LAYS PAKISTAN PROJECT

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 TABLE OF CONTENTS

• The Exordium 3
• Acknowledgement 4
• Introduction 5
• History 5
• Companies Portfolio 6
• SWOT Analysis 9
• Key Objectives 12
• Marketing Environment 13
• Marketing Strategy 17
• Product Planning 17
• Price Planning 24
• Place Planning 25
• Promotion planning 25
• Budgeting 27
• Recommendations 27
• References 28

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 THE EXORDIUM

Nothing is deserving worship Almighty Allah, the most Merciful,

Compassionate and Gracious. All praises for him because he is the creator of
this mysterious universe and guides us with the Holy Prophet Mohammed
(Peace be upon him) and Holy Quran to explore it. We supplicate that Allah
grant us serenity to accept the things we cannot change, courage to change
the things we can, and wisdom to know the difference.

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 ACKNOWLEDGEMENT
Above all we are indebted to almighty Allah, lord of our life and of everything in the
universe and his HOLY PROPHET MUHAMMAD (peace be upon him) whose
blessings enabled us to perceive and pursuit higher ideas of life.

The project of FOUR P’S OF MARKETING is the result of our day and night efforts,
which we have made to, complete this extensive and informative project. Certainly, we
have been able to complete this project with the help of numerous factors, which played a
key role in it.
“THE PROFOUND EFFECT OF A TEACHER UPON THE STUDENTS CAN BE
DESCRIBED BY THE LIVES OF HIS STUDENTS”
(PRINYA NATALYA)

We deem it with an honor and privilege to record sense of gratitude to the respected
resource person PRO. AZEEM AHMAD KHAN for his constructive style of teaching
and maintaining very open and competitive atmosphere within the class.
We really liked our respected resource person for his full command on the subject and
unconventional style of teaching. This made the subject very comprehensive and
understandable.
We feel it a liability to offer heartiest thanks to all our respondents who helped us in
completing this project and all our teachers for their inputs and suggestions, which helped
us a lot.

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INTRODUCTION
Lay's is the brand name for a number of potato chip varieties as well as the name of the
company that founded the chip brand in 1938. Lay's chips are marketed as a division of
Frito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay
group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels.

HISTORY
Native American chef George Crum invented potato chips in 1853 while working in a
New York hotel. The snack food became popular during the 1920s following the
mechanical potato peeler. As distribution increased, a number of small companies began
manufacturing and selling the product.

In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee
and, in 1938; he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food
Company," renaming it "H.W. Lay & Company." Lay criss-crossed the southern United
States selling the product from the trunk of his car. In 1942, Lay introduced the first
continuous potato processor, resulting in the first large-scale production of the product.

The business shortened its name to "the Lay's Company" in 1944 and became the first
snack food manufacturer to purchase television commercials, with Bert Lahr as a
celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the
chips' first slogan along with "de-Lay-sious!" As the popular commercials aired during
the 1950s, Lay's went national in its marketing and was soon supplying product
throughout the United States.

In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-
Lay Inc., a snack food giant with combined sales of over $127 million annually, the
largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan
"betcha you can't eat just one." Sales of the chips became international, with marketing
assisted by a number of celebrity endorsers.

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In 1965, Frito-Lay merged with the Pepsi Cola Company to form Pepsico, Inc. and a
barbecue version of the chips appeared on grocery shelves. A new formulation of chip
was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the
company introduced the "Wavy Lays" products to grocer shelves. In the mid to late
1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece,"
named after a popular sauce, and introduced a lower calorie baked version and a variety
that was completely fat-free (Lay's WOW chips containing the fat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax
that was intended to compete with Pringles, and the company began introducing a variety
of additional flavor variations.

Frito-Lay products presently control 55% of the United States salty foods marketplace.

Companies Portfolio

1. PepsiCo

Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo. Created
and developed in 1893 and introduced as Brad's Drink, it was renamed as Pepsi-Cola on
August
1898
1906
1950
1973
1998
2003
Today
28, 1898, then to Pepsi in 1961, and in select areas of North America, "Pepsi-Cola Made
with Real Sugar" as of 2014. World’s second largest soft drink after coca-cola.

2. Mountain Dew

Mountain Dew (currently stylized as Mtn Dew in the United States) is a carbonated soft
drink brand produced and owned byPepsiCo. The original formula was invented in 1940
by Tennessee beverage bottlers Barney and Ally Hartman. A revised formula was created
by Bill Bridgforth in 1958. The rights to this formula were obtained by the Tip
Corporation of Marion, Virginia. William H. "Bill" Jones of the Tip Corporation further
refined the formula, launching that version of Mountain Dew in 1961.[2] On August 27,

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1964, the Mountain Dew brand and production rights were acquired from Tip by the
Pepsi-Cola company, at which point distribution expanded more widely across the United
States and Canada.

