Price and Channel Strategy

Reading Head: RESEARCH MARKETING 1

WEEK 1 – Researching Marketing Questions

MKT/ 571: Marketing

Calvin Jefferson

June 12, 2020

Instructor: Catherine Burr

RESEARCH MARKETING 2

PART 1

MEMORANDUM

To: Senior Vice President (SVP) of Marketing

From: Calvin Jefferson

Date: June 12, 2020

Re: Business Growth Overview Dataset

Thank you in advance for taking the time to read through this memo.

The memo is based on the review of the company’s data and financials for the years 2015 and

2016. From the analysis, there are evident changes in the revenue earnings from 2015 to the first

and second quarters of the 2016 financial year. From my analysis, the changes could be

attributed to the strategic operations that have been adopted by the company. The performance of

the company improved, from a general point of view, though there are areas that have noticeable

decreases in revenue. The decrease could be because of poor pricing strategies or ineffective

marketing campaigns in some sectors of our business operations.

Three significant areas showed an increase in revenues from the two periods. The first was an

increase in Domestics in the Global Breakout area. There was an increase of +$1,930,466. The

Commercial sector in the Customer Class area also saw an increase of +$1,282,340, and the

other increase I noticed from the review was in Expand, in the Customer Rank area, which had

an increase of $1,130,973. Despite the increase, some areas in the company show decrease in

revenue. Delta Appliances had a decline in revenues, recording a loss of 5.3%. The resell-

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industrial hygiene in the Customer Class also experienced a drop in sales translation to a loss of

revenue and profit by 14.2%. Francois and Sons showed a decline in revenues of 7%.

From my analysis, after reviewing the available data, there are signs that the trend in various

categories will not change unless something is done. The acquisitions, customer rank selling,

commercials, domestics, and expand categories show signs of having a continuous increase in

revenue. There is a downward trend in the revenues for resell-industrial hygiene, Delta

Appliances, and Francois and Sons. Such revenues will see an increase in strategic planning and

development of the new strategic operation. Such operations will aim to try reviving the

revenues of the sectors mentioned above. More focus in the future should thus focus on the

sectors that are showing a downward trend.

Effective marketing strategies will be required to ensure the continued growth of revenue

throughout the different categories in the business. The strategies will also be aimed at declining

the rate at which revenues are decreasing in other sectors. On reviewing the data on domestic

customers, it is advisable to focus on both retention and acquisition of new clients. The domestic

consumers are a principal asset for the company and thus should be regarded with utmost

importance. To attain the above strategies, such as having a motivated and consumer-oriented

workforce, should be employed. Marketing strategies and campaign efforts should shift focus to

categories with declining revenues but not abandon the categories that are doing well. Marketing

determines the sales that the company will make and could also offer feedback, to give insight

into why revenues for some sectors are decreasing. Online and broadcast advertising campaigns

will help create awareness, act as a reminder, and introduce new consumers to the company's

products and services.

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It is of utmost importance to sit down with the company team, especially the marketing

department, and come up with a marketing goal. The goal could be to retain current customers

and also attract new customers. The success of such a marketing goal will be measure by the

level of sales and revenues. Marketing goals are essential for the planning process, and it also

gives the team direction. The goals also put a significant focus on the marketing team giving

each team player specific responsibilities that will help attain the objectives set. The setting of

marketing goals will also ensure that marketing activities are consistent with the company's

objectives and establish priorities for marketing resources.

Applying the suggested strategies will help improve the company's financial position and see an

increase in consumer base and, therefore, a proportional increase in revenue. The strategies will

help improve the outlook of the sectors that show a declining trend in revenues.

Sincerely,

Calvin Jefferson.

PART 2

PepsiCo is one of the largest snacks and beverage companies in the world. The company

has over 22 brands and located in over 200 territories across the globe. The main products for the

company are snacks and carbonated drinks such as Pepsi Cola. According to their 2018-2019

fiscal year financial statements, the company makes 54% of its revenues from food snacks while

the remaining 46% is from beverages. The report shows that from the company’s brands, 100 of

those generate annual revenues of over US $1 billion. The company has its headquarters in

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Purchase, Harrison, New York. It also has 263,000 employees as of 2019. PepsiCo chooses its

distribution channels based on the needs of the consumer (PepsiCo, 2020). The company has

three channels of distribution: direct distribution, customer warehouse, and third-party

distribution networks.

The company is publicly-traded and thus owned by shareholders. The revenues as of

2019 stood at 67.16 billion USD. PepsiCo beverage brands include Pepsi Cola, Pepsi One, Pepsi

Wild Cherry, Caffeine Free Pepsi, Diet Pepsi, Diet Pepsi Lime, and carbonated water. Other

beverage products from the company include Gatorade drinks and Mountain Dew. The snacks

that the company provides hot and cold cereals from subsidiaries like Quakers. Quick snacks

include Frito-Lays brands, Tostitos brand, and Cheetos, among others.

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References

PepsiCo. (2020). Annual reports and proxy information. PepsiCo, Inc. Official Website.

Retrieved June 12, 2020, from https://www.pepsico.com/investors/financial-

information/annual-reports-and-proxy-information

PepsiCo. (2020, April 16). PepsiCo to hold virtual annual meeting of shareholders for 2020 due

to coronavirus precautions. PepsiCo, Inc. Official

Website. https://www.pepsico.com/news/press-release/pepsico-to-hold-virtual-annual-

meeting-of-shareholders-for-2020-due-to-coronavir04162020

Hollensen, S. (2019). Marketing management: A relationship approach. Pearson Education.