Pepsico Business Strategy And Competitive Advantage Om Ex 48282w

PepsiCo Business Strategy and Competitive Advantage Posted on May 1, 2016 by John Dudovskiy

PepsiCo mission statement has been worded by CEO Indra Nooyi as ‘Performance with Purpose’ and this principle is closely integrated with the strategic direction chosen for the company. The most prominent aspects of PepsiCo business strategy are based on the following six principles: First, achieving growth through mergers and acquisitions (M&A). M&A can offer the advantages of gaining access to competencies and infrastructure, reducing direct costs and overheads and achieving organic growth. Recently, PepsiCo has completed as a set of important acquisitions such as acquisition of juice and diary businesses Lebedyansky and Wimm-Bill-Dann in Russia, Lucky snacks and Mabel cookies in Brazil, and Dilexis cookies in Argentina. M&A can be specified as one of the cornerstones of PepsiCo business strategy. As a result of an aggressive pursuit of this strategy, today PepsiCo portfolio comprises 22 brands and each of these brands have generated at least one billion USD in retail sales in 2015.[1] Second, forming strategic alliances in the global scale. Specifically, strategic partnerships have been formed with Tingyi in China in order to claim a share in growing beverage market in China. Moreover, formation of a tventure with Tata in India to enhance drinking water manufacturing capabilities, and initiation of strategic partnership with Almarai in Saudi Arabia can be mentioned to illustrate PepsiCo’s adoption of strategic alliances as an integral part of the corporate strategy. Important strategic alliances are formed by PepsiCo at home markets as well. Specifically, by forming a strategic alliance with Starbucks – a global coffee house chain, PepsiCo has been able to claim its share from increasing energy drink market segment. Third, focusing on emerging markets. An aggressive pursuit of this strategy has had positive impact on the bottom line. The year of 2015 witnessed a double-digit growth in the sales of snacks in China and Pakistan[2] and PepsiCo is also strengthening its position in the Middle East. The company has been able to more than double its e-commerce business in China in 2015.[3] Moreover,

PepsiCo CEO Indra Nooyi has publicly expressed commitments to further increase the level of presence of the company in emerging markets. Fourth, focusing on organizational culture. Organizational culture can be defined as “the collection of words, actions, thoughts, and “stuff” that clarifies and reinforces what a company truly values”[4] and the nature of organizational culture directly impacts its performance in short-term and long-term perspectives. PepsiCo CEO Indra Nooyi is widely believed to be an unconventional corporate leader for a good reason. It has been noted that “she’s been known to walk the halls at Pepsi barefoot, sometimes even singing along the way”[5] and this fact communicates her willingness to embrace her differences with positive implications on employee morale and organizational culture. The same message is effectively communicated to organizational stakeholders and integrated into Pepsi Brand as well in a way that the brand marketing message is associated with ‘making the most of the moment’, and ‘embracing own individuality’. Being listed among the top 25 ‘World’s Best Multinational Workplaces’ by the Great Place to Work Institute in 2012 and PepsiCo Canada being recognized as one of Canada’s Top 100 Employers for 2014 by Mediacorp Canada Inc[6] can be interpreted as an indication of effective working culture within PepsiCo. Fifth, developing and promoting the idea of One PepsiCo. Specifically, Indra Nooyi has been striving to increase the level of association of individual brands with PepsiCo company values and philosophy through promoting the idea of One PepsiCo. This is meant to be facilitated through sharing supply-chain management and infrastructure, operational costs for many brands within PepsiCo portfolio have been decreased. Sixth, innovation in marketing initiatives. A wide range of innovative marketing initiatives developed by PepsiCo marketing team include “Do Us a Flavor” campaign that involved consumers in 17 countries submitting flavor ideas, development of Lipton Brisk Star Wars game application for mobile phones, and using celebrity endorsement in an innovative manner by attracting a popular singer amongst Pepsi brand target customer segment Beyonce Knowles. Importantly, cross-cultural differences in various markets are taken into when developing and delivering PepsiCo marketing messages. For example, the marketing tagline of “Live for Now” associated with Pepsi brand has been modified as “Yalla Now” and “Oh Yes Abhi” for Middle East and Indian markets respectively taking into cross-cultural differences associated with these markets.

