PepsiCo's Marketing Strategy and Recommendations: A Detailed Report

This report provides a comprehensive overview of PepsiCo's marketing strategy, focusing on the application of the 8P marketing mix, particularly in relation to the Mountain Dew brand. It delves into the key components of the 8P model – product, price, promotion, physical evidence, partnership, process, product distribution, and people – and how they are implemented by PepsiCo. The report then addresses contemporary challenges faced by the company's marketers, including corporate social responsibility concerns related to product health and environmental impact, the complexities of social media interactions, and the effects of globalization. Finally, the report offers recommendations to help PepsiCo navigate these issues and enhance its marketing effectiveness. The analysis provides insights into the beverage industry and the strategic approaches needed for sustained success.

Running head: MARKETING STRATEGY AND RECOMMENDATIONS
MARKETING STRATEGY AND RECOMMENDATIONS
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................3
8p marketing mix concept...............................................................................................................3
Applying the component to the Mountain Dew..............................................................................7
Contemporary issues facing the marketers......................................................................................9
Impact of contemporary issues on marketing strategy of Pepsi Co...............................................11
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

2MARKETING STRATEGY AND RECOMMENDATIONS
Introduction
The purpose of this assignment is to provide an overview about the marketing mix and
evaluate the marketing strategies facing the marketers of the Pepsi co Company. The application
of 8P marketing mix on one of the product offerings of Pepsi is discussed in this report. PepsiCo
Inc is one of the biggest American multinational beverage corporation headquartered in New
York. The organizations beverage portfolio provides several choices to their customers and
hence drives enhancement in productivity as well as new capabilities. Their product portfolio
includes near about 22 brands, which in turn generates around $1 billion in annual retail sales. In
fact, their product brand is available across the globe. The purpose of this company is to create
healthier relationship between customer and product while continuing to expand their business.
The marketing mix signifies the set of varied marketing tools that the entity utilizes for pursuing
its objectives of marketing. The firm uses it as strategic tool for formulating development plan as
well as promotion of their product (Armstrong et al., 2015). 8p marketing mix aids the firm to
review their business problem that affects their marketing strategy of the commodities. In
addition, this kind of marketing mix also helps this company to realize the synergy and
dynamics, which are included among some of the vital elements. This study also focuses on the
contemporary issues that affect the marketing strategy of this organization. The last section of
the study focuses on the recommendations for aiding Pepsi co to face these issues.
8p marketing mix concept
8P marketing mix signifies the model that aid to assess the business marketing strategy
through some approaches. It is basically flexible for adapting all kinds of business selling goods
and service as well as involving the role of customer service (Baker & Saren, 2016). This kind of

3MARKETING STRATEGY AND RECOMMENDATIONS
marketing mix is also taken into account as significant framework that aids the firm to analyze
their competitors and plan their strategy based on this. The components of this 8P marketing
mix involves-
 Product-One of the core value of the marketing effort is the good that the company
produces based on the target customers. Most of the firms apply product testing method
before launching the product in the market. The main reason behind adoption of this
method is to attain trust of the customer and achieve success in the marketplace (Baker,
2014). This testing thereby facilitates them to make important decisions regarding the
product such as designing, giving brand names, packaging etc. In some situation, the
company faces difficulty in selling the new products owing to less demand. However,
the integration of this tool might help them to increase these products demand in the
competitive marketplace. PepsiCo provides huge product range under different brands
including Pepsi, Pepsi Diet, Pepsi Max, 7up, Diet Pepsi Lime and so on.
 Price- Price usually covers the amount paid by the consumers for purchasing the product.
This generally represents the total unit basis, which the company obtains from marketing
of the products (Hanssens et al., 2014). The marketing department of the organization
generally concentrates on the certain objectives of pricing as well as the factors impacting
product price. Moreover, if the product being launched attains positive customer value,
then the organization strategizes to set higher price. This in turn helps them to gain high
profit margin. In addition, price of few commodities also gets influenced by the
company’s distribution plans, competitors goods price, markups and its value chain cost.
However, it is necessary for the firm to make proper marketing strategy in order to
mitigate price challenges arising in the competitive business environment. PepsiCo

