Group 3 members:
Group number: 2




Class: MEC v 13e
Date: 12-03-2014
Daria Butiu
Zofia Kajca
Frederik Kothe Sørensen
Laszlo Daniel Perge
Market Research Project
Industry: Carbonated soft drinks
Firm: Pepsi Co.
Market: Denmark
Signatures of the group members:
Total number of characters:
20.652
1
Table of content
Motivation ................................................................................................................................................. 3
Research question ................................................................................................................................... 3
Sub Questions ........................................................................................................................................... 3
Scope........................................................................................................................................................... 4
Methodology ............................................................................................................................................. 5
Analysis ...................................................................................................................................................... 7
Marketing stimuli: 4 P’s ........................................................................................................................ 8
Pepsi............................................................................................................................................................ 8
Coca Cola ................................................................................................................................................ 10
Analysis .................................................................................................................................................... 11
SOR model (Buying behavior) ........................................................................................................... 13
Analysis .................................................................................................................................................... 14
Solution .................................................................................................................................................... 16
Strengthening the 4P`s ......................................................................................................................... 18
Conclusion............................................................................................................................................... 20
2
Motivation
The greatest brand competition in history, the one between Pepsi and Coca-Cola, began in 1930
and has played a role in American politics along with world consumerism.
The rivalry between the two was inevitable from the moment when the Coca-Cola President,
Robert W. Woodruff, ordered a special group of 148 Coca-Cola employees in the U.S. military
to deliver Cokes to every G.I. “ for five cents, wherever he is, and whatever it costs the
company”.
In Denmark, slow economic recovery is predicted to see soft drinks sales stabilize. The strong
discounts, price promotions and German border trade trends will dominate the off-trade
consumption of soft drinks. In 2013, the Danish government reduced the taxes on soft drinks
(like Coca-Cola and Pepsi). The effect has been a 20% increase in sales on soft drinks. The
reason behind this is that the government wants to create places for new jobs.
Even if in Denmark the consumption of soft drinks is not so high, in comparison with the USA
for example, when it comes to choose between Pepsi and Coca-Cola, Danish people tend to
choose Coca-Cola.
It would be interesting to find out on which buying criteria people base their decision when they
choose to buy Cola instead of Pepsi, by answering the following research question:
Research question
Why Danes tend to choose Coca Cola over Pepsi ?
Sub Questions
1. Which one is considered ‘better’?
2. What is the real difference between them?
3. What are the buying motives of consumers of Pepsi and Cola?
4.How does the price influence the choice between Cola and Pepsi?
5. What can be done to increase the sales of Pepsi?
3
Interpretation
In our Research Question by tend to, we mean that Coca Cola leads the market share for
carbonates by 28,5% ahead of Pepsi, which has only 9,7%. (2012)
The word better, in our first Sub Question, refers to the customers’ perception on taste, design,
and company image.
By difference in the second Sub Question, we consider the main differences in Product, Price,
Place, Promotion of Coca Cola and Pepsi.
Buying motives, in our third Sub Question, are the combination of emotions generated by the
product/service, which stimulates the buying decision.
In the last Sub Question, by increasing sales we focus on selling more of our product to the end
users. As the price of a Pepsi bottle is similar to the biggest competitor's product, increase in
sales will lead to bigger market share.
Scope
During our market research and analysis of the beverages industry we go into the Coca Cola Co.
and PEPSI Co. Inc. brands. However to be more precise and clear answering our research
question, scope of our project reaches only one product from each company (ordinary Coca Cola
and ordinary Pepsi Cola). We do not include other products of those companies (like juices, noncarbonated beverages, coffees, teas and also isotonic or energy drinks).
Regarding the market on which we are operating, we analyze only Danish market, questioning
inhabitants of Copenhagen. Our project does not scope other countries and nations.
4
Methodology
A. Data collection
For collecting data we used few channels for each task:
-Desk research (collecting data about companies) ; we have used the official websites of the
companies [1] and some of the online portals containing articles about products that we compare
[2].
