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Pepsi is one of the reputed soft drink companies covering 37% of the global market. International markets like Europe, China, Mexico, India and Saudi Arabia have been the popular places for Pepsi. At every stage in the Pepsi Company, to obtain highest standards for everything they do, great cares are taken. Although they assure to work in the direction of improvements for all areas in their organization; but for their product, marketing, packaging and advertising; they think that their customer needs quality products so they strive for excellence. So, in order to meet quality products as expected by customers Pepsi follows strict Quality Assurance (QA) and Quality Control (QC) in their bottling process, filling of their packages and manufacturing. Before marketing of every bottle and can, they are sent through series of testing process and inspection.
Each container is rinsed and quickly filled via high-tech, modern process which prevents the entry of any foreign particle into the product. The veracity of Pepsi products, from warehousing till it reaches the consumer, is ensured through additional QC measures. Pepsi personal determine based on the local demands and other marketing factors which commodities to sell and type of packaging. They with their promoters, celebrities and brand ambassadors target their audience. The Pepsi through its promotion technique encourages youth popular music. Pepsi has started gaining the football marketplace as well. Pepsi through its promoters like internet, various sponsorships, newspapers, radios, etc promotes its products by offering like discounts like buy one get one free, competition like prizes that attract the consumer.
Thesis statement: – Despite the claims for a better marketing assessment tool for successful marketing researches shows that swot and pest analysis with their interpretation as well as perception has proved to be an important tool.
SWOT ANALYSIS FOR PEPSI
SWOT is an analysis technique used in many managerial and marketing scenarios. SWOT involves examining of existing activities in the organisation (Strengths and Weakness) and then with the help of external research locates the Opportunities and Threats which exist and if possible try to manipulate and minimise them.
Strengths: – Pepsi with its complexity with the American culture has an over-romanticizing image taken profoundly to their hearts. The Pepsi’s image has been demonstrated now-a-days on T-shirts, caps, and collectibles; such way of branding is one of their greatest strengths. Pepsi is enjoyed by over millions everyday around the world as it stands for a simple and powerful icon for enjoyment and quality (Allen, 1995). Pepsi’s has a unique bottling system contributing to its strength (Bettman, et. al, 1998). This assures them to demeanour business in the global market while maintaining same local approach. As the Pepsi Company does not have complete ownership of its bottling network, they generate their revenues by selling their concentrate to bottling companies, owned and operated by business people authorized to sell Pepsi products (Bettman, et. al, 1998).
Weaknesses: – Although some domestic business markets as well as international soft drink markets are blooming, Pepsi has recently reported some declines in Indonesia and Thailand due to reduced consumer demands. Latin America, Japan, and Southeast Asia account for around 35% of Pepsi’s revenues and none of these markets were performing to expectation (Mclean, 1998); such declines usually affect its infrastructure and productivity. Pepsi has some health issues like their side effect on the teeth’s as well as it contains sugar in greater proportion so person addicted to Pepsi usually show health problems, because drinking Pepsi on daily basis affects body at latter stage of your life.
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Opportunities: -Brand recognition affects Pepsi’s cut-throat position as today its brand name being well known throughout the world. The primary concern over the past few years has been to get this brand name to be at an even better position and well known. Packaging changes have also affected its sale and marketing positioning of the industry, but truly speaking in general, public’s attention and interest was not affected by new products (Allen, 1995). As mentioned earlier bottling system being its strength allows the company an advantage of its growth in global market allowing them to serve a large geographically diverse area (Bettman, et. al, 1998).
Threats: -Currently, threat from new feasible competitors in the carbonated soft drink industry is not as significant as the threat of substitutes which is building up in the market. The Pepsi Company as such is very sturdy, but as consumers are not essentially married to it, their taste is bound to change. Possible substitutes are continuously putting pressure on beverage companies like Pepsi, Coca Cola, juices, tea, milk, coffee, and hot chocolate (“Cola Wars”, 1991). Although Pepsi controls about 40% of the world beverage market, increasing health consciousness in people and the market might show a serious influence some day. Pepsi have by now diversified into the world market there by allowing them the opportunity to exploit market shares with ability to counterbalance any losses incurred due to fluctuations in the market (“Cola Wars”, 1991). Consumer luring for power are the potential threat for the Pepsi. The enmity between Pepsi and Coca Cola has consequence into a very slow moving industry in which management are continuously needed to react to the shifting attitudes and demands of their consumers lest face trailing market share to the competition.
PEST ANALYSIS FOR PEPSI
PEST involves examining changes caused by Political, Economical, Social and Technological issues. Political changes like rise in healthcare as well as privatisations under Conservative authorities. Economic changes like recession which creates amplified activities at the inferior sect of price ranges in the product. Lower interest rates bring up the miserable business infrastructure with redundancies and lower expenditure levels. Social change involves changing attitudes and lifestyles. The escalating numbers of women going out to vocation has led to the need for time-saving products for the home. Technological changes create opportunities for new products and product improvements and of course new marketing techniques such as the Internet, e-commerce.
