Effective Brand Management Strategies: A Case Study of PepsiCo

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Brand management
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
Task 2...............................................................................................................................................8
Task 3.............................................................................................................................................11
Task 4.............................................................................................................................................13
Conclusion.....................................................................................................................................15
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Introduction
In today’s intensely competitive business environment, the idea of brand management has
become an increasingly significant part of the marketing function in an organisation that
facilitates its growth and success. Brand management is the process of providing a unique
identity to products and effectively positioning it among customers. the concept of branding is
used by all organisations to have a long-term success and growth among customers in the
market. It has become important for organisations to try re-inventing their brands in the market
so as to create and maintain brand equity.
The aim of this report is to gain a wider perspective and knowledge about the concept and
significance of brand management as a marketing tool for an organisation along with discussing
the different aspects of the process. It will examine and discuss the concepts of brand and brand
equity along with identifying the needs of an organisation to build a strong brand value, which
helps in boosting the performance of the brand and attaining the different business objectives. It
will assess the idea of hierarchy management of a brand and discuss the various strategies to
create and develop brand value and extension. Overall, it will attain a greater knowledge of the
vast significance of brand management in all organisations.
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Task 1
Introduction
Overview of brand and brand equity
Brand is understood commonly as a symbol, term, name, sign, or a combination of some or all of
them, which helps to identify the goods and services of one company from similar goods and
services of its competitors company. Brand is one of the most valuable assets of organisations. In
today’s increasingly competitive business environment, branding has evolved as one of the most
important portion of the marketing function. This is made after examining the organisation’s
common objectives, resource availability and product line. Each organisation aims at building an
emotional connection with all its customers and this helps in attaining customer loyalty and
retention, which in turn increases its competitive advantage in the market (Elliott et al., 2015).
Brand equity is a term closely associated with the concept of brand. This may be understood as
the added value of different goods and services that are reflected in the purchasing behaviour of
customers in the market. The marketing department conducts this vital function of creating and
developing a successful brand that attracts customers.
Stages of building a successful brand
A good brand management includes effective marketing decisions and locating the changes that
will help in making the products more popular among customers in the market. The stages of
brand creation include building an effective logo and an attractive tagline. It then conducts strong
marketing that helps in promoting the brand well (Heding et al., 2015).
Role of the marketing department in creating brand equity
It is primarily the role of the marketing department to create brand equity by fixing the price, the
goods and services and the different distribution channels. It plans, organises and devises
innovative ideas and techniques that has the capacity of creating brand identity and provide it
with a unique identity over its chief competitors in the market.
Main body:
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A thriving brand is the effect of an efficient performance by the product along with good trade
cooperation. A number of brands such as Apple, Porsche, Coca Cola and Audi has established
their brand equity and has been able to provide an effective quality control in the goods and
services that are delivered. The primary aim of all firms is to develop their brand equity by
emphasising on the quality and credibility of its brand and the various goods and services
offered. Brand consistency is one of the most effective strategies for a brand to position and
establish itself in the potential market and gain greater competitive advantage in the market. The
brand equity is dependent on the quality of products and consumer awareness. It also depends on
how far is it possible to gain monetary value (Jugenheimer et al., 2015).
One of the most commonly used models to examine the manner in which brand identity
associates with the different elements is the Aaker’s Brand Equity Model. This is also used to
examine the manner in which brand identity is perceived through the various perspectives. It can
be perceived as a product that comprises of certain product values, attributes, scope and quality
along with its uses. For instance, HP is widely renowned for the various software and hardware
products that it offers such as monitors, desktops, printers, accessories and tablets. These reveal
the scope of the products as well as the values provided through the products by the brand. For
an organisation, the next perspective comprises of the global as well local activities along with
the various organisational attributes. For instance, P&G is renowned for the various local and
global activities. The businesses that compete with the products of P&G are thus unable to
compete with it in the market. Brand may also be perceived and the major elements here are
consumer brand relationships, consumer behaviour and brand personality. Brand is also
perceived as a symbol and has the power of influencing customers through various audio impact,
visual images, and different metaphorical symbols. Firms try to make their logos and symbols
attractive so that it has a powerful effect on the customers in the market (Tatoglu et al., 2018).
