“Pepsi Next baby” TV commercial involves a mother snapping her baby playing on the floor. The father comes home with a box full of the new “Pepsi Next” soda. Unfortunately, the mother never admitted that Pepsi Next could taste like the original Pepsi. From the advert, it is clear that the new soda in the market contains 60% sugar. When they try the soda, they become so enthralled by the Pepsi Next soda that they do not realize their baby dancing, performing ‘the worm’, and playing guitar (Stewart 2008, p. 67).
Generally, this advertisement is suitable for individuals suffering from diabetes, and need sodas containing less sugar (healthier sodas). The audience can also be people trying to lose weight without surrendering their soda consumption. In this essay, this advertisement (“Pepsi Next baby” TV commercial) is critically analyzed in the realms of denotation and connotation, Polysemy, Technical codes, and symbolic codes, convention, and Representation.
Denotation and Connotation
While denotation is what can be depicted from a given image, connotation refers to the supplementary or associated meanings that go along with any sign or image. The connotations of an image or symbol are individual-based compared to the straight forward denotations since they involve personal perceptions and emotions about that sign or image (Stewart 2008, p. 67). In Pepsi Next baby commercial advertisement, the denotations that have been used include a literal depiction of a mother who hardly believes that the new Pepsi Next does not taste like the original Pepsi.
There is extreme happiness in the house after trying it. The baby dances while playing the guitar. The mother does not believe in the new taste of the Pepsi Next product. She represents the fact that most people do not believe that Pepsi Next can taste like soda, a fact that is not true. Nevertheless, trying it could result in great happiness among the users. This would attract individuals who would want to try it out to ascertain what is advertised.
Polysemy
According to Calder (2008, p. 305), polysemy is the existence of diverse interpretations regarding a single advertisement. Even though there is no much polysemy in this advertisement, it can be viewed from a different perspective. An individual can believe that, from this advertisement, people do not believe that Pepsi Next is tasty until it is tried. This is evident from the kind of happiness experienced after experiencing it. This is a critical interpretation; rather than focusing on the sugar content in the Pepsi Next, it focuses on the taste. Pepsi Company sets its TV adverts on priorities depending on its marketing goals and objectives. Additionally, the advert priorities exist after considering some other advertisement projects the company needs to develop. Pepsi Next baby commercial will be given priority if it is more strategic compared to other adverts in the market.
Technical codes and symbolic codes
Technical codes depend on the technology of the image used to generate a meaning while symbolic codes replicate the kind of non-verbal communications used in the concerned advert. They are also used to get additional attention in most advertisements (Kelley & Jugenheimer 2008, Pg. 124). In the Pepsi Next baby commercial advertisement, the first entity that attracts the attention of the audience is the delightful baby in the scene.
The great feeling of excitement associated with the father giving off the new Pepsi Next, and lastly the dancing of the baby creates a complete entertaining advertisement. These symbolic codes have been incorporated in this advertisement to make it more appealing to the audience. Technical codes used include a bright background color to acquire more attention since most people have snags in life and would appreciate seeing bright colors. This is because they believe that it spotlights very joyful and happy thoughts into an individual’s life (Stewart 2008, p. 67).
Use of recognizable convention
The use of recognizable conventions can be depicted by the marketing techniques employed in this advertisement. The Pepsi Next retail tactics in this ad regard the use of ‘surprise and awe’ at the same time. This implies that the audience will be astonished that the new Pepsi Next has an equivalent taste of Pepsi but it has reduced sugar content suitable for diabetic individuals. This is evident in this statement: “The NEW Pepsi Next has the SAME great taste but 60% less sugar!!” Also, it makes an individual think that he or she can never notice anything in their surroundings apart from the wonderful taste of the Pepsi Next; just like both the mother and the father of the baby do not notice their baby dancing and playing guitar.
The aspects of convention initiatives are also considered by the advert to promote the new Pepsi Next product (Calder 2008, p. 305). The emergence of the convention in marketing has revolutionized the world. Most organizations are prospecting to exploit the opportunities created by the social media provisions to augment their global limelight. Pepsi Company is in the process of revamping its new Pepsi Next product to increase its globalization and market reach. It is vital to agree that the advert used becomes quite competitive in diverse contexts. Due to this, only novelty and innovation can make an organization remain competitive and survive in the market through its creative promotional techniques on TV.
Representation
The concerned advertisement depicts the realities witnessed among families by providing versions that are superior, healthier, richer, and more successful. People need to buy commodities promoted through well-orchestrated advertisements (Stafford & Faber 2005, p. 164). In the representation contexts, this advertisement is a clear construct wisely created to let the audience step into a different “world” and admit its messages and implications as real, ordinary, and familiar.
For instance, in this advertisement, the mother capturing her baby performing ‘baby’ activities, and then the dad bringing home a new Pepsi Next soda are real and depicts an ordinary family lifestyle, where mother s are more concerned about their babies while dads need to make them more cheerful-in this case by bringing the new Pepsi Next home. Due to extreme excitements in the house, the baby does crazy and unbelievable things including strange dances.
This is a critical provision in the context of advertisements. From the provided advert, Pepsi Company has selected its specific target markets to inform them specifically. Customers demand goods, which satisfy their needs with the utmost precision and satisfaction. It is from this context that the advert prospects lie in selecting the target market. Additionally, the need to execute efficient TV clips has always helped Pepsi to deliver its business objectives as it addresses growth and profitability quests.
List of References
Calder, J 2008, Kellogg on advertising & media the Kellogg School of Management, John Wiley & Sons, Hoboken, NJ.
Kelley, D & Jugenheimer, W 2008, Advertising media planning: a brand management approach, M.E. Sharpem, Armonk, NY.
Stafford, R & Faber, J 2005, Advertising, promotion, and new media, M.E.Sharpe, . Armonk,NY.
Stewart, K 2008, Media, New Ways and Meanings 3rd Edition, Jacaranda Press, London.
The Coca-Cola Corporation and Pepsi Inc. are quite comparable companies in consideration of business, desired clientele, and signature goods. Coca-Cola and Pepsi are equally international drink manufacturers, with numerous beverage products to select from. Both corporations also handle additional commodities like consumable packaged foods. Pepsi and Coca-Cola seem to have corresponding marketing approaches. However, there are significant distinctions in the ways the two companies function. Coca-Cola and Pepsi are formidable competitors who take significantly distinct tactics to market dominance acquisition. The websites for Coca-Cola and Pepsi can be compared and contrasted through their use of purpose, visuals, descriptive language, and target audience.
First Technique: Purpose
Many firms utilize their websites to acquire prospects or potential clients, but they do not close sales digitally. However, the platform’s goal is to capture qualified prospects and enable them to provide their details to the company, which will subsequently contact them. The Coca-Cola website promotes its products and educates its customers about environmental and social concerns. The company’s mission is displayed on the webpage to offer products and beverage alternatives that individuals prefer, enabling them to be refreshed. Pepsi’s website employs the purpose strategy to promote their goods. Pepsi’s web page depicts its offerings through pictures with captions, which range from nutritious breakfasts to wholesome and enjoyable afternoon snacks and drinks to late pleasures. The website of Coca-Cola conveys its purpose most effectively compared to Pepsi’s webpage. Pepsi’s website only provides advertisement for its products while Coca-Cola’s webpage displays advertisements and social activities that the company performs. Furthermore, the webpage shows diversity in Coca-Cola’s staff, which informs the consumers that the company is against racial discrimination. Conveying products and activities on websites is crucial since web pages offer the first impression to prospective clients.
Second Technique: Visuals
Companies use visuals like appealing photos, graphic designs, gifs, fascinating films, and innovative infographics in their marketing approach. Coca-Cola’s website employs a variety of enticing and colorful pictures displaying individuals who are shown to have benefited from the company’s involvement. Pepsi’s web page shows many attractive pictures of their products and individuals enjoying meals with a Pepsi beverage. Furthermore, the website has a short, fascinating video advertising the corporation’s product. Pepsi’s website offers the most effective pictures, colors, and visuals to communicate its message to clients. Colorful pictures of individuals enjoying meals with a beverage of Pepsi appeal to the eyes of consumers. Furthermore, Pepsi’s webpage provides a video that conveys information on the quality of drinks. It aids consumers in effectively visualizing items, engaging with promotions, interacting with companies, and making smart purchasing decisions.
