Pepsi: Crunching The Competition Essay

2583 words - 11 pages

When Frito Lay, the snack food subsidiary of PepsiCo, entered India in 1990 it had to face the formidable presence of Uncle Chipps from homegrown Delhi-based company Amrit Banaspati, which accounted for over half the market.There were other discouraging moments too. In 1993-94, a Pepsi spokesman admits, a local chain of sweatmeat shops, Nathu's, sold more volumes than Frito Lay sold in the whole of India.Eleven years down the line it is Frito Lay that has not only managed to buy out Uncle Chipps, but has also succeeded in becoming the dominant player in the market with little challenge from its rivals.Apart from a dominant 90 per cent share of the tough packaged potato chips market, it now ...view middle of the document...

Most importantly, it fell into the standard multinational trap by failing to read the consumer correctly. The multinational's decision to launch in India was mainly an offshoot of the success of its snack food business worldwide. Frito Lays' first offerings were Hostess potato chips, Cheetoz corn snacks and Ruffles, which was a ribbed chip.By 1994, it was clear that consumers weren't biting at least two offerings - Hostess and Cheetoz. Hostess bombed because it was a plain salted offering that was priced higher than the nearest competition. And Cheetoz, an extruded corn-based snack, proved unfamiliar for Indian taste-buds. Both products were withdrawn for lack of volumes.Even with Ruffles, however, Pepsi suffered some teething problems. When Pepsi entered the market Uncle Chipps enjoyed a market share of 53 per cent. The rest went to local players such as Hello, Twinkle, Marvel and OK. (By the mid-nineties, the other major competitor, Binny's from Delhi-based liquor group Jagatjit Industries, had made an ignominious exit on the back of packaging problems which affected the shelf life of the product.) Ruffles was perceived as a premium product, mainly because of the relatively high-tech packaging and its global lineage. Lays was the first company to introduce nitrogen packaging in a special metallic film that was developed by the parent company.Although this improved the shelf life of the product, it also increased costs - packaging alone accounted for half the price of the product. The problem was that consumers didn't perceive the plus in the packaging; as far as they were concerned, they were paying extra for the same chips.To begin with Ruffles was available in various flavours including "Classic Salted". Then in 1991, to combat Uncle Chipps, it introduced such "ethnic flavours" as "Pudina Punch" and "Magic Masala". Despite this, by 1994, Ruffles sold only 300 tonnes - a tenth of the branded potato chips market.Consumers were turned off because Ruffles chips were initially a darker brown rather than the conventional golden colour. This was mainly because the company used locally sourced potatoes which others were also using. Again, this didn't allow any scope for product differentiation that would rationalise its premium position.Frito Lay also choked on its distribution strategy. Before 1994, Frito Lay was distributing chips through Pepsi India's bottling system. This proved a mistake because the nature of the two businesses are different. Soft drinks is an established market in India whereas the branded snack food market was undeveloped. So simply offloading chips to the retailer, which is what was done with soft drinks, proved counterproductive especially since snack foods had a far lower shelf life.Turning point The turning point was 1995. As a company spokesman says, "When we launched snack foods in India, it took us time to understand the product, the price and distribution. By 1995, we had clearly understood the consumer, consumer...

Other Essays On Pepsi: Crunching The Competition

Unit 7 assignment Purdue global - Mt140 intro to management - Paper

546 words - 3 pages much bigger over the last one hundred-twenty five years, and has made its competitor, Pepsi Inc, falter in the line of competition and run for their market share. Corporate Social Responsibility refers to the contribution of a business to the social and economic development of the surrounding community, improving the quality of life of the workforce and society at large. Corporate Social Responsibility (CSR) is also aimed towards environmental

Environmental Factors Essay

1152 words - 5 pages leader in the beverage industry. Some of the high level domestic and global environmental factors which could possibly impact on Coca-Colas marketing decisions are; economic influences, globalization, political climate, regulatory requirements, demographic environment, and direct competition. Some of these factors will be discussed in detail.When analyzing the economic factors careful consideration must be given to the dynamics involved by which

How do firms make location decisions when internationalising - uni year 1 - essay

2286 words - 10 pages theories focus more on the locational advantage of internationalising, explored the concept of markets competition in both product and process such as the US. His theory identified and explained what opportunities these firms had outside of their current market. Designing a 4 stage product life cycle first being the home market. Proceeding clockwise, exploring markets with a similar level of consumer needs, for the US firms, Europe countries and

Strategic Management Report For TC Company

7137 words - 29 pages both hardware and software are making big progress. The online gaming industry is basically attractive through Porter's Five Forces analysis. Urgent affairs for China's online gaming industry should focus on integrating resources, further improving game quality, and avoiding excessive competition. In addition, strategic group map reveals that TC should strive to win more market share to accomplish its short-term goal and consolidate its long-term

