Company Profile

PepsiCo, Inc. operates as a global snack and

beverage company. It manufactures, markets, and

sells carbonated and non carbonated beverages;

various salty, sweet, and grain-based snacks; and

food products worldwide. Its beverage product suite

includes beverage concentrates, fountain syrups, and

finished goods under various beverage brands,

including Pepsi, Mountain Dew, Gatorade, Tropicana

Pure Premium, Sierra Mist, 7up, Tropicana Juice

Drinks, Propel, SoBe, Slice, Dole, Tropicana Twister,

and Tropicana Season’s Best. It also manufactures,

markets, and sells ready-to-drink tea and coffee

products through joint ventures with Lipton and

Starbucks. PepsiCo’s snack product suite includes

Lay’s potato chips, Doritos flavored tortilla chips,

Cheetos cheese flavored snacks, Tostitos tortilla

chips, Fritos corn chips, Ruffles potato chips, Rold

Gold pretzels, Sunchips multigrain snacks, Munchies

snack mix, Grandma’s cookies, Quaker Quakes corn

and rice snacks, and Cracker Jack candy coated

popcorn. In addition, the company licenses the

Aquafina water brand to its bottlers and markets this

brand. PepsiCo also offers cereals, rice, pasta, and

other products, including Crunch and Life ready-to-

eat cereals, Rice-A-Roni, Pasta Roni, and east side

dishes. The company distributes its products through

direct store delivery, broker warehouse, and food

service and vending distribution networks to its

customers, including franchise bottlers, distributors,

and retailers. PepsiCo was founded in 1898 and is

headquartered in Purchase, New York.

Shareholders

PepsiCo (symbol: PEP) shares are traded principally

on the New York Stock Exchange in the United

States. The company is also listed on the

Amsterdam, Chicago, Swiss and Tokyo stock

exchanges. PepsiCo has consistently paid cash

dividends since the corporation was founded.

Corporate Citizenship

At PepsiCo, we believe that as a corporate citizen,

we have a responsibility to contribute to the quality

of life in our communities. This philosophy is

expressed in our sustainability vision which states:

“PepsiCo’s responsibility is to continually improve

all aspects of the world in which we operate –

environment, social, economic -- creating a better

tomorrow than today.”

Our vision is 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.

PepsiCo Headquarters

PepsiCo World Headquarters is located in Purchase,

New York, approximately 45 minutes from New

York City. Edward Durrell Stone, one of America’s

foremost architects, designed the seven-building

headquarters complex. The building occupies 10

acres of a 144-acre complex that includes the

Donald M. Kendall Sculpture Gardens, a world-

acclaimed sculpture collection in a garden setting.

Masters such as Auguste Rodin, Henri Laurens,

Henry Moore, Alexander Calder, Alberto Giacometti,

Arnaldo Pomodoro and Claes Oldenberg focus the

collection of works on major twentieth century art,

and features works. The gardens originally were

designed by the world famous garden planner,

Russell Page, and have been extended by François

Goffinet. The grounds are open to the public, and a

visitor's booth is in operation during the spring and

summer.

Current Market Scenario

The soft drinks market is perhaps the most hard

fought product categories in India in every respect -

media, events, distribution, pricing, communication,

endorsements and so on.

Pepsi has a market share of 46% in the Indian

market, second only to Coca-cola (48%) currently.

There is cut-throat competition between the two cola

giants. However, sales figures over the past few

years have shown that Pepsi has grown at a faster

rate as compared to Coca-cola. This bodes well for

Pepsi in India as trade analysts have forecasted that

Pepsi will emerge as a market leader by the year

2025.

Unique Selling Proposition (USP)

“Convenience at a Pop”

The USP of 7up Pop is that it is the only insta-

soda pop available in the market today. Its size

greatly increases its portability. It has an

extended shelf life which helps make it the

ideal accompaniment to food and fun. 7up Pop

is a revolution that redefines the limitations of

consumables worldwide.

S .T.P

SEGMENTATION

Market Segmentation is an effort to increase a

company’s precision marketing. A market consists of

a large identifiable group within a market with similar

wants, purchasing power, geographical location,

buying attitude, or buying habits.