Moreover, the senior management focuses on the framework known as ‘5Cs’ to guide PepsiCo business strategy and long-term planning. 5Cs stand for the following: 1.

Commercial agenda

2.

Building new capabilities

3.

Increasing focus on costs

4.

Fostering a culture of collaboration

5.

Exercise discipline when it comes to capital returns

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4. Location Strategy. PepsiCo has many company-owned facilities and partner-owned facilities in strategic locations. Such an operations management approach is based on this strategic decision area’s objective of maximal reach to target markets. In PepsiCo’s case, such facilities are located in key areas near most retailers. PepsiCo is especially interested in large retail outlets and food service establishments with high sales volume.

, consumers can purchase Pepsi-cola from supermarkets, restaurant, KFC and Pizza Hut, which have partnership with Pepsi. Pepsi-cola brand is already been brought into the mind of the consumers as an invisible image. As the good reputation and image was created, Pepsi-cola almost exist anywhere and can be easily purchased by customers.

5. Layout Design and Strategy. Efficient movement of people, materials and information is the operations management concern in this strategic decision area. In PepsiCo’s case, spaces are designed with efficiency and productivity in mind. For example, layout design in PepsiCo production facilities is centered on the principles of assembly line production and total quality management (TQM).

7. Supply Chain Management. This strategic decision area focuses on operations management practices that optimize the supply chain to match demand for materials and intermediary products. PepsiCo’s approach is to diversify and distribute its supply chain hubs. For example, the company operates supply chain hubs for each regional market. In this way, PepsiCo optimizes response times to fluctuations in demand.

8. Inventory Management. PepsiCo’s inventory management emphasizes automation. Adequacy, scheduling, and cost minimization are the key objectives in this strategic area of operations management. PepsiCo does so through computerized monitoring of inventory. Inventory managers can access real-time data to help them make decisions.

10. Maintenance. PepsiCo’s maintenance concerns are widely varied, considering the company’s wide array of products and markets. This strategic decision area of operations management focuses on adequate workforce and other resources that grow with the business. PepsiCo continues to hire individuals and promotes from within the organization to grow its workforce. Facilities are expanded, constructed or acquired to PepsiCo’s growth.

PepsiCo Business Strategy and Competitive Advantage Posted on May 1, 2016 by John Dudovskiy

PepsiCo mission statement has been worded by CEO Indra Nooyi as ‘Performance with Purpose’ and this principle is closely integrated with the strategic direction chosen for the company. The most prominent aspects of PepsiCo business strategy are based on the following six principles: First, achieving growth through mergers and acquisitions (M&A). M&A can offer the advantages of gaining access to competencies and infrastructure, reducing direct costs and overheads and achieving organic growth. Recently, PepsiCo has completed as a set of important acquisitions such as acquisition of juice and diary businesses Lebedyansky and Wimm-Bill-Dann in Russia, Lucky snacks and Mabel cookies in Brazil, and Dilexis cookies in Argentina. M&A can be specified as one of the cornerstones of PepsiCo business strategy. As a result of an aggressive pursuit of this strategy, today PepsiCo portfolio comprises 22 brands and each of these brands have generated at least one billion USD in retail sales in 2015.[1] Second, forming strategic alliances in the global scale. Specifically, strategic partnerships have been formed with Tingyi in China in order to claim a share in growing beverage market in China. Moreover, formation of a tventure with Tata in India to enhance drinking water manufacturing capabilities, and initiation of strategic partnership with Almarai in Saudi Arabia can be mentioned to illustrate PepsiCo’s adoption of strategic alliances as an integral part of the corporate strategy. Important strategic alliances are formed by PepsiCo at home markets as well. Specifically, by forming a strategic alliance with

