Final Marketing Plan
By: Scott Kalister
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Executive Summary:
PepsiCo is inclusive of three entities: PepsiCo Americas Foods, PepsiCo Americas Beverages
and PepsiCo International. Between these companies, PepsiCo owns over 200 smaller
corporations, including Frito-Lay, Quaker Oats, Gatorade, Tropicana and many others. PepsiCo
is a publically traded company and owned by shareholders and its business affairs are overseen
by a board of directors. Pepsi has marketing opportunities that include the broadening of the
product base, international expansion and growing the snack and bottled water market via
internet sales. The plan is to be the premier products company that focuses on convenient great
tasting beverages and, of course, to produce financial rewards for shareholders and employee
growth. Specifically, my plan targets youths as I am convinced they are the leading internet users
and can be more easily swayed into being Pepsi fans. My internet marketing plan will include the
idea to offer product subscriptions at lower costs and gain attention by eliminating shipping fees
to consumers.
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Marketing Plan Part I:
Description of the company: PepsiCo is the company that I chose for my marketing plan.
PepsiCo, Inc. was incorporated in 1919; it is a global food and beverage company. The company
makes, markets, and distributes a variety of foods and beverages in more than 200 countries.
Organizational structure: PepsiCo consists of three units: PepsiCo Americas Foods, PepsiCo
Americas Beverages and PepsiCo International. PepsiCo Americas Foods encompasses FritoLay North America, Quaker and all Latin American food and snack businesses. PepsiCo
Americas Beverages oversees Pepsi-Cola North America, Gatorade, Tropicana, and all Latin
American beverage businesses. PepsiCo International is responsible for PepsiCo business in
Europe, Asia, and Africa.
The PepsiCo Mission Statement: “Our mission is to be the world's premier consumer products
company focused on convenient foods and beverages. We seek to produce 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...”
Description of the product or service: PepsiCo’s soft drinks (including Pepsi, Mountain Dew,
and Slice) make up about one-quarter of its sales. PepsiCo also owns Frito-Lay, the world’s
number one maker of snacks such as corn chips (Doritos, Fritos) and potato chips. PepsiCo sells
its Gatorade sports drink and Tropicana orange juice brands through other divisions. The
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company also sells Aquafina bottled water, Dole juices, Lipton ready-to-drink tea, and Rold
Gold pretzels. The PepsiCo challenge is to try to keep up with its rival the Coca-Cola Company.
Summary: The main thing that Pepsi does is it quenches your thirst. There is nothing better on a
hot day than a Pepsi on ice. On the flip side there are negative things that Pepsi does like the
Phosphoric acid in Pepsi eating tooth enamel if regular brushing is not done. The high amounts
of sugar in Pepsi can be harmful to some people. The caffeine in Pepsi can be argued for both
sides.
As a consumer a person can buy caffeine-free Pepsi, Pepsi Next which has 60% less
sugar than regular Pepsi or diet Pepsi or Pepsi Max with fewer calories, but twice the caffeine.
Pepsi Wild Cherry introduced in 1988 was discontinued in 2005.Pepsi Clear released in Mexico
for a limited time in 2005. Pepsi AM containing more caffeine than regular Pepsi discontinued
after one year in 1990. Pepsi Natural containing natural ingredients and released in 2009. Several
others including Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Christmas Pepsi, Kona Pepsi,
Lemon Pepsi, Pepsi Lime, Pepsi Mojito, Pepsi Raging Razzberry, Pepsi Strawberry Burst, Pepsi
Summer Mix, Pepsi Throwback, Pepsi Tropical Chill, Pepsi Freeze, Pepsi Twist, Pepsi Vanilla,
Pepsi X Energy Cola, Pepsi 100, Pepsi Cherry Vanilla, and Pepsi Next. This list supplies
consumers with just about every need or want from the different Pepsi varieties.
PepsiCo has been scrambling to come out with new types of beverages that fit a healthier
profile in the 2000’s, because of the slowing sales. Drinks like Muscle Milk, vitamin water, and
Honest Tea have fit the bill. The competitive advantages for Pepsi are as complicated as they are
tricky. The contents of things to consider are: 1. The industry 2. Competitive analysis 3. Market
research 4. Issues 5. Competitive aids 6. Recommendations 7. Bibliography. PepsiCo’s main
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strengths are: Large market share, purchasing economies of scale, customer loyalty, worldwide
brand recognition, huge distribution network, and new product development.
