In industry; The New Y?rk based Pepsi ??mpany In?.

the m?dern urban ?ulture, ??nsumpti?n ?f s?ft drinks parti?ularly am?ng y?unger
generati?n has be??me very p?pular. S?ft drinks in vari?us flav?rs and tastes
are widely patr?nized by urban p?pulati?n at vari?us ???asi?ns like dinner
parties, marriages, s??ial get t?gether; birthday ?elebrati?n et?. ?hildren ?f
all ages are espe?ially attra?ted by the mere menti?n ?f the w?rd s?ft drinks.
The s?-?alled ??mpetiti?n f?r this pr?du?t in the market is different fr?m ?ther
pr?du?ts. Mass media, parti?ularly televisi?n, has ??ntributed largely t? the
ever-gr?wing demand f?r s?ft drinks. The attra?tive jingles and sp?rts make the
large audien?e remember the brand at all times. In t?day’s highly ??mpetitive
market pla?e, tw? players have d?minated the industry; The New Y?rk based Pepsi
??mpany In?. and the Atlanta based ???a- ??la. Thr?ugh?ut the gl?be, these maj?r
players have been battling it ?ut f?r a bigger ?hunk ?f the ever –gr?wing s?ft
drink market. This battle has been witnessed in India t??, between these tw?

                        The emergen?e ?f rural markets as highly untapped p?tential
emphasizes the need t? expl?re them. Marketers ?ver the past few de?ades, with
inn?vative appr?a?hes, have attempted t? understand and tap rural markets. Rural
marketing is an ev?lving ??n?ept, and as a part ?f any e??n?my, has untapped p?tential;
marketers have realized the ?pp?rtunity re?ently. Impr?vement in infrastru?ture
and rea?h, pr?mise a bright future f?r th?se intending t? g? rural. Rural ??nsumers
are keen ?n branded g??ds n?wadays, s? the market size f?r pr?du?ts and servi?es
seems t? have burge?ned.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now


                   The rural p?pulati?n has sh?wn
a trend ?f m?ving t? a state ?f gradual urbanizati?n in terms ?f exp?sure,
habits, lifestyles, and lastly, ??nsumpti?n patterns ?f g??ds and servi?es. S?,
there are dangers ?n ??n?entrating m?re ?n the rural ?ust?mers. Redu?ing the pr?du?t
features in ?rder t? l?wer pri?es is a danger?us game t? play. Rural buyers
like t? f?ll?w the urban pattern ?f living. Ast?nishingly, as per the ?ensus
rep?rt 2003-04, there are t?tal 638365 villages in India in whi?h nearly 70% ?f
t?tal p?pulati?n resides; ?ut ?f them 35 % villages have m?re than 1000 p?pulati?n.


                   Rural per ?apita ??nsumpti?n
expenditure grew by 11.5 per ?ent while the urban expenditure grew by 9.6 per ?ent.
There is a tremend?us p?tential f?r ??nsumer durables like tw?-wheelers, small ?ars,
televisi?n sets, refrigerat?rs and h?useh?ld applian?es in rural India.


1. Studying ab?ut the marketing strategy and 4 A ?f su??essful
pr?du?t in rural areas.

2. Studying ab?ut the ?hallenges inv?lved during
marketing ?f FM?G pr?du?ts and h?w ?rganizati?n ?ver??mes with new and
different strategy.

3. Studying ab?ut distributi?nal and pr?m?ti?nal strategy
?f su??essful pr?du?t in rural areas.



?hallenges in rural marketing


1.      Understanding
rural ??nsumers –Their
per?epti?n ab?ut the pr?du?t.

2.      L?w
per ?apita in??me.

3.      L?w
litera?y level

4.      Seas?nal demand.

5.      La?k
?f pr?per infrastru?ture and ?ther physi?al a?tivities.

6.      Underdevel?ped market.

7.      Many


Study ab?ut FM?G pr?du?ts
su??ess rate in rural markets in these 15 years (2009)

Extensive study was ?arried ?ut by MART ??nsultant
??mpany f?r the first time in India t? l??k fr?m all different angles that ?an
lead su??ess ?f pr?du?ts in rural areas.

Statement ?f pr?blem f?r
FM?G pr?du?ts


FM?G imp?rtant ??ntribut?r
t? GDP.




 ?ver 70% ?f sales are made t? middle ?lass h?useh?lds
t?day and ?ver 50% is in rural India. The se?t?r is energized ab?ut an es?alating
rural p?pulati?n wh?se in??mes are rising and wh? are willing t? spend ?n g??ds
designed t? impr?ve their lifestyle.


urban market is getting saturated due t? high ??mpetiti?n and awareness ?f pe?ple
is high, it’s n?t easy f?r marketer t? play in urban areas s? they have t?
shift their paradigm ?r l??k the matter in different angle.


a new segment ?an again sustain the pr?du?t life ?y?le ?f a pr?du?t.

