In this hypothetical case, the 3-firm concentration ratio is Further examples Banking The Herfindahl — Hirschman Index H-H Index This is an alternative method of measuring concentration and for tracking changes in the level of concentration following mergers. If the index is belowthe market is not considered concentrated, while an index above indicates a highly concentrated market or industry — the higher the figure the greater the concentration.
Demographic is the study of human population in terms of size, density, location, age gender, race, occupations and other statistics. The marketers at Pepsi keeps close track at the demographic trends and development in Pakistan and after some objective research they have come up with some facts regarding the Pakistan demographic structure which have helped them a lot in targeting the best segment and increasing their sales.
The Pepsi Pakistan have targeted their market to youth mostly in universities and cafes but their major success lies in the targeting of the family structure of Pakistan.
Pepsi is not just a brand for young energetic youth but it is also a family product there is hardly any party in Pakistan which does ends on a cold drink which is a success of Pepsi demographic research.
Investing in sports specially in cricket have helped Pepsi in winning the hearts of young blood which indeed is a very high consumer of their product. They have developed different flavors for different ages of consumers— 7 Up is mostly used in hotels and is consume by old age people to digest their food, The sugar free Pepsi is purchased by diabetic patients though it is still unhealthy for them but special product specifically for diabetic patients eager patients to buy the productDew Macro and micro of pepsi Sting are for younger age group who feels that they will get extra energy after drinking and last but the not least Pepsi itself is a general product which is not specific to a particular age group.
So the demographic research and correct implementation have made Pepsi an unbeatable giant in Soft drink industry of Pakistan. Consumers require buying power to buy a product. The economic environment consists of factors that affect consumer purchasing power and spending patterns.
Pakistan has a developing economy which offers outstanding business opportunities for the right kind of product. Pepsi Pakistan has also focused on this factor using their economic forecasting. Pepsi have announced different products for different set of people.
So if there is an economic downfall in the country they still have the capacity to run their business and they have absolutely no fear of wipe out. Their economic policy preparation can be seen through their price patterns— The 20Rs regular drink is targeted for local customer outside needing refreshment after lunch or dinner.
The 40Rs disposable pet bottle is targeted for people who are traveling and have high buying capacity. The 75 Rs pet bottle is targeted for families belonging to middle class who wants to enjoy a dinner with soft drink.
The Rs Jumbo is targeted for the occasions or parties and is a product which is more consumed by middle class.
The 50Rs Cans are status symbol and are consumed by upper class to show some difference.
The other advantage Pepsi finds from their perfect marketing is that their sports sponsorships help them gain respect in youth which increases their sale when there is a win from Pakistan team.
So they never get cut short in a boom. The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. So Pepsi shares a great liberty in manufacturing their products in Pakistan for the home country and also for the neighboring countries if there is a need of more supplies to neighboring countries of Pakistan.
The natural environment is vastly effected by the cluster of industries and Pepsi Co. According to a report Pepsi Co. Through this approach of new packaging and paying high amount of money in the recycling system they are now considered as an environmental friendly company. Their new initiative to replenish water has been a major success.
They are able to achieve a positive water balance, giving back more water than they consumed through their various initiatives of recharging, replenishing and reusing water.
The cultural environment is made up of institutions and other forces that affect the society basic values, Perceptions, preferences and behaviors.
The Pepsi uses the cultural factor of people of Pakistan which is giving dinners to the family remembers and they have targeted this particular thing in their ads which has created Pepsi a basic necessity of every get together.
Pepsi have utilize this cultural factor very smartly and through discount promotions and viral ads campaign during the Ramadan and EID help them gather a very successful business and market share. The perfect ads campaign forces even the lower middle class to purchase the Pepsi products during Ramadan and especially for EID.
One major disadvantage Pepsi had due to some extreme religious beliefs of some people in Pakistan which tried to portray Pepsi as a Non Muslim company and the products they sell are forbidden or prohibited in Islam.
But Pepsi came out of this challenge by asking Junaid Jamshaid old singer now a renown Islamic scholar to do an ad for them to promote their product and tell consumers that this product is permitted.
So tackling each factor sensibly is an art of marketers and Pepsi Co. The political factors also play a key role as the macro environmental factor in the company profits and market value.
The Political factor comprises of two things, internal factor—which involves country level politics that affects the country. External factor—which involves global political change that also creates problem or hurdles for the company.
The global political factor that affected the most to Pepsi Co.
Secondly there are some major local political factors that affect Pepsi Pakistan—the biggest one is that the Pepsi Pakistan is a franchised which is owned by politicians Jahangeer Tareen PTI and Hammuyun Saeed PMLN so any rift between the major political parties harms the production of Pepsi Pakistan as traditionally there is a concept of political victimization in Pakistan.
But on the other hand Pepsi Pakistan is being organized very well as there is not political involvement inside Pepsi Pakistan and every employee is selected and treated without any political basis. The Pepsi Pakistan has also applied strict rules inside the company and no employee is allowed to form any sort of political union inside the company.
As we are discussing political factors with respect to a Pakistani company so one harm full disease which every big company has to face in Pakistan is extortion and same goes with Pepsi which gives of about 2million rupees in extortion every year to supply their products through logistics.
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PepsiCo PESTEL/PESTLE Analysis & Recommendations. Updated on Updated on February 6, by Pauline Meyer. A Pepsi-Cola signage in New York City.
PepsiCo must improve its products, supply chain, sustainability, and expansion strategies based on the company’s PESTEL/PESTLE analysis. based on the conditions of their remote .
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