PEPSICO'S MARKETING STRATEGY IN NIGERIA

The study of discounts and freebies as a promotional choice is an important aspect of product category management. The comparison between these two approaches shows that both have their strengths and weaknesses. Discounts can be an effective way to drive sales, but they may also lead to cannibalization of future sales. Freebies, on the other hand, can create positive word-of-mouth and increase brand loyalty, but they may not provide immediate financial returns. The study suggests that a combination of both approaches may be the most effective promotional strategy.

MANAGING MARKETING

Table of Contents
INTRODUCTION ..........................................................................................................................1
1. BACKGROUND OF THE COMPANY ....................................................................................1
2. INDUSTRY OVERVIEW ..........................................................................................................2
3. CONTEXT ANALYSIS .............................................................................................................3
3.1 PESTEL analysis of Nigeria market ....................................................................................3
3.2 SWOT analysis of PepsiCo...................................................................................................4
3.3 Constructing marketing mix for Pepsi pomegranate.............................................................5
3.4 Competitor analysis ..............................................................................................................6
3.5 Stakeholder analysis .............................................................................................................7
4. PROMOTIONAL OBJECTIVE .................................................................................................8
4.1 Objectives .............................................................................................................................8
4.2 Target market and segmentation ..........................................................................................8
5. MARKETING STRATEGY .......................................................................................................8
6. RECOMMENDATION ..............................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10
APPENDIX ...................................................................................................................................12
Appendix 1: PESTEL analysis of Pepsi Co. ............................................................................12

Illustration Index
Illustration 1: PESTEL analysis.......................................................................................................4
Illustration 2: Marketing mix...........................................................................................................6
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INTRODUCTION
Marketing management is basically managing all marketing activities which are being
carried out by enterprises. Firm is required to manage its marketing activity in an appropriate
manner (Arora and Stoner, 2009). If the activity is not managed then in the given condition it
will became difficult for enterprises to attract buyers towards the company in an effective
manner. For the present report, PepsiCo is selected which is a famous food and beverage
company. This report will provide detail explanation regarding the ways with the help of which
marketing plan for newly developed product of Pepsi can be prepared.
1. BACKGROUND OF THE COMPANY
PepsiCo is the American multinational food and beverage company and it is
headquartered in New York, United States. The organization was founded by Donald Kendall
and Herman Lay in the year 1898. In addition to this, it is the public limited company that has
team of around 271000 employees. The firm offers range of goods and services under its own
brand name. In this context, it has been assessed that the product which are offered by PepsiCo
possesses 63 percent food and 37 percent beverages.
Further the PepsiCo has the mission to become world's famous consumer product
company which carries out the production of convenient foods and beverages. Banerjee, 2009).
The corporate has the vision to pursue sustainable growth by investing in healthier future. The
list of product which is being offered by PepsiCo consists of Pepsi, Mountain dew, Lay's,
Tropicana, 7 Up, Doritos, Lipton Tea, Miranda, Cheetos, Aquafina, Tostitos, Fritos, Sierra Mist
and Walkers etc. (PepsiCo, 2015). These all brands of PepsiCo have established their unique or
distinct image in the respective market. Thus, it can be stated that, these all given products have
played very crucial role in the success of the cited firm.
For the present report, new product for PepsiCo is developed named Pepsi pomegranate.
This product will be launched in Nigeria. Further, the good can be considered as one more
addition to the existing product line of cited corporation. The drink will be of light pink colour
and it will be produced by using organic ingredients.
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2. INDUSTRY OVERVIEW
The soft drink industry in Nigeria is booming because of growing population and hot
climatic condition of the country (Soft drinks in Nigeria, 2015). Rapid urbanization is seen in the
given nation. This can be considered as fruitful aspect for companies who are planning to enter
in the given market with new and unique soft drink. In addition to this, growing young
population in the country will also be considered as another beneficial aspect for soft drink
industry. With increase in population of country demand of soft drinks will also be increased as
it is popular among young buyers.
In addition to this, significant boom is being seen in the given industry. It is because of
the increase demand of soft drink among Nigerian buyers. . Furthermore, it has also being
analysed that Nigeria buyers are also demanding for ready to drink cold water which can be
consumed by them while walking and travelling (Cook, 2007). However, lack of access to the
safe drinking water is raising the demand of boiled water. Thus, on conducting industry analysis
it can be said that it is beneficial for PepsiCo to launch its new product in the respective market.
The given market possesses huge opportunity for the cited company.
