BTEC Marketing Essentials Report: Coca-Cola and Pepsi Analysis

This report, submitted as part of a BTEC Higher National Certificate in Business, Unit 2: Marketing Essentials, provides a detailed analysis of marketing principles through the lens of two major players in the beverage industry: Coca-Cola and Pepsi. The report begins with an introduction to marketing, defining it as both a human activity and a science, and then proceeds to explore how organizations use elements of the marketing mix (7Ps: Product, Price, Place, Promotion, Physical Evidence, People, and Processes) to achieve overall business objectives. A significant portion of the report is dedicated to comparing the marketing strategies of Coca-Cola and Pepsi, examining their product offerings, pricing strategies, distribution channels, promotional activities, and other aspects of their marketing mix. Furthermore, the report develops and evaluates a basic marketing plan for Coca-Cola, outlining its mission, current marketing situation analysis (including external and internal analysis), and a SWOT analysis. This plan aims to address market issues and achieve the company's objectives. The report concludes with a discussion of the marketing planning process and its importance in achieving business objectives. The analysis provides a comprehensive overview of marketing principles and their application in a competitive business environment.

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Marketing
Essentials
By Kaloyan Dzhivanov
Student ID: CCL-19-302
Tutor: Bernard Hot

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Learner Assessment Submission and Declaration
When submitting evidence for assessment, you must sign a declaration confirming that the
work is your own.
Learner name: Kaloyan Dzhivanov Assessor name: Bernard Hot
Issue date: 16/09/2019 Submission
date: 21/12/2019 Submitted
on: 21/12/2019
Programme: BTEC Higher National Certificate in Business
Unit: Unit 2- Marketing Essentials
TABLE OF CONTENT
Learner signature: Kaloyan Dzhivanov Date: 21/12/2019

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TABLE OF CONTENT
1. Introduction…………………………………..……………………………………….…4
2. Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives (LO2 – P3).……..5
3. Develop and evaluate a basic marketing plan (L03 –P4)……………………….7
4. Compare ways in which different organisations apply the marketing mix to the
marketing planning process to achieve business objectives…………………..9
5. Produce and evaluate marketing plan for an organisation…………………….13
6. Conclusion….…………………………………………………………………………….16
7. References………………………………………………………………………………….17

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Introduction
The emergence and history of marketing can be considered in two directions -
as a human activity and as a science.
The modern concept of marketing was formed only in the early 80's. Another
opinion is that marketing was born with the industrial revolution in Europe.
Despite these initial forms of marketing, the pioneer can be considered the
American engineer Sayers McCormick (1809-1884), he was the discoverer of market
research and analysis, and the laying of basic principles of service. Therefore, we can
say that the science of marketing is the brainchild of industrial society.
Marketing is an analysis, planning, implementation and control of activities
aimed at establishing, strengthening and maintaining profitable exchanges with
target customers to achieve certain tasks of the organization, such as profit, sales
growth and more. Marketing is a philosophical system for market management of
production and the company, it is a system of organizational and managerial functions
in companies related to the production and sale of goods, services and ideas.
The emergence of the theory and practice of marketing is caused by the
changes that have taken place in the economic development and market situation of
the capitalist countries. The sharp increase in the production of goods leads to an
increasing saturation of the market, due to which producers are beginning to take
much more into account the tastes, desires and demands of consumers in order to
gain a strong position in the market. (Gulenova, 2001)

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Compare ways in which organisations use elements of the
marketing mix (7Ps) to achieve overall business objectives.
Definition of the marketing mix and the 7P’s
Phillip Kotler, the father of modern marketing, defines marketing mix to refer to
a set of controlled and managed marketing tools that business organisations employ
to achieve a certain response in the target market. It is a general term that is widely
employed to refer to the various choices that businesses employ in the whole process
of developing products and presenting in the market. Moreover, it is the decisions that
business organisations put in place to promote their brands effectively in the market.
According to Kotler and Armstrong (2018), the marketing mix is comprised of seven
elements that businesses use to promote their products in the market. They include:
Product, Price, Place, Promotion, Physical evidence, People and Processes.
Comparison between Coca-Cola and Pepsi
Competition is explained in every aspect: competing products and competing
manufacturers.
Coca-Cola's competitor is Pepsi. Fanta or Mirinda? Sprite or 7up? Those products
can take care of delicious qualities, but also for different manufacturers. Namely, they
are competing producers and this is competitive relationship of the company Coca-
Cola and Pepsi. Pepsi can compete in a market way, but they] don't have statistics of
Coca-Cola.
Coca-Cola has a huge lead in the beverage market, but Pepsi's many business
lines generate more revenue. Coca-Cola has a market share of 42% and Pepsi 32%,
while Coca-Cola has annual revenues of $ 35.2 billion and Pepsi's annual revenue of $
57.8 billion. Coca-Cola spends $ 2 billion a year on advertising, and Pepsi $ 1.1 billion.

