Building and Managing Brand Equity: A PepsiCo Case Study

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BRAND MANAGEMENT
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2:................................................................................................................................. 8
LO3................................................................................................................................ 10
LO4................................................................................................................................ 13
Conclusion..................................................................................................................... 16
Reference List................................................................................................................ 17
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Introduction
Brand management is a very important aspect for the business in respect to provide full
control over the market place. The management of brand gives proper view as to how
the entities will deal with the products they have and how they will display their products
properly in the market in respect to the message that they want to share to the people.
The assignment will provide information about all the aspects of the brand that is to be
prepared by the entities in respect to control the brand properly.
Company Overview
The entity that is selected for the assignment is PepsiCo, UK. The headquarters for the
company is situated in the United Kingdom. They sell products that are of foods and
beverages. There are numerous types of products that are being sold by the company.
They operate in almost all parts of the world with all of their products to satisfy their
customers in a proper way (pepsico.co.uk, 2019).
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LO1
Demonstrate an understanding of how a brand is built and managed over time.
Explain the importance of branding as a marketing tool and why and how it has
emerged in business practice
Branding is such an activity that enables the entities to show their presence in the
market. Various tools of marketing are present in order to perform the practice of
branding. These are explained below:
Maintain the message
The main message of the entity needs to be maintained. Here, it is necessary for
PepsiCo to maintain the message that they needs to spread in the world (Sinclair and
Keller, 2017). The message needs to be present in the branding of the product.
Target the emotion
The emotion is a very effective thing for any entity. This needs to be targeted during the
branding of the product in respect to have utilisation of branding. PepsiCo needs to
target that emotion of the people where they can make an effect.
Business Identity
Branding helps the entities to bring out their identity in front of the people. It is the use of
branding as a tool for marketing enables any entity to display the identity of the brand.
PepsiCo also uses branding to display their identity in the market.
Brand Differentiation
Branding also helps in differentiating the brands from one another. In addition, this very
significant tool is used by the entities. PepsiCo uses the process of branding so that the
people can differentiate their brands from the other brands like Coca Cola.
Evaluate how brands are managed successfully over time using application of
appropriate theories, models and concepts
There are three types of theories that are followed by different entities during the time of
branding. These will be explained below:
Theory of brand loyalty
This is a very significant theory, where the loyalty of the brand is the most imperative
thing for the business. It is essential for the entities to bring in loyalty in the customers
that they have. This can be done by providing good service. If the people get satisfied
then they become loyal towards the brand, which is an important thing for them.
The branding theory
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This theory helps the entities to manage the brands properly and use them in proper
ways. This helps the entities to make the brand known to the people ( Sierra et al.,
2016). This also helps in making a proper relationship with the starting customers as if
those customers are satisfied then they will spread good news about the brand that will
help in increasing the sales for the entity.
The value based brand theory
This is another theory that is also followed by the entities in respect to raise the value of
the entity. This also shows the long term values of the customers the entities wants to
build. These are vital for the business in order to have proper functioning of the brands
within the market. In this theory, it is stated that the customer is the most important
aspect of the entity and everything revolve around them.
Provided above are the different types of theories that are followed by the entities in
order to manage the brands properly. These are beneficial for the business so that they
can capture the market and satisfy the customers properly in order to bring in the loyalty
about their products. This brings in proper control over the market and the
performances of the entities are improved using these theories.
Analyse the key components of a successful brand strategy for building and
managing brand equity.
Brand strategy is a very imperative component for the entities in respect to manage and
build the brand equity. These are significant for the entities like PepsiCo to use the
brand in a proper way. The components will be explained below:
Brand compliance
Brand compliance is a method that makes sure that the entity PepsiCo creates a
message for the products that they have and follow the message throughout the time so
that they do not deviate from the objectives that are set by them in respect to the brand.
Brand Loyalty
Brand loyalty is such a method of successful brand management that enables the entity
PepsiCo to bring in loyalty among the customers (Carolino Sousa Santos et al., 2018).
These can be done by proper service. If the customers are satisfied with the service that
is provided by the entity then the customers become loyal towards the brand.
