MARKETING PLAN: Apple

MARKETING PLAN

1. ORGANIZATION’S CURRENT SITUATION

1.1 INTRODUCTION & HISTORY

Pepsi cola is one of the world’s most famous brands of soft drinks. The history of Pepsi Cola

starts with the birth of Caleb Bradham in 1893, a young pharmacist from New Bern. He starts

experiments with many different soft drinks in 1898. One of his formulations known as “Brad’s

drink” a combination of carbonated water, sugar, vanilla, rare oils, and cola nuts and later named

as “pepsi cola”. After this success pepsi got its first logo on 1898.

In 1902, Bradham launched the Pepsi-Cola Company in the back room of his pharmacy

and on December 24, 1902 the Pepsi-Cola Company was incorporated in the state of North

Carolina. The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially

registered with the U.S. Patent Office. At first, he mixed the syrup himself and sold it exclusively

through soda fountains. That first year, Bradham sold 7,968 gallons of syrup, using the theme

line "Exhilarating, Invigorating, Aids Digestion." He also expanded his operation by opening a

second Drug Store at the corner of Middle and Broad Streets. Caleb soon recognized that a

greater opportunity existed to bottle Pepsi so that people could drink it anywhere. In 1905,

Bradham began selling Pepsi-Cola in six-ounce bottles and awarded two franchises to Charlotte

and Durham, North Carolina. The following year, 15 franchises were awarded, with another 40

by 1907. In 1910 there were 250 franchises in 24 states and in January of that year the Pepsi Cola

Company held their first Bottler Convention in New Bern. 

Caleb Bradham enjoyed 17 years of success with Pepsi-Cola. However, he had gambled on the

fluctuations of sugar prices during WWI. He believed that sugar prices would continue to rise,

but they fell drastically, leaving him with an overpriced sugar inventory. Pepsi Cola went

bankrupt in 1923 and its assets were sold to Craven Holding Corporation for $30,000.

1.2 ORGANIZATION’S VISION, MISSION, AND OBJECTIVES.

VISION

"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.

MISSION

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

foods and beverages. We seek to produce financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the

communities in which we operate. And in everything we do, we strive for honesty, fairness and

integrity.

OBJECTIVE

“Objective the business strategy is to increase volume, expand share worldwide non alcoholic

ready to drink beverages sales, maximize long term cash flows and create economic value added

by improving economic profits”.

1.3 ORGANIZATION’S PRODUCTS AND BRANDS

Pepsi-Cola North America is the refreshment beverage unit of PepsiCo, Inc., in the United States

and Canada. Its U.S. brands include Pepsi, Mountain Dew, Sierra Mist, SoBe, AMP Energy,

IZZE, Naked Juice, Propel, Mug, and Aquafina, among others. The company also makes and

markets North America's best-selling ready-to-drink iced teas and coffees, respectively, via joint

ventures with Lipton and Starbucks.

From its humble beginnings over a century ago, Pepsi-Cola has grown to become one of the

best-known, most-loved products throughout the world. Today, the company continues to

innovate, creating new products, new flavors and new packages in varying shapes and sizes to

meet the growing demand for convenience and healthier choices. Pepsi is constantly on the

lookout for ways to ensure their consumers get the products they want, when they want them and

where they want them.

1.4 ACTUAL CUSTOMERS

Pepsi cola is basically targeting to the young generation and the most of the customers are

between the ages of 18 to 40. Pepsi cola also is targeting the schools, colleges, hotels, homes,

offices and stores. In the 1990’s, Pepsi shifted their focus to the growing American teenage

market. PepsiCo adopted a new marketing strategy which aggressively marketed through

high school and college campuses. PepsiCo began selling contracts of exclusivity to hundreds of

American schools, benefiting many schools with needed monies, and providing PepsiCo a direct

link to American teenagers. While Coca- Cola has adopted a similar method of obtaining

exclusive selling power, PepsiCo has followed up with various aggressive advertising campaigns

using popular American teen icons to promote Pepsi products.

1.5 MARKET SEGMENTS

Pepsi Co aims to attract different groups of consumers with difference types of products. Pepsi

targets the young people since before until now because most of the teenagers and kids love

sweetener beverages. In 1960, Young and adults become the target consumers and Pepsi's

advertising keeps pace with "Now it's Pepsi, for those who think young".