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Figure 1: The Marketing Mix 7 P`s.
Source: http://proffesionalacademy.com//
Elemen
t
Coca - Cola vs. Pepsi Co
Product Coca-Cola has a very large product category including e.g. different type
of cola drinks, energy drinks, juices and so on. This also applies to Pepsi,
which operates additionally in the food business. King of the cola drinks is
definitely the Coca-Cola Classic, which is the most sold soft drink in the
world. It has become with a lot different flavours as well like lemon,
cherry and vanilla. Another significant cola product of this leading
company are Coca-Cola Light and Coca-Cola Zero. Archenemy’s most
famous product is the regular Pepsi that is number two in the soda
markets. Pepsi has developed a lot of variations from its primary cola too
and the company has a strong positioning on diet cola markets as well.
Price Both Coca-Cola and Pepsi are facing competition on cola markets, but
mostly from each other. These two leaders are dominating the market
and the existing situation is called oligopoly. This means that companies
have more pricing power than if they were operating in perfect market
circumstance. It is clear that their pricing is highly influenced by
competition, because Coke and Pepsi are almost perfect substitutes and
therefore, if Coca-Cola increases its price, many of its customers will start
to consume Pepsi. However, there can be identified a bit different pricing
strategies between rivals especially in United States. Coca-Cola’s pricing
is based on the value that its products create to customers in different
situations. That’s why Coke’s price per litter can variate depending e.g.
on the packaging or location. Pepsi is taking this value based pricing
strategy a bit further with their “Hybrid Everyday Value” model. This
pricing strategy is an effort to make customers buy Pepsi not only when it
is on sale. It’s expected that Coca-Cola might try some kind of similar
pricing model if Pepsi succeeds with their own, although Coca-Cola’s
pricing is nowadays slightly more aggressive.

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Place Coca-Cola and Pepsi are literally everywhere! Their products are sold in
more than 200 countries over the world throughout supermarkets, cafes,
restaurants, vending machines, gas stations, movie theatres and so on.
Thus there is not a big difference between availability of Coke and Pepsi.
Coca-Colas distribution is based largely on operating through local
bottling partners, which in turn are working with customers. Pepsi is also
using same kind of strategy. All in all, it is a bit difficult to find differences
between the cola market placing/distribution strategy of Coca-Cola and
Pepsi. In any event, I can give you a hint. Be prepared to drink Coke if
you visit in one of these leading fast food restaurant chains: McDonalds,
Subway or Burger King.
Promotio
n
Promoting has a huge influence on cola beverage giant’s present and
future success. Coca-Cola and Pepsi are heavy-users of promoting e.g. on
television, on the Internet, in stores, in social media and via sponsorships:
their combined advertising budget is billions of dollars. Rivals, however,
are committed to use their marketing actions responsibly. Briefly this
means that Coca-Cola and Pepsi don’t target their marketing to children
under the age of 12. In addition, they emphasize the meaning of healthy
life. Although competitors use almost similar promoting tools, are tactics
naturally various because of different targets and starting-points. More
information about promoting and communication strategies can be found
from my next post.
Physical
evidenc
e
Coca-Cola and Pepsi need to monitor and develop their websites, pages,
articles, journals, blogs, etc. thus these will provide a wealth information
of the company and its products. In terms of packaging Coca Cola is
much more developed. Pepsi will need to produce clarity on packaging
philosophy that cater recycling, reducing, reusing, removing, and
renewing. With regards to the above implementation, this must be
adopted in a timely manner subject to monitoring and attention of top
management of the company.
People To achieve their objectives, both companies employ qualified and
experienced employees who have what it takes to address the needs of
customers effectively. Moreover, the companies have heavily invested in
training and developing its employees to equip them with the right skills
and knowledge. As per data from 2017 Coca Cola has 139 600 employee
worldwide and Pepsi has 294 000.
Processe
s
The Coca Cola system includes the Coca Cola company and its around
225 bottling partners. The international business operations of the
company are supported by these bottling partners as well as a large
distribution network. Pepsi will need to restructure its overall process in
accordance to the compliance and advance way of communication.
P3. Develop and evaluate a basic marketing plan
According to Kotler et al. (2015), a marketing plan is a formal document that
outlines an advertising strategy a business organisation will put in place to create
awareness and reach the target market. Typically, a market plan contains a detailed
outreach and Public Relations Campaigns that a business will undertake for a certain
period. Armstrong et al. (2018) state that marketing planning is important because it
enables business organisations to effectively target their customers leading to
increased sales and profits. Targeting the market effectively leads to a reduction in