Third Technique: Descriptive Language
Several marketing efforts utilize a descriptive language to make it appear as if individuals are having regular discussions about the qualities of the promoted product. Figurative language contrasts things to provide additional information about them. The webpage of Coca-Cola company uses figurative language to describe to its consumers the effectiveness of its product. The slogan, ‘Taste the feeling,’ is displayed on the website, and it intends to attract customers to purchase the beverage and have a taste of the product. Pepsi’s website uses the slogan, ‘That’s what I like’ as a figurative language to attract consumers. Coca-Cola’s website use of descriptive language is interesting and effective compared to Pepsi’s slogan employed on its webpage. The slogan used on the website for Coca-Cola is concise and specific, which makes clients desire to have a taste of the product. Unlike Pepsi’s slogan, that describes a particular individual’s experience of their product, Coca-Cola’s slogan invites consumers to experience what they offer. Corporations utilize a descriptive language to assist the reader in grasping what they are attempting to convey.
Fourth Technique: Target Audience
Companies that define their target audience will be able to generate a style of marketing that communicates directly to their customers. Coca-Cola’s website views every thirsty client as a potential and prospective consumer as pictures portray the young and old. All demographics are being pursued, but the age bracket from eighteen to twenty-five, which accounts for roughly forty percent of the whole age group, has the most promise. The webpage of Pepsi portrays clients of ages thirteen and thirty-five with a sophisticated lifestyle. Coca-Cola’s website appeals to its target audience most effectively than Pepsi’s webpage. The website for Coca-Cola works with influencers to advertise its products and shares the brand values with the public. The webpage shows its support against racial discrimination, and a picture of its staff members displayed on the site shows diversity. A target audience study offers businesses guidance for their advertisements and maintains messaging coherence, allowing them to establish stronger customer connections.
Conclusion
In conclusion, the website aims to inform and advertise to prospective consumers the products and services offered by particular organizations. Visuals on the web pages capture clients’ attention and, in turn, may increase the market share of the corporations. Employing descriptive language is a marketing strategy that helps customers grasp the conveyed information. The target audience plays a critical role in enabling companies to develop further from profits made from purchases. The Coca-Cola website is the most effective because its focuses on the brand over the products. Coca-Cola’s webpage does not concentrate on selling the beverage in the bottle, but it sells happiness in a bottle. This paper critically analyzes essential ideas that readers should take into account.
When the television was invented no one knew how it was going to change the way people live. No one considered how it can radically alter the way information is shared by many people all over the world. But it has to be pointed that the television was not an overnight success.
It took years of creating meaningful and exciting shows before the world began to tune in. However, someone has to pay the bill and just like newspapers and magazines the logical way to finance soap operas and news broadcast is through advertising.
Television advertising grew in leaps and bounds because tad agencies together with their creative talent mastered the art and science of communication and learned how to utilize concepts like ideology, myth-making, representation and language.
The proponent of this study will take a closer look at a recent Pepsi commercial made popular by the fact that it was shown in the 2011 Super Bowl – an event watched by millions of people in America. The ad was sponsored by Pepsi and the product advertised was Pepsi Max.
What goes on in the Ad?
It is normal for husband and wife disagree on an issue. If the disagreement is not resolved then conflict will ensue. In the Pepsi Max ad, the wife does not want her husband to indulge in great tasting but high-calorie content food. The food items that the husband loved to eat includes French fries, pie and burger.
Every time the husband attempts to eat these food items he gets a beating from his wife. In the first scene the mere fact that he was thinking of ordering French fries made him cringe from a quick kick from underneath the table. His wife was on the other side of the table.
In the second scene the husband was about to indulge in a pie and his wife came from behind to give his head a quick push into the center of the pie.
And in the third scene the husband hid in the bathtub to eat a burger but his wife was there to grab the burger and replaced it with a bar of soap. But in the final scene he chose to drink a Pepsi Max and this was met with approval. However, his roving eye was not part of the appreciation package and so his wife threw a Pepsi Max at him.
What is the purpose?
The Pepsi ad wanted to show the struggle of husband and wife who are attempting to maintain a healthy lifestyle. This was broken down into different sets of “myths” such as the idea that husbands cannot control themselves. This is not true for all husbands but the ad forced this concept into the audience and has to be accepted as truth.
The second myth is the idea that wives are always in control. This is not true because there are thousands of overweight women in America and most of them became obese because of the lack of self-control.
The purpose of the ad is not to persuade every type of viewer. The focus of the ad is on husbands and men in general. This message was designed for men and created an experience of shared emotions and struggles.
The message that it tries to convey is that Pepsi Max sympathizes with struggling husbands and men who had to keep up with a partner that forces them to watch what they eat. When this objective was achieved the alternative was given – Pepsi Max. The drink has zero calories but does not compromise on taste.
How does it persuade?
The ad created the perception that husbands and men in relationship need not to suffer all the time when it comes to watching their weight and being mindful of what they eat. There is a way to indulge without getting fat.
This can be achieved by drinking Pepsi Max. Everything that they love is forbidden but there is one thing that cannot be taken away from them and it is their beverage of choice enhanced by Pepsi Max.
The ad offers an alternative. A path to happiness that men are more than willing to take. The ad succeeded in creating desperation within their target market. Forcing them to acknowledge the “truth” that there is no way out.
It is like having a man drowning in the ocean and the moment that someone throws a lifesaver at him, he will automatically grab it thinking that there is no other way (Hall, p.30). This seems to be the effect of the commercial. Everything that was once considered great tasting and wonderful is off-limits. But Pepsi Max is still legal.
What does it naturalize?
The ad naturalizes the myth that man does not have self-control by showing that things that he loves to eat. The message is that man will do everything based on instinct without thinking about the consequences. He needed help from someone who knows self-control.
The naturalization process involves food items that men can easily relate (Fiske, p.21). French fries is everyone’s favorite. A pie is something that is instantly recognizable on screen. A burger is also another favorite food among American men.
The myth concerning the disciplined wife is naturalized by depicting a loving partner. The wife may be mean when it comes to her strategy of forcing a husband to adhere to a strict diet but everything was done with a smile on her face. She is not angry or controlling she is merely demonstrating her love for her husband.
What does it ignore?
The ad ignores the fact that there is no need to drink Pepsi Max. If the husband is indeed trying to lose weight then there are healthier alternatives. There is no need find an alternative to soft drinks that contain an inordinate amount of sugar.
But the ad totally ignores that fact, and proceeds to persuade the target audience that happiness in a relationship can be achieved if husband and wife finds common ground. When it comes to monitoring calorie intake one of the suggested strategies was to drink Pepsi Max.
Rewriting
Instead of using a husband and wife team the new ad will cast a family. Instead of using people that have an athletic build it would be better to use slightly overweight couples and slightly obese children in the re-imagined ad. This goes to show the real struggle. This helps explains why there is a need to lower the calorie intake of the family.
In the original Pepsi Max ad, the producers used characters that obviously has no weight problem. This creates confusion in the minds of the audinece as to the real purpose of drinking a zero calorie drink. As a result the actions of the wife was interpreted as being mean.
Those who are overweight will come to realize that the husband is not undisciplined but to the contrary his ideal weight is a product of exercise and self-control. It is possible that the audience will turn against the wife because they would want the husband to be rewarded for what he has done. Thus, there is nothing wrong in eating great tasting food once in a while.
In the final scene a jogger took a break from a vigorous run and sat on a bench next to where the husband and wife was seen drinking Pepsi Max.
The husband’s self-control issue resurfaced and he was caught looking appreciatively at the gorgeous girl. This provoked the wife to throw a can of Pepsi Max at her husband but he was able to duck on time and so the poor girl was hit on the head and she knocked down.
It would be better if the jogger was not alone but a part of the group that tried so hard to lose weight. The camera should focus on a group of joggers panting and sweating because of their need to lose weight. So when the Pepsi Max was thrown at the woman the product did not become an object of scorn but a message in itself.
In the original ad the audience is left with a bitter aftertaste after seeing the innocent girl sprawled on the floor (Snyder, p.1). But if this was re-written the audience will get the idea that exercising is not necessary as long as they learn to drink Pepsi Max.
Works Cited
Fiske, John. Television Culture. New York: Taylor & Francis Group, 2010.
Organizations use celebrity endorsement to popularize their brands. Nevertheless, the marketing strategy may fail to achieve the indented purpose due to the negative projection of information. Such an incident happened to PepsiCo recently. The multinational corporation was forced to remove its advert featuring Kendall Jenner and apologize to the public. The advert featured protesters from diverse racial backgrounds who were demanding peaceful coexistence and were against the harassment of black people by the police. It showed Jenner abandoning her celebrity life to join the protesters. She walked to a police officer, handed him a can of Pepsi. The police officer sipped the soda and smiled leading to the protesters going wild (Arceneaux par. 3). Even though the company intended to relay an appropriate and innocuous message of social unity, the public regarded the advertisement as an inauthentic and opportunistic marketing maneuver. This article will critique the advert and identify what the company could have done to prevent the public from misconstruing the intended message.