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applies price discrimination strategy for maintaining pace and meet the requirement of
customers.
 Promotion- Promotion of a particular commodity generally encompasses sponsorship,
advertising in social media, personally selling, hoardings, public relations etc. With the
help of promotional mix, the company makes aware of the product to their target
audience (Chaffey & Ellis-Chadwick, 2016). This method influences the customer’s
decision making of purchasing the commodity. Apart from this, the firms usually make
their contact with their consumers through these promotional efforts. In addition, these
promotional activities also increase the expectations of the consumers and also drive total
sales of the entity. One of the important marketing as well as promotional tools used by
Pepsi is making strategic alliance with several other partners around the world. Other
promotional strategies used by this company involves introduction of new flavors, low
pricing, seasonal advertisement and so on.
 Physical evidence- All tangible as well as visible traces of business encountered by the
customers that precedes buying of commodities are termed as physical evidence. Some of
the important sections of physical evidence in the entity involves advertising, signage,
brochure etc. These physical evidences are generally used by the firms in order to gain
competitive advantage against their rivalries and improve their brand image in the
market. They have also packaging philosophy that is- reduce, reuse , recycle and renew.
 Partnership-The organizations seeks for making new partners and administers their
existing business partners for perking up their marketing operations. In addition,
partnership also facilitates them to increase their level of profitability and enhance the
performance in business. PepsiCo partners with SODA (Soda Stream International) for

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driving sales of certain beverage products. However, this entity expanded their business
in the globe by using their strategic partnerships.
 Process- Every organization designs the marketing process in such a manner by which
they can provide full satisfaction to their customers (Gilligan & Hird, 2012). Few
problem arises while conducting this process including process elements, which in turn
place convince of provider ahead of consumers. The process used by Pepsico involves
removal of high fructose from the traditional. The filled bottles are shipped for wrapping
and sealing for protection, cartons, labels etc. Trained technicians performs quality
control audits during manufacturing sequence. Lastly, as rinsed cans reaches filler, it is
reinverted, filled and closed with lid.
 Product distribution- Distribution of product refers to the method applied by the
organization to reach their products to customers. Effective product distribution is
important for the entity for attaining their marketing target (Boone & Kurtz, 2013). There
are basically three types of strategies used by most of the firms for distributing the
product based on its characteristics. These distribution strategies involves- selective,
exclusive and intensive. Extensive distribution refers to distribution of highly priced
commodities, which in turn requires details of sales from the mediator. Selective
distribution is used when the manufacturers needs high geographical spread.
Additionally, intensive distribution is applied for distributing low priced goods. PepsiCo
has huge extensive distribution network across the globe, which ensures that the Pepsi
products are available in each locality especially where the target market is situated.
 People-They are mainly the staffs of the company who contact with the customers
directly and hence define service (Thaichon, Quach & Lobo, 2013) One of the important

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business operations used by the companies includes selection, recruitment, and retaining
people for doing the work involved in marketing operation process. The staffs involved in
marketing operations of PepsiCo have standard uniform and maintains friendly service
with their customers.
Applying the component to the Mountain Dew
The Pepsi Co entity has developed many products of different flavors and launched them
across the globe. One of the product brands that have gained good reputation in the global
market is Mountain Dew. This product is carbonated soft drink brand manufactured and owned
by this entity. The 8P marketing mix of Mountain Dew is explained blow:
 Product- Mountain Dew has been one of the famous beverages that has its existence
across the globe. This product has citrus flavor, high levels of caffeine and less carbonate
content. This brand has implemented commodity adaption strategy since in some nations
this product has less caffeine levels. Over the last few years, this brand has expanded
their product portfolio by manufacturing hygienic drinks including Diet Mountain Dew,
Raspberry Citrus, citrus orange etc.
 Price- This product brand has implemented competitive pricing strategy owing to
competitive soft drinks market across the globe. This brand also revises its price based
on the geography as well as competition in the market. The main purpose of
implementing this pricing strategy is to increase market share by reducing their profit
margin each unit and gain profit by applying economies of scale. They also applies
discounted prices for promoting new product.

