TERM PAPER OF

CONSUMER
BEHAVIOUR
CONSUMER PERCEPTION TOWARDS
PEPSICO PRODUCTS.

SUBMITTED TO:- MR. AMIT DUTT

RAMGANESH KUMAR
RGD NO:-10907104
ROLL NO. :-RT1903A55
2010-11-13
 ACKNOWLEDGEMENT

I take this opportunity to present my votes of thanks to all those guidepost who
really acted as lightening pillars to enlighten our way throughout this project that
has led to successful and satisfactory completion of this study.

We are really grateful to our professor for providing us with an opportunity to

undertake this project in this university and providing us with all the facilities. We
are highly thankful to MR. AMIT DUTT for his active support, valuable time and
advice, whole-hearted guidance, sincere cooperation and pains-taking involvement
during the study and in completing the assignment of preparing the said project
within the time stipulated.

Lastly, We are thankful to all those, particularly the various friends , who have
been instrumental in creating proper, healthy and conductive environment and
including new and fresh innovative ideas for us during the project, their help, it
would have been extremely difficult for us to prepare the project in a time bound
framework.

NAME–RAMGANESH KUMAR

Regd.No-10907104

Roll.No-RT1903A55
HISTORY OF PEPSI

PepsiCo is a USA based company having its head quarters at New York with the net worth of
$30-40 million. The average sales of the company are approx 90 million bottles per month. Pepsi
made it first international move in Russia in 1959. During the Khrushchev era, within 32 years
Pepsi emerged as the biggest competitor for Coca Cola. Pepsi is available in 155 countries.

In any soft drink, on the globe Pepsi food is one of the largest soft drink companies in the world
with its headquarter in New York. It was invented by Pharmacist Culab D. Baradham in 1898 to
cure the disease “Dyspepsia”. It is from this word that its name was related to Pepsi. Soon it
entered the American market as soft drink, which at that time mostly dominated by Coca Cola,
but soon Pepsi able to dominate the Cola market, and there after it never looked back. Pepsi and
Coca Cola are engaged in ferocious cola war that has taken the whole world by storm.

Pepsi entered the Indian soft drink in Kanpur in 1988 and began its production in May 1990 and
soon it was giving the local contenders run for their money in soft drink market. It comes out
with dazzling marketing innovation that rocked the cola market, like selling the product through
function Pepsi outlets. Its advertisement agency was “Hindustan Thomson Association” (HTA).
Its advertisement budget for 1995-1996 was valued at Rs. 24 crores which is likely to be
increased manifold in coming years.

Pepsi food is one of the largest and best foreign investments in India. Till today it has invested
Rs. 500 crores in India to develop the local market. Pepsi has distributed exclusive franchises in
India to bottle its total product. There are 28 bottling plant of Pepsi in India. Some are directly
controlled by Pepsi and rest is under various franchisees.

Pepsi stands 51st position among the fortune 500 companies of the world. Its total capital is
approx $3000 crores and total sales annually is worth $37 crores. Its total profit in the year 1996-
97 was worth Rs. 458 crores approx. The total number of employees engaged in the business is
45.25 lakhs globally.

PepsiCo’s success is the result of:-

• superior products

• high standards of performance

• distinctive competitive strategies

 • the high integrity of our people

COMPANY PROFILE-IN INDIA

PEPSICO INDIA

PepsiCo entered India in 1989 and in the span of a little more than a decade it became the
country's largest selling soft drinks company. The Company has invested heavily in India
making it one of the largest multinational investors. The group has built an expansive beverage,
snack food and exports business and to support the operations are the group's 43 bottling plants
in India, of which 15 are company owned and 28 are franchisee owned.

PepsiCo stays committed to providing its consumers with top quality beverages. Its diverse
portfolio of brands include the flagship cola brand - Pepsi; Diet Pepsi; 7Up; Mirinda; Mountain
Dew; Slice fruit drink; Tropicana brand 100% fruit juices in various flavors; Aquafina packaged
drinking water; Gatorade plus local brands Lehar Evervess Soda, Dukes Lemonade and
Mangola.

