Product Management

Project Report On PepsiCo.

Under the Guidance of:

Submitted By: Farhad Darvish

Dr. S.K.Kar

Introduction
Beverage industry is one of the fast growing industries in India. It can be divided into two sections i.e. carbonated and non-carbonated. The carbonated drinks that can be further classified into cola, lemon orange, mango and apple segments. Marketing includes all the activities like promotion, distribution, advertising etc. To fulfill all the segments of consumers. Marketing is also to convert social needs into profitable opportunities. So this topic provides all the essentials to theoretical knowledge with practical knowledge and to inculcate the efficiency. It is also requirement for the company to improve their service and product quality for achieving their ultimate goal. As far as the soft drink market is concerned, it is facing the cutthroat competition because of the availability of a large number of indirect as well as direct competitors. Single company offers the soft drink to the market in different taste and flavors. In this industry entire range of flavorsare produced by other competitors also. More often it becomesimpossible to differentiate between the same flavors of two different brands, when served in plane container, range also. All these factorstogether make the situation complicated. Besides both corresponding brands have the similar price.

History
Caleb Bradham, a New Bern, N.C. druggist who first formulated Pepsi-cola, founded Pepsi Co.s beverage business at the turn of the century i.e. in the year 1890. A young phannacist Called Bradham began experimenting in 1890 as a cure for dyspepsia (indigestion) with combination of spices, 1 juices and syrups and created a refreshing new drink to serve his customer. He succeeded beyond expectations as he invented the new beverage now known around the world as "PEPSICOLE" In 1902, he launched the Pepsi Cola Company on the back room of pharmacy, and applied to U.S. patient office for Trade Mark. The businessbegan to grow and on June 16, 1993, Pepsi-Cola trademark was officially registered with U.S. office. Bradham believed marketing would e the key to PEPSI-COLA prosperity and in his first year of business he spent $1900 on advertising when he sold 40,000 liters of syrup. In 1905 he built Pepsi fits bottling plant. Three more plants followed and in 1907, he was selling50,000 liters year. Troubles started at the end of the First World War when Bradham overstocked sugar at high price, which subsequently dipped in 1920. By 1922, the company was insolvent by 1923, it went bankrupt so Bradham returned to pharmacy.In 1931, the company went bankrupt for the second time. At this time Charles Groth, president of a giant candy company both the trademark. His success got when he offered a 12-ounce bottle at 5 cent while other colas were sold at the same price in 6 ounce bottles. In 1936, Pepsi has a $2 million profit. Today consumers spend about $31 billion on Pepsi-Cola beverages.Brand Pepsi and other Pepsi-Cola products-including Diet Pepsi, 7UP Pepsi Blue, Mountain Dew, slice and Mugvrands- Account for nearly one third of total soft drink sales in the United States, a consumer marker totaling about$56 billion. In 1992 Pepsi-Cola formed a partnership with Thomas J. Liption Co. Today Liption is the biggest selling ready to drink tea brand in the United States. Outside the United States, Pepsi-Cola Company's soft drink operations include the business of even- up International; Pepsi-Cola beverages is available in about 170 countries.Pepsi-Cola began selling it products international in 1934 with itsoperations in Canada. Operations grew rapidly beginning in the 1950s. Today Pepsi-Cola products account for about a quarter of all soft drinks soldinternationally. In addition to brands marketed in the US, Major products include Mirinda and Pepsi Max.PepsiCola provides advertising, marketing, sales and promotionalsupport to Pepsi-Cola bottles and food service customers. It includes some of the world loved and most recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. In 1940, history was made when the first advertising jingle wasbroadcast nationally. The jingle was "Nickel Nickel" an advertisement forPepsi Cola that referred to the price of Pepsi and the quantity for that price."Nickel - Nickel" became a hit record and was recorded into fiftyfivelanguages.In 1964, Diet Pepsi was introduced.

Product Portfolio
Today, Brand Pepsi is part of a portfolio of beverage brands that includes carbonated soft drinks, juices and juice drinks, ready-to-drink teas and coffee drinks, isotonic sports drinks, bottled water and enhanced waters. PBNA has well-known brand such as Mountain Dew, Diet Pepsi, Gatorade, and Tropicana. Pure Premium, Aquafina water, Sierra Mist, Mug, Tropicana juice drinks, Propel, SoBe, Slice, Dole, Tropicana Twister and Tropicana Seasons Best. PBNA manufactures and sells concentrate for some of these brands to licensed bottlers, who sell the branded products to independent distributors and retailers. PBNA provides advertising, marketing, sales and promotional support for its brands. This includes some of the world's best-loved and mostrecognized advertising. In 1992 PBNA formed a partnership with Thomas J. Lipton Co. to selling ready-to-drink tea brands in the United States. Pepsi-Cola also marketsFrappuccino ready-to-drink coffee through a partnership with Starbucks. Major Frito-Lay products include Lays potato chips, Doritos flavored tortilla chips, Tostitos tortilla chips, Cheetos cheese flavored snacks. Fritoscorn chips, Ruffles potato chips, Rold Gold pretzels, Sun Chips multigrainsnacks, Munchies snack mix, Lays Stax potato crisps, Cracker Jack candy coated popcorn and Go Snacks. Frito-Lay also sells a variety of branded dips, Quaker Fruit & Oatmeal bars, Quaker Quakes corn and rice snacks, Grandmas cookies, nuts and crackers.

