Warc Blog

Pepsi seeks to disrupt Indian status quo

19 February 2014
CHANDIGARH: The new head of PepsiCo India is focused on the power of disruption to drive consumption, urging staff to be proactive in trying new business models and promotions.

"Disaggregate the business model and think different," CEO and chairman D Shivakumar told a team of executives accompanying him on a visit to Chandigarh to meet retailers and consumers.

The Economic Times reported one grocery store encounter where the store owner explained how he supplied homemade snacks for children's birthday parties. "So we should try bundling Tropicana juices with Lays chips and selling them as birthday packages," said Shivakumar, as an example of how PepsiCo could look for customised solutions to drive consumption.

Such bundling will be easier once his overhaul of the company structure is in place next month. On taking office in December 2013, Shivakumar instigated sweeping changes, bringing together the beverages and snacks sides of the business and merging the marketing teams.

"The structure makes the organisation more responsive, quicker on decision making and more competitive," Shivakumar explained.

He is also keen to explore new distribution channels, including direct to the consumer in cities like Chandigarh where larger packs and bottle sizes outsell smaller ones. The Economic Times noted that other soft drinks makers had done so in the past and that, as a small, planned city, transport there could be undertaken quickly and at relatively low cost.

Modern retail was another area where Shivakumar saw multiple opportunities. "Use modern trade as your lab...keep experimenting all the time," he told executives.

He also stressed the importance of maintaining personal contact with people on the ground. "A retailer is the best 15-minute MBA you can get," he declared.

In a recent address to the India Chapter of the International Advertising Association, Shivakumar noted that the rise of a connected middle class in India would require brands to become more responsive and to develop strategies to drive consumption through a "more dependent ecosystem".

Data sourced from Economic Times; additional content by Warc staff

 
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