Political Analysis for Pepsi: -Non-alcoholic beverages come under the food category supervised by FDA. The government influences the process of manufacturing of such products through various regulations. The legislation describes payment of potential fines to the government by the companies if they fail to meet such regulatory standards. Following are some of the governing key factors that could influence Pepsi’s actual action that could differ materially as expected and described in the company’s forward statement. Firstly, changes in laws and regulations. These changes include revolution in accounting procedures, taxation requirements such as change in tax rate, enforcement of new tax laws and interpretation of revised tax laws and also by environmental laws enforced by domestic or foreign jurisdictions. Secondly, changes noticed for non-alcoholic beverage business market. This includes an unlimited competitive product with a blend of pricing pressures which offers an ability to either gain or sustain share for sales in the global marketplace which is an end result to the actions of competitors. Thirdly, hindrance observed by political state of affairs in the international marketplace. Political affairs like civil disorder, displacement in the government bodies and restrictions on capital transport across the borders. Finally, aptitude for infiltration in the developing and emerging global markets by the company. This is also influenced by economic and political circumstances, and the lagging time to attain or form a strategic business association with local bottling companies and make essential infrastructure development towards production and manufacturing facilities, sales tools, distribution networks, and technology.
Economic Analysis for Pepsi: -Year before recession U.S. had sound economy in every sector and it was budding. However, things have changed. Most economists slackly define this period of recession as two uninterrupted quarters of reduction, or negative GDP growth. Officially on Monday 26th of March, government officials declared of U.S. economy to be in recession (CBS Market Watch. “U.S. Officially in a recession.” Rex Nutting. [nov 26,2001]. www.cbsmarketwatch.com). The Federal Reserve took intensive measures to help recover the economy. The interest rates were cut down nearly ten times and were figured out to be as low as 2%. This lowering in the interest rates ultimately affected consumer demand. Companies started expanding by incurring debt as a direct effect of low interest rates. Pepsi was able to borrow money and invest it in other products as well. Such flow of money could be diverted to the research of new merchandise or technology. As such researching would give rise to cheap manufacturable products and an opportunity for the Pepsi to sell its merchandise. This will also influence the consumer to spend as they could get cheap merchandise from Pepsi. The U.S. economy was recovering before the 9/11 attacks on September 2001 and today its economic levels are nearly achieved. Consumers on other hand are now resuming to their normal habits such as surfing and shopping in the malls, dinning in the restaurants and car shopping. However, many people are still money conscious and are handling them cautiously. Officials believe that lower inflation which is yet to come will help consumers to recover their self-assurance in recent year. The non-alcoholic beverage industry shows a high sales rate in countries outside the U.S. economic borders. According to the survey by Standard and Poor’s Industry, “soft drink companies have seen vast economic expansion in the international marketplaces such as Japan, India, Germany and Brazil.”
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Social Analysis for Pepsi: -Now-a-days U.S. nation has diverted towards the practices of healthier lifestyles. An effect of such decision on the non-alcoholic beverage industry is that people are substituting to bottled water and diet Pepsi and Colas instead alcoholic beverages like beer. Also, time management has increased and is at approximately 43% of all households. The need for bottled water and other more convenient and healthy products are in important in the average day-to-day life. Consumers from the ages of 37 to 55 are also increasingly concerned with nutrition. There is a large population of the age range known as the baby boomers. Since many are reaching an older age in life they are becoming more concerned with increasing their longevity. This will continue to affect the non-alcoholic beverage industry by increasing the demand overall and in the healthier beverages.
Technological Analysis for Pepsi: – The following are some of the factors that could cause Pepsi company’s actual results to differ materially from the expected results described in their underlying company’s forward statement. Some factors that cause company’s actual results to differ materially from the expected results are as follows. Firstly, the effectiveness of company’s advertising, marketing and promotional programs like the new technology of internet and television which use special effects for advertising through media. They make some products look attractive. This helps in selling of the products. This advertising makes the product attractive. This technology is being used in media to sell their products. Secondly, introduction of cans and plastic bottles have increased sales for Pepsi as these are easier to carry and you can bin them once they are used. Thirdly, as the technology is getting advanced there has been introduction of new machineries all the time. Due to introduction of this machineries the production of the Pepsi company has increased tremendously then it was few years ago. Finally, CCE has six factories in Britain which use the most stat-of the-art drinks technology to ensure top product quality and speedy delivery. Europe’s largest soft drinks factory was opened by CCE in Wakefield, Yorkshire in 1990. The Wakefield factory has the technology to produce cans of Pepsi faster than bullets from a machine gun.
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