Pepsi’s Marketing Mix

TABLE OF CONTENTS ABSTRACT 2 INTRODUCTION 2 MISSION STATEMENT 3 VISSION 3 ABOUT Pepsi 3 CORPORATE OVERVIEW AND FINANCIAL PERFORMANCE 4 5C ANALYSIS 5 6P’S OF A BUSINESS 8 CREATIVE STRATEGY OF Pepsi 13 DISTRIBUTION SYSTEM 13 SWOT ANALYSIS 14 CONCLUSION 15 ABSTARCT The marketing plan is central to the business plan. Marketing research helps you define your product or service, the target market, and the competition. Pricing your product is an important step that must begin with an understanding of the total cost of the product or service. Markup percentage, gross margin percentage, production costs, non-production costs, and profit must all be considered when deciding price. Promotions and advertising should be planned for at least a year in advance, taking into account seasonal fluctuations, high and low sales times, competitors’ INTRODUCTION Pepsi is currently one of the most successful consumer product company in the world its annual revenue exceeding $30 billion and has more that 480,000employees. pepsi co. inc. as began as a successor to a company incorporated in the 1931known as loft inc. once known as Pepsi cola. , the company expanded its business and adopted its current name Pepsi co. after a merger with Frito-lay in 1965. the merger dramatically increased its market potential and set the foundation of company’s tremendous growth. Pepsi co. ’s products are recognized and are the most respected all around the globe. They operate main three devisions: beverages ,snack foods and restaurants. In each of these business the Pepsi co. as attained a leadership position as being the world leader in the soft drink bottling . The corporation increasing the success has been based on high standards of performance , marketing strategies, competitiveness, determination, commitment and the personal and professional integrity of their people, product and their business practices. Mission Pepsi is continuously striving for synergy between technology system and human resource to provide product and services to meet the quality, performance and price aspirants of customers. hile doing so it maintains the highest standard of ethics and social responsibilities, innovative product and processes and develop team that keep the momentum going to take the company to excellence in the new millennium. Vision PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today. † Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. About Pepsi Pepsi-Cola North America is the refreshment beverage unit of PepsiCo, Inc. , in the United States and Canada. Its U. S. brands include Pepsi, Mountain Dew, Aquafina, Sierra Mist, IZZE, SoBe, Mug, Tropicana Twister Soda, Tropicana Juice Drinks, Dole and Ocean Spray single-serve juices. The company also makes and markets North America's best-selling ready-to-drink iced teas and coffees, respectively, via joint ventures with Lipton and Starbucks. From its humble beginnings over a century ago, Pepsi-Cola has grown to become one of the best-known, most-loved products throughout the world. Today, the company continues to innovate, creating new products, new flavors and new packages in varying shapes and sizes to meet the growing demand for convenience and healthier choices. Pepsi is constantly on the lookout for ways to ensure their consumers get the products they want, when they want them and where they want them. The Pepsi cola drink contains basic ingredients found in most other similar drinks. Corporate Overview and Financial Performance PepsiCo, Inc. is one of the most successful consumer products companies in the world, with 2000 revenues of over $20 billion and 125,000 employees. The company consists of: Frito-Lay Company, the largest manufacturer and distributor of snack chips; Pepsi-Cola Company, the second largest soft drink business and Tropicana Products, the largest marketer and producer of branded juice. PepsiCo brands are among the best known and most respected in the world and are available in about 190 countries and territories. In 2000, PepsiCo has a reported net sale of $20,348 and a comparable net sale of $20,144 in comparison to its 1999’s net sales of $20,367 and $18,666 respectively. PepsiCo has increased its comparable net sale of 8% in 2000 while it had an increase of 15% in 1999. This reflects the increasing rate is going slower. On the other hand, PepsiCo’s interest expense declines 39% showing that the company is significantly lower the average debt level. Back to 1999, the report shows that the company’s interest expense dropped 8%, which indicates that the company is performing well in managing its financial strategies. More details about the financial performance of the company will be discussed in the later part of this paper. Company PepsiCo's overall mission is to increase the value of shareholder's investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity. In order to profitably satisfy customer needs, the firm first must understand its external and internal situation, including the customer, the market environment, and the firm's own capabilities. Furthermore, it needs to forecast trends in the dynamic environment in which it operates. A useful framework for performing a situation analysis is the 5 C Analysis. The 5C analysis is an environmental scan on five key areas especially applicable to marketing decisions. It covers the internal, the micro-environmental, and the macro-environmental situation. The 5 C analysis is an extension of the 3 C analysis (company, customers, and competitors), to which some marketers added the 4th C of collaborators. The