Brand Awareness
Brand awareness helps the entity PepsiCo to bring in awareness among the brands that
are present. This helps to distinguish different brands from each other. These are
essential for the entity to perform in order to show the people what they sell. The
awareness of the brands is important for the entities in order to provide proper
knowledge to the people about the products that are provided by them.
The above provided components are essential for the entities in order to have
successful management of brands so that the strategy is improved for proper building
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and manage the equity properly. These help in distinguishing the products from one
company to the other and give clear view to the services provided by the entities.
The strategies that are used for strengthening the equity of the brands will be explained
below:
Figure 1: Keller's Brand Equity Model- CBBE Model
(Source: Apéria and Persson, 2018)
The diagram that is provided above gives a clear view of the model of brand equity that
is produced by Keller. It can be analysed that there are four stages in the model that
states resonance, brand response, brand meaning and brand identity. These are
essential for the business entity PepsiCo.
Brand Identity
The identities of the brands are important for the entity PepsiCo in respect to make the
brand identified to the market (Blascheck et al., 2016). This is the first stage in the brand
equity model. This requires PepsiCo to provide information of who they are.
Brand Meaning
The meaning of the brand is also essential for the entity PepsiCo in order to make
proper utilisation of the objective that is set by the entity.
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Brand Response
The brand response is needed for the entity PepsiCo to follow. They have variety of
product in the market. It is necessary for them to identify all the response for different
range of products in respect to have proper survey of the market.
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LO2:
Analyse how brands are organised in portfolios; how brand hierarchies are built
and managed.
Analyse different strategies of portfolio management, brand hierarchy and brand
equity management
Portfolio management strategies are basically divided into two main groups. These are
active management of portfolio and passive management portfolio. This provides all the
details of the strategies that are necessary for the entities to manage the portfolio.
Passive portfolio management strategies
Efficient theory of market
The theory of market is a very efficient thing for the entity PepsiCo. This helps the entity
to have a proper market research of the products in order to check the feasibility of
those products in the market (Karanges et al., 2018). These give proper utilisation of the
products that are present within the entity in order to schedule the production properly.
Aggressive Portfolio
The aggressive portfolio allows the entity to invest in the areas that are of high risk.
These are essential for them, as there are different times during which proper risks are
necessary for the business to undertake.
Active portfolio management strategies
Top down approach
This approach provides a view of the market that gives a bird’s eye view for the
management of PepsiCo. These enable the management of PepsiCo to check all the
aspects of the whole industry that performs in the same cycle of economics. The overall
view helps PepsiCo in structuring the operations of the business in such a way that
helps them to perform well in the market.
Bottom up approach
The bottom up approach is such an approach that helps the entity PepsiCo to check
their own business in respects to the strengths that they posses in the field of pipeline of
the products and the statement of finance for the business (Veloutsou and Guzman,
2017). This enables them to have proper approach for the whole system of
management.
Brand Hierarchy
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Figure 2: Hybrid Brand Hierarchy
(Source: Aguirre-Mar, 2013)
The hierarchy of the brand that is followed in the entity PepsiCo is the Hybrid Brand.
This is such type of hierarchy where there are varieties of product under the original
brand name. It has been analysed that PepsiCo has different types of products within
their operations, which is relatable with the hybrid brand. These are necessary for the
entity to check all the products under one brand as they have cold drinks, drinking
water, energy drinks, chips, tea, oats and many more. This is the reason why the whole
system is under the hybrid brand hierarchy.
Brand Equity Management
The management of brand equity has several aspects that are necessary to be followed
by the entity PepsiCo. These are necessary to be discussed below:
Build amazing values
Proper values are necessary to be build by the management of PepsiCo in order to
bring out the exact values of the products that are sold by them (Burmann et al., 2017).
These are essential for the entity as these help the management to follow according to
the values of the products that are present in the market.
Maintain brand image
The brand image needs to be maintained in such a way that enables the entity to bring
out proper image of the products so that these are brought in the market. These are
essential for PepsiCo as they provide related information about the objectives to the
customers in the market.