- Field research (collecting people’s opinions regarding two products we analyze); we have used
face-to-face questionnaires interviewing inhabitants of Copenhagen.
B. Theories and models used
For answering our research questions (see: above) we have used:
- Question 1. : Analysis based on questionnaires, as we assume that by analyzing real answers of
people that we have interviewed, we will be able to draw the most proper conclusions regarding
motives of their choices and their preferences.
- Question 2.: comparing two similar products which we focus on, we have used part of
marketing mix to be able to asses which features may impact the buyer’s decision of purchase.
- Question 3. : For better understanding buying motives of Coca Cola and Pepsi customers, we
have used the buying behavior model.
- Question 4: same as question 1
- Question 5: for finding out how to expand our company we have assessed the proper growth
strategies
5
C. Structure
Motivation
Research
Question
Interpretation
Marketing
Mix
SOR
PivotTable
Analysis
Growth
Strategy
Scope
Strengthenin
g the 4P`s
D. Criticism of sources
As we know, some of the sources, especially that ones provided by the companies it selves, may
be subjective. Though we are aware of the possibility that some of our conclusions might not be
100% accurate and objective.
6
Analysis
In order to answer our first sub question, “ Which one is considered better?” we have used our
databases gained through interviewing different groups of people. From the “Preferences”
PivotTable (Table 1) we can see that the “better” one is considered to be Coca Cola. 66 people
out of 100 prefer it, while only 34 consume Pepsi. From all these people, 30 out of 34 who prefer
Pepsi are between 15 and 25 years old, while the other 4 are between 26 and 45 and no one over
45. So, we can say there is more Pepsi consumption among the teenagers. Regarding Coca Cola,
46 people out of 66 are between 15-25 years old, 13 between 26-45 and 7 over 45. So, in this
case, Coca Cola is preferred by middle-aged people more than Pepsi is.
45+
Male
15-25
26-45
Female
Male
Coca-Cola
Female
Pepsi
Male
Female
0
5
10
15
20
25
30
35
Table 1- Preferences
Our second sub question is “What is the real difference between them?” We can answer this by
analyzing the 4P`s of both Pepsi and Coca Cola and also by looking into the “Taste”, “Design”,
“Image” PivotTables.
7
Marketing stimuli: 4 P’s
Pepsi
Marketing mix of the company
PepsiCo is situated in the soft drinks industry in Denmark. Pepsi`s Marketing Mix is defined by
4 components: Product, Promotion, Price and Place. We are going to analyze them with the
following 4P´s model.
A) Product
PepsiCo produces many variants of soft drinks, Pepsi, Diet Pepsi, and Mountain Dew including
other products as well, and are one of the biggest soft drink producers in the world. The Supply
to create the different products is produced at different suppliers all over the world and then
merged at Royal Unibrew facilities for the Danish market, Pepsi and Royal Unibrew has been
partners since 1970 1. The keywords in the supply strategy for Pepsi are procurement by making
the conditions better for both nature and the employers and continuously improve production
efficiency2. The quality of the Pepsi Cola, which is the product we focus on, is to be considered
high due to our market research and Pepsi also has a quality assurance policy that the suppliers
are obliged to follow.
B) Price
The price of the Pepsi Cola is as well as our main competitor Coca Cola relatively low so the prices
is not the main focus of the buying behavior when it comes to B2C or the B2B, the buying behavior
1
2
http://www.royalunibrew.com/Default.aspx?ID=154
http://www.pepsico.com/Download/PepsiCoSSMSupplierRelationsGuidelines.pdf
8
is more decided on the factors of preference. And the retailers selling the products are the ones
responsible for setting prices, making offers and communication directly to the consumers3.
C) Place
The entire distribution of all Pepsis products in Denmark goes through the Royal Unibrew
company that both stand for the production and the selling of the products, Pepsi is broadly
found all through the Danish supermarket and food retailers in Denmark. And also at the bars,
restaurants and places of entertainment that cooperates with Royal Unibrew4.