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3. CONTEXT ANALYSIS
3.1 PESTEL analysis of Nigeria market
The PESTEL analysis of Nigeria market with respect to new product of PepsiCo named
Pepsi pomegranate is depicted in below: Political: At present, All Progressive Congress (APC) of Nigeria is ruling the country. ,
The given party favours the regulated and controlled market economy (PESTEL analysis
of Nigeria, 2015). The party also give importance to improving infrastructure and
technological condition of nation. This can be considered as a beneficial aspect for
PepsiCo. In the given political environment it will become easier for cited enterprise to
start operation of new product in particular market in an effective way.
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Illustration 1: PESTEL analysis
(Source: PESTEL analysis, 2015)

 Economical: With respect to GDP (Gross domestic product), Nigeria will be considered
as a fastest growing economy in the world. Thus, by operating in the given market,
PepsiCo can gain benefit in the form of increased profits and sales within the given
specified time period (Laplume, Sonpar and Litz, 2008). Social: Nigeria is a growing economy and the economists have stated that it will be soon
counted among 5th most populous country in world till the year 2050. Furthermore, the
majority of population who resides in country are generally youth. Thus, by targeting the
given population of country PepsiCo can achieve success in the Nigeria market. Technological: Being in the position of growing economy, the nation is making
significant efforts in improving technological environment. In this regard, the
government plays crucial role. By taking assistance from latest technology, nation can
attract wide number of private enterprises and thereby it can improve its economic
condition in an effective manner (Kotler and Armstrong, 2005). Environmental: Lack of clean and fresh water is being regarded as the main issue which
is being faced by the country. Thus, in order to mark success in the given market PepsiCo
should take measure for the given issue. Through this way, firm can develop positive
image of their brand in the Nigeria market. As a result of it, PepsiCo can ensure success
of new product Pepsi pomegranate in an effectual way.
 Legal: The firm which operates in the given industry has to abide with all type of rules
and regulations. However, it has been critically evaluated that if not followed then in the
given circumstance it will become very difficult for the cited enterprise to attain success
in the particular market (Breton and Martín, 2011).
3.2 SWOT analysis of PepsiCo
The SWOT analysis of company is depicted below:
Strength
 It is one of the most popular and globally
recognized brands.
 It is presently operating in more than 200
countries.
 String supply chain network
Weakness
 Highly dependent upon domestic market.
 Impeded image because of some scandals
associated with its products.
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 Excellent branding
 Team of talented and skilled personal. Financially stable.
Opportunity
 Opportunity to expand its operation in
emerging market such as Indian and China. To penetrate in new market by launching
new product.
Threat
 Threat from competitors who offers similar
types of products and services.
 Changing tastes and preference of buyers.
The above specified strength will help the company to achieve success with new product
in the Nigeria market.
3.3 Constructing marketing mix for Pepsi pomegranate
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Illustration 2: Marketing mix
(Source: Marketing mix, 2015)

The marketing mix consists of four different types of elements such as product, price,
place and promotion. It is enumerated in below: Product: Pepsi pomegranate will be light pink colour soft drink which will be
manufactured by using ingredients like pomegranate extract, carbonated water and sugar
etc. This drink will be high in healthy element and it will be produced in such a manner
that it will be consumed by buyers who are more conscious towards their health. The
product will be sold in 1 and 2 litre bottles. Price: With an aim to increase the share of firm in Nigerian market, price penetration
tactic will be used for the given new product. In this regard, at the time of launching the
product low prices will be charged from the buyers (Czinkota and Ronkainen, 2012).
This tactic is used for the purpose to attract large number of Nigerian customers. Thus, by
complying with the given type of activity firm can perform significant improvement in
their own sales and profits. Place: The product will be sold through both direct and indirect mean. With respect to the
direct mean, the product will be sold through the stores of PepsiCo. In addition to this, it
will also be marketed through different type of retail stores prevailing within the country.
In addition to this, it will also be distributed through online means. This is done for the
purpose to cover large number of Nigerian buyers.
 Promotion: TV advertisement will be made in order to promote or spread information
about presence of new Pepsi product in the respective market. In addition to this, along
with TV advertisement, firm can also take help from print media like magazines and
newspapers etc. (Hingley, Sodano and Lindgreen, 2008).
