Marketing Plan & Strategy at Pepsi - Case Study Example

Marketing Plan Contents Executive Summary 3 Introduction 3 Marketing Plan for PepsiCo 4 Conclusion 11 References 12 Executive Summary The marketing strategy is a mechanism that incorporates all the possible measures that a company would adopt so as to reach its short term or long term goals. The marketing strategy of one company differs from the other and it totally depends on the nature of the product and the demand for the product in the market. The company needs to be aware of its strengths, weakness, opportunities and threats before it plans to invest into a particular market or enhance its market presence in the competitive market. A marketing strategy is said to be effective only when it is implemented in such a way that it meets the interests of customers as well as other stakeholders. The report focuses on the business operations of one of the most renowned food and beverage companies: PepsiCo. As globalization is on the increase, successful companies have begun to realize that companies need to adapt their marketing to suit the customers of the particular country where they serve. Similarly, Pepsi Co. also needs to adapt its marketing in different countries. In this paper, a marketing plan is developed for the company’s operations in India. Pepsi Co. already has a strong presence in India and this paper will attempt to improve upon that performance by revaluating the 4Ps of the company’s offer in India. Introduction PepsiCo Inc. is a multinational beverage and food corporation which has its headquarters in United States. The company is focused towards manufacturing as well as marketing beverages, snack foods and various other forms of products. The company initially had only one product under the brand name, Pepsi. This was later expanded into broad range of product portfolio that included both beverages and food. The company in the year 1998 had acquired the brand Tropicana and in 2001 it was able to add energy drink, Gatorade into its product portfolio. The major brands under the banner of Pepsi Co. are Pepsi, Lay’s, Lipton Tea, Cheetos, Mountain Dew, Aquafina, Mirinda, Sierra Mist, 7 Up, Quaker Foods, Fritos, Doritos, Walkers, Ruffles, Pepsi Max, Tositos, Tropicana and Gatorade. As Pepsi Co. has expanded its operations in different parts of the world, it has become a common name in every household around the world. However, given the excessive competition that Pepsi Co. faces from its competitors, it is important that the company is able to develop an edge from the existing competition. For this, the company would have to understand each region and the people it serves in those regions. The global brand has to localize its marketing strategy in order to win gain a bigger market share. In this paper, the marketing strategy of Pepsi Co. will be discussed for India. Pepsi Co. already has its operations in India but this paper will focus on localizing the marketing strategy of Pepsi Co. to meet the demands of the Indian consumers. Marketing Plan for PepsiCo The marketing plan for any company is very essential as it is the tool that aligns the goals of the company with the demand and expectations of the target market. The marketing plan should initially comprise of internal and external analysis of the company. The mission of PepsiCo is to gain a bigger market share for its products across the globe (Richter, 2012).The company faces tough competition directly from beverage companies such as Coca-Cola; and indirect competition from other food and beverage companies such as Nestle. In order to develop a viable marketing plan, an analysis of the external and internal environment is necessary. For this, the SWOT Analysis would be conducted for Pepsi Co. SWOT Analysis Strengths Strong brand image; Diversified product portfolio; Presence in more than 200 countries; Earnings of more than 1 billion dollars; Extensive Marketing and Promotion; Competitively Priced; Strong Distribution Network. Weaknesses Dependence on carbonated drinks for profits; Opportunities A large customer base in India; Population continues to increase in India which further increases potential customers for the brand; Increase in demand for company’s food products and juices; Threats Presence of strong competition from Coca-Cola and Nestle; Demand for carbonated drinks is expected to decrease. Segmentation, Targeting and Positioning Segmentation of the market is done on three broad divisions: geographical segmentation, demographic segmentation and behavioural segmentation (Allen, 2006). In terms of geographic segmentation, this reports focus on one particular region-India. The Indian consumer is more price conscious when compared with consumers in Europe or other developed nation (Handlechner, 2008). Also India presents a good opportunity to the company in terms of its high population. In terms of demographic segmentation, the company targets a wide age group including children, teenager, young adults etc. The age bracket of the Pepsi consumers in India is from 8 to 55 years. The family size is also an important demographic consideration. In