This homework for Adrian Monroe

Source: Esterl, Mike. Article “PepsiCo Boosts It Profit Outlook”

The Wall Street Journal, Friday September 30th 2016: B1. Print.

Summary of the article

The article gives a snapshot of PepsiCo performance in the current year. There is an analysis of the financial performance of the company. The expectation is that the adjusted expected earnings per share will grow 10% instead of 9% after issuance of cost cutting measures. Organic revenues have grown by 8% in emerging and developing markets. The share price also has closed at high compared to previous periods.

There is a breakdown of the various beverages and their performance during different quarters of the year. Non-carbonated beverages are performing better than the carbonated beverages. The revenues from non-carbonated beverages therefore have offset the decline in revenues from carbonated beverages. Product volumes have also grown at 3% and 2% for snacks and beverages respectively.

The article also analyses different markets both domestic and overseas. Half of the revenues abroad come from items such as juice, potato chips and soda which give customers varieties. The effect of global economy and other global factors is also discussed in relation to their effect on the performance. The domestic market in US is performing better than other markets. There is also an explanation on how cost cutting measures have led to growth in profit margins. The company is optimistic that the profit margin will grow compared to the previous year and quarters.

Relevance to the course

From the article there several concepts applicable to marketing in general. The most evident is global marketing. On the major factors that affect global marketing is global economy. The article has outlined various regions where economic factors have led to declines in revenues as compared to the domestic market. The effect of currency fluctuations is also a factor in the total revenue has also been discussed in the article.

The other concept that comes out of this article is diversification. Apart from the traditional soda business there is also juice and potato chips. This increases the presence of the company as a brand as well giving the customers various options. One non-performing product in an area can be supported by the other products. Apart from product diversification there is also geographical diversification. This has ensured that despite declines in losses in some regions other regions can generate revenues to cushion these shocks.

The concept relevant to this course is consumer’s tastes and preferences. The article outlines how the sales of non-carbonated drinks have increased compared to carbonated drinks. Changing tastes and preferences should be observed in order to avoid obsolete products.

What I have learned

Managing an organizations and especially marketing for a company whose operations are global is different from locally operated companies. The products that perform well in the domestic market might not be the same products performing well in the global market. I have also learned that consumer tastes and preferences changes over time. On this beverages industry health concerns have to be observed keenly. Differentiation should be done based the health benefits of the product so as to beat competition. Tastes and preferences can also change from one geographical region to another. Therefore the right product should be delivered to the right region. Customizing products can be a good asset so as to capture different markets.