Eight Secrets Of Pepsico Inc'S Success

Recently, President Zhu Huaxu, President of PepsiCo (China) Investment Co., Ltd., analyzed the localization ideas and practices of PepsiCo in China for more than 20 years, sponsored by the Ministry of Commerce and international trade and Economic Cooperation Research Institute, "the seminar on localization of PepsiCo Inc."

PepsiCo is a multinational company in the food and beverage industry.

Since 1898, Pepsi Cola was released in the United States, and after many business restructuring, PepsiCo Inc's main business is beverage and food. In 2003, its global turnover was $27 billion, operating profit was $5 billion 800 million, and there were 140 thousand employees worldwide.

Among the many brands owned by PepsiCo, there are 15 retail sales of over $1 billion a year, such as Pepsi Cola, Qi Xi, Miranda, and entertainment.

According to the latest global best international brand ranking by international brand consultancy, Pepsi brand ranked twenty-second in value of $12 billion.

In 1981, PepsiCo Inc set up its first filling plant in China in the Shenzhen Special Administrative Region. At present, the company has set up 15 Pepsi filling plants in China, 1 non carbonated beverage plants, 1 concentrating liquid factories and 4 food exclusive manufactory.

In recent years, Pepsi business has maintained rapid growth in China, with a total investment of more than 1 billion US dollars and nearly 10 thousand employees.

In the top 10 countries and regions dominated by Pepsi's international business, China's growth rate exceeds 30%, ranking first.

According to Li Chunjia, general manager of Pepsi (China) Investment Co., Ltd., PepsiCo Inc's Localization Practice in China is mainly manifested in the following eight aspects: 1.

PepsiCo Inc is mainly engaged in business through PepsiCo (China) Investment Limited registered in China in 1995. It generally contacts with its 15 filling plants in China through special licensing and concentration supply agreements. At the same time, it differs from other parts of the world such as the United States that PepsiCo Inc also has investment in these filling plants.

Generally speaking, the franchisee's franchisee has to pay a licence fee to the Licensor. According to the special requirements of the Chinese market, Pepsi will not charge any fee to the canned factory when the trademark is licensed. The price of the concentrate is also under the Chinese government's management.

PepsiCo Inc maintains the value and value of trademarks by means of advertising investment and other means of operation. At the same time, it also makes joint efforts to expand regional markets through cooperation with filling plants. According to the two sides' franchise agreement, PepsiCo Inc has specific restrictions on the sales area of 15 filling plants in China.

Li Chunjia said that practice has proved that the proper operation of the world's franchising mode based on local specific laws and regulations and business environment can ensure a successful operation.

Two, marketing strategy localization.

The common practice of Pepsi in the world is direct marketing.

After coming to China, it has gradually evolved into an active sales system with Chinese characteristics, such as direct selling, direct selling, selling, cooperative wholesale, exclusive distribution, Wholesaler Management, traditional wholesale, etc.

By imparting its management technology and experience to local wholesalers and distributors, PepsiCo Inc has gradually pformed them into active product distributors or third party logistics providers, and has developed sales channels in line with China's national conditions and explored new ways of sales.

Three, brand development localization.

In view of the preferences of Chinese consumers, PepsiCo Inc attaches importance to the brand equity of products with Chinese characteristics.

For example, in the production of related brand advertisements, we should use international creativity and integrate into the Chinese concept, effectively use the assets of China's sports and music stars, and convey the brand spirit of "yearning for boundless and breakthroughs", and accept it locally.

By signing a single star, gradually forming a star family, longitudinally combining music and sports resources, set up Pepsi music charts, integrate brand and media resources, and enhance brand value through local values, thereby enhancing their own value.

Four, raw material procurement and equipment localization.

Since 1982, the raw materials of PepsiCo Inc's products sold in China include edible sugar, bottles, cans, boxes, caps and so on, which are purchased locally in China. From 1982 to 2003, raw material procurement cost has exceeded 20 billion yuan. In addition, 1999 to 2003, Pepsi system also purchased 33000 sets of refrigerators in China, totaling about 120 million yuan.

Even if the cost is guaranteed, it also brings sales to local related industries.

Five, staff localization.

At present, the PepsiCo Inc has employed nearly 10 thousand local employees directly in China, and the number of indirect employment in the industrial chain is about 150 thousand.

In Pepsi China, fewer than 1% foreign employees are employed. The proportion of Chinese management is 64%.. The company has invested heavily in training and training of joint ventures, cooperative enterprises and related business personnel. In the past 5 years, it has provided 4500 training for joint-venture enterprises, distributors and wholesalers.

At the same time, PepsiCo Inc has established a relatively complete talent organization structure to reserve local talents for future business development, such as promoting the integrity of regional director's organizational structure, and training local talents as joint venture management personnel and selecting outstanding talents of joint venture enterprises as general managers.

Six, agricultural project localization.

Since PepsiCo entered China in 1993, it has set up 4 factories in China and invested 20 million US dollars to develop potato planting projects in Western China.

Its products are not only used by Chinese companies, but also exported to Southeast Asia in Shandong, Inner Mongolia and other places since 2003. The export contract has reached 7000 tons this year.

Localization of agricultural projects has been well developed.

Seven, the localization of public welfare undertakings.

It mainly includes: in 2001, the special fund for Pepsi Cola was established at the all China Women's Federation and the Chinese women's development foundation to help mothers and children in poor areas; and to support Tibet's training teachers, donations to support the government to fight SARS, sponsor children's concerts in Beijing's International Music circles, participate in environmental protection activities such as "protecting mother river", and set up a good social image in China.

Eight, R & D capability localization.

In 1998, it invested $700 thousand and established the Pepsi agricultural development research center with the Ministry of agriculture of China.

Meanwhile, PepsiCo is about to set up the first beverage R & D center outside the United States in China to carry out R & D work in China and the global market.

Li Chunjia said, from the above analysis, we can see that PepsiCo Inc's Localization Practice in China is successful.

The company has been trusted by the Chinese government, and its products are widely loved by consumers, and production and operation have maintained steady growth.

He said that in the future, the company will continue to increase its investment in China, and sincerely cooperate with Chinese partners in the scope of policies and laws, and create a win-win situation.