Starbucks – a global coffee house chain, PepsiCo has been able to claim its share from increasing energy drink market segment. Third, focusing on emerging markets. An aggressive pursuit of this strategy has had positive impact on the bottom line. The year of 2015 witnessed a double-digit growth in the sales of snacks in China and Pakistan[2] and PepsiCo is also strengthening its position in the Middle East. The company has been able to more than double its e-commerce business in China in 2015.[3] Moreover, PepsiCo CEO Indra Nooyi has publicly expressed commitments to further increase the level of presence of the company in emerging markets. Fourth, focusing on organizational culture. Organizational culture can be defined as “the collection of words, actions, thoughts, and “stuff” that clarifies and reinforces what a company truly values”[4] and the nature of organizational culture directly impacts its performance in short-term and long-term perspectives. PepsiCo CEO Indra Nooyi is widely believed to be an unconventional corporate leader for a good reason. It has been noted that “she’s been known to walk the halls at Pepsi barefoot, sometimes even singing along the way”[5] and this fact communicates her willingness to embrace her differences with positive implications on employee morale and organizational culture. The same message is effectively communicated to organizational stakeholders and integrated into Pepsi Brand as well in a way that the brand marketing message is associated with ‘making the most of the moment’, and ‘embracing own individuality’. Being listed among the top 25 ‘World’s Best Multinational Workplaces’ by the Great Place to Work Institute in 2012 and PepsiCo Canada being recognized as one of Canada’s Top 100 Employers for 2014 by Mediacorp Canada Inc[6] can be interpreted as an indication of effective working culture within PepsiCo. Fifth, developing and promoting the idea of One PepsiCo. Specifically, Indra Nooyi has been striving to increase the level of association of individual brands with PepsiCo company values and philosophy through promoting the idea of One PepsiCo. This is meant to be facilitated through sharing supply-chain management and infrastructure, operational costs for many brands within PepsiCo portfolio have been decreased. Sixth, innovation in marketing initiatives. A wide range of innovative marketing initiatives developed by PepsiCo marketing team include “Do Us a Flavor” campaign that involved consumers in 17 countries submitting flavor ideas, development of Lipton Brisk Star Wars game application for mobile phones, and using celebrity endorsement in an innovative manner by attracting a popular singer amongst Pepsi brand target customer segment Beyonce Knowles. Importantly, cross-cultural differences in various markets are taken into

when developing and delivering PepsiCo marketing messages. For example, the marketing tagline of “Live for Now” associated with Pepsi brand has been modified as “Yalla Now” and “Oh Yes Abhi” for Middle East and Indian markets respectively taking into cross-cultural differences associated with these markets. Moreover, the senior management focuses on the framework known as ‘5Cs’ to guide PepsiCo business strategy and long-term planning. 5Cs stand for the following: 1.

Commercial agenda

2.

Building new capabilities

3.

Increasing focus on costs

4.

Fostering a culture of collaboration

5.

Exercise discipline when it comes to capital returns

INTRODUCTION Pepsi-Cola Pepsi's beverage business was founded by a pharmacist named Caleb Bradham who created a special beverage, a soft drink, in the back room of his drug store in New Bern, North Carolina (Pepsi Co, 2004). It has become one of today’s leading soft drink with nearly $20 billion in worldwide retail sales (PepsiCo Inc., 2003), and like what coke has, Pepsi also has a variety of products in the world, such as Pepsi-Cola, diet Pepsi, Pepsi max, mountain dew and so forth. In this report, we will specifically focus on Pepsi-Cola, and the aim of this report is to summarize and analyse Pepsi’s growth strategy as well as its marketing strategies. Firstly, the background of Pepsi Company and their products will be summarized. Secondly, four elements or components will be analysed in this report, which are based on: * Product * Price * Place * Promotion Finally, some recommendations relative to Pepsi’s marketing strategy will be suggested. In order to make the information of this report accurate and forceful, several valuable sources were used to analyse. Those sources including: * Marketing textbook * Academic paper * Internet * Online business magazines BACKGROUND Pepsi Co. is a Multinational corporation, which extends over many