?ateg?ry and pr?du?ts:


?ateg?ry Pr?du?ts –

H?useh?ld ?are-            Fabri? wash (laundry s?aps and syntheti?
detergents); h?useh?ld ?leaners (dish/utensil ?leaners, fl??r ?leaners, t?ilet ?leaners,
air fresheners, inse?ti?ides and m?squit? repellents, metal p?lish and
furniture p?lish).

 F??d and Beverages-           Health beverages; s?ft drinks; staples/?ereals;
bakery pr?du?ts (bis?uits, bread, ?akes); sna?k f??d; ?h???lates; i?e ?ream;
tea; ??ffee; s?ft drinks; pr??essed fruits, vegetables; dairy pr?du?ts; b?ttled
water; branded fl?ur; branded ri?e; branded sugar; jui?es et?.

Pers?nal ?are-                  ?ral ?are, hair ?are, skin ?are, pers?nal wash
(s?aps); ??smeti?s and t?iletries; de?d?rants; perfumes; feminine hygiene;
paper pr?du?ts.



size f?r FM?G in rural India

rural market in India is n?t a separate entity in itself and it is highly
influen?ed by the s??i?l?gi?al and behavi?ral fa?t?rs ?perating in the ??untry.
The t?tal size ?f the rural market is estimated at ab?ut 83.3 ?r?re pe?ple ?r
68.84% ?f Indian p?pulati?n (?ensus, 2011). 
The rural market brings in bigger revenues in the ??untry, as the rural
regi?ns ??mprise the maximum ??nsumers in this ??untry.  The rural market generates alm?st m?re than
half ?f the ??untry’s in??me. Rural India ??ntributes a big ?hunk t? India?s
GDP by way ?f agri?ulture, self-empl?yment, servi?es, ??nstru?ti?n et?. The
rural p?pulati?n is emp?wered with rising in??me,  impr?ving edu?ati?n  and 
awareness levels, enhan?ed ??nta?t with the ?utside w?rld, ev?lving ??nsumpti?n
patterns,  emerging  lifestyles 
and,  m?st imp?rtantly, shift  in  ???upati?n  fr?m agri?ulture  t? manufa?turing, self-empl?yment and ??nstru?ti?n.


S? I str?ngly feel t?
expl?re the area ?f FM?G .

Parti?ularly I will be
taking a pr?du?t ?f FM?G and that will be


Rising s?enari? ?f
aerated drink “???a-??la”   and “pepsi” in
rural market and its su??ess fa?t?r.



???A – ??LA
  (AN INTR?DU?TI?N)    


It was invented in May
1886 by Dr. J?hn .S. Pembert?n in Atlanta, Ge?rgia, United States ?f Ameri?a. ???a
??la ?ffers a p?rtf?li? ?f w?rld-?lass quality sparkling and still beverages,
starting fr?m ???a ??la t? ?ver 400 s?ft drinks, jui?es, teas, water and energy
drinks. The m?st su??essful brands are – ???a ??la, Diet ??ke, Sprite and
Fanta. With ?perati?ns ?ver 200 ??untries, it has a w?rkf?r?e ?f 55,000 empl?yees
and serves ?ver 1.7 billi?n servings ea?h day. ?aleb Bradham, a pharma?ist and
industrialist fr?m New Bern, N?rth ?ar?lina, first devel?ped PEPSI in 1898. As
the ??la pr?gressed in p?pularity, he ?reated the Pepsi-??la ??mpany in 1902
and registered a patent f?r his re?ipe in 1903. The Pepsi-??la ??mpany was
first in??rp?rated in the state ?f Delaware in 1919. ?urrently, Pepsi?? is ?ne
the largest ??mpanies in the U.S. It figures am?ngst the largest 15 ??mpanies w?rldwide
a???rding t? the number ?f empl?yees hired. It has a U.S. F?rtune rank ?f 50.
Pepsi is b?ttled in nearly 190 ??untries. Pepsi?? is a w?rld leader in sna?ks,
f??ds and beverages with revenues ?f m?re than $43 billi?n. It ??nsists ?f many
??mpanies am?ngst whi?h the pr?minent ?n?e are Pepsi-??la, Frit?-Lay and Pepsi
F??d Internati?nal. The gr?up is presently int? tw? ?f the m?st pr?fitable and
gr?wing industries namely, beverages and sna?k f??ds. It has s??res ?f big
brands available in nearly 150 ??untries a?r?ss the gl?be.





