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sophia f

on 3 September 2013

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Transcript of PEPSI

Pepsico Expand Globally
Issues Pepsi has Faced
Pepsi has always been placed under comparison with Coco-cola. Both being very successful Coco-Cola is actually more popular than pepsi. For Example in America Coke and Dunkins Brands group recently announced a multi year agreement to switch from Pepsi and hire Coco cola product instead exclusively in more than 9400 Dunkin donuts and Baskin Robbin outlets across the U.S. Starwood hotels also switched to cola from Pepsi last year. Pepsi has been losing dominance and coco cola has been able to conquer more marketing. Coco cola is in the lead as the #1 TNC worldwide, coco cola has been ahead in international sales leaving pepsi's growths harder. Since coco cola began earlier (1886) it had a better opportunity to expand globally it was selling a million gallons per year before pepsi was even made. This has been an issue for pepsi as having competition leads to difficulty in marketing investors as they start to compare and most likely choose the beverage that they know is more popular and more likely to be sold. it is huge competition between pepsi and coco cola because they are very similar beverages. Coco cola had sold $28 Billion worth of soda whilst Pepsi only sold $12 Billion. Having to compare in our global market to be able to invest is a issue to pepsi as it decreases sales when their competitors are investing in more countries e.g. coco cola has been investing in the Asia region this has lead to such a increase in sales as it is a very wide region that is known for its sales in marketing beverages. What is also a concern for pepsi is the competition it has when campaigning their beverage because they now have to compete with coke to see who has the best marketing campaign all these things are incooperated with less profit which leads to many issues

Pepsi was first introduced as "Brad's Drink in 1898. The drink was invented by Caleb Bradham who was a pharmacist and drugstore owner in New Bern North Carolina. His idea of the formation of this drink came from a general experimentation that included a combination of of spices, juices, and syrups trying to create a refreshing new drink to serve his customers. He succeeded beyond all expectations because he invented the beverage known around the world as Pepsi-Cola. Caleb Brad ham had exactly known what would bring back his customers to his pharmacy.His idea of turning it into a gathering place was exactly what he thought would do the trick.He did so by creating his own special beverage, a soft drink. His creation, a unique mixture of kola nut extract, vanilla and rare oils, became so popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow, convincing him that he should form a company to market the new beverage.

In 1902 Caleb Bradham had launched his new company called the Pepsi-cola in the back room of his pharmacy.He had also applied to the U.S patent office for a trademark. At first he had mixed the syrup himself and sold it through soda fountains but he had then realised that it would be a much better way to be recognised would be if he sold it in a bottle that would let people drink it anywhere. By 1903 Pepsi-cola was officially registered with the U.S. Patent office. Caleb had sold around 7, 968 gallons of syrup using the theme line "Exhilarating, Invigorating, Aids Digestion."

BY 1903 Pepsi was officially registered with the U.S patent office. Caleb Bradham had outgrown the back room of his drug store, and moved his young company to temporary rented quarters for almost a year before finally settling into its permanent home, known as Bishops factory, in New Bern. Since then Pepsi has been such a success its saled have sprea global in almost every country in the world Pepsi has turned into a drink that is well known by almost everyone.
Pepsi co is not just another vast range of shelf Choices, it is a brand that had made a decision years ago to step into the global arena. Making a decision of expanding globally would make this American cooperation into a multinational corporation. The expansion of PepsiCo has lead to a manufacturing of beverages and snack foods across 200 countries. PepsiCo’s global expansion continues to establish dominance even through the competition between Pepsi and coco cola, Pepsi has still been able to take some part of dominance.
By 2009, PepsiCo had infused $700 million into India and plans another 500 million over the next 3 years. Pepsi had began to work on 2 major deals to expand its global footing. One with Tingyi holding (a prominent Chinese beverage company) and the other with privately held Grupo Mabel, the 2nd Largest maker of cookies in Latin America. In recognition of competing with coco-cola in China (since coke has dominated the Asian Market) Pepsi had traded its bottling operation in china for a position in Tingyi Holding is beverage business. Pepsi’s bottling business in china had been incurring losses over the past 3 years as the cost of raw materials become competition with coca cola as coke contains 17% market share in Chine almost 3 times that of Pepsi.
Pepso had also began its alliance with Tingyi (Tingyi’s beverage subsidiary) which will become Pepsi’s franchise bottler in China this lead to a 5% equity interest in Tingui-Ashai and plans on increasing it 20% by 2015, as china will become the largest liquid refreshment market in the world.