countries; Pepsi and Frito-Lay merged in 1960, which named the new company Pepsi Co. Besides, Pepsi Co. has merged with some other companies such as Gatorade, which became the world’s fifth-largest food and beverage company with 15 brands. The company operates in a monopolistically competitive market, where its biggest competitor is Coca-Cola. Pepsi brand name and its strategic message ‘it’s the cola’ have already penetrated the world market. In this case the brand name ‘Pepsi’ is very effective in differentiating its product from the others. Within the soft drink industry Pepsi is considered to be a middle class drink and Pepsi offers quality product that provides assurance to the public. Pepsi is undertaking both advertising and marketing campaigns around the world, its advertising campaign include TV, magazines, in-stores, outdoors and on the Internet. The marketing campaigns it undertook include lucky draw and promotions. For example in Singapore there is a promotion done by Pepsi that for every 6-pack of Pepsi you purchase you can have a turn on the fortune wheel to win prizes such as Pepsi t-shirt, more Pepsi drinks and cash prizes. This is done when the economy is in recession and Pepsi is trying to boost up its company and product image. Pepsi’s target market has usually been the middle-income family, as Pepsi is not as expensive as Coke and not as cheap as the other brands. Pepsi around the world usually target toward young people early teens to late twenties, however this is still based on location and in China the target market are usually people from early teen to their late thirties. Pepsi-Cola has been around for more than a hundred years. It is first produced in 1898 and in the earlier times, Pepsi is target against African Americans and it is not until later that Pepsi started to target the younger population for all races. PRODUCT Pepsi, one of the most famous brands, can be identified easily as it is been on various finest soft drinks available almost all over the world for over 100 years. The Pepsi logo has become a remarkable feature in United Stated of America indicating an ‘ice blue background’ synonymous with Pepsi products. The Pepsi-Cola website

points out that at Pepsi-Cola, quality taste and consumer satisfactions are the highest priorities (pepsi.com, 2004). Kotler (Kotler, 2004, p110) identified the meaning of products is the branded ‘goods and service’ offers to the target market. For classic Pepsi cola, which is the widely sold Pepsi soft drink, price sensitive segment becomes one of the most important factors for target marketing. Moreover, for the target customers, Kotler (Kolter, 2004, p111) identified the product elements that attract them as shown below: · Variety · Quality · Features · Brand name · Packaging · Sizes · Add-ons · Warranties · Returns Using the above methodology, Pepsi World shows how Pepsi is made to introduce the quality and features of classical cola (pepsi.com, 2004). At the same time, the website indicates that each ingredient of producing Pepsi-Cola must high standard, rigorous quality control tests and strict bottling procedures all over the world. It can be proved that both the high quality and famous global brand make Pepsi-cola so successful to compete with Coke-cola. Currently, Keiley mentioned that Pepsi-Cola sales are up in America compared with the Coke-cola, which was particularly disappointing because the careful balance of pricing and marketing (Kiley, Coke leaves a bad taste on the street, internet, 9/15/2004). Targeting a suitable marketing is essential for the success and Pepsi-Cola sets lower prices as the key at high quality. Pepsi-Cola can be a warranty as its famous brand. It is known that consumers prefer lightweight, recyclable, plastic bottles. In order to meet customers’ needs and make them easy-to-use, the packagings of Pepsi-cola had tried many different industries but it always follows Environmental and Recycling of USA. Now, it is reported that the ‘cube’ as a new innovative 24-can Pepsi multipack is used by a small test market population to give the company before the introduction (pepsi.com, 2004).