3.4 Competitor analysis
While launching Pepsi pomegranate in the new market, cited firm will face competition
from number of competitors. It includes list of both domestic and international rivalries. It
consists of Coca Cola and La Casera etc. These both given competitors have established their
presence in the Nigeria market. Furthermore, both are using various types of tactic to increase
their market share in the specific market (Okazaki, Mueller and Taylor, 2010). In this context, on
the basis of evaluation it is assessed that Coca Cola is a leading carbonated and bottled water
category, with the help of strong distribution network and aggressive marketing approach. In the
similar way, domestic competitor named as La Casera also introduces unique and flavoured
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drink on timely basis to penetrate in the Nigerian market in an effective way. Thus, with an aim
to compete with the given firm Pepsi has to come up with new and innovative soft drink option
like Pepsi pomegranate.
3.5 Stakeholder analysis
Before making any kind of decision it is beneficial for the firm to conduct stakeholder
analysis. With the help of them only organization can convert its idea into reality. In this regard,
following stakeholders of PepsiCo has been identified: Suppliers: These are the people who supplies raw material to the corporation. For
PepsiCo it is very essential to take measure with regard to maintain satisfaction of its
suppliers in an appropriate manner. However, if not maintained then in the given
situation it will become difficult for the cited enterprise to mark an effective presence
with the new product in Nigerian market (Prasad, 2010). Here, the satisfaction of the
supplier can be maintained by PepsiCo by giving timely payment for the services which
are taken by the company. Through this type of activity corporation can maintain
appropriate balance between demand and supply of goods. Thereby, it can gain profit in
the form of increased profits and sales. Employees: The success of the company largely depends upon its employees. In this
context, with an aim to develop Pepsi pomegranate, cited firm will require team of
talented and skilled individual who have full knowledge of carrying out production of
given soft drink. In addition to this, PepsiCo can also take measures to organize training
and development programs for its employees. This is done with an aim to increase
competency of Pepsi worker for the development of new product.
 Customers: Before launching Pepsi pomegranate in Nigerian market, firm must carry out
prior testing of product. This is done by organising exhibition of given product in the
particular market (Wilson and et.al., 2012). Furthermore, by complying with the given
type of activity information with respect to the taste and preferences of Nigerian buyers
can also be gathered. According this, slight variation can be performed in the new
product.
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3.6 Porters five forces analysis
This approach is used for the purpose to analyse the conditions which are prevailing in
the external environment of company. The detailed explanation of the same with respect to Pepsi
Co company is depicted in below: Threat of new entrant: For the Pepsi Co threat of new entrant is because firm has to
carry out major investment in the task of establishing manufacturing company.
Furthermore, there are many legal laws and regulations needs to be fulfilled by company
while entering in the given industry. Threat of substitute: This is high for the company new product. The fresh juice of
pomegranate can be consider as substitute of firm's product. Bargaining power of buyers: This is high because of the availability of varied soft drink
options. Bargaining power of suppliers: This is low because of the presence of large number of
suppliers who provides ingredients to the newly developed product of firm.
 Rivalries among competitors: This is high and in this regard it is assessed that the
corporation is facing competition from the giants like Coca Cola.
4. PROMOTIONAL OBJECTIVE
4.1 Objectives
Following promotional objectives are framed for the new product of PepsiCo s.
 To raise the market share of Pepsi pomegranate by 25% till the year 2017.
 To attract large number of Nigerian buyers towards the new product.
4.2 Target market and segmentation Target market: All the citizens of Nigeria will be considered as target customers of the
firm. This is because; soft drink is the type of product which is liked and consumed by all
types of customer irrespective of their age. However, with an aim to target customer,
differential target market strategy will be used. In this regard, different promotional
message for the same product will be farmed. This will assist the firm in raising its sales
and profitability within the given specified time limit. Furthermore, by showcasing
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healthy benefit of given product, the distinct image of given product can be created by the
cited firm in comparison to its competitors (Piercy and Evans, 2014).
 Segmentation: It is practice of dividing whole consumer market into varied sub
segments. In accordance with the given context, different types of segmentation are
identified such as demographic, geographic and psycho graphic etc. For the purpose to
segment the new product of firm which is of Pepsi pomegranate, demographic criteria of
segmentation can be used (Wilson and et.al., 2012). Here, the Pepsi pomegranate can be
segmented on the basis of age of customers. For instance, customer who lies in between
15-30 years will be given drink which is high in nutrition element. However, for all other
individual drink which possess very low calorie will be produced. Thus, by complying
with the given type of activity both given segments of buyers will be targeted by the cited
enterprise (Palmer, Meek, Parkinson and Meek, 2012).
