My View On Macro environmental Factors of Pepsi Pakistan

Pepsi Pakistan

Macro Environmental Factors :

Demographic:
Demographic is the study of human population in terms of size, density, location, age gender, race, occupations and other statistics.
The Pepsi Pakistan Private Limited has also researched in the demographics of Pakistan. 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. According to the Pepsi Pakistan research report the young people in Pakistan lies between 50 to 60 % of the total population of, out of which almost 45 % are 8 years older. So the Pepsi Pakistan target market is almost 45% of the population which is a very huge amount of consumer for a company to promote and sell their product. 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 product), Dew and 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.
 Economic Environment:

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 100Rs 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 Pepsi Co. price targeting                                    
for different groups help them run their business efficiently in economic down fall time too. If the there is a big economic downfall in the country so their sale of regular bottles decreases but on the same time due to their perfect marketing their  1.5 litter pet bottle sale increases. 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.

Natural Environment:
    The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. The Pepsi Co. have a great advantage manufacturing in Pakistan because the major ingredient required to manufacture Pepsi is Sugar which is produced in a vast amount in Pakistan. 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. was also one of the major factors of waste materials in the country through their disposable plastic bottles but now they have invested in a major recycling plant in Pakistan and have followed many different ways to reduce the industrial waste. According to a report Pepsi Co. have reduced their 80% of the industrial waste through new majors (Last Friday PepsiCo issued an update on its goals of sending no waste to landfills by 2020, being entirely fossil fuel free by 2023, and making all of its packaging recyclable or biodegradable) .
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 Pepsi Co. another initiative of waste to wealth in which they educated their customers how to properly dispose of the used bottles so that they could be recycled is also a important breakthrough in making a green environment.

Cultural Environment:
     The cultural environment is made up of institutions and other forces that affect the society basic values, Perceptions, preferences and behaviors. The Pepsi Co. Pakistan is an expert in dealing with the cultural factor though it is an non Muslim company but still it’s most sales are in Muslim countries the reason behind their success is that they have never created boundaries of religion in their add campaign and they have deal with the Muslims in their own way. 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. The other major Muslims belief is Ramadan and EID. 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. team have always come up with the new ideas to increase their business.

Political:
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. Pepsi Co. also faced some global and local political issues during their production here in Pakistan. The global political factor that affected the most to Pepsi Co. was due to the different wars started by America against Muslims as Pepsi Pakistan is an international franchise of Pepsi Co. which basically is a christen company so tension at the global stage cuts the sale of
Pepsi locally here in Pakistan. 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.

Technological Factor:
The technology is advancing day by day with new technology coming up and replacing the old quite easily. The technology advancement is also a macro environmental factor for a business. As the new technology coming up rapidly so no company can rely on their conventional ways of production and other tasks. World has now become a global village and there is no issue of transferring one product from one country to different so the only way to survive for companies is by producing the product in quick time and with cheap price this was the reason behind the success of China as they manufactured cheap and fast products through advancing in technology and by using new ways to manufacture a product. Similarly Pepsi also keeps on advancing their machine, production units, sale systems and logistics supply system to keep up with the fast growing world. The major change in the Pepsi production came up with the advancement of their inventory control system from normal SQL to SAP. This allowed them to record complete sale record of the country and track each every sales point present throughout the country. The expert system Pepsi Co. uses helps them in taking crucial decisions and forces them to advance to new production units in a timely fashion. The new recycler plant implemented by Pepsi Co. saves 70% of the waste which not only helps in making environment green but also reduces the cost of bottles by 50%.

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