International Marketing Strategies of PepsiCo in European Markets

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INTERNATIONAL
MARKETING

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Analyze the scope and key concepts of international marketing...........................................2
P2 Explain the rationale for an organisation to want to market internationally and describe the
various routes to market they can adopt......................................................................................4
M1 Evaluate opportunities and challenges that marketing internationally present to an
organisation..................................................................................................................................5
LO2..................................................................................................................................................6
P3 Evaluate the key criteria and selection process to use when considering which international
market to enter.............................................................................................................................6
P4 Explain using examples, the different market entry strategies, including the advantages and
disadvantages of each..................................................................................................................7
M2 Apply market evaluation criteria, entry strategies and make recommendations for selected
organisation..................................................................................................................................9
D1 Produce a critical evaluation of the international market context, including insight into how
organisation should adapt their marketing strategies for various markets................................10
LO3................................................................................................................................................11
P5 Present an overview of key arguments in global versus local debate..................................11
M3 Evaluate context and circumstances in which an organisation should adopt a global or
local approach highlighting the implications of doing so..........................................................12
P6 Investigate how the product, pricing, promotional and distribution approach differs in
variety of international context..................................................................................................13
M4 Determine and articulate in detail how to adapt the marketing mix of selected organization
in different international markets...............................................................................................14
D2 Produce a critical evaluation how the marketing mix is applied to range of international
context........................................................................................................................................15

LO4................................................................................................................................................16
P7 Explain and analyse the various international marketing approaches organisation can adopt
...................................................................................................................................................16
P8 Compare home and international orientation and ways to assess competitors outlining the
implications of each approach...................................................................................................20
M5 Evaluate various marketing approaches and competitor’s analysis in relation to an
organisation and make recommendations on how they should operate in an international
context........................................................................................................................................22
D3 Make recommendations on how organisations should be structured to maximize
opportunity in an international context......................................................................................23
Conclusion.....................................................................................................................................25
References......................................................................................................................................26

LIST OF FIGURES
Figure 1: International expansion results.........................................................................................2

LIST OF TABLES
Table 1: International strategies for entry........................................................................................7
Table 2: Arguments for debate......................................................................................................11

Introduction
International marketing refers to application or principles of marketing in various countries that
aims to cross national overseas and boundaries. The current study will explain concept and scope
of international marketing in reference to Pepsi by analyzing its expansion plans in European
Markets. It will further explain market routes, selection criteria and market entry strategies for
Pepsi that by discussing its merits and demerits. Further, debate will be presented for local versus
global by investigating its marketing mix approach while international markets. Lastly, various
approaches of the international marketing and orientations will be discussed for Pepsi expansion
plans with its implications.
1

LO1
P1 Analyze the scope and key concepts of international marketing
Pepsi is known as carbonated soft drink that is manufactured by PepsiCo which was introduced
in 1893 from Caleb Bradham. It was originated from US and firstly named as “Brad’s Drink”. It
includes vanilla and sugar as ingredient that also created fountain drink that helps in boosting
energy and digestion. From year 1940 it has started its expansion in the international areas with
planning to grow higher using several promotional techniques. International marketing refers to
business operations by developing plans, pricing, managing and promotion of goods for buyers
across international as well as national boundaries to grab high growth. Marketing plan is able to
play crucial role in expansion of business operations (Armstrong, et.al, 2015). Global marketing
is conceptualized for understanding prospective buyers, after sales service, product distribution,
production according to consumer demand and charging reasonable amount.
Figure 1: International expansion results
(Source: Sharon Bailey, 2014)
For Pepsi, international marketing has variety of scope to expand business through goods and
services with following methods which are as follows:
2

Import – It focuses on importing materials within one country to another that prepares product to
sell in national markets. The materials for producing products are acquired from US that help in
developing product and then planning to sell in another country.
Export – This is method in which product is sold to international markets and franchises that aids
in gaining higher profits and revenues (Dinnie, 2015). As the organisation is running by focusing
on franchise markets it gains higher market share by promoting product to global world.
Contractual Agreements – It targets on boosting business operations across domestic boundaries
that expands volume, market, base and profit of consumers. Doing business by partnerships will
provide opportunity to grow at international level.
3

