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Situational Analysis Paper
Situational Analysis Paper
Nicole Kathman
MKT 309-07
Competition and costs both affect the setting of my product’s price. PepsiCo is a company that
strives in looking for ways to cut costs in order to maintain competitive prices and raising prices to
consumers is not a decision easily made (“US: PepsiCo to Increase Tropicana Prices, 2011”). So in a
sense, competition lowers prices, as the case for many products. In terms of cost, higher costs can lead to
higher prices, but it is not always the solution. In 2011, Tropicana made the choice to increase prices by
between 4-8 percent due to the continuance of expensive oranges due to the small crop for a second year
in a row (“Us: PepsiCo to Increase Tropicana Prices,” 2011). It could be inferred that from the delay to
raise prices, unless increased costs are long term, prices are not affected. Finally, in terms of demand,
orange juice is a normal good. When demand decreases, prices fall. In fact, a 11 percent decrease in
consumption of orange juice from last season and an increase in supply has led to orange juice futures
being priced at a two and half year all-time low last May (Wexler, 2012).
VII. International Ramifications
The product of Tropicana orange juice is marketed and sold across the globe. It does not seem
that product itself goes through changes but rather the price and promotion. It seems that more physical
structures are used to advertise internationally. For example, in London in the year 2007, Tropicana
installed 3-metre high orange trees inside of a clear carton in London train stations (“Orange Tree Offers
Juice to Travelers,” 2007). Also, in London in the year 2012, Tropicana placed a giant sun in Trafalgar
Square with the light equivalent to 60,000 light bulbs to launch a campaign (“Hit or Miss? Giant
Tropicana Sun Rises Over Trafalgar Square,” 2012). Perhaps, this difference in promotion and
advertisement is due to the differences in advertisement customs and norms or difference in response to
various types of advertisement.
VIII. Comparison
Brand Comparisons
Tropicana Simply Orange
100% Florida Oranges Imported Oranges
County Size A consumers Higher Price
Census Region: Northeast County Size B consumers (“Fall 2011 Product”)
African American Target Market Census Region: West
Graduated College Plus Target Market White Target Market
Mature Brand Attended College and Graduated College Plus Education
Target Market
Existence since 2001 (“Our Story”)
APPENDIX
This chart below summarizes the inferred characteristic and what popular TV channels and
magazines of Tropicana Orange Juice consumers lead to that conclusion.
Heavy User Psychographic Profile
Characteristics Examples of Favorite TV channels and
Magazines that demonstrate this
Planet Friendly, Appreciates Nature Animal Planet, Discovery Channel, National
Geographic, Audubon magazine, National Wildlife
magazine, Planet Green
Value Business and Work Bloomberg Television, Consumer News and
Business Channel (CNBC), Fox Business Network,
The Economist magazine, Inc. Forbes, Fortune
Family Oriented Cartoon Network, Disney Channel, FamilyNet
Television Network, Family Handyman magazine
Gardener Garden Design magazine, Gardening How-To
magazine, Birds and Blooms magazine
Likes Fitness/Active Fitness magazine, Bicycling magazine, Muscle and
Fitness magazine, Runner's World Magazine,
Sports Fans Sports Illustrated, Sporting News magazine, Golf
Channel, ESPNU, The Tennis Channel
Traveler Travel Channel, Arthur Frommer’s Budget Travel
magazine, Conde Nast Traveler magazine, US
Airways Magazine
Enjoys Art/Contemporary Culture Ovation channel, Elle magazine, Esquire magazine,
Smithsonian magazine, Life & Style Weekly,
Vanity Fair
Likes to be informed/Intellectual Popular Mechanics magazine, Psychology Today
magazine, Reader's Digest, Scientific American
magazine, Time, Popular Science,
Gamer Official Xbox Magazine, Game Informer
magazine, PC Gamer magazine
Movie Watchers Hallmark Movie Channel, Flix channel, Lifetime
Movie Network (LMN), IFC (Independent Film
Channel)
Works Cited