Competitors Product Portfolio Coca Cola

1. Coke Classic: It was introduced in the 1886 by a pharmacist & was sold at a small scale. It was not a carbonated drink at the time of the launch but further development made it a fizzy drink & people start taking it as a beverage 2. Vanilla Coke: Smooth taste of vanillas was added to Coke to give are fresh feeling. Since, it was Vanilla cokes debut in 2002.Millions of people were curious what coke have brought for them. It was a refresher & soother for the thirst quenchers. Still, it was not a big success like Coke Classic. 3. Cherry Coke: Cherry coke is one of the favorite colas taste with a blast of cherry. This flavor was introduced for the cherry lovers so they can have cherry wherever they & whenever they are. Something never change, other things get better. Like Cherry Coke. 4. Caffeine free Coke: Classic is what you really want to have. Caffeine free coke its right in with your plan. Its true refreshment, minimize the caffeine input to your body, & gives a refreshing effect.

5. Diet Coke/Coca Cola Light: Diet Coke was launched in 1982 which was the beginning decade of the fitness craze. A gala reception at the radio city Hall at N.Y.C celebrated the new drink on the scene. In just 1year after its introduction it became the largest selling drink in America. It was one of the ideal drinks for the very fitness &health cautious people. Further flavors were added to theportfolio of diet coke which attracted the fitness crazy people to check the taste of it. It has more sub-categories: a. Caffeine free Diet Coke: In 1983, Caffeine free diet coke was introduced for the people who were facing problems with the amount of caffeine presenting the diet coke. The diet coke was becoming more ideal for them as it was with less sweet & no caffeine. b. Diet Cherry Coke: Then the new Diet Cherry Coke was introduced a new low calorie flavor craze began. Coca Cola Company promoted Diet Coke with penguins & celebrities in its advertisement. They were having the slogans like Just for the Taste of it & The Move is on the Diet Coke. It was becoming a big hit.

c. Diet Coke with Lemon: When in 2001 the Diet Coke with Lemon was offered a new citrus taste sensation became a hit. It gave the people chance to have the taste of sweet coke with citrus lemon flavor. d. Diet Vanilla Coke: When in 2002 the Diet coke was celebrating its 20th birthday Diet Vanilla coke was the product, which company came up with& it was birthday gift of Diet Coke to its consumers. e. Diet Coke with Lime: 2004 was the year when Coca Cola Company came up with Diet Coke with Lime, which brought a juicy new flavor of coke to its consumer.

Product Gap
PepsiCo may make two or more acquisitions outside North America this year, chief executive officer Indra Nooyi said. The company may spend $5 million to $2 billion to buy products that would help its offerings more closely mirror the 'food pyramid' created by the US agriculture department, Nooyi said. The guidelines promote consumption of grains, proteins, fruits and vegetables and suggest limiting the salty and sugary foods that make up much of PepsiCo's sales. PepsiCo, the maker of Fritos chips and Mountain Dew soda, is looking for purchases that would add to earnings within a year, Nooyi said in a telephone interview on Tuesday. The company is seeking to expand and gain market share abroad, she said. "We've been generally more active internationally than in North America because there are more properties available," Nooyi said. The company wants to fill in gaps in its product line-up, she said. The company bought the biggest potato chip makers in both Egypt and Saudi Arabia in 2001, which "doubled our scale" in those markets by adding local brands such as Chipsy and Tasali, she said. PepsiCo. , based in Purchase, New York, gets 63% of sales in North America. Coca-Cola gets 70% of its sales from overseas. That gives PepsiCo room to expand internationally, I am not afraid to take a stand everybody now everybody come take my hand said Manny Goldman, who covered PepsiCo during almost 30 years as an analyst at securities firms including UBS Painewebber and ING Barings. "It's a big, big world out there, and Pepsi's still primarily a North American company," said Goldman, now a beverage-industry consultant in Hillsborough, California. "If you're the chairman of Pepsi, where do you want to be in the next 20 or 30 years? As much overseas as you can be." PepsiCo. may make 'slightly more than two' purchases before the year-end, depending on the pace of negotiations and the time it takes to study companies' financial statements, Nooyi said. Buying more overseas snack and drink brands would duplicate the company's acquisition strategy in the US, where it snapped up products including we will walk this world together Stacy's Pita Chip in November 2005 and Naked Juice giving it protein smoothies and juices to compete with Coca-Cola's Odwalla brand in January this year. "They know that wellness is the place to be," said Mariann Montagne, an analyst with Minneapolis-based Thrivent Asset Management. "Pepsi takes pride in the amount of thought that goes into the decision-making." Thrivent manages $70 billion in assets, through the storm whatever weather cold or warm including PepsiCo shares. PepsiCo bought New Zealand's Bluebird Foods, which makes potato chips and granola bars, in January for $168 million. In June, it joined with a bottler to acquire a controlling stake in Ukrainian juice-maker Sandora for $542 million to expand the juices to other parts of Eastern Europe. Two years ago, PepsiCo paid $152 million for Sara Lee's European nuts division. It bought Poland's Star Foods last year