It means that you divide the target market in to different groups. Market consists of buyers and

buyers differ in one or more ways. They may differ in wants, resources, locations and buying

practices. Through market segmentation companies divide large, heterogeneous markets into

smaller segments that can be reached more efficiently and effectively with products and services

that match their unique needs.

Segmentation is done on basis of the previously mentioned external factors and the following:

Behavioral Base

It is how people perceive a specific product, in short psychological analysis of a

product. Pepsi all over the world is recognized as a quality drink and therefore

people drink it without any hesitation whenever they are thirsty or otherwise. So

marketers of Pepsi have made it a drink for all people and for diabetic people they

introduced diet Pepsi.

Cognitive Base

It pushes and pulls the consumer. If the outlook of Pepsi bottle is desirable and it

attracts the consumer, he will buy it even if he isn’t thirsty.

1.6 ORGANIZATION’S COMPETITORS

Pepsi Corporation’s direct competitor is Coca-Cola and it has the highest market share in cola

industry after Pepsi. Coca cola is also a multinational company and well known brand. So there

is cutthroat competition between these two companies. The Pepsi also faces competition from the

local companies which cheaper than Pepsi so they have price competition in the market. The non

soft drink competitors are tea, coffee, energy drinks, water, sports drinks, milk etc which are all

consumed on beverages occasions. Pepsi aims to gain greater share of these occasions.

1.7 CURRENT POSITION IN THE MARKET

Pepsi-Cola ranked as the second -best selling soft drink in American supermarkets in 2000. A

consistent runner-up to Coca-Cola Classic, Pepsi- Cola was joined by three other PepsiCo

products in the year 2000 rankings – Mountain Dew, Diet Pepsi and Caffeine-Free Diet Pepsi.

Pepsi Coranked second in American CSD market share to the Coca-Cola Company, holding

31.4% during the same year. Coca-Cola Classic outsold all soft drinks in America during the

year 2000, netting over USD$ 2 Billion at the cash register. The Coca-Cola Company maintains

the CSD market as its primary line of business. With subsidiaries located throughout the globe,

Coca-Cola is easily able to dominate the Global CSD market.

In the year 2000, Coca-Cola generated only 29% of its operating income in North America,

representative of its large volume of international sales.4 inversely; PepsiCo maintains lines of

business in both the CSD market and the snack foods market. According to the Beverage

Marketing Corporation (BMC), Coca-Cola has held command of over half of the world's CSD

market since 1998. On abrand-by-brand scale, Coca-Cola took five of the top seven spots

globally in 1999, with standard-bearer Coca-Cola holding a 28.6% share of global CSD volume.

Pepsi-Cola was in second place with a 10.8% share, while PepsiCo's Mountain Dew placed sixth

in terms of global Volume.

2. SWOT ANALYSIS

SWOT Analysis, which is based on thorough review of the business (corporation, product

category competition, customers and products), identities and evaluates the internal strengths and

weakness of the companies well as its external threats and opportunities. The marketing mix is

driven by the results of the SWOT analysis.

STRENGTH

Demand of Pepsi is more than its competitors.

Company has a very established name and a good reputation.

Pepsi has large market share than its competitors.

As the target customers of Pepsi is young generation, so Pepsi has more

brand loyal customers.

Most of the customers are satisfied with the price of the Pepsi.

Pepsi is an international company and it has a very strong position

internationally.

The environment of factory is very good and attractive.

Pepsi spends a lot of budget on its advertising.

Pepsi has a very vast distribution channel and it is easily available

everywhere.

Employees are also motivated.

Pepsi offers many discount schemes for customers time to time.

Pepsi Cola is sponsoring sports, musical concerts, walks.

The location of the Pepsi plant is utilized that all major markets of Lahore

are within the reach of the Pepsi plant within 30-45 minutes.

WEAKNESSES

Pepsi does not offer any sort of incentive or discount to its retailers.

Pepsi target only young customers in their promotions.

Crown of the disposable bottle is not good.

Demand of disposal bottle is declining.

Pepsi tin pack is not available in far off rural areas.

Pepsi is not considering many potential outlets like hotels, college

canteens etc.

OPPORTUNITIES

Company may start entering rural areas also.

The company may also diversify its business in some other potential

business.

Increased interest of people in musical groups, cultural shows and sports

has provided an opportunity for Pepsi to increase its sales through them.