5. MARKETING STRATEGY
5.1 Marketing communication strategy
Marketing communication is the way to spread information about new products and
services which is being produced by the company. In order to communicate about new product
PepsiCo can use electronic media like placing ads in the television. The framed television ads
must be shown by the company in that specific channel which is being liked by majority of
Nigerian customers. It is an effective or expensive marketing communication mean. Thus,
organisation can also choose options like print media like newspapers and magazines etc which
are more economic promotional options than others. (Piercy and Evans, 2014). This tool will
also assist the firm in spreading information about Pepsi pomegranate among large number of
buyers.
Here, with the help of these means healthy benefit related with brand image of the new
product will be created in the mind of buyers. Furthermore, in order to develop relationship with
Nigerian buyers personal selling approach will be used (Kumar, 2012).
6. RECOMMENDATION
From the above discussion, it is recommended to the cited firm to modern mean of
promotion such as placing ads in social networking site to influence large number of young
buyers. By using social networking sites, company can showcase comparison between the
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product which is produced by it and its competitor. Thereby, it can raise sales of Pepsi
pomegranate flavoured soft drink.
CONCLUSION
Articulating all the facts from the given report, it can be stated that by preparing an
effective marketing plan, organisation can set direction of its marketing team. In addition to this,
by complying with the given type of activity, enterprise can target its targeted customers.
Furthermore, with the help of tool like SWOT and PESTEL analysis information about external
and internal environment of the company will be gained. This information will help the manager
in making right decision. Overall, it can be said that it is very beneficial for the corporations that
they must use an effective marketing tactic for the promotion of their products and services.
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REFERENCES
Books and Journals
Arora, R., and Stoner, C., 2009. A mixed method approach to understanding brand personality.
Journal of Product & Brand Management. 18(4). pp. 272–283.
Banerjee, S., 2009. Effect of product category on promotional choice: comparative study of
discounts and freebies. Management Research News. 32(2). pp. 120–131.
Breton, G. C. and Martín, M. O., 2011. International market selection and segmentation: a two-
stage model. International Marketing Review. 28(3). pp. 267–290.
Chaharbaghi, K. and Lynch, R., 2010. Sustainable competitive advantage: towards a dynamic
resource-based strategy. Management Decision. 37(1). pp. 45–50.
Cook, G. R., 2007. Marketing to Leading Edge Baby Boomers: Perceptions, Principles,
Practices, Predictions. Journal of Consumer Marketing. 24(7). pp. 447–448.
Czinkota, M. and Ronkainen, I., 2012. International marketing. Cengage Learning.
Hingley, M., Sodano, V. and Lindgreen, A., 2008. Differentiation strategies in vertical channels:
A case study from the market for fresh produce. British Food Journal. 110(1). pp.42–61.
Kotler, P. and Armstrong, G., 2005. Principles of Marketing. 11th Ed. New York: McGraw-Hill
Publishing.
Kumar, A., 2012. Managing marketing mix and communications in a digital era: The role of
traditional and new media in a multichannel environment. State University Of New York
At Buffalo.
Laplume, A. O., Sonpar, K., and Litz, R. A., 2008. Stakeholder Theory: Reviewing a Theory
That Moves Us. Journal of Management. 34(6). pp. 1152-1189.
Okazaki, S., Mueller, B. and Taylor, C. R., 2010. Global consumer culture positioning: testing
perceptions of soft-sell and hard-sell advertising appeals between US and Japanese
consumers. Journal of International Marketing. 18(2). pp.20-34.
Palmer, R., Meek, R., Parkinson, L. and Meek, H., 2012. CIM Coursebook 06/07 Managing
Marketing Performance. Routledge.
Piercy, N. and Evans, M., 2014. Managing Marketing Information (RLE Marketing) (Vol. 17).
Routledge.
Prasad, V., 2010. Business Environment. Gyan Publishing House.
Wilson, A. and et.al., 2012. Services marketing: Integrating customer focus across the firm (No.
2nd Eu). McGraw Hill.
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Online
PepsiCo. 2015. [Online]. Available through: <http://www.pepsico.com/>. [Accessed on 23rd
October 2015].
PESTEL analysis of Nigeria. 2015. [PDF]. Available through: <http://www.helafrican-
chamber.gr/articlefiles/agl%20nigeria%202015%20.pdf>. [Accessed on 23rd October
2015].
Soft drink in Nigeria. 2015. [Online]. Available through: <http://www.euromonitor.com/soft-
drinks-in-nigeria/report>. [Accessed on 23rd October 2015].
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APPENDIX
Appendix 1: PESTEL analysis of Pepsi Co.
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