Diet Pepsi's Challenges: A Case Study with Strategic Action Plans

This case study examines the issues impacting Diet Pepsi, a non-calorie carbonated soft drink produced by PepsiCo, in the current market landscape. The study identifies key challenges such as new age beverage competition from companies like Coca-Cola and Dr. Pepper Snapple, rapid market fluctuations driven by technological changes, limited expansion in international markets compared to Coca-Cola, negative perceptions related to side effects, and shortcomings in marketing and communication strategies. To address these issues, the study proposes several action plans including developing public relations, improving advertising through social media and promotions, refining product strategies to enhance taste and health effects, maintaining consistent supply and cost management, offering discounts and incentives, targeting international market investments, improving packaging, conducting thorough market research, educating consumers about product benefits, enhancing ingredients, and leveraging diverse communication channels for feedback and promotion. The analysis aims to provide a comprehensive understanding of Diet Pepsi's current state and offer actionable recommendations for improvement.

Running Head: ISSUES WITH THE CURRENT STATE OF DIET PEPSI 1
Issues With The Current State of Diet Pepsi
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ISSUES WITH THE CURRENT STATE OF DIET PEPSI 2
PepsiCo is a company which produces soft drinks which are non-calorie carbonated
called Diet Pepsi. It was started in 1964 in the United States of America (Rao, & Purkayastha,
2017). Currently, it is facing many issues since most of the people prefer the newly healthier
drinks and bottled water. It is the second largest soft drink dealing company after Coca-Cola
Company. The issues which have led to its current state are discussed below.
1. New age beverage competition. More companies which deal with soft drinks and healthier
beverages have emerged which include coca cola, Dr. Pepper Snapple, among others (Cohen
et al., 2018).
Action Plans include
i. Develop and use public relations. This will help much in creating the good rapport
with the company. In addition, the customers will know the trademark of the
company.
ii. Advertising – improve on the advertising which is done through social media,
campaigns, shows and exhibitions and promotions.
iii. Have product strategies – Explore all the possible ways of improving the Diet Pepsi.
This is in terms of taste, the cost, the strengths and improving on the health effects.
(The link: https://www.iisd.org/business/markets/green_action_plan.aspx)
2. Rapid market fluctuations. This has been a big issue in the sales of Diet Pepsi. The main
cause has been the technological changes as well as generational. Due to the emergence of
new and improved technology, better and cheaper products have been manufactured hence
the change fluctuations.
Action plans include

ISSUES WITH THE CURRENT STATE OF DIET PEPSI 3
i. Maintain supply and costs. This is by maintaining the distribution and not being on
and off of the market.
ii. Reducing the selling prices but considering the production cost.
iii. Giving discounts and incentives.
(The link: https://www.slideshare.net/SameerDhurat/pepsi-vs-coke-76521610)
3. Takeoffs in international markets. PepsiCo has been competing with Coca-Cola Company
but not considering improving its international markets. This is why Coca-Cola is ahead of
them in occupying international markets.
Action Plans
i. Avoid smaller market imitations and target on investing in the international markets.
ii. Check and packaging and pack more as compared to the other companies.
iii. Do market research and find out how to improve in the given countries
(The link: https://adage.com/article/cmo-strategy/pepsi-pledges-toe-toe-coke/313280/)
4. Side effects. Many customers and clients have preferred not to use the product due to the
known and the perceived side effects. Most of the people have the perception that ‘soft
drinks have many chemicals’ hence preferring to bottled water and healthier beverages.
Action Plans include.
i. Training the consumers on the side effects of the products and its importance.
ii. Explain and include ingredients in the products to do away with the negative
perception.
iii. Improve on the ingredients used and introduce better ones
(https://www.dietdoctor.com/cspi-downgrades-sucralose-from-caution-to-avoid)

ISSUES WITH THE CURRENT STATE OF DIET PEPSI 4
5. Marketing and Communication. This has brought the difference in ranks of the various
companies which deal with soft drinks. Coca-Cola has been at the top due to its improved
marketing strategies.
Action Plans.
i. Introduce discounts and incentives. This will encourage customers to buy more
products.
ii. Introduce promotions. This can include partnering with other companies such as
communication companies where customers can subscribe to or benefit from using the
product.
iii.Cover all primary communication channels which customers use to get information. In
addition, introduce ways in which customers can give their views and feedback about
the use of the product.
(https://www.slideshare.net/FatemaTuzZzohora/a-marketing-plan-for-pepsi-
assaignment)

ISSUES WITH THE CURRENT STATE OF DIET PEPSI 5
References
Cohen, D. A., Bogart, L., Castro, G., Rossi, A. D., Williamson, S., & Han, B. (2018).
Beverage marketing in retail outlets and The Balance Calories
Initiative. Preventive medicine, 115, 1-7.
Rao, A. S., & Purkayastha, D. (2017). Sustainable development at PepsiCo. In Case
Studies in Sustainability Management (pp. 77-98). Routledge.