FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS BUSINESS AND FINANCE

FINAL ASSESSMENT

PEPSICO
MARKETING PLAN

SUBMITTED BY:
RECENTES, GWYNNETH
RODRIGUEZ, FRANCINE THERESE
ROM, AIZEL MAE
SARTE, ALEXA
TALAVER, JONAH
VALENCA, PRINCE KEVIN
VENTOLERO, SWITZER
YOUNG, GERRARD DOMINIC

SECTION 16
 TABLE OF CONTENTS

I. EXECUTIVE SUMMARY…….…………………………….……………….……..1

II. CURRENT MARKETING SITUATION

2.1 INDUSTRY ANALYSIS…………………………………..….……..…...…….1
2.2 PORTER’S FRAMEWORK……………………………………..…..………..2
2.3 COMPETITIVE PROFILE MATRIX………………………..………………...3
2.4 CONSUMER PERCEPTION……………………………..…………………..5
2.5 MACRO-ENVIRONMENTAL FORCES……………………...……..............6

III. COMPANY PROFILE

3.1 ABOUT THE COMPANY……………………….…….………………………..8
3.2 MISSION AND VISION……………………………..………………………….8
3.3 COMPANY HISTORY…………………………………….……………………9

IV. OPPORTUNITIES AND ISSUE ANALYSIS

4.1 SWOT ANALYSIS…………………………………………………………....9
4.2 KEY SUCCESS FACTORS…………………………………………………11

V. TARGET MARKET………………………………………………………………..13

VI. KEY MARKETING STRATEGIES

6.1 POSITIONING STATEMENT………………………………………………..13
6.2 PRODUCT STRATEGY………….…………………………………………..13
6.3 PRICING STRATEGY………………………………………………………...13
6.4 PROMOTION STRATEGY…………………………………..……………….14
6.5 DISTRIBUTION STRATEGY………………………………………………...14

VII. REFERENCES…………………………………………………………………….15
 I. EXECUTIVE SUMMARY

A food and beverage company called PepsiCo sells non-alcoholic beverages

including juice, soft drinks, and energy drinks that are consumed by people in
more than 200 countries and territories every day. PepsiCo gained billions in net
sales thanks to a complimentary beverage and convenience food portfolio that
includes Lay's, Doritos, Cheetos, Gatorade, Mountain Dew, Quaker, and
SodaStream. The product portfolio of PepsiCo comprises a variety of delectable
foods and drinks, several of which are legendary brands with projected annual
retail sales of over $1 billion apiece (About PepsiCo, n.d.).

Though there were many primary industry participants such as Coca-Cola,

Nestle, Red Bull, and Dr. Pepper Snapple Group, according to Gorton (2022),
consumers still tend to purchase Pepsi Co, Inc. products because of its
affordable prices on its diversified product portfolio encompassing the food,
snack, and beverage industries.

II. CURRENT MARKETING SITUATION

2.1 Industry Analysis

The industry trends recently are health and wellness, convenience, and
sustainability. Health and wellness are where individuals become more health-
conscious and are now opting for healthier food and beverages in the market.
Convenience, since most people are busy nowadays, we usually prefer on-the-
go drinks. Aside from that, the increased awareness of people for the
environment led to consumers preferring products that are sustainable and
good for consumption with little to no harm to the environment.

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Moreover, the food and beverages industry keeps on expanding with a 19.5%
growth rate (Orendorff, 2022). The industry is expected to grow in the coming
years. The factors that contribute to this growth are population growth,
increased demand for food and beverages, changes in an individual’s eating
habits, and technological advancement or innovations for food production.

2.2 Porter's Framework

Figure 1. Porter’s Framework for PepsiCo

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 As shown, the Competition in the industry is high for PepsiCo, Inc. since it
competes with other big companies such as Coca-Cola, Red Bull, Nestle, and
other Food and Beverage companies. These competitors compete with the
price, the quality of their products offered, the way they market the products,
and the distribution of the products to different areas. The threat of new entrants
to PepsiCo is low. To enter the industry, new entrants require to have a
significant amount of capital and investments in producing a product, along with
distribution and marketing. Aside from that, existing companies have already
gained several loyal customers, it will be a huge challenge for any new entrants.

On the other hand, the Bargaining power of suppliers is low to moderate. With
PepsiCo having a wide variety of suppliers for raw materials, it provides them
more choices in which deal is the best which reduces the bargaining power of
suppliers. In contrast to that, the specialized materials such as the ones used
for packaging tend to have few to a sole supplier which gives the supplier more
bargaining power.