Trends and Preferences
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The trends and preferences of the market are also known with the help of the
management of brand equity (Rauschnabel et al., 2016). This is important for the entity
PepsiCo as they sell different kinds of products and they need to know which product is
doing well in the market and which product is doing badly. This helps them to analyse
the preferences of the customers and as well as the trends of the product in the market.
Critically analyse portfolio management, brand hierarchies and brand equity
using appropriate theories, models and frameworks
Various aspects give a proper view of the brands to the public for which the entities use
different theories, framework and models. According to Rosenbaum-Elliott et al. (2015),
the management of portfolios is important for the entities for managing their brands is
because this gives proper structure for the business to perform well in order to display
their brands properly. On the contrary, Heding et al. (2015) stated that due to the use of
brand hierarchy the entities get proper identification of the products that are being sold
in the market. This gives a proper difference between the different types of hierarchies.
As opined by Atwal and Williams (2017), he stated that the use of brand equity gives
proper models for the business to have control in what they perform in the market that is
related to the brand.
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LO3
Evaluate how brands are leveraged/extended over time domestically and
internationally.
Evaluate how brands are managed collaboratively and in partnership both at a
domestic and global level.
There are few ways, by which Pepsi Co can extend and leverage their brand in both
domestic and international level. It will be better if they use Ansoff Matrix to extend their
market.
Figure 3: Ansoff Matrix
(Source: Schawel and Billing, 2018)
Market penetration
Pepsi Co will have to use their existing product to penetrate their domestic market.
They will require a brand new strategy for marketing to encourage more customers to
buy their products. They can offer special discounts in their product to attract more
customers. The company can acquire other companies of same nature in domestic
country to capture more market. They have to find potential customers in their existing
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market and try to convert them into their loyal customers. It is a very good process to
extend brand inside domestic locations. They can modify their soft drinks and make it
according to the market trend. For this, they will have to perform market research and
have to appoint good marketers, who can get more insight about demands of
customers. The recent trend in UK market shows that people are more concerned about
their health. Obesity is a huge health issue and should be tackled by British community.
Pepsi Co can use this issue and focus on their soft drinks, which contains less sugar.
They can popularise these products. It is very natural, these products will have more
demand in future and they will be able to get hold of more market segments through this
(Schawel and Billing, 2018).
Market development
Pepsi Co will have to find new market in international locations to expand their brand.
The newer markets can give them more opportunity to extend their company’s market
and capture more customers. This can be done through various methods like
collaboration or partnership. This type of co-branding will help them to get more
customers in newer markets and their market entry will become much smoother. They
have to find newer locations, which suites their company’s operation and have lesser
resistance for setting their business. This can be done by partnership with other
companies. They will need to find other companies, who are operating in their selected
international markets and should collaborate with them to expand their brand. The
partnership with another company will let them have an idea about other countries,
where they are targeting to expand their brand. It will provide them with critical
information, which they can use to take precautions for averting any financial blunder for
their business (Roberts et al., 2016).
Critically evaluate the use of different techniques used to leverage and extend
brands.
Market penetration can be advantageous for Pepsi Co, as they know their domestic
market more. They have been operating inside this zone for many years and can make
changes in their product with more confidence because they have more chances for
convincing customers to buy their modified products. They had already conducted huge
research on customers and know a lot about their choices. Therefore, brand extension
and leveraging can be much easier in this market. There are certain disadvantages in
market penetration and the major problems can come from competitors. There are
companies in UK, who makes similar products like Pepsi Co and can provide huge
amount of competition to them. This competition may prove to be difficult for brand
extension, as their competitors will also try to capture more market (Dawes, 2018).
Market development can give Pepsi Co major advantages, as it may provide them with
new information through collaboration. The partner company has already established
themselves in that market and can help Pepsi Co to make their entry easier. The
company can use their partner’s brand popularity to achieve success in new market. It
will let them add their own brand equity with their collaborator to make the brand
stronger in international locations. The market entry becomes easier, as they can get
huge amount of funds from their partner company, which lets them reduce set up costs.
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