We have done the segmentation on the basis of the

following variables:

DEMOGRAPHIC SEGMENTATION: Age, Income,

Social Class & Occupation

PSYCHOGRAPHIC SEGMENTATION: Lifestyle and

Personality

BEHAVIORAL SEGMENTATION: Occasions,

Benefits, Usage Rate & Attitude

GEOGRAPHICAL SEGMENTATION: Region & city

TARGETING

After segmenting the market we are targeting the

following segments:

INCOME GROUPS: We will be targeting all

income groups. 7up, being an established brand

with mass appeal and cost effective pricing, it

will not discriminate between income groups.

YOUTH: A huge potential market for 7up Pop lies

with youth whom we will be specifically targeting

through ‘Pop Culture’ and road shows to be held

as part of the ‘Add Colour’ campaign.

TRAVELLERS: Due to its mini-form factor, 7up

Pop is highly convenient to carry along during

journeys or trips. This is why it will be targeted

at travellers as well.

POSITIONING

“We don’t serve markets, we create them.”

We will position 7up Pop as a lifestyle drink for the

masses. Through extensive advertising we will be

able to establish 7up as a way of life. 7up will

represent vibrance and seek to promote a new zest

for life, a break from the routine, excitement and

exhilaration.

COMPREHENSIVE MARKETING MIX

(4P’s)

Product

New 7up Pop is a revolution in the soft drink market.

It will be available in a capsule which on contact with

the requisite quantity of water will give rise to 7up

Pop.

The capsule will provide the consumer easy access to

the 7up Pop at all times, greater portability and an

extended shelf-life. An instant drink, 7up Pop’s

uniqueness lies in the fact that it is the only soft

drink which can be made ready-to-drink in a matter

of seconds. 7up Pop deviates from the traditional

colourless 7up in that it contains multi-coloured

granules. One will be able to make out at least 7

shades of colour in the drink. The drink will contain

‘Pop’, micro-granules with a bittersweet tang to it.

These granules on contact with the taste buds will

create a tingling sensation. The drink now has a

more ‘icy’ feel and is a source of instant energy. The

use of these granules and other additives in 7up Pop

has been approved by the FDA (Food & Drugs

Authority). The drink will also contain a greater

amount of froth than any other existing drink in the

market.

7up Pop will also be available in attractive Tetra

Packs (300 ml) and pet bottles for its 500ml and 1.5

litre variants.

We will be setting up “Pop Culture”, 7up theme

stores based on the ‘Add Colour’ campaign. These

stores will feature a Pub-7, serving an extensive

variety of mocktails, smoothies with a 7up base. The

pubs will also other soft drink brands of our parent

company Pepsi. They will also feature Grub-7, a

‘filling station’ serving a wide range of snacks and

appetizers. These stores will also be ‘Wi-Fi’ hotspots.

“Pop Culture” will become the ideal hangout for

young and old alike. With happening music, an

assortment of magazines, quality ambience and a

vibrant feel, we will capture the imagination of

everyone looking for an ideal spot to unwind with

friends or spend some fun-time with family.

PRICE

Having the 1st mover advantage, PepsiCo has the

complete say in determining its own price. PepsiCo’s

pricing has always been competitive and with the

launch of 7up Pop, it aims at capturing a much larger

share in the market.

Assuming the change in the future trends in the

market and taking into consideration the inflation

rates with respect to 2005, PepsiCo has decided to

launch 7up Pop at an initial launch price of Rs. 20

(per capsule). One capsule would be equivalent to

250 ml of 7up when dissolved in water. A strip of 5

capsules would cost Rs. 90.

PLACE

7up Pop will be launched in Delhi, Mumbai, Kolkata,

Chennai, Bangalore, Ahmedabad and Hyderabad

initially. These cities have been chosen for the launch

as our surveys have shown that people in these cities

are looking for a drink with a difference. We will be

moving towards semi-urban and rural market

phasing our activities in the basis of initial and

subsequent consumer response.

PROMOTION & ADVERTISEMENT

Marketing Objective:

“Massification” -

The task ahead is to concentrate on making the cake

bigger rather than fighting for a bigger piece of the

existing cake.

7up Pop will balance its communication expenditure

by using the following communication vehicles:

NEWSPAPERS and E-BOOKS:

We plan to advertise in the English national dailies

such as The Hindu and Times of India as their reach

is widespread within the country. The advertisements

would cover a full page in the initial stages and half a

page thereafter. They would appear once in three

days initially and then take on a bi-weekly schedule.