Intended Message
According to PepsiCo’s leadership, the advertisement was meant to send an international message of peace, unity, and understanding. The company had no intention of trivializing any serious issues that affected the country or a particular race. PepsiCo Inc. alleged that the advert featured people from diverse cultural backgrounds coming together to promote peaceful coexistence (Watercutter par. 4). The company believed that such a message was essential and resonated with the demand for the respect of black lives that ensued following the killings of African-Americans by the police. PepsiCo stated in its YouTube that the advert featured “a short film about the moments when we decide to let go, chose to act, follow our passion and nothing holds us back” (Channick par. 10). It depicted the fortitude and actions of individuals who make good use of every moment that comes their way. It also featured multiple stories, lives, and emotional connections that depicted joy, passion, unrestrained, and limitless moments.
Unintended Message
Opponents of the advert argued that the company took advantage of the national protest movement to market its brand. The move was utter ridicule of the urgency of the existing issues and diminished the severity and magnitude of why people go on streets to demand respect for the lives of minorities in the United States. The release of the advert resulted in an extensive sharing of a photo showing Leshia Evans standing calmly in front of the police during the protest against the murder of Alton Sterling. Evans, who was an African American, was arrested despite not confronting the police. Conversely, Jenner, who is white, exchanged a smile with the police. The police officer even accepted a drink from Jenner in spite of her being one of the protesters. The majority of the people failed to understand how a can of soft drink could resolve the injustice meted on the minority groups by the police. Bernice King, daughter of Dr. Martin Luther King Jr., shared a picture of her father being harassed by police despite partaking in a peaceful demonstration. She wondered why the father had to go through such humiliation while PepsiCo had the capacity to resolve the problem. Bernice writes in her Twitter account “If only Daddy would have known about the power of Pepsi” (Smith par. 13).
Criticism of the Advertisement
Today, marketers are trying to take advantage of sensitive social issues to market their brands without alienating the target audiences. The majority of the marketers are exploiting cultural zeitgeist as a way to remain relevant. In the case of PepsiCo, the company tried to take advantage of Jenner’s publicity and the increase in demand for social justice to market its soft drink. Unfortunately, the company failed to appreciate that Jenner was not renowned for fighting for social justice. Her involvement in the advertisement resulted in the oversimplification of the challenges facing the minority groups in the United States.
PepsiCo’s advert failed to meet the intended goal. One of the weaknesses of the advertisement was authenticity. The majority of the people were against the ad because it did not look authentic at a moment when realism is so critical, especially amid the millennials. The company was not conscious of the existing political environment. The success of an advertisement depends on its capacity to paint a current condition in a pleasant manner without seeming to ridicule any of the affected parties. Production of politically incorrect ads may have far-reaching repercussions on business. PepsiCo failed to consider the reaction of the movements that fight against social injustice in the United States. The inclusion of Jenner, a white woman, in a public demonstration comprising the blacks undermined the purpose of the protest.
The advert undermined the significance of political action. Currently, most employees are not members of trade unions. Moreover, the majority of the organizations that are bestowed the responsibility of fighting for social justice have abdicated their duties. Consequently, people view political action as the ultimate means of filling the gap left by trade unions. Research indicates that at least one out of a hundred Americans have ever participated in political action. Indeed, the public demonstration is an integral constituent of the modern vernacular. Given that, the controversial advertisement by PepsiCo was in line with the contemporary ways of advertising. In the past, companies like Burger King, McDonald’s, and Coca-Cola have taken advantage of political issues to popularize their brands. Even though the PepsiCo advert may be commended for acknowledging the existence of the minority groups in the United States and the challenges that they encounter, it did that with the assumption that they were consumers. The company told the protesters angered by a government, which jeopardized and ignored them that it understood their predicament. The corporation reminded the demonstrators to try its calorie-free Pepsi Max. Jones and Yu aver, “The intentional creation of the ad with people of so many ethnicities seemed compelled” (par. 16).
The advert dubbed “Live for Now Moments Anthem” failed to appreciate the severity of issues like racism, divisiveness, and protests that affect the United States. Most advertising consultants argued that the advert degraded the seriousness of critical issues by attempting to show that a can of soda could resolve grave problems on the streets. One wonders how the company could use Jenner in such an advertisement. The ad depicted a rich, white celebrity as a public hero. The issue of presenting white stars as heroes are common in Hollywood as well as most of the advertising firms. PepsiCo’s ad relegated the African Americans and other minority groups to props in the milieu. There is nothing wrong with depicting a white person as the central character in an event featuring minority groups and vice versa. Nonetheless, it is imperative to use the right person. In the case of the PepsiCo advert, Jenner did not have a legitimate association with the cause, leading to the advert appearing phony. Moreover, it undermined the significance of the protest by portraying it as a social outing. The most upsetting part of the advertisement was where Jenner approached the police in a manner that other folks could not even dare.
The advert was a clear demonstration of how capitalism takes advantage of pandemonium and blunts its potential. Vilanova avers, “When the mainstream subsumes political action, we lose track of its target and purpose” (par. 8). A good example is when the Republican politicians intentionally capitalized on Bruce Springsteen’s Vietnam-Protest anthem for their benefits. The politicians used the song dubbed “Born in the USA” to rally the public to support them. The move resulted in the loss of the meaning of the anthem. Corporate culture has neutralized the mainstream music industry. The song “Lion” that is featured in the PepsiCo’s advert is meant to encourage people to continue the struggle. Just like the lion is the king of the jungle, the song serves an assurance to those struggling that there is no obstacle that they cannot overcome. Unfortunately, using the track in the PepsiCo’s advert affects the inspirations behind the song.
In spite of PepsiCo pulling the advertisement, it did not change the ignorance that contributed to its creation. The company’s ad tagline is “Live bolder. Live louder. Live for now” (Vilanova par. 11). Such a tagline is despicable given the conditions at play. Victims of police brutality like Philando Castile cannot benefit from the company’s products. In spite of Trayvon Martin had purchased a soft drink, it did not protect him from George Zimmerman. One wonders how dead people can “live for now”. Pepsi issued an apology to Jenner for putting her in an awkward situation because of the public outrage that followed the advertisement. The apology showed that the company did not pay attention to the plight of the black women who partake in movements that fight for social justice. Instead, it only considered the fate of the famous, affluent white woman. Today, many women play significant roles in the movements that advocate social justice in the United States. Trivializing such movements amounts to demeaning the women. PepsiCo ought to have understood that social injustices affect the lives of women from minority groups. The company owes black women an apology for failing to feature them in the advertisement.
PepsiCo’s Response
An attempt by PepsiCo to defend its ad did not change the public perception of the advert. The company argued that the ad sought to champion peaceful coexistence amid people from diverse cultural backgrounds. It underlined the reason the advert featured people from different ethnic backgrounds. The company released a statement that described the commercial as an international advert that called for harmony amid people from diverse walks of life. PepsiCo believed that such a message was worth communicating to the public. Despite the explanation, all features of the advertisement did not reflect the intentions that the company gave. The public was not ready to buy for the reasons that PepsiCo outlined. Eventually, the company resolved to pull the advertisement and issue an apology. The corporation retaliated that it did not intend to trivialize serious matters that affected the minority groups in the United States. It also apologized to Jenner for implicating her in its slip-ups. The company’s apology did not seem genuine as it failed to consider the individuals who were directly affected by the advert. For instance, PepsiCo should have issued an apology to the families of those who died due to police brutality. One wonders why PepsiCo had to apologize to Jenner. She agreed to feature in the advertisement because it earned her handsomely. Therefore, she should have understood the possible repercussions of featuring in such an advertisement.
How the Company could have Avoided Criticism
In the contemporary world, organizations must be conscious of racial politics. The Internet enables businesses to reach the global market, thus the need to come up with well-thought-out concepts when structuring an advertisement. Ads that bear words or actions, which appear to alienate a particular group of people, may have adverse impacts on the image of an organization. PepsiCo should have considered the political environment in the United States when developing the advertisement. Even though the company had good intentions, co-opting images of individuals involved in political actions resulted in the public believing that the advert was in bad faith. It showed contempt of the injustices that force the minority groups into the streets. Some people may argue that PepsiCo meant no harm in its advert. However, it is imperative to understand that making whiteness the center of attention, unconsciously or not, is a political proclamation that might have negative impacts on the organization.