3. Lay's potato chips

.Lay's (also known as Walkers in the United Kingdom and Ireland, Smith's in Australia
Chipsyin Egypt, Poca in Vietnam,Tapuchips in Israel, Margarita in Colombia and S
abritas in Mexico) is the brand name for a number of potato chip varieties as well as the
name of the company that founded the chip brand in 1932. Lay's has been owned by
PepsiCo since 1965. Other brands in the Frito-Lay group include Fritos, Doritos, Ruffles,
Cheetos, Rold Gold pretzels, Munchos, Funyuns, and Sun Chips. Most popular brand of
the world in all the chips have many flavors. s
4. Gatorade

The Gatorade Company, Inc. is a manufacturer of sports-themed beverage and food

products, built around its signature line of sports drinks. Gatorade is currently
manufactured by PepsiCo and distributed in over 80 countries. The beverage was first
developed in 1965 by a team of researchers at University of Florida, to replenish the
combination of water, carbohydrates, andelectrolytes that the school's student-athletes
lost in sweat during rigorous athletic competitions.

5. Tropicana beverages
Tropicana Products, Inc. is an American multinational company which primarily makes
fruitbased beverages. It was founded in 1947 by Anthony T. Rossi in Bradenton, Florida.
Since
1998 it has been owned by PepsiCo. Tropicana's headquarters are in Chicago, Illinois.
The company specializes in the production of orange juice.

6. 7 Up
7 Up is a brand of lemon-lime flavored, non-caffeinated soft drink. The rights to the
brand are held by Dr Pepper Snapple Group in the United States, and PepsiCo (or its
licensees) in the rest of the world. The U.S. version of the 7 Up logo includes a red cherry
between the "7" and "Up"; this red cherry has been animated and used as a mascot for the
brand as Cool Spot.

7. Doritos tortilla chips

Doritos is a brand of seasoned tortilla chips produced since 1964 by American food
company Frito-Lay (a wholly owned subsidiary of PepsiCo).

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 8. Lipton teas (PepsiCo/Unileverpartnership)

Lipton is a brand of tea belonging to Unilever. Lipton was also a supermarket chain in the
United Kingdom before it was sold off to Argyll Foods, to allow the company to focus
solely on tea. The company is named after its founder Thomas Lipton.

9. Quaker foods and snacks

The Quaker Oats Company is an American food conglomerate based in Chicago. It has
been owned by PepsiCo since 2001.

10.Cheetos
Cheetos (formerly called Chee-tos until 1998) is a brand of cheese-flavored, puffed
cornmeal snacks made by Frito, a subsidiary of PepsiCo. Fritos creator Charles Elmer
Doolin invented Cheetos in 1948, and began national distribution in the U.S. The initial
success of Cheetos was a contributing factor to the merger between The Frito Company
and H.W. Lay & Company in 1961 to form Frito-Lay. In 1965 Frito-Lay became a
subsidiary of The Pepsi-Cola Company, forming PepsiCo, the current owner of the
Cheetos brand

NATURE OF THE BUSINESS

Snacks are of two types, Extruded and Potato Chips. “KURKURE” lies in the extruded
item which comes under FMCG Products (fast moving consumer goods).

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 SWOT Analysis

Strengths

• Almost all income level especially below 5000 and even above 10000 can buy
and consume LAY’S.

• Brand conscious people like it most.

• LAY’S being the multi national company having the huge investment spending
massive amount on advertising campaigns to aware the customer towards LAY’S

• People are comfortable with the Price of LAY’S.

• Placement is becoming a plus point it means company is emphasizing on its

distribution and placement strategies.

• LAY’S chips have a strong brand image at their back like Lay’s and also PEPSI
International.

• LAY’S is the blend of maximum satisfaction at minimum price that’s why

customers are much satisfied by LAY’S chips. We can say it that

Value = Satisfaction

• LAY’S chip is such kind of product which has no any restriction of age or gender.

• LAY’S being a new product in snacks which is also useful for health conscious
people because it is made of grains (wheat, rice and many others).

• LAY’S chip is such type of snacks which is always ready to consume.

• They also give incentives to retailers

• Human Capital is the main strength of LAY’S.