There are also many sizes of bottle to satisfy different kinds of consumers. Smaller bottles are easy for consumers to carry and larger ones with lower price are suitable for families. When buying Pepsi-Cola, consumers get chances to take add-ons back home. It is really a good idea to set add-ons because it is not only advertising the new product among the consumers, but also stimulating customers to get more. For the package, the symbol of brand is quite clear and obvious. However, the design of bottles is very similar as other brands of cola. It is not easy for consumer to recognize and be interested in it. The appearance of bottles can improve (to be) more fashionable or lovely to attract younger consumers and make loyal customers enjoy new style of Pepsi classical cola. Moreover, in the market, there are always few drink packages designed for particular groups of people, such as the kids. Kids are quite important consumers in the market. It is believed that it is better to design a package with some popular cartoon stars for children to choose. For examples, the bottle of Pepsi classical cola can be with the shape of Nemo or Winney the Pooh. Moreover, the bottles for children could be smaller than the usual size for them to carry to school. The children can also collect different kinds of cartoon bottles for fun. In this way, it can raise the sales of classical coke and attracts loyal consumers in a young age. PRICE Providing quality products at the lowest possible price has always been one of the main concerns of Pepsi. For example, in some parts of the country a two-litre bottle of Pepsi cost 99 cents a decade ago and still does today. One of the ways they have been able to assist this effort is by expanding their use of inexpensive and recyclable plastic bottles. (Pepsi World, 2004) Another ways is to reduce the cost of the bottles. The soft drink industry sold their drink to customers; they must have a container to carry. So bottles in the soft drink industry are a very important part of the whole processes. The company manufactures and sells soft drink relies on Pepsi bottlers. PepsiCo takes over the bottling operations from its franchisee. It does propose is to shift its franchisee operations from Coca-Cola to Pepsi.

As the bottlers shifted to Pepsi, Coca-Cola had to struggle hard to counter Pepsi's aggressive marketing strategies. They were getting bottles from neighbouring states incurring heavy expenditure on transportation and storage. What is more, they had to offer a lot of incentives, like Pepsi, without increasing the price. Coca-Cola is still having an upper hand with 56 per cent market share. But with the bottling operations shifting over to Pepsi in November 1997 -- which had forced Coca-Cola to import its bottles from outside till recently— Pepsi managed to increase its share to almost 44 per cent from a mere 30 per cent three years ago. (Sandesh, 2000) This takes over the bottling operations not just make Pepsi’s competitors to shift up their manufacturing cost on purchase the bottling, but also reduce its own risk on the bottles inflation and has a steady supply of bottle. The soft drink industry today is confronted with a bewildering array of price increases. Pepsi expenditures for labour, ingredients, transportation and more rise continuously. The cost of aluminium alone has increased dramatically since last year. Across their entire system, however, have been cutting overhead and re-engineering our manufacturing process in order to keep our prices competitive. It is their policy to limit any price increases to the retail trade to the lowest possible extent. Reducing and maintaining the cost is not the only marketing strategic used by Pepsi. Sometimes Pepsi use cutthroat competition to war with its main competitor – Coca-cola. One of the price war, triggered by Pepsi, follows an earlier onslaught when both the companies reduced prices by about 20 per cent across the board. Just before the Union Budget for 2003-04, Pepsi had to slash prices of its 300 ml returnable glass bottles to $0.6 and this price cut to make its brands more affordable in April 2003. The Pepsi management thinks in a high-consumption market, aggressive price points devolving from the 300-ml segment will work much better. As a consequence, 200-ml bottles are priced at $0.5. The new price points are 300 ml at $0.6, and 200 ml at $0.5. According to industry sources, this sector is heavily dependent on returnable glass bottles and Pepsi's latest price reduction strategy is critical to drive volumes. In the home-consumption segment too, Coca-Cola took the lead earlier in 2003 by slashing prices of its 1.5-litre and 2-litre PET bottles. Pepsi yet to follow suit too reduced prices of its 1.5-litre and 2-litre PET bottles, to 1.5 and 2.0 respectively, against the earlier price of $1.2 and $1.6. So that Pepsi sometimes takes non-profitable turns with

