Assignment 4: Part D: Your Marketing Plan – Video Presentation

Dr. Adina Scruggs

Marketing is a major functional aspect in any organization. Marketing covers product development and research, product sales, promotions, and advertising. Effective marketing requires ample budgets, time and appropriate preparation. Proper marketing helps a business organization to achieve its goals hence there is need for the organization to come up with effective marketing strategies. In essence, an effective marketing plan enables the organization to follow programs and strategies that will enable it to achieve its marketing and financial objectives. A good marketing plan includes a proper situational analysis, market analysis and the tactical plans (Lacobucci D., 2013). This paper seeks to provide the situational analysis, tactical plans and the market analysis of the PepsiCo Inc. Moreover, the paper provides an environmental analysis and both the short-term and long-term objectives of the company. 

Description of Company and Product

PepsiCo Inc. is a food and beverage company located in Purchase, New York. The company is second largest globally in the food and beverage industry after Coca-Cola and it has branches in over 200 countries (Reuters, 2015). PepsiCo is a global world leader in convenient snacks, beverages and food that take in revenues of more than $39 billion and over 185,000 employees. PepsiCo Inc. produces 22 brands and it focuses on providing healthy foods. It centers on product localization strategy.  However, the food and beverage market is very competitive and the company faces stiff competition from other companies such as Coca-Cola, Kraft Foods, and Dr. Pepper Snapple Group (Neely K. et al., 2009). PepsiCo produces healthy foods since it employs innovative technologies that embrace lower calorie sweeteners (PepsiCo, Inc., 2014).  Despite the competition, PepsiCo is able to develop products that meet the needs of its local customers. PepsiCo is keen on producing healthy products that are currently on high demand. Currently, there is a huge demand for non-carbonated drinks in the US. More people are moving away from the sugary soft drinks and embracing less-sugary and healthier drinks such as water, fruit juices and low-fat milk (Strom S., 2012).

Environmental Analysis

The environmental factors include the sociocultural, economic, legal, political, and technological factors. Any business that produce/develop a product or service that they want to market nationally or globally must think through what the influence each of these factors may have for them. Not taking into the thought process these aspects can result in the unsuccessful attempt to market a product, which may be successful domestically, in other nations where there is an important market potential. Pepsi is known as a large business that conducts marketing domestically and globally and have an outstanding reputation to follow.

Sociocultural Factors

This area would consider demographic characteristics, macroeconomic characteristics and the social-cultural aspects (Roudna J., 2010). They emphasize on the numerous advantages of an educated population. Sociocultural factors emphasize on educational institutions that provide necessary education and insist on the availability of employees with the essential skills and knowledge. 

Legal Factors

Focus on the functioning of law courts, copyrights and law enforcement. They emphasize on maintenance of law and order within the industry. They also emphasize on a code of conduct which requires all employees of the company to follow local employment regulations and laws to include labor laws and treatment of employees.

Economic Factors

These factors are concerned with the economy. They focus on the basic assessment of macroeconomic condition, tax factors and access to financial resources. The macroeconomic conditions include the inflation rate, interest rate, exchange rate, budget surplus or deficit, trade surplus or deficit, and monetary stability within a country. Factors that influence access to financial resources include the local banking system, costs of bank loans and the accessibility of the loans. The tax factors include tax rates, customs and tax burdens and development of tax rates.

Political Factors

Strives to focus on the political-economic factors, political influence of various groups and assessment of external relationships (Roudna J., 2010). Political-economic factors study the attitude of the locals towards private and foreign investments and the relationship to the state industry. These features help the company to determine whether the locals will adopt the product. Assessment of external relationships helps the company to identify conflicts or political instability within the areas of operation.

Technological Factors

Basically influence the type of production and the product. They focus on government support for research, new discoveries, speed of enactment of new technologies, overall technical level, and speed of ethical obsolescence. 

Primary and Secondary Target Markets

PepsiCo has a both primary and secondary target markets for its non-carbonated beverages. The primary target market is the main segment of customers that the company is targeting who will give the greatest return (Ashe-Edmunds S., 2015). PepsiCo is targeting children, students and those with health complications as its primary buyers. The secondary target market comprises of second most likely customers to purchase the non-carbonated beverage. The company is targeting customers who are shifting towards the healthier and less-sugary products as its secondary buyers. 

Marketing Mix

A combination of the 4ps is suitable for marketing PepsiCo’s non-carbonated beverage. This paper, gives a combination of product, price, place and promotion strategy for PepsiCo as follows:

Product strategy: PepsiCo has numerous products such as 7up, Mirinda, Mountain dew, Nimbooz, Pepsi, Slice, Tropicana, Auafina, Gatorade and many other drinks (Lacobucci D., 2013). The non-carbonated beverage will help to meet the needs of its customers who now prefer healthy products.

Pricing strategy: PepsiCo is keen on maintaining consistency in pricing of its products. Pepsi has known to give promotional discounts on bulk buying of its products.

Promotion strategy: Effective promotion of the non-carbonated beverage is essential in helping the company to communicate the nutritional value of this product to potential buyers. Pepsi also utilize trade promotions as well as sales promotions at point of acquisition.

Place strategy: PepsiCo enjoys a good market share at the global level since it has branches in over 200 countries. 