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 Weaknesses

• Facing the enormous competitors prevailing in the market.

• Competitors like Kolson and Triple M are investing heavily in branding.

• Although they are trying to make their efforts best to make their supply excellent
but still they are not reached to the rural areas of Pakistan.

• Some areas like Highways (especially on Motorway) and many others exist in
Pakistan where still LAY’S cannot manage to fulfill their requirements and where
the products of competitors are available.

• Elite class of your society are not consuming too much as compared to the
middle and others due to the price as we can say the status problem

• At that time LAY’S only offering four flavors.

• LAY’S are not providing any extra facility or benefit to the customer.

Opportunities

• Supply of this product in the remote areas of Pakistan.

• Improvement in its Quality as there is always room for the improvements in

anything.

• Addition of new local flavors helps a lot to sustain in the market.

• Sponsoring major events and festivals for huge awareness campaigns.

• Try to make supply in all the areas where the other competitors are existing
already.

• Design such strategies and advance planning to become the market leader in the
smallest span of time.

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• Introduce the family and economy pack to serve the large families which also cost
you cheaper and ultimately will accepted by the consumer.

• Try to serve the elite class according to their status and requirement.

• Make advertisement in suburban and rural areas and give incentives to the shop
personals so that also motivate towards it.
• LAY’S has an opportunity to introduce a less spicy or light flavor to increase
their consumer ship and target market.

Threats

• Competitors like kolson and Tripple M are the biggest threats to our product.

• Indirect competitors are also contributing in the same way.

• BUSCUITS and NIMKO hold major share of Market.

• New entrants can also the threat for the LAY’S chips and may create hurdles in
the growth.

• Small companies that are not a problem at that time may become the main
competitors or threats to LAY’S chips.

• On arrival of LAY’S Kolson introduced a new flavor in their brand Slanty which
may divert the attention of consumer towards them from LAY’S chips.

• There are many substitutions in the case of snacks which is the great threat for
LAY’S chip’s.

• People usually like variety in flavors which is the up coming threat to the LAY’S
because they have only four flavor .

• Govt. policies may affect the growth of the lay’s chips.

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Key Objectives
Like every business the primary objective of LAY’S Company is to be flourishing and
earn more profits. But it’s possible only when the company understand the environment
of the market, where:

1. Different types of customer in this region who consider low price but still want
for high quality.
2. Currently weak competition for a multinational company regarding quality with
price.
3. A handsome share of the market is still vacant.
4. Company’s own profit orientation by producing in bulk quantity and reducing
cost.
5. Strong distribution channels are helpful to distribute and sale quickly and can
generate high turn over.

Therefore they pursue following objectives:

1. Produce high quality product at reasonable low price.

2. Facilitate as maximum share of market as they can.
3. Customer satisfaction is the top priority.
4. Acquire the strong distribution channel so the product is made available on the
shelf.

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 MARKETING ENVIRONMENT

MICROENVIRONMENT

Research & Development

Company has established their own plant at plot no 413, Sunder industrial Estate,
Raiwind Road, Lahore. Its working and efficiency is under consideration. Experts are
there to watch out and examined the machinery as well as production unit. They are also
ensuring that its production is fulfilling the requirements in due time. Experts make it
sure that they are producing Quality products. (Maintaining their quality standards)

Production

Company was importing “KURKURE” from China and Lays chips from “Saudi Arab”
through its supplier “Saudi Snack Food” Company has started its production at its New
Plant at Raiwind road Lahore on 14th August 2006. That improves the performance of
the company. The time period of importing the product is eliminated. Raw material can
be available in local market, so it would reduce the budget for raw material. The time
span right from the production to distribution will squeeze and efficiency will be
enhanced.

Suppliers

Company was importing Lays chips from “Saudi Arab” from 1st June 2005 through its
supplier “Saudi Snack Food” and has a strong bond with them but now LAY’S CHIP’S is
produced in Pakistan.

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Marketing Intermediaries

To execute an assortment of necessary functions to get the product to the final customers
lay’s has one major distributor, Shahbaz brothers in Pakistan.

Shahbaz brothers having maximum of their targets and maximum margins which is 14 %
are their major distributors they are covering area of Gulberg, Defence, Cant, Sadar, Taj
Bagh, Taj Pura and Jalo etc.

Order placement to Main Depot which is situated at Gulberg II, Pepsi office is weekly
based and within 48 hours supplies arrives from Main Depot to Distributors Depot from
where they distribute them to different retailers. Distributors are covering 70 to100 shops
daily to fulfill their target in the end of the month period. For distribution available
vehicles are vans, Suzuki and shahzors (only for Shahbaz Brothers).