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costs and enhances the chances of converting leads into sales. However, companies
should ensure that the plan takes to account all the necessary information as failure
will lead to negative outcomes. The following is a marketing plan that will help the
company overcome any market issue that may arise in the future effectively.
Coca - Cola’s Marketing Plan 2020
 Mission
The mission of Coca-Cola Company is to bring freshness and enjoy people's
lives, make your products an integral part of everyday life.
The main goals, subordinated to the mission of their own are: to move to stable
and stable positions in world markets; the expansion of markets and less entry into
the preservation of already markets, the greater increase in market share; increase in
sales volume; preserving the image of the people.
The Coca Cola Company aims to develop the best sales and distribution skills,
as well as to increase the efficiency of financial resources management. In particular,
powerful market entry systems and dynamic partnerships with customers are being
built to achieve a unique market realization. In the long run, ways are being sought to
optimize the use of working capital and the efficiency of internal processes and
systems.
 Current marketing situation analysis
1. External analysis - It includes broad social forces influencing the entire
microenvironment of the company. For its successful activity Coca-Cola must
take into account both the forces of the macro-environment acting on the
internal, resp. the American market, as well as those in other countries in
which it distributes its products. The factors of the macro environment that
the company must take into account are: demographic, economic, political,
legal, cultural. Coca-Cola is very dependent on the foreign market, as it sells
most of its sales there. The wide distribution of the products on the world
market and especially the popularity of its main product Coca - Cola show
that the company successfully copes with the impact of all these factors.
2. Internal analysis - Aims to develop the best sales and distribution skills, as
well as to increase the efficiency of financial resources management. In
particular, it builds powerful market entry systems and dynamic partnerships
with customers to achieve a unique market realization. At the same time, it
seeks ways to optimize the use of working capital and to evaluate the
efficiency of internal processes and systems. The mission of Coca-Cola is to
give freshness to consumers, to be a partner to its customers, to reward
shareholders and to enrich the lives of local communities, among which it
operates.
SWOT Analysis
Strengths Weaknesses
• Coca Cola have excellent trained
sales processing staff with strong
knowledge of current products
• Have built, lasting and strong
relationships with their clients
• Strong internal communication
system
• Much of their sales depend on a
few well-known brands. This makes
the company vulnerable to any
abrupt changes in the behaviour of
their customers.
• The company is highly dependent
on advertising to shape consumer