PepsiCo should have ensured that it used the right persons for the advertisement. The company should have used individuals who are known to fight for social justice. It would not have appeared as if the company is not serious about what the African Americans experience in the hands of the police. Additionally, the advert would not have seemed to alienate the minority groups. Experts claim that PepsiCo failed by letting the in-house content creation team assume the responsibility of developing the advertisement. The company should have consulted an outside agency before releasing the advert. It would have enabled PepsiCo to test the advert with a broader network of clients to determine its reception.
Conclusion
In conclusion, organizations are increasingly using current political issues to popularize their brands. Experts warn that organizations require understanding the prevailing political environment to avoid the target market misconstruing their advertisements. It is imperative to ensure that an advertisement does not appear to alienate a particular group of people. Recently, PepsiCo was forced to take away an ad that meant to popularize the company’s soft drink. The advertisement featuring Jenner, a renowned celebrity, received harsh criticism, particularly from the minority groups. Even though PepsiCo intended to send a message of harmony and promote peaceful coexistence amid the public and law enforcement agencies, the public thought otherwise. The company was criticized for trivializing serious matters that impacted the lives of many African Americans. A major mistake that the corporation committed was to feature a celebrity who is not renowned for partaking in the fight for social justice. The company could have avoided the backlash by ensuring that the advert featured individuals who are directly affected by social injustices.
Coca Cola Company is the largest beverage business that deals with retailing, manufacturing as well as marketing of its products. Basically, the company deals with only non-alcoholic drinks and syrups. The mode of operation of the company is a franchise system, which is known all over the world. The company has its headquarters in Atlanta Georgia and is also listed in New York stock exchange. Since its incorporation in 1892, the company has since grown to produce over 500 different brands of refreshments and syrups.
Through the years, the company has acquired different companies all over in the line of refreshments making it a world renowned brand. The company boasts of having a covering of 200 countries with a daily sale of billions of their products. However, it is notable that most of their sales come from United States, probably because it is the home of their brand. The company has continually lobbied for a good legislation of their products in the United States.
The move is mostly focused in the increase tax subject to the soft drinks sector. As a production unit, Coca Cola Company only produces the syrup leaving the rest to the franchises carrying the Coca-Cola brand to package the products and distribute the products to retailers and stores that sell their products. Though the company has seen much success through the years, they have not done it without complains.
Various civil rights have at times criticized the monopolistic nature of controlling the market. In turn, the company has responded to the same by changing their practices to counter such accusations. On the same note, the company has seen itself being criticized in the issue of environment. Claims have been severally made of the company overusing the water near their production unit, which in turn results to lack of water to the farmers in the area (Schwartz Para 3).
On the other hand, Pepsi is a company that is also involved in production of beverages and snacks. The company was introduced in 1883 under the name brand drink but was to be renamed Pepsi-Cola drink in 1903. The popularity of Pepsi brand of drink came about in the duration when the world was suffering from the great depression as having been cheap.
The Pepsi-Cola as it is known today was due to merging of Pepsi and Frito-Lay Inc. in 1965. The company has its headquarters in Purchase New York since 1970 after relocation from Manhattan in New York. Frito-Lay Inc., unlike Pepsi, which was involved in beverage manufacture, was involved in snack manufacturing. The company has gained expansion by acquisition of various companies that are involved in both the snack and beverage sectors.
However, their major highlight of the many acquisitions was the acquirement of the Northern America Pepsi Bottlers Group in bid to increase the control of their production. Through the years, the major competitor of Pepsi has been Coca Cola brand, which has had a bigger market in United States market. It is also notable that most of the revenue that is generated by Pepsi Company does not come from the soft drinks but from the snacks part of it.
Though the company is involved in production of snacks, the company has taken the initiative to get involved in production of healthier food. One of their mission statements in the recent years is to provide more variety of health foods to their customers. The move to incorporate healthier foods has been much encouraged by different nutritionists. In turn, the company has shown intention of focusing on even more healthy foods like fruits and vegetables.
Though there are great efforts of the company to stay on the right side of environment, there have been critics over the environmental issues that arise due to their activities. In some parts of the world like India, there have been reported instances of shortages of water (Schwartz Para 5). There has also been complains on disposal of their beverages bottles and recycling suggestions were being campaigned for.
Coca Cola Company and Pepsi have similarity when it comes to distribution of their products. For one, they tend to sell their products to franchises that are in control of marketing as well as sales. These two companies usually have interests on the franchises they sell their products to the public. It is notable their control is attached to the equity interests that they have on these franchises.
Though these franchises have some control of the production, it is notable that the brand owners Coca Cola and Pepsi are the main controls of their supply chains. In bid to control the geographical supply chain, the two companies have resulted to acquiring other independent companies. An example of the same is the acquisition of Pepsi America Inc. by Pepsi Inc.. Coca Cola has also shown this by the acquisition of North American Pepsi Bottlers brand.
Such moves by these two companies is usually aimed at controlling their supply chains from production to distribution (Ferrari Para 4). The two companies have also embraced flexibility in their supply chains so as to make sure that they are in control of other markets in different parts of the world. They have re-looked on their supply chains capabilities so that they may introduce innovative cycles that are likely to attract the attention of their consumers.
When it comes to asset management, the two companies are cautious of establishment of smarter methods of controlling their assets in production to minimize the cost of production and enhance their control of markets. The two companies have a similar way of production. They are involved in manufacturing of the syrup and sell it to the companies that are involved in bottling and distribution of the same.
To many, there is no much difference between production of Pepsi and Coca Cola companies. The two have notably the same way of production of their products as they meet a common purpose of consumer satisfaction. The production formula is different between these two brands with many people tending to take Coca Cola brand to being a little acidic in comparison to Pepsi.
Also on the same point, Coca cola incorporate caffeine in their drinks unlike Pepsi. The coke brand is also notable to having not changed through the years to meet the social changes that have taken place; this is unlike the Pepsi brand, which has embraced changes within the years (Franzen and moriarty 197).
Coca Cola and Pepsi companies are the biggest players in the beverage sector as well as the snacks sector. Any strategy brought out by each of the two companies is usually absorbed by the other with minimal changes (Banker Para 6). In turn, this has lead the companies having consistent control of the beverage market all the world over. The brands show similar trends, though Coca Cola is the bigger of the two and commands a bigger customer base than Pepsi.
The global market has experienced a lot of competition in the recent past from rival companies of each service produced. The market has turned from being monopolistic to perfect competition market. One such example is the market of carbonated soft drinks simply referred to as soda.
There are various companies producing soft drinks including brands like the Coca-Cola, Pepsi and Schweppes. Of the aforementioned three brands, Coca-Cola is one of the oldest existing companies established in 1944 in the United States. In terms of market penetration, Coca-Cola has managed to distribute its products to over 200 countries round the globe (Mikkelson and Mikkelson, 2001, p.1).
The dominance that Coca-Cola has globally is attributable to a businessperson by the name Griggs Candler, who after purchasing the company initiated strong marketing tactics that led to its success. In order to perfectly venture into the market, Coca-Cola produces new brands of its soft drink including diet coke, caffeine-free Coca-Cola and Coca-Cola vanilla just to mention a few.
In addition to this, the company distributes soda fountain concentrates to food service distributors as well as restaurant who prepare the drink at first hand to the customers. In addition to this, the packaging materials used by Coca-Cola are attractive and durable thus attracting more customers. In short, the marketing strategy of Coca-Cola Company is one of the best leading to its dominance in the global market.
Pepsi-Cola is another company that specializes in producing soft drinks. The rivalry between Pepsi cola and Coca-Cola reached the top in the 1970s leading to the ‘cola wars’ (Louis and Harvey, 1980). In this, the Pepsi company came up with faulty results from tests they had conducted to suggest that consumers preferred their products to those of Coca-Cola.
These are some of the marketing strategies that Pepsi has used over the years in a bid to conquer the market. Pepsi had a slogan that played on radio and the television to attract consumers to their products. In addition to this, the Pepsi Company made use of the services of an artist by the name Polly Bergen in order to promote its products.
The most recent marketing strategy by Pepsi is that of re-designing their company logo. The logo together with the production of new brands of drinks such as the regular, diet and Pepsi max have been a breakthrough in the market penetration of Pepsi drinks.
Schweppes is another of the soft drinks brand produced by different companies depending on the location. This company has specialised in the production of carbonated water and ginger ales, making it different from the other two companies discussed above. The most common marketing strategy that the company has used is derived from the sound of gas that is normally produced in the process of opening the tin bottle.
Therefore, most of their commercials on the television and radio use onomatopoeia of “Schhhhh…..Schweppes” which has helped in market penetration of their brands. In fact, the packaging used by Schweppes has greatly contributed to the success of the brand, as people prefer the tin cans to the glass bottles mostly used by other companies.