Customers

The strategic focus of a business or a marketing plan of lay’s Company is that they are
targeting Youth, Girls and housewives (opinion leaders).

The company needs to study five types of customers like consumers, business, resellers,
International and government. But in the case of lay’s only consumers are exist.

Public

All the public groups has an impact on lay’s, banks from they have obtained loan,
advertising agencies from whom they have run their advertising campaigns, govt. will
also because they have an opportunity to collect tax and employees also because they
have to earn from this.

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MACRO ENVIRONMENT

Demographic

Lay’s are not specifically concerned with any religion, race, occupation, family life cycle
or sex and has a target market in every societal group. Main concerned segment is girls,
housewives and youth. Who have experienced high product consumption level? But they
are also targeting families, as they understand this influence factor in this region.

Economic

All income groups are favorable for the business of Lay’s although those are not who are
working class (labors).

Increased government intervention (political)

“KURKURE” is a legally registered company and applying labor laws and market laws
of Pakistan. But it is known to them that Government interaction got much importance in
every business and if there are some restrictions on them then it may be a hurdle in their
way to success. That’s why some harsh Government rules may influence a wrong impact
on company’s goals and achievements in future.

Natural

Lay’s as an extruded item, made of vegetables, although these are natural resources but
still there are not harmful to the nature. And there is rare chance of shortage of raw
material in this case.

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Cultural

Lay’s is not as such a product which can be affected by the culture and tradition (primary
& secondary) changes. Infect, it is based upon the culture of South Asia (Sub-continent)
and Pakistan

Technological

Lay’s being the product of PEPSI International and having a good repute in international
market are already using modern technology to enhance the production and the quality.

Marketing Objective

Company is having very clear perception about the target market which is
explained as follows:

• Company want to capture as many share of the market so that the company
maximize its market share.

• Customer attraction towards the product is very important and without this
phenomena company can’t fulfil its targets.

• Strong distribution channel is the foremost element and is required more when the
need increases, so the company should also focus on them and will give them
certain benefits as well as the retailers.

• Profit maximization is always prior magnitudes for every company for that
purpose they reduce the cost of production to enhance the turnover of the
company.

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 MARKETING STRATEGY

LAY’S Target Markets

LAY’S is such kind of product which is designed for the region of south Asia specially
the sub-continent (Pakistan and India) where the people like spicy kinds of food and
snacks including urban and suburban areas.

LAY’S is not concerned with any religion, race, occupation, family life cycle or gender
and has a target market in every social class. Main concerned segment is youth who have
experienced high product consumption level. But they are also targeting families, as they
understand this influence factor in this region.

Except lower classes of our society, every social class and income level is favorable for
the company.

LAY’S is usually consumed on occasionally basis, providing the better quality at

economical price along with the convenience to consume. We deeply focus on non users,
potential users and first time users in readiness stage they are unaware, desirous,
interested and intending to buy. LAY’S is expecting the positive response from the
customers.

Product

LAY’S as an extruded item which lies in the snacks category is offered to market for
consumption and it is much satisfying the consumer’s needs and wants.

Levels of Products

For every product there are basically three levels of product.

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 Core Benefit

Before introducing the brand the LAY’S Company conduct different surveys to get the
perception of the consumer about features, design and quality level. Public want to buy
the potato chips to remove their hunger with little bit crunch and unique taste.

But mostly people are not ready to compromise on quality. In fact there is no any basic
necessity regarding snacks however it plays a vital role to fulfill that need.

Actual product

After a complete research LAY’S Company turns the core benefits into the actual
product and introduces the LAY’S CHIPS which is unique in Quality, Flavor, taste and
quantity. It’s totally fulfilling the need of the people.

Augmented Product

As we know that LAY’S is the convenience good at the consumer level so they are not
offering any services directly to consumer i.e. after sale service, user manual but they are
offering benefits to the retailers in the form of more profit. LAY’S stands etc.

Consumer Product

Consumer products are those products which consumer buy or purchase for their personal
use or consumption. So LAY’S are the consumer product because it basically use at the
consumer end.

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Convenience Type of Product

LAY’S snacks is the Convenience type of product in which consumer buying behavior is
frequent purchase, little planning and little comparison and has a low price. And LAY’S
is believed on wide distribution channel.

