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-UPs 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 departmentsfranchising, marketing, bottlers, sales
operation and finance

Market in Pakistan
Pepsis 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 areas 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
Its 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

Mustafas 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 pointof-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