MARKETING MANAGEMENT EXAMINATION

NAME: Karen May B. Alonsagay

1. What are factors outside the company should Pepsi capitalize on?

● Healthy Options: It should work more on improving the health implications of their products and
make the customer aware of the same. Diet Pepsi is a positive move towards that direction.
● Diversification: Business diversification into different market segments is a huge opportunity.
They have the talent, resources and financial backing to do the same. This can also be done by
acquisitions.
● CSR: They can do more CSR activities to tackle the negative remarks that hurt the brand image
of the organization and benefit the local people.
● R&D: Recently PepsiCo came out with healthier options in a soft drink. To make 7Up by using
the substitute of sugar called Stevia. This can prove to be a game changer. More such research
needs to be done. Focus more on the diet drinks category. They have recently released a variant
of their cola sweetened with Stevia and sugar called Pepsi Next.
● Flavors: A brand which has risen strongly in the recent years is Paperboat. Paperboat is known
for its various flavors such as watermelon, raw mango etc. Bringing in such flavors even in
carbonated beverage form can help Pepsi attract a larger market.

2. What are factors outside the company should Pepsi consider as damaging?
● Competitors: PepsiCo’s main competitors are Coca-Cola, Kraft foods, Nestle, Dr Peppers Snapple
Group and Mondelez.
● Health Factor: The unhealthy factor associated with its products can take a toll on the health
conscious customers and might lose them. This can be clearly seen by the fall of soft drinks sale.
● Economic Slowdown: With the recent reforms in the country PepsiCo might see a drop in its
sales due to a cash crunch in the economy. Other factors such as recession and inflation may
also impact sales of the company.
● Government Norms: Different norms of different countries might prove difficult to handle and
compliance with it as well.

3. What are Marketing Dimensions that Pepsi is good at? bad at?
Good at:
● Brand equity: it is one of the most prominent and famous brands in the world in the food and
beverage sector. It is also known as the brand of youth. It has a high brand recognition and
reputation. It has a brand valuation of $19.4 billion and it is ranked 29 in the Forbes most
valuable brands list.
● Strong Leadership: Under the leadership of Indra Nooyi PepsiCo has been doing really well. It
has managed to stay at number two position in the complete food and beverage sector only
behind Nestle in that field.
 ● Customer Loyalty: PepsiCo has an extremely loyal customer base. In its beverage category all its
soft drinks have an iconic taste and that’s why their customers do not prefer to shift brands.
They have emerged as a very strong brand when it comes to juices and bottled water category.
Frito-Lay has been one of the top-selling brands in the world with brands under it such as
Doritos, Lay’s, Funyuns, Uncle Chips, Cheetos, Tostitos and Walkers. They had managed to grab
6 slots in the top 10 global snack brands with topping the charts (all 3 spots) as well.
● Strong distribution: Pepsi has a global presence in more than 200 countries providing them with
a very good distribution network.
● Supply Chain: It has one of the best supply chain networks in the world, making the products
available throughout the world. Apart from this they also have a very efficient reverse logistics
associated with it.
● Tie-Ups: They have tie-ups with sports events and music concerts which keeps them in the lime
light and thereby increasing the brand recall. They have sponsorships to major sports teams
thereby standing with what the brand is known for, youth and energy.
● Clear target audience: Pepsi, unlike Coca Cola has always had a clear target audience – the
young crowd. It always targets youngsters through its ads and generally the youngsters are
shown to be smarter then the old ones. The message is clear – Pepsi is the in thing.
Bad at:
● Competition: It has heavy competition from Coca-Cola in their soft drinks category. They are
always neck to neck with each other. This competition thereby provides a room for not so loyal
customer base to switch brands quickly.
● Products perceived as unhealthy: Most of the soft drinks of the PepsiCo is perceived as
unhealthy.
● Product Dependence: They are only present in the food and beverage industry which may be
harmful in the longer run. They need to diversify their business to other product segments to
become a global leader.
● Failed Products: Many failed products such as ‘Crystal Pepsi’ which hurts the brand image of the
PepsiCo and thereby giving room to the competitors to grow.
● Brand Ambassadors: Wrong remarks or ill performance by the famous personalities/celebrities,
in turn, might damage the brand image of PepsiCo as they are the face of the organisation. Over
dependence on celebrities for endorsements is a huge risk.
● Value addition: Pepsi is known to have advertisements which are targeted towards youngsters.
However, it is not known to display Value advertising which is a characteristic of Coca cola. Coca
cola has time and again focused on the positive values of life, something which Pepsi can learn
from them.
4. With factors stated above, what strategies can Pepsi do? (use SWOT Matching Matrix)

Swot Matrix

Strength Weakness
S1: Brand equity W1: Competition from Coca-
S2: Strong leadership cola
S3: Customer loyalty W2: Products perceived as
S4: Strong distribution unhealthy
S5: One of the best suppy chain W3: Product dependence
network W4: Failed products
S6: Ties-up with sports events W5: Wrong remarks from brand
and music concerts ambassadors
S7: Clear target audience W6:

Opportunities

Threats

5. What tactics should Pepsi do for the next 3 – 5 years?

Note: Always remember the SMART principle.