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Analysis of key marketing themes for Pepsi-Cola

Seminar Paper 2014 19 Pages

Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media

Excerpt

Table of Contents

Executive Summary

List of figures and tables

1 Introduction
1.1 Problem definition
1.2 Aim of the Assignment
1.3 Scope of Work

2 Analysis of Marketing-Mix
2.1 Definition of Marketing-Mix
2.2 Product
2.3 Price
2.4 Promotion
2.5 Place

3 Application of Marketing-Mix
3.1 Promotion of Pepsi-Cola
3.2 Evolving the product

4 Conclusion

References

ITM Checklist

List of figures and tables

Figure 1: (assumed) Product-Life-Cycle of Pepsi-Cola in Germany

Figure 2: Four answers to successful branding

1 Introduction

1.1 Problem definition

The first assignment showed, how much a market position of a product depends on customers’ needs. Consumers want a product, which is well known and of high quality. But potential consumers do not experience the quality of a product totally on their own. Most of the main products, like Coca-Cola, River-Cola and Pepsi-Cola are present through retailers of all kinds, commercials and sponsorship activities. People are motivated to buy a cola by external factors. Although health and envi- ronmental topics occur repeatedly, German consumers keep the numbers of sales on a constant level. PepsiCo will have to launch a long-term strategy for Pepsi- Cola, in order to at least maintain the market position in Germany. Therefore, the brand image has to be increased, because in the beverage field people are more trustful to high value products.

1.2 Aim of the Assignment

In the second assignment, a strategy for the product Pepsi-Cola on the German market is set. The aim of this paper is to outline the performance of Pepsi-Cola in the marketing-mix. According to Kotler’s four factors, product, price, promotion and place, the activities of PepsiCo are analyzed. Other analysis tools have been excluded, because of the limited size of the assignment. The next step is to find approaches for improvements that support Pepsi-Cola’s situation on the market based on the model of Pepsi-Colas product-life-cycle. Similar to the market definition and analysis the customer’s needs play a strong role for future developments. Therefore, approaches of strategic branding are used. The goal is to lay the groundwork for a strategic planning aiming to influence the German perspective on Pepsi-Cola, which possibly leads to a positive buying decision.

1.3 Scope of Work

The structure of the paper contains the introduction into marketing-mix by applying Kotler’s four P’s on the German market. First, the role of Pepsi-Cola in Germany is defined by outlining the portfolio of PepsiCo and the key factors of its performance. As a result the product-life-cycle leads to further analysis in detail. Second, two factors are chosen from the marketing-mix in order to develop a strategy, how Pepsi-Cola’s situation in Germany can be improved. The consumer is always part of the analysis, too. Last, an obligatory conclusion and outlook complete the marketing analysis of the product Pepsi-Cola in Germany.

2 Analysis of Marketing-Mix

2.1 Definition of Marketing-Mix

The mix of marketing methods is a tool to either place a new product on the market or evolve a current product. In order to achieve the strategic goal of a company the combination of four major elements is useful.1 First, information and related data about the costumer’s needs for a certain product is necessary, but hard to get.2 The next step contains the (re-) development of a product with a first idea of its market price. At about the same time, a company has to communicate directly with the potential costumer. Finally, the product is distributed and therefore available for the consumer.3 Applying tools from the marketing mix aims to influence the demand for products.4

2.2 Product

PepsiCo’s portfolio is very diversified all around the world. Despite its food seg-ment, the company focuses on non-alcoholic beverages.5 PepsiCo sells several products either a well-known brand like Gatorade or named after Pepsi (e.g. Pepsi- Cola). The portfolio consists of cola-drinks (e.g. Pepsi-Cola), juices (e.g. Tropi- cana), sports-drink (e.g. Gatorade), and other soft drinks (e.g. Mountain Dew, Mirinda).

In Germany, PepsiCo offers variations of classic Pepsi-Cola, namely Pepsi-Light (low calories), Pepsi-Max (no sugar), and Pepsi-Twist (lemon-flavored).6 In terms of quantity, PepsiCo’s cola products are third most liked in Germany in 2013.7 Con- cerning quality, Pepsi-Cola is positioned as a very tasteful product, which repeated- ly has been proven in blind-tastings.8 Additionally, Pepsi-Cola’s brand value turns out be the second best classic cola, although Coca-Cola is valuated almost seven times higher.9

In comparison, the corporate design of Pepsi-Cola has been evolved more often since its first use. PepsiCo appeared on the world market in the 1950s, when Coca- Cola had already been known globally.10 Pepsi-Cola is sold in plastic bottles with deposit in nearly every German super market. Overall, the product can be considered as niche-product on the German market.

2.3 Price

The price of the product is very important not only for the producer but also for the consumer and the relationship between each other. From the producer’s point of view, the price determines, how much profit he might get out of product sales. The consumer is directly influenced by the price, because his decision to buy a product is a result of his evaluation of his personal cost-benefit-balance.11

Neither Coca-Cola Co nor PepsiCo sell their products directly to the consumer.12 Therefore, a pricing strategy is part of consultations between producer and retailer. But in the end, every retailer decides about the price himself.13 Consequently, Pep- siCo’s has to find a consensus between its goal of pricing and the discount strategy of the retailer, before they agree on a partnership.14 Due to the fact that the Ger- man beverage market is very tough to handle for PepsiCo a comparative behavior seems to be necessary.15

In the 1930s, Pepsi-Cola tried to influence the demand for cola in the United States. The company sold larger bottles at the same price Coca-Cola offered their stand- ard-sized bottles.16 During the Great Depression, this strategy proved to be suc- cessful, but it also led to an image of “cola for the poor”.17 In Germany, the price for Pepsi-Cola compared to Coca-Cola varies depending on the retailer and their dis- tribution region.18 But also the competition between cola-producers affects the pric- ing of retailers. In total, there is no obvious hint proving a skimming or penetration strategy. Nevertheless, PepsiCo is more likely penetrating the German market by a lower pricing, which is followed by discount markets like Lidl.19

[...]


1 Cf. McDonald (2008). P. 307.

2 Ibid., p. 8 and Pepels (2000), p. 369 and Cateora, Gilly, Graham (2009), p. 316.

3 Cf. McDonald (2008). p. 9.

4 Cf. Kotler, Armstrong, Saunders, and Wong (2003), p. 191.

5 Cf. PepsiCo (2014a), p. 10.

6 Cf. PepsiCo GER (2014).

7 Cf. BWC-statista (2014a).

8 Cf. PepsiCo CAN (2012).

9 Cf. BWC-statista (2014b).

10 Cf. Schmeh (2003).

11 Cf. Kotler, Armstrong, Saunders, and Wong (2003), p. 192.

12 Cf. PepsiCo (2014b).

13 Cf. Der Handel (2013).

14 Cf. McDonald (2008). P. 307.

15 Cf. Harris (1997), p. 50.

16 Cf. Schmeh (2003), p. 4.

17 Ibid.

18 Cf. Der Handel (2013).

19 Cf. Ryan (2008), p. 35.

Details

Pages
19
Year
2014
ISBN (eBook)
9783656728733
ISBN (Book)
9783656728702
File size
536 KB
Language
English
Catalog Number
v279086
Institution / College
University of Applied Sciences Essen
Grade
1,3
Tags
marketing mix branding product-life-cycle four Ps by Kotler

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Title: Analysis of key marketing themes for Pepsi-Cola