RADIO:

Radio is the order of the day. From, sky-buses to

metro rails, Satellite radio has wider reach than one

could possibly imagine at the start of the century. We

plan to advertise our launch in all major radio

stations like Radio City 91 FM, Radio Mirchi, and

World Space etc. in all areas. There will be no

definite time slots. We will advertise on randomly

selected slots in order to reach out to a wider section

of society.

TELEVISION:

We would put our advertisements on all major

television channels like, Sony T.V, MTV, Zoom and

ESPN-STAR. The reason we have chosen these

particular channels to broadcast our ads is because

they enjoy the highest viewer-ship in their respective

domains. Media like Internet TV, Mobile TV etc. will

also be prominent advertising avenues.

BILLBOARDS:

We are planning to put up advertisements on

billboards on busy streets, shopping malls and

highways so that our message can be delivered to

pedestrians and traveling public. Advertisements on

billboards would be electronic and would be similar

to videos. This will attract the attention of numerous

people and have a wider appeal.

ROAD SHOWS and PARTIES:

Road shows and 7up Pop theme parties will be held

in our initial target cities. The road shows will provide

expression platforms called ‘shout-boxes’. We will

also conduct games and other fun-filled activities for

onlookers. The road shows will also feature live

performances by popular regional artists. Our theme

parties will feature a host of celebrities, pulsating

music and their own makeshift Pub-7s. We plan on

making these events spectacular, which will make

them eagerly anticipated in coming years and will re-

define the party scene in Urban India.

LAUNCH PARTY:

7up Pop would hold a launch party to celebrate its

arrival, where the top celebrities and the who’s who

of the city will be invited to celebrate the arrival of

the lifestyle drink. There will be press coverage of

the party.

TIE-UP WITH HUTCH:

We will be tying-up with Hutch, leading cellular

service providers in India. Hutch will promote our

drink via sms. We will also enable Hutch a ‘Hutch

Zone’ at every ‘Pop Culture’. This will enable

consumers to pay their bills with greater convenience

while they enjoy a sip of 7up Pop. Hutch will also

feature our Mascot, ‘Fido Dido’ and promote our

drink on their recharge and tariff cards.

Internet 2

With the emergence of the sequel to the Internet,

communication and advertising has undergone a

complete face-lift. Internet 2 has a larger user

network and higher bandwidth capabilities than the

previous version of the Internet, which makes it the

most accessible and preferred medium for the

promotion of 7up Pop.

5 M’S OF ADVERTISING

SETTING UP THE SYSTEM(For marketing)

We intend to design a “Competitive Intelligence

System”.

Identifying vital competitive information:

The first step calls for identifying vital types of

competitive information and consumer preferences,

identifying the best sources of this information, and

assigning people who will manage the system and is

services.

Collecting the data:

The data is collected on a continuous basis from the

field, from people who do business with competitors,

from observing competitors and from published data.

Evaluating and analyzing the data:

The data is checked for validity and reliability,

interpreted and organized.

Disseminating information and

responding:

Key information is sent to relevant decision makers,

and managers’ inquiries are answered. With a well-

designed system, company managers receive timely

information about competitors via e-mail, phone

calls, bulletins, newsletters, and reports.

MARKETING STRATEGY

Identifying vital competitive information

Evaluating and analyzing

Collecting the data

Disseminating  & responding

COMPETITIVE INTELLIGENCE SYSTEM

PLANNING AND COMMUNICATION

PROCESS

CORE MARKETING STRATEGIES

Concrete marketing strategies were developed by us

in order to achieve its marketing objectives which are

as follows:

Creating brand awareness

Increasing the market size

Change customer attitude

Increased customer traffics

Pursue purchase actions

Increase turnover

The marketing strategies have been developed after

studying the product life-cycle. The various stages

were:

Stage 1

Market research:

We conduct a market survey and analyze various

aspects of the industry. This is done by studying all

the three aspects of the industry which are mainly

the consumers and competitors.

Stage 2

A complete attacking strategy:

In order to launch the product we use extensive

advertising and promotional strategies already

mentioned in the marketing mix.

Stage 3

Maturity stage:

Once the brand image is created, the advertising and

the promotional campaigns will be slowed down

according to the market needs. Sudden reminders

would appear and seasonal push strategy will be

followed.

GENERAL ATTACK STRATEGY TO

WITHSTAND THE COMPETITION

Today’s soft drink providing industry is known for its

competition hence it was not sufficient to study the

market by just analyzing the consumer behaviors

and about their wants. Understanding the

competition and its strengths was also very essential.

