n g t h e p r o d u c t p l u s t h e p r o f i t a n d o t h e r e x p e n s e s .

B u t a f t e r t h e e m e r g e n c e o f o t h e r c o m p a n i e s e s p e c i a l l y t h e l i k e s o f P e p s i , C o c a - c o l a s t a r t e d w i t h a p r i c i n g s t r a t e g y b a s e d o n t h e b a s i s o f c o m p e t i t i o n . N o w a d a y s m o r e e x p e n s e s a r e s p e n t o n a d v e r t i s i n g m y s o f t - d r i n k c o m p a n i e s r a t h e r t h a n o n m a n u f a c t u r i n g .

C o k e h a s b r o u g h t i n a r e v o l u t i o n e s p e c i a l l y i n I n d i a n m a r k e t s w i t h t h e R s . 5 p r i c i n g s t r a t e g y w h i c h w a s v e r y f a m o u s . I t w a s t h e f i r s t c o m p a n y t o i n t r o d u c e t h e s m a l l b o t t l e o f C o k e f o r j u s t R e . 5 . T h i s c a m p a i g n w a s v e r y s u c c e s s f u l e s p e c i a l l y w i t h t h e p r i c e c o n s c i o u s I n d i a n c o n s u m e r s . E v e n t o d a y m o s t p r i c e s o f C o k e a r e d e c i d e d o n t h e b a s i s o f t h e c o m p e t i t i o n i n t h e m a r k e t .

Pepsi – Price P e p s i a g a i n d e c i d e s i t p r i c e o n t h e b a s i s o f c o m p e t i t i o n . T h e

b e s t t h i n k a b o u t t h e c o m p a n y P e p s i i s t h a t i t i s v e r y f l e x i b l e a n d i t c a n c o m e d o w n w i t h t h e p r i c e v e r y q u i c k l y . T h e c o m p a n y i s r e n o w n e d t o b r i n g t h e p r i c e d o w n e v e n u p t o h a l f i f n e e d e d .

B u t t h i s r i s k t a k i n g a t t i t u d e h a s a l s o e a r n e d P e p s i l o s s e s . T h o u g h l o w e r i n g t h e p r i c e w o u l d a t t r a c t t h e c u s t o m e r s b u t i t w o u l d n o t h e l p t h e m c o v e r u p t h e c o s t i n c u r r e d i n p r o d u c t i o n h e n c e c a u s i n g t h e m l o s s e s .

T h i s w a s t h e s i t u a t i o n e a r l i e r b u t n o w P e p s i i s a f u l l - f l e d g e d a n d g r o w i n g c o m p a n y . I t h a s c o v e r e d a l l i t s l o s s e s a n d i s n o w g r o w i n g a t a r a p i d r a t e .

Place P l a c e i s a t e r m t h a t h a s a v a r i e t y o f m e a n i n g s i n a d i c t i o n a r y s e n s e , b u t w h i c h i s p r i n c i p a l l y u s e d i n a g e o g r a p h i c s e n s e a s a n o u n t o d e n o t e l o c a t i o n , t h o u g h i n a s e n s e o f a l o c a t i o n i d e n t i f i e d w i t h t h a t w h i c h i s l o c a t e d t h e r e . I n m a r k e t i n g , p l a c e r e f e r s t o o n e o f t h e 4 P ' s , d e f i n e d a s " t h e m a r k e t p l a c e " . I t c a n m e a n a g e o g r a p h i c l o c a t i o n , a n i n d u s t r y , a

g r o u p o f p e o p l e ( a s e g m e n t ) t o w h o m a c o m p a n y w a n t s t o s e l l i t s p r o d u c t s o r s e r v i c e s , s u c h a s y o u n g p r o f e s s i o n a l w o m e n ( e . g . f o r s e l l i n g c o s m e t i c s ) o r m i d d l e - a g e d f a m i l y m e n ( e . g . f o r s e l l i n g f a m i l y c a r s ) .

Coke - Place C o k e i s a m u l t i n a t i o n a l c o m p a n y a n d i t h a s i t s m a r k e t a r o u n d t h e e n t i r e w o r l d . T h i s c a n b e s a i d j u s t b y t h e f i r s t p a g e o n i t s s i t e w h i c h a s k s p e o p l e t o s e l e c t t h e p l a c e o f t h e i r c h o i c e . T h e w e b s i t e l o o k s s o m e t h i n g l i k e t h i s :

Pepsi – Place P e p s i a g a i n h a s s p r e a d w o r l d w i d e . P e p s i w h e n e n t e r i n g a n e w

m a r k e t d o e s n o t g o i n a l o n e b u t i t l o o k s f o r p a r t n e r s a n d m e r g e r s . T i l l n o w P e p s i h a s c o l l a b o r a t e d w i t h c o m p a n i e s l i k e Q u a k e r O a t s , F r i t o - l a y s , L i p t o n , S t a r b u c k s , e t c .

