Situation analysis

Initial Stage & Development of Pepsico : This is a soft drink and it was first developed in 1880 by a new born, north carolina pharmacist and industrialist. In 1898 the name of pepsi became change to pepsicola. as pepsicola got mach popularity, it was registered in 1902. Between the late 1970s to 1990s pepsico expanded via acquisition of business out side of its core focus of packaged food and beverage brand. Now a days there are lots of brand under pepsico it includes Pizza Hut Toca bell California pizza kitchen North american vanline Wilson sporting goods Hotn Now etc Area of Business : The Structure of pepsico global operation his shifted multiple time in its history as a result of international expansion and as of 2010 it is separated into four main division. (i) pepsico ameriean food. (ii) pesico beverage

(iii) pepsico europe and asia (iv) pepsico middle east and africa

In 2009 71 percent of the companys net revenue came from north and south america, 16 percent from europe and 13 percent from asia

Sales growth information :

In 2010 pepsico reported revenues of $10.3 billion for the quarter. A 70 percent from its sale last year, driven primarily by the consolidation of its bottling system. And every day all over the world the sales of persico soft drink is increasing incredibly.

Financial Condition :
A Cursory examination of pepsico income statement reveals that pepsico revenue have increased from $ 29.3 billion in 2004 to $ 43.3 billion in 2008 that means revenue growth was average 9.6% year over year. While the cost of goods has increased from $ 13.4 billion to $ 20.4 billion in the same time frame. This represent an increase of cost of goods sold from 45.8% to 47.1% in the five years period. The result is that pepsico gross margin has decreased from 54.2% to 52.9%.The obvious culprit is the increase in commodity price (oil, Gas, Sugar, wheat etc) Market summary: Pepsi posses good information about the market & know a great deal about the common attributes of the most priced customers. This information will be leveraged to better understand who is served , what their specific needs are & how pepsi communicate them. Target market Young Adult Old

Market demographics: Market demographics includes the following the things such as geographic & demographics.

Geographic: It serve in both international & domestic customers. its products are sold in almost 200 countries worldwide. The competition is very much high in soft drink industry. PEPSI Cola is operating in a oligopoly market where two or three large competitors control the lion share of that market. The market size of soft drinks in Bangladeshis around TK.800 Crore per year.

Demographic: There is almost an equal ratio between male & female users. Ages 10-60

Market growth information : In 2010 pepsico reported revenues of $10.3 billion for the quarter. A 70 percent from its sale last year, driven primarily by the consolidation of its bottling system. And every day all over the world the sales of persico soft drink is increasing incredibly.

SWOT Analysis PepsiCo

Strengths Branding - One of PepsiCos 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, Lays 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 PepsiCos 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 - PepsiCos diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCos 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 PepsiCos total net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos 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-Marts 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 PepsiCos 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 Russias 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 PepsiCos primary competitors. But others include Nestl, 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 of PEPSI

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43 billion and over 285,000 employees & its products are sold in almost 200 countries worldwide through four Ps of the marketing mix which are described as following.

1. Pepsi Products
Variety

SoBe Diet 7up soda Life is short, live it up...7uP. So Believe! Starbucks Coffee Drinks A new way to refresh. Mountain Dew Do the dew.

AMP Energy More Power to You

Aquafina Make your body happy!

Dole Juice Healthy juices on the go

Gatorade Rehydrate. Replenish. Refuel.

Lipton Brisk Its bold. Its refreshing. Its Lipton Brisk.

Pepsi Max The Invigorating Cola

Lipton Pure Leaf Tea Lipton Tea can do that.

No Fear Man Up!

Pizza Hut Toca bell California pizza kitchen

North american vanline Wilson sporting goods Hotn No

2. Pepsi Price

Pepsi is competitively priced to its major competitors, offering a better tasting product at a competitive price. Pricing decisions are almost always made in consultation with marketing management. Price is the only marketing mix variable that can be altered quickly. Price variables such as dealer price, retail price, discounts, allowances credit terms etc, influence the development of marketing strategy, as price is a major factor that influences the assessment of value obtained by customers.

Supplier

Manufacturer

Distributor

Retailer

Customer

Customers directly relate price to quality, particularly in case of products that are ego intensive of technology based. Pepsi being a company which emphasizes product quality, it tends to sell its products with price range from moderately low to high prices, depending on the use and targeted customers.

Sample list of price:

Regular Pepsi (250ml) Tk 15 Pepsi disposable (500 ml)

Pepsi can (300 ml) Tk 25 Pepsi (1 liter)

Tk 25 Pepsi (1.50 liter) Tk 55

Tk 35 Pepsi(2.25 liter) Tk 70

3. Pepsi place

To serve the right packs size at the right price, in the right place at the right time. PAH/PI own the Pepsi brands. They sell the concentrate to CSA who manufactures and bottles the Pepsi products and distributes it to consumers. CSA distribute Pepsi via various channels e.g. major supermarket chains, convenience stores, smaller milk bars, restaurants and fast food outlets (e.g. KFC, Pizza Hut, and Oporto). Decisions with respect to distribution channel focus on making the product available in adequate quantities at places where customers are normally expected to shop for them to satisfy their needs. Depending on the nature of the product, marketing management decides to put into place an executive, Selective, or intensive network of distribution, while selecting the appropriate dealers or wholesalers.

Direct Distribution: Delivery of post mix cylinders & handling of key accounts: The key accounts are different wholesalers, restaurants and hotels like pizza Hut, KFC, Metro which serve as a place for key sale. These are known as national key account and very important in terms of competition. Export parties

Indirect distribution: o Through Base market distributors o Through outstation distributors Before delivering the product some certain guiding principles are followed for the assessment and distributors capability: Applicant must have 20 to 25 vehicles (depending on the area). Applicants must have 20,000 cases of empty bottles. Applicant must deposit Rs. 1,000,000 as a security. This is usually done through taking over key revenue areas. If the distributor does not achieve its sales target, the distribution is taken back and an addition of new

distribution is done. Therefore Pepsis supply is low supply uncertainty. Some of its supply source capabilities are: Less Breakdown High quality Flexible supply capacity Mature production process

4. Pepsi promotion

Promotion is a key element of marketing program and is concerned with effectively and efficiently communicating the decisions of marketing strategy, to favorably influence target customers perceptions to facilitate exchange between the marketer and the customer that may satisfy the objective of both customer and the company.

A companys promotional efforts are the only controllable means to create awareness among publics about itself, the products and services it offers, their features and influence their attitudes favorably.

Advertising: Advertising is any paid form of non-personal mass communication through various media to present and promote product, services and ideas etc. by an identified sponsor. PepsiCo has advertised its products through many different ways and media. Through TV we have seen different advertisement of its products such as Pepsi or dew. PepsiCo also advertise its products by targeting those favorable television programs like sports, series and also PepsiCo uses some events the Pepsi cargoes? to promote is products.