D) Promotion
Pepsi is one of the world’s most well known brands and has a long history of successful
promotion that has created a high awareness among its customers and consumers. The
3
http://www.royalunibrew.com/Files/Billeder/Prisliste%20Retail%201.%20januar%202014%206%20sidet.pdf
4
http://www.royalunibrew.com/Default.aspx?ID=154
9
promotion of Pepsi happens from the Pepsi Company itself through social medias such as
YouTube, Facebook and Twitter and they are also well known from their TV commercials that
often use celebrity endorsements to promote the wanted signal to the end user. Celebrity
endorsement is also used on social media and targeted specific domestic celebrities in Denmark
on Pepsis Danish website, but mostly international campaigns are aired with international music
stars or football players all showing the affection for the product5. Pepsi has the last many years
used this tactic and has been very successful by it6. We are also using posters on train stations
close to the public eye.
Coca Cola
A) Product
Coca Cola - a carbonated soft- drink produced and manufactured by Coca-Cola Co. IN Denmark,
the bottling rights are sold to Carlsberg A/S. It is the world’s most famous non-alcoholic soft
drink. There are multiple flavors, but the core coke taste is always in the product7.
B) Price
It’s a relatively cheap everyday product. The price of a Coca Cola bottle is similar to a bottle of
Pepsi (Coca Cola’s biggest competitor on the global cola market) and is mostly decided by the
retailer selling it.
5
http://indkast.dk/index.php?nyhed=90740
6
http://www.pepsi.com/da-dk/d
http://www.coca-colacompany.com
7
10
C) Place
Coca Cola sold the bottling rights of their product to Carlsberg A/S in 19978. Carlsberg sells
their products mostly to grocery retailers and other businesses, such as cafés restaurants or
cinemas. End users can access it here.
D) Promotion
Coca Cola promotion campaign is very intensive and most of the time effective as well. They
promote as many major events as possible but also focus highly on occasions such as Christmas
or FIFA World Cups. One of their most famous faces is Santa Claus himself, who is recognized
almost all over the world. The usage of this imaginary person proved to be a major success in the
company’s history.
Analysis
Moreover, from the tables we can see that 4 females out of 53 ranked the taste of Pepsi as being
bad, 8 ranked it as being not so bad, 21 said it`s pretty good, 17 said it is good and no one said it
is very good. On the other hand, 9 man out of 47 ranked the taste of Pepsi as being pretty good,
18 ranked it as good and 20 said it`s very good, while none of them said it`s bad. In conclusion,
the majority of the interviewed people said the taste of Pepsi is good: 35 out of 100. (Table 2)
14
12
10
8
6
4
2
0
Not answered
Bad
Not so bad
Pepsi Coca Pepsi Coca
Cola
Cola
15-25
26-45
Female
Coca Pepsi Coca
Cola
Cola
Coca
Cola
Coca
Cola
45+
26-45
45+
15-25
Pretty good
Good
Very good
Male
Table 2 - Taste
8
http://www.carlsberggroup.com/investor/news/Pages/carlsbergandthecoca-colacompanyinco-operationtofoSEA1997.aspx
11
If we take a look over the Design of Pepsi (Table 3), we observe that 11 females between 15 and
25 years old ranked the design of the can as being bad and also 11 between 26 and 45 years old
ranked it the same. 7 females between 15 and 25 said it is pretty bad, 10 considered it is pretty
good, other 10 said it is good, but none of them ranked it as very good. As an average, the
majority of the females, 22 out of 53 consider the design of Pepsi as being bad. Moreover, if we
look at men’s` opinion, we can see that most of them, 13 out of 47 ranked the design as being
bad as well, so a number of 35 people out of 100 think the same. Therefore, the design can be a
fail point for our company, which should be improved.
Count of Design
Design
3.Gender
4.Age Bad
Female
15-25
11
26-45
11
Pretty
Pretty
bad
good
7
Male
10
good
Total
10
38
4
4
22
7
14
10
15-25
7
11
7
9
26-45
6
53
4
38
6
45+
Male Total
Grand
11
45+
Female Total
Good
Very
3
3
13
11
10
9
4
47
35
18
24
19
4
100
Grand
Total
Table 3 - Design
Now, we are looking into the Company Image PivotTable (Table 4) and we can see that 35
people out of 100, from which 13 males and 22 females, consider our company image as being
pretty bad. 24 out of 100, from which 16 males and 8 females, think it is pretty good and only 6
people said it is very good. We can see that our image is not so popular, so we can improve it by
promoting it more and better.
