Packaging plays an important role as a medium in the marketing mix, in promotion campaigns, as a pricing criterion, in defining the character of new products, as a setter of trends and as an instrument to create brand identity and shelf impact in all product groups. The purpose of this study was to examine the effect of packaging on consumers’ perception of a product quality: a Case of Pepsi (SBC) at Saint Augustine University of Tanzania (SAUT). The study was guided by the following objectives: (i) to determine the different packages used by Pepsi Cola consumers, (ii) to identify the consumers’ perceptions towards Pepsi products’ packaging, (iii) to assess how package influence consumers’ perceptions on product quality, (iv) to establish challenges that consumers face when linking packaging with price of the product. Qualitative and Quantitative research approaches using descriptive design were employed. The study surveyed 375 students from SAUT and 10 Pepsi (SBC) Management using questionnaires (quantitative data) and in-depth interview (qualitative data). Data analysis from qualitative data was analyzed in the form of content analysis while quantitative data was organized and analyzed by descriptive statistics using SPSS and data was presented in the form of frequency tables. The findings revealed that SAUT students buy different packages of Pepsi Cola such as returnable glass bottle, plastic bottle and aluminum cans. Majority of students purchase Pepsi Cola products packaged in returnable glass bottle as they are consumable at the point of purchase. Another common used package is plastic bottle which are used for take away that is consumed away from the point of purchase. The findings also revealed that the price of Pepsi products in plastic and can packages is much higher than glass because they are not returnable. The study also recommended that consumer segmentation should be implemented so as to identify niche market. Also areas for further research were suggested.