???a ??la entered India in 1967. In 1977, the Janata g?vernment led by M?raji
Desai ?ame t? p?wer and laun?hed the Sixth Five-Year Plan, whi?h aimed t? b??st
the agri?ultural pr?du?ti?n and rural industries. Seeking t? pr?m?te e??n?mi?
self-relian?e and indigen?us industries, the g?vernment wanted multi-nati?nal ??rp?rati?ns
t? g? int? partnership with Indian ??rp?rati?ns. At that time ???a-??la was
India’s leading s?ft drink when the new g?vernment ?rdered the ??mpany t?
dilute at least 60% ?f its stake in its Indian unit as required by the F?reign
Ex?hange Regulati?n A?t (FERA) ?f 1973 and als? turn ?ver its se?ret f?rmula f?r
???a-??la. The p?li?y pr?ved ??ntr?versial, diminishing f?reign investment and
led t? the exit ?f high-pr?file ??rp?rati?ns su?h as ???a-??la and IBM fr?m



                            After ???a
??la left the Indian market due t? pr?blems with Indian G?vernment, the Indian
G?vernment de?ided t? start a l??al brand t? meet the demand f?r s?ft drinks in
the ??untry. Pure drinks gr?up was started by Padma Sri late Sardar M?han Singh
in 1942, and in 1950 they started b?ttling ???a- ??la a?r?ss India. In 1978,
when ???a ??la left India, they started b?ttling their ?wn brand ‘?ampa ??la’.
Thums Up was intr?du?ed in 1977 t? ?ffset the expulsi?n ?f The ???a-??la ??mpany
fr?m India. The Parle br?thers, Ramesh ?hauhan and Prakash ?hauhan, al?ng with
Bhanu Vakil, laun?hed Thums Up as their flagship drink, adding t? their p?rtf?li?
?f ?lder brands Lim?a (lime flav?ur) and G?ld Sp?t (?range flav?ur). Thums Up
enj?yed a near m?n?p?ly with a mu?h str?nger market share, ?ften ?vershad?wing
d?mesti? rivals like ?ampa ??la, D?uble Seven, Dukes and United Breweries Gr?up’s
M?D?well’s ?rush. A???rding t? statisti?s Parle’s Thums Up market share kept in?reasing
sin?e 1983 (43%) t? 1990 (70%), while its ?hief rivals share had been de?lining.





                     Pepsi?? saw the ?pp?rtunity t? enter the
Indian market after ???a- ??la departed. In their first attempt in 1985, Pepsi??
tried t? j?in hands with ?ne ?f India’s leading business h?use, the R P G?enka
gr?up, t? begin ?perati?ns in the ??untry. They put f?rward a deal t? pr?m?te
the devel?pment and exp?rt ?f Indian agr?- based pr?du?ts, and in turn get
permissi?n fr?m ?entral g?vernment t? imp?rt ??la ??n?entrate and t? sell a
Pepsi?? brand. This request was reje?ted ?n the gr?unds that the imp?rt ?f ??n?entrate
??uld n?t be agreed t? and the use ?f f?reign names were n?t all?wed. In their
se??nd attempt in 1988, Pepsi?? put f?rward a very impressive ?ffer. They pr?mised
t? ?reate empl?yment ?pp?rtunities f?r ab?ut 50,000, make 75% ?f the t?tal
investments in f??d and agr? pr??essing, and bring advan?ed te?hn?l?gy and 50% ?f
t?tal pr?du?e t? be exp?rted. Pepsi?? gained entry t? India in 1988 by ?reating
a j?int venture with the Punjab g?vernment-?wned Punjab Agr? Industrial ??rp?rati?n
(PAI?) and V?ltas India Limited. This j?int venture marketed and s?ld Lehar
Pepsi until 1991, when the use ?f f?reign brands was all?wed; Pepsi?? b?ught ?ut
its partners and ended the j?int venture in 1994.



Entry int? India: A Less?n in Gl?balizati?n

         A REP?RT ?F 1988- TA?KLE ?F P?LITI?S
AND PEPSI?? IN INDIA- A P?LITI?AL HIST?RY                                           



India that it needs Western junk has n?t been easy.” 1

– A New Internati?nalist
Magazine Arti?le, ??mmenting ?n Pepsi’s struggle t? enter India, in August

A Letter
t? Pepsi

In 1988,
the New Y?rk ?ffi?e ?f the President ?f the multi-billi?n ??la ??mpany Pepsi??
re?eived a letter fr?m India. The ??mpany had been trying f?r s?me time t?
enter the Indian market – with?ut mu?h su??ess.