the sole aim of retaining market shares. (PTI, 2003) However this cutthroat competition should not too often war with its main competitor. The consequence not just affects the Pepsi Co. net profit. Also it affects the normal price market. It will affect as the customer adapt and get use to the cheaper price. After the price war, price shift back to the normal price. The customers will change their taste to Coca-Cola more elastically. PLACE Pepsi-cola as a famous brand is welcomed almost everywhere in the world and is well ed by millions of people.. Its beverage business contains North America and international. According to the statistics from the Australia Pepsi website, currently there are “more than 400 Pepsi-cola bottlers in the US and more than 600 internationally. The Pepsi-cola product is sold approximately about 195 countries and Territories” (PepsiCo Inc, 2004). The Pepsi Company manufactures and sells their products to the company they owned, and the independent bottlers that are franchised operating facilities through out the United States and Canada. Meanwhile, the PepsiCo also sell Pepsi-cola through the cooperation with other partners (PepsiCo Inc., 2004). The Pepsi website states that in 1992, a partnership agreement was formed by Pepsi-cola with Thomas J. Lipton Co, owner of the number one tea trademark in the US, and a distribution agreement was also entered with Ocean Spray, the number one non-refrigerated juice trademark in supermarkets (PepsiCo Inc., 2004). Other partners such as Pizza Hut, KFC and Hard Rock CAFÉ have partner relationship with Pepsi -cola. They receive from PepsiCo and sell the product. The incentive for the PepsiCo is to extend their brand reputation in the whole world through those businesses, resulted in great sales. Normally, consumers can purchase Pepsi-cola from supermarkets, restaurant, KFC and Pizza Hut, which have partnership with Pepsi. Pepsi-cola brand is already been brought into the mind of the consumers as an invisible image. As the good reputation and image was created, Pepsi-cola almost exist anywhere and can be easily purchased by customers. In contrast, Pepsi-cola still need improvement for their market strategy in order to have an increase in their product sales. For instance, localization of Pepsi-cola in the limited area would limit the product sales volume and lower its profit. Pepsi-cola may try to establish better relationships with other fast food businesses such as

MacDonald. Pepsi -cola could possibly sign the contract with MacDonald competing with their competitor. Due to the same reputation as KFC, the permission of sale for Pepsi-cola in the MacDonald would be helpful to raise its reputation and profit. The more places the Pepsi-cola can be sold, the more reputation and revenue the company would have. PROMOTION Pepsi-cola has an extensive integrated marketing communication by coordinating promotional efforts. It uses advertising, public relations, personal selling and sales promotion to continuously reinforce consumers’ attitudes and perception of the product. In advertising strategies, Pepsi-cola attracts consumers’ attention by the new campaign “Pepsi, It is the cola”, associating with the food-friendly strategy (PepsiCo. Inc, 2004). In the new released television commercial, it spreads the food-friendly message strategy by identifying customers’ benefit— consumes Pepsi with popular American food like hot dogs and tacos is an enjoyment, fun and satisfaction. This commercial released during the Super Bowl XXXVIII as an in-game ment. Pepsi-cola also used outdoor advertising in billboards and at bus stops all over America. The campaign persuades and reminds consumers the product brand images— spirited, spontaneous, contemporary and exciting, and adding a new ‘hero” image to the product. These strategies also put into the features of new radio, prints and on line adverting. (PepsiCo Inc., 2004) Another advertising tool frequently used by Pepsi-cola is sponsorship. It sponsors various sports teams and events including soccer, football, baseball and car racing (PepsiCo. Inc, 2004). Different sports stars, movie stars and famous singers are used as a representative of the product to attract consumers’ attention and affect the liking of the product. A sponsorship deal was signed with Magna Entertainment Corp. in September as an extension of this strategy (The Blood-Horse Inc, 2004). Besides, the automatic vending machines are placed all over the country, targeting the self-selecting target market. For public relations, Pepsi-cola makes an effort on building a responsible image on both environment and the well-being of consumers (Wong & Takamune, 1997). In the annual report 2003, Pepsi declares its