As the competition is established we not only have to

attack the competition but also be ready to face their

retaliation.

In order to overcome the above problem we studied

our competition and all its moves and try to stand in

front of our competition. The following attack

strategies were undergone:

FRONTAL ATTACK

In pure frontal attack, the attacker matches its

opponent’s product, advertising, prices and

distribution. Hence in the initial stage we used the

Frontal Attack strategy by standing in front of the

completion and ready to face it.

FLANK ATTACK

The competitor’s weak points become our targets.

Hence by targeting the weak points of the competitor

we would grab a huge share.

ENCIRCLEMENT ATTACK

It involves launching a grand offensive on several

fronts. This would not be followed until forced by the

competition.

BYPASS ATTACK

By bypassing the enemy and attacking easier

markets to broaden our service. This would be

followed only after a reasonable amount of time

keeping in mind competitor’s retaliation.

GUERRILLA WARFARE

By offering special promotional offers, intense

advertising blitzes and legally studying all

competitor’s move. This will be taken once I.Q

establishes a significant space in the market.

ATTACKING STRATEGIES

THE MARKETING STRATEGY

BYPASS ATTACK

FRONTAL ATTACK

ENCIRCLEMENT ATTACK

FLANK ATTACK

GUERRILLA ATTACK

COMPETITORS

7UP POP

The marketing strategy to be followed in giving a

hyper mileage to 7up Pop is the application of the

DELTA MODEL.

The Delta Model is a fresh approach to business

strategy development and strategic management in

today’s increasingly networked economy.

Economic networks have altered the nature of

competition, amplifying the relationships between

customers and suppliers, enabling the development

of new business models for competitors and fostering

the role of new participants as complementers.

The underlying theme of the Delta Model is that

strategy – in both the new and old economy – maybe

and in many cases should be, formulated on the

basis of bonding as opposed to rivalry. It expands a

strategic tableau to include customers, suppliers,

competitors, substitutes and complements. It

recognizes and describes how customer and

complements relationships can create strong bonds

to the customer – independent of the product or

service that the company sells. It explicitly links

strategy with execution – the necessary processes,

metrics and adaptations that constitute the day-to-

day actions of the business. It acknowledges the fact

that more businesses fail due to the gaps in

execution that in strategy.

The Delta Model is a practical framework for

competing in the new economy of processors. It is

integrated from strategy to execution:

It captures three essential forms of competitive

positions viz. product, customers and

complements (distributors and retailers).

It explains how these positions are translated

into a strategic agenda

It describes how processes and tasks are aligned

to that agenda

It defines the metrics to track progress

It shows how to adapt inevitable uncertainties in

the market

Delta: a brief overview

Competition based on system economics

Complements Lock In (distributors and retailers)

Competitor lock out,

System Lock In

Total Customer Solution Best Product

Reducing customer costs Low cost

Increasing their profits

We believe that the total model constitutes a new

approach and a new discipline for strategic

management.

Our foremost concern in defining the strategy is to

decide on the relevant strategic positioning. This

should capture the essence of how our service

competes and serves customers in its relevant

market place.

There are three distinct strategic options, which offer

very different approaches to achieve customer

bonding. They are depicted graphically through a

triangle. We have chosen the Triangle to display the

strategic positions not simply because it is a visual

icon that is easy to remember, but also because it

represents the letter Delta, which means

transformation.

The Best Product (B.P) positioning builds upon the

classical form of competition. The customer is

attracted by the inherent characteristics of the

product itself, either due to its Low Cost, which

provides a price advantage to the customer which

introduces unique features that the customers value

and for which they are willing to pay a premium. The

product tends to be standardized and unbundled.

The customers are generic, numerous and faceless.

The central focus of attention is the competitor, who

is trying to equal or surpass. Competitive advantage

rests upon product economics and the internal

supply chain, which provide engine for efficient

product production. Innovation is centered on the

internal product development process. The liability of

this approach it generates a minimum amount of

customer bonding, hence making the incumbent

firms most vulnerable to the new entrants. Its

obsessive concern with competitors often leads to

imitation and prince war, resulting in rivalry and

convergence; the worst of all situations.

The Total Customer Solution (TCS) strategy is a

complete reversal from the best product approach.

