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1. Introduction:
PepsiCo Inc. (PEP) is a multinational food and beverage corporation
with operations in over 200 countries. Chips, flavored snacks, cereals,
rice, pasta, and dairy-based products are among PepsiCo's food
offerings. Carbonated soft drinks, juices, ready-to-drink tea and coffee,
sports drinks, and bottled water are among the company's beverage
offerings. The corporation employs over 274,000 people worldwide and
is headquartered in Purchase, New York.
PepsiCo holds nine of the top 40 packaged goods trademarks in the
United States, according to market research firm Information
Resources, Inc. (or IRI). Pepsi, Lays, and Gatorade are just a few of the
company's brands, and 22 of them earn more than $1 billion in revenue
apiece.
Pepsi is the second-largest beverage and food processor in the world.
In 1965, Frito-Lay and Pepsi Cola merged to become this company
(Anon., 2009). Consumers all over the world now have access to the
company's healthful and fun products. With Quaker Oats and
Tropicana, it has completed mergers and acquisitions. It has also
bought two well-known bottlers, PepsiAmericas and Pepsi Bottling
Group.
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This acquisition has greatly increased the company's transaction
volume and reinforced its position as a beverage company in Europe
and northern America.
Additionally, the company generates about $60 billion in annual
revenue from the sale of its products and services. Furthermore, foods
and snacks account for around 49% of its annual income, while
beverage sales account for 51%.
In terms of regional earnings, overseas business accounts for 47% of
annual income, with the remaining revenue coming from product sales
in Canada and the United States.
PepsiCo Africa, the Middle East, and Asia, PepsiCo Europe, PepsiCo
Americas foods (PAF), and PepsiCo Americas drinks make up the
company's corporate structure.
A brief history of PepsiCo
The Pepsi-Cola Company and Frito-Lay, Inc. merged in 1965 to
establish PepsiCo. Pepsi-Cola, Diet Pepsi, and Mountain Dew were all
produced at the time by Pepsi-Cola Company. Fritos corn chips, Lay's
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potato chips, Cheetos cheese flavored snacks, Ruffles potato chips,
and Rold Gold pretzels were among Frito-goods. Lay's With the
acquisition of Tropicana in 1998 and the merger with Quaker Oats in
2001, PepsiCo became even bigger.
PepsiCo was formed by the merger of these companies, which resulted
in a powerful diversified consumer staples company. We'll go into
PepsiCo's business model in greater depth in the upcoming installment
of this series.
Type of Organizational Structure
PepsiCo used to be a single division with a hierarchical organization
and power that flowed from the top down. As the corporation has
evolved and acquired more brands over the years, it has had to divide
into several divisions based on both geographical and product lines
considerations.
The Pepsi firm structure has been reformed several times as the over
120-year-old corporation has continued to expand and add new
product lines, such as Pepsi, Quaker, Gatorade, Tropicana, Frito-Lay,
and others. It was divided into three divisions in 2008, one for the
company's North American food offerings, one for its North American
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beverage offerings, and one for foreign activities. It has been divided
into three divisions to handle its product offerings in North America
and three divisions to address specific geographic regions now that it
has over 22 brands and operates in over 200 countries and territories.
Global Hierarchy of PepsiCo
The PepsiCo organizational structure concludes with a hierarchical
structure that spans the entire company. This hierarchy applies to
every part of the business, including the six product and regional
divisions, as well as the seven corporate functional groupings. It
entails monitoring, control, and governance from the top to the bottom
of the organization, with a top-down framework for communications,
monitoring, and control at all levels.
This is how Pepsi ensures that the firm's policies, standards, and plans
are followed by everything and everyone that works for the
organization.
Customer segments
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PepsiCo's key mission is to develop and offer services that keep
customers interested and satisfied. This goal strives to increase
profitability, market share, customer equity, and revenue through
preserving customer loyalty and satisfaction. The company's food and
beverage goods are primarily aimed at primary, secondary, and
emerging markets. Individual clients to major worldwide organizations
are among the market groups that the company has addressed.
Pepsi in Egypt
Pepsi started its business in Egypt back in 1948, and it celebrated 70 years for the giant
soft-drink brand in the Egyptian market.
Pepsi is using several tools in its marketing campaigns to reach all its customers, as
they featured Mohamed Salah in Advert about Ambition and Success, co-branding with
Vodafone in campaign called "Drink...Recharge", they even recently chose to make its
Ramadan campaign through social media and internet asking customer to engage with
them and build customer relationship with them and it went viral.
One of the creative ideas they have made during the Egyptian national soccer team
joining the world cup when they changed the color of their cans to red color to support
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them.
Pepsi utilizes three product levels in its marketing strategy. First there is the core
benefit that seeks to meet the users' specific needs. For instance, there is the diet pepsi
that does not have calories. Secondly, there is the actual product that focuses on the
branding. For instance, the primary colors of Pepsi are blue, red, and white. Lastly,
there is the augmented product that refers to the non-physical aspect of Pepsi. For
instance, the involvement of Pepsi in the Egyptian community is an augmented product.
Pepsi is a convenience product.
Pepsi is an inexpensive product that a customer has ease when selecting and
purchasing. It requires little no planning and can be bought on impulse. The best
distribution strategy that could meet Pepsi's business objectives is intensive distribution.
Intensive distribution allows an organization to use multiple outlets to penetrate the
market. For instance, Pepsi is made available at local shops, supermarkets, and gas
stations among others.
