PepsiCo Marketing Mix

The paper includes an analysis of the marketing mix, segmentation, commoditization, competitive advantage, and differentiation. The marketing mix is a combination of 4Ps namely: product, price, place, and promotion. The company also sets reasonable prices that fetch high profits in the market. Moreover, promotion refers to the marketing strategies used by a company. Market segmentation involves dividing customers into different categories. Indeed, PepsiCo has grouped its consumers based on their behaviour (personality and loyalty), demography (age, gender, income, and occupation) psychographics (lifestyle and social class), and geographic location. The competitive advantages of a company are aspects that increase its bargaining power against its rivals. A SWOT analysis is a productive method of establishing the competitive advantage. Eventually, product differentiation makes a brand distinguishable from similar products in the market while commoditization refers to the difficulty in distinguishing the products of one company from another due to the lack of uniqueness.

Marketing Mix

Marketing Mix involves setting the right price for a commodity, as well as availing it at the right time and place. Indeed, the 4Ps are a product, price, place, and promotion. The product must address the needs of the consumers (Isoraite, 2016, p. 2). Furthermore, most companies think that having the lowest prices in the market will eventually lead to high sales and profits. However, consumers affiliate extremely low process with poor quality, which is a negative brand image. Companies should draw the line between greed and timidity in pricing (Ehmke, Fulton, and Lusk, p.2). The place determines the nature of the relationship with the customer. A business owner with a small retail store has a close relationship with the customer since he/ she is at the end of the supply chain (Ehmke et al., p.3).

Promotion refers to a company’s marketing strategies.  They include the traditional media, new media, traditional sales and marketing, public relations, events, etc. the conventional media includes TV, radio, print, and promotional literature (cards and brochures) (Nager, 2014, p. 2). New media includes social networks, videos, banners, search engine marketing, and e-mail marketing (Edelman, 2010, p. 7).

PepsiCo has a wide range of products such as cereal, soft drinks, breakfast bars, energy drinks, bottled water, etc. PepsiCo’s marketing mix is a combination of strategies and policies that make the company successful. The promotional mix includes all the communication tactics and strategies used by the organisation to reach its clients. They are public relations, direct marketing, sales promotion, and advertising. PepsiCo regularly uses celebrities such as Kendall Jenner to advertise its products on radio, TV, online media, and print media. The organisation’s pricing strategy varies due to the diversity of the products, i.e., the company has a high number of product brands and lines. PepsiCo’s primary pricing strategies are hybrid everyday value pricing and market-oriented pricing. The plan ensures that the organisation’s prices are competitive according to the present market conditions and the company’s overall prices (Young, 2017).

Differentiation

Differentiation entails making a brand distinguishable from others in the market. Human beings are wired to remember things that are different since the brain acts as a filter that protects people from acquiring excessive information (Neumeier, n.d., p. 43). The Nike logo makes its products easily spotted from other shoes in a store (Nagger, 2013, p. 3). Today, marketing is about creating an identity. Companies want to develop products that customers want to identify with and create a “tribe.” For example, people associate computing with Dell and driving with Volkswagen. Companies that lose focus on their goals because of bad brand extensions, which favour short-term profits and risk the long-term reputation (Neumeier, n.d., p. 58).

PepsiCo primarily differentiates its products from others in the market by its name. The organisation also uses the brand extension strategy since it reduces the marketing budget for the new product and reaches a large target audience. The classic drink for the company is Pepsi. After some time, the organisation produced a new drink with a lower sugar content than the initial one and used the same brand name, i.e., Pepsi. The new drink received positive reviews from clients since it was associated with an already popular brand (Feng, 2014, p. 5).

Competitive Advantage

The competitive advantage of a firm is determined by the leadership, incentives, as well as the organisational culture, design, and systems. The SWOT analysis of a company brings out its strengths, which constitute the competitive advantages. PepsiCo has several advantages that put it ahead of its competitors. The organization has a high exposure to emerging, fast-growing markets such as India. Furthermore, PepsiCo has a wide range of products that cater to different needs. The company produces several healthy snacks and beverages. PepsiCo spends a lot of money on research to enhance the sustainability of its supply chains and to introduce healthier foods into the market. PepsiCo’s shares have high values in the company’s areas of operation. These include Argentina, Chile, Mexico, Turkey, South Africa, etc.  The organization has strong marketing capabilities compared to its competitors. In 2017, PepsiCo spent more than $4 billion on marketing and $2.4 billion of this amount was used in advertising (Pratap, 2018). The company’s “Bring Home Happiness” campaign in China was highly successful as the twenty-minute video had more than one billion views; other campaigns on digital channels were also favorite among customers. The use of celebrities in the company’s marketing makes PepsiCo attractive to the younger generation who are the primary consumers of soft drinks.

Segmentation

There are a plethora of types of customers, with different buying patterns. A thorough analysis of a market is necessary to determine the consumer behaviour. The form of marketing to be used by a company depends on the users of the services/ product being advertised. Survey results and statistical analyses are used to determine consumer behaviour. Indeed, to develop a new product, a company should investigate the strategies used by an organisation that produces similar goods/ services and fill in the gaps. The firm should also study the customers’ finances, preferences, and purchases (Yankelovich and Meer, n.d., p.4). PepsiCo divides its customers into specific groups based on particular characteristics. For example, Pepsi Cola tastes good but is not suitable for customers with health issues due to its high sugar content. Furthermore, PepsiCo divides its customers according to their behaviour (personality and loyalty), demography (age, gender, income, and occupation) psychographics (lifestyle and social class), and geographic location (Dudovskiy, 2016).

Commoditisation

Commoditization refers to the difficulty in distinguishing the products of one company from another due to the lack of uniqueness. PepsiCo has used several strategies to prevent the commoditization of its products. For instance, the company has increased the number of products connected to health and wellness, e.g., the introduction of low sugar drinks and healthy snacks. PepsiCo also includes sustainable development in its programs to gain favour among the environmentalist consumers (Nooyi and Johnston, 2014, p.4).

References

Daniel, Y. and David, M., n.d. Rediscovering Market, s.l.: s.n.

Dudovskiy, J., 2016. PepsiCo Segmentation, Targeting and Positioning. [Online]

Available at: https://research-methodology.net/pepsico-segmentation-targeting-and-positioning-2/

Edelman, D. C., 2010. Branding in the Digital Age, s.l.: s.n.

Ehmke, C., Fulton, J. and Lusk, J., n.d. Marketing’s Four P’s: First Steps for Enterpreneurs, s.l.: s.n.

Feng, N., 2014. Building a Strong Brand and Managing Brand, s.l.: s.n.

Indra, N. and Hugh, J., 2014. PepsiCo: Sustainable Value Creation, s.l.: s.n.

Isoraite, M., 2016. Marketing Mix Theoretical Aspects. 4(6), pp. 25-37.

Nager, F. J., 2014. A Brief Introduction to Promotional Media, s.l.: s.n.

Nagger, F. J., 2013. Branding: An Introduction, s.l.: s.n.

Neumeier, M., n.d. The Brand Gap, s.l.: s.n.

Pratap, A., 2018. Pepsi Strategic Analysis. [Online] Available at: https://www.cheshnotes.com/pepsi-strategic-analysis/

Young, J., 2017. PepsiCo’s Marketing Mix (4Ps) Analysis. [Online] Available at: http://panmore.com/pepsico-marketing-mix-4ps-analysis