12
14
12
10
Bad
8
Pretty bad
6
Pretty good
4
Good
2
Very good
0
15-25
26-45
45+
Female
15-25
26-45
45+
Male
Table 4 – Company image
In order to know why Danes tend to buy more Coca Cola than Pepsi, we need to look into their
Buying Motives. For this, we have made the Buying Behavoiur Analysis and also we have
looked into the buying criteria PivotTable.
SOR model (Buying behavior)
Sociocultural stimuli
The Danish society is very much focused on organic food and healthy eating. This causes that
they are very aware of the sugar level in soft- drinks, which makes a challenge for beverages
companies to produce sugar-free products that still reach consumer’s taste. Both of the
companies managed to achieve it by producing special line free of sugar, only with some
sweeteners; Coca Cola sells Coca Cola Light/ Diet Coke/ Coca Cola Zero and Pepsi sells Pepsi
Light.
13
O- Organism
Psychological factors: buying decision is based in this case mostly on basic needs like
physiological one: beverages quench the thirst and maybe on social needs: trends of carbonated
drinks (decreasing now in Denmark) and sense of belonging to a group that is recognizable by
international brand name recognition.
R- Response
According to the Marketing Stimuli with reference to the price, the response of the customers is
that they are willing to buy it more over Coca Cola if it would be between 10% and 19%
cheaper. Therefore, we can lower the price so we will gain competitive advantage,
Analysis
In the PivotTable we tried to look into what would make people buy more Pepsi than Coca Cola.
We saw that 21 females out of 53 would buy more Pepsi if it would have a lower price, while 17
males out of 47 have the same reason. 7 women would prefer a better can design, while no men
would buy more for it. 3 females and 10 males would like a better quality and 19 females and 17
males would buy it more for a better taste. We can conclude that most of the people, 38 out of
100, would prefer a lower price, but also other 36 would buy it more for a better taste (Table 5).
14
25
Not answered
20
Lower Price
15
Better Can Design
10
Better Quality
5
Better Taste
0
Other
Female
Male
Table 5 – Buying criteria
Our O
Our 4th sub question refers to the influence that price has on the buying process. For this, we will
look into the price sensitivity for both Pepsi and Coca Cola. We asked people how much cheaper
should Pepsi be in order for them to buy it over Coca Cola. We observed that 50 people out of
100 would like it to be between 10% and 19% cheaper, 26 out of 100 would prefer it to be
between 20% and 29% and 21 people would prefer it to be over 30% cheaper. Therefore, we can
lower the price of our product with between 10 and 19% in order for Danes to buy it over Coca
Cola (Table 6).
35
30
25
Not answered
20
10-19%
20-29%
15
30%
10
5
0
Female
Male
Table 6 – Price sensitivity Pepsi
15
We also asked people how much cheaper should Coca Cola be to buy it over Pepsi. We came up
with the conclusion that 45 people out of 100 would prefer it to be between 10% and 19%
cheaper, 34 of them would like it to be between 20% and 29% cheaper and only 18 people said
they would like it to be over 30% cheaper. Therefore, again, most of them would buy more Coca
Cola than Pepsi if it would be between 10% and 19% cheaper (Table 7).
30
25
Not answered
20
10-19%
15
20-29%
30%
10
5
0
Female
Male
Tabel 7 – Price sensitivity Coca Cola
Solution
Regarding our finding from the marketing research and our analyzes we would like to use the
Ansoff Matrix looking at product development by keep making new interesting products to the
already existing market.
During
the
history
of
Pepsi
in
collaboration with the Royal Unibrew we
have already used this strategy several
times,
we
have
launched
different
products, among those the less successful
Pepsi Twist, which was taking out of the
16
market again9. But we also had success when we launched the PepsiMax in 1993 as an
alternative to Pepsi Light and regular Pepsi.