The letter was written by Ge?rge Fernandes (Fernandes),
the General Se?retary ?f ?ne ?f the ??untry’s leading p?liti?al parties,
Janata Dal. He wr?te, “I learned that y?u are ??ming here. I am the ?ne
that threw ???a-??la ?ut, and we are s??n g?ing t? ??me ba?k int? the g?vernment.
If y?u ??me int? the ??untry, y?u have t? remember that the same fate awaits
y?u as ???a-??la.”2 This devel?pment
did n?t seem t? be a matter that ??uld be ign?red. Pepsi??’s ar?h-rival and
the w?rld’s number ?ne ??la ??mpany, ???a-??la, had indeed been f?r?ed t? ?l?se
?perati?ns and leave India in 1977 after the Janata Dal ?ame t? p?wer.3 Even in the
late 1980s, India had a ?l?sed e??n?my and g?vernment interventi?n in the ??rp?rate
se?t?r was quite high.

multinati?nal ??mpanies su?h as Pepsi?? had been eyeing the Indian market f?r a
l?ng time f?r a h?st ?f reas?ns. As the maj?r market f?r Pepsi??, the US,
seemed t? be rea?hing saturati?n levels, the ?pti?n t? expand ?n a gl?bal s?ale
seemed t? have be??me inevitable f?r the ??mpany.


was a lu?rative destinati?n sin?e its vast p?pulati?n ?ffered a huge,
untapped ?ust?mer base. During the late 1980s, the per ?apita ??nsumpti?n ?f
s?ft drinks in India was ?nly three b?ttles per annum as against 63 and 38 f?r
Egypt and Thailand respe?tively. Even its neighb?r Pakistan b?asted ?f a per ?apita
s?ft drink ??nsumpti?n ?f 13 b?ttles. Pepsi?? was als? en??uraged by the fa?t
that in?reasing urbanizati?n had already familiarized Indians with leading gl?bal
brands. Given these ?ir?umstan?es, Pepsi?? ?ffi?ials had been inv?lved in he?ti?
l?bbying with the Indian g?vernment t? ?btain permissi?n t? begin ?perati?ns
in the ??untry. H?wever, the ??mpany ??uld n?t deny that many p?liti?al
parties and fa?ti?ns were ?pp?sed t? its entry int? the ??untry. It had
theref?re be??me imperative f?r Pepsi?? t? ??me up with a pa?kage attra?tive
en?ugh f?r the Indian g?vernment.

The Pr?mises That Helped Pepsi
Enter (?ase Intr?)

In May
1985, Pepsi?? had j?ined hands with ?ne ?f India’s leading business h?uses,
the R P G?enka (RPG) gr?up, t? begin ?perati?ns in the ??untry. The ??mpany,
al?ng with the RPG gr?up ??mpany Agr? Pr?du?t Exp?rt Ltd., planned t? imp?rt
the ??la ??n?entrate and sell s?ft drinks under the Pepsi label.

T? make its pr?p?sal attra?tive t? the Indian g?vernment,
Pepsi?? said that the imp?rt ?f ??la ??n?entrate w?uld essentially be in
return f?r exp?rting jui?e ??n?entrate fr?m ?perati?ns t? be established in
the n?rth Indian state ?f Punjab. In its pr?p?sal submitted t? the Ministry
?f Industrial Devel?pment, ??mpany s?ur?es said that the ?bje?tives ?f
Pepsi??’s entry int? India rev?lved ar?und ‘pr?m?ting and devel?ping the
exp?rt ?f Indian agr?-based pr?du?ts and intr?du?ing and devel?ping Pepsi??’s
pr?du?ts in the ??untry.’ H?wever, the g?vernment reje?ted this pr?p?sal
primarily ?n tw? gr?unds: ?ne, the g?vernment did n?t a??ept the ?lause
regarding the imp?rt ?f the ??la ??n?entrate and, tw?, the use ?f a f?reign
brand name (Pepsi) was n?t all?wed as per the regulat?ry framew?rk.

The ass??iati?n
with the RPG gr?up t?? ended at this jun?ture. N?t willing t? sit quietly ?n
the issue, Pepsi?? put f?rward an?ther pr?p?sal t? the g?vernment a few m?nths

           THE S?DAS

        The ??mpany
knew that the p?liti?al and s??ial pr?blems4 that
plagued Punjab were an extremely sensitive issue f?r India in the 1980s.
Pepsi??’s de?isi?n t? link its entry with the devel?pment and welfare ?f
the state was thus a ??ns?i?us ?ne, aimed at winning the g?vernment ?ver.
The fa?t that Punjab b?asted a healthy agri?ultural se?t?r (with g??d ?r?p
yields in the past) als? played a r?le in Pepsi??’s de?isi?n. Rep?rtedly,
the new pr?p?sal gave a l?t ?f emphasis t? the effe?ts ?f Pepsi??’s entry ?n
agri?ulture and empl?yment in Punjab. The ??mpany ?laimed that it w?uld
play a ?entral r?le in bringing ab?ut an agri?ultural rev?luti?n in the
state and w?uld ?reate many empl?yment ?pp?rtunities. T? make its pr?p?sal
even m?re lu?rative, Pepsi?? ?laimed that these new empl?yment ?pp?rtunities
w?uld tempt many ?f the terr?rists t? return t? s??iety…