PepsiCo is also a dominant player in the snack food segment in India. PepsiCo's snack food
company Frito-Lay is the leader in the branded potato chip market. It manufactures Lay's Potato
Chips; Cheetos extruded snacks, Uncle Chips; traditional namkeen snacks under the Kurkure and
Lehar brands; and Quaker Oats.

PepsiCo is one of the largest MNC exporters in India and its export business consist of three
categories - agri business, commodities and Pepsi system sales. PepsiCo has made significant
investments with the Punjab Agriculture University to develop a comprehensive agro-technology
program that has helped thousands of farmers across India improve the yield of their farms and
the quality of their agricultural products. PepsiCo has leveraged its knowledge in contract
farming to develop seaweed cultivation in Tamil Nadu and has partnered with the Government of
Punjab to help farmers of the state through the utilization of developed technology for citrus
farming.

As part of its sustainable development initiatives, PepsiCo India has been a committed leader in
the promotion of rain water harvesting, water conservation recycling and the reduction of
effluent discharge. PepsiCo has also established zero waste centers and PET recycling supply
chains and assisted victims of natural disasters. PepsiCo stays dedicated in its endeavor to
develop community outreach programs by supporting rural water supply schemes, administering
medical camps in villages, providing computers to rural schools and creating opportunities for
women in rural areas through vocational training as an alternate means of livelihood.
Soft drinks market in India

India is one of the top five markets in terms of growth of the soft drinks market. The per capita
consumption of soft drinks in the country is estimated to be around 6 bottles per annum in the
year 2003. It is very low compared to the corresponding figures in US (600+ bottles per annum).
But being one of the fastest growing markets and by the sheer volumes, India is a promising
market for soft drinks.

The major players in the soft drinks market in India are PepsiCo and Coca-Cola Co, like
elsewhere in the world. Coca-Cola acquired a number of local brands like Limca, Gold Spot and
Thumps Up when it entered Indian market for the second time. Pepsi Co’s soft drink portfolio
also consists of Miranda and 7Up along with Pepsi. The market share of each of the company is
more or less the same, though there is a conflict in the estimates quoted by different sources.

The major ingredient in a soft drink is water. It constitutes close to 90% of the soft drink content.
Added to this, the drink also contains sweeteners, Carbon dioxide, Citric Acid/Malic acid,
Colors, Preservatives, Anti Oxidants and other emulsifying agents, etc.

BEVERAGE INDUSTRY

Indian Beverages industry’s size is Rs. 8000 Crores and it is dominated by two player’s viz.
Pepsi & Coke only. This high profile industry has lot of potential for growth as per capita
consumption in India is 8 bottles a year as compared to 20 bottles in Sri Lanka, 14 in Pakistan,
while 12 bottles a person in Nepal.

The group manufactures and markets carbonated and Non-Carbonated Soft Drinks and Mineral
Water under Pepsi brand. The various flavors and sub-brands are Pepsi, Mirinda Orange,
Mirinda Lemon, Mountain Dew, and 7UP, Slice Mango, Evervess Soda and Aquafina.
INGREDIENTS OF SOFT DRINK:

We only use the finest ingredients to make Pepsi-Cola products. To guarantee our consumers
consistent quality, each ingredient must pass our high standards, rigorous quality control tests
and strict bottling procedures.

Pepsi-Cola products contain natural flavors, including extracts of the kola nut ND flavor oils
derived from natural sources such as citrus and other fruits. Caramel (made from corn sugar)
adds color and flavor to our colas. Other ingredients add a refreshing taste: phosphoric acid in
colas; citric acid and sodium citrate in Mountain Dew, Slice and Diet Pepsi.

We also put a freshness date on every can and bottle. Soft drinks may lose some flavor over time
so our freshness date tells consumers when the product is freshest and best tasting.

Every can and bottle of Pepsi-Cola products has a Nutrition Facts panel, which shows the
number of calories and other nutrients per serving. There is essentially no fat in any Pepsi-Cola a
product. The main ingredients found in Pepsi-Cola products include carbonated water,

carbohydrates, sugar, sodium, potassium and caffeine. For a complete breakdown by ingredients
by product, see our product information for Pepsi, Diet Pepsi, Mountain Dew, Slice and
Aquafina.

