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Pepsi-cola was founded in the

late 1890’s when a young

pharmacist names Caleb

Bradham formulated the

drink in the back of his

store and soon began selling it his soda shop. It was called Brad’s drink.

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• On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced Steve Reinemund as chief executive officer.

• Nooyi remains the corporation's president, and became Chairman of the Board in May 2007.

• Mike White is the President of Pepsi-Co International Division.

• In December 2005, PepsiCo surpassed Coca-Cola Company in market value for the first time in 112 years since both companies began to compete.

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Political Situation In India

Political Environment in India• Key Issues

– India seen as unfriendly to foreign investors for many years

– Due to India’s suspicion of foreign business stemming from past history, Pepsi received alien status upon entry to the Indian market.

– Bureaucracy and regulation to foreign direct investment.

• Low Demand for Carbonated Drinks– Average of 3 servings a year/person in 1989– Average of 1404 servings a year/person in U.S. in 1989

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• Indian Laws• Unlawful to market under their Western

name in India• Pepsi became “Lehar Pepsi”• Coca-Cola merged with Parle and became

“Coca-Cola India”

Political Environment in India

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• Main Barrier was political and legal environment.

• The corporation was required to follow many laws, which delayed their business.

•Could these problems have been forecasted prior to market entry?

– Probably not because of changing and inconsistent government.

• The Liberalization of India’s Government in 1991:• “New Industrial Policy”• Trade rules & regulations simplified• Foreign investment increased

• After its existence from 1958-1977, Pepsi re-enters in 1986.

Timing of Market Entry

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Timing of Market Entry

• Pepsi (early entry-1986)– Advantages

• Entered the market Before Coca-Cola and was able to gain a foothold in the market while it was still developing.

• Gained 26% market share by 1993.– Disadvantages

• Were forced to change their name to Lehar Pepsi

• Govt. limited their soft drink sales to less than 25% of total sales

• Struggled to fight off local competition

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Responses to India’s Enormity

• Introduced returnable glass bottles to cut the cost.

• Heavy promotion during Navratri festival by giving out a kilo basmati rice on refill of every case.

• Advertisement sponsered by cricket celebrities.

• Took the help of music directors to promote their project.

• Introduction of bottled water.

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Pepsi’s innovations, research and development proved very attractive.

Pepsi’s “Glocalization Strategies”

• What is “Glocalization”?– Global + Localization = Glocalization– By taking a product global, a firm will

have more success if they adapt it specifically to the location and culture that they are trying to market it in.

– Pepsi have successfully implemented glocalization.

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Pepsi’s Glocalization

• Formed joint venture when entering with two local partners, Voltas and Punjab Agro, forming “Pepsi Foods Ltd”.

• In 1990, changed the name to “Lehar Pepsi” to conform with foreign collaboration rules.

• In keeping with local tastes, Pepsi launched its

Lehar 7UP in the clear lemon category.

• Tried to adapt with the local taste of consumers

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Coke or Pepsi in the Long Run?

• Pepsi– Better marketing and

advertising strategies– More widely accepted– More market share

• Coke– Government conflicts– Trailing Pepsi in market

share

• Pepsi will be fare better in the long run

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Pepsi’s Defensive Strategies

• Claimed that the products had been

tampered with.• Openly claimed that it would pursue legal

action against false claims.• The president made appearances in front of

media, gave interviews saying the bottling line was secure.

• Brought video cameras to show the bottling

process.

• Communicated with the public across

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SUGGESTIONS

• Should have focused more on education of its products.

• Spent very small amounts on 7UP marketing campaigns in India due to its relatively low market size (4.5%).

• Pump of advertisement expenses more freely and strategically for higher return.

• Should have been ready for a health scare after 1988 when it was discovered that BVO, an essential ingredient in locally produced soft drinks, was carcinogenic.

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Pepsi’s Lessons Learned

• Beneficial to keep with local tastes

• Beneficial to pay attention to market trends

• Celebrity appeal makes for exceptional advertising

• It pays to keep up with emerging trends in the market

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Pepsi Today• 4th largest consumer products company in India.

• Provides direct and indirect employment to 150,000 people in India.

• Has more than 36 bottling plants including 13 Company & 23 Franchise owned ones.

• Launch of Pepsi Max, a sugar-less cola brand with a stronger taste. (for age group of 25-35 years as per 2nd Aug,2010)

• PepsiCo CSR: Reduces Per Unit Energy Use in Beverage Plants by 16% (10th Aug,2010)

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CSR:Corporate Social Responsibilty

Swot Analysis• Strengths:

Its innovations, reputation, brands, market share, strong distribution.

• Weaknesses:

-Not all PepsiCo products bear the company name.-Today far away from leader Coca-cola in the international market - demand.

• Opportunities:

-Focus on most important customer trend - "Convenience".-There are increasing trend toward healthy foods. -Focus more on non-carbonated drinks due to its fast growing part in industry.

• Threats:

-Competes with Coca-Cola and Kraft foods and many more.

-Pepsi is blamed for pesticide residues in their products in one of their most promising emerging market e.g. in India.-People facing obesity problems

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Conclusion

• Pepsi faced various legal and political

hurdles in India

• It adapted changes quickly

• It took up glocalisation as a new weapon

• Created much better image than coke

• It targeted youth of the nation• Today holding a market share of upto 45%

and the HEARTS OF INDIAN PEOPLE

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C r e d i ts

! Youngistaani Arti Wadhwa

! Youngistaani Amruta Dalvi

! Youngistaani Shweta Gulabani

! Youngistaani Shweta Sansare

! Youngistaani Kaushal Ailsinghani

! Youngistaani Pratham Barot

! Youngistaani Sagar Purswani

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Thank

You