Global Warming, Marketing and the Consumer PepsiCo - Research Paper Example

Global Warming, Marketing and the Consumer PepsiCo Introduction Global warming impacts everyone, in every country, in every local population, all across the globe. What is global warming? One expert suggests that global warming is the process of increasing the world’s temperatures caused by “the massive increase in greenhouse gases, such as carbon dioxide, resulting from the burning of fossil fuels” (Maslin, 2004, p.27). Innovative and dedicated scientists and environmental researchers have identified that there are currently some of the highest levels of atmospheric carbon dioxide not seen in over a half-million years (Maslin). Consider the scope of this timeframe: If scientists are accurate in their assessments, this should be an alarming statistic for businesses and consumers. Inhofe (2007) disagrees, however, as this author believes that global warming is nothing more than hysteria caused by media exposure on this subject. However, even if this were true, it would clearly illustrate that media maintains the ability to change consumer perspectives, therefore PepsiCo can benefit from the media exposure which already exists on rising temperatures and global sustainability. O’Connor and Ward (2009) identify that science consistently points toward human involvement in pollution as the cause of global warming. This evidence was offered as “compelling and overwhelming” with rising carbon dioxide levels being a “threat to public health and welfare” (O’Connor and Ward, 2009, p.3). On top of consumers being inundated with these statistics, there is also overwhelming evidence that global warming, as a product of the burning of fossil fuels, has caused rapid ice melt in the Antarctic which could potentially lead to devastating rises in the ocean levels across the world (Naish, Levy and Wilson, 2009). Now that you have an understanding of global warming and some of its many consequences on the environment and in terms of human health, what does this mean to PepsiCo and its products? What does this mean to marketing strategy and corporate social responsibility? It means a significantly great deal as consumer shifts toward ecologically friendly products are driving a new consumer behaviour which is shifting toward green products and earth-friendly products. This is a tremendous opportunity for PepsiCo, as a multinational business leader, to consider how to incorporate these consumers shifts toward green products in existing packaging concepts and reposition certain brands from current strategy to an eco-friendly position in the minds of consumers. This is also an opportunity for PepsiCo to illustrate its focus on reducing carbon emissions, thus coming as somewhat of a branded rescue entity to help the Earth sustain its environment. A new business position PepsiCo is currently exploring alternative energy sources to fuel its manufacturing foods plants such as the adoption of wind turbine power in India to reduce the strain on carbon dioxide levels (Annual Report, 2008). These are sustainable business practices, however is it enough to ensure that PepsiCo maintains a positive image as an eco-friendly, conglomerate business? There is no evidence that PepsiCo is using this opportunity to use these new business enhancements in the pursuit of providing less manufacturing pollution in the company’s promotional strategies. One marketing publication identifies the many retailers in the United Kingdom have been finding success by “convincing the public that they are leading players in the war against global warming” (Marketing Week, 2007, p.20). These successes seem to have come in higher profitability and has given some brands higher environmental credibility. This is showing that some companies, perhaps competition, is capitalising on public relations materials which show their sustainable energy practices or changes to existing manufacturing in a method to reduce global warming. PepsiCo should utilise this opportunity to promote its enhanced focus on corporate social responsibility. From a profitability standpoint, some rather low-cost television advertisements or print promotions which link the PepsiCo brands with changing business models related to energy could bring higher profitability for the eco-oriented consumer. Donaghy (2007) offers that even though climate change is happening on a worldwide basis, the impact of rising global temperatures is experienced at the local community level where people work and live. Additionally, temperatures in Africa have already risen by over one degree Celsius in the last century, with expectations for a two to three degree (Celsius) increase by no later than 2050 (Cherry, 2007). What all of this is suggesting is that consumers all across the globe are experiencing different climatological scenarios at differing degrees. This gives PepsiCo the opportunity to expand its ability to provide positive, international attention to the firm’s focus on providing cleaner-powered facilities to help citizens regain confidence about the ability to lessen the impact of rising temperatures. For instance, in Africa, the bottled water segment of PepsiCo could utilise local print advertisements for this market which show the many benefits of buying PepsiCo products as the plants which produce them help to keep communities free of atmospheric concerns. This could link certain brands, like Pepsi-Cola, with consumer perceptions of responsible business behaviour, making this the drink of choice in markets where temperature increases have already caused significant social and economic problems. McLaughlin (2008) further supports that consumers are shifting their behaviour toward buying products which reflect responsible environmental policies and business practices with the results of a recent study which identified that consumers “are very interested in global warming…with the number one action being to buy green products in a variety of categories” (McLaughlin, 2008, p.30). If global warming is currently so entrenched in the minds of consumers, then PepsiCo maintains a wide variety of additional strategic options to capitalise on this trend in consumer attitude and values. The transformation of various brand packaging, to include specific partnered logos, perhaps with agencies like the U.S. Environmental Protection Agency, could give consumers higher confidence about the sustainable practices of this company. PepsiCo also maintains the ability to redevelop its existing logo, the most notable on Pepsi-Cola products, to illustrate environmental friendly policies with the addition of greens or the representation