It becomes easier for a firm to maintain and strengthen brand equity if it has superior quality of
products. It is important that a brand delivers exactly what it promises to and under
circumstances where it fails to do so, its profitability significantly decreases. Brand equity can
only be maintained under a situation where a firm is able to maintain a good customer
relationship (Abrahams, 2016).
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Brand extension may be understood as the process in which the name of the brand that is
associated with a product along with its good image in the business of a dissimilar category. For
instance, Coca-Cola had a well established brand name and image and it used these while
entering into businesses which were quite different from the products it usually offered. It
catered to the sugar-free drink segment in the market by bringing Diet-Coke, which had same
brand identity. The process of brand extension assists an organisation in expanding its business
areas and effectively takes care of any financial issues and instabilities effectively (Ertimur,
2015). For instance, Coca-Cola ushered in a variety of products under its well-established brand
and experimented by changing the flavour and ingredients of the existing products. This
increased the product portfolio, had a huge positive impact on sales, and helped Coca-Cola to
grow and expand further. It is considered one of the most effective leaders in effective brand
strengthening, revitalising and facing crises efficiently. Coca-Cola undertakes regular promotion
campaigns which help in reinforcing the brand’s image and maintain a good market share.
The various strategies of brand reinforcement have helped Coca-Cola in conquering brand crises
during competition with its rivals such as Pepsi. This assisted it to prevail over the crisis that it
faced while introducing a product with a similar taste with that of a product by its business rivals.
It helped the company in conquering the situation and increasing the sales margins. Coca-Cola
faced another crisis situation when few children from Belgium fell ill in 1999 after consuming its
soft drinks. It was with the help of brand reinforcement and effective communication strategies
that the company could protect its brand image among its customers. The ban of Coca Cola’s
products was lifted by many countries like France, Belgium and Luxembourg thereafter. The
company was able to regain its position among the consumers with the help of efficient branding
strategies (Sheth, 2018).
Conclusion
In order to maintain a greater competitive advantage in the market, it is essential that
organisations improve its brand image within the industry. The marketing department has a huge
role to attain this objective. The role of a brand is integral during the process of developing a
market plan. An organisation is able to focus on its long and short term objectives according to
the brand value. It then relates the marketing plan with its specific objectives. It becomes
convenient for an organisation to assess the preferences of its consumers by examining the
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consumer inclination towards a specific brand. It has been seen that the well-branded and well-
marketed products are more successful in the market than other that have weak brand identity
and are not effectively marketed. The marketing plan helps in expanding the organisation’s
estimated worth by an efficient marketing plan and strong branding. It enables the organisations
in having a greater negotiation command with the suppliers. Thus, it can be seen, that for any
organisation to establish and succeed in the market, branding plays one of the most important
marketing tools and makes it exclusive and outstanding.
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Task 2
In this section of the study, the brand portfolio strategy is developed for the brand PepsiCo. The
company is a multinational company, which serves customers with beverages, snacks and other
food products. The brand was established in 1965 by merging the Pepsi-cola and Frito-Lay
company (Pepsico.co.uk. 2018). This brand has various popular brands in their brand portfolio
such as Quaker Oats, Tropicana and others.
Brand portfolio strategy of the organisation
The large businesses need multiple different brands and many different services. The brand
PepsiCo will need to plan a specific strategy to manage all the entities together. The companies
of PepsiCo have helped the company to generate more than 39 billion dollars from the global
market (Pepsico.co.uk. 2018). The company can maintain their profit margins by implementing
effective brand portfolio strategy. The company makes sure that each brand is given a well-
defined role so that they can operate in their way. Each brand of a family requires to be managed
so that the parent brand can avoid the risks. The parent brand efficiently identifies such brands,
which will be able to bring changes in the business infrastructure and successfully generate more
revenues (Greenland, 2015). The company focuses on differentiating the product line from each
of its sub-brands. The company also eliminates such brands, which are not required. The brand
portfolio strategy will help the company to clarify the roles of each brand so that they can avoid
internal conflicts due to misconception.
Hierarchical management
Hierarchy management is required to manage the organisational structure by using different
levels of authorities and links or other subordinates (Herrero et al., 2017). The four processes of
hierarchical management are discussed in this section.
Corporate brand: Corporate branding refers to the process of gaining recognition by using the
brand name as their product names. For example, PepsiCo has used their company name for
naming their beverage product.