The history of Pepsi started in 1898 with the invention by Caleb Bradham a pharmacist
and drugstore owner in North Carolina. He began experimenting with combinations of spices,
juices and syrups trying to create a refreshing new drink to serve to his customers. He eventually
concocted his own special beverage, a soft drink. His creation a mixture of pepsin, kola nut
extract, vanilla and rare oils, his customers named it Brads drink. Caleb renamed his drink
“Pepsi-Cola and advertised his new soft drink. In 1903 Pepsi was patented, and from there it took
off. In 1910 there were Pepsi franchises in 24 states. After WWI Caleb went bankrupt because of
the rising cost of sugar, and sold the company to Charles G. Guth who was president of a large
chain of candy stores on the eastern seaboard. In 1941 Guth reformulated the drink and offered
to sell Pepsi to the Coca-Cola Company, who refused the offer.
PepsiCo has enjoyed a long history of delivering strong financial growth for
shareholders. With some of the world’s most powerful brands, Pepsi’s commitment to
sustainability and top global talent, PepsiCo is positioned to win in the long term.
PepsiCo’s plans for the future include goals in the area of nutrition, the environment, and
workplace practices.
PepsiCo is a publically traded company owned by shareholders. PepsiCo’s business
strategy and affairs are overseen by its board of directors, which is comprised of one executive
director and twelve independent outside directors. The CEO of PepsiCo is Indra Nooyi.
PepsiCo’s regional offices are worldwide. PepsiCo is not a subsidiary of any other company but
they do have many subsidiaries themselves. My plan will meet the mission of the company
because my plan is to be
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the premier consumer products company that focuses on convenient great tasting beverages.
Also to produce financial rewards to investors as well as providing opportunities for growth to
employees, business partners and the community.
Marketing Plan Part II:
SWOT Analysis:
Strengths:
Weaknesses:
Branding
Knowledge
Relationship Selling
History
Brand Dominance
Diversification
Distribution
Overdependence on Wal-Mart
Overdependence on U.S. Markets
Low Productivity (Revenue per Employee)
Image Damage Due to Product Recall
Opportunities:
Threats:
Broadening of Product base
International Expansion
Growing Savory Snack and Bottled water
market in the U.S.
Decline in Carbonated Drink Sales
Potential Negative Impact of Government
Regulations
Intense Competition
Potential Disruption Due to Labor Unrest
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Summary of the SWOT analysis: Pepsi is one of the top beverage brands recognized
around the world. Pepsi generates more than $15,000 million of annual sales. PepsiCo is present
in over 200 countries and has the largest market share in the U.S. at 39%. Pepsi has a broad
product base plus a multi-channel distribution system. The company delivers its products directly
from manufacturing plants and warehouses to customer warehouses and retail stores. Around
12% of PepsiCo’s total net revenue is from Wal-Mart. Wal-Mart’s low price themes put pressure
on PepsiCo to hold down prices.
In 2008 salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and
waffle mix from retail shelves. In 2007 there were incidents of exploding Diet Pepsi cans. This
all damages company image and confidence in PepsiCo products. PepsiCo is doing many things
to broaden their product base. Decline in carbonated drink sales resulted in PepsiCo to be in the
process of diversification. Based upon recent history, PepsiCo may be vulnerable to strikes and
other labor disputes.
Marketing Objectives: To make Pepsi products bigger than they already are and to make more
money for the investors than ever before, also to change consumers’ minds about which soft
drink is the most refreshing, the best tasting and the most enjoyable. Pepsi products enhance
consumer’s lives by providing refreshing soft drinks to a wide variety of targets, almost the
entire population. There is nothing like a cold Pepsi over ice on a hot day. Pepsi is one of the
largest and most recognized beverages in the world.
The plan communicates the answer to the questions asked because PepsiCo continues to
give consumers what they want when they want it and where they need it and the consumers are
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drawn to Pepsi. PepsiCo’s revenues are higher than ever before. Using the expand --strategy
growing the selected market segment much faster than the overall segment is growing. Because
PepsiCo will be grabbing a competitor’s share it is an aggressive strategy, often involving
considerable expense and time of key people.
The plan is to be the premier consumer products company that focuses on convenient
great tasting beverages. Also to produce financial rewards to investors as well as providing
opportunities for growth to employees, business partners and the community.
Target Market Strategy: The target market is basically the entire population but I am going to
focus on the children and teenagers age group to narrow the target market. Yes. I am targeting a
demographic (age group) so that I can focus on a narrower target market. I am convinced that it
is easier to sway a child or teenager to become a Pepsi fan. Child and teen exposure to TV ads
for full-calorie soda doubled from 2008 to 2010. This increase was driven by companies like and
Coca-Cola and Dr. Pepper Snapple group. Children were exposed to nearly twice as many TV
ads for sugary drinks from these companies. In contrast, children were exposed to 22% fewer ads
for PepsiCo sugary drink products. In 2010, black children and Hispanic teens saw 80 to 90
percent more TV ads than white children. Marketing on Spanish-language TV is also growing. In
2010 Hispanic children and teens saw nearly twice the number of sugary drinks and energy drink
ads as in 2008.