India, family sizes are typically larger than those in UK or USA. Also in India core families tend to live together, which further increases family size. Therefore the company should introduce bigger bottles such as the 2.25 litre bottles simply because bigger families would demand for more product volume. The major income group that is targeted by the company is lower and upper middle income group and even upper level income group. The behavioural segmentation plays a major role while implementing a marketing strategy. The company needs to analyse the consumer behaviour in terms of usage rate and user status (Peng, 2013).The usage rate comprises of heavy, light or medium users and non-users of the products of PepsiCo. The user status comprises of first time user, non-user, potential user, regular user, ex-user, etc. 4Ps of Marketing The 4P’s of marketing are one of the most widely used tool for determining what the brand has to offer. The offer is developed after considering the price, product, promotion and place for the brand (Kotler and Keller, 2012). Thus, the marketing strategy that is adopted by a company depends on many factors such as product features, price, distribution as well as promotion. Amongst all the above four factors, the product and pricing depends on the demand of consumer market whereas promotion and distribution has significant relationship with reaching a wide array of customers. The globalized operations of the company need to be sustained through proper implementation of market strategies (Doole and Lowe, 2008). Product The company has a wide range of products which it can market appropriately using the best of marketing (Spulber, 2007). Pepsi Co. offers all four different kinds of drinks: carbonated drink, mineral water, and energy drink and fruit juice. Pepsi has also recently expanded to include a diverse portfolio range which consists of Lay’s, Lipton Tea, Cheetos, Quaker Foods, Fritos, Doritos, Walkers and Ruffles. In India, the company makes it profits from selling carbonated drinks. The demand for carbonated drinks is decreasing throughout the world as people are becoming aware of its health effects and as the beverage industry is diversifying to include energy drinks and fruit juices. It is expected that India would also catch up with the international trend and the demand for non-carbonated drinks would increase in the future. Pepsi can take the first mover advantage here by strongly promoting non-carbonated drinks along with its range of carbonated drinks. For its products such as Lay’s, Doritos etc. the company should consider introducing local flavours. It could introduce Chicken Tikka flavour or Fish Curry flavour in India to attract the more spice loving consumers in India. Pricing As discussed before, the average Indian consumer is price sensitive. Since India is a developing country and incomes of the Indians are not quite high, the Indians are conscious of where they spend their money. This is further compounded by the fact that Pepsi’s biggest competitor, Coca-Cola has a strong market presence in the country. Cost leadership is a pricing strategy adapted in markets where the competition is intense (Hooley, Piercy and Nicoulaud, 2012). Therefore the company would have to retain its competitive pricing strategy in India. Promotion Pepsi Co. mainly promotes its products through celebrity endorsements. Celebrity Endorsements are one of the most effective marketing techniques since the average consumer is able to relate to the celebrity and aspires to be like him (Kotler, 2011). However, the company needs to understand that the consumers should be able to relate the celebrity with the brand (Hollis, 2008). Choosing the right celebrity is also important. For localizing the global brand, the company would have to select celebrities that the average consumer can relate with. The Indian consumers are highly inspired by their film actors. Prominent Indian actors include Amitab Bachan, Shahrukh Khan, Salman Khan, Akshay Kumar etc. Also Indians have strong affinity with their cricket players including Sacchin Tendulkar, Virat Kholi and Mehendra Singh Dhoni (Forbes, 2013). Using these celebrities, the brand can develop a strong and attractive image. The typical Indian family lives together as one unit. Here the company can link its products with happiness that it brings in lives of millions of its customers who trust their products. The company could advertise its product on an emotional level by showing happy families enjoying Pepsi together. This would be particularly appealing during festive seasons which are quite common in India including events such as Holi etc. In terms of approaching the consumers for the promotional activities, the company should consider traditional marketing channels including television, print and outdoor along with new channels such as internet. The Indian consumers are becoming more technologically advanced and their internet usage in increasing. As with the rest of the world, the Indian consumers use social media regularly. Social media as a promotional tool is adopted by a company when it wants to save