action on environmental improvement, like efficient usage of water, seeking methods that are socially responsible, such as using 10% recycled materials in plastic bottles; develops education programs and follows environmental legislations. The report also declares its concern on responsibility to contribute to the well-being of consumers, communities with direct contribution to not-for-profit groups and working with organizations delicate to improving the life of people (PepsiCo. Inc, 2004). Other public relation strategies like posing newsworthy information on the company website have also been used. Pepsi-cola contests and games promotions are one of the major tools it uses to achieve sales promotion objectives—rewarding loyal customers and lure customers away from its competitor Coca-cola. Other sales promotion like in-store displays to attract consumers’ attention during shopping increases sales. Latest sales promotion featuring a collectable Pepsi die-cast car in a commemorative vending tin on the internet and a million give away in a television show (PepsiCo. Inc, 2004). The Pepsi Bottling Group has about 6000 salespeople and recently invested in a Pocket PCs with customized software “Shelflink” to its sales force. It helps the salespeople to reduce time spending on various calculations and getting all sales information immediately. This new technology allows Pepsi-cola sales force achieve the sales objectives quicker by increasing time efficiency (Microsoft Corp., 2003) Pepsi-cola’s promotion is highly ed by PepsiCo. Ink’s online marketing plan. The Pepsi.com coordinates with the Pepsi-cola advertising strategies by combining attractive graphics with the marketing message. It provides easy to access product information and latest promotion programs to customers. The PepsiCo.com has constantly updated news and information on the product. (PepsiCo. Inc, 2004) The overall performance of Pepsi-cola’s promotion strategies is satisfactory. It generates sales and increases demand of the product effectively. Advertising is “the action of calling something to the attention of the public, especially by paid announcements” (Webster, 1993). Pepsi-cola existing advertising strategies can achieve the attention of the public effectively and achieve its advertising objectives—to persuade buyers to purchase the product and switch to

the brand, and remind consumers the brand image in order to maintain top-of-mind product awareness. The new message strategy “Pepsi, It is the cola” communicates well to consumers the new hero image added to the product. Another message of the new advertising campaign is “Pepsi-cola is food-friendly”. This message combines with related graphics to attract attentions; however the campaign’s creative message cannot relates to the food-friendly strategy. Since creative message has a large effect on consumers’ memory, Pepsi-cola is recommended to increase its effectiveness of creative messages exclusively. Besides, major media types have been use to reach and expose to the target market effectively. Sponsorship is one of the most important advertising tools used by Pepsi-cola. Sponsoring sport events and teams can be very effective on spreading its brand images. Like the new in-game commercials during famous sport event Super Bowl XXXVIII can effectively tailor to suit large amount of sport loving consumers. On the other hand, the automatic vending machines tailor to suit the self-selecting targets. It is unquestionable that sufficient spending has been made in these areas, and it has been successfully generates to increase sales and improve brand image (PepsiCo. Inc, 2004). Building good relationship with various publics by building up a good product image is important for a brand. Pepsi-cola attempted to create a healthy image—including declares to take responsibilities on consumers’ health and the environment. As both are the new trends that increasingly concerned by the public, this strategy is able to bring positive image to the product. Press releases of Pepsi-cola in the Pepsi Co. Ink website is also a good tool of building a positive product image, with more credibility and a much lower cost than advertising. Pepsi-cola should increase its usage of public relations to impact the public awareness of the product, such as making public speeches and presentations (PRSA, 2004). Sales promotion can push up sales in short term and building up consumers’ long term commitment. Using games and contests to push up sales is one of the most effective ways of increasing consumers’ product awareness. Pepsi-cola is able to create large incentive to consumers, but it needs to consider the cost effectiveness of these promotions carefully. Increasing usage of other sales promotion tools is also recommended as alternatives, such as patronage rewards and redeemable coupons in order to attract various consumers by different

