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Company background
Pepsi Company is the world’s second largest beverage and food processor. It was formed through a merger between Frito-lay and Pepsi Cola in 1965 (Anon., 2009). Today, the company offers wholesome and enjoyable products to consumers all over the world. It has undertaken mergers and acquisitions with Quaker Oats and Tropicana. Besides, it has acquired PepsiAmericas and Pepsi Bottling Group which are two well established bottlers.
This acquisition has tremendously boosted its transactions and significantly strengthened its position as a beverage company in Europe and northern America. Under Indra Nooyi who is the Chief Executive officer and chairman, Pepsi has employed over 300,000 workers globally (Anon., 2009).
Additionally, annual revenue from sale of its products and services is approximately $60 billion dollars (Mohanty, 2011). Besides, an estimated 49% of its annual revenue comes from foods and snacks while 51% is derived from sale of beverages (Mohanty, 2011).
In terms of earnings from regions, 47% of its annual revenue comes from conducting business internationally while the remaining revenue is tapped from sale of products in Canada and USA.
Moreover, Pepsi company has a corporate structure that is made up of several business units including PepsiCo Africa, middle East and Asia, PepsiCo Europe, PepsiCo Americas foods (PAF), as well as PepsiCo Americas beverages (PAB) (Anon., 2009).
Customer segments
Developing and delivering services that keeps customers attracted and satisfied is the main goal of PepsiCo. This goal aims at maintaining customers’ loyalty and satisfaction towards increasing its profitability, market share, customer equity and revenue. Its food and beverage products mainly target primary, secondary and emerging markets (Carrigan, Marinova & Szmigin, 2005). The company has targeted market segments ranging from individual customers to large global corporations.
How it determines needs and wants
PepsiCo focuses on customers’ unmet needs by bridging market gap and also through its regular potential offerings. It achieves superior returns and growth on invested capital by using new offerings to target existing market segments, using existing offerings to target new segments and addressing the needs new offerings and new segments.
Most importantly, as a good business, it is in a position of understanding how to meet consumers’ needs (Carrigan, Marinova & Szmigin, 2005). This has been achieved through considering and exploring social issues that may potentially affect business operations and creating awareness of its. These needs can be met by engaging consumers in order to understand their feelings, beliefs, attitudes knowledge and motivation.
Besides, it seeks to understand how psychographics, market mix factors, social class and culture influence behaviour of consumers. This influences intentions of consumers to make purchases. Therefore, actions such as disposal, use, decision, alternative identification and evaluation are some of the strategies applied to meet the needs of consumers (Carrigan, Marinova & Szmigin, 2005). Through consumer feedback, the company is capable to meet their tastes and preferences.
Products offered
On a global scale, PepsiCo owns the largest billion dollar beverage and food brands. Each of its product lines generates annual retail sales of more than 1billion.
The company has laid strong foundation in the market with most of its product being widely used by businesses and other consumers. Some of these products include Aquafina, Tostios, Quakers, Doritos,Ruffles, Mirinda, Tropicana and Pepsi.
In terms of characteristics, Quality has been viewed as a competitive marketing strategy in PepsiCo (Carrigan, Marinova & Szmigin, 2005).
Its quality strategy revolves around creating products geared towards providing excellent services. Its quality products have made it take a lead in the market and be recognized as a responsible company. The brand of this company has become popular worldwide as one of quality, reliability, integrity and safety care and service. The commitment on quality service towards sustainable development is driven by the responsibility the company has to its stakeholders.
Pricing strategies
Low price is important since it enables PepsiCo to gain competitive advantage known as cost advantage. The lower the price, the lower customer’s perceived value. However, this is specific in some products and not others. As a business, PepsiCo has put in place strategic initiatives that target its growth through the sale of its large range of food and beverage products (Mohanty, 2011).
To achieve this, it attracts price sensitive customers and enthusiasts through discounted prices. Low prices aid the business in underpinning competitive prices. Its strategy in food and bevarage market is to target segments of high growth, open more new stores while improving profitability and efficiency of the existing ones.
Promotional strategies
Through concerted efforts to promote its products, build and develop consumer engagement, the company has adopted several strategies that includes doing one-to-one marketing via blogs and forums where customers interact qualitatively with other customers, the company or brand (Baker, 2011).
To make this long term strategic plan easy, the company is seeking to determine how to increase its marketing organization, how to make their brand more attractive to consumers and what consumers seek in a product that benefits them and meet their needs through forums, FAQ’s and customer care.
Distribution of products
Distribution at PepsiCo plays an important role in enhancing its performance and sustaining competitive advantage. The company has been able to effectively manage its distribution processes through organizing the functions of customer care, consumer engagement, transportation, inventory control and management materials.
In consumer engagement, organized forums, FAQ’s, product review and advertising has helped pepsiCo to know how to effectively improve its distribution. Efficient and effective distribution systems eliminate inventory, effort and time wastage. Its customers’ needs have been satisfactorily met when they receive their products in good time (Baker, 2011).
To achieve proper distribution, PepsiCo has synchronized the industry’s supply chain with the demands of customers through functions such as distribution, procurement and production. Additionally, it has tackled and mitigated its distribution problem through forming collaborative efforts with its chain supply partners. This has helped in reduce stock-outs, lead time, costs, inventory levels, and conversely increase accuracy of information and service to customers.
Marketing plan
In PepsiCo, Marketing entails all those activities that precipitate the knowledge on the availability of certain products and services so that appropriate levels of production can be attained in accordance with the movements in demand and supply. It also features the strategic movement of finished goods and services to various points of sale as dictated by demand.
Social responsibility and marketing programs
Social responsibility at PepsiCo involves quality control, grading, wastage reduction, packing, processing, transport and physical handling processes that it does in marketing (Baker, 2011). Its marketers put concerted effort in examination of ethical implications of differentiated marketing and market segmentation when targeting consumers of diverse groups.
It is imperative to note that social responsibility is part of PepsiCo program since it understands that the ethical complexities of the market exchange requires factors such as market selection, consumer characteristics and nature of the products be understood and also integrated in the framework. Public policy makers and marketers will be faced with different ethical when the aforementioned factors interact.
References
Anon. (2009). PepsiCo’s Strong, Diversified Portfolio and Growth Strategy Deliver Sold Second-Quarter Results; Company Reaffirms Full-Year Guidance The Free Library. Retrieved from https://www.thefreelibrary.com/
Baker, J. (2011). Conceptualizing the dynamic strategic alignment competency. Journal of the Association for Information Systems, 12(4), 299- 322.
Carrigan, M., Marinova, S. & Szmigin, I. (2005). Ethics and international marketing research background and challenges. International Marketing Review, 22, 481- 493.
Mohanty, S. (2011). Having analytics may not be enough: Organizations need to improve business intelligence and decision-making through guided, predictive analytics. Information Management, 21(1), 30.
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