From the above discussion, it is clear that the marketing strategy that a company chooses is the determining factor of it success (Kotler and Keller, 2009). The three companies discussed above, have different marketing strategies that they use to venture into the market and retain their customers.
Reference List
Kotler, P., and Keller, K. (2009). Marketing management (13th ed.). Upper Saddle River, New Jersey: Pearson Prentice Hall.
Louis, J. and Harvey, Z. (1980). The Cola Wars. Everest House, Publishers, New York, NY, USA.
Consumers are generally influenced by two factors: internal influences and external influences. Internal influences are personal feelings and thought that includes self-concept, motivation, attitudes, emotions and perceptions. These factors generally influence perception, purchasing patterns, and attitude customers develop towards a product or a service offered by business.
Besides, these factors are directly linked to internal and external interacting social aspects that control the pattern of though and expressed feelings. Reflecting on internal and external influences, this paper develops a comprehensive matrix for purchasing patterns exhibited by customers of the Pepsi soft drink in the UAE in relation to the future marketing practices that the Pepsi Company may adopt in order to penetrate the Middle Eastern market.
Marketing the Pepsi drink in the UAE
Market dynamics and consumer behaviour in the UAE
It is necessary for the Pepsi Company to tailor its calcium-fortified drink to suit the acceptable cultural norms in the UAE. Several external influences affect consumer behaviour in UAE. These influences include individual culture and sub-culture, group associations, social cultural and household structure since the consumption and purchasing behaviour is heavily influenced by the unique UAE conservative culture[1].
The general buying decision in the UAE
There has been substantial research on consumer behaviour, examining the decision process and influences upon it. These are in terms of store and brand characteristics and consumer behaviours. Solomon (2009) notes, “Central to the theories of consumer behaviour is the conviction that different consumers go through markedly complex decision making process that is influenced at different stages by a number of possible variables”[2].
The buying process normally begins with the need for a particular product or good. The ‘need recognition’ by consumers is essential part of the buying process because purchase cannot take place without it. Thus, the acceptance of the calcium-fortified Pepsi soft drink will depend on recognition of its significance in UAE.
The second stage in the decision making process is ‘information search’. The need that is created prompts a consumer to such for available information concerning the good or service that can satisfy that need.
Information search occurs internally and externally. The internal search involves search for information from the memory of the consumer and is determined by past experiences with such products. External search is employed when the internal search fails to provide the information necessary to help the consumer make the buying decision in the UAE.
After realizing the need to purchase, the UAE consumers engage in information search to be able to determine the best quality and cheapest brand available in the market that is aligned to their unique culture. ‘Evaluation’ is the last Stage before the consumers decide to make the purchase. It is a process by which an alternative evaluation is based on price, brand name and country of origin before the product is selected to meet the need[3].
Despite the fact that the market for Pepsi products have been in existence for a long time in UAE, there has never been a calcium-fortified drink from this global company. As a result of the recent economic difficulties, families in the UAE have been scrimping and operating on relatively fixed budgets. Families may benefit from the new Pepsi product since it promises rich calcium to the young children.
Reflectively, the potential clients are likely to accept this product since it usability is on a daily basis, that is, most UAE snacks are incomplete without the soft drinks. This would make potential clients prefer this product especially now that it also promises calcium nutrient. Thus, as an efficient and affordable product, potential UAE clients are likely to embrace this drink as part of their dieting programs in their homes[4].
Potential influencing factors
This calcium-fortified Pepsi soft drink targets families on both ends of the economic ladder. They purchase and consumer fresh drinks often and have a budget allocation for the same from time to time. These families are spread across all regions of UAE and are major consumers of soft drinks as revealed by the current statistics.
Thus, the main factor that would influence their behaviour is the social identification with the product, that is, it is the first of its kind besides offering rich calcium nutritional value to the UAE users. Moreover, the product is likely to change the perception of the UAE clients whose purchasing ability is defined by perceived quality.
Thus, the Pepsi Company should utilize advertising materials such as print, broadcast and internet ads as a product that is well-worth its price. Given the literacy levels and the exposure to technological inventions of the target buyers, the group is likely to choose the imported calcium-fortified Pepsi drink among other products performing the same function based on the psychological perception created by these advertisements.
Properly designed online marketing and product distribution management facilitated the success and sustainability in online marketing since it operated within stipulated business laws. Among the new development elements that the Pepsi Company should incorporate in the segmented UAE market include trust, distribution, fair retribution process, and passing accurate information to target audience to restore confidence within these networks.
Potential risks factors
The potential risk factors that may face the calcium-fortified Pepsi drink is the possibility of rejection by the older members of the UAE since their bodies do not need too much calcium. Since the product will penetrate the market whit the message of calcium fortification, the new Pepsi drink will be vulnerable to distorted messages on calcium content since the target market is known for its reservations and rejection based on what a close family member says about the product[5].
In order to avoid the above risks, the new Pepsi drink should come with self explanatory sticker written in simple language that the potential consumer can understand and read in order to know the exact calcium content. Besides, Pepsi Company should make the stickers in Arabic language in order to create a sense of belonging as the potential UAE customer of the soft drink will want to associate with a product they can understand[6].
Distribution network for the new Pepsi drink in UAE
The physical distribution patterns are with no doubt a critical area of focus. This will make use of the company’s brand logos that are highly recognized by most of the UAE consumers to build other distribution channels in the UAE market. The Pepsi Company may use the already existing distribution network to make the new soft drink easily available in all regions of the UAE.
For various reasons, the provision of the calcium-fortified Pepsi drink would be best done by sales persons of the UAE native. This will increase the chances of credibility and ease on the interpersonal variables during product promotion and provision[7]. The potential UAE customers will not have to struggle to get this product which is likely to be part of their daily dieting needs.
Conclusion
Consumer behaviour is a decision-making process and all activities that a potential customer is involved in prior to acquisition, evaluation, use, and disposition of goods and services. Consumer’s decision making thus is complicated, dynamic, multi dimensional process as is the case in UAE.
Essentially, success of brand and product management for the proposed calcium-fortified Pepsi soft drink as part of consumer behaviour in UAE will depends on a proper alignment of the company’s functional idea into the creation of flexible, involuntary, and quantifiable measurement of perception among the target UAE customers.
The calcium-fortified Pepsi soft drink is likely to penetrate the UAE market since the calcium nutrient content will be its competitive advantage to cue to perceptions of the conservative UAE society. However, the product may face minor resistance from the market segment targeting the elders due to its high calcium content which they do not need.
Bibliography
Rong, TS, Consumer Behaviour, Wu-Nan Book Co. Ltd, Taipei, 2009.
Solomon, M, Consumer behaviour: buying, having, and being, 8th edn, Prentice Hall Higher Education, Madison, 2009.
Winchester, M, “Positive and negative brand beliefs and brand defection/uptake,” European Journal of Marketing, vol. 42 no. 6, 2006, pp. 553-570.
Footnotes
M Solomon, Consumer behavior: buying, having, and being, 8th edn, Prentice Hall Higher Education, Madison, 2009, pp. 16-45.
Ibid
TS Rong, Consumer Behavior, Wu-Nan Book Co. Ltd, Taipei, 2009. PP. 21-56.
M Winchester, “Positive and negative brand beliefs and brand defection/uptake,” European Journal of Marketing, vol. 42 no. 6, 2006, pp. 553-570.
M Winchester, “Positive and negative brand beliefs and brand defection/uptake,” European Journal of Marketing, vol. 42 no. 6, 2006, pp. 553-570.
TS Rong, Consumer Behavior, Wu-Nan Book Co. Ltd, Taipei, 2009. PP. 21-56.
M Winchester, “Positive and negative brand beliefs and brand defection/uptake,” European Journal of Marketing, vol. 42 no. 6, 2006, pp. 553-570.
Pepsi Co. is one of the biggest non-alcoholic drinks manufacturers in the world, selling its products to its consumers globally. To continually retain its market leadership position in the UK and continuously grow its market share, Pepsi has recognized that it should continually come up with innovative products that will allow the company to meet its objectives.
UK consumers would greatly benefit from a Pepsi product that encourages healthy living, hence the introduction of Pepsi vitamin water under the brand name “Pepsi VITAMAX”.
Pepsi is well known for its R&D initiatives, while management expects a positive response from the market once the Pepsi VITAMAX is introduced. Vitamin water can be made in the same procedure as bottled water, using the same equipment, while adding electrolytes, natural flavors, artificial flavors, sweeteners, minerals and more importantly, vitamins. VITAMAX will contain lower calories than other soft drinks, which means that the product will be attractive for athletes and health conscious consumers.