Pepsi uses advertising where non-personal presentation is used to communicate the existence
of the product to the public. For example, the use of Mohammed Salah in Pepsi advertisements.
Pepsi also uses sale promotions to stimulate customer purchases. This could be identified
through strategies such as buying an item and getting another free. Pepsi also uses personal
selling where face-to-face interaction between the company and clients is made. In this case,
Pepsi uses brand ambassadors to push their sales. Lastly, Pepsi uses publicity where the
organization uses free services such as social media to propel mass communication. This
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strategy can be identified in the Ramadan Campaign done by Pepsi on its social media
platforms.
PepsiCo's competitors
In the food and nonalcoholic beverage industry, PepsiCo competes
with global, regional, and private competitors. ConAgra Foods, Inc.
(CAG), Kellogg Company (K), Kraft Foods Group Inc. (KRFT), Mondelez
International, Inc. (MDLZ), Snyder's-Lance, Inc. (LNCE), and Nestlé S.A.
are some of the company's competitors in the food sector (NSRGY).
The Coca-Cola Company (KO) is PepsiCo's closest competitor in the
nonalcoholic beverage business. Dr Pepper Snapple Group, Inc. (DPS),
Cott Corporation (COT), Red Bull GmbH, and Monster Beverage
Corporation are among the beverage industry's competitors (MNST).
Products offered.
PepsiCo owns the most billion-dollar beverage and food brands in the
world. Each of its product lines generates over a billion dollars in
annual retail sales.
The company has established a solid market position, with the
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majority of its products being widely used by enterprises and other
consumers. Aquafina, Tostios, Quakers, Doritos, Ruffles, Mirinda,
Tropicana, and Pepsi are just a few of the brands.
Quality has been seen as a competitive marketing approach by
PepsiCo in terms of features.
Its quality strategy focuses on developing items that are designed to
provide excellent service. Its high-quality products have helped it to
become a market leader and an ethical corporation. This company's
brand has become synonymous with quality, dependability, integrity,
and safety care and service all over the world. The company's
dedication to quality service and sustainable development is
motivated by its obligation to its stakeholders.
Promotional strategies
The company has employed numerous techniques to promote its
products, generate and develop consumer interaction, including one-
to-one marketing via blogs and forums where people interact directly
with other customers, the company, or the brand.
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To make this long-term strategic plan easier, the company is looking
into how to expand its marketing organization, how to make their
brand more appealing to customers, and what consumers look for in a
product that benefits them and meets their demands through forums,
FAQs, and customer service.
Distribution of products
PepsiCo relies heavily on distribution to improve its performance and
maintain its competitive advantage. Customer service, consumer
engagement, transportation, inventory control, and management
materials have all been organized to help the organization successfully
manage its distribution processes.
PepsiCo has synced the industry's supply chain with customer
demands through operations such as distribution, procurement, and
production to accomplish proper distribution. It has also addressed
and minimized its distribution issues by developing collaborative
efforts with its supply chain partners. This has aided in the reduction
of stock-outs, lead times, expenses, and inventory levels, as well as
the improvement of information accuracy and customer service.
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Marketing plan
Marketing at PepsiCo refers to any efforts that result in knowledge of
the availability of specific products and services so that adequate
levels of production may be achieved in response to demand and
supply fluctuations. It also includes the demand-driven strategic
movement of finished goods and services to various places of sale.
Social responsibility and marketing programs
PepsiCo's social responsibility processes include quality control,
grading, waste reduction, packing, processing, transportation, and
physical handling. Its marketers have made a concentrated effort to
investigate the ethical implications of differentiated marketing and
market segmentation when targeting customers from various
demographics.
It is critical to note that social responsibility is a part of PepsiCo's
program because the company recognizes that the ethical
complexities of market exchange necessitate factors such as market
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selection, consumer characteristics, and product nature being
understood and integrated into the framework. When the
aforementioned issues intersect, public policymakers and marketers
will face distinct ethical dilemmas.
Pepsi's channels of distribution
Distribution systems move the product from the factory to the consumers. Pepsi has
three channels of distribution:
a) large format - include customers such as Kroger and Walmart, where they have
shelves, large displays and people have take-home purchases. The main benefit is
reaching a lot of customers and the target market are families and young independent
people.
b) small format – include customers such as Walgreens, Dairy Mart, Thornton's. This is
where impulse purchases occur, and benefit is allowing small business to focus on core
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competencies without having to hire new personnel. The target customers are adults
helping their loved ones with personal needs, senior population, and older citizens.
c) On-premises - include schools and restaurants such as KFC, Taco Bell and Pizza
Hut. The target customers are kids and families. Benefits are cost and time saving.
Marketing Channel Strategy
The role of distribution in corporate objectives and strategy
The distribution system of PepsiCo is aiming to make all or most of its products
available within a distance that can be easily reached by customers. PepsiCo is
focusing on adapting its distribution system by developing its distribution capacity while
meeting the needs and preferences of its customers to increase the sales. The
distribution strategies of Pepsi such as traditional retailing distribution, online channel
and franchised partner play a significant part in its long-term business strategy which
lead to a fast purchase decision for customers.
The role of channel strategy in creating a differential advantage.
Since Place is a competitive advantage in the marketing mix because it cannot be easily
copied by competitors, PepsiCo Egypt is targeting several marketing segments with
suitable and affordable prices while making its products available all over the country.
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PepsiCo has over 34 distribution centers around Egypt, however PepsiCo is focusing on
hiring more transportation facilities to get as far and, to reach the geographical
territories that cannot be reached by its competitors in order to create a differential
advantage.
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