To produce a success and a closing gap with coco cola Pepsi would need to Aquire Marilan Arimentos ( a Brazilian cookie manufacturer) and if successful Pepsi would be head to head with Kraft foods and close to beating coco-cola. Pepsi’s global footprint would increase significantly everywhere especially in grocery stores.
All these footprints would be a significant boost to Pepsi and would not only provide them with profits and a brand that Is known for worldwide but will also conquer all competitions especially against coco cola
“Any growth we achieve in one area takes from another and where we compete”

All the investments in Asia and Europe have created success but in America also have been switching up of loyalties. Coco-cola trying to invest in American companies and stores gave pepsi the need to now become the exclusive drinks at Pap Johns (3000 outlets).
Pepsi co’s recent moves into the global market will increase solid growth and a increase in investors and continues expansion.
Achieving a expansion globally will make profits to the pepsico brands and will make it a expanding market which will increase sales meaning more profit and success and diversification in their product line.
Pepsico’s strategies will also help with competitiveness and many TNC’s expand globally for defensive reasons to protect themselves from competitors or potential competition

Pepsco is well known for its main collection of Drinks of all kind and snacks, but is lately been expanding and people have recognised the flavours of Pepsico through a variety of its products. Pepsico is a very successful brand that has had an effective marketing especially due to the type of products being sold. For Example Pepsi being a refreshing drink that is affordable makes it an effective way of being sold and through the successful campaigns that have been made throughout the past years this has lead to an effective way of marketing this drink worldwide.Pepi's products are very successful because they are product that people can afford and are products that people like the Pepsico products collection has a huge variety that also increases consumers and sales in food stores in the global market.
How Pepsi has changed through how its run/organised
Pepsi first began as a small little beverage sold at the back of a pharmacy. It later developed when caleb Bradham decided to start his own store instead.He had created a lovely store for locals to come and have some Pepsi-cola. During the Great Depression was mainly when pepsi had actually gained popularity following the introduction in 1936 of a 12-ounce bottle.Through campaigns and advertisements this was Pepsi's main way of increasing sales and customers. Since beginning as a little beverage sold at a pharmacy to turning into a beverage that is sold in almost every country. This is a huge successful difference in how this TNC has changed since it first began.Pepsi is now run differently it is run with a headquarter in every country and it is serving with companies globally. Just imagine how many stores around the world sell pepsi. Pepsi has changed extremely with the way it is run it has turned into a global market that is expected to sell its products worldwide instead of in a little town in New York. Pepsi has managed to keep the same taste of the beverage but has changed the organization of it products marketing such as logos and bottles. All these changes have been made to suit and adjust to the certain time. Production had expanded and entered different industries giving it that rapid growth in time. Since they where able to gain profits due to sales they where now able to expand Pepsi having huge changes on the way it is run. Pepsi has also expanded its product from beginning with one Pepsi flavour to now having a huge variety e.g. pepsi Zero this has lead to needed to expand their product range and expand Pepsi overall.
Issue No.1
Issue No.2
Another issue Pepsi faced was that some pepsi products where found to have tracing of a possible cancer causing chemical. This lead to a whole change and became an issue. pepsi had to find a way to replace the chemical and use a different one. Through tests it was proven that in pepsi's caramel colouring it contained worrisome level of carcinogen. In March both coco cola and pepsi both said they would adjust their formula nationally after California had passed a law mandating drinks contains a certain level of carcinogens come with a cancer warning label. This lead to changes in the formula and issues to pepsi; the centre for environmental health had found through tests that pepsi products outside of California are positive with the chemical. Having been using the carcinogen this was a risk and had issues for pepsi when deciding what to replace the caramel with. There where also at high risks of being sued if products had been recalled by consumers. Many products through pepsi co have been recalled in the past and it is important for pepsico to be aware as it is a multinational cooperation. For example pepsico has once had recalls on Tropicana drinks they where recalled due to containing contaminated water. This kids orange juicce had 277 multipacks of tropicana with contaminated water they consisted of 'microbiological contamination" This was tested and found by foods stands agency. Pepsi and Pepsico have been having issues of product recalls which is a huge issue and can affect us as humans especially with chemicals entering your body.
Pepsi's Image
Pepsi Variess from all around the world its image in different countries is all different it is seen different and presented differently to suit different countries. In Australia Pepsi is seen as a very cooling and refreshing beverage that people can afford. But pepsi in Australia is compared to coco cola all the time many people have different opinions to which drink is better especially due to similar taste but different in some ways. Pepsi is known as that blue can that is found in almost all food stores its a drink that almost everybody likes and it is a drink that everybody is aware of. But pepsi is seen differently in other countries for example the middle east they see Pepsi as their no. 1 drink. pepsi to them is much better than Coco cola mainly due to personal and religious beliefs about the drinks originality. Pepsi's marketing campaign also varies from country to country in many countries like india and pakistan as they mainly use glass bottles whilst in Australia we use cans it is mainly depending on what sources are cheaper in each country and what suits their needs. Also campaigns vary from country to country for example during the Month of Ramadan in the Middle east they campaigned a commercial of a family feasting at Ramadan whilst in Australia they would of not campaigned that they would of most likely campaigned something similar to America since we have similar traditions and both recognize celebrities from each country. Different countries campaign different things to relate to they certain time of year like in Australia during Christmas a campaign with a family feasting at Christmas might be campaigned to suit the Australia
Ramadan Ad
American/Australian Ad
Glass bottle (Pakistan)
Sofia Vergara
New Pepsi Product
How they overcame issues
Issue 1:
They started investing with more companies and brands globally and began campaigning new advertisements with popular celebrities.
Issue 2:
They had replaced the caramel and had made sure they followed the new law. For product recalls they replaced the product and began stricter rules on health concerns when it came to their food and beverages
How Pepsi has evolved
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