The American Academy of Pediatrics says highly caffeinated energy drinks have no
place in the diet of children and adolescents. But in 2010, teenagers saw 18 percent more TV ads
and heard nearly twice as many radio ads for energy drinks than adults did. Our children are
being assaulted by these drinks that are high in sugar and low in nutrition. The companies are
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marketing them in highly aggressive ways. The Centers for Disease control and prevention says
about 15 percent of children are overweight or obese. Children today are likely to have shorter
life spans than their parents, which will affect their ability to work and pay taxes, while
threatening to drive up healthcare costs. It is important to consider the online interaction children
have with brands, especially since they tend to stay online for longer than they watch TV
commercials. Marketing to children and teens by way of the internet is probably the best way to
reach them or possibly get them to switch soda brands. Bombarding kids with internet ads has to
be one of the most effective ways to market soda products.
Marketing Plan Part III:
Product:
o Pepsi Cola 18 packs and 24 packs delivered (free Shipping)
o I wanted to show from the title that a consumer can order Pepsi products and have
delivery to their doorstep. They can also order a year’s worth and receive discounted
prices.
The Idea is to distribute Pepsi products to consumers at reasonable prices and with no
shipping costs. The minimum order is at least one 18 or 24 pack of Pepsi. The customer
can also set up delivery once a month or once every two weeks and receive discounted
prices if they sign a contract for up to a year or more of delivery service. It is a very
convenient way to get your Pepsi products sent right to your door without having to
travel to the grocery store.
Placement:
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o The categories where I would list Pepsi products would have to be the beverages and
refreshments section. The target customer is basically the entire population but I am
focusing my attention on children and teenagers to narrow the market down.
o Other sources to get Pepsi products are: e bid, u bid, amazon, Google product search,
dealighted.com (a site that is a mash up of deals from other sites like sickdeals,
fatwallet and gottadeal), password.com, bens bargains, deal dump, deals plus, and
cybuys.
o The means of shipment would be Fed-Ex or UPS, the United States Postal Service is
probably the cheapest between the three. I would see which one was the quickest and
most effective then I could make a decision on which one to choose to make my
deliveries. The product will probably have to go to a distribution or storage facility
first then on to the customer. Because the product is shipped all over the world the
distribution facilities are going to be scattered everywhere.
Promotion:
o Pepsi tastes very similar to Coca-Cola, but their recipes are slightly different. There
are no coca leaves in Pepsi, Pepsi has pepsin and has more lime flavor. Pepsi has
more sugar and therefore is sweeter. Pepsi is also slightly less fizzy. However, the
drinks taste so similar that many people have difficulties telling them apart.
If you have never tried Pepsi before, think of it as a syrupy sweet, fizzy (because of
the carbonation), caramel-like beverage, with cinnamon, vanilla, lime and ginger
notes, as well as bitterness from kola nuts, which add caffeine.
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I chose to describe Pepsi by letting people know some of the major ingredients used
in the recipe of Pepsi. Describing the way that Pepsi tastes is obviously another way
of giving a potential customer an idea of what they might expect when drinking a
Pepsi for the first time. It is a very refreshing and thirst quenching beverage that is
really good especially when poured over ice and enjoyed on a hot day. I personally
have been drinking Pepsi for many years and you might say that I am a loyal
customer.
Price:
o Consumers are interested in obtaining a reasonable price. Reasonable price really
means perceived reasonable value at the time of the transaction. The price paid is
based on the satisfaction consumers expect to receive from a product and not
necessarily the satisfaction they actually receive. Many factors go in to setting the
price of a product such as: demographics, location, what the competitors are
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charging, and the costs of suppliers, distributors, advertising and the profit margin.
The gross profit margin is the amount of money the retailer makes as a percentage
of sales after the costs of goods are subtracted. I don’t think that price skimming or
penetration pricing is a good strategy for Pepsi although status quo pricing and
value based pricing would work well.
Pepsi will not be open bid, buy it now would be the best way to sell on eBay.
I think that I will give customers free shipping to give them an incentive to purchase
Pepsi products. If the customer wants to buy shipping insurance they will have to
purchase that on their own.
I arrived at my price by researching competitors, doing surveys, and keeping a close
eye on sales, and then adjust the price accordingly. Prices will also vary depending
on geography or location. The cost of a Pepsi somewhere like Africa will probably
be about 10% of what it costs here in the United States as an example.
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