THREATS

The main competitor of the company is the Coca Cola.

At the international level, Pepsi has a very strong competition with Coke.

Coke has started its advertisements more effectively to increase their

demand and it is a very strong threat for Pepsi.

Cola drinks are not good for the health so the awareness level of the

people is in creasing which is a big threat to the company.

2.1 INTERNAL ENVIRONMENT ANALYSIS

Pepsi main focus is the consumers which are the end users. Pepsi has to make its marketing

strategies keeping in view the consumer buying behavior. To forecast the behavior of the

consumer is a business problem. Physical aspect of the consumer can be satisfied but it is

difficult to satisfy the consumer psychologically. Consumer buying behavior is affected by

certain factors like Cultural factors, Social factors, Personal factors and Psychological factors. So

the producer should keep these factors in Mind while promoting their product so that they can

acquire the customer and increase their market share.

Suppliers form an important link in the company’s overall customer value delivery system. They

provide the resources needed by the company to produce its goods and services. PepsiCo

International provides raw materials to Pepsi franchises in Pakistan. Supplier problems can

seriously affect marketing. Marketing managers must watch supply availability i.e. supply

shortages or delays, labor strikes and other events can cost sales in the short run and damage

customer satisfaction in the long run. The company should monitor the price trends of their key

inputs. Rising supply costs may force price increases that can harm the company’s sales volume.

2.2 EXTERNAL ENVIRONMENT ANALYSIS

The environment continues to change rapidly. By carefully studying the environment, marketers

can adapt their strategies to meet new marketplace challenges and opportunities.

Some of the external environmental factors that affect the marketing trend of the company are as

follows:

2.2.1 Demographic Factors:

Age

The requirements of different age groups are different. Pepsi should target that

age group that consumes it the most and make promotional strategies according to

their behavior. So their main target is the young generation.

Education

A company has to make promotional strategies keeping in view the customer

level. If the percentage of education is high in a country then through

advertisements people can be made well aware of their product and can convey

their message easily. Promotion and education has a direct relationship.

Population Distribution

Population distribution means how much population lives in areas and poor areas.

Pepsi is focusing on advanced areas as people there are more inclined towards

such beverage.

Population Density

It means number of people in one square km per area. China and India has the

largest population density

2.2.2 ECONOMIC FACTORS:

Income and Income per Capita

If the income level or per capita income of the people increases, it will have a

positive effect on the consumption of Pepsi.

 Inflation

If the country faces inflationary trend in the market, the price of the Pepsi will

ultimately increase which will lower its demand.

 Consumption Behavior

Due to demonstration effect the people are more inclined towards consumption

than saving. So the people of Pakistan spent heavily on food items. Hence Pepsi

has a good market share in the present circumstances.

Income Distribution

It means how much is in the hands of rich and poor class. In Pakistan 10% rich

people posses 93% of wealth and 90% people posses 7% of wealth. If there is

balanced distribution of income in the country, the consumption of the people will

increase hence increasing the sales of beverages as well.

Employment Opportunities

As employment opportunities increase the living standard of the people increase

and the people consume more.

Aggregate Demand

In case of Pepsi, aggregate demand of the product increases in the season of

summer as the hot weather makes the consumers want to drink more.

Aggregate Supply

In summer season to cope up with the increasing demand they have to increase

the aggregate supply of their product.

Economic Policies

Some of the economic policies which can affect the market of Pepsi are discussed

below:

2.2.3 TECHNOLOGICAL FACTORS:

Research and Development

Through research and development quality of the product can be improved or

better techniques or machinery can be developed which can increase the

production. When technology is advance the supply of the product increase hence

the company experiences growth in their business.

2.2.4 POLITICAL AND LEGAL FACTORS:

Political Stability:

Whenever the government is considered to be stable, the business will flourish. If

there is political stability in the country the policies and strategies made by Pepsi

can be consistent to be implemented. Foreign companies are also keen to invest in

those countries which are politically stable where they have no fear of decline in

their market share or shut down due to sudden change of government.

Mixed Economy

In mixed economy government and private sector both plays their role in

developing the economy of the country. Investment by foreign companies like

Pepsi is more likely to flourish in mixed economy.

Laws Formulation

Government has given copy rights to Pepsi so that another company cannot sell

their product by the name of Pepsi. The countries where laws are formulated, the

strategies and activities of the company are different.