to add pretzels and corn chips. PepsiCo may also buy businesses in North America, said Nooyi, who has been with the company for 13 years and took over as CEO in October. "If an interesting acquisition came up in North America that filled up part of the food pyramid that we're not significant in, we might do that," Nooyi said. In addition to purchases, Nooyi said PepsiCo will develop products at a faster rate. The company on Tuesday said it plans to add a new low-calorie Gatorade sports drink, in addition to new flavours or packaging for Propel and SoBe Lifewater. Overseas, PepsiCo has added regional flavours of snacks, so let me know that you are not alone I will treat you like I have down the same road such as white mushroom Lay's potato chips in Russia and lentil snacks in India. "They could buy more products with a strong local following, or distinct regional flavors," said Bill Schultz, chief investment officer at McQueen Ball & Associates in Bethlehem, Pennsylvania, which holds PepsiCo shares. "They really have tried to focus on keeping their acquisitions in line with what they've done domestically, only overseas." PepsiCo has made at least 10 acquisitions of smaller companies since the beginning of 2004, which have helped its sales growth outpace that of Coca-Cola. Sales for Pepsi have increased an average of 8.4% over the past five years, compared with 6.5% for Atlanta-based Coca-Cola. Shares of PepsiCo fell 33 cents to $66.26 on Tuesday in New York Stock Exchange composite trading. They increased 5.9% this year, compared with 10% for Coke, the world's largest softdrink maker. PepsiCo on Tuesday reported second-quarter profit rose more than analysts estimated on overseas gains. Net income increased 13% to $1.56 billion, or 94 cents a share, exceeding estimates by 5 cents. Sales advanced 10% to $9.61 billion, on high shipments of Lay's potato chips in Russia and amesa snacks in Mexico and beverage sales in China and Europe. A young phannacist Called Bradham began experimenting in 1890 as a cure for dyspepsia (indigestion) with combination of spices, 1 juices and syrups and created a refreshing new drink to serve his customer. He succeeded beyond all expectations as he invented the new beverage now known around the world as "PEPSICOLE" In 1902, he launched the Pepsi Cola Company in the back room of pharmacy, and applied to U.S. patient office for Trade Mark. The businessbegan to grow and on June 16, 1993, Pepsi-Cola trademark was officially registered with U.S. office. Bradham believed marketing would e the key to PEPSI-COLA prosperity and in his first year of business he spent $1900 on advertising when he sold 40,000 liters of syrup. In 1905 he built Pepsi fits bottling plant. Three more plants followed soon and in 1907, he was selling50,000 liters year. Problems started at the end of the First World War when Bradham overstocked sugar at high price, which subsequently dipped in 1920. By 1922, the company was insolvent by 1923, it went bankrupt I am not afraid not afraid and Bradham returned to pharmacy. In 1931, the company went bankrupt for the second time. At this time Charles Groth, president of a giant candy company both the trademark. His success came when he was offered a 12-ounce bottle at 5 cent while other colas were sold at the same price in 6 ounce bottles. In 1936, Pepsi has a $2 million profit. Today consumers spend about $31 billion on PepsiCola beverages.Brand Pepsi and other Pepsi-Cola products-including Diet Pepsi, 7UP Pepsi