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• All stores have an excellent
geographical location with a high
entry level of traffic
• Conveniently designed and
successful marketing strategies
• Have the business reputation of
an innovative company
opinion and drive traditional sales.
This can lead to high trade costs
with a controversial return on
investment.
• Food sales in some major markets
are increasingly concentrated in the
hands of several giant retailers such
as Tesco, Asda, Lidl. These
companies have the ability to
demand drastic price reductions
from their suppliers.
Opportunities Threats
• Increased disposable income in
countries like China may increase
demand for luxury goods such as
mineral water, ice cream or even
pet food.
• Lifestyle changes, such as longer
working hours, more women
employed in the workforce, and
large households in India, will
increase the demand for pre-
packaged foods.
• Increased mobility and a boom in
own cars have dramatically
increased demand for packaged
food, candy, bottled water and even
snacks in countries such as China.
• Retailers such as Tesco, Asda,
Aldi, Lidl are hard to impose their
own brands that are more profitable
for them. These brands are often
sold at a lower price and are given
greater visibility on the shelves.
Some retailers, such as Aldi and
Lidl, emphasize their own brands at
the expense of traditional products.
Marketing objectives
 To increase sales volume and profits
 To attract many customers and enhance customer satisfaction.
 To promote the brand value as well as maintain a positive reputation.
 To grow the company’s market share
 Develop and steer brand loyalty and retention
Target market segmentation
The market segmentation in terms of that much of the watch drinks are
consumed by young and middle-aged people. Coca - Cola is constantly focused
on schools, colleges, universities, hotels, hotels and fast food stores. The
company invests huge amounts of money to compete with PepsiCo.
contracting schools, colleges, universities to sell their products. Coca – Cola
customers are mostly adolescents and young people between the ages of 14
and 29.
Pepsi divides the target market into different groups, they differ in
desires, resources, locations and purchasing practices. Through marketing
segmentation, companies make products more efficient and effective and
meet their needs. Pepsi segmentation is based on the following factors:

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 GEOGRAPHICAL SEGMENTATION: In geographical segmentation,
Pepsi's market share is subdivided into districts and cities / villages
and localities.
 Areas: District differences exist respectively with the demand for
products. For example, buyers of Pepsi from Sindh (Pakistan) are
different from those in Punjab.
 Towns / villages: There are differences in the shopping behavior of
consumers from towns and villages. According to the marketing
strategy of "Pepsi" design depends on what they like, dislike, their
mood, preferences, fashion and shopping habits.
 DEMOGRAPHIC SEGMENTATION: The company studies different
aspects of the population. The market can be divided as
demographic factors such as: age, gender, education, etc.
1. Age: The analysis of the market by age is to divide the general
population into age groups and to analyze the desires and
needs of each of the groups.
2. Income: Pepsi Perfect sales depend on consumer income. No
two separate beings or families spend their money on the
same things. That is why the company provides economical
packages of "Pepsi Perfect" on the market.
3. Number of family members: Consumption of "Pepsi" definitely
varies along with the number of people in a household, so the
company has both 1.5 liter and 2.25 liter bottles.
4. Race: Pepsi and Perfect consumer trends differ on a racial
basis. A marketing study shows that if 15% of people buy 2.25
liter bottles, the remaining 85% will follow suit.
Marketing strategies
To effectively target the market, Coca – Cola will make use of the four types of
segmentation addressed above. However, for the company to achieve the set
objectives, it has to employ various marketing strategies in its marketing. The
marketing strategies the company will use include:
 Horizontal integration: With this strategy, the company will acquire or merge
with its competitor or any company of its level to increase its market share. This
strategy is effective as it enables the company to increase its market base and
reduce competition. This will also enhance the goodwill of the company as well
as its customer base.
 Training and development: With this strategy, the company will provide
extensive training to its staff to equip them with the right skills and knowledge
to effectively execute their tasks.
 Market P’s: The Company is required to revise its marketing strategy to
effectively incorporate all the 7 P’s of marketing for appropriate growth and
development. This will help the company increase its market base as well as the
sales volume.

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Figure 1. Structure of Sales and Marketing at Coca – Cola
Source: Coca-cola.co.uk
Conclusion
The Coca-Cola company pays attention to all factors that affect it both directly
and indirectly, as well as to the factors that affect its customers. With the quality of its
products the company guarantees regular customers who have affection and loyalty
to brand and use only their products. Apart from the quality of its products, Coca-Cola
also attracts customers with the prices of its products, which are in the pockets of the
majority of the population not only in Bulgaria, but also in other countries. Proof of this
is that even in developing countries and third world countries, the company holds a
large share of the markets. Marketers must continue to pay attention to the factors
they can control and try to turn even negative changes in the political environment to
their advantage. This can be done through constant research and monitoring of
changes and even by forecasting what would happen and developing marketing
programs that can be put into use in the event of a change in some of the conditions
or factors.
.

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