Marketing Plan Of Pepsi & Failure of Pepsi Twist

Marketing Plan Of Pepsi & Failure of Pepsi Twist

Group Members:

Kiran Asif Aasia Siraj Hajra Asad Syed Talha Khalid Fawad Khan Shahid Hussain

HISTORY OF PEPSIHISTORY OF PEPSI

The brand was trademarked on June 16, 1903, though the drink was first made on August 28, 1898, by pharmacist Caleb Bradham.

PepsiCo divisions operate in three major US and international businesses: beverages, snack foods, and restaurants.

MISSION STATEMENT:MISSION STATEMENT:

Our mission is to be the world's premier consumer Products Company focused on convenient foods and beverages.

VISION STATEMENT:VISION STATEMENT:

Our vision is to 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.

MARKETING ENVIRONMENTMARKETING ENVIRONMENT

MACRO:MACRO:GEOGRAPHIC VARIABLE:

World Region/ Country: AsiaCountry Region: PakistanCity: Karachi, Lahore, Islamabad, Multan, Faisalabad, Shakarganj etc.Density: Urban & RuralClimate: Hot DEMOGRAPHIC:DEMOGRAPHIC:

Age: 15+Gender: Male, FemaleFamily Life cycle: Young, Single, Married with childrenIncome: Deprived (less than Rs. 90000), Aspirers (Rs. 90000 to Rs. 200000) Occupation: Students, Professional & Technical, Managers, Officials, Households, Supervisors, ClericalEducation: Literate, some colleges’/HSC, Graduate, PostgraduateReligion: Muslim, Hindu, Christian, SikhNationality: Pakistani

PSYCOGRAPHIC:PSYCOGRAPHIC: Social Class: Lower Lower, Upper Lower, Middle Class, Working Class, Upper Middle. Lower Uppers, Upper UppersLife Style: Survivors, Achievers, StriversPersonality: Ambitious, Gregarious, Authoritarian

BEHAVIORAL:BEHAVIORAL: Occasion: Regular Occasion, Holiday, Eid ul FITAR, Eid ul AZHA, Seasonal,partiesBenefits: Convenience, Economy, QualityUser status: Ex-user, Regular user, Non-usersUser Rate: Light User, Medium UserLoyalty Status: None, MediumReadiness stage: UnawareAttitude toward product: Indifferent, Negative

ECONOMIC ENVIRONMENT OF PAKISTANECONOMIC ENVIRONMENT OF PAKISTAN

GDP Growth Rate: 2%Inflation Rate: 15.48%Unemployment Rate: 5.5%Pakistan’s economy is considered as SUBSISTENCE ECONOMY

Five Economic Classes

TECNOLOGICAL ENVIRONMENTTECNOLOGICAL ENVIRONMENT

• PROCESSES USEDPROCESSES USED

• THE MANUFACTURING PROCESTHE MANUFACTURING PROCES• 1. CLARIFYING the water• 2. FILTERING, STERILIZING & DECHLORINATING

the water• 3. MIXING the ingredients• 4. CARBONATING the beverage• 5. Filling and packaging

PSYCHOGRAPHIC SEGMENTATION PSYCHOGRAPHIC SEGMENTATION PEPSI being a soft drink manufacturing company divides buyers based on their tastes. Pepsi make their marketing strategies and segment their markets by consumers’ tastes and lifestyles.

Pepsi products for different segments:Pepsi products for different segments:Pepsi uses the sugar mixed soft drink lovers group to sell its PEPSI SOFT DRINK.Pepsi uses the diet conscious group to sell its PEPSI DIET.Pepsi uses non sugar users to sell its PEPSI MAX.Pepsi uses the lemon taste lovers group to sell its PEPSI TWIST.Pepsi uses the orange taste lovers group to sell its MIRINDA.Pepsi uses the adventurous people of our culture to sell its MOUNTAIN DEW.Pepsi uses the extra strong taste lovers group to sell its 7UP.

MICRO ENVIRONMENTMICRO ENVIRONMENT

Suppliers:Suppliers:

COMPETITORS:COMPETITORS:

COCA COLA NESTLE STAR BUCKS LACNOR MITCHELLES PAKOLA SHEZAN

PERCEPETUAL MAPINGPERCEPETUAL MAPING

BCG MATRIXBCG MATRIX

PEPSI TWISTPEPSI TWIST HISTORY:HISTORY:

Pepsi Twist was introduced in the US in the summer of 2000.

Pepsi had previously produced a lemon-flavored diet cola in the 1970s and 1980s in the US called Pepsi Light.

Pepsi launched Pepsi A-ha, with a lemon flavor in India, in 2002.

Pepsi Twist was marketed in Pakistan in 2006. The product failed to capture the market, but it is still available in some supermarkets.

TARGET MARKETTARGET MARKET

• Pepsi customers are mostly young group.• Age: between the ages of 14 to 35• Also target at School, Colleges, Universities,

Homes, Restaurant, Hotel and Stores.

