Brand Management Report: Analysis of Pepsi and McDonald's Strategies

This report provides an in-depth analysis of brand management, focusing on the strategies employed by Pepsi and McDonald's. The report begins with an introduction to brand management, emphasizing its role in shaping consumer perception and driving revenue. It then explores key aspects of brand management, including brand awareness, brand associations, perceived quality, and brand loyalty, using Pepsi and McDonald's as case studies. The report examines Pepsi's brand awareness through its logo, product variety, and sponsorships, and McDonald's through its global presence and unique offerings. Brand associations are analyzed, highlighting Pepsi's sponsorships and celebrity endorsements and McDonald's pricing strategies. The report also delves into perceived quality, examining how Pepsi and McDonald's manage customer expectations and address criticisms. Finally, the report discusses brand loyalty, exploring factors influencing customer behavior and the loyalty business models employed by both companies. The report concludes by summarizing the key findings and implications for effective brand management. This report aims to provide a comprehensive understanding of how these two brands have successfully managed their brands.

Running head: BRAND MANAGEMENT
Brand Management
Name of Student
Name of University
Author Note

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Table of contents
1. Introduction............................................................................................................................2
2.1 Awareness............................................................................................................................3
2.2 Brand associations................................................................................................................4
2.3 Perceived quality..................................................................................................................5
2.4 Brand loyalty........................................................................................................................7
2.5 Other proprietary brand assets.............................................................................................8
3. Conclusion..............................................................................................................................9
Reference..................................................................................................................................11

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1. Introduction
Brand management is considered as a way to analyse and plan the perception of
brands. The response of a particular company by the public helps organisations to formulate a
target market that can help in increasing the revenue of the organisations. According to
Rosenbaum-Elliott, Percy and Pervan (2015), brand management consists of two elements
that are essential for maintaining the loyalty of the customers. These include the tangible as
well as the intangible elements. The tangible elements include the price and packaging of the
materials and the intangible elements include the relationship it organisations have with the
customers. The assignment focuses on brand awareness and the brand associations that
organisations create with the customers. For this purpose, the assignment focuses on Pepsi
and McDonald’s and identifies its perceived quality as well as the brand loyalty that
customers have on these companies.
Pepsi is one of the most recognised soft drink in the world. Pepsi is a carbonated soft
drink that is manufactured by PepsiCo. The drink was initially introduced in 1893 as Brad’s
drink after the name of its founder Caleb Bradham. The drink was renamed to Pepsi-Cola in
1898 and later the name Pepsi came up in 1961 (Pepsi.com, 2018). The drink was first made
popular in North Calorina in the United States. The drink was made in a drug store due to the
lack of space and proper funding to experiment with the chemicals. Currently, Pepsi is one of
the leading soft drinks in the world and is a popular sponsor for many sports teams and
sporting events (Pepsi.com, 2018).
McDonald’s is a fast food company in the United States that was founded in 1940.
McDonald’s is a public restaurant that manufactures one of the best burgers, chickens and
French fries. The headquarters of the company is located in Chicago after it had moved from
Illinois. McDonald’s is considered as the largest restaurant chain in the world with customers
in over a 100 countries. All over the world, McDonald’s has 37,000 outlets (Mcdonalds.com,
2018). It has seen a steady growth since its initial years. It has also been reported that
McDonald’s is the world's second-largest private employer with over 375,000 employees
working with the restaurant (Mcdonalds.com, 2018). The assignment focuses on these two
brands and analyses the level of awareness it has in the market and the loyalty customers
have upon these brands.

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2.1 Awareness
According to Okonkwo-Pézard (2017), brand awareness refers to the extent to which
customers recognise a particular brand. Brand awareness has been recognised as one of the
important factors that perceive the behaviours of the customers. Based on the manner in
which customers are aware of a brand, organisations tend to form strategies that help them to
continue with the manufacturing of products. Vigneron and Johnson (2017) stated that
awareness does not always have to mean that customers have to recognise the brand.
Customers need to remember certain distinct features about a brand so that it can become a
success. The brand awareness has an important application in the decision-making process of
customers. The analysis of the brand awareness of Pepsi and McDonald’s can be done to
recognise the manner in which customers identify the brand.
As stated earlier, Pepsi is one of the most recognised soft drinks in the world.
According to Ertimur and Coskuner-Balli (2015), developing a proper logo is the most
important thing for the brand as most customers recognise brands by the logo. In the case of
Pepsi, the red, blue and white colour logo is the most distinguishing factor for the drink. The
fact that the drink contains flavours that are appreciated by the customers makes it unique in
terms of taste as well. Other factors that define the brand awareness of Pepsi is the fact that
the drink is recognised for the variety of manner it is presented to the public. The introduction
of dietary drinks for people having sugar has made the drink gain global recognition and
fame (Brunk, 2016). Thus, it can be said that the brand awareness of Pepsi can help it to
maintain its customers in the business.
In the case of McDonald’s, the company has been popular among the people since its
formation. The fact that the company is one of the biggest restaurant chains in the world
makes it possible for people to be well aware of McDonald’s. Like Pepsi and other major
brands, the logo of McDonald’s is unique and the customers instantly recognise it. Other
distinguishing features that separate McDonald's is the fact that it provides toys for the
children purchasing the products. The fact that the company celebrates special occasions for
the children is one of the unique things that make McDonald’s famous. For example, during
the release of the Star Wars movie in 2017, the company gave away action figures based on
the characters from the movie (Mcdonalds.com, 2018).

