Marketing Strategy and Practice

This report discusses the marketing strategy and practice of Pepsi, including digital marketing and cause-related marketing. It also explores stakeholder consumption and anti-consumption of Pepsi.

Running Head: MARKETING AND MANAGEMENT 0
MARKETING STRATEGY
AND PRACTICE

MARKETING AND MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................2
About Pepsi................................................................................................................................2
Marketing Strategies..................................................................................................................3
Recommendations......................................................................................................................5
Stakeholder consumption of Pepsi.............................................................................................6
Anti-consumption visible to Pepsi.............................................................................................7
Conclusion................................................................................................................................10
References................................................................................................................................11

MARKETING AND MANAGEMENT 2
Introduction
This report is divided into two sections i.e. Part A and Part B. In Part A of the report,
Pepsi Incorporation marketing strategy is being identified in relation with digital marketing
strategies and cause-related marketing and then relevant recommendations are also being
suggested. In Part, B of the report, the stakeholder consumption of Pepsi is discussed
including consumer behaviour, competitors, and significant stakeholders in comparison with
coke.
The scope of this report is extended with identifying advanced and contemporary
marketing theory and practice in relation to Pepsi and investigate consumer consumption and
anti-consumption environments in association with significant marketing theories.
About Pepsi
Pepsi is a carbonated soft drink developed by PepsiCo; however, it was first presented
as “Brad Drink”. The original recipe also includes vanilla and sugar. PepsiCo is a
multinational corporation dealing with snacks and beverages. In extent with revenue, PepsiCo
net revenue globally amounted to about 64.66 billion U.S. dollars (statista.com, 2019). Other
than Pepsi, the company also had a broad range of subsidiaries in its portfolio including
Tropicana orange juice, Gatorade, Lipton Brisk tea, Quaker Chewy, SoBe and so on. Most of
the products of PepsiCo and its subsidiaries are regarded as compliments as if they are
consumed together.
In terms of positioning, Pepsi brand positioning has lastly always been as a energizing
cola beverage for the youth in relation to every social occasion (Ferreira, Hall & Bennett,
2008). On the other hand, Coke signifies moments of joy and happiness protecting nation and
sustain the status quo. Other than this, Pepsi builds values and embrace individuality. Those
who are loyal to Pepsi believes that an individual needs to live an exciting life rather than
happy one.

MARKETING AND MANAGEMENT 3
Marketing Strategies
Pepsi is being served in more than 200 countries and the convenience of accessibility,
low-price and satisfactory taste are some of its strong attributes that help the enterprise to
withstand in the competitive non-alcoholic beverages marketplace (foxnews.com, 2018). In
order to develop its footprint more effective in all the countries, the company needs to adopt
necessary strategies such as digital marketing and cause-related marketing. Digital marketing
strategies help the company to connect with thousands of users sitting on social media as well
as on relevant search engines such as Google, Bing and Yahoo (Erdemir, 2015). Other than
this, the company can also go for cause-related marketing which helps the brand to obtain
emotional positioning among consumers. The company have already gone for such plans
such as Pepsi Refresh Project in 2010 embracing new idea that has progressive influence on
the society, state or count. However, both the strategies are further explained below –
High Caffeine
Low Sweetness High Sweetness
Low Caffeine
PepsiCoca
Cola

MARKETING AND MANAGEMENT 4
Digital marketing strategy
It represents the other way to reach to consumers in an effective way. With the
connection of social media, mobile devices, internet and other channel, it offers a new
endeavour requires a new approach to reach to the customer. Digital marketing targets a
definite segment of the consumer base and promotes two-way communication between the
consumer and organisation (Dwivedi, Kapoor & Chen, 2015).
In the parlance of digital marketing, Pepsi needs to follow up various digital
marketing channels such as website marketing, pay-per-click advertising, content marketing,
email marketing, social media marketing, affiliate marketing, video marketing and SMS
messaging. These channels cost less to Pepsi in comparison with the traditional channels
including Television advertising, hoardings, sales marketing and so on.
However, digital marketing possesses special challenges for its purveyors, as the
practices and algorithms of digital channels changes rapidly that makes difficulty to capture
receiver attention as they are increasingly inundated with competing ads in relation to the
other brands including Pepsi (Webster & Lusch, 2013). The challenge of capturing and using
data efficiently shows that digital marketing needs a new methodology with unique
understanding of consumer behaviour. For example, Pepsi needs to understand new forms of
consumer behaviour such as tweets on Twitter and Facebook.
Cause related marketing
Pepsi is positioned to a specific target market including male and female having age
group of 16-45. They positioned themselves as an energetic product for the youth who are
forward thinkers.
Cause related marketing is growing in importance as businesses put their resources
and money in match with their core competencies with the objective to help philanthropic
ventures as well as the bottom line. Considering cause related marketing, any company can
make them differentiate with one another in an effective way. However, Baghi, Rubaltelli &
Tedeschi (2009) stated some negative aspects also in relation with cause related marketing.
He stated that an organisation could make the wrong decision also when developing a
partnership based around a cause. It is also sometimes difficult to check whether a corporate
philanthropy angle might be better or otherwise it may lead to big impact.

