[China Glass Network] Recently, Zhu Huazhen, President of PepsiCo (China) Investment Co., Ltd., analyzed the development of Pepsi in China, organized by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, “A Seminar on Localization of Multinational Corporations--A Case Study of PepsiCo†The localization ideas and practices for the rest of the year. Pepsi is a multinational company in the food and beverage industry.
Since the advent of Pepsi-Cola beverages in the United States in 1898, after several business restructurings, PepsiCo's current main business is beverages and food. In 2003, its global turnover was US$27 billion, operating profit was US$5.8 billion, and there were 140,000 worldwide. Employee. Among the many brands owned by PepsiCo, there are 15 retailers with annual retail sales exceeding US$1 billion, such as Pepsi, Qixi, Mei Nida, and Music. According to the newer “World's Better International Brand Rankings†of international brand consultancy companies, the Pepsi brand is ranked 22nd with a value of US$12 billion. In 1981, PepsiCo established its bottling plant in China in the Shenzhen Special Economic Zone. Currently, the company has established 15 Pepsi-Cola bottling plants, 1 non-carbonated beverage plant, 1 concentrate plant and 4 food-only productions in China. plant. In recent years, PepsiCo's business in China has maintained rapid growth, with a total investment of more than 1 billion US dollars and nearly 10,000 employees. Among the top 10 countries and regions where PepsiCo's international business is dominant, China's growth rate exceeded 30%, ranking first.
According to Li Chunjia, general manager of PepsiCo (China) Investment Co., Ltd., the localization practice of PepsiCo in China is mainly reflected in the following eight aspects:
First, the franchise model is localized. PepsiCo is principally engaged in the business of PepsiCo (China) Investment Co., Ltd., which was incorporated in China in 1995. It generally contacts its 15 bottling plants in China through trademark special licenses and concentrate supply agreements; A slight difference between the United States and other parts of the world is that PepsiCo also has investments in these bottling plants. Generally speaking, the licensee of the franchise needs to pay a certain license fee to the licensor. According to the special requirements of the Chinese market, Pepsi does not charge any fees when the trademark is licensed to the canning factory. The price of the concentrated liquid is also in the Chinese government. Under certain management. PepsiCo maintains the value and value of the trademark through various investment methods such as advertising investment, and also cooperates with the bottling plant to jointly expand the regional market (according to the franchise agreement between the two parties, PepsiCo's 15 bottling plants in China) There are specific restrictions on the sales area). Li Chunjia said that the practice has proved that the world-wide franchise model can be properly localized and adjusted according to local specific laws and regulations and business environment to ensure the success of the operation.
Second, the marketing strategy localization. Pepsi's more common practice in the world is direct sales. After arriving in China, it has gradually evolved into an active sales system with Chinese characteristics, such as direct sales, direct sales, collaborative wholesale, franchise distribution, wholesaler management, and traditional wholesale. By transferring its management technology and experience to local wholesalers and distributors, PepsiCo gradually transforms them into active product distributors or third-party logistics providers, and develops sales channels in line with China's national conditions to explore new sales methods.
Third, the brand development localization. In response to the preferences of Chinese consumers, PepsiCo focuses on giving branded products with Chinese characteristics. For example, in the production of advertising related to the brand, both the international creativity and the Chinese concept are used, and the sports and music star assets of China are effectively used to convey the brand spirit of “craving for infinity and breaking through the desire†and accepting it locally. By signing a single star, gradually forming a star family, using music and sports resources in a vertical combination, establishing a Pepsi music ranking, integrating brands and media resources, and enhancing their value by enhancing the local value of the brand.
Fourth, raw material procurement and equipment localization. Since 1982, the raw materials for PepsiCo's products in China, including edible sugar, bottles, cans, boxes and caps, have been purchased locally in China. From 1982 to 2003, the cost of raw material procurement has exceeded 20 billion yuan. In addition, 1999-2003 In the year, PepsiCo also purchased 33,000 freezer units in China, totaling about 120 million yuan. Even if the cost is guaranteed, it will bring sales to the local related industries.
5. Localization of employees. At present, PepsiCo directly employs nearly 10,000 local employees in China, and indirectly employs about 150,000 people in the industry chain. Among PepsiCo China employees, foreigners are less than 1%, and the proportion of Chinese in management is 64%. The company has invested heavily in the training and capacity development of joint ventures, cooperative employees and related business personnel. In the past five years, it has provided 4,500 person-times of training for joint ventures, distributors and wholesalers. At the same time, PepsiCo has established a relatively complete talent organization structure to reserve local talents for future business development, such as promoting the localization of the complete regional director organization structure personnel capacity, strategically cultivating local talents as joint venture management personnel, and selecting joint ventures. The outstanding talents of the company are selected as general managers.
6. Localization of agricultural projects. After PepsiCo entered China in 1993, it has set up four factories in China and invested US$20 million to develop potato planting projects in western China. Its products are not only used by companies in China. Since 2003, its potatoes grown in Shandong and Inner Mongolia have also been exported to Southeast Asia. The export contract has reached 7,000 tons this year. The localization of agricultural projects has been well developed.
7. Localization of public welfare undertakings. It mainly includes: in 2001, the National Women’s Federation and the China Women’s Development Foundation set up a “Pepsi Cola†special fund to help mothers and children in poverty-stricken areas; and funded Tibetan training teachers, donated money to support the government’s fight against SARS, and sponsored Beijing International Music’s Children’s Concert. Participate in the "protection of the mother river" environmental activities, and establish a good social image in China.
8. Localization of research and development capabilities. In 1998, the company invested RMB 700,000 and established the “Pepsi-China Agricultural Science Research Center for Agricultural Development†with the Chinese Ministry of Agriculture. At the same time, PepsiCo will set up an early beverage research and development center outside the United States in China to conduct research and development work for China and the global market.
Li Chunjia said that from the above analysis, PepsiCo's localization practice in China is successful. The company has gained the trust of the Chinese government, and its products are widely loved by consumers, and its production and operation have maintained steady growth. He said that in the future, the company will continue to increase investment in China, and cooperate with Chinese partners in a policy and legal permit to create a win-win situation.
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