We find that the competition of market is high and that the main competitor Coca Cola is also
using the product development strategy in order to win market from Pepsi so in this highly
competitive market it is of almost necessity to keep challenge the competitor and launch new
products by having a close view into the costumers needs and how the needs are changing over
time.
The launching of new products demands research, development and innovation. The way to
figure out what demands the costumers has can be figured out by using social media like
Facebook and Twitter to figure out what trends that exists in the market and how to merge that
with the new products.
A new product for the Danish market could be an ecological Pepsi where sustainability is
underlined as well as ecology or as called in English more often organic products. The
consumption of organic products has increased with 80% from 2003 till now10. An ecological
Pepsi could fit with the awareness of health among the Danish consumers that are more and more
concerned about sustainability and ecology11.
9
http://finans.tv2.dk/pension/article.php/id-62707315:kæmpeflops-de-blev-trukket-tilbage.html
10
11
http://www.organicdenmark.dk/uk/home.aspx
http://www.organicdenmark.dk/uk/home.aspx
17
Strengthening the 4P`s
If we look into the 4ps of Pepsi we find that the structure of the company has been and still is
successful. When we look into the promotion part of the 4 p`s we would suggest that Pepsi
moves even closer to make personalized promotion, our main competitor Coca Cola launched a
good example of this when they personalized their bottles with normal first names, so that the
consumer could find a Coca Cola bottle with their own name on it 12. Pepsi could use same
strategy just in another innovative way, creating a fun factor to the customer, finding something
in our product that is personal. Another point in the 4 p`s when we look into Product, could be to
make a Cola that is made of Danish commodities to strengthen the trust and quality perception of
the brand among Danish consumers. The reason behind this suggestion is statistics showing that
80% of Danish consumers likes to buy Danish products13.
12
http://www.shareacocacola.si/Bottle
13
http://www.foodculture.dk/Samfund_og_forbrug/Forbrug/2012/Danskere_koeber_dansk_for_at_sikre_danske_job.a
spx#.Ux5OxtyrMgY
18
Another opportunity would be in Place. The Royal Unibrew could try to expand their
collaboration with places to sell on trade and off trade to gain greater accessibility. We found
from our market survey that when people were are asked if they would be willing to substitute
Coca Cola with Pepsi % said yes if Coca Cola was not available, if Pepsi gained more of the
market they could take advantage of this fact.
Regarding our survey we figured out when making table 6, that the price also has a role to play
in the buying decision of selecting Pepsi or Coca Cola, we figured out that 50% of the asked
people would like to buy Pepsi over Coca Cola if the price of the product is reduced with 10 to
19%, so it would have sense to look into the prices of the products to gain market territory from
Coca Cola.
All of this together could strengthen Pepsis position in the market and lead to growth and add
additional value to the product, price, place and promotion in our marketing mix.
19
Conclusion
We have made the 4 p´s of Pepsi and also looking into growth strategies strengthen the 4 ps and
made a market research. In our market research we found a lot of relevant data that can answer
our research question Why Danes tend to choose Coca Cola over Pepsi.
One of the most relevant observations is that we made is the first table about preferences where
we saw that 66 people out of 100 preferred Coca Cola in contrast to 34 people preferring Pepsi if
we split that up in age groups its clear to see that the age group that consumes Pepsi the most is
the teenagers and Coca Cola biggest segmentation group according to our study is the middleage people and that is where the largest difference is regarding the segment.
Another Interesting fact to answer the research question would be looking into the factors of the
buying behavior looking into price, taste and image. The majority of the people interviewed in
our survey said that taste of Pepsi is good, our research also made an interesting discovery
regarding the design of Pepsi that was considered not good we believe that its relevant to change
the design according to the survey.
When we look into table 4 about the image of Pepsi its clear to see that the perception of the
brand and the image is not popular, this is a serious reason for the difference between the brand
Coca Cola and Pepsi and could explain a lot about the we made a way to strengthen this area
with personal advertisement, Product development strategies and moving closer to the trends and
needs of the cultural environment of Denmark.
20
Appendices
21