Social Responsibility

Pepsi’s social responsibility is to provide its customers with clean and hygienic

product so to do this they have increased the use of disposable bottles.

3. MARKETING OBJECTIVES AND MARKETING STRATEGIES

3.1 MARKETING GOALS & OBJECTIVES

The ultimate objective and goal of an organization marketing strategy is to attract customers and

to create demand. Our objective is to deliver sustained growth, through empowered people,

acting with responsibility and building trust. Here’s what this means:

Sustained Growth

It is fundamental to motivating and measuring our success. Our quest for sustained growth

stimulates innovation, places a value on results, and helps us understand whether today’s actions

will contribute to our future. It is about growth of people and company performance. It

prioritizes making a difference and getting things done.

Empowered People

It means we have the freedom to act and think in ways that we feel will get the job done, while

being consistent with the processes that ensure proper governance and being mindful of the rest

of the company’s needs.

Responsibility and Trust

Responsibility & trust form the foundation for healthy growth. It’s about earning the confidence

that other people place in us as individuals and as a company. Our responsibility means we take

personal and corporate ownership for all we do, to be good stewards of the resources entrusted to

us. We build trust between ourselves and others by walking the talk and being committed to

succeeding together.

3.2 TARGET MARKETS

pepsiCo's target market can be people of all ages because of their wide range of products: they

include gatorade, lays, tropicana, and quacker, and their products are classified under many

catagories. Their target market is very diverse.

3.3 PRODUCT STRATEGIES

The soft drinks market enjoys dynamic growth in both volume and value terms. Carbonated

drinks have become part of the culture and multinational companies have maintained standards

over the years to provide the nation with high-quality drinks. Poor areas have driven sales of

carbonated drinks to new heights as more percent of the population resides in rural areas and

young consumers are more attracted to advertising. Pepsi is the most popular and leader brand in

the market and is consumed by children and adults alike. Pepsi is a responsible corporate brand

and have contributed a lot to the economy.

In marketing, a product is anything that can be offered to a market that might satisfy a want or

need. Until unless the product of the company is not strong in the market it can not survive in the

longer run.

Pepsi has a product line comprised up of carbohydrate drinks, Lays and many other products in

Pakistan. Pepsi’s product line satisfies consumer needs because Pepsi produces different types of

soft drinks for different consumers.

The most popular product of Pepsi is Pepsi Cola. Due to its good taste Pepsi is a well-known

product. Thus Pepsi Cola satisfies the consumer’s needs efficiently by launching a desired

product.

　3.4 PRICING STRATEGIES

Pepsi has intense competition with the coca cola the largest soft drink company world wide. So

its pricing can’t exceed too much nor decrease to much as compared to the price of coca cola. If

price of the Pepsi exceed too much from the coke people will shift to the coca cola and on the

other hand if the price of Pepsi decreases people might get the impression that quality of the

Pepsi is also low.

3.5 PROMOTION STRATEGIES

This includes ad campaigns, sales promotions, new packages and brand launches. Events this

includes sponsoring events at national, state, district and city level e.g. sports tournaments, rock

shows Musical Nights, Dance competitions, School and college annual festivals etc.

Marketing department at the Unit Office is headed by a Marketing Manager and has three

Marketing Executives.

Advertising & Publicity

Pepsi Co. is one of the biggest and spenders in India. It is also one of the biggest global ad

spenders. It has long a list of endorsers from pop stars. Pepsi Co. is known for its board cast as

well as non board cast advertising i.e. hoarding, banners, posters stickers, specialties, hangar,

dealer board, glow signboards, wall painting and news paper. The expenses on this type of

advertising are made at territory or unit level.

3.6 DISTRIBUTION STRATEGIES

There are two marketing channels that involve in the transfer of product from the producer to the

consumer. The intermediaries involved in the transfer are distributors and retailers.

DISTRIBUTORS

Distributors are appointed agents of the company who make orders to the company by paying in

advance through drafts, stock the products in their godowns and supply them to outlets through

their fleet of delivery was and a team of salesmen and drivers. They are allowed to sell to

company's product to the retailers in a specified area. The company divides this area into routes.

Each route is covered by one unit i.e. one de livery van, one salesman one driver, one helper etc.

These units and godown are their main investment. Distributors have to invest in empty bottles

and crates too, so t hat they can maintain a specified quantity of reserve stock and facilitate the

quick rotation of glass crates.