MARKETING AND MANAGEMENT 5
For instance, the Pepsi refresh program was initiated by the company in 2010;
however, due to decline in market share and falling to third place, the project was closed in
2012. This project of Pepsi was also criticized for following a coalition of progressive,
nonprofit enterprise and there were various accusations were placed on the company for
violating its own term.
Recommendations
It is important for Pepsi to scan opportunities and threats in the changing course of
business environment such as increase in technology, e-commerce platforms and various
other variables. (Nair & Boulton, 2008).
In response with digital marketing strategies, Pepsi needs to prioritize customer
requirements over bells and whistles as this will help them in building their web presence
more effectively while developing new products and services. Moreover, the company needs
to audit and update their SEO more frequently and it will help them to reach out the exact
people they want to offer their products. To attain this, the company needs to match exact
algorithms as per the search engine. For instance, Google updates its search engine
algorithms more than 500 times a year (Killoran, 2013). This will help Pepsi to make its
brand more searchable and discoverable on various search engine. Other than this, the
company needs to change it social media marketing strategy, as it is a great practice for
consumer engagement. For instance, the company may run promotional campaign on their
all-social accounts including Facebook, Twitter and Instagram. Like at present, Pepsi has
more than 37 million followers on Facebook and so considering social media marketing
strategy, running an effective promotional campaign may prove to be quite effective for the
company. Other than this, the company can also gain necessary feedback from social media
sites under social media strategy in extent with change of packaging, flavors and other things.
In response with cause related marketing strategy, the company is required to provide
adequate balance to both profit and nonprofit activities and they need to market this thing to
the consumer more keenly as change in negative customer perception may negatively
influence the enterprise operations (Lin et al, 2011). Other than this, Pepsi is required to
match each aspect of their plans proactively and match it with the changing business scenario
to get out best out of it. The company also required to promote differences in their CSR
activities as well as CRM.

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Stakeholder consumption of Pepsi
One of the key stakeholders of PepsiCo is customers who are consuming the product
and their consumption pattern, preference, and purchase decision to decide the key success
factor for PepsiCo. The soft drink industry has a high opportunity in the market, as customers
consuming PepsiCo are generally addicted due to caffeine as one of the major ingredients to
the drink (D’mello, 2016). However, the competition is high that makes the price as the key
factor for the customers for a purchase decision. The consumption pattern generally depends
on the nation where the company is offering goods. PepsiCo is the globalized company, thus
the patterns are quite different. Considering the Asian region, the consumption of the soft
drink is generally regular in nature, like with fast food, and sue to high temperature nations
the consumption level of these drinks generally increases(GreenBiz, 2019).
The supplier relations are strong for PepsiCo as the company is into sustainable
sourcing for which the company has considered various initiatives and taken various actions
(pepsico, 2019). The company is liable to hold its suppliers and maintain relationships with
the same integrity as they consider themselves. Moreover, the due care is taken regarding this
aspect; the reason being any misconduct by the suppliers could influence its global reputation
of the PepsiCo brand (pepsisupplychain, 2019).
Various close competitors are generally interchangeable due to similar in taste and
formula of manufacturing; one such competitor is coca cola. Other competitors of PepsiCo
across the globe are Red bull, Dabur real juice, Mondelez International, and Dr Pepper.
Other stakeholders
The Company consider the employee to be a major stakeholder for long-term growth of
the company. This group of stakeholder is interested in company operations and their career
development. The company considers talent sustainability as the key goal or policy to address
these stakeholders. Other than this, Investors are the key stakeholders providing finance to
the company through the cost of capital and availability of significant finance. This group is
very much interested in PepsiCo operations and the company considers this group’s interest
through various CSR activities. In addition, government is also one of the stakeholder where
the legal rules and allowances depend on the government of the nation in which the company
is investing, making these as an important stakeholder to exist in any nation. Communities
are the next second priority group and stakeholder for the company as these may influence

