Making Promotion Work in PepsiCo - Case Study Example

The paper “Making Promotion Work in PepsiCo" is an affecting example of a case study on business. As mentioned in PepsiCo’s press release (Sept. 19, 2011), Pepsi launched a nationwide retail promotion by offering customers an opportunity to win a trip to Los Angeles and attend the taping of THE X FACTOR videos. Out of the fundamental four marketing mixes, namely product, place, price, and promotion, promotion plays a relatively very significant role in the competitive aspects of the marketing. As some marketing experts viewed, promotion may not be as critical as pricing or product, but often becomes more critical than the other three elements if the competitive rivalry is highly stronger and the market is very complex in nature.

Perhaps most of the highly competing large market players are usually depending on common promotion strategies such as discounts, offers, competition, etc. Promotion techniques, if they are very repeated in the market, will be boring to customers and thence less effective too. But, PepsiCo designed a promotion technique that is unique in nature and highly interesting to customers. For customers, the effort is easier and the benefits are high-valued. As the company designed, consumers are offered a snap picture with their mobile phone or camera to take a picture of THE X FACTOR Pepsi brand being sold anywhere and send that image to a specific e-mail id. Customers, in return, will receive exclusive videos and various useful content. The most interesting aspect to the customers is that they get a chance to win up to 600 daily prizes including a trip to Los Angeles. This is the way PepsiCo designed its promotion strategy to market it’s the X-FACTOR brand. Promotion, no matter how big or small the offer is, will work only if it is interesting to the customers.

The very underlying concept of promotion is creating and establishing brand awareness among the customers. Brand awareness can be converted to brand image and brand loyalty and thus to very long term profitability. Influencing customers’ decision to buy, select or even use positive word-of-mouth of a product or service is extremely critical to marketing success. An effective promotion strategy can influence customers’ decisions to buy and spread good words about the products or services. As Cateora and Graham (2007, p. 468) explained, promotion is a marketing strategy tool that stimulates consumer purchases and improves retailer as well as middlemen effectiveness and cooperation. The four Ps of marketing mix plays a pivotal role in structuring and shaping a market, and each of the four elements determines how the market will be and how effective and competitive it will be. The promotion strategies may vary from company to company, but the main success factors depend on how strategically the company designs and develops its promotion technique.

As Carvens and Piercy (2002) described, market targets and positioning strategy guide and envisage promotional decisions. Various decisions are involved in setting the promotion such as 1) designing a communication objective, 2) deciding on the role of each of the components that makes promotion mix, 3) determining the promotion budget, etc. In order for the promotion tool to be beneficial and useful, it should be developed by considering proper communication channels and accurate budgeting, etc.