Ascorbic Acid

Another name for Ascorbic Acid is Vitamin C the Ascorbic Acid used in our carbonated soft
drinks functions as an antioxidant to protect the flavors, color, and taste. In some beverages we
also add it to provide the nutritive value found in Vitamin C.

Aspartame

Aspartame is a sugar substitute used in our diet beverages and many other food products.
Aspartame is made of the same building blocks as protein, so it is considered a "nutritive
sweetener," but the very small amounts used in diet drinks contribute no calories.
Blue1

Blue 1 is a FDA-approved food coloring used in a variety of products such as jellies, condiments,
puddings, and beverages.

Brominated Vegetable Oil (BVO)

Brominated vegetable oil has been used by the soft drink industry since 1931. It is a widely used
food additive that has been extensively tested and approved by the U.S. Food & Drug
Administration. Brominated vegetable oil is derived from soybean oil that has been

modified in order to keep the flavoring oils well blended.

Caffeine

Caffeine provides a characteristic flavor to soft drinks. Caffeine is naturally found in coffee, tea
and chocolate. For comparison, an 8-oz. cup of brewed coffee can have from 85-120 mg of
caffeine on average, while an 8-oz. serving of Pepsi contains about 25 mg of caffeine. An 8-oz.
cup of coffee therefore contains three to four times as much caffeine found in

a caffeinated colon. There is no caffeine in Caffeine Free Pepsi, Caffeine Free Diet Pepsi,

Aquafina, Slice, Mountain Dew or Mirinda.

Caramel

Caramel is a flavoring that is added to some of our beverages.

Citric Acid

Citric Acid can be found in citrus fruits such as lemons and oranges. Citric acid is used to bring
out the flavor of other ingredients and imparts a tang or tartness to beverages. Citric acid is not
Vitamin C. the same fruits that have citric acid often have Vitamin C but the technical name for
Vitamin C is ascorbic acid.

Gum Arabic

Gum Arabic is a purified natural vegetable gum obtained from the acacia tree and is used in
keeping our carbonated beverages well blended.
High Fructose Corn Syrup

High Fructose Corn Syrup (HFCS) is a sugar derived from corn and provides sweetness and taste
to our beverages. HFCS has the same sweetness as table sugar (sucrose) and has almot the
identical composition f fructose and glucose.

Natural Flavorings

Natural Flavorings are flavoring ingredients that are the essences or extracts derived from natural
plant sources. Natural Flavorings are what gives a product its distinctive flavor and

taste. Pepsi products are the only products with these distinct flavor blends, which are considered
part of our secret formula. The term natural flavor is defined by the food and drug administration
and all of our natural flavorings meet this definition.

Phosphoric Acid

A small amount of phosphoric acid is added to our soft drinks. However, it is greatly diluted and
is fully approved by the U.S. Food and Drug Administration for use in soft drinks. Phosphoric
acid provides tartness, essential to a well-rounded flavor. Phosphorus, like calcium, is an
essential mineral in bone. It is widely distributed in the food supply, including fish, milk, meat,
eggs and cereal grains.

Potassium

Potassium in Pepsi-Cola products may come from water or as part of certain ingredients. For
example, potassium may be combined with benzoic acid, which helps prevent spoilage and
flavor changes. Potassium is an electrolyte that helps meet the mineral needs of active people.

Quillaia

Quillaia Extract is a purified extract derived from the bark of the Quillaia tree. It is carefully
selected based on its characteristics. It is cooked, filtered and pasteurized. It is FDA-approved,
non-hazardous. Quillaia is found in some of our frozen drinks.

Red 40
Red 40 is a FDA-approved food coloring used in beverages.

Sodium

All of our products are "low sodium" and contains less than 110 mg per eight-fluid-ounce
serving. A number of beverages have less than 35-mg sodium per serving, so they are considered
"very low sodium" products.

Sugar

Regular soft drinks and sports drinks are sweetened with sugar. There are many types of sugar
available today. In soft drinks and sports drinks, the sugar is primarily high fructose corn syrup,
which comes from corn.

Total Carbohydrates

Total carbohydrates include the sugars and any carbohydrate-like parts of ingredients, such as
organic acids. Although diet drinks may have no sugar, they may contain more than half a gram
of carbohydrate.

