The Current Positioning Of PepsiCo
|✅ Paper Type: Free Essay||✅ Subject: Commerce|
|✅ Wordcount: 2890 words||✅ Published: 9th May 2017|
Pepsi International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. They produce, one of best carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all over the world.
Pepsi is producing Cola for more than 100 years and it has dominated the world market for a long time. Its head office is in New York.
PepsiCo is the second largest food and beverage company in the world. It manufactures markets and sells a variety of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages PepsiCo seeks to achieve growth and long-term value in its operational activities by creating competitive advantages through new product innovation.
“To be the world’s premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.”
“To be the world’s best beverage company”. Being the best means providing outstanding quality, service, cleanliness and value, so that their every customer is contented and happy with their products.”
“To increase the value of their shareholder’s investment through sales growth, cost control and wise investment of resources.”
FACTS ABOUT THE COMPANY
Pepsi is a USA based public company whose stocks are available in New York.
Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising and package graphics room hillbillies to action-oriented scenes.
The third Mountain Dew slogan appeared in 1973 “Put A Little Yahoo in Your Life.”
PepsiCo acquired Pizza Hut, Inc. Pizza Hut was founded in 1958 by Dan and Frank Carney.
Taco Bell is was acquired by Pepsi. Taco Bell was established in the mid 1960s by Glen Bell.
PepsiCo purchased Kentucky Fried Chicken, the leader in the quick service chicken market. KFC was founded by Colonel Harland Sanders. Colonel Sanders began franchising the company in 1952. KFC was spun off along with Pizza Hut and Taco Bell businesses as Tricon Global Restaurants, Inc. in 1997.
PepsiCo purchases Seven-Up International, the third largest franchise soft drink operation outside the United States
SWOT Analysis, which is based on thorough review of the business (corporation, product category competition, customers and products), identities and evaluates the internal strengths and weakness of the companies well as its external threats and opportunities.
The marketing mix is driven by the results of the SWOT analysis.
Demand of Pepsi is more than its competitors.
Company has a very established name and a good reputation.
Pepsi has large market share than its competitors.
As the target customers of Pepsi is young generation, so Pepsi has more brand loyal customers.
Most of the customers are satisfied with the price of the Pepsi.
Pepsi is an international company and it has a very strong position internationally.
The environment of factory is very good and attractive.
Pepsi spends a lot of budget on its advertising.
Pepsi has a very vast distribution channel and it is easily available everywhere.
Employees are also motivated.
People like the taste and quality of Pepsi around the world
Pepsi has heavy advertising and promotion activities
Pepsi offers many discount schemes for customers time to time.
Pepsi Cola is sponsoring sports, musical concerts, walks
Pepsi does not offer any sort of incentive or discount to its retailers.
Pepsi target only young customers in their promotions.
Crown of the disposable bottle is not good.
Demand of disposal bottle is declining.
Result of low profile or non-existent advertising
Pepsi tin pack is not available in far off rural areas.
Pepsi is not considering many potential outlets like hotels, college canteens etc.
Most of the beverages supply is restricted to few countries.
Lack of innovation.
Lack of popularity of many Pepsi’s brands
Company may start entering rural areas also.
The company may also diversify its business in some other potential business.
Launch healthy drinks
Increase mineral water sales
Increased interest of people in musical groups, cultural shows and sports has provided an opportunity for Pepsi to increase its sales through them.
Increase Awareness programs
New technologies that access efficiencies.
Launch other Pepsi variants in the untapped countries.
The main competitor of the company is the Coca Cola.
At the international level, Pepsi has a very strong competition with Coke.
Coke has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi.
New entrants are gaining market share
Cola drinks are not good for the health so the awareness level of the people is increasing which is a big threat to the company
Decrease in Pepsi brand value in last few years.
Some negative health effect
Economy instability in third world countries
Economic altitude become abortive
Political instability in few countries
The prices of raw materials such as sugar and metals using in manufacturing are increasing rapidly.
Adversary is Thinking Seriously About Textile Sector Market
3.1. POLITICAL FACTORS:
Whenever the government is considered to be stable, the business will flourish. If there is political stability in the country the policies and strategies made by Pepsi can be consistent to be implemented. Foreign companies are also keen to invest in those countries which are politically stable where they have no fear of decline in their market share or shut down due to sudden change of government.
In mixed economy government and private sector both plays their role in developing the economy of the country. Investment by foreign companies like Pepsi is more likely to flourish in mixed economy.
Government has given copy rights to Pepsi so that another company cannot sell their product by the name of Pepsi. The countries where laws are formulated, the strategies and activities of the company are different.
Pepsi’s social responsibility is to provide its customers with clean and hygienic product so to do this they have increased the use of disposable bottles.
3.2. ECONOMIC FACTORS:
Income and Income per Capita
If the income level or per capita income of the people increases, it will have a positive effect on the consumption of Pepsi.
If the country faces inflationary trend in the market, the price of the Pepsi will ultimately increase which will lower its demand.
United Kingdom and other countries are consumption oriented societies. Due to demonstration effect the people are more inclined towards consumption than saving. So the people spent heavily on food items. Hence Pepsi has a good market share in the present circumstances.
It means how much is in the hands of rich and poor class. In World 10% rich people posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced distribution of income in the country, the consumption of the people will increase hence increasing the sales of beverages as well.
As the use of plastic money is increasing the consumption pattern of the people are increasing. Although it will have a low affect on the consumption of Pepsi.
As employment opportunities increase the living standard of the people increase and the people consume more.
In case of Pepsi, aggregate demand of the product increases in the season of summer as the hot weather makes the consumers want to drink more.
In summer season to cope up with the increasing demand they have to increase the aggregate supply of their product.