This strategic marketing plan stipulates the need for the proposed product, marketing efforts that will be carried out within the first year of production as well as the various control measures that will make sure that the product becomes successful (Wheelen & Hunger 2002, 43).
Advertising efforts will go towards educating the general public on the importance of healthy drinking habits, and he reasons as to why the need Pepsi VITAMAX. With the given success of bottled water in the UK, vitamin water is certain to be the next phenomenon.
Pepsi will employ technology that will lead to cost and time savings in the production processes as well as distribution channels. Quality and tasteful products will always differentiate PepsiCo from its main rivals. The company expects to achieve sales of £5 million within the first year after introduction into the market.
Corporate Objectives
PepsiCo’s mission is to build and manage a wide range of brands that will increase the company’s market share and cement its position as the leading soft drink manufacturer in the world. The goal of the Pepsi vitamax project, as established by the company, will be to ensure customer satisfaction by promoting healthy drinking habits (Steiner 1997, p. 185). In the long term, Pepsi intends to extend the vitamax brand so as provide for different consumer preferences, and build on the growth of the vitamax brand.
Market Overview
According to the 2010 UK soft drinks report, published by the British Soft Drinks Association (2010, p. 5), the value of the of the UK non alcoholic drinks industry was worth an estimated £13.224 billion in 2009. This represents a 2.2 per cent increase in value from the previous year, while industry analysts are upbeat on the growth of the industry.
The UK economy is improving from the effects of the 2007/2008 recession. While unemployment levels in the UK still remain significantly high, with the government seeking to cut spending and jobs in the public sector in order to tackle its budget deficit, households are not expected to greatly affected by this since the economy is gradually improving.
Hypermarkets, supermarkets and discounters remain the biggest retail outlet for non alcoholic drinks in the UK, accounting for 51 per cent of all sales in the sector. These retailers are strong revenue sources for Pepsi; thereby a favorable partnership with these retailers will boost sales for VITAMAX. Competition in the UK is significantly high, with companies battling for leadership in the beverage market. the industry continues to grow on an annual basis, meaning that Pepsi can capitalize on the revitalized concept of healthy eating by marketing drinks that have nutritional value to the consumers.
Marketing Audit
Marketing Mix
A penetration marketing policy will take effect in the first year of the product launch in order to gain ground fast in the market. A flexible pricing policy will also be adopted in a move that will aim on attracting retailers to purchase and promote Pepsi vitamax in their stores. Prices will range from £0.9 to £1.5 for a 500ml bottle, depending on location within the UK and other factors such as transportation costs.
The product design will be a vital feature in attracting customers and creating interest. As required by UK regulatory laws, the bottles will exhibit details of the ingredients used to make vitamax. Pepsi will also strive to make vitamax available in cans during the first year depending success factors for vitamax, whereby the cans themselves will be available at a cheaper price.
Strategic partnerships with major retailers will make sure that Pepsi vitamax is widely available and accessible throughout the UK. a favored transportation channel will be used so as to reduce transportation costs to retailers across the country.
Promotions will be conducted via mass and social media, utilizing the power of the internet in a cost effective manner (Brown 2006, p. 116). Seasonal discounts could be used to boost sales in certain periods of the year, for instance during the summer or in the festive season. Advertising will inform the public on the benefits of drinking vitamax (Kotler 2003, p. 89), while complying with UK Advertising Standards Authority regulations.
SWOT
Strengths: Pepsi already has a strong brand name, resultant from its spirit of innovative products. The company is also known for its youthful marketing campaigns, whereby most consumers like the brand for its sporty feel. Pepsi can thereby use its strong brand name in marketing the new product in the UK, whereby a strong positive response is expected from consumers and retailers of the proposed VITAMAX brand.
Pepsi has a strong distribution network in the UK, given its strong ties with hypermarkets and supermarkets. Pepsi can reap from the benefits of economies of scale by manufacturing the VITAMAX brand using the same machinery that is used to produce other Pepsi products, thereby encouraging mass production (Baumol and Blinder 2007, p. 142).
Weaknesses: Pepsi may have an over dependent on the US market, whereby the American market accounts for most of its revenues. This may render the company vulnerable to harsh economic conditions in the US, and miss out on opportunities in major markets such as Asia and Europe.
Large US customers such as Wal-Mart are able to negotiate for lower prices and therefore restrict the profitability of the PepsiCo due to their strong bargaining power (Kotler 1999, p. 47). Pepsi intends to correct this by increasing investments in other major markets such as the UK and market its products in a manner that is directed towards UK consumers.
Opportunities: the key opportunities that emerge include bottled water growth, broadening the product base and adjusting products to the changing lifestyles of consumers, especially in the UK. Changing preferences, such as healthy living, present an opportunity for PepsiCo to market more consumer-oriented products. With sales of carbonated drinks expected to decline in forthcoming years, PepsiCo can increase investments in flavored water and vitamin water so as to fill in the gap in the market as a result of lower carbonated drink sales. Pepsi can also benefit from the success of recent products in the UK, such as Pepsi Max, thereby providing a favorable opportunity for a brand extension program in the form of VITAMAX.
Threats: competition from other non alcoholic drink manufactures such as Coca Cola remains a threat, meaning that sales targets will be difficult to achieve. Pepsi intends to market its products aggressively in the market, though such marketing efforts will be limited in part due to the regulatory environment in the UK. The UK Advertising Standards Authority sets measures on advertising standards, therefore it would be unlikely for the authority to grant Pepsi permission to brand VITAMAX as nutritious if the product contains
Fluctuating oil prices are likely to affect the production costs (Sinkovics and Ghauri 2009, p. 145) of plastic bottles, and distribution of products to the various retail outlets in the United Kingdom. An unfavorable effect arising from the introduction of VITAMAX is brand cannibalization, where it is feared that the sales of the VITAMAX brand will reduce the sales of other Pepsi drinks, such as those in the carbonated and energy drinks division. Should this happen, then it will result into slow growth in overall Pepsi sales in the UK.
PEST
The political environment in the UK is regarded as rather stable, with the government been known for its tough stance on consumer protection. Companies are required to publish correct information regarding its products, while advertisements are subject to various checks such as the content of such promotional information. Advertising content should therefore be in compliance with UK’s Advertising Standards Authority recommendations.
The UK is still in the middle of an economic recovery, with the government relying on the private sector to lead in economic growth. Consumption in most sectors of the economy is increasing, as evidenced in market reports such as the publication by the British Soft Drinks Association. Fluctuations in oil prices are likely to affect production costs of the plastic bottles, and transportation costs of the products to the various retail outlets.
The social scene in the UK has seen gain in popularity of the norm of healthy eating habits, whereby consumers now take count of the number of calories they consume with each intake of a particular product.
Technological: Pepsi already has a strong presence in the UK, which is a developed country. Europe is widely known for its efficiency in building machinery; therefore equipment will be sourced from the local market, while other parts can be imported from Germany and France, which have a close proximity to the UK. As such, transportation costs are not likely to influence the purchasing decision of vital equipment.
Assumptions
Assuming that competitors will not be quick to react following the introduction of Pepsi vitamax, then increase in product awareness is expected to be reflected by a corresponding increase in sales.
The high sales figures during the first year of product launch are as a result of ever gaining popularity of bottled water while the Pepsi vitamin water product is expected to match the expectations of the rising health conscious consumers in the market. The slow rise in sales in subsequent years is as a result of expected competitor action in the industry (Tanaka 2004, p. 94). A key assumption is that the UK will continue with economic recovery in the forthcoming years.
Marketing Objectives and Strategies
The main marketing objective of introducing the Pepsi VITAMAX is to stay in line with the overall company policy of continually developing new products for the benefit of consumers, increase sales and market share for the company and continue to build on PepsiCo’s brand name as the favored non alcoholic drink producer in the world. Pepsi intends for VITAMAX to follow on the recent success of Pepsi Max, achieve £5 million target and continually grow in sales by an average of 3 per cent in subsequent years while ensuring healthy profit margins for the company (Heding et al. 2009, p. 34). Increase in sales could lead to increase in the UK market share, whereby the industry grew by 2.2 per cent in value.
The sales targets are achievable, given the strong Pepsi brand name, while the company is also able to produce enough units to meet the market demand. Profit margins will be ensured by the mass production concept, where the company will benefit from economies of scale.
Another objective of equal importance dwells on increasing consumer satisfaction which will highly improve the product repurchase rate. Customer satisfaction data can be obtained via feedback from consumers in the company’s online portal, and social networking sites such as Facebook and tweeter.
The driving factors for the achievement of the above objectives come from the production of a quality product, and distribution at a reasonable price. Retailers such as hypermarkets, supermarkets and discount stores are an important factor to consider since most have these retailers have a broad base of loyal customers.