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Modifiers: Modifier is a term, which refers to the uses of such words or phrase that works as an
adjective. This is used for differentiating the product lines from the sub-brands.
Family brand: The family brands use their brand name to market different products of their
company. The product lines are introduced in the market with the same brand name that has
helped the company to gain brand recognition.
Individual brand: The individual branding helps to market any individual product. The products
are given unique names individually in this branding process. The brands, which use this
branding process, avail the advantage of differentiating their product from other brands in the
market.
The brand hierarchy for PepsiCo
Figure 1: brand hierarchy of PepsiCo
(Source: created by the leaner)
Strategies for managing brand equity
The brand extensions of PepsiCo have given the opportunity to gain a stronghold in the
international market. The brand equity is required for expanding business and attracting
customers globally. The brand should plan a strategy to maintain the brand equity of the
company. The company should use the brand association to increase the brand equity of the sub-
brands of the company. The company should sponsor several sports and events so that they can
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PepsiCoFritolayQuakerOats

create brand awareness that will be beneficial for developing brand equity (Keller and
Brexendorf, 2017). The company should focus on building a large customer base in the industry.
This can be achieved by using innovative ideas and marketing. Unique logo and efficient
marketing will help the company to attract new customers. The brand needs to maintain their
brand assets and brand elements so that they can develop their brand equity. PepsiCo has
already gained brand equity, and they need to maintain their brand equity by using such steps
(Elliott et al., 2015).
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Task 3
Brand leveraging refers to the usage of the existing brand names for supporting the new entrants
in a related product category. This process helps to make aware the customers of the new
products in the market. The customers who are an existing customer of that reputed parent
company can be easily attracted to the new products. In this section, the brand leveraging process
of Frito Lay is provided.
The strength of the brand leveraging process
Frito Lay has been able to increase their sales by using the brand leveraging process. The Brand
leveraging has helped them. Frito lay introduces new products and has a diverse product range
such as Lays, Doritos and others, so that it helps to reduce the risks of brand leveraging. The
promotional activities of this brand are high, so this helps the company to start brand leveraging.
The product category of this company is related to the product categories of PepsiCo. For
example, Frito Lay manufactures snacks, and other sub-brands of PepsiCo are reputed for
producing the beverages and food products. This shows that the products of the organisation are
related but different from each other. Frito Lay successfully fits into the product family of
PepsiCo that has helped the company to use brand-leveraging strategy. The biggest strength of
the company is that the revenues of Frito lay can easily cover the product development cost of
the company (Zhang et al., 2015). Frito Lay is an established company of North American
company, so the company helps PepsiCo to earn a brand reputation in that country.
The organisation has been able to expand their business in northern America with the help of the
company. The brand leveraging strategy has unlocked new opportunities for the company
because of their existing strengths.
Weaknesses of the brand leveraging process
There are different companies, which are responsible for producing different products so that the
company should focus on preventing the brand cannibalisation. The competition among the
brands can be the reason behind the conflicts. The conflict poses a great threat to the company so
that the brand should develop strategies for resolving the conflicts (Fritolay.com. 2019). There
are many local substitutes’ brands, which are giving tough competition to the international brand
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so that the company needs to pay attention to the market research. The company needs to collect
information about the local customer’s requirement and manufacture products as per the
research. In this way, the company will be able to convert their weakness into opportunities. The
company needs to pay attention to the manufacturing process of the companies so that they can
avoid any product recall. The unhealthy and unhygienic production process can be the reason for
customer switch. The company further can be eliminated from PepsiCo that will pose a threat to
the brand.
Partnership Agreements
The partnership agreement helps the brand to promote itself and drive new customers. The
partnership agreement is required for clarifying the owners of the business. The agreement
reduces the misunderstanding among the partners. The agreement has become beneficial for
producing collaborative work. The company Frito Lay has collaborated with Vivaldi. According
to a report, the company’s business process was disrupted as the company was facing issues of
customer loyalty and supply chain (Capaldo et al., 2016). The engagement has helped the
company to regain their previous reputation. Vivaldi is a web platform developed by the Vivaldi
technologies. The partnership has helped the brand to reposition itself by using specific slogans.
The collaboration helped the company to develop strategies based on their brand architectures so
that they can improve their service quality. Vivaldi has helped the company to promote itself by
aggressive marketing based on their unique slogan that promotes joy and happiness.
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