MARKETING AND MANAGEMENT 7
customers perspectives and employees perspective of the company, they also provide
financial assistance to the company (GreenBiz, 2019).
The key positive aspects of PepsiCo, when compared to Coca cola, could be the
current sales and share of both the companies. From news in Forbes in July 2018, the article
says that PepsiCo is beating coca cola and have been able to gain a share of 2.95 per cent for
previous two years as compared to that of coca cola that is -1.45 per cent. Therefore, it can be
said that in terms of financial consideration PepsiCo is leading Coke (Forbes, 2019).
However, considering the negative aspect, the PepsiCo is considered to be higher
sweetener than that of Coca cola. Coca Cola keeps the sweet level at low and maintains with
other ingredients that make a better taste for various customers. Moreover, Coca cola has
various varieties of top soft drinks including a range of zero sugar products (FOXBusiness,
2019).
Anti-consumption visible to Pepsi
Pepsi is the soft drink industries are in threat due to changing social trends like increase in
obesity and understand the key disadvantages and side effect of soda drinks. The key side
effects that have been observed that cause to anti consumption like various relevant research
studies investigated that the phosphates in the drink of PepsiCo may be responsible for
increasing the ageing process in an individual. The experiment on rat’s study that they died in
five weeks that is quite earlier for the expectancy life rate of a rat. The phosphoric acid as per
the study is found to be the key ingredient responsible for kidney damage, muscle loss,
osteoporosis, and heart problems (Sunyecz, 2008).
In addition, the sweeteners in the drink and soda are the major cause of the increase in
weight for the people. The obesity rates of western nations are increasing at a rapid pace,
which may be due to a high consumption level of soda drinks.
With regards to this, the caramel colouring in soda drinks by Pepsi grounds cancer in
creatures. Statistically, it remained inquired for the prohibition of these drinks, the reason
being it comprises 2 and 4- methylimidazoles. Key records that only 15 micrograms each day
could be responsible for cancer threat. Nevertheless, maximum of the common Pepsi requires
199 micrograms for every 20 ounces (fitness, 2019).

MARKETING AND MANAGEMENT 8
As per the new article in 2018 states that there have been various stakeholders like
State and local government, Health advocates, and Communities that have been responsible
for the ant consumption of soda drinks like PepsiCo and Coca cola through financial barriers
that are the heavy leverage of the taxes on sweetener and soda drinks. Moreover, they believe
that commercialization must be limited to restrict the increasing level of such drinks
(business today, 2019).
As per the report, the voters in Oregon and Washington had inundated with the
promotional activities and advertisements. Such advocacy organization is other stakeholders
who are fighting for the efforts related to anti-obesity and are influencing their government of
state and region to restrict such companies. Moreover, the health advocates had influenced
the government to increase the taxes for the sugar pack beverages in order to increase the cost
to the customer and decrease in consumption by the customers. They stated the Americas to
be obese on an average of forty per cent, which is quite high and the major reason stated was
sugar packed drinks like Pepsi Co (CNBC, 2019).
Strategy to overcome stakeholder anti consumption
The initiatives that PepsiCo can take to overcome these issues or anti consumption act
are producing low caloric drink than the current one. This may include implementing
innovation through process and procurement of ingredients and could go for new product
development like lemonades for attracting the health conscious customers and abide by the
rules and laws regulated by the government in the nation. Moreover, the company could also
introduce with other range of soda drinks like no sugar Pepsi in order to decrease the cause of
weight gain in the public. Moreover, the key causing ingredient was phosphoric acid; for
which the company must search for alternative formula or ingredient to avoid the key caused
due to this acid.
Another key initiative would be mini can packaging so as to reduce the per servings
of the drinks to avoid the large quantity of drink by the customers. This initiative would also
be attractive for the individuals who would like to have these drinks but with limited quantity
as the large quantity packaging is generally been used immediately due to a decrease of soda
content once the bottle is open. This would not only be helpful to people health but would

MARKETING AND MANAGEMENT 9
also encourage the sale of the company due to attractive packaging by solo travellers (Adam
& Kotler, 2014)

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Conclusion
The key highlighting aspects discussed in the report regarding PepsiCo one of the
packed drink globalized company includes Digital marketing strategies help the company to
connect with thousands of users sitting on social media as well as on relevant search engines
such as Google, Bing and Yahoo. Nevertheless, Cause-related marketing helps the brand to
obtain emotional positioning among consumers. In terms of positioning, Pepsi brand
positioning has finally always been as a refreshing cola drink for the youth in relation to
every social occasion. One of the key stakeholders of PepsiCo is customers who are
consuming the product and their consumption pattern, preference, and purchase decision to
decide the key success factor for PepsiCo. PepsiCo is the globalized company, thus the
patterns are quite different. The competition is high that makes the price as the key factor for
the customers for a purchase decision. One such competitor is coca cola. Other competitors of
PepsiCo across the globe are Red bull, Dabur real juice, Mondelez International, and Dr
Pepper. These were the key strengths and opportunities for PepsiCo.
However, the key weakness and threats for the company include key side effects that
have been observed that cause to anti consumption include Pepsi can gain weight, Pepsi
fastens ageing, Pepsi can cause cancer. various stakeholders like State and local government,
Health advocates, and Communities that have been responsible for the ant consumption of
soda drinks like PepsiCo and Coca-cola through financial barriers that are the heavy leverage
of the taxes on sweetener and soda drinks.

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