As for the Bargaining power of buyers to PepsiCo, it is moderate. It is sold to a

wide variety of customers, from distributors, wholesalers, retailers, and of
course, to the consumers of the product itself. It is moderate for these customers
to somewhat have the power to negotiate when it comes to the price of the
product.

Lastly, the threat of substitute products for PepsiCo is high. The existence of a
wide variety of other beverages in the market gives the customers choices or
options and could also switch to healthier alternatives.

2.3 Competitive Profile Matrix

The Competitive Profile Matrix (CPM) is a tool utilized to compare a company's

strengths and weaknesses in comparison to its main competitors. It is frequently used to
3.
better understand the contributing external environment and competition in a specific
industry.

4- Major Strength

3-Minor Strength

2-Minor Weakness

1-Major Weakness

COMPANY COMPANY A COMPANY B COMPANY C

PRODUCT PEPSI-COLA COCA-COLA REDBULL

PRICE 4 3 2

DISTRIBUTION 3 4 1
CHANNELS

PRODUCT 4 4 3
QUALITY

RANGE OF 4 2 1
PRODUCTS

GLOBAL 3 4 2
PRESENCE

TOTAL 3.60% 3.40% 1.80%

WEIGHTED
SCORE

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 2.4 Consumer Perception

Factors that influence consumer perception of a brand:

a. Quality- This is one of the main factors which consumers take into consideration
when making their choice of brand. Quality, according to Uggla (2001), is an
essential element of a brand, building how it is perceived by the public eye.
b. Price- This is also an important factor that consumers should take note of when
choosing a brand, going for lower prices to combat the current economic status. It
also reduces financial risk or consumes a higher tag to achieve greater brand
quality.
c. Influence of external factors- Word of Mouth is an element that improves sales
of a brand, the more people talk about it, the more demand it induces. Consumers
are nurtured to consult each other about a new product before buying it, this is
through the form of watching product reviews, forums, social media exposure, or
just by simply asking questions.
d. Advertising Methods- Customers' first glimpse of the products is through
advertisements, which become one of the most important factors influencing
customer perception. A company's advertisements and campaigns help build a
positive customer perception and increase sales. It also increases the exposure of
the product, making it well-known to the public eye, this can be done through social
media or television advertisements.
e. Packaging- Packaging plays an important role as it is one of the first factors on
why an individual will consume a product. Companies put effort into packaging and
they avoid certain tactics that will make their product unappealing to their target
markets. Packaging is a type of advertisement in the sense that it promotes sales.
This includes attracting customers and describing and selling the product.
f. Convenience- According to Lin and Chang (2003), convenience plays an
important role in consumer choices. It also reduces non-monetary costs such as
the time and energy of consumers when purchasing certain products.
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 Pepsi-Cola has been prominent in the beverage industry for decades, with
accessible products that contributed to its tremendous growth. It can be seen being sold
in various establishments, as its brand revolves around smartness, youthfulness, and fun.
They also present sustainability actions such as aiming to increase resource use, lower
greenhouse gas (GHG) emissions, replenish water, enhance product quality, and recycle
packaging materials at every level of our intricate value chain. Aside from that, they have
cashback loyalty programs that target enhancing customer loyalty.

At first glance, Pepsi-Cola utilizes simple and catchy packaging that can be
seen across the establishment, increasing sales on an overall level. They also have
smaller cheaper versions of their products making it accessible to everyone, as it is also
sold in locations such as sari-sari stores. It is also campaigned through creative factors,
PepsiCo uses advertising as its main marketing communication strategy. For instance,
the business is well-known for using famous people as brand ambassadors to advertise
its products in print, radio, television, and online. The business sponsors or provides
storefronts and other locations with business signs as another form of advertising.

2.5 Macro-Environmental Forces

A. Political Factor

The political environment can have a variety of effects on business organizations. This
can lead to potential risk factors and result in a significant loss of a company. Political
factors have the ability to alter outcomes and results, They can also have an impact on
government policies at all levels, from local to federal. Companies will decrease risk if
they are prepared to deal with the local and international consequences of politics. An
example of this is the increase or decrease in taxes. A higher tax on beverages affects
the company directly.

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 B. Economic Factor

PepsiCo is affected by inflation, economic stability, and taxes. Fortunately, for most parts,
it is mainly manageable. It becomes more challenging when so many of their products
are purchased from other countries. The local currency influences their prices. But
PepsiCo felt the first signs of trouble between 2015 and 2016. With sudden changes in
international exchange rates and inconsistent economic conditions, PepsiGo’s business
fate highly depends on economic stability on a global scale.