Vail Resorts Case Analysis

7419 words - 30 pages 10 years running, it must realize that the competition is gaining financial strength and cannot be overlooked (Yahoo!Finance, 2006).* Strength of the U.S. Dollar: Canadians often travel to the states to spend discretionary income when the strength of the U.S. Dollar exceeds that of the Canadian. Currently, the Canadian dollar is weaker that the U.S. which means Canadians must pay more if they cross the boarder to ski. Therefore, U.S. ski

Persuasive Essay Gay And Lesbi

623 words - 3 pages someone is born producing hormones of the opposite sex, shouldn't we have compassion, instead of hating and labeling them as 'morally wrong'? Why are so many people homophobic? Being gay is human, not wrong.Many people say that gays and lesbians are not equal to the straight community. They are wrong. There are hundreds of gay and lesbian foundations and activist groups around the country. They are not fighting for gay rights, but for human rights

Mark Mcgwire Vs Sammy Sosa

1206 words - 5 pages Although a lot of people play baseball two names that come to mind are Mark McGwire and Sammy Sosa. McGwire and Sosa are very good hitters but are also so very different hitters. McGwire and Sosa are very great athletes who share apart of baseball history. McGwire and Sosa are good players but off the field they are very charitable individuals. McGwire and Sosa have many similarities and differences. IT is hard to compare Mark McGwire and

Master and slave. an analysis

495 words - 2 pages Each of the characters in The Tempest finds themselves in bondage. However, by the end of the story, the same characters are set free from whatever enslaves them. A few characters one can see enslaved are Prospero, Miranda, Ariel, and Caliban.Prospero is in bondage to his magic. Since his exile by his brother from his dukedom in Milan, he has had but a few books to help pass the twelve long years. During this time, he becomes very proficient in

Methods Of Therapy

2480 words - 10 pages METHODS OF THERAPY Therapy, from a psychologist's viewpoint, has many different meanings. It can be physical or psychological, or even both. In this paper, several different aspects of therapy will be discussed. First the word therapy will be defined more clearly, and then psychotherapy and how it differs from other interactions yet is also similar. Next therapy will be examined from the Psychodynamic, Cognitive and Humanistic-Existential points

Phineas And Gene A Comparitive

1538 words - 7 pages was a natural athlete, so when he would beat Phineas in school, he became very happy. Gene stated, "He might be the best natural athlete in the school, the most popular boy, but I was winning where it counted."(105). Even though he and Phineas were not in competition, Gene always managed to try and be on top. Gene was aware that Phineas did not excel academically, but in his mind he believed Phineas "was trying to take me in; he hated the fact


2008 words - 9 pages , Torrio simply had him killed off in 1920. In a way, he symbolized the revolt of the second-generation Americans against the Old World attitudes of their elders, the so-called "Mustache Petes." (Hank Messick and Burt Goldblatt 22).Soon the competition of selling newspapers became incorporated with the Mafia. McBride and Ragen allied together, both being in charge of large newspapers in Cleveland. In 1940, Moses Annenberg founder of the national

Similar Papers

Brandinf Essay

6830 words - 28 pages launch energy drinks with the brand name of "Sting".When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, "Teem" to compete with 7up. It successfully, after some years, took over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share where as the coke just has 20

Effective Communication Case Study

1255 words - 6 pages to deal with the public in the United States, but now other countries as well. However, the same steps the PepsiCo took in 1993 would be the same steps the company would need to take today. Effective communication is the key and Pepsi showed that. The ensuing activities of PepsiCo and the U.S. Food and Drug Administration won the company the coveted "Best of Silver Anvils" in the 1994 Public Relations Society of America competition. (Center, 2003

Communication Case Study Analysis: There's A Syringe In My Pepsi Can! Mkt438

1797 words - 8 pages Effective communication between an organization and its publics is key component of crisis management. Organizations must see the importance of releasing the right information to both internal and external publics to minimize negative publicity and negative public reaction. In today's marketplace organizations have to make a concerted effort to manage a crisis situation or inevitably the media will. A crisis such as the Pepsi Case Study: There's

Competitor Analysis Of Coca Cola Southern States University / Bu 531 Assignment

1871 words - 8 pages Adnan Suzen Competitor analysis of Coca Cola 1. Number of competitors in each market (domestic and international) Pepsi The most important and nearest competition of coca-cola; its own arch competitor Pepsico was shaped right after the merger of Pepsi and Frito put in 1965. The newest has also seen increase inorganic profits in 20 17. It's 20 billion dollar makes in its own product portfolio. US it-its biggest market at which it's participated