Pepsi Marketing Mix [Assignment]

            Marketing Mix of Pepsi

Pepsi Company is one of the world's largest food and beverage companies, with 2007 annual revenues of more than $39 billion. The company employs approximately 185,000 people worldwide, and its products are sold in approximately 200 countries through four P's of the Marketing Mix which are following.

1. Product

2. Promotion

3. Place

4. Price

1. Pepsi Products

Variety

Quality

Pepsi follows one quality standard across the globe.

Pepsi has a long-standing commitment to protecting the consumers whose trust and confidence in its products is the bedrock of its success. In order to ensure that consumers stay informed about the global quality of all Pepsi products sold in World, Pepsi products carry a quality assurance seal on them. The ‘One Quality Worldwide’ assurance seal appears on the entire range of Pepsi’s beverages.

What goes into a soft drink?

​Composition of a Sugar-containing Soft Drink

·       Water: 86-90%

·       Sugar: 10-13%

·       CO2: 0.3-0.7%

·       Concentrate: 0.2-0.4%

Water Quality: Incoming Water
Water accounts for the bulk of all beverages including colas. In other words, the water used in PepsiCo soft drinks must be as safe as possible for human consumption.

How do Pepsi ensure this?

·       Every water source used for PepsiCo beverages must first be analytically qualified, which includes using accredited laboratories to test for at least 100 parameters

·       At every plant, Pepsi require the incoming water to be purified even further, using a variety of processes. At a minimum, every plant in world employs a dual back-to-back carbon filter.

Standards for flavors and other ingredients

·       Pepsi flavor concentrates, which make up less than 1% of Pepsi finished beverages, also are diligently controlled

·       Each supplier must submit written verification that each lot of ingredient shipped to Pepsi facilities meets Pepsi strict specifications

·       In addition to water, sugar, and flavor testing, other ingredients, including non agricultural have been analyzed by outside laboratories

·       All ingredients including flavors, emulsifiers, preservatives, colors, ​acidulants, anti-oxidants and low-calorie sweeteners are food grade and have been approved by global food standards like the JECFA/CODEX, USFDA and EU Scientific Committee for Foods. All ingredients used also conform to standards laid out by the Prevention of Food Adulteration Act under the health ministry

Sugar

·       Sugar accounts for 10 to 13% of a soft drink

·       Sugar must meet high standards of quality, which are uniform for all of Pepsi beverage plants across the globe. All of Pepsi sugar manufacturers must undergo the same supplier qualification process

·       To add to Pepsi already high quality standards, all of Pepsi plants in World further purify sugar with hot activated carbon and fine filtration.

Quality of sugar

At Pepsi, sugar is bought only from approved sugar mills after a rigorous supplier qualification process described below:

Self Assessment	Perform self-assessment tool to evaluate current sugar situation and knowledge base
Paper Audit	·       Provide supplier with Pepsi sugar specification ·       Get requests into from supplier: o        Type of sugar o        Manufacturing flow chart o        Supplier's Quality process & checkpoints ·       Supplier submits information ·       Quality and Procurement review supplier data & if complete, proceed to next stage
Sample Submission	·       Supplier to send test sample to independent outside lab ·       Lab informs supplier of results ·       Supplier shares data with Pepsi ·       Review data & decide whether to proceed to the next stage
​ On-site Audit	·       Audit supplier's plant ·       Review their quality procedures ·       Determine ability to supply COC/COA ·       Ensure that the supplier is capable & willing to consistently comply with the Pepsi sugar specifications
Conditional Approval	·       "Conditional" approval ·       Supplier can being supplying from approved refinery ·       Pepsi or outside lab tests first 10 deliveries against COA ·       Supplier submits sample from beginning, middle and end of session to outside lab ·       Pepsi/supplier share results of analyses
Full Approval	" Final approval status granted after supplier has met COA requirements on 10 separate lots of sugar and has submitted sample from beginning, middle and end of production session to an outside lab and all have been approved
Maintain Approved Status	·       Supplier sends sample from beginning, middle and end of production season to outside lab for complete analysis ·       Lab informs supplier of results ·       If sample fails, Pepsi & Supplier meet to develop corrective action plan ·       If problem is not solved, revocation of "Approval" & shipments are halted

After sugar is received in the beverage plant, it is subjected to further treatment to reduce impurities, colour, odour, and microbes to achieve Pepsi's Global Specifications. Note, however, that white milled sugar has no standard for pesticide residue as it is a processed agri-product.

Carbon Dioxide ·       The CO2 in each bottle of Pepsi surpasses that recognised for medical applications. ·       Pepsi achieve this by subjecting each supplier to a rigorous supplier qualification process, which includes a complete audit of refineries and testing from approved international laboratories ·       Further, each batch carries certificates of analysis and compliance ·       Once the CO2 reaches a bottling plant, it undergoes further purification

​Summary ·       Pepsi products are safe ·       Pepsi analyze water, sugar and flavorings in accordance with the best international guidelines ·       Pepsi products comply with most stringent international regulations, including the new regulations for carbonated soft. Design

Brand Name

Packaging

2. 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 company’s promotional efforts are the only controllable means to create awareness among public 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 advertisements 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 like “Pepsify Karogey?” to promote its products.

​Through newspapers like Jung and Dawn, PepsiCo has advertised a wide range of products it offers to its customers. And also through Posters a message has been sent to a lot of people to be aware of the products which PepsiCo offers.

3. Pepsi Place 

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 exclusive, selective or intensive network of distribution, while selecting the appropriate dealers or wholesalers.

·       Direct distribution:

o        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 accounts and are very important in terms of competition.

o        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 of distributor’s capability:

·       Applicant must have 20 to 25 vehicles (depending on the area).

·       Applicant 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 distributor is done. Therefore Pepsi’s supply is low supply uncertainty. Some of its supply source capabilities are:

·       Less breakdowns

·       High quality

·       Flexible supply capacity

·       Mature production process

4. Pepsi 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.

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 the targeted customers.

Sample List of Price

Regular Pepsi (250 ml) Rs. 15/-	Pepsi Can (300 ml) Rs. 25/-
Pepsi Disposable (500 ml) Rs. 25/-	Pepsi (1 Liter) Rs. 30/-
Pepsi (1.5 Liter) Rs. 50/-	Pepsi (2.25 Liter) Rs. 60/-