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Product And Service Design Pepsi

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The PepsiCo challenge is to keep up with archrival The Coca-Cola Company - never ends for the world's soft-drink maker. PepsiCo's soft drinks (including Pepsi, Mountain Dew, and Slice) make up about one-quarter of its sales. (Bottling operations are run independently). Pepsi Co also owns Frito-Lay, the world's number 1 maker of snacks such as corn chips (Doritos, Fritos) and potato chips (Lay's, Ruffles, WOW!). PepsiCo sells its Gatorade sports drink and Tropicana orange juice brands through other divisions. The company also sells Aquafina bottled water, Dole juices (licensed), Lipton ready-to-drink tea, and Rold Gold pretzels. Pepsi's mission is to be the world's premier consumer products company focused on convenient foods and beverages. They seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

Problem Statement:

What does product and service design do to help Pepsi meet its consumer needs?

Research Questions

1. What kind of things does Pepsi do in regards to research and development?

2. What are the existing products and services?

3. What are new products and services?

4. What are their legal, Ethical, and Environmental Issues?

5. Examine Pepsi's life cycle.

6. Does Pepsi supply a standardized product?

7. Does Pepsi design for mass customization?

8. What are Pepsi's production requirements?

9. What kind of things does Pepsi do regarding their social responsibility?

10. What kind of factors does Pepsi emphasizes on service design?


Our team will be using the Internet to obtain various information on the company, such as: the income statement, sales revenues, history, finance, products/operations, and industry. We will also be using periodicals and our text book to compile information about product and service design. The text book will be used as a guideline for understanding the concepts of product and service design. While the periodicals such as "Wall Street Journal" and "Forbes" will be used to authenticate our findings and research.

Results and Findings

1. What kind of things does Pepsi do in regards to research and development?

PepsiCo's research and development refers to organized efforts to increase scientific knowledge or product innovation in communications, medicines, and space technology. PepsiCo gives to the community through the PepsiCo Foundation, the PepsiCo Community Affairs Department and PepsiCo divisions. The PepsiCo Foundation, PepsiCo and its divisions contributed approximately $26.4 million to nonprofit groups in 2002. The PepsiCo Foundation and its operating divisions gave grants to more than 1,000 community organizations, of which a significant portion were organizations championing diversity efforts. Organizations are also supported through gifts in-kind, such as product, premiums, printing, meeting arrangements, equipment donations, support of events, conventions, journals and meetings. The geographical area most at risk of HIV/AIDS impacts the health of people and of nations is Sub-Sahara Africa. As a company as PepsiCo with operations in Africa, PepsiCo actively works to address the associated health risk among its employees and in the community. As a global company and concerned corporate citizen, PepsiCo has joined with other businesses to fight HIV/AIDS on a worldwide basis. PepsiCo advise these vendors of PepsiCo's family companies' commitment to support minority economic development with respect to majority-owned companies and general contractors. PepsiCo encourages these suppliers to use minority and women vendors, distributors and qualified subcontractors as part of their service. PepsiCo also makes a great job on product innovation, such as "buying into the burgeoning industry through Pepsi Bottling Group (PBG, $23), the leading manufacturer and distributor in the U.S. of Pepsi's beverage brands. Bottlers are more exposed to the water business, since their fortunes aren't based on, say, how well Chester the Cheetah pushes Cheetos for Pepsi's Frito-Lay division. PBG, which is nearly half-owned by PepsiCo North America, is expected to reap some 40% of its domestic profit growth over the next few years to come from H2O. That could push profitability 'surprisingly high'" suggests by Goldman analyst Marc Cohen in Lee Clifford's articles (pg.204). Therefore, Aquafina is named No. 1 best-selling brand of bottled water in The New York Times in 2003.

2. What are the existing products and services?

PepsiCo's success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of its services by all employees. PepsiCo has hundreds of brands. PepsiCo's brands are available worldwide through a variety of go-to-market systems, including direct store delivery (DSD), broker-warehouse, and food service. There are five best known brands are: Frito-Lay Brands, Pepsi-Cola Brands, Gatorade Brands, Tropicana Brands, and Quaker Brands. The PepsiCo creates more new product lines to serve different tastes for the different kinds of customers in the market. That is also the successful strategy to keep the company running well in both domestic and international market. Almost each year the PepsiCo has the new products to introduce to the market.

The website provides the whole list of the PepsiCo's new introductory products and events of each year from 1965 to 2003. For examples, Doritos brand tortilla chips are introduced and Pepsi enters Japan and Eastern Europe in 1966. In 1967, PepsiCo stock splits two-for-one. And Pepsi Generation advertising, "Come Alive! You're in the Pepsi Generation" campaign that named and claimed a whole generation (1963-67), introduces a new theme: "Taste that beats the others cold. Pepsi pours it on!" In 1969 Bold, modern Pepsi-Cola packaging using red, white and blue is introduced. "You've got a lot to live, Pepsi's got a lot to give,"



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