MARKET SHAREMARKET SHARE

Company  Pepsi Cola Coca Cola

International Market Share 30% 70%

Pakistan’s Market Share 65 35

No. of Countries 160 200

Variety of Product Large Large

Target Market Youth General

Strategy Focus Diff. Differentiation

Diversification Related Related

MARKET SAMPLE SIZEMARKET SAMPLE SIZE

• -         Main Market 45 % of Total Sample• -         Side Market 30 % of Total Sample• -         Village Market 25 % of Total Sample

PEPSI TWIST MARKET POTENTIALPEPSI TWIST MARKET POTENTIAL Q = n * aTaking; n = 1 million a = 25 liters per annumQ = 1 million * 25 liters per annumQ = 25000000 units

PEPSI TWIST SALES POTENTIALPEPSI TWIST SALES POTENTIALn * a * price of the PEPSI TWISTTaking; n = 1 million a = 25 liters per annumPrice = Rs. 50 per 1.5 literSales potential = 1 million * 25 liters per annum * Rs.50 Sales potential = Rs. 1250000000

MRKETING MIX (4PS)MRKETING MIX (4PS)

1. PRODUCT1. PRODUCT Product Mix of PepsiProduct Mix of Pepsi 1. Soft Drinks2. Water 3. Carbonated Soft Drinks4. Energy Drinks5 Ready to Drink Teas6. Juice and Juice Drinks7. Dairy-based Drinks8. Ready to Drink Coffees 9. Sports Drinks10. Snacks

Product line of Soft Cold DrinkProduct line of Soft Cold Drink Pepsi-Cola Caffeine Free Pepsi Diet Pepsi Caffeine Free Diet Pepsi Pepsi Twist (regular & diet) Slice Dole juices and juice drinks (License) Aquafina purified drinking water Mirinda 7UP (International) Teem Pepsi Light Fiesta Mandarin (License)

PRODUCT DEPTHPRODUCT DEPTH

The variants that are offered by Pepsi in terms of size and quantity:

1. 175 ml Mini Bottle2. 250 ml Regular Bottle3. 300 ml Tin4. 1000 ml Regular Liter Bottle5. 1500 ml Disposable Bottle　

BRANDING:BRANDING:Consumer view a brand name as an important part of the product and branding can add value to the product. A name, term, sign, symbol or design or a combination of these intended to identify the goods and services of one seller or group of seller and to differentiate them from their competitors.

RODUCT LIFE CYCLERODUCT LIFE CYCLE

LEVELS OF PRODUCTLEVELS OF PRODUCT

Core Product i.e. the benefit of the product – Pepsi Twist’sdifferent taste.

Actual Product – Pepsi Twist Augmented Product – lots of value added for which you may

or may not pay a premium. Pepsi Twist – Benefits of citrus

2. 2. PRICINGPRICING

FINAL LIST PRICE:FINAL LIST PRICE:

The list price of the Pepsi twist was the same as regular Pepsi price. There was no such difference. RETAILER %:RETAILER %:

the retailer’s percentage was 7 to 8 %. Usually the retailers are a given the discount

in case of bulk purchasing of crates.

For e.g. If they purchase 5 crates, then half crate is given free.

Prices of different bottles Prices of different bottles Regular bottle = Rs.20 Non Returnable/disposable= Liter Bottle= Rs 35 1.5 Liter Bottle= Rs 75 2.25 Liter Bottle= Rs 85

PRICING STRATEGIESPRICING STRATEGIES

1. Competition based pricing approach‑ 2. Promotional Pricing Policy 3. Market Penetration Pricing Policy

DISCOUNTS:DISCOUNTS:Pepsi Cola offers various discounts to those retailers who have the maximum sales of Pepsi products on daily, monthly and on seasonal basis

INCENTIVES:INCENTIVES:

Incentive to Retailers : Pepsi Cola provide various incentives to retailers. These incentives are in the shape of: Deep FreezersReturn TicketsFree Transportation Services.

Incentive to Dealers The best dealer of the year is awarded with a brand new Suzuki Pickup. The second best is awarded with Motor Cycle. The third best is awarded with Return Ticket to Middle East.

Credit:Credit:There is no credit system in the beverage industry. Every single bottle is sold on the cash basis. ***Total annual sale of soft drink in Pakistan 120 million cases***Total annual sale of soft drink in Pakistan 120 million cases　Pepsi annual sales in Pakistan 75 million 　Market share of Pepsi 65%　Consumption growth 1.7 % per year PEPSI TWIST PRICING:PEPSI TWIST PRICING: Though the quality of twist was best and was available too in the most affordable price as the other Pepsi was , its non availability for the general public conveniently was one of the many different reasons for its failure.

3.PLACE3.PLACE

CHANNELS OF DISTRIBUTION:CHANNELS OF DISTRIBUTION:The Pepsi uses the following two channels for the distribution of their products. 1. Indirect Distribution1. Indirect DistributionIndirect distribution involves agency holders e.g. Riaz Bottlers Pvt. Ltd. Lahore franchise has divided its region i.e. Lahore and Kasur districts in two categories. Local ZoneLocal ZoneThese are 62 agencies distributing Pepsi Products (250ml STD) only around Lahore in their respective allocated sub zones.