C. Social Factor

With sudden changes in the population’s consumerism from fast foods to more health-
conscious products, more and more individuals opt for healthier diets leading to a threat
to PepsiGo’s products that mainly contain sugar. As society shifts away from consuming
carbonated drinks, PepsiGo had a fall in its sales.

As this problem arose, PepsiCo took action to cater to this fallback. This includes
releasing diet versions of their drinks that are mainly low in sugar and have low-calorie
content. As society shifts to healthier products, they release a line of products to stay
relevant to the current trend.

D. Technological Factor

PepsiCo can benefit from the most recent technological advancements in artificial
intelligence, machine learning, and digital bots. It can be utilized to increase their brand
exposure. Online marketing is the most effective way to connect with customers, as well
as to increase sales. It’s especially accessible to companies like PepsiCo, which is well-
known around the world. It is not required to compete with new businesses that are still
trying to find their footing and become well-known to the public eye.

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 E. Environmental Factors

People are becoming more aware of environmental challenges, and tend to focus on
brands that have compassion towards the environment and include factors to reduce
environmental damage. Pepsi utilizes plastic bottles as it is much more convenient to
consumers than glass bottles. At the same time, incorporating plastic packaging implies
the idea that the company doesn't make an effort to adapt sustainable methods for its
product production. Careful planning and steering the company in the righteous direction
opens up new possibilities for the company.

III. COMPANY PROFILE

3.1 About the Company

The corporate headquarters of the multinational PepsiCo’s food and beverage division is
based in Purchase, New York. It became one of the largest food and beverage firms in
the world in 1965 as a result of the merger of Frito-Lay and Pepsi-Cola. Popular beverage,
snack, and food brands like Pepsi, Lay’s, Gatorade, Tropicana, and Quaker Oats are
among the company’s product offerings. More than 300,000 people work for PepsiCo,
which operates in more than 200 countries and territories.

3.2 Mission and Vision

The mission of PepsiCo is to lead the global consumer products industry by supplying
easy food and drink options. The company seeks to give its investors a profit in addition
to opening up opportunities for its workers, business partners, and the communities in
which it works. PepsiCo is committed to maintaining honesty, fairness, and integrity in all
its business dealings. The company’s vision is to achieve top-tier financial performance
through sustainable business practices that leave a positive impact on society and the
environment.

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3.3 Company History

PepsiCo has a rich history dating back to 1898 when Caleb Bradham, a pharmacist,
invented a drink called "Brad's Drink," which later became Pepsi-Cola. The company
experienced rapid growth in the early 20th century and merged with Frito-Lay in 1965 to
form PepsiCo. Since then, PepsiCo has expanded its product offerings and global reach
through strategic partnerships and acquisitions. With a wide range of brands and a strong
commitment to sustainability and social responsibility, PepsiCo is a significant participant
in the food and beverage sector today.

IV. OPPORTUNITIES & ISSUE ANALYSIS

4.1 SWOT Analysis

Strengths

1. Strong brand portfolio: PepsiCo has a strong portfolio of brands, including Pepsi, Lay's,
Doritos, Gatorade, Tropicana, and Quaker Oats.

2. Diversified product portfolio: PepsiCo has a diversified product portfolio, including

beverages, snacks, and foods, which provides the company with stability and the ability
to withstand economic fluctuations.

3. Wide distribution network: PepsiCo has a strong distribution network that covers more
than 200 countries, allowing the company to reach a wide range of customers.

4. Strong financial performance: PepsiCo has a history of strong financial performance,

with consistent revenue growth and profitability.

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 Weaknesses

1. Dependence on a few major markets: Although PepsiCo has a global presence, the
company is highly dependent on a few major markets, such as the United States, which

could expose the company to risks associated with economic and political instability in
these markets.

2. High sugar content: Some of PepsiCo's products have high sugar content, which may
make them less attractive to health-conscious consumers.

3. Limited presence in emerging markets: Although PepsiCo has a global presence, the
company has a limited presence in some emerging markets, which may limit the
company's growth potential.

Opportunities

1. Growing demand for healthier products: There is a growing demand for healthier
products, and PepsiCo can capitalize on this trend by developing and marketing healthier
products.

