Global Marketing - The Global Economic Environment - Essay Example

Marketing

Introduction

The 21st century is experiencing a culinary revolution of globalization and revolution all over the world. Local markets are no longer enough for the sale of products. Global competitiveness has made it hard for a business to remain in the market with an only concentration on the local market. It is, therefore, the aim of every business to ensure that their product has found a platform in the global market for it to retain its competitive advantages. The market for food and beverages has been revolutionized as a result of the homogenization of taste profiles. Same foods are being eaten in most of the world (Hollensen, 2015). This homogenization of taste profiles and the rising of cultural acceptance has created a large market opportunity for one of the major suppliers of food and beverages from the United States, PepsiCo.

Product Description

The product in this case is foods and beverages from PepsiCo. The utility marketing model consists of four utilities. The model takes into consideration the convenience of the customers in purchasing the product, the availability of the product to the consumer at any time as well as how the consumer feel about the product (Voss & Voss, 2013). The four utilities include time, place, possession, and form.

Time

For Pepsi products, they are available on the store shelves whenever the consumers want them. The product adheres to time utility. Every time consumer arrives at a retail shop to order foods and beverages from Pepsi; they find them readily available. Though the demand for many products varies depending on seasons, personal tastes and preferences, weather and incomes, the demand for beverages and foods remain the same all throughout the year, for any time can be drinking time for customers.

Place

This is the value placed by customers on the location they buy their products. The place must be convenient and not very far from the place of work or the home of the consumers. The foods and beverages from PepsiCo have adhered to the place utility since they are located near retail shops and not in the factory or the warehouse.

Possession

Possession utility is the value put by consumers on the product and the freedom they have to use that product. The products from Pepsi are meant to be drunk. However, if the consumers find the drinks a good medicine for the skin of their children, they can go ahead and do it. Once the consumer has paid for the product, it is to them to decide how they want to use the product.

Form

Form utility is the values that are seen by the consumers on the final product. The products from Pepsi are finished products that the consumer cannot receive in portions. They can only put a value on the final bottle of beverage that they purchase.

Target Market

The target market at the USA and East Africa is the youth and the children. For the last few years, the food and beverage industry has considered youths and children as a major market force. They are now the target for the immense and customized food and beverage advertising and pro option efforts. PepsiCo in both USA and East Africa is interested in the adolescents as the main target market. This is as a result of the youths’ purchasing influence, spending power, and as the potential future adult customers. PepsiCo will, therefore, use various channels and techniques to reach the youths in East Africa, starting from the time they are small to foster the building of the brand and to influence the purchase behavior for the Pepsi foods and beverages (Mobin, & Dehg, 2014).

Competition

The food and beverage industry have grown rapidly due to the changing lifestyles and the rising demands of fast foods. PepsiCo makes 25% of the food and beverage market in its home market. It receives high competition from companies such as McDonald, Coca-Cola, Hardees and Burger King. The tough competition is usually a chance for the company to better its products and services in the aim of maintaining its market share and the competitive advantages. The competition at East Africa for foods and beverages is not high. Foods and beverages have not gained market in the foreign market countries because of their dependent on indigenous food.

Segmentation, Targeting and Positioning (STP)

After identifying the target market and competition that could face the product, it is important to stimulate demand in the new foreign market, increase the profits and sales as well as enhance the brand image of the product (Wedel, & Kamakura, 2012). For the food and beverages, we shall first introduce a volume purchase plan with the distributing agents and give price allowances for those who but on a full container basis. Quantity discounts will also be given to those who reach a minimum sales quota for a certain period. Segmentation will involve identification of the main characteristics of every segment of the market (Wedel, & Kamakura, 2012). Since our main target is the children and the youth ¸the market shall be segmented regarding age brackets. Targeting will then involve evaluating the potential attractiveness of every segment. We shall target the youths as the main market in the East Africa Market. Since one of the main values of the PepsiCo Company is to balance the short term and the long term benefits, the youths will make a good market currently as well as in the future as adults. Installing the purchasing behavior of Pepsi drinks while still young, will make the influence remain in the minds of the youths even into their age. Having developed a detailed product positioning for every segment, the company will position its product as a brand in a way that will attract the youths. It will offer discounts and benefits to customers who buy in bulk.

Environmental Facts

Before exporting products from the United States, suppliers ought to understand the different commercial environments in which they are selling their products. It is important to have a thorough knowledge of the various legal, cultural, political, and economic environments for the success of the product in the new market. The international consumer of the product should be well understood and how they decide to buy the product. A thorough understanding of the environment is important so that you can plan for the labeling, packaging and ingredients requirements for the product to sell in the new foreign market. Economically, East Africa is not currently doing well as a developing country. The political environment in the foreign region has not been stable which could largely affect the operations of the business (Green, & Keegan, 2011).

Campaign and marketing plan

The marketing mix for PepsiCo has been evolving with time as a result of acquisitions and mergers effects. The company, in the foreign market, will employ the 4Ps to implement its marketing plan.

Product

This element of the marketing mix represents the outputs of the company that is made available. The products that will be provided in the new market will include energy drinks, soft drinks, rice snacks, cereal, side dishes, snacks, sports nutrition, among others.

Place

This element also is known as distribution. It involves the way the product will reach the customer. PepsiCo will use a global network to distribute the products to the East Africa region.

Promotion

Since the foreign market is a new market, the company must promote its product to attract new customers. Different methods of promotions will be used which include sales promotion, direct marketing, advertising, and public relations.

Price

Price is a major determinant of the sales of a product. Since the company offers many products, the prices are varied. The company uses two different methods to analyze its prices. These include, the hybrid everyday value and the market oriented.

Ethical marketing considerations

Food is a very sensitive product in the market since it is consumed for Sustainability. The company will have to consider ethical consideration such as healthy concerns to degradation of the environment, cultural sensitivity, and safety of food. Though PepsiCo has become one of the major leaders in the social and sustainability movement, it has not been considered truly sustainable (Green, & Keegan, 2011). It, therefore, has to consider the cultural background of the foreign market before introducing its products. East Africa is known for its rich cultural endowment and hence, must be well understood by any company that seeks to expands into the PepsiCo recognizes the importance of sustainability and social responsibility. The company has an emphasis on its commitment to sustainability and social responsibility (Green, & Keegan, 2011). It gives back to every community in which it is involved in.

In the new foreign market, PepsiCo will give back to the community in East Africa and still seek to uphold its standards of food and beverages and producing outcomes that are attainable. The company will only provide food and beverage of which it can be proud. It will have a high commitment to the consumer needs for the convenient foods and beverages. There are also some food and beverage rules and laws that are allowed in the USA but are not allowed in Eat Africa such as food additives. The company will have to evaluate the laws of East Africa for them to know the types of ingredient they can put in their products without interfering with restrictions in the foreign market.

Conclusion

The introduction of a new product into a new market requires having a market strategy. The success of the product into the new market is determined by the strategy used by the company. The foreign market identified above for PepsiCo foods and beverages is East Africa. The target market in this particular region is the children and the youth. The above methods of segmentation, positioning and targeting and promotion methods identified above will enhance the acceptance of the brand by the people of East Africa. The company will ensure that PepsiCo products do not interfere with the cultural and legal laws of the foreign market. The likelihood of the product to succeed in the foreign market is high, given the describe introduction of the product into the market and level of competition is also low.