further addition of a macro-environmental analysis (climate) results in a 5 C analysis, some aspects of which are outlined below. The Image of Pepsi co. in the global market is really very excellent. They use the new Technology and they have lots of years of experience in this market. Their ultimate Goals are to achieve highest share in the market. Collaborators The Pepsi co. has Distributors in whole world. Their distribution strategy is different than the others. Their distribution partners are Pepsi co. has suppliers and alliances all over the world. Which helps them to distribute their products to each of the market in each country. The distribution channel make the easy supply of goods. Customers Pepsi co. has potential customers to be a successful organization. The Market size and growth is fully based on the ultimate customers. Market segmentation of the product in whole world Geographic, Demographic, Behavioral and Psychographic. The company provides Benefits that consumer is seeking, tangible and intangible. The customer can give Motivation behind purchase; value drivers, benefits vs. osts. Frequency of purchase can give idea about how many customers repeat their product. Seasonal factors works for increasing the sales. It is a trend that how consumer needs and preferences change over time will affect the company. Competitors OVERALL MARKET SHARE COCA-COLA 43. 9% PEPSI COLA 30. 9% CADBURY SCHWEPPES 14. 5% BREAKDOWN OF MARKET SHARE COCA-COLA CLASSIC 20. 6% PEPSI COLA 14. 5% DIET COKE 8. 5% MOUNTAIN DEW 6. 3% SPRITE 6. 2% Pep si is situated in an environment that is ever changing and dynamic. Pepsi must be concerned of changing taste of the consumer and be able to respond to that need immediately or risk losing market share. They also need to be financially strong to keep up with a powerhouse like Coca-Cola and be able to strike back in the long running cola war. Pepsi must also be able to respond to different cultures in the international environment. Actual or potential competition is going on in the market. Direct or indirect: Pepsi have direct competitors like coke, thumps up, etc. Products: they all have same kind of product soft drinks. Strengths and weaknesses of competitorscan make easy success to the company to survive in he market. Climate The climate or macro-environmental factors are: Political & regulatory environment – governmental policies and regulations that affect the market share of the Pepsi. The price of the all soft drink has to at their cut through level because the Economic environment – business cycle, inflation rate, interest rates, and other macroeconomic issues. Day by day Pepsi makes new soft drinks as Social/Cultural environment society's trends and fashions make the different taste in the soft drinks. The advertisement strategy makes different sense. Technological environment – new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products. Build a solid foundation for your organization's marketing efforts Why balancing the 6 P's is crucial to success Keys to the successful marketing mix Knowing what's right for your organization The six P's of marketing are the updated version of the tried-and-true 4 P's. Understanding each of the 6 P's and how to use them can help your marketing results skyrocket. We'll cover each of the 6 P's: From this workshop, you'll get a solid understanding of the foundations of marketing strategy and how the pieces fit together. Whether you have a product or service, are profit-based or non-profit, the 6 P's can put you on the right track. Presidents, executive directors and managers responsible for marketing – anyone involved with creating the marketing vision for your organization. A solid understanding of the elements of marketing and how your organization can use the 6 P's to improve your marketing results. How to use the six basic elements of marketing Key factors for great strategies on pricing, product, target markets, promotions and more Secrets to creating the best marketing mix for your organization How to balance the 6 P's for your organization or company Identifying the right product, right people, right place and right promotion The 6 P's — The Building Blocks of Marketing features an interactive presentation and discussion, along with group exercises, to help you understand the power and the beauty of the perfect marketing mix. Marketing objectives To be most effective objective at any level should meet the following four criteria which Pepsi co. is in, The objectives are relevant to the high level of objectives. They are challenging but still sustainable. They are measurable. They are time specific. Pepsi marketing strategies Pepsi has the concentration segment, targeted the youth segment instead of trying to be something to all segment. pepsi achieve the international position as a drink for th new generation. Papsi has been successful in positioning itself for the younger generation. Promotion Pepsi has promoted it’s all product by every means of promotion. They have done Advertising through the electronic media TV, radio, and internet. The public relations and other promotion has done by the Pepsi. Promotional agreements they have signed with the retailers which include the pizza hut or KFC. Selling process: Pepsi has very well managed selling system. Different stock keeping units. And distributed to the distributer and they supply to the retailers. Pepsi soft drinks are produced in the very well managed selling system. For every rout there is a rout agent who cover maximum shops each day, so that regular supply