Some of the economic policies which can affect the market of Pepsi are discussed below:
It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise having negative effect on its consumption.
Monetary policy is made to restrict or increase the supply of money in the market. If policies are made to restrict the flow of money in the market, inflation can be controlled hence increasing the real income of the people which will ultimately affect the consumption of Pepsi.
If price of Pepsi is increased its demand will decrease and vice versa.
If income of the people will increase their purchasing power will increase and hence increasing the market share of Pepsi?
3.3. SOCIAL FACTORS:
It is a combination of demographic and psychological factors. Psychological attributes mean how you perceive things. The company will focus on the behavior of consumers and make different changes in their product quantity or quality and in promoting their product so that they can attract the customers. Keeping in view that the behavior of different consumers is not alike they have to make their marketing strategies in accordance with their requirements so that they are convinced to buy the product.
Religious factors can influence the market sales of Pepsi as it happened in 2003 when the U.S-led attack on Iraq, wide sections of society in Pakistan have banned American multinationals Coke and Pepsi
Pepsi is a well renowned brand. People who are brand conscious will not drink beverages of lesser known brands. They will try to show their status by drinking Pepsi which is known to all as a quality drink.
It is a very important factor for marketing. Media these days is a very effective way of inspiring people to buy a specific product. A good promotion can boast up sales to a great extent.
3.4. TECHNOLOGICAL FACTORS:
Research and Development
Through research and development quality of the product can be improved or better techniques or machinery can be developed which can increase the production. When technology is advance the supply of the product increase hence the company experiences growth in their business.
Pepsi operates in almost all the countries and these are also technological factors:
Introduction of cans and plastic Bottles
Newer and attractive Designs
3.5. OTHERS FACTORS:
3.5.1. DEMOGRAPHIC FACTORS:
The requirements of different age groups are different. Pepsi should target that age group that consumes it the most and make promotional strategies according to their behavior. So their main target is the young generation.
A company has to make promotional strategies keeping in view the customer level. If the percentage of education is high in a country then through advertisements people can be made well aware of their product and can convey their message easily. Promotion and education has a direct relationship.
Population distribution means how much [population lives urban areas and rural areas. Pepsi is focusing on urban areas as people there are more inclined towards such beverage while people in rural areas are more inclined drinking desi drinks.
3.5.2. PHYSICAL FACTOR:
World is divided into different geographical regions. Marketing and sales of Pepsi is different in different geographical regions. In hot areas its demand is more.
The cities which are densely populated the consumption of Pepsi is more.
Pepsi is more suitable for humid or hot weathered countries. It is a source of refreshment when a person is thirty due to the hot weather.
Roads are the basic need for transportation of Pepsi from one place to another. Pepsi cannot open factories in every city so it has to transport it to other cities where Pepsi is demanded.
Electricity is the basic necessity for production of any product. Constant load shedding slows down the process of production which leads to less production and low market share.
The marketing world is full of surprises. Who could imagine that Coca Cola would be overtaken by Pepsi? If Coke could be overrun by Pepsi, it would be no wonder that Pepsi might be overtaken by some other beverage. The need then is to combine quality with ingenuity. Along with that, the reputation of the company has to be kept robust.
Today we live in a fast moving world where novelty and newness count a lot. One cannot rest on one’s laurels. Fresh efforts, newness of approach must remain the cardinal principles of a well orchestrated marketing strategy and the campaign must be relentless.
A continuous bombardment in advertisement would convince the clients that Pepsi is a part of their lives. In order to live with style, Pepsi ought to be an essential ingredient of one’s life. The Pepsi is at its maturity stage and the sales of company are not growing very rapidly. Company is doing a lot of promotional activities to let the product remain in the market. It holds a large share of the market and whenever the sales state declining, the company can improve it by different promotional activities.
Marketers of Pepsi can try to improve sales by improving one or more marketing mix elements. They can cut prices to attract new users and competitor’s customers. They can also launch a better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Pepsi is at its maturity stage.
PEPSI, the choice of Generation next is not providing the first choice of young generation. A young generation wants something strong in cold drinks & thus prefers Thumsup. Pepsi should come out with some extra strong taste to catch up maximum young generation & to become exactly Generation Next drink.
Company should appoint competent & honest salesman so that they could provide schemes to the entire retailer’s & cover their full route.
It is often seen that some salesman do not intimate schemes to the retailer & few of the retailers complained about it. So there should be frequent visits of Customer Executives to their respective areas to keep the shopkeepers benefited with various schemes.
Delay in starting of supply vans from respective depot should be checked & a proper time register should be maintained.
Most of the retailers are complaining about non-fulfillment of commitments regarding their sampling. Company should make sure that the retailers get the sampling on time so that they are satisfied.
Most of the retailers are complaining about delay & no replacement of burst bottles. Marketing Management should sort some solutions to this major problem of replacing burst bottles.
Half filled bottles should also be checked at the time of issue of goods from the distributor’s go down to the respective routes.
Company should try to give some credit facility to the distributors so that they get motivated.
Credit facility for retailers should be provided.
Proper feedback system should be developed by ensuring regular visits & check randomly at the various outlets
Pepsi is a well renowned company and it has maintained its position well by understanding the client psychology, by ensuring quality, by introducing ingenuity in products, by enlarging its product base, by keeping economic factors in view and by intense and jazzy advertisements.
Whenever and where ever there is a spotlight event, Pepsi must figure in, like the cricket and football matches between any country and many other such occasions. The key word for success in the Marketing World is to “remain in the spotlight” and that is what Pepsi is doing.
SWOT Analysis of Pepsi, which is based on thorough review of the business (corporation, product category competition, customers and products), identities and evaluates the internal strengths and weakness of the company well as its external threats and opportunities.
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