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Mountain Dew, Pepsi - Economics Presentation

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sophie king

on 26 June 2013

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Transcript of Mountain Dew, Pepsi - Economics Presentation

Mountain Dew,
PepsiCo

A journey from America
to across the world
Mountain Dew has also celebrated success
in other countries such as China, Russia, India, Pakistan, Gulf, the Philippines, Nigeria, Australia, South Korea and Romania.
Mountain dew is a soft drink owned and produced by PepsiCo. The original formula was invented in the 1940s in Marion, Knoxville Tennessee. The Mountain Dew rights were acquired in 1964 by PepsiCo, at which point distribution expanded across the USA.
Between the 1940 and 1980, there was just one variety of Mountain Dew, which was citrus-flavored and caffeinated. Diet Mountain Dew was introduced in 1988 followed by Mountain Dew Red which was introduced and discontinued in the same year. While Mountain Dew Red was short-lived, it represented the beginning of a long-term trend of Mountain Dew being produced in different flavor variations. In 2001, a cherry flavor called Code Red was made. This product line extension trend continued with expansion into specialty, limited time production, region-specific, and retailer-specific (Taco Bell, 7-Eleven) variations of Mountain Dew.
Production was first extended to the UK in 1996, though this initial debut was short-lived and phased out in 1998. The product returned to the UK under the name "Mountain Dew Energy" in 2010 and returned to the Republic of Ireland in Spring 2011.
As of 2009, Mountain Dew represented a 6.7 percent share of the overall carbonated soft drinks market in the U.S, accounting for eighty percent of citrus soft drinks sold within the U.S.
PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $60 billion and over 285,000 employees.
In the UK Mountain Dew has a very different marketing campaign than the one used by the rest of the world, using the slogan "Wild Colour Smooth Taste", a different logo and incredibly surreal TV ads could have only added to its demise. Why Pepsi didn't just use the already successful "Do the Dew" extreme sports angle is still a mystery.
PepsiCo. partnered with Britvic for the UK expansion. They now make, market and distribute the Pepsico brands in the UK.
According to the 2010 Britvic Soft Drinks Report, the Glucose and Stimulant drinks category was the fastest growing last year, up 7% to £567m in 2009. Top brands include Red Bull, Monster and Relentless, the latter two accounting for 58% of the growth in the category.
The brand was brought to the UK following a petition from Dew fans and is now worth £18.3m and is the winner of multiple industry and NPD awards in 2011.
In April, PepsiCo India revealed its latest campaign ‘Darr Ko Maro Dew’ for its popular drink, Mountain Dew. The ‘Darr Ko Maaro Dew’ campaign is all about shrinking your fears to overcome them and emerging victorious with a bold, daring and a can do attitude. Supported by a television commercial and the internationally popular Mountain Dew Xtreme Tours, the campaign brings to India leading Skateboarders, BMX & FMX professionals. It sets out to give a feeling of confidence to shrink your fears and get ahead in life with Darr ko jitna chota samjho utna hi achha hai.

Kick-starting the campaign, Mountain Dew recently associated with boxing champion, Vijender Singh; World Champion wrestler, Sushil Kumar and Indian national hockey player, Sandeep Singh and has given consumers a unique opportunity for to train with the top athletes in India for a day.
PepsiCo products in India comply with the most stringent Indian and international regulations, including the new regulations for carbonated soft drinks notified by the Health Ministry on July 15, 2004. They follow quality standards across the globe.
PepsiCo entered India in 1989 and has grown to become the country's largest food and beverage business. One of the largest multinational investors in the country with an investment of over $1 billion, PepsiCo India has built an expansive beverage and snack food business supported by 36 beverage bottling plants, (13 company & 23 franchisee owned) and 3 food plants. PepsiCo India’s extensive portfolio includes iconic brands as well as fast growing brands such as Nimbooz and Aliva.