2. Expansion into emerging markets: PepsiCo can expand into emerging markets to tap
into new growth opportunities.

3. Acquisitions and partnerships: PepsiCo can acquire or form partnerships with other
companies to diversify its product portfolio and expand its distribution network.

Threats

1. Intense competition: PepsiCo faces intense competition from other food and beverage
companies, which could affect its market share and profitability.

2. Changes in consumer preferences: Changes in consumer preferences could negatively

affect PepsiCo's sales if the company is unable to adapt quickly enough.

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3. Government regulations: PepsiCo is subject to government regulations, particularly
regarding food and beverage labeling and advertising, which could affect the company's
operations and profitability.

Overall, PepsiCo has a strong brand portfolio, diversified product portfolio, and wide
distribution network, which provide the company with a competitive advantage. However,
the company faces challenges such as high sugar content in some of its products,
dependence on a few major markets, and intense competition. To mitigate these
challenges, PepsiCo can focus on developing healthier products, expanding into
emerging markets, and forming partnerships and acquisitions.

4.2 Key Success Factors

PepsiCo Inc. is a global food and beverage corporation that has established itself as a
leader in the industry. To maintain and strengthen its market position, the company needs
to focus on several key success factors in its marketing plan.

1. Strong Brand Identity: PepsiCo Inc. has a strong brand identity based on a long
history of successful marketing efforts. According to Interbrand's 2021 Best Global
Brands ranking, PepsiCo is ranked 23rd with a brand value of $26.6 billion
(Interbrand, 2021). Maintaining a strong brand identity is crucial for PepsiCo's
success as it helps the company differentiate its products from competitors.
2. Innovation: According to Interbrand's 2021 Best Global Brands ranking, PepsiCo
is ranked 23rd with a brand value of $26.6 billion (Interbrand, 2021). Maintaining a
strong brand identity is crucial for PepsiCo's success as it helps the company
differentiate its products from competitors.
3. Target Market Segmentation: PepsiCo segments its target market based on
demographics, psychographics, and behavior patterns. For example, the company
targets millennials with its Mountain Dew and Doritos products, which are known
for their bold flavors and edgy marketing campaigns (Nielsen, 2018). This targeted
approach helps PepsiCo create marketing campaigns that resonate with its target
consumers and increase the chances of conversion.
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4. Effective Distribution Channels: PepsiCo has an extensive distribution network
that includes partnerships with retailers, vending machines, and e-commerce
channels. According to its 2020 Annual Report, PepsiCo has 22,000 distribution
routes in the US alone (PepsiCo, 2020). This allows the company to ensure that
its products are available to consumers in a timely and efficient manner.
5. Effective Pricing Strategies: PepsiCo uses a range of pricing strategies,
including penetration pricing and value-based pricing, to reflect market conditions
and consumer demand. According to a report by Euromonitor International,
PepsiCo’s pricing strategy for its Pepsi brand focuses on affordability and value for
money, which has helped the brand maintain its market share (Euromonitor
International, 2019).
6. Social Responsibility: PepsiCo has a strong commitment to social responsibility
and sustainability. The company has set ambitious goals to reduce its carbon
footprint, promote sustainable agriculture, and support local communities. For
example, PepsiCo’s Sustainable Farming Initiative aims to train 250,000 farmers
in sustainable farming practices by 2025 (PepsiCo, 2020). This commitment to
social responsibility helps PepsiCo build a positive brand image and attract socially
conscious consumers.
7. Data-Driven Decision Making: PepsiCo uses data and analytics to optimize
marketing campaigns, product development, and pricing strategies. The company
uses a range of tools, including consumer insights, sales data, and social media
analytics, to make data-driven decisions. According to a report by Adweek,
PepsiCo’s data-driven approach has helped the company increase its marketing
efficiency and ROI (Adweek, 2018).

PepsiCo Inc. can maintain and strengthen its market position by focusing on these
key success factors. By investing in innovation, branding, distribution, cost
efficiency, and sustainability, the company can continue to meet consumer needs
and expectations while driving growth and profitability.

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 V. TARGET MARKET

Pepsi Cola’s target market is teens, young adults, and middle-aged adults, usually
between the ages 13 and 45 years old, in the US and also worldwide. They
currently cater to a wide range of socio-economic classes, their current target
market is in classes A, B, C, and D.

VI. KEY MARKETING STRATEGIES

6.1 Positioning Statement

- PepsiCo offers a wide variety of food and beverages that are enjoyed by
consumers all around the world. It creates a refreshing sensation upon having a
taste of a PepsiCo product. In contrast with the other brands, As stated by PepsiCo
(n.d.), they have some of the most iconic brands and convenient products that
cater to and satisfy the needs of their customers and consumers.