P2 Explain the rationale for an organisation to want to market internationally and describe the
various routes to market they can adopt
Pepsi has planning of expanding operations in European markets for achieving higher profits and
sales that has followed the strategy of promotions using stars for eliminating colour barriers that
has helped in gaining 45% of revenues that is accompanied from outer areas of USA. The firm
has properly targeted the market of European countries that has helped in achieving higher
growth (Watson, et.al, 2018). While entering into new market organisation must carry
knowledge of entry routes that makes entry much easier. The new market entry routes consist of
following methods for Pepsi that are as follows:
Brand Franchising – The plan is created for convertible business that uses same business model
while expanding business. It is easy method that helps in breaking international market but
brings issue with franchisers rules that affects revenues and profits. The organisation with strong
recognition in market will provides opportunity to expand in European countries.
Partnerships – The organisation with same business gets ready to invest or markets the product
of Pepsi in international markets helps in running operations effectively. It can be fulfilled by
entering into partnership contracts that will provide opportunity to grow.
Direct Exporting – It refers to targeted market planned by organisation for selling finished goods
and products. For example – the computer parts and tools selling directly to manufacturing plant
of computers. The only drawback is high cost for shipping logistic but gives higher growth at
global level.
The aforementioned marketing routes includes best entry methods from that direct exporting and
brand franchising is beneficial for Pepsi to grow in European markets (Verbeke, et. Al, 2018).
4

M1 Evaluate opportunities and challenges that marketing internationally present to an
organisation
Planning for international expansion is determined as challenging way and worthy endeavour. It
is essential for Pepsi for indentifying barriers that might come in expansion plans that include the
following:
 Unfamiliar Cultures – It is important to assimilate with cultural challenge of country that
has been targeted by organisation. For example – the colour issues in European countries
can be resolved by focusing on promotions with various stars by understanding the taste
preferences (Leonidou and Hultman, 2018).
 Choosing Countries – The main task of Pepsi is to research and understand European
market effectively that will provide opportunity to grow at global stage. While targeting
European countries list must be prepared mentioning merits and demerits of international
marketing from which best market with higher profit can be selected.
The international marketing will dispense several opportunities for Pepsi by boosting its potential
revenues, developing economies of scale, targeting low competitive areas and boosting growth of
sales.
5

LO2
P3 Evaluate the key criteria and selection process to use when considering which international
market to enter
The international expansion of Pepsi in European markets has done huge hard work by searching
markets effectively. It is necessary to follow certain steps while entering into new market that aid
in boosting opportunity of product selling that positively provides higher sales and growth. The
evaluation and selection criteria of market will able to enhance situation of European markets for
making expansion task easier (De Mooij, 2018). The selection criteria for entering new market
includes following steps:
Country Identification – First stage includes the plan and target from Pepsi towards the country
in which expansion needs to done. The strategy must focus on choosing countries near to USA as
it will help in reducing exporting cost by searching potential customers and markets.
Preliminary Screening – The stage studies macroeconomic environment focusing on factors
such as economic stability, exchange rates and consumption degree. The countries in European
sectors have high economic stability that identifies the customer’s intentions as income levels are
higher and people are able to spend on drinks.
In-Depth Screening – After searching European market, particular country is aimed for targeting
for expanding. The research than will be based on understanding pricing strategies, channels of
distribution and market segmentation that will provide idea of selling products.
Final Selection – Under this stage, the list prepared will contain the names that are targeted by
Pepsi. It will identify factors such as market competitors and rivals from which business might
impact in terms of achieving profits and revenues by focusing on non-alcoholic drinkers.
Direct Experience – It is important for marketing manager to refer or evaluate country chosen
for identifying trade practises and plan adopted by organisations from which business guidance
will be understood (Gillespie and Riddle, 2015).
6

P4 Explain using examples, the different market entry strategies, including the advantages and
disadvantages of each
International expansion of business depends on strategies that are used in entering new market. It
is essential for understanding market entry strategies by Pepsi that will provide opportunities to
manage markets of European countries by focusing on merits and demerits of methods. Thus,
following are strategies for market entry with benefits and drawbacks that is discussed below:
Table 1: International strategies for entry
Market Entry
Strategies
Advantages Disadvantages Examples
Brand Franchising The business expansion is
much easier that has low cost
and risk which escorts profits
from global customers. It
further gives chances to deal
with tough market competitors
that prepares organisation to
handle tough situations.
It creates damage as
management gets tough,
developing reputation is at
high risk, going from legal
matters lowers market image
and high competition creates
intense pressure on
organisation.
Subway, McDonald’s etc
(Mathews, et.al, 2016).
Direct Exporting It is able to control selection of
markets and impacts positively
on profits and organisational
sales. It focuses on
strengthening relationships
with consumers by listening to
their feedbacks for heading
towards improvement.
The risk and cost charge is
too high that helps in
managing organisational
change, time and resources.
The method is confusing as
high number of customers
gets involved.
Shipping method is used
to export rice in world
from China.
Partnerships The customer base and brand
name gets increased by
partnering with same business
organisations that boost firm at
global level. The small
business owners and
It requires time, currency
fluctuations, language
barrier, governmental
barriers, and understanding
foreign market make
expansion tough.
China Mobile and Apple
holding strategic
partnership.
7