Out Station ZoneOut Station Zone17 dealers have been appointed by the bottlers for far distant places and in out skirts of Lahore and Kasur the dealers involved in direct distribution are only authorized to sell 250 ml (STD) bottle of Pepsi, Team and Marinda.

2. Direct Distribution2. Direct DistributionThe factory vehicles operate on 45 direct routes in Lahore selling non-returnable bottles Litter, Pet and Can.　SPECIAL POINTSSPECIAL POINTS

Other than these some special points are also being looked after by direct sales vehicles such hotels restaurants, public parks, big and reputed super stores etc. At Avari, Pearl continental, village, Seas magnificence etc. Pepsi Cola directly distributes the products. WHAT TYPE OF OUTLETS IT ARE AVAILABLE IN?WHAT TYPE OF OUTLETS IT ARE AVAILABLE IN? AGHAS MAKRO HABIB IMTIAZ SUPER STORE NAHEEDS SUPER MARKET DAIRY SHOPS LOCAL STORES PHARMACIES HOSPITALS SCHOOLS PUBLIC PLACES

4.PROMOTION4.PROMOTIONPepsi also developed its market strategy according to the unique tastes of customers. They spent huge amounts of money to invite famous singers, stars and soccer players to promote its products. The company called this its “soccer & music” promotional strategy.

Getting shelvesGetting shelvesThey :get or purchase shelves in big departmental stores and display their in that shelves in order to get a clear attention from the customer.

Sales promotion:Sales promotion:Company do sponsor a lot of sports events to get their market share.

Advertisement:Advertisement:The company uses different stars of sport or films to promote their brands for this they uses different medium:   Print media  Electronic media  Billboards and holdings 

Promotional Budget of PepsiPromotional Budget of Pepsi Pepsi spend 1.45 bn in 2009, making Pepsi co the worlds no 19 advertiser.

SLOGANSSLOGANS

1981 - Pepsi's Got Your Taste For Life!1983 - Pepsi Now!1984 - Pepsi, the Choice of a New Generation1992 - Gotta Have It1993 - Be Young, Have Fun, Drink Pepsi1995 - Nothing else is a Pepsi1999 - The Joy of Cola2000 - The Joy of Pepsi2002 - Ask for more2003 - It's the cola2004 - Dare for more2006 - Ye Dil Maange More 2010 - Badal Do Zamana2011 - Dunya Hai Dil Walon Ke

 

STRATEGY:STRATEGY:

Captive Market – Captive Market – means parks, cinema, canteen, institute, govt. offices, courts, etc.

ADVERTISING BUDGETADVERTISING BUDGET::

STATISTICS OF ITS OBSELETE PRODUCTSTATISTICS OF ITS OBSELETE PRODUCTPEPSI TWISTPEPSI TWIST

WHAT AGE WAS INTERESTED IN USING PEPSI TWIST?WHAT AGE WAS INTERESTED IN USING PEPSI TWIST?

IF YOU THINK, PEPSI TWIST IS FAILED SO WAS IT DUE TO:IF YOU THINK, PEPSI TWIST IS FAILED SO WAS IT DUE TO:

Usage of pepsi twist?Usage of pepsi twist?

Satisfaction level of customers?Satisfaction level of customers?

OPINION ABOUT DRINK?OPINION ABOUT DRINK?

IF PEPSI TWIST COMES AGAIN IN MARKET, I WILL USE IT?IF PEPSI TWIST COMES AGAIN IN MARKET, I WILL USE IT?

REASONS OF FAILURE OF PEPSI TWIST:REASONS OF FAILURE OF PEPSI TWIST:

Actual product may be poorly designed. It may incorrectly positioned launched at wrong time Too High Price Poor Advertising Taste is not according to Customer Need An Idea may be good but company may overestimate / underestimate the market size. Cannibalization Was not presented at an arms length

IT WAS FAILED DUE TOIT WAS FAILED DUE TO Poor Taste (59.5 % ) Availability (26.8 %) Quality (Only 4.8 % out of 100) Due to Citrus Fanta of Coke

SUGGESTIONS FOR PEPSI TWIST SUCCESS:SUGGESTIONS FOR PEPSI TWIST SUCCESS:

Pepsi Company should have maintained taste factor. Pepsi twist should also have

some gas and strong taste whereas it was very sweet and flat. For promotion purpose, some brand ambassador should be use for e.g. a

sports star Target market should have been properly selected and properly targeted. Huge amount of advertising and promotion activities should be done. Stalls should have been placed outside cinemas, parks, fun fairs, beaches etc. Pepsi Company should have appointed teams to visit different schools, colleges

and universities to promote the product. Free samples should have been given to public so that they became aware and

accept new brand. Packaging should be adventurous and attractive. Unique advertising proposition strategy should be used. Launching time should be proper. Mistake that it was launched together with

main competitors coca cola brand citrus Fanta.