PepsiCo India's employees are driven by the company's global commitment to sustainable growth, Performance with Purpose (PWP), which works on four planks of replenishing water, partnering with farmers, waste to wealth and healthy kids. In 2009, PepsiCo India achieved a significant milestone, by becoming the first business in the PepsiCo global system to achieve ‘Positive Water Balance’, a fact validated by an independent audit.
In 1981, PepsiCo was one of the first American companies to
enter China when it signed an agreement with the local
government to establish its first bottling plant in Shenzhen.
Over the past 30 years, PepsiCo Greater China
Region has become one of the country’s most
successful food and beverage companies. The
investment has exceeded RMB
10 billion making PepsiCo as a market leader
in China's fastest growing food and drink sector.
In 2012, PepsiCo formed a partnership with Tingyi Holding to establish Tingyi‐Asahi Beverages (TAB) as PepsiCo’s franchise bottler in China to manufacture, sell and distribute PepsiCo's products throughout China, co-branding using the Tropicana brand under license from PepsiCo. The PepsiCo‐Tingyi beverage system is the largest in China, providing Chinese consumers with some of the country’s most popular beverage products.
They currently operate 27 drink plants through out China and employ more than 20,000 people. PepsiCo receive 5% of Tingyi-Asahi, with an option to increase its stake to 20% by October 2015.
By the end of 2010, China became the world's second largest economy after the United States. It has been the world's fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years, and is set to become the largest economy in the world in 2020, making it an attractive market to get into.
With average wages for factory workers being only 64 cent per hour it is in PepsiCo interest to set up factories to reduce costs. 64 cents buys as much as $2.95 in the US.
The PepsiCo Foundation and PepsiCo Greater China actively support a range of public welfare programs, including a more than 10‐year association with Water Cellars for Mothers, delivering clean‐water access to people in regions of central and western China. Local activities involving employees at the plant and farm level benefit the immediate communities in which they operate; and also emergency disaster relief in times of national crisis.   

As of 2011, the total contributions from the PepsiCo Foundation, PepsiCo Greater China and employees amounted to RMB 74.85 million.   

Safe Drinking Water Access   2012 marks the 12th year of cooperation between PepsiCo and China Women’s Development Foundation of the All‐China Women’s Federation on clean water access in China. In 2000, the Foundation launched a national program to raise awareness of the lack of safe drinking water access for hundreds of millions of people in drought‐stricken rural areas of China. The program focused on the construction of ‘water cellars' which used with rainwater and basic water treatment— allowing clean drinking water access to more than 1.7 million people. PepsiCo has been a key supporter of the Water Cellars for Mothers from early on in 2001 and have continued to give steady support as it has grown in scale and impact over the last ten years and they remain the single largest multi‐national corporate donor.   
By the end of 2010 they had built more than 1,500 water cellars, funded construction of more than 30 centralised small scale water supply projects and have trained over 10,000 women to maintain them. Over 58,00 people in 24 countries have benefited directly as a result.
Under the "1 + 5 Project", five extensions were added around the water cellar a solar‐powered cooker, a sanitary toilet, animal husbandry, cash crop cultivation, and small‐scale gardening. Access to water alone can significantly improve people's health, living standards, economic stability, and chance for a better life. 

Despite the massive shift towards urbanisation, China remains a nation of more than 600 million farmers. In 2007, PepsiCo Greater China Foods began an employee‐driven initiative to support the needs of rural village schools nearby the farms, which are often underfunded due to limited resources at the local level —first by donating money to buy new books, desks and chairs, and then by donating used books collected from employees across China.

By 2011, PepsiCo Greater China had given more than RMB 1.65 million to build nine libraries to benefit more than 3,640 rural students. The program collects used books and donations from employees across farms and plants as well as from the business, which then go to fund scholarships and the “Pepsi Reading Stars" program to encourage reading and writing, plus purchases of computers, books and desks, bookshelves and teaching equipment
When unusually heavy snow and blizzards afflicted central and southern regions of China in early 2008, PepsiCo was quick to fund raise and donated RMB 330,000 to the Red Cross Society of China, and other local disaster relief centers.   
In May 2008, a devastating 8.0 earthquake struck Wenchuan County of Sichuan province. PepsiCo donated more than RMB 19 million in disaster relief.   
In March 2010, in response to the severe drought in five provinces in Southwest China, PepsiCo Greater China donated RMB 200,000 worth of drinks, including 4,697 cases of Tropicana Guo Bin Fen and 2,000 cases of Gatorade, for urgent disaster relief.
In April 2010, Yushu Prefecture of Qinghai Province was struck by a 7.1 earthquake. PepsiCo Greater China bottlers   responded with immediate campaigns to support the victims of disaster. Donations from bottlers and their employees exceeded RMB 575,000.   

A proposal with the Indian government was rejected in 1985. However they renegotiated and where allowed to start trading if they agreed to export fruit juice from Punjab, with a 5:1 export ratio.
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