Product Attributes

Quality

LAY’S CHIPS are following the concept of Siemens (Quality is when customer come
back and our product don’t) as far as the quality is concerned. They also not neglect the
two dimensions of quality (performance & conformance) to gain the satisfaction of
consumer.

Features

All the features (like spiciness) and characteristics of LAY’S is compiled by the company
on the need and want of the consumer.

Style & Design

Style and design matter a lot on the outcome and response of the product. LAY’S as the
product (inside the pack and out side wrapper) has much attractive and catchy colors style
and design which attracts the customers a lot.

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Branding

The brand name came from India from a Hindi word Kurkura/Kurkuri means brittle
or crispy and to avoid that particular anti-patriotism they have decided to choose that
particular pack color.

• French Cheese

• Barbeque

• Masala

• Salted

With the time being this brand is so familiar so its capture the mind of every person as a
unique, quality, and tasty extruded with LAY’S Brand.

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SLOGANS
• That's another reason to smile! Lay's Potato Chips (2007)
• Food for the fun of it! (2007)
• Lay's, get your smile on! (2006-)
• Lay's. Want some?
• Betcha can't eat just one (1960s-present)
• Lays ka mazaa lo(Lay's Pakistan)meaning-Have fun with Lay's
• You can't eat just one....Lagi bet! (Lay's India)
• Har programme ka main food (Lay's India)meaning- The main food for
every programmme
• No one can eat just one (Lay's India)

FLAVOURS
Except for barbecue-flavor potato chips, which were introduced no later than 1958, up
until the last 20 years, the only flavor of potato chips had been the conventional one.
Despite an explosion of new flavors, the unadorned original is still the selection of 81%
of consumers.

In the Pakistan, Lay's offers a number of flavor combinations, in addition to the classic
chips. Flavored products in the traditional fried varieties include

• Barbeque
• Salted
• French cheese
• Magic Masala

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Nutritional information

Bag of Lays Baked Chips

As a snack food, the Lay's brands contain very few vitamins and minerals in any variety.
At ten percent of the daily requirement per serving, vitamin C is the highest. Salt content
is particularly high, with a serving containing as much as 380 mg of salt.

A one ounce (28 gram) serving of Lay's regular potato chips has 130 calories and
contains ten grams of fat, with three grams of saturated fat. Kettle cooked brands have
seven to eight grams of fat and one gram of saturated fat but are 140 calories. Lays
Natural has nine grams of fat, two grams of saturated fat and 150 calories. Stax typically
contain ten grams of fat, 2.5 grams saturated fat and are 160 calories per serving. Wavy
Lays are identical to the regular brand except for a half-gram less of saturated fat in some
combinations. The various brands do not contain any trans fats.

The baked variety feature 1.5 grams of fat per one ounce serving, and have no saturated
fat. Each serving has 110 to 120 calories. Lay's Light servings are 75 calories per ounce
and have no fat.

Lays Classic Potato chips are cooked in 100% pure sunflower oil (originally
hydrogenated oil until January 1st, 2007). A one ounce serving has 150 calories, 90 of
which are from fat, 10 grams of fat, and 1 gram of saturated fat.

They have many flavors in the baked lays as well. Baked lays are produced in cheddar,
barbecue, and original.

Level and Type of Competition:

Their competition strategies are based on the competitor’s strategy. They don’t follow the
price war competitive strategy. They follow the standard of product and quality in
competition. Their competition type is oligopoly.

Competitors:
One can’t imagine about a business without competition. Lays has also some competitors.
Major threats to Lays are Pringles, Kolson and Golden, Tripple Em which has almost
45% of the market share. But as quality of the product play an important role that is not
up to the standard by the competitors. So, Lays is outstanding in all ways to the
competitors like quality, quantity, price and variety of the products etc.

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Competitors Products & Activities:
Following Competitor’s products are being sold in the market but their product
availability is not that good. The only reason for their presence is the Credit facility and
high margins.

• Niralla
• Smith
• Bunny
• Sherry
• Sadiq Dry Fruit
• PACE (Rancher)
• Golden
• Pak Food (Maxo)

GRAPH

100%
80%
60%
40%
20%
0% Lays 45% Kolson 15% Golden 8% Smith 5% Tripple Em 15% Others 12%

Lays = 45%
Kolson = 15%
Golden = 8%
Smit = 5%
Tripple Em = 15%
Others = 12%

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Market of LAY’S

As far as the LAY’S is concerned with the market in which it deals is near to pure
competition but due to certain factors it lies in the monopolistic competition because
every company is charging the different prices according to their quality and product
features and as well as target market. Lay’s is charging comparatively high prices from
other ones in potato chips. And if we talk about the Pringles they serve the elite class with
quality and style that’s why they are getting too high prices which is not near to any
company which deals with snacks.