Yellow5

Yellow 5 is a FDA-approved food coloring. Used since 1916, it is found in a variety of products
such as skim milk, yogurt and macaroni and cheese.

KEY ELEMENTS OF THE TRADE

1. JO DIKHTA HAI WOH BIKTA HAI: - This is a company slogan, it is to increase the
visibility of the product, the company stresses more on increasing the number of outlets than on
the volumes of sales. That is the reason of the company providing visibility courses to the

Shopkeepers.

2. A BOTTLE THAT IS CHILLED IS SOLD: - In the industry it is considered that a bottle is

chilled or putting in cooling compartment is sold. That is the reason the policy providing triage’s
come up because according to the contract the shopkeeper has to keep only & only Pepsi’s
products in the visi cooler.

3. A BOTTLE LOSS TO COKE IS A GAIN TO PEPSI: - The competition is so strong between

the two companies i.e. fighting is on for each bottle that is to be sold in the market. Competitive
bidding goes on for each & every prestigious outlet in their region.

Monopolizing entries & fat foods joints is their first priority.

4. EMPTY kA HI KHEL HAI: - [Empty plays an important role]: - As discussed earlier the
distribution points keeps on putting up distribution schemes for retailers i.e. like two bottles of
solution free with the purchase of every one carat of solution. Now these schemes have timed
well keeping in mind the environmental conditions & schemes provided by the other company.
These schemes are of twenty-four hours duration. If a scheme is launched & there is no empty in
the market for refill, the whole effort goes in vain that is the reason is said ki sub empty ka khel
hai.

Perception of Consumers
Today, advertising is a multi-billion industry, employing hundreds of thousands of people and
affecting billions of people’s lives worldwide. Yet, seeing as advertising clutter has increased
tremendously and is more intense than ever, it is vital that companies differentiate themselves
from competitors by creating even more powerful, entertaining and innovative advertisement
messages, as well as sponsoring different events.
Product demand is driven by consumer preferences and tastes. Therefore, the Company
operates in a highly competitive market that relies on continued demand for products. Company
initiative focuses on changes that reduce demand on products and a decline in competitive and
financial position. PepsiCo hopes to create game-changing transactions that will enable them to
grow and improve profitability, particularly in developing markets and in evolving categories
(PepsiCo, 2009). The organization's inability to compete effectively may have an adverse impact
in revenues and profit margins. This will affect share of sales or gross margins in the global
market.

Management takes into consideration that significant costs are expected to be incurred with
mergers of other companies in connection to new product innovation. The Company anticipates
a significant portion of such cost to be incurred during the first year after completion of the
mergers. The anticipated cost savings will adversely affect the value of the organization's
commons stock and securities.

DATA ANALYSIS

1 PRFRENCE ANALYSIS

When I ask question about preference of brand between coke and pepsi

About 62% of people choose pepsi as their first choise, which show that pepsi is

More popular than coke.

2. Happy with PepsiCo product?

About 50%of people are strongly happy with pepsi product,which show good image of pepsi

20%are happy and20%are neutral.

3. Requirement meeting Analysis

When matter come

of requirement meet
64% of people are
in favour of pepsi
which

Show good
distribution of
pepsi,31%are with
coke and5% are
with other.here
pepsi is

Fulfilling the demand of customer better than other.

4. Are the PepsiCo products ahead of its competitor?

I have taken the data of 50 people out of which 35 say that it has no substite

7 are neutral and only8 people are in disagree and fully disagree,which clearly show

That agree% is much much more than disagree%,which show good image of pepsi.

5. Price analysis

Almost more than 70%are happy with prise of pepsi because all colddrink

Have similar price.

6. Most preferable brand of PepsiCo.

 When term come of
preference of brand
between pepsi
aquafena is more
popular than other

Folled by mounain

dew,7up,mirinda,pepsi,slice.

7. Availability of Pepsi

When I ask of availability, about 85%are happy with pepsi,they told that

They found pepsi always,10%say that some time pepsi is not available at

Every place,about 8%not satisfied with pepsi.

8. One of the Reason of Preference

Pepsi flavour are more popular than coke and other,about 55%are liking pepsi flavor

About35%are with coke and only 12% are with other brand.