Instead of commoditizing the customer we seek a

deep customer understanding and relationship that

allows us to develop value propositions that bond to

each individual customer. We also seek to develop

an integrated supply chain that links us with key

suppliers and customers. We are outwardly driven;

customer economics is our guide. Strategy is not war

with our competitors; it is a love with our customers

(customer bonding)

The System Lock –In (SLI) strategic option has the

widest scope; it includes the extended enterprise –

the firm, the customers the suppliers, and most

importantly the complements (retailers and

distributors). The key to the strategic option is to

identify, attract and nurture the complements. These

complements are rarely detected and effectively by

other players-hence this is our strength. That is why

a system lock in strategy has to start with full

corporate scope – not just for a product or business –

and has to continue with the identification and

incorporation of all the key external players that can

become complements. The customer continues to be

the central focus, but now we can extend the

enterprise to the fullest. We look a the overall system

supply chain, not just the supply chain of our

product, and harness the innovation percolating

throughout the system as a whole.

SWOT Analysis

Strengths:

1. Brand Equity

7up has a strong brand presence in India. It is a

premier soft drink brand reaching out to large section

of society. 7up has always been associated with

youthful vibrancy and a positive outlook toward life,

which has led to its surge in the Indian market.

2. Strong position of Pepsi

Pepsi, our flagship company is the market world

leader in non-alcoholic beverages worldwide. Pepsi

has constantly reinvented itself to suit the needs of

the changing consumer. Being a giant in its area of

operation, it has a strong market presence, which

enables Pepsi to provide us with essential technical

know-how and full-fledged financial backup.

3. Portability

New 7up Pop is an ultra-light capsule which can be

carried anywhere with ease. Its size is of great

advantage to the consumer as it requires minimal

storage space and is highly portable.

4. Convenience

We at 7up, offer every consumer the opportunity of

obtaining his own glass of 7up Pop at his

convenience. Easy to use, 7up Pop has a extended

shelf life which helps it to sustain its quality over long

periods of time. Therefore, 7up is instant, lasting and

highly convenient.

5. Pioneer product

7up Pop is a revolution in the soft drink market; it

solves the problems of portability, storage and offers

greater convenience to the consumer. We are

innovators who believe that it is time to give the

consumers what they are looking for.

6. Established distribution network

Pepsi has a strong brand presence all over India. It

has a comprehensive distribution network, which

makes its brands easily available to consumers

anywhere in the country. This will help us reach out

to our target markets more effectively and help us

establish a strong foothold over them.

Weaknesses:

1. Acceptance

We are still wary of the acceptance of our product. It

is however essential for us to overcome this

weakness by providing the consumer with adequate

information and by employing an effective marketing

strategy.

2. Usage

Incorrect usage of the product could lead to changes

in the concentration level. This makes it important

for us to explain usage procedures and ensure

proper communication with the end consumer

through proper packaging.

Opportunities:

1. First mover advantage

We are innovators, heralding a revolution that is

slowly changing the face of beverages worldwide. We

have given rise to a complete upheaval of existing

trends. Hence, we have a first mover advantage in

our field, providing consumers with unadulterated

refreshment in a form beyond what one could barely

imagine a few years ago.

2. Untapped market

7up Pop will cater to a larger section of society owing

to its strong distribution network. We will be able to

capitalize on existing as well as untapped markets

because our product is the complete retail solution;

convenient to store and easily distributable.

3. Rise in living standards

With the boom in the Indian economy, we have

overcome all barriers to productive growth and

development. Indian standards of living have seen a

drastic makeover in the last decade. Products and

services have become increasingly affordable. People

have become conscious of the need to keep pace

with changing times. Our product will be able to

reach out to the masses more effectively and capture

untapped markets.

Threats:

1. Cut throat competition

Coca-cola and Pepsi have always been at

loggerheads. A retaliation from Coke as a counter-

measure against 7up Pop is expected. However, the

first mover advantage would strengthen 7up Pop’s

foothold in the market.

2. Further innovations

Being innovators ourselves, we cannot ignore the

possibility of further innovations that may eat into

our market share.

FINANCIALS

PepsiCo has always followed aggressive promotion

strategies to capture the market. Having an excellent

financial backup the costs of advertising and other

marketing activities is reported as selling, general

and administrative expenses. Advertising expenses

were $1.7 billion in 2005, $1.6 billion in 2004 and

$1.5 billion in 2003.

Considering the inflation and deflation rates of a

period of 20 years down the lane and updating itself

to the latest technologies and strategies of

promotion, PepsiCo would use extensive finance to

promote 7up Pop in 2025.