6.2 Product Strategy

- PepsiCo products are some of the most well-known food and beverages in the
market today. According to Ferguson (2017), they attract customers by
continuously creating and developing new variants of their existing products such
as zero-calorie, sugar-free, caffeine-free, reduced-salt, and many more
improvements to fit the needs of their customers.

6.3 Pricing Strategy

PepsiCo's pricing techniques are market-based and hybrid everyday value. Pepsi
products are priced using market-based pricing because PepsiCo wants to
ensure that its price is competitive and is based on other firms and market
conditions. While Hybrid Everyday Value is only used for a few of their items,
particularly beverages, the purpose of hybrid everyday value is to reduce the
price or gap between holidays and regular days so that customers will want to
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 buy more regularly rather than just during holidays.

6.4 Promotion Strategy

PepsiCo’s promoting strategy is composed of four strategies: Advertisement,

Sales promotion, Direct marketing, and Public relations.

1. Advertisement - PepsiCo is known for using celebrities for promoting their

products, which they promote on social media, TV, radio, and other platforms.

2. Sales Promotion - The company also uses sales promotions such as

discounts, package deals, and Coupons.

3. Direct Marketing - PepsiCo uses direct marketing to approach the target

market directly and the customers who are less active online and they are doing this
to provide wholesale prices to others.

4. Public Relations - Pepsi is one of the well-known beverages around the

world and they are using its image to assist and sponsor an event such as sports
events and concerts, where it can promote its products and engage with the
customers.

6.5 Distribution Strategy

Pepsi's primary distribution strategy is Direct-Store-Delivery (DSD) and e-

commerce platforms, in which Pepsi products are sold directly to customers or
retail stores, the company delivers its products and bypasses the distribution
center to reduce operating costs, and some of the products are sold directly to
the customer via online or e-commerce. With the Pepsi DSD, the company can
monitor the stocks of the customers and reduce the shortage of their product
while maintaining and building a strong relationship and loyalty to the customers.

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 VII. REFERENCES

● About Pepsico. PepsicoUpgrade. (n.d.). https://www.pepsico.com/who-we-

are/about-pepsico
● Adweek. (2018, June 11). How PepsiCo Is Using Data and AI to Drive Marketing
Efficiency.https://www.adweek.com/performance-marketing/how-pepsico-is-
using-data-and-ai-to-drive-marketing-efficiency/
● Euromonitor International. (2019, March 27). PepsiCo Inc in Soft Drinks (World).
Retrieved from https://www.euromonitor.com/pepsico-inc-in-soft-drinks-
world/report
● Ferguson, E. (2017, February 6). PepsiCo’s Generic and Intensive Growth
Strategies. Panmore Institute. Retrieved from: https://panmore.com/pepsico-
generic-strategy-intensive-growth-
strategies#:~:text=Product%20Development.&text=This%20intensive%20strateg
y%20requires%20offering,its%20food%20and%20beverage%20products.
● Gorton, D. (2022, March 23). Coca-Cola vs. Pepsi's Business Models: What's the
Difference? Investopedia. Retrieved from
https://www.investopedia.com/articles/markets/081415/comparing-cocacola-and-
pepsis-business-models.asp
● Interbrand. (2021). Best Global Brands 2021. Retrieved from
https://www.interbrand.com/best-brands/best-global-brands/2021/ranking/
● Mridula, N.T. (n.d.). Pricing Strategy of PepsiCO. TheStrategyWatch. Retrieved
from https://www.thestrategywatch.com/pricing-strategy-pepsico/
● Nielsen. (2018, February 12). Snack Attack: How PepsiCo Plans to Grow Its
Snack
● Orendorff, A. (2022, April 28). Food and Beverage Industry Report: The Digital
Future of Consumables in the Ecommerce World. Commonthread.
Https://commonthread.com/blogs/coachs-corner/food-and-beverage-industry-
trends#statistics

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● PepsiCo. (n.d.). About PepsiCo. Retrieved from https://www.pepsico.com/about.
● PepsiCo. (2021). Mission & Vision. Retrieved from
https://www.pepsico.com/sustainability/mission-vision.
● PepsiCo. (n.d.). Our history. Retrieved from https://www.pepsico.com/about/our-
history.
● PepsiCo. (n.d.) Who We Are. Retrieved from: https://www.pepsico.com/who-we-
are/about-pepsico.

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