Life Cycle

Product Life Cycle

1)   Pre- launch or Development:  In the early days, Caleb Bradham, a pharmacist, made ‘Brads Drink’ which was basically a formula made digestive drink later named ‘Pepsi-Cola’. The trademark ‘Pep Cola’ was bought for 100 dollars.

2)   Introduction: The initial aim was to create awareness. The trial of the product was a success. Also, Pepsi-Cola was not sold in bottles but through soda fountains. The distribution of the product was very selective and started from Caleb’s pharmacies.

As awareness was there key aim, a celebrity endorsed the product.

3)   Growth: Even during the recession of 1929 and post that, sales of Pepsi-Cola were only rising. Value for money is what brought people to the drink. With the increase in competition, Pepsi-Cola was now bottled and sold. With a low price and huge volumes of sales, Pepsi-Cola got a huge boost in terms of reach and availability to the consumers.

4)   Maturity: To the present day, Pepsi has been in the maturity phase. Using the establishment of the product, range of products was then launched to increase the profit making stage in the curve. The brand is constantly aiming to differentiate itself as a brand for the young. Pop stars have been associated with Pepsi for the same reason.

5)   Decline: Though the brand is very strong and may not show a downfall, it constantly needs to reinvent the brand itself to not enter the decline phase.

Industry Life Cycle

The industry, per se, is in the maturity stage, which includes Coke, Pepsi, Sprite, Thums Up, Mountain Dew, Limca, 7up, Miranda.

80 % of the sales in drinks come from carbonated drinks.

However, according to a report in 2000, the per capita consumption as compared to the US is very small – 5 bottles annually versus 800 bottles annually.

Industry profitability will continue until new products are introduced to keep the market competitive and also reduce cost per unit.

A new product in the market of soft drinks faces a challenge of product differentiation and distribution (reach) of the product, that too, in an already established soft drink industry.

Though with studies proving that soft drinks are one of the main reasons for increase in obesity in children, drinks such as fruit punch, iced tea, lemonade (non carbonated beverages) are also growing in consumption.

Brand Life Cycle

Though PepsiCo is widely known because of Pepsi, but its other products, which consist of 63 % foods and 37 % beverages, are huge revenue generators too. Also, PepsiCo caters to different demography with their required tastes. Eg., Kurkure for the Indian regional market.

The brand has evolved since the 1800’s and as of now, they are the second largest food and beverage business in the world. Their merger in 1965 with Frito-Lay let to the expansion from Pepsi to a range of products that they have today.