types of incentives. Pepsi-cola salespeople should be able to make good relationships and communicating well with retailers. The new technology improves the performances of the sales force, with access of all sales information in hand all the time. This helps the salespeople to understand the needs of the retailers and be able to build a good connection with them. Constant retraining should be provided to the salespeople in order to improve their performances and keep up with the latest market trends. Beside all the traditional marketing tools, online marketing is the latest and fastest growing trend in the global market. Pepsi has developed the Pepsi.com and PepsiCo.com—two major website related to Pepsi-cola. The fashionable graphics and a -friendly menu are able to attract many web servers’ attention. These websites is designed to coordinate with all of the advertising campaigns and strategies, public relations strategies and sales promotion strategies of Pepsi-cola. On the other hand, the websites are able to target another group of consumers in the market. On the whole, Pepsi-cola has well-developed promotion plan and strategies in all dimensions. Facing its greatest competitor Coca-cola—the market leader of soda, Pepsi-cola’s promotion strategies helps to gain a large market during the last decade. (PepsiCo. Inc, 2004). This is a proof to its success on promotion strategies. Nevertheless, there is some space of improvement for Pepsi-cola. Notes that market research would be able to help the marketers to gain more understanding of its target market, it is recommended to increase the budget spending in this area. Moreover, since the effectiveness of promotion strategies is greatly affected by the economy, marketers should also study the changing economic condition and trends. CONCLUTION In brief, Pepsi has built a good reputation around the world. In the analysis of Pepsi’s marketing strategy, this report has built a clear sense through four important elements---product, price, place and promotion. Moreover, some usual definitions relative to the analysis have been broadened out. Furthermore, a detailed view at Pepsi Co. was also conducted. Overall, Pepsi is a company in the soft drink market with a strong history, an impeccable image and an assurance of quality

in all aspects that explains its current success and will lead to its undeniable success in the future. RECOMMENDATION On the whole, there are a few improvement can be made by Pepsi-Cola. Although Pepsi is the fifth largest food and beverage company, its product Pepsi-Cola is still quite cheap comparing with Coca-Cola— the leading soft drink provider. Most people can link price with quality and the low-price may actually indicates poor quality and it could cause Pepsi to lose the business in the long run. If an ment that show Pepsi only allow excellent quality product to be sold to the consumers, it could alter the consumer’s perspective on Pepsi (i.e. Pepsi offer excellent quality product only). Pepsi currently have contract with some fast food outlets to sell Pepsi products only, for examples, KFC, Pizza Hut and Taco Bell. These fast food restaurants are usually seen as lower to middle class restaurants and it could affect the brand name in the minds of consumers. However there are some small restaurants selling Pepsi when customer asks for it, it still doesn’t change consumer’s perspective of Pepsi. If a contract was written with smaller restaurant, such as a restaurant beverage must include all Pepsi products and not any of Pepsi competitor’s products could improve Pepsi’s image as a beverage provider for middle class families. Some recommendations for Pepsi are as follows: · Pepsi should increase its price to show it has high quality product. · that all Pepsi products must high standard, rigorous quality control tests and strict bottling procedures all over the world. · Pepsi should make contract with smaller restaurant as well instead of just fast food outlets. · Pepsi should sign contract with some small takeaways to buy Pepsi form Pepsi Co. directly as this could reduce the cost of both Pepsi Co. and the take way owner.

However there are draw back for all of the recommendations, the higher price of Pepsi product could lead people to buy more coke as the soft beverage market is a highly elastic market, which means a small price change could lead to a large change in quantity demanded (Kotler, 2004 p.491). The ment showing Pepsi products high quality control could have some effect on consumer’s perspective of the product Pepsi; however excess advertising of this could be a major expenditure for Pepsi with limited effects, especially in a large economy that is in recession such as America.