9.Facotor attracting towards PepsiCo products.

There are somany factor which attract customer towards pepsi,out of which word of mouth play
most important role followed by ads and taste,availability and price.

10. Satisfaction analysis

At last I ask about satisfaction,about58% are not satisfied with pepsi product

And 42 %are satisfied,there are so many factor behind in like availability,taste,price.

Findings

1. Customer are accepting PepsiCo products more than its nearest competitor.

2. Dissatisfaction is also there due to availability and test.

3. Its well known that beverage products are not having much mfg. cost but Advertisement
cost raise the price even then Customers’ perception is not bad related to the price and
they are able to afford the price.

BIBLIOGRAPHY

- A.C. Nielsen. 1992. “Category Management: Positioning Your Organization to

Win.” NTC Business Book. Chicago, Illinois.

- Adams D. 1995. "Category Management - A Marketing Concept for Changing

Times." Heilbrunn J, ed. Marketing Encyclopedia: Issues and Trends Shaping the
Future.

- Blattberg R. C., Glazer, R., and Little, J. D. C. 1994. The Marketing Information
Revolution. Boston, Massachusetts: Harvard Business School Press.

- Ball B. 1999. "Drowning in Data, Marketplace Management." Progressive

Grocer.

- Bucklin, R.E., and S. Gupta. 1999. "Commercial Use of UPC Scanner Data:
Industry and Academic Perspectives." Marketing Science 18 (3) 247-273.
 - Bulow, J., Geanakopolos, J., and Klemperer, P. 1985. "Multi-market Oligopoly:
Strategic Substitutes and Strategic Compliments." Journal of Political Economy
93 (3) 485-511.

- Butz, D. A. 1997. "Vertical Price Controls with Uncertain Demand." Journal of

Law and Economics, 40 (2) 433-459.

- Carpenter, G. S., and Couohlan, A. T. 1998. "Alliances with Opportunism:

Sustainable Distribution Partnerships through Credible Threats and Credible
Commitments." Discussion paper, J L Kellogg Graduate School of Management.
Northwestern University.

- Chen, Y., Hess, J.D., Wilcox, R.T., and Zhang Z. J. 1999. "Accounting Profits

- versus Marketing Profits: A Relevant Metric for Category Management."

Marketing Science 18 (3) 208-229.

- Choi, S. C. 1991. "Price Competition in a Channel Structure with a Common

Retailer." Marketing Science 10 (4) 271-296.

QUESTIONNAIRE

Questionnaire related to academic purpose, which is prepared to take feedback from customer.

Name ……………………………………………………………………………

Address …………………………………………………………………………….

Contact no…………………………………………………………………..

Sex …………….. Age ………………………..

1. You are interested to have

Pepsi ………. Coke …….

Reason:

If Pepsi then
 2. Are you happy with PepsiCo product?

1.)Very happy………2.) Happy……… 3.) Partially happy………..4.)Not happy……

3. Which of the company you feel is suitable to meet your requirements in a better way?

Coke ……………….

Pepsi ……………….. Others……… Specify…………………………..

Use the notes taken during the exercise to answer the questions below

1.)Strongly Agree 2.) Agree 3.)Neutral 4.)Disagree 5.)Fully Disagree

4. Do you agree that PepsiCo product has no substitute?

1 2 3 4 5

5. Are PepsiCo products in budget?

1 2 3 4 5

6. Which are the brands of PepsiCo do you like most?

(a) Pepsi Cola (b) Mirinda (c) 7’Up

(d) Slice (e)Mountain Dew (e)Aquafena water

7. Do you get availability of Pepsi?

1).Always…………. 2.)sometimes……….. 3.)Never……….

 8. which company’s flavor attracts you most?

(a)Coke ( b) Pepsi ( c)Others

9.Which factors attracts you?

(a) Advertisement (b) Word of mouth

(c) Availability (d) Taste

(e) Price (f) Others

10. Have you any type of dissatisfaction regarding the product. It yes then why?

………………………………………………………………………………

11. Your recommendations about Pepsi company?

……………………………………………………………………………………………………
………………………………………………………………………………

Any suggestion .

…………………………………………………………………………………………