P e p s i l i k e C o k e h a s s p r e a d a l l o v e r t h e w o r l d . I t i s b e c a u s e o f t h i s w o r l d w i d e s p r e a d t h a t n o w i t i s c o m i n g u p w i t h A d v e r t i s e m e n t s w h i c h c a n b e b r o a d c a s t e d i n t h e d i f f e r e n t n a t i o n s i n t h e w o r l d . T h e r e c e n t e x a m p l e w i t h w o u l d b e t h e P e p s i a d v e r t i s e m e n t s h a v i n g D a v i d B e c k h a m a s i t b r a n d a m b a s s a d o r .

Promotion P r o m o t i o n i s o n e o f t h e f o u r a s p e c t s o f m a r k e t i n g . P r o m o t i o n c o m p r i s e s f o u r s u b c a t e g o r i e s : 1 . A d v e r t i s i n g 2 . P e r s o n a l s e l l i n g 3 . S a l e s p r o m o t i o n 4 . P u b l i c i t y a n d p u b l i c r e l a t i o n s

T h e s p e c i f i c a t i o n o f t h e s e f o u r v a r i a b l e s c r e a t e s a p r o m o t i o n a l m i x o r p r o m o t i o n a l p l a n . A p r o m o t i o n a l m i x s p e c i f i e s h o w m u c h a t t e n t i o n t o p a y t o e a c h o f t h e f o u r s u b c a t e g o r i e s , a n d h o w m u c h m o n e y t o b u d g e t f o r e a c h . A p r o m o t i o n a l p l a n c a n h a v e a w i d e r a n g e o f o b j e c t i v e s , i n c l u d i n g : s a l e s i n c r e a s e s , n e w p r o d u c t a c c e p t a n c e , c r e a t i o n o f b r a n d e q u i t y , p o s i t i o n i n g , c o m p e t i t i v e r e t a l i a t i o n s , o r c r e a t i o n o f a c o r p o r a t e i m a g e .

B o t h t h e c o m p a n i e s P e p s i a n d c o k e a r e f a m o u s f o r t h e i r p r o m o t i o n s . T h e r i v a l r y w a s f i r s t s t a r t e d w h e n P e p s i s t a r t e d w i t h i t s b l i n d t a s t e t e s t s k n o w n a s t h e P e p s i C h a l l e n g e . T h e c h a l l e n g e i s d e s i g n e d t o b e a d i r e c t r e s p o n s e t o c r i t i c s w h o a l l e g e t h a t C o c a -C o l a a n d P e p s i - C o l a a r e i d e n t i c a l d r i n k s , w i t h n o m e a n i n g f u l d i f f e r e n c e s . T h e c h a l l e n g e t a k e s t h e f o r m o f a t a s t e t e s t . A t m a l l s , s h o p p i n g c e n t e r s a n d o t h e r p u b l i c l o c a t i o n s , a P e p s i r e p r e s e n t a t i v e s e t s u p a t a b l e w i t h t w o b l a n k c u p s , o n e c o n t a i n i n g P e p s i a n d o n e w i t h C o k e . S h o p p e r s a r e e n c o u r a g e d t o t a s t e b o t h c o l a s , a n d t h e n s e l e c t w h i c h d r i n k t h e y p r e f e r . T h e n t h e r e p r e s e n t a t i v e r e v e a l s t h e t w o b o t t l e s s o t h e t a s t e r c a n s e e w h e t h e r t h e y p r e f e r r e d C o k e o r P e p s i . I f P e p s i i s r e v e a l e d , t h e s h o p p e r i s g i v e n a s m a l l p r i z e . T h e i m p l i c a t i o n i s t h a t P e p s i t a s t e s b e t t e r t h a n C o k e , a n d t h u s c o n s u m e r s s h o u l d p u r c h a s e P e p s i .

I n b l i n d t a s t e t e s t s , m o r e c o n s u m e r s p r e f e r t h e t a s t e o f P e p s i t o t h a t o f C o c a - C o l a . B e c a u s e C o k e w a s t h e h i s t o r i c a l l e a d e r , m o r e p e o p l e e x p e c t e d t h a t t h e y ' d p r e f e r a n d s e l e c t C o k e . T h e i r s u r p r i s e a t p i c k i n g P e p s i i n t h e b l i n d t a s t e t e s t ( p r o d u c t s w e r e s e r v e d i n u n m a r k e d c u p s ) h e l p e d c h a n g e t h e i r m i n d s a b o u t w h i c h p r o d u c t t h e y p r e f e r . C a p t u r i n g t h i s o n f i l m , P e p s i t u r n e d t h i s i n t o a m e m o r a b l e T V c a m p a i g n t h a t l a s t e d m a n y y e a r s .