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 Promotion- The target segment of this product brand is young customers and so their
promotional strategy aims at placing product as sports inclined customer’s choice. In fact,
360 degree marketing has been used by this brand through ATL (Above the line) and
BTL( below the line) platforms. In ATL campaign, the product are usually promoted
through print media, TV advertisement and billboards (De Mooij, 2013). Furthermore,
they also uses social media for promoting the advertising theme. On the other hand, in
BTL campaign they have started Green Label Gaming program for extending their
sponsorship to top vedio game designers. In addition,
 Physical evidence- The logo of Mountain Dew and several methods of promotional
campaign facilitates them to attract large number of customers around the world.
 Product distribution- This brand has widespread as well as strong distribution network
owing to its manufacturer PepsiCo. It involves services of retailer and distributor for
reaching their customers through restaurants, supermarkets, discount stores etc.
 Process- The condensation process is used for bringing droplets and shiny luster in the
product. This procedure results to sublime nature in the product. In fact, the packaging
procedure involves creative bottling and labeling of drink. They mainly focuses on the
designing bottles in order to attract more young aged customers in the global market.
 Partnership- This brand partners with three main esports company including Splyce,
Team SK gaming and Team Dignitas. These partnerships provide gamers across the
globe, which in turn improved the brand image around the world.
 People- The staffs recruited by them are provided training for dealing with the customers
while marketing the product. However, this helped them to increase the sale of product
and achieve success in the market.

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Contemporary issues facing the marketers
The contemporary problems facing the PepsiCo marketers are given below:
 Corporate social responsibility (CSR)- CSR is defined as the commitment made by the
business for improving the well being of society through certain discretionary practices
and resource contribution (Tai & Chuang, 2014). There are some areas of CSR interest
such as- environmental protection, welfare of workers etc. Some of the problems that
this company marketers faces in the recent era involves-
i) This company faces several criticisms for their products as these are viewed
unhealthy and its packaging contributes to huge waste.
ii) The CSE ( Centre for Science and Environment ) has claimed water used for
producing the product contained toxins. However, the toxins included pesticides,
which in turn affect the health of many people across the globe.
iii) The company has been given the allegations that they use groundwater for
making their operations that makes the farmers harder to grow crops in effective
way.
 Social media Interactions- In the present decade, the marketers of the organization face
several problems regarding social media interactions owing to absence of guiding
principle given by the respective government of nation (Garrigos-Simon, Lapiedra
Alcami & Barbera Ribera, 2012). While interacting with the customers through social
media, the companies sometimes face inadequacy of data (Constantinides, 2014). This in
turn adversely affects their total productivity. Furthermore, at times socially insensitive
messages discourage the employees working in Pepsi Co. As a result, this negatively
affects their reputation and financial performance.

9MARKETING STRATEGY AND RECOMMENDATIONS
 Globalization- Globalization refers to intensification as well as acceleration of
mechanisms, activities and procedure, which helps to promote global interdependence.
Few evidences reflect that globalization creates several issues for the organization
marketers in recent decades. The companies face immense competition in account of
product pricing as well as its distribution method due to globalization. PepsiCo faces
political as well as social problems due to this globalization. In fact, they faces huge
competition regarding pricing and quality from Coca- Cola company.
 Technological advancement- Although technological advancement eased the
operations of marketers, they faced many problems including direct interactions with
their customers, provide training to other staffs for innovating new products. Since one
of the vital components of marketing is to target foreign customers, some companies
face several issues regarding identification of the persona of varied purchasers.
Introduction of new technology reduces the efficiency of workers in PepsiCo, which in
turn leads to lower productivity level. Moreover, it also affects their designing and
packaging of the products.
 Ethical concerns- The marketers of the organization face ethical problems relating to
promotional campaigns since it sometimes targets the children. The Pepsi Co Company
has been linked to the Child labor, low wages and exploitation of employees. There are
several workers in this company who paid less despite fulfilling their working conditions
(DesJardins & McCall, 2014). This beverage organization has also been accused of
continuing violations of human rights as well as union practices relating to anti-trade
regarding existing factories of some nation. This organization has been given the

