Case Study : The Pepsi Company

For more than a century, Coca Cola and PepsiCo have been the major competitors within the soft drink market. By employing various advertising tactics, strategies such as blind taste tests, and reward initiatives for the consumer, they have grown to become oligopolistic rivals. In the soft-drink business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market shares in virtually every region of the world. They have brands that the consumers want, whether it be soft-drink brands or in PepsioCo’s case, snacks. With only one soft-drink market, the two competitors have no choice but to increase sales by stealing the other competitor’s clients. This led to the term, the “cola wars” which was first used

The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called “Brad’s drink.” It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies

In 1898, Caleb Bradham which was a pharmacist invented pepsi-cola beverage. It was first called the “Brad Drink”. Then its named changed into Pepsi, however some parts of North America called in Pepsi-Cola.

Since there are a wide range of products available, the pricing for both Coca Cola and Pepsi is done according to the Market demands and the geographic segment and thus both the products pricing are set around the same level. Neither of the brands can win if they enter into a price war, simply because the cost of manufacturing and transportation is huge. The advantage to either of the companies was if they enter into a brand war. Since, Coca Cola always had competitors constantly driving them to be smarter, better and faster and since they were successfully been existing for more than a century, they have had to remain consistent with their pricing strategy. Throughout the years, Coca Cola has made many pricing decisions, but eventually the ultimate goal is to maximize the shareholder value. Coca Cola uses lower price point to penetrate new markets to face competition and also to raise brand awareness. This strategy is strongly implemented till it repositions itself as the Premium beverage as compared to its competitors.

By consulting the above graphs and charts it can be concluded that Pepsi has been a strong competitor to Coke and that throughout history they have been performing at comparable rates. Each has a similar background and customer base, but there are some differences between the two companies and their individual performance overall. It is clear that Pepsi holds a major stake in the market and is somewhat ahead of Coca-Cola in market share and productivity. Although both companies appear to be competing neck-to-neck Pepsi appears to be performing at a slightly higher rate than Coke, despite the popularity of both. Coke is wildly popular and is considered an American institution, but many seek different tastes and this is where Pepsi has been taking some of the market share as some consumers opt for Pepsi as their choice of beverage.

The rivalry between coke and Pepsi is legendary and not just only product development and occasionally get personal collusions which sometimes resonate their marketing and promotional activates.

In 1931 the company switched hands and the founder of the modern Pepsi-Cola- Charles Guth- established a new company with a better-formulated drink, new bottle and merchandising.

PepsiCo’s corporate strategy had diversified, in 2008, the company into salty and sweet snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees, purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals, grain-based products, and breakfast condiments. Strategies that kept their brands at the top were tied to new product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. A new element of PepsiCo’s corporate strategy was product reformulations to make snack

Coca-Cola seems to have a slight lead in the market and has always been a leader but not by a landslide Pepsi is always running close behind. There is both loyal Coke and Pepsi customers and some who enjoy both products and go back and forth. Coke has many brands like Minute Maid, Vitamin Water, Aquafina, Sprite, and many more. Pepsi also has many of the same or similar brands like Tropicana, Sobe Life Water, and more to coincide with Coke. Brand extensions are very important in the success of these companies. Pepsi Cola and Coca-Cola were both started in the late 1800s by pharmacists in the south Pepsi in N.C. and Coke in GA. Pepsi Co was formulated in a merger with the Frito Company which became Frito Lay. Brands like Frito Corn Chips and Lays Potato Chips and Pepsi together were formed in 1965. Though apart Frito was started in 1932 and Pepsi in 1895. This 1965

Pricing strategy of PepsiCo is depending on consumer’s perception of value. PepsiCo also change to a new “hybrid everyday value” plan for reduce the prices for different in between holiday and regular day. The purpose of the new pricing strategy is to discount on holiday with value package. The new pricing strategy is designed to boost up the sales and profit. PepsiCo use that strategy because they want to attract more daily customer. Prices of the products also have to bring the maximum benefits and profile for PepsiCo. Following factors PepsiCo kept in mind while determining the pricing strategy. PepsiCo should not set their products’ price too high or too low compared to the competitor company. Moreover, PepsiCo’s products pricing strategy might influence the relationship between PepsiCo and Walmart because Walmart is focusing on selling low price for the product. So that, it may put some pressure on PepsiCo because it low down the

Pepsi-Cola is a carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores, restaurants and from vending machines. The drink was first made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since 1903, including Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil), Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, and Pepsi Ice Cucumber in Japan .Pepsi cola is situated is an Industry that is dominator by two Competitors Coca

In 1971 Donald M. Kendall became the chairman of the board of directors when Herman W. Lay retired where he held the positions for 11 years. From there the companies starts to grow from there. In 1977, PepsiCo was able to bring Pizza Hut Inc. under its umbrella and a year after that Taco Bell. While PepsiCo Inc. is bringing more members to the corporations they also bring new products, they introduces the first soft drink that had real fruit juice (Slice also available in Diet) and also introducing Tostitos brand chips. PepsiCo Inc. did not stop there with their progress. From 1980 – 1989, PepsiCo Inc. created caffeine-free colas; they also bought Kentucky Fried Chicken (KFC), Mug Root Beer, Walkers Crisps, and Smith Crisps. Not only that, but they were able to have a “space can”, which met that they had one of their cans tested aboard a space shuttle. PepsiCo Inc. did not stop there and that is shown through their accomplishment from 1990 – 1999. Two drinks that is popular was introduce in this time frame one of which was a tea base drink and that was a corporations between Pepsi-Cola and Unilever. The second drink is from another well-known brand, Starbucks, which is a North American Coffee Partnership from PepsiCo Inc. with Starbucks. They also created the Aquafina, which is well known everywhere today. With all the products they produce we cannot forget about what PepsiCo Inc. does on the side like planning to buy Cracker Jack and then they also bought Tropicana

1.) Why do companies like Pepsi need to globalize? What are the various ways in which foreign companies can enter a foreign market? What hurdles and problems did Pepsi Face when it tried to enter India during the 1980s?

Long before now has branding been considered as one of the peripheral aspects of business. Manufacturers, investors and other key players focused on the product without paying much attention to the consumer. But as the business landscape got tougher, marketing became not just an integral part of business but one of the fundamental principles of success.

Pepsi Co started in 1965 and became one of the world 's highest end user product businesses with a number of important and precious trademarks (Bongiorno, 1996, p 70).