of the planet cast in an eco-friendly bottle or can. This would be a strong promotional opportunity to provide consumers with a new picture of how strongly PepsiCo is working toward meeting reduced carbon dioxide emissions. One interesting ambition, offered by the U.K. Code of Sustainable Homes, is to have all homes in this country free of carbon, in construction and output, by only 2016 (Osmania and O’Reilly, 2008). This again reinforces that consumers are thinking toward sustainable homes with contribute to the environment rather than detract from it. If consumers are being exposed to builders who are suggesting methods to reduce their carbon footprint, they are obviously becoming more educated about global warming and how their own personal lifestyles should be adjusted to contribute positively. This is yet another important opportunity for PepsiCo, as part of corporate social responsibility, to utilise as much public relations as possible to market the company’s focus on providing sustainable packaging and other energy conservation efforts. This would make PepsiCo appear less like a corporate, conglomerate giant, but more like a partner in community eco-friendly development. This could give, in certain regions of the country, a better image for Pepsi and its multitude of food brands in terms of how the company gives back to and considers the needs of its buying segments. By now, you might be asking yourself: How did carbon dioxide, a natural element in the atmosphere, become considered to be a pollutant? Johnson (2009) clearly states that it is due to the fact that concentrations of this gas are increasing across the globe. When this occurs, heat becomes trapped in the atmosphere, thus warming the entire planet when heat cannot radiate back into space. What does all of this, again, mean to PepsiCo? With earth-friendly policies and marketing philosophies sprouting up from business to business (and brand strategy to brand strategy), PepsiCo maintains the ability to reposition any of its struggling food brands to link it to a more planetary focused food brand. Planetary? Yes, rather than using promotional materials to show only eco-friendly manufacturing efforts, the business can utilise a more consumer-connected-to-planet approach in which the Earth is represented as a figure in consumer lifestyles. Much like many competing food brands use an animated, personified hand to build brand image and consumer recognition, PepsiCo can utilise the planet (who can copyright the Earth?) as a brand logo which playfully bounces across consumer kitchen countertops to promote on-air advertisements of struggling food brands. Since the marketing funds are likely already allocated to more intensive marketing for products which are not meeting sales expectations, a simple redevelopment to include the planet Earth as a staple household character could revolutionise how consumers view PepsiCo and green product consistency. Al Gore, a rather famous candidate for the U.S. presidency and strong proponent for improving climate change through radical changes in business practices, suggests that American consumers are so concerned about the lives and activities of celebrities that they have lost their focus on the dangers of global warming (Marketing Week, 2008). Though this might seem to be somewhat hysterical to consider, there might be an element of truth in this statement based on the propensity of Westernised consumers to value the insights and beliefs of celebrity statements and on-air lifestyle activities. Since it is a rather well-known fact that celebrity endorsements, in marketing promotion, can bring true profit and value to a brand, this is an opportunity for PepsiCo to partner with different global celebrities to link them with Pepsi branded products. Having a celebrity endorsement which touts the laurels of PepsiCo’s changes to provide more energy-efficient, less-polluting facilities could change the scope or positioning of many of the company’s less-profitable food brands. The reason that less-profitable PepsiCo brands are being recommended for a shift toward eco-friendly products is because the costs of redesigning brands, which are already selling at or above expectations, would be a waste of corporate resources; obviously. When marketing budgets are increased in the process of selling a non-performing brand, a simple reallocation of these funds for more celebrity-oriented focus on green technologies could put PepsiCo into a category of marketing innovator. Even though other companies have surely done this before and this is likely no way to measure their previous financial or brand-building successes, PepsiCo can utilise humorous and creative methods to include celebrities in themed promotional projects which put global warming and its prevention on the forefront of the consumer consciousness. Haley (2002) also offers that global warming is so hotly debated in the media and among governmental policymakers that no useful conclusions are being reached about how best to deal with these issues. With PepsiCo’s new focus on reducing global warming, this could also be an opportunity for the company to partner with certain outspoken political figures, in the UK and abroad, to assist in non-profit efforts at building awareness. Essentially, PepsiCo could allow the company and its resources to act as a platform for further spreading the message about global warming and its social and economic impacts. Some might argue that this would not be ethical, however since policymakers were elected into office as representatives of people (the consumers), a business message for non-profit, non-compensated political spokespersons could again show that PepsiCo is greatly concerned about the issue and its impact on consumers and is even willing to motivate itself politically to show its ambitions. This could also send consumers the message that PepsiCo is becoming a corporate leader in positive risk-taking efforts to build positive public image, but is succeeding through innovation and creative partnerships in a multitude of different social areas. From the aspect of distributorship and retailing, companies like the giant retail conglomerate Wal-Mart are demanding more sustainable packaging from their supplier manufacturers of different brands (Hammerbeck, 2008). This somewhat represents a strangle-hold tactic with Wal-Mart using its brand power and buying power to coerce manufacturers to provide more eco-friendly packaging and global-warming prevention efforts in design of products. PepsiCo, as another corporate conglomerate with considerable resources, should not be caught in a situation where consumers