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allegation of wasting water and using harmful ingredients in producing the product. This
in turn adversely impacts on their reputation in the market and also decreased their sales.
Impact of contemporary issues on marketing strategy of Pepsi Co
All the contemporary issues stated above negatively impacted the marketing strategy of
the Pepsi Co. Owing to the CSR issues, this organization has lost the trust of their customers and
also in certain situation faces long legal procedure. In addition, the allegation given to this
company regarding CSR activities also badly influenced their overall sales of products and
reputation in the global marketplace (Reisch, Eberle & Lorek, 2013). Globalization has also
influenced the marketing strategy of the management of most of the companies. It adversely
affects four areas of marketing of PepsiCo that includes- their brands, marketer’s community,
their customers and academic area of marketing. Owing to these problems, they revise as well as
introduced new marketing strategies for sustaining in the competitive business environment. The
marketing managers of this entity adopt strategic alliance as market entrance strategy (Cartwright
& Cooper, 2012). They even increases exporting more products, which in turn results into
worldwide economic integration. They even adopted licensing as well as franchising strategy
that involves less commitment of total resources on the international marketer. Not only this, the
marketers of Pepsi Co adopted counter trade for increasing their export of products especially
with the developing nations. With the integration of this strategy, this entity has gained entrance
in USSR. The promotional campaigns used by PepsiCo also creates conflicts between marketers
and society, which in turn negatively affected their target customers as well as pricing policy of
the product. Owing to advancement in technology, some unskilled laborers left their job. Some
of them also lowered their efficiency level and this affected their performance. For this reason,
the marketing department strategized to provide training and development to the marketers for

11MARKETING STRATEGY AND RECOMMENDATIONS
mitigating with this challenge. As social media interactions affect their customer’s decision
making in buying the products, they revise their strategy of disclosing all product features. They
also planned to attain feedback from customers after launching and try to produce new product
based on their requirements.
Recommendations
The recommendations provided should be considered by the marketers of this company
to improve their operations and achieve success in future. One of the important marketing
strategies that this company should continue in future is mergers and acquisitions (Cartwright &
Cooper, 2012). For continuing their growth in business, this entity should continue to make
effective mergers and acquisitions of bottling and beverages. As PepsiCo has several brands that
contributes to their overall income, their marketing department should spent huge amount of
money on advertising as well as marketing campaigns. However, it is predicted that successful
campaigns will help them to increase market share over the competitors. Since globalization
creates branding problems for PepsiCo, it is necessary for their marketers to adopt new
marketing strategies (Gilligan & Hird, 2012). These might include- different slogans for varied
products and designing new bottle for new product in order to improve their brand image and
maximize profitability. Opportunity in growth is also found in the rise in demand for consumers.
However, this company should not only expand their product categories but also produce the
products with lesser amounts of calories as well as sugar. This in turn will help them to
drastically increase their sales and attain higher revenue. In addition, this organization should
also adopt responsible marketing in order to avoid ethical issues. Responsible marketing means
that the entity should design their advertising as well as marketing campaigns in socially
sustainable manner (Von Schomberg, 2013). Furthermore, they should also include moral values

12MARKETING STRATEGY AND RECOMMENDATIONS
while making advertising campaign for creating positive impact on their customers. It is also
suggested that this firm should focus on their pricing decisions. It has been seen from the recent
study that the price of PepsiCO products are generally lower as compared to their rivalries. This
in turn might translate to lower product quality to their customers. Therefore, it is recommended
that this firm should increase their prices for matching their rivalries. As this organization has
been found using tap waters in the bottled drinks and selling it to their customers, this created
issues in CSR activities. Therefore, the entity is suggested to eliminate utilization of deceptive
marketing practices and be more transparent to their customers.
Conclusion
The conclusion that can be drawn from the above study is that effective implementation
of marketing strategies help the organization to attain higher profit margin and achieve success.
It also facilitates them to gain competitive advantage over their competitors. PepsiCo gains
competitive advantage through their innovative product line. As this company has been reliant on
franchise bottle organization for distributing their product, they face issues since some franchises
oppose to introduce new products. Moreover, other contemporary issues also affect the
marketing strategies of this company. Additionally, the strategic marketing plan should be made
by the marketers of the company by focusing on their business strategy. Furthermore,
recommendations provided in the last section of report will help this firm to improve their
marketing strategies and enhance business operations.

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