WARC, 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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