Partnership agreements with these retailers will ensure that both parties; retailers and PepsiCo achieve their individual objectives. Another strategy deals with the awareness program which will aim to reassure to consumers that Pepsi vitamax is indeed a healthy product, not to be confused with energy drinks that contain high amounts of sugar and cholesterol.
Identification of Alternative Plans
An alternative plan would be to create the vitamin water position by extending another popular Pepsi brand. While this is a viable option, it might confuse consumers in the market (Kottler and Keller 2006, p. 134), for example extending an energy drink brand with the vitamin water may not get the desired effects since some consumers may mistake the vitamin water for an energy drink. The chosen independent brand division, the vitamin water division under the Pepsi vitamax brand, will make it easier for the company to expand the product in the future.
Promotional Program
The design and conception of VITAMAX will likely steer the product during its launch in 2011 and in subsequent years. The management team and the sales and marketing department will work hand in hand to ensure that positive and unique qualities of VITAMAX are portrayed in the market, appealing directly to potential customers (Wheelen and Hunger 2002, p. 238).
A strong public relations initiative will create a strong foundation for campaign activities that set to create a strong foot hold for the company on entrance into the industry. The company could hire consultants who would advice on the placement of advertisements in online, television as well as print media.
The first three months of the year will be dedicated towards creating awareness for the product, with advertisements targeting sporting channels and health channels and magazines. As always, Pepsi will provide details of its products via its online portal, (www.pepsiproductfacts.com).
Packaging and advertising materials will also display relevant and vital information that consumers can use in their purchasing decisions. Following progress reports from the awareness program, Pepsi will enter into partnerships will local retail outlets in a move that will make the product more available nationwide, allowing retailers’ greater flexibility in the setting of their own prices so that they can achieve their own objectives, increase sales or even reward their customers.
Pepsi will tone down on promotional spending after the first three months of introduction into the market whereby the VITAMAX brand will be subsequently promoted together with other Pepsi brands in the market. The company could focus on how VITAMAX complements other Pepsi products so as to boost of sales of other products.
A product augmentation approach may also take shape as a result, whereby consumers of Pepsi snack foods may get a discounted or free Pepsi VITAMAX bottle with every pound purchase, a level that will be determined by management and its retail partners. All these steps could take place in the five months following the first three months of introduction.
In the last four months of the year of the product launch, PepsiCo may decide to revitalize the Pepsi VITAMAX product by introducing several flavors into the market, all under the VITAMAX brand name. VITAMAX orange for example would contain vitamin C, Calcium and electrolytes, VITAMAX passion would contain vitamin E and Choline, VITAMAX cherry would have mixed vitamins and antioxidants.
Other product variations will be determined following further market research and performance of the initial Pepsi VITAMAX during the first two thirds of the year of product launch. Endorsement deals are likely to be conducted by Pepsi ambassadors in the UK, most notably athletes and other celebrities.
Measurement, Review and Control
Prior to the introduction of the Pepsi vitamax brand into the market, the company will seek legal consulting as to the legal framework of the UK beverage industry. Feasibility studies conducted beforehand will seek to determine milestones that the company is to achieve with the Pepsi vitamax brand. The use of milestones will be of most importance (Johnson, Scholes & Whittington, p. 115), whereby Pepsi will establish short-term targets that should be in line with the company’s overall objectives.
Follow up on the milestones is to be conducted on a monthly basis so as to make sure that promotional activities deliver the intended results (Kourdi 2009, p. 59), while maintain promotional costs. Key performance indicators such as sales reports and industry data will guide management on the selection of appropriate strategies.
Feedback from customer satisfaction data will be used to gauge the impact of Pepsi vitamax in the market (Case 2008, p. 201), while expense analysis reports will determine whether marketing efforts have been successful by comparing such data with sales figures in the periods of incremental spending. Budgetary controls will illustrate the performance of Pepsi vitamax against expected results (Trott 2008, p. 55).
Reference List
Baumol, W. J. & Blinder, A. S., 2007. Economics: Principles and Policy. New York, NY: Cengage Learning.
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Case, J., 2008. Competition: The Birth of a New Science. New York, NY: Farrar, Straus and Giroux.
Heding, T., Knudtzen, C. F. and Bjerre, M., 2009. Brand management: research, theory and practice. New York, NY: Taylor & Francis.
Johnson, G., Scholes, K. & Whittington, R., 2008. Exploring corporate strategy: texts and cases. 8th edn. Boston, MA: Pearson Education Limited.
Kotler, P., & Keller, K., 2006. Marketing Management, 13th edn. New York, NY: Prentice Hall.
Kotler, P., 1999. Principles of marketing, 2nd edn. New York, NY: Prentice Hall.
Kotler, P., 2003. Marketing Insights from A to Z: 80 concepts every manager needs to know. New Jersey, NJ: John Wiley & Sons Inc.
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Sinkovics, R. & Ghauri N.P., 2009. New Challenges to International Marketing. London: Emerald Group Publishing.
Steiner, G., 1997. Strategic planning: what every manager must know. New York, NY: Simon and Schuster.
Tanaka, G., 2004. Digital deflation: the productivity revolution and how it will ignite the economy. New York, NY: McGraw-Hill Professional.
The British soft drinks association, 2010. The 2010 UK soft drinks report. London: British soft drinks association.
Trott. P., 2008. Innovation Management and New Product Development, 4th edn. London: Pearson.
Wheelen, T. & Hunger, D.J., 2002. Strategic management and business policy. New Jersey, NJ: Prentice Hall.
Pepsi is an international brand in the field of soft drinks. This company is familiar to every country as the international marketing is highly developed. To consider the external opportunities and threats of this company, the general environment, industry environment, and the firm’s strategic group should be considered along with SWOT analysis to determine this information.
The company is influenced by a number of different issues which may be divided into the general (or macro) environment and competitive (or industrial) environment.
According to Amason (2010), the general (or macro) environment includes demographic information, social and economic forces, technology, and political context. Competitive (or industrial) environment covers competitors, customers, suppliers, regulators and financiers. These both environments are considered to be the organizational one which establishes the conditions each company should work in.
The general environment of Pepsi Company may be considered as supportive. The demographic increase of the population is a positive factor for the company development as more and more people are going to consume its products. The company should create more and more innovative products “to improve the quality of life of a broad community – local, national and international” (Amason, 2010, p. 41).
Pepsi tries to follow this principle and invents more and more opportunities to met social needs of different societies. The economic forces which influence the company development include the purchase power, the rate of unemployed and the interest rates in the organization. Recent increased number of mergers and acquisitions is one more economic force which influences the company development.
Increase of the use of innovative technologies influence the company; the more innovative ways in manufacturing are aimed at reducing the costs of production and the profit increase.
Legal regulations on the state, local and federal levels are aimed at creating supportive environmental in business. The USA laws do not overregulate business in the country that creates positive conditions for business development (Daft & Marcic, 2008).
Turning to the industrial environment, it should be mentioned that the company has a lot of competitors, both on the national and international levels, which create both threats and opportunities for the company. The competition encourages the company for better performance and higher quality.
Customers have an opportunity to influence the company production as they state the demand and consume the products. Suppliers provide the company with the raw materials that may create a number of problems if the delivery of some goods is stopped. Regulators and financiers also add to the industrial environmental of the company (Daft & Marcic, 2008).
Dwelling upon Pepsi’s strategic group, it should be mentioned that this concept has been considered by Porter who defines it as “companies that emphasize the same strategy” (Kelly & Booth, 2004, p. 153). The Coca Cola and Pepsi are the companies which form a strategic group.
It may be explained by the fact that they have very similar advertising strategies and broad line of products. To see the difference between the nice players and the strategic group, it is possible to mention Cadbury Schweppes which is not the member of the strategic group but just a niche player (Kelly & Booth, 2004).
The external opportunities and threats of the company may be considered with the help of five forces analysis. The competition within the industry is too high and it is influenced by other forces in the model, like the threat of the new entrants in the industry of soft drinks, bargaining power of suppliers and customers who may change their preferable relation to Pepsi is too high as well.
The final power which influenced the industry is the high possibility of the substitute products (Jelassi & Enders, 2008). The technologies are developing and no one knows what new and interesting is going to be invented in the nearest time. So, the Porter’s five forces model may be se in such a way.
The rating of the threats on the basis of the Porter’s five forces for the Pepsi Company has the following look, the company’s possibility for competition is influenced by the emergence of the subsidiary products, then by the bargaining power of customers, bargaining power of customers and the final and the less influential force is the possibility of the new entrants in the industry which may reach the company level of development.