The STP Strategy:

The company also combines market segmentation, targeting markets and positioning to reach out to more potential consumers as follows:

Market segmentation: PepsiCo is aware of the increasing demand for non-carbonated products (Lacobucci D., 2013).

Targeting strategy: PepsiCo has ascertained that the non-carbonated drink will enjoy a sizeable market share because of the increasing demand and high incomes. Pepsi consumers consist mainly of Teenagers and Young Adults between the ages of 14 to 30. It also markets its products at Schools, Colleges, Universities, Homes, Restaurants, Hotels, and Stores.

Positioning strategy: PepsiCo uses the quality of the non-carbonated beverage to set the prices. They position by using direct contrast and ensuring that their product is positioned where if would benefit their target market.

Situational Analysis

This analysis focuses on the 5Cs that include the customer, company, context, collaborators, and competitors. The analysis is as follows:

Customer factor: The target primary buyers are more satisfied with the non-carbonated beverage and health products such as Quaker.

Company factor: Its main aim is to become the world’s leading non-carbonated beverage distributor both domestic and global.

Context factor: PepsiCo considers the political, legal, economic, sociocultural, and technological factors when making important production decisions (Lacobucci D., 2013).

Collaborator factor: PepsiCo maintains good relations with suppliers and distributors.

Competitor factor: PepsiCo is ware of its major competitors and their strengths.

Company’s Goals

PepsiCo has both the long-term and the short-term goals that help to track and monitor its performance. The long-term goals is set to increase the level of growth by ensuring yearly incomes of 20% per share with an equity return of equal to or greater than 42%. To maximize the production and distribution of the products at the international level by leveraging infrastructure and the target market of the company. The short-term goal is to prioritize the provision of standard, affordable and healthy products that meets the demands of the customers. The company can assess the long-term goals by analyzing its growth rate in relation to that of their competitors, customer engagement and margin. Additionally, it can assess the short-term goals by studying website visits, market share and adoption rates of the non-carbonated beverage (PepsiCo, Inc., 2014). .

SWOT Analysis

It is important for the company to carry a SWOT analysis because it helps the company to ascertain its internal weaknesses and strengths while unveiling the threats and opportunities present for the company to take into consideration during market planning. The strengths and weaknesses fall under the internal environment while the opportunities and threats fall the external environment. The company’s SWOT analysis is as follows:

Strengths

PepsiCo has various strengths that arise from its internal environment. The company has an administration with a varied base of knowledge and interests. The work force PepsiCo includes employees with diverse abilities and expertise that are necessary for the success of the company. PepsiCo provides unique and healthy products that meet the needs of its customers. The company’s product line and the brand portfolio offer the company an upper hand in the marketplace. The company has an incorporated supply chain and distribution. The company focuses on mergers hence making the marketing and distribution of its products easier. PepsiCo register high revenues and a large capital base.

Weaknesses

PepsiCo’s management experiences a conflict of interests. The company has a high number of employees promoting conflict of interests. The company faces stiff competition from its rival company Coca-Cola. This aspect generates a wide niche in the product marketing.

PepsiCo lacks a customer base for the new non-carbonated, less-sugary products since generic companies make such beverages cheaper.

Opportunities

It is undeniable that there is an increasing demand for the healthier beverages. PepsiCo major rival, Coca-Cola Company produces carbonated beverages giving PepsiCo an opportunity when marketing healthy products. The company embraces online promotion that helps the company to reach out to a larger audience. The high-income earners in the US give PepsiCo an opportunity to profit from the consumption of convenience.

Threats

PepsiCo charges higher prices compared to Coca-Cola for the same products.

Computerized production poses a risk to the company because of mechanical computer breakdowns and effects from viruses. It is important to note that the company needs to maximize on its strengths, ascertain the opportunities and improve weaknesses (PepsiCo, Inc., 2014). 

From the discussion above, it is clear that a marketing plan is very important for the success of PepsiCo as it tries to gain a share of the untapped non-carbonated beverage market. The company needs to consider the environmental, situational, marketing mix, and the SWOT analyses when developing a proper marketing plan.  

References

Ashe-Edmunds S. (2015, January 12). What is Primary Target Market? Retrieved from Houston

Chronicle: http://smallbusiness.chron.com/primary-target-market-1478.html

Lacobucci D. (2013). Chapter 17: Marketing Plans (ppt slides). Cengage Learning.

Neely K., Tevis M., McDonald A., Brown S., & Pond H. (2009). PepsiCo International:

Industry and Competitive Situation Analysis. kimboal.ba.ttu.edu/MGT%204380%20SM%2009/091/PepsiCo.pptx: PepsiCo.

PepsiCo, Inc. (2014). Report on Pepsi. http://www.scribd.com/doc/35223569/Report-on-Pepsi:

PepsiCo, Inc.

Reuters. (2015, January 9). PepsiCo Inc. (PEP). Reuters, p.

http://www.reuters.com/finance/stocks/companyProfile?symbol=PEP.

Roudna J. (2010). SLEPT Analysis of Logistics Centers' Operating in Czech Republic. University

Of Pardubice.

Strom S. (2012, May 15). Soda Makers Scramble to Fill Void as Sales Drop. New York Times,

pp. http://www.nytimes.com/2012/05/16/business/pepsi-and-competitors-scramble-as-

soda-sales-drop.html?pagewanted=all&_r=0.