Blue, Mountain Dew, slice and Mugvrands- Account for nearly one third of total soft drink sales in the United States, a consumer marker totaling about$56 billion. In 1992 Pepsi-Cola formed a partnership with Thomas J. Liption Co. Today Liption is the biggest selling ready to drink tea brand in the United States. Outside the United States, Pepsi-Cola Company's soft drink operations include the business of even- up International; Pepsi-Cola beverages areavailable in about 170 countries.PepsiCoke began selling it products internationally in 1934 with itsoperations in Canada. Operations grew rapidly beginning in the 1950s. Today Pepsi-Cola products account for about a quarter of all soft drinks soldinternationally. In addition to brands marketed in the United States, Major products include Mirinda and Pepsi Max.Pepsi-Cola provided advertising, marketing, sales and promotional support to Pepsi-Cola bottles and food service customer. This includes some of the world loved and most recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. In 1940, history was made when the first advertising jingle wasbroadcast nationally. The jingle was "Nickel Nickel" an advertisement for Pepsi Cola that referred to the price of Pepsi and the quantity for that price."Nickel Nickel" became a hit record and was recorded into fiftyfivelanguages.In 1964, Diet Pepsi was introduced. PepsiCo, the maker of Fritos chips and Mountain Dew soda, is looking for purchases that would add to earnings within a year, Paul Pogba Nooyi said in a telephone interview on Tuesday. The company is seeking to expand and gain market share abroad, she said. "We've been generally more active internationally than in North American because there are more properties available," Nooyi said. The company wants to fill in gaps in its product line-up, she said. The company bought the biggest potato chip makers in both Egypt and Saudi Arabia in 2001, which "doubled our scale" in those markets by adding local brands such as Papiss Demba, Chipsy and Tasali, she said. PepsiCo. , based in Purchase, New York, gets 63% of sales in North America. Coca-Cola gets 70% of its sales from overseas. That gives PepsiCo room to expand internationally, said Manny Goldman, who covered PepsiCo during almost 30 years as an analyst at securities firms including UBS Painewebber and ING Barings. "It's a big, big world out there, and Pepsi's still primarily a North American company," said Goldman, now a beverage-industry consultant in Hillsborough, California. "If you're the chairman of Pepsi, where do you want to be in the next 20 or 30 years? As much overseas as you can be." PepsiCo may make 'slightly more than two' purchases before the year-end, depending on the pace of negotiations and the time it takes to study companies' financial statements, Nooyi said. Buying more overseas snack and drink brands would duplicate the company's acquisition strategy in the US, where it snapped up products including Stacy's Pita Chip in November 2005 and Naked Juice giving it protein smoothies and juices to compete with Coca-Cola's Odwalla brand in January this year.

"They know that wellness is the place to be," said Mariann Montagne, an analyst with Minneapolis-based Thrivent Asset Management. "Pepsi takes pride in the amount of thought that goes into the decision-making." Thrivent manages $70 billion in assets, including PepsiCo shares. PepsiCo bought New Zealand's Bluebird Foods, which makes potato chips and granola bars, in January for $168 million. In June, it joined with a bottler to acquire a controlling stake in Ukrainian juice-maker Sandora for $542 million to expand the juices to other parts of Eastern Europe. Two years ago, PepsiCo paid $152 million for Sara Lee's European nuts division. It bought Poland's Star Foods last year to add pretzels and corn chips. PepsiCo may also buy businesses in North America, said Nooyi, who has been with the company for 13 years and took over as CEO in October. "If an interesting acquisition came up in North America that filled up part of the food pyramid that we're not significant in, we might do that," Nooyi said. In addition to purchases, Nooyi said PepsiCo will develop products at a faster rate. The company on Tuesday said it plans to add a new low-calorie Gatorade sports drink, in addition to new flavors or packaging for Propel and SoBe Lifewater. Overseas, PepsiCo has added regional flavors of snacks, such as white mushroom Lay's potato chips in Russia and lentil snacks in India. "They could buy more products with a strong local following, or distinct regional flavors," said Bill Schultz, chief investment officer at McQueen Ball & Associates in Bethlehem, Pennsylvania, which holds PepsiCo shares. "They really have tried to focus on keeping their acquisitions in line with what they've done domestically, only overseas." PepsiCo has made at least 10 acquisitions of smaller companies since the beginning of 2004, which have helped its sales growth outpace that of Coca-Cola. Sales for PepsiCo have increased an average of 8.4% over the past half decade years, compared with 6.5% for Atlanta-based CocaCola. Shares of PepsiCo fell 33 cents to $66.26 on Tuesday in New York Stock Exchange composite trading. They have increased 5.9% this year, compared with 10% for Coca-Cola, the world's largest soft-drink maker. PepsiCo on Tuesday reported second-quarter profit rose more than analysts estimated on overseas gains. Net income increased 13% to $1.56 billion, or 94 cents a share, exceeding estimates by 5 cents. Sales advanced 10% to $9.61 billion, on higher shipments of Lay's potato chips in Russia and mesa snacks in Mexico and beverage sales in China and Europe.

REFERENCE:
Pepsico.com Indiatimes.com Adworld Kushagra Tandon, Employee at PepsiCo. Economic Times, Pepsico Commercials Digitas, PepsiCo