RETAILERS

The sale of particular soft drinks depends a lot entirely on retailer’s wish. Like if he does not

keep Aquafina and if his shop is at the prime location then certainly the customer with turn

towards other cola drinks like Bisleri, Bailley, Kinley etc. This all goes to prove that retailer is

king. So retailers require special focus from the company. Pepsi Co. helps the retailers to serve

its customer better by providing good margin to them for storing its product using merchandising

to improve in-store product display, installing cooling equipment in outlets to make the product

ready to drink and offering different promotion schemes to them time to time to push different

brands,

3.7 RECOMMENDATIONS FOR CHANGE

The marketing world is full of surprises. Who could imagine that Coca Cola would be overtaken

by Pepsi? If Coke could be overrun by Pepsi, it would be no wonder that Pepsi might be

overtaken by some other beverage. The need then is to combine quality with ingenuity. Along

with that, the reputation of the company has to be kept robust.

Today we live in a fast moving world where novelty and newness count a lot. One cannot rest on

one’s laurels. Fresh efforts, newness of approach must remain the cardinal principles of a well

orchestrated marketing strategy and the campaign must be relentless. A continuous bombardment

in advertisement would convince the clients that Pepsi is a part of their lives. In order to live with

style, Pepsi ought to be an essential ingredient of one’s life.

The Pepsi is at its maturity stage and the sales of company are not growing very rapidly.

Company is doing a lot of promotional activities to let the product remain in the market. It holds

a large share of the market and whenever the sales state declining, the company can improve it

by different promotional activities.

Marketers of Pepsi can try to improve sales by improving one or more marketing mix elements.

They can cut prices to attract new users and competitor’s customers. They can also launch a

better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Pepsi

is at its maturity stage.

4. TACTICAL PROGRAMME

However Pepsi launch its several variants with a minor difference on frequent interval of

time. There have been many Pepsi variants produced over the years since 1903, including Diet

Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi

Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil), Pepsi Next (available in

Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, Pepsi Ice Cucumber and

Pepsi White in Japan.

To give a true and positive picture of the product is the best positioning. The company should

promote its good points or comparative advantage which it has over its competitors. Logo is used

for image differentiation. Logo is what establishes a brand name in the consumer mind. It is the

brands identification, signature and image. Pepsi has kept on changing its logo from time to time.

Big firms or companies say that everyone is their buyer whether they belong to rural or urban

area, big or small country, rich or poor, adults and small children etc. Pepsi is mostly used by the

young generation but it claims that it is moving towards mass marketing.

5. BUDGET AND IMPLIMENTATIONS

PepsiCo spends even more on advertising. Its total domestic advertising budget was $1.31 billion

in 1999 -- $165 million for Pepsi beverages, $37.7 million for Mountain Dew"

Requirement for success analysis:

C.M. per bottle = 382,159.36 / 328,000 = $1.17

Break-even

: (113,453.56+25,676.33) / 1.17 = 118,914 (bottles)

Market share

: 118,914 / 1,000,000 = 11.9%

In one year, if Coca-cola can sell 118,914 bottles of Bubble Buzz, or in other words achieve

11.9% of the functional drink market share, it will break even. After this point, every bottle Coca

cola sells will generate average $1.17 towards the profits. The potential profits can up to

$1,030,770.00

based on our target market.

Expected Costs:

COGS: $597,124 * 36% = $214,964.64O/H: $597,124* 38% = $226,907.12

Expected Revenues

(total) = $597,124(refer to Appendix J)

6. MONITORING AND CONTROL

Monitoring and controlling allows the business to check for variance in the budget and actual.

This is important because it allows Pepsi to take the necessary actions to meet the marketing

objectives. There are three tools Pepsi should use to monitor the marketing plan. They are the

following.

5.1 SALES ANALYSIS.

The sales analysis breakdown total business sales by market segments to identify strengths and

weaknesses in the different areas of the sales. Sellers of Pepsi products vary from major retail

super markets to small corner stores. This gives the product maximum exposure to customers at

their convenience.

5.2 MARKET SHARE ANALYSIS

Market share analysis compares Pepsi’s business sales performance with that of its competitors.

Pepsi looks to increase its market share by over 60%. With the change Pepsi is currently

undergoing. They aim to regain an iron first control of the market.