PepsiCo is an American multinational food and beverage corporation which was established in 1965 with a merger of Pepsi-Cola Company and Frito-Lay Inc. The company manufactures and distributes its food products and in more than 200 countries and territories. PepsiCo’s headquarter is situated in Purchase, New York and employs around 274,000 people worldwide.
There are 22 brands of PepsiCo available in 200 countries and territories around the world and serves million people each day. The target market of PepsiCo is not limited to age or gender but it is serving everyone everywhere. According to Forbes, Pepsi markets itself as a brand of youth and have always captured teenagers and young adults. Even the taglines over the year included “Live for Now” and the “Pepsi Generation”. Moreover, the diet Pepsi brand is more inclined towards adult men and women.
PepsiCo is substantially investing in R&D in order to make its product healthier. The R & D of PepsiCo is trying to discover new ingredients, recipes, and sweeteners to keep themselves one step ahead of the competitors. Moreover, PepsiCo is also making investments in advanced manufacturing technologies to makes its portfolio healthier. PepsiCo has 20.09% market share in the global market as recorded in 2015. (Euromonitor) PepsiCo expanded itself over the years through the acquisition of business outside of its core function of food and beverage brands.
Pepsi has four main goals to stay as the leading company:
• To improve the beverage and food choices that meet the needs of consumers
• Protect global water supplies
• Make a safe and healthy workplace
• To sustain shareholder value
• Deliver long-term financial performance
The strategy of PepsiCo focuses on the following six areas:
• Attaining growth through mergers and acquisitions
• Creating strategic alliance in the international scale
• Focusing on emerging markets
• Focusing on Organizational culture.
• Developing and marketing the idea of one PepsiCo
• Innovation in marketing initiatives
Annual Marketing Budget
Total revenue of company by 2016 is $62.799 billion with a total net income of $6.329 billion. PepsiCo spends heavily on marketing and promotional activities. PepsiCo spent $2.5 billion in advertising in the company’s most recent fiscal year.
PepsiCo is providing a number of products under the name of different brands. The product line of PepsiCo includes soft drinks, energy drinks, cereal, snacks, side dishes, breakfast bars, sports nutrition, bottled water, etc. Soft drinks include Pepsi, 7up, Mirinda, Mountain Dew, etc. Snacks item includes Cheetos, Lays, etc. Some of the brands and products of PepsiCo were included in the product portfolio through acquisition.
PepsiCo different pricing strategies for brands. Most of the products are priced based on competitive pricing strategy since the price competition between Pepsi and Coca-Cola is too heavy. Some of the products are priced based on Hybrid everyday value, especially soft drinks. The strategy is aimed to drive customer loyalty by keeping average pricing and not giving the low-quality product impression.
PepsiCo has a strong presence globally because of its strong distribution network. PepsiCo products are available in retailers, such as supermarket, grocery, and convenience stores. PepsiCo is also available through online merchandisers.
PepsiCo spends heavily on promotion because of the intense competition. They focus on all elements of marketing mix such as an advertisement, Sales promotion, direct marketing and PR. They also spend heavily on digital campaigns. Cutting-edge consumer engagement programs turn PepsiCo a dominant driver of food & beverage retail sales growth around the globe.
PepsiCo has a fierce competition with Coca-Cola which is a market leader in the beverage industry. Other competitors are Dr. Pepper Snapple Group and Reeds.
• Strong brand image and reputation
• Entrenched and Diversified Product Portfolio
• Extensive global production network
• Extensive global distribution network
• Low penetration outside the USA
• Products perceived as unhealthy
• Strong competition in beverages segment
• About PepsiCo. Retrieved from http://www.pepsico.com/company
• Pepsi target market. Retrieved from www.forbes.com
• PepsiCo Market Share. Retrieved from http://www.euromonitor.com/pepsico-inc/company
• PepsiCo advertising budget: Retrieved from https://www.statista.com/statistics/286547/pepsico-advertising-spending-worldwide/