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2.2 Brand associations
According to Kelley, Sheehan and Jugenheimer (2015), the brand associations are not
considered as the benefits provided or taken by a particular company. It is considered as the
image, symbols and logos that are associated with the brand and the benefit of it. Brand
associations help in providing differentiations that are not replicable by the competitors. Du
Preez and Bendixen (2015) stated that the brand associations have a deep impact on the mind
of the customers. It is essential for brands to be associated with other businesses so that
customers can perceive the brand and provide its necessary feedback. Brand associations can
help in identifying the degree to which specific product and service are recognised within a
particular product or service. Huang and Sarigöllü (2014) are of the opinion that the name of
the company need to display the attribute that a company possess for its success in the
business market.
In the case of Pepsi, the brand associations of the company had begun with Coca-
Cola. The two companies were joined together to manufacture soft drinks that are essential to
the success of the company. However, the association deal was cut off, and currently both the
brands work independently. According to Sasmita and Mohd Suki (2015), the success of
Pepsi is mainly dedicated to the sponsorships it provides to sports and sporting events. For
example, Pepsi is a sponsor for the NASCAR events that are held in the United States. This
provides the company with an opportunity to continue its production in the business and
maintain its reputation. Another association of Pepsi is with different celebrities. In this
regard, it can be said that the drink is associated with a number of celebrities from all genres
of entertainment.
In the case of McDonald’s, the brand associations are formed at the price at which the
company sales its products. According to Barreda et al. (2015), one of the reasons behind the
success of McDonald's is the fact that it provides good quality products at pocket-friendly
prices. This is mainly because McDonald's tend to target the young customers such as
children and college goers for increasing its products. This provides opportunities for the
company to excel in the market and enhance the quality of the product. This provides
uniqueness for the company and the competitors cannot replicate the strategy of low-price
easily. Thus, the brand associations of both the companies are unique and provide an
advantage in the competitive business market.

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2.3 Perceived quality
Arora and Kumar (2018) stated that the perceived quality is defined as the perception
of the customers about the overall quality and the position it holds in the market. The quality
is determined by comparing the present quality along with the intended purpose of the
product. It has been seen that the viewpoints provided by the customers are the result of the
experience that they have with a particular brand or organisation. Perceived quality depends
upon two main factors necessary for intriguing the interests of the customers. These factors
include the extrinsic factors and the intrinsic factors (Rubio, Oubiña and Villaseñor, 2014).
This results from the involvement and the knowledge of the customers towards a particular
product. Thus, it can be said that in the case of Pepsi and McDonald’s the companies need to
forecast the demands of the customers.
In the case of Pepsi, the perception of the customers are determined to form the
manner in which the people understand the nature of quality of the products. Customers
cannot determine the quality of a product in an objective manner (Lee et al., 2015). Pepsi
manufactures cold drinks that are good for the health and that contains no extra ingredients
that can be harmful to the people. The specifications of the drinks are provided in the bottle
and the customers expect consistency in terms of the ingredients of the products. Thus,
deviation from the chemicals used for the manufacturing of drinks may have a different view
of the customers. According to Papps and Quester (2016), such change in perception may
have a negative impact on the strategies of the business.
On the other hand, in the case of McDonald’s, the perception of the customers is
based on the quality of the food served by the company in comparison with the quality served
by the competitors. This enables McDonald's to remain aware of the competitors and ensure
that it remains the best in the business. However, criticisms are received during the
introduction of new products, as customers may not feel it lived up to the expectations. This
is mainly because of the fact that the customers may have a high expectation from the
company and the disappointment can bring about the extinction of the product from the
company. For example, The Hula burger of the company was a failed strategy as the
customers did not feel the fact that it lived up to the expectations of the quality of food served
by McDonald's (Mcdonalds.com, 2018).