Pricing Strategies

The pricing strategy which is LAY’S is following, cannot be easily evaluate because
from company has not mentioned clearly about any system. However most of the
companies including this are following the Cost-Based Pricing. But a company cannot
follow a single strategy straightly because in the FMCG’s product market their will be
fluence of competitors based pricing along with a bit affect of customer value.

• It is already decided between kolson and Lays about their price strategy.
• They made the agreement that their prices will remain the same.
• They also decide the price of their packaging; they also set their strategy on Cost
+ Price.
• Their cost includes:
▪ Man Power
▪ Machinery
▪ Electricity
▪ Raw material
▪ Employees

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Setting the right price is the most important thing, and Lays is doing well. Price is set by
keeping in view the quality of the product and the prices which are being offered by the
competitors.

Profit Maximization:
Pepsi has priced its products to achieve a certain percentage return on its sales. It has
settled the price of its products so that it can earns a net profit on its net sales.

Consumer Satisfaction:

There is a balance in consumer’s mind between the price they pay and the quality of the
product they purchase.

Affordable Price:

The price of Lays is affordable for middle level income groups. The price is adjusted
according to the demand of the product. When Lays Jumbo pack was launched, its price
was high as Rs. 25 now they reduced it @ Rs.20, causing an increase in demand of the
product.

Place/Distribution
PepsiCo uses a global network for distributing its products to consumers. Venues for
distribution and sale are considered in this element of the marketing mix. PepsiCo’s
places for distribution are as follows:

1. Retailers
2. Online merchandisers

Most PepsiCo products are available at retailers, such as supermarkets, grocery stores,
and convenience stores. However, customers can access PepsiCo-licensed merchandise
like tumblers and t-shirts through retailers and their websites. Based on this element of
the marketing mix, PepsiCo’s places for distributing its products are mostly non-online
retailers.

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PROMOTION PLANNING

1. Advertising:

Lays advertises through various channels

▪ Media (Fm media, TV channels, Internet links etc.)
▪ News Papers & Magazines
▪ Billboards & Banners
▪ Sponsoring various Shows and Matches
▪ Free samples

2. Sales Promotion:

Lays made sale promotion in the following ways:

▪ By launching any new product like Aquafina they get sale promotion in their
business.
▪ When Lays lauched they offered a package of “Buy 2 and get 1 free”.
▪ When Mountain Dew was launched they offered free drinks to people to develope
the taste.
▪ They have a deal with KFC and Pizza Hut where they offer drinks to their
customers.
▪ They decrease their prices to increase the sales to capture the market.
▪ They also decrease their prices in winter too.

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Budgeting
The world’s largest snack-food maker may boost the advertising and marketing budget
for its namesake cola and other drinks by as much as $600 million, or 50 percent, to $1.7
billion when it announces the results of a yearlong business review Feb. 9, according to
analysts surveyed by Bloomberg. Nooyi is seeking to take back market share from Coca-
Cola Co. and regain the confidence of investors who have questioned whether she has
focused too much on healthier products. Some investors and analysts have also
recommended splitting the company. PepsiCo’s shares have risen about 2 percent during
her five-year tenure while Coke has gained more than 50 percent. “PepsiCo overall needs
to step up investments behind their brands to reinvigorate them,” Bonnie Herzog, a New
York-based analyst at Wells Fargo & Co., said in a telephone interview. “If you go back
10 years, they have definitely been under-investing relative to Coke.” Nooyi took over as
Purchase, New York-based PepsiCo’s CEO in October 2006 and sped up the company’s
move into healthier snacks and drinks. She set a goal of tripling sales of what the
company calls “nutrition products,” including Gatorade, Tropicana and Quaker, to $30
billion by the end of the decade. To that end, Nooyi, 56, has focused resources on
acquisitions, including juice producers.

Recommendations
PepsiCo can use its strengths to effectively respond to the issues identified in this SWOT
analysis, especially those considered as threats. The realistic actions that PepsiCo could
take to improve its competitiveness and international growth are as follows:

1. Diversify businesses to minimize market risk exposure

2. Further penetrate developing markets to grow revenues
3. Improve product healthfulness to attract more consumers
4. Enhance recycling efforts to address environmentalism

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References

• Leigh, D., & Pershing, A. J. (2006). SWOT analysis. The Handbook of Human
Performance Technology, 1089-1108.
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