CASE 3

PEPSI COLA PAKISTAN

PREPARED BY:
Pankaj Jain (05)
Jigar Patel (16)
Mitul Patel (17)
Jignesh Soni (22)

PEPSICO INC.
In 1990
150 countries
Soft Drinks

: Pepsi Cola Company

: Pepsi Cola

International
Snack Foods
: Frito Lay Inc.
: PepsiCo Foods
International

Restaurants

: Pizza Hut
: Taco Bell
: KFC

COMPETITIVE ANALYSIS
In 1990, Soft Drink Market Share

 Coca-Cola focused solely on

beverages
PepsiCo had diversified
from the soft drink business
into other food-related lines
A very high-stakes struggle
for brand loyalty

PEPSI COLA PAKISTAN INC.(PCI)

Divided into 5 functional departments:
Franchising
Marketing
Soliciting companies (bottlers)
Sales & operations
Finance

MARKET & PRODUCTS

Soft drink business divided into 3 main areas
Concentrate producer PepsiCo, Coca-Cola
Bottlers
Retailers
Stages in marketing of carbonated drinks
PCI manufacture concentrate
Bottlers add carbonated water & sweetener and
then sold product through retail stores

 In 1991, the per capita consumption of soft drinks in

Pakistan was 12 eight-ounce bottles/year Lowest in
the world

Reason:
250 ml bottle price was PKR 4
1 liter bottle price was PKR 12
Average disposable personal income was
PKR 682
Average per year spending for soft drinks =12*225
ml (1 eight-ounce bottle=225ml bottle)*12/1000
= PKR 32.4
Disposable personal income was low

 PCIs line of products in Pakistan prior to 7Up acquisition:

Pepsi Cola(cola)
Mirinda (orange)
Teem (lemon-lime)
Coca-Colas line of products in Pakistan:
Coca-Cola (cola)
Fanta (orange)
Sprite (lemon-lime)

 Market segments:
On-premise
Restaurants, Cinemas, Snack bars,
Parks,
Airlines
Accounted for 85% of total Pakistani
soft
drinks market
Take-home
Accounted for 15% of total Pakistani
soft
drinks market

DISTRIBUTION
54000 small retail outlets sold soft drinks
Key Factors
Soft drinks were highly substitutable
Maintaining cold chain is important
PCI branded refrigerators was one way to
maintain cold chain & it encouraged retail
outlet loyalty

ADVERTISING &
PROMOTION
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

Trade promotion: point-of-purchase displays,

incentives to sales force, local events, social work,
government campaign-related programs
Consumer promotion: price-off discounts, free items
with purchase of products, collecting bottle caps to win

BOTTLERS
Pepsi Cola to expand distribution with low
investment began using Franchise System
Franchise systems main components:
Bottlers get exclusive rights to produce,
bottle, price, & sell the product in a
designated area.
10 years tenure with option to renew for
a period of 5 year

 Bottlers could distribute other beverages that

didnt compete with pepsi products
Bottlers didnt have to carry secondary
products of producer

Mustafas top 3 priorities

Acquiring 7-Up bottlers
7-Up bottlers feared that their brand could be
overshadowed and neglected by Pepsi
Cloudy Teem
Objective was to move clear Teem consumers to
7-Up or Cloudy Teem

 Brand Portfolio & Marketing Plan

Pepsis advertising & promotion budget
focused on maintaining market share
7-Ups advertising & promotion budget
focused on building market share
Mirindas advertising & promotion budget
focused on hold share strategy.

Thematic Advertising
Expenditures
(Rs in 000)

Promotional Advertising
Expenditure
(Rs in 000)