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2.4 Brand loyalty
Brand loyalty is the positive feeling that people have towards a particular brand. The
loyalty of the customers encourages them to purchase the products that satisfy their needs. It
also helps in making commitments to purchase from the same brand in the future (Cha, Yi &
Bagozzi, 2016). However, certain factors exist that affect the brand loyalty of the customers.
Factors such as quality and price of products are some of the factors that need to be
considered before being loyalty towards the brand. Apart from this, it is also essential that the
quality of the brand satisfies the customers and meet the needs. It has been seen that most
organisations frame the business network based on the loyalty of the customers. These
frameworks are known as the loyalty business model that is essential for increasing the
loyalty of the customers.
In the case of Pepsi, the company have faced competitions from other soft drinks
company like Coca-Cola. However, the loyalty of the customers is kept by the quality of
drinks and the versatility of the drinks that are introduced in the market. The loyalty of the
customers purchasing this drink mainly lies in the fact that the drink sponsors the sports
teams and events (Zheng et al., 2015). Hence, sports enthusiasts are keen to purchase the
drinks and remain loyal to the drink. This helps in establishing the positive behaviours from
the customers, as they can be aware of the type of quality that is to be expected from the
drink. Moreover, the use of celebrities as promotional tools acts as a strategic influence of the
company.
The brand loyalty of McDonald’s lies in the fact that the customers remain aware of
the quality of food served by the company for its success. The comparison is made with the
quality of food served by the competitors. The fact that the company attracts children by
providing toys makes it certain that the loyalty of the children exists with the company (Blut
et al. 2015). In this regard, it can be said that the customers also consider the services
provided by McDonald’s before being loyal to the company. This is mainly because of the
fact that the restaurant provides self-service and need to be ready with the products so that
customers can be treated quickly. According to Zablah et al. (2016), the company need to
remain active in terms of quality in products and services to remain active in the market.

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2.5 Other proprietary brand assets
As stated by Saeidi et al. (2015) brand assets refer to the elements that are involved in
establishing brand equity. The highlighted factors in the assignment that determines the brand
equity form assets that help in the setting up business in a market. The loyalty of the
customers is considered as the assets of a company as the customers are the main
stakeholders for many of the brands. Hence, it is necessary that the organisations need to
maintain a proper quality of products and services for gaining the loyalty of the customers. At
the same time, it can be said that the patents, trademark and channel relationships are other
brand assets that define a company (Hwang & Suh, 2018). In this regard, the brand assets of
Pepsi and McDonald’s can be considered.
The brand assets of Pepsi consist of the relationship it maintains with television and
radio channels. As stated, earlier the drink is associated with sporting events and celebrities
that normally like to be promoted. Hence, collaboration with channels can help in increasing
the reputation of the company and maintain its competitive advantage in the market. The
trademark of the company needs to be from the ISO so that people trust in the product.
Eisingerich et al. (2016) stated that the drink has to be free from any harmful elements and
the best method to examine that is the certification received from the ISO.
In the case of McDonald’s, the brand assets lie in the fact that the restaurant needs to
focus more on maintaining the loyalty of the customers and gain patent rights. Collaboration
with other companies, particularly companies making drinks needs to be obtained so that
McDonald's can serve soft drinks with its food. It has been seen that Pepsi is one such
company with which, McDonald's share collaboration (Kim, Vogt & Knutson, 2015). The
drinks served by the company consist of other soft drinks as well that makes it popular in the
market. Thus, it can be said that the brand assets of a particular organisation are essential for
the enlargement of a business.
3. Conclusion
Thus, it can be concluded that brand management plays an important role in the
promotion of a company. Without proper branding, a company cannot gain international fame
and continue with the success of the business. Brand loyalty and brand awareness are two of
the most important aspects of an organisation and it is necessary that the customers are
satisfied to ensure that such loyalty and awareness exists. Reputed companies need to ensure

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that the branding is done based on proper promotion so that customers can identify the
changes that are taken place in a company and aim to make future business relationships with
it. Companies like Pepsi and McDonald’s need to be well aware of the factors that influence
the loyalty of the customers.
The analysis of Pepsi shows that the drink is one of the most popular soft drinks in the
world. The longevity of the drink makes it more popular with the customers and therefore, it
can be said that the drink has a huge fan base that helps in increasing its brand value. It has
been seen that Pepsi provides sponsorships to leading sports teams and events and gain the
loyalty of the customers. The perceived quality of the company is the fact that the flavours of
the drinks need to be harmless and the customers need to recognise the value of the product
based on the quality it serves in the market. Apart from this, maintaining relationships with
the customers via channels can help the company to maintain its interaction with the
customers. Thus, brand management of Pepsi is important for maintaining its image in the
market.
At the same time, it can be concluded that in the case of McDonald’s, the company
need to focus more on the price and quality of products. One of the biggest advantages that
McDonald’s and Pepsi have is the fact that people are well aware of the brands and thereby,
the popularity of the company is continuously on the increase. It needs to get the patent rights
to collaborate with other companies so that it can align its market. The fact that it collaborates
with Pepsi increases its possibility of being the leading restaurant that serves food and soft
drinks to the children and other target customers. Thus, it can be said that maintaining a
proper brand management can help McDonald’s to improve its market position.

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