On the basis of the information considered above, it is possible to state that Pepsi Company has a number of opportunities and threats. The technological development, acquisitions and joint ventures, low possibility of new entrants create a number of opportunities for the company.
At the same time, there are a number of threats which should be considered and the measures should be taken to overcome those on the basis of the company strengths.
Being a powerful international company, Pepsi has much strength which helped it reach high success in the industry of soft drinks. At the same time, the company also has some weaknesses which should be reduced to minimum by means of the company opportunities. The company strengths and weaknesses may be considered from the financial statement of the company.
Fleets glance at the financial statement where the comparative analysis of the financial activities of the company in 2008, 2009 and 2010 are presented allows us to consider the increase in the company income and assets. At the same time, attention should be paid to the fact that the company liabilities and debt have increased as well.
The percentage increase is similar, so, the company has tried to increase its revenue by means of the debt capabilities. The company revenue has increased by 34% in 2010 in the comparison with 2009 that says about the correct choice of the strategy.
Dwelling upon the strengths and weaknesses of the company, the resource-based view (RBV) should be considered as the “influential framework to understand the strategic management” (Brüggemann, 2007, p. 6). The main idea of RBV is to consider the unique resources the company uses to create competitive advantages ().
Being a link between the company characteristics and performance, RBV of Pepsi may be considered a specific recipe of the product which is difficult to copy. There are a number of strengths the company possesses, like high turnover, the variety of products and healthy direction, in spite of the fact that people have some concerns about soft drinks.
Thus, it may be completed that Pepsi Company has a number of opportunities and threats along with strengths and weaknesses which interact with each other and provide mutual impact on each other creating some strategies which may help the further development of the company.
Reference List
Amason, A.C. (2010). Strategic management: From theory to practice. New York: Taylor & Francis.
Brüggemann, N. (2007). Competence analysis: An approach to a firm ́s competence domain. München: GRIN Verlag.
Cho, Y.K. (2009). Service alignment and performance in electronic service operations. Ann Arbor: ProQuest,
Jelassi, T. & Enders, A. (2008). Strategies for e-business: creating value through electronic and mobile commerce: concepts and cases. London: Pearson Education.
Kelly, L. & Booth, C.A. (2004). Dictionary of strategy: strategic management A-Z. New York: SAGE.
One of the major problem within PepsiCo entails paying workers less than minimum wage set by the government, despite working for long hours. The problem was discovered while going through the company’s payment schemes and comparing with other similar companies and the stated government regulations concerning salary renumeration.
PepsiCo is a multinational company and such unethical behavior though may profit the company in the short run, leads to tainting company’s image in the long-run which ultimately results into greater losses. According to utilitarianism views, ethical actions are evaluated through their impact on all the stakeholders. Interview done on few of the workers revealed that they were being paid minimal wages and at the same time working in poor conditions without recommended full protective gear.
These conditions made the workers a party to the company’s exploitation which is against the rule of law governing business ethics. Also discovered was the fact that any complain by workers concerning the lowered salaries have always earned them indefinite leave denying the workers freedom of expression. However, workers also have the right to better their interest in line with the governing rules and regulations (Nimgade).
Multinational company like PepsiCo should adhere to the international business ethics which provides for good relationships between companies and individuals. All the operations and behaviors within the company’s premises should uphold the cultural value system as well as the accepted ways concerning business operations within the society.
The company has detailed ethical duties towards the employers, employees and all other stakeholders within the public domain. Therefore this calls for PepsiCo to operate beyond their own self interest of gaining through exploitation and infringing on others rights (Nimgade).
The other problem is that PepsiCo markets one of its recently produced beverage product without clear descriptions in the developing countries. Good percentage of the beverage is alcoholic, an ingredient not specified by the company and at the same time recommends and markets the drink as fit for all ages including children. The drink is at the same time sold at higher price within the developing countries.
According to international business ethics, alcoholic drinks should not be sold to the under-age especially teenagers. Unethical marketing of alcoholic drink as non-alcoholic within developing countries presents a good example of inflicting injury on the population knowingly and willingly (Nimgade).
By following Kant’s rule, the company should provide quality and at the same time safe products to the global market. The nature of their marketing strategy within the developing countries involved promoting the product amongst teenagers especially within learning institutions enabling PepsiCo to get good market base.
The marketing department promoted the product as a substitute to energy drinks making widespread development of an alcoholic generation within these countries. Such kind of action is detrimental and therefore PepsiCo should really be concerned with the preservation, safety and health status of various consumers through giving the whole truth about their products by appropriate labeling as well as marketing (Nimgade).
Solution to the problem
From the perspective of international ethical standards robust leadership is required for organizational change to be a success. Mature leadership would largely assist in re-aligning organizational systems as well as stakeholders behaviors towards business core values and vision. The level of effectiveness achieved would be based on the extent of ethical leadership embraced.
Upgrading of the company’s ethics requires the management to impose codes of conduct which champions for the fact that all people should be treated with respect. There is a necessity for leadership training on business ethical issues since strategic decisions are made by leaders.
Corporate moral excellence should be largely considered for the development of the company’s ethical culture. At the same time great care should be taken when marketing the product in developing countries to avoid value conflict between the company, consumers and government bodies within the stated country.
The business should have the capability of respecting human dignity and the basic human rights; hence people should be treated the same way irrespective of their background countries. According to OECD rules, all international businesses are subject to the various laws, regulations of the countries they operate in. This therefore, makes PepsiCo subject to the respect of consumer rights in spite of the results. Concerning consumer safety, the company should consider human life more important than making profits (Nimgade).
Respect to employee rights is paramount to every multinational company such as PepsiCo. The problem on pricing could well been caused by the company’s desperation towards maximization on returns. Such kind of move can always be resolved through excellent leadership and management skills. Violations of such kind would best be handled by reinforcing penalties on various heads of departments involved (Nimgade).
Improvement of management system
PepsiCo Company should consider operating under strict and valuable corporate governance principles. The company should come out clear on various rules and regulations concerning chemical composition of their beverage drinks. The established rules and regulations would enable easy monitoring of the production and quality control processes.
Having full control on the external issues at times prove difficult, since it is not easy to enforce and ensure acceptable conduct of the various managers operating within different geographical regions. There should be company’s regulation touching on explicit labeling on all their beverage products. (Nimgade).
The code of conduct guarding company integrity should be very clear concerning employment and marketing procedures. Majority of the rules condemns unethical actions towards all stakeholders and clarifies the various company responsibilities through robust management capabilities (Nimgade). All marketers working for PepsiCo would be required to organize clear, informative and descriptive messages on all the products from PepsiCo.
Such clear communication would boost international selling processes since majority of the developing countries would not feel their people are given raw deal by PepsiCo.
There will be workshops organized to offer detailed training for all managers and at the same time offer chances where companies would together share their various challenges and ways through which they could overcome at international levels. The trainings are also aimed at improving the various human resource management systems used in every sector (Nimgade).
Clear definition of the code of conduct is essential within the company’s operation systems. The various multiple channels of communication would be utilized to ensure the message reaches every stakeholder. The principles of corporate conduct have always been discussed between management and all other employees as well as partners on a regular basis.
During such meetings both acceptable and unacceptable behaviors would be critically analyzed and clearly communicated to corporate employees and other stakeholders. Control systems are set to ensure adherence to the given code of conduct. Clear signs of incidences have always been detected from the beginning and necessary corrective actions taken as per the company’s board agreement, since a compromise to the company’s policies always lead to disastrous results.
The parties involved in any violation are made aware of the consequent results including the actions which could as well lead to complete dismissal. All employees and partners have been granted freedom of discussing ethical issues within the business premises and strictly follow established principles involved in whistle-blowing to identify and rectify the specific concern (Nimgade).
Conclusion
PepsiCo as one of the multinational company’s will not compromise their principles of operation when transacting their businesses. The watchdog community is normally very vigilant in exposing such like actions hence companies need to be more careful with industrial laws. PepsiCo resolves to above all else stand for ethics as their first principle safeguarding all other actions.
This would help in restoring the company’s image hence making it possible for PepsiCo to compete favorably within the market place. In light of all these, the management team wishes to appeal for calm amongst all employees since all unethical issues would be dealt with and the necessary legal actions taken to correct such incidences.
Foreign managers will be carefully selected considering the various technicalities involved such as value congruency. The company will apply the Aristotelean rule which asserts that individuals are equal and therefore should receive equal treatment unless under extreme situations not relevant to their conditions (Nimgade).
Works Cited
Nimgade, Ashok. “American Management as Viewed by International Professionals”. Business Horizons (1989): 98-105. Print.