of soft drink is made. The rout agent takes the order from the shopkeeper and move to the next. They have some agency in each rout. They supply in the areas where truck could not reach. These areas are called indirect routs. Product People satisfy their needs and wants with their product and services. A product is anything that can be offered to market to satisfy a need or a want. The concept of product is not limited to physical objects. To maintain its high quality and standards of its product the company has highly equipped lab for testing the quality of carbon dioxide and the level of sugar in the product. Pepsi is one of the most core products of the organization and the company puts in the lot of effort to retain its image through its highly professional team. The members of the organization work day and night making every possible effort to attain the organizational goals and achieve excellence. Price Pepsi has adopted market penetration pricing strategy at that time when it was introduced but now it is on the same level of its competitor coca cola. Providing quality products at the lowest rates had always been one of the main concern of Pepsi. The price of Pepsi is very copetitve with the highest quality. Place Place includes the company activitiesthat make product to the available to target customers. Pepsi is placed the market according to the extent of the target market located in the particular geographical area. Retail stores are placed all around the franchise areas in order to ensure the availability of the product. The distribution network also works according to the promotional campaign or the season. * P*ositioning The activity that communicate the merits of the product in order to persuade the target customers to buy it. Advertiserscan choose among as number of positioning approaches , depending on what the situation analysis revels about the strength of that product , the needs of their customers and action of their competitors. Following are the positions available to the advisors. Positioning by product differences. Against the particular competitor. Against entire product category. By association. By problem. In order to the Pepsi, depend on the market conditions, Positioning by product usage Positioning by association Positioning against particular competitor. Production Production and process: flexibility or fixed? Services: the sky is the limit Looking at the future for production activities, and opportunities for free publicity. Customer service may be the most important element in your total marketing strategy. Use, evaluate, and revise your marketing plan regularly. Creative strategy of Pepsi The creative strategy is the plan to defines three advertising efforts. The art direction The artistic design of the advertising. The production values. Various audio and visual components and stylistic touch make up the advertisement and the copy platform , a check list providing the background information that copywriter and art director need to craft the advertisement. Managing the advertising efforts by Planning, organizing, Implementing and controlling Distribution system The Pepsi co. has Indirect distribution system. The distribution of the product is done as under Manufacturer to wholesaler to retailer to consumers. *SWOT *analysis Strength: The brand name is the highest strength of the organization, which is known s excellent. Managing the highest quality by using the latest equipment in order to produce best hygienic product. The easy availability in the market is the second strength. Highly skilled professionalize working. The company enjoys the brand loyalty which is plus point for the organization. The market share covered by the company is also a great strength. Weakness: The packaging of the product is sometime difficu lt for the product to maintain. Provide opportunities to the competitors by not covering rural areas in the different countries. The lack of Advertisement in rural area. Opportunities: The company has opportunities to develop their sales force in rural areas. Post mix operation can be expanded in order to make the product available at all times. New and innovative products have always been acted as opportunity to the organization. Threats: The biggest threat for the organization is itscompetitors. so Pepsi needs to develop the strategy keeping in mind for their reorganization. The government policies and changing requirement of the customers can effect the operations of the company. Conclusion Pepsi has 37% global market share operating in 190 countries. At every level of Pepsi co. Take great care to ensure that highest standards are met in everything they do. In their production, marketing , advertising and packaging they strives for excellence because they think their customers deserves better quality products. They promise to work towards improvements in all areas of their organization. They also follow the strict quality procedures during manufacturing and filling of their packages. Additional quality control measures helps to ensure the integrity of Pepsi products throughout the distribution process. References http://www. fixyourmarketing. com/workshops/sixp. htm http://www. missouribusiness. net/sbtdc/docs/marketing. pdf http://www. scribd. com/doc/15434619/Pepsi-Project Phillip Kotler (2004). Marketing management, 11th edition (page 590). Delhi: Pearson Education. http://www. pepsico. com/Company/Our-History. html http://newswiretoday. com/news/57876/ Mickey gill (2006). 1000 coke or Pepsi? : 1000 Coke or Pepsi questions to ask your friends? Longwood,FL