perceive the company is being forced to take action by the expectations of another powerhouse business. To lose revenue from major global retailers such as Wal-Mart, for failing to provide sustainable products with an earth-focus in mind, is not in the best interest of PepsiCo. Therefore it is recommended that PepsiCo reinforce its commitment to these earth-friendly activities to prevent any problems with its current sales distribution strategies. If PepsiCo were to be coerced to change product packaging by major retailers in an effort to drive a better company image, the long-term brand damage in consumer loyalty could be substantial. PepsiCo needs to stay on the forefront of environmental initiatives and use this opportunity to create strategic marketing advantage for many of its food brands. A discussion of further recommendations The purpose of this report is to identify the multitude of opportunities at PepsiCo’s disposal for using global warming as a platform for brand-building and higher sales successes. PepsiCo surely cannot prevent global warming and a well-educated consumer would not put these high expectations onto the company as a means of determining their overall loyalty to the brand. PepsiCo creates some of the most innovative and flavour-varietied food products on the planet and consumers regularly buy these products because they perceive value in the PepsiCo branded product lines. With this in mind, PepsiCo cannot afford to lose this long-standing connection with its consumer segments and should act quickly to include promotional materials which include energy-related changes and other sustainable manufacturing activities related to the planet. It is a likely assessment that consumers are interested in how products are manufactured, therefore giving consumers a look into the PepsiCo manufacturing and process environment could further revolutionise how consumers view their connection to the company. A once ambiguous foods facility turned into an on-air tourism commercial, with in-plant process spotlights, could revitalise the entire PepsiCo product line by appealing to the consumer needs for belonging and to be treated as knowledgeable and educated segments. There is certain to be costs associated with any major business repositioning, however would the costs of redesigning existing product packaging to include more earth-oriented efforts be consumed by higher sales revenues and higher consumer loyalty to the company? If the business is able to make consumers believe that PepsiCo is a leader in reducing global warming, and they are already leaning toward making purchases based on eco-friendly attributes and philosophies, the sales result would likely fit into profitability expectations. Redesign of packaging might be as simple as producing a new set of labels which are already transfixed to the package upon assembly and process. What this all suggests is that there is not necessarily the need to radically-alter existing manufacturing capabilities, a multi-million dollar venture to say the least, but to change conceptual logo design and presentation to create a new consumer image of the company and its strong focus on responsibility and community commitment. Again, because PepsiCo maintains a multi-national presence in many different markets, with many different demographics and social values, PepsiCo can adjust existing promotional strategies to best fit within the research profile of what drives regional lifestyles and social expectations. Are people in one region being exposed to rising waters which is affecting agriculture? PepsiCo can reinforce its commitment to changing how energy is consumed. Why? As a new slogan for a struggling brand, to recede the tide of global warming. Such a new concept strategy could be effective in offering, to a small degree, hope for consumers in these markets. Has global warming caused more difficulty in oceanic supply chain for businesses? Again, struggling brands can reinforce how these situations have affected PepsiCo, and what the firm is doing about these problems, to give a new contemporary image of PepsiCo as an honest partner who is also, like the consumer, doing the best they can to curb a growing problem. A new slogan such as With X product, we’re in this together or something similar would be effective in raising awareness of PepsiCo and satisfying connection with consumers in the process. Conclusion Global warming is a problem which is not going to rectify itself overnight, therefore the likelihood of consumers moving toward products which have a strict focus on preventing global warming will likely gain more loyalty than ever before. PepsiCo’s different food brands have different levels of consumer recognition and consumer preference levels than others, however this is an opportunity for PepsiCo to strengthen the majority of its brands by either making them inclusive of eco-friendly policies or the innovators of it. Regardless of the specific strategy which might be considered and implemented by the Board, each of the recommended opportunities for repositioning, repackaging/relabeling, gaining the commitment of political or celebrity endorsements, or simply changing the scope or print or on-air promotions can provide a positive image of a progressive company which never stops considering all of the needs of consumers, both physiological and psychological. Consumers would likely enjoy having a corporate representative, who provides meaningful insights and is willing to expose internal manufacturing efforts, to help them find inspiration in doing their part to reduce carbon dioxide emissions across the globe. Based on unique social values and customs, PepsiCo can rely on its conglomerate of existing consumer research data to create a consumer profile for each market environment and determine which strategy is most effective in building a stronger brand profile and stronger company image for PepsiCo. The company always seems to find marketing success, however the recommendations can simply improve business focus in all things green and atmospheric-minded. Bibliography Annual Report. (2008) PepsiCo company – We are performance with purpose. http://www.pepsico.com/Investors/Annual-Reports/2008-Annual-Report.aspx (accessed 20 Apr 2009). Donagy, Kieran. (2007). Climate change and planning: Responding to the challenge. The Town Planning Review, Liverpool. 78(4), p.1-9. Hammerbeck, Pauline. (2008). Sustainability is taking root. Brand Packaging, Deerfield. 12(3), pp.6-12. Haugen, David M. (2007). Global warming is media-hyped hysteria. At Issue: Is Global Warming a Threat. 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