cost as well as reach to a large number of customers. The social media in today’s scenario gives an opportunity for the company to analyse their position in the consumer market in comparison to other competitors and at the same time even reflect upon the areas where they are able to satisfy its customer base (Onkvisit and Shaw, 2009). PepsiCo should make use of this effective tool and explore different digital marketing strategies that would save a lot of time of the company. This strategy can be implemented by the company to reach out to its target market and even create a social media platform for itself. The company while operating globally can send in bulk messages and bulk emails in relation to their new product launch or any kind of price changes so that they are able to continuously trigger its brand name in consumer minds. The other form of social media tool that can be used by the company would be creating blogs and its presence in sites such as Twitter and Facebook where customers can put their views and also can be associated with the brand (Urban, 2004). The company can even adopt the strategy of sponsoring events such as musical shows, big scale shows, corporate events and even sports shows. PepsiCo down the years has been associated with many sports events and this has proved to be an effective tool simply because it relates to the target youth market of the company. These forms of sponsorships is the best approach to implement marketing strategy of a company as it helps to create brand presence to a large audience in the market as well as enrich its brand equity (Cheverton, 2005). Place The company has gained its market presence across the globe simply because the company is able to understand the demand of the market and place its product as per that identified demand. The company distributes its product either through direct distribution or in the form of franchisees. The support of franchises helps the company to avoid risk as well as it does not have to invest much in the distribution operation. The promotional strategy plays a critical role in a scenario where there is intense competition. The same distribution strategy would be implemented by the company. However, in India, the company would have to create an extensive distribution channel considering that many parts of India are difficult to access such as rural under developed regions. The company would have to rely on local dealers for distribution in such areas. Implementation and Control For implementation of the above marketing plan, the company would have to adapt its promotion and distribution strategy with the local consumers. Product and price would remain essentially the same. For its promotional ventures, the company would have to approach local celebrities and enter into contracts with them. For distribution, the company would use all modes of transportation: road, rail, sea etc. This is because India is a large country and different modes of transportation are suitable for different areas. Conclusion In order to localize the brand, Pepsi Co. would not have to make many changes to its overall marketing plan. It would only adapt its existing marketing plan with the Indian consumers. The product and price strategy of the company would remain essentially the same. The company would focus on introducing its non-carbonated drinks in the market considering the future of the carbonated market in the country. The price of the product would be competitive and similar with that of its biggest rival, Coca-Cola. In terms of promotion, the company would use local celebrities. The company would also market the brand as one associated with happiness and celebration considering that the Indians have many festive events throughout the year. References Allen, M. 2006. Analysing the Organizational Environment. UK: Select Knowledge Limited. Cheverton, P. 2005. Key Marketing Skills: Strategies, Tools and Techniques for Marketing Success. Great Britain: Kogan Page Publishers. Doole, I., and Lowe, R. 2008. International Marketing Strategy: Analysis, Development and Implementation. Canada: Cengage Learning EMEA. Forbes, 2013. India’s Forbes Celebrities 100, Retrieved from http://forbesindia.com/lists/2013-celebrity-100/1439/1 [Accessed 4 July 2014] Handlechner, M. 2008. Marketing Strategy. UK: GRIN Verlag. Hollis, N. 2008. The Global Brand: How to Create and Develop Lasting Brand Value in the World Market. New York: Macmillan. Hooley, G., Piercy, N. and Nicoulaud, B. 2012. Marketing strategy and Competitive positioning, New York: Prentice Hall. Kotler, P. and Keller, K. L. 2012. Marketing Management. New York: Pearson Kotler, P. 2011. Framework for Marketing Management. New York: Prentice Hall Onkvisit, S., and Shaw, J. 2009. International Marketing: Strategy and Theory. New York: Routledge. Peng, M. 2013. Global Strategy. Canada: Cengage Learning. Richter, T. 2012. International Marketing Mix Management. Berlin: Logos Verlag Berlin GmbH. Spulber, 2007. Global Competitive Strategy. USA: Cambridge University Press. Urban, G. L. 2004. Digital Marketing Strategy: Text and Cases. UK: Pearson Prentice Hall. Read More