PepsiCo Strategy: Marketing, International, Competitive, Jobs 2013

 A. Marketing Strategy for PepsiCo
1. Price and advertising strategy
PepsiCo Overhauls StrategyPepsiCo overhauls strategy is part of its advertising strategy. PepsiCo Company plans to save $1.5 billion in the next three years. The company plans on revamping up its advertisements, cutting on thousands of its work force and ensuring a bigger than the expected decline in it’s near term earnings. The funds saved by the company will help the company to step up its spending on brand advertisement.

The saved amounts will offset the high and increased amount spend on marketing and advertisement (PepsiCo Strategy, 2013). This move is expected to increase the cost-competitiveness of the company and to provide the company with funds for innovative initiatives and for brand building which will then lead to an increase in the sales obtained from the North American market.

PepsiCo has been shaping its pricing strategies in ways which will suit the soft drink global market. The pricing strategy of PepsiCo is to reduce the price of its products during holy months like Ramadan and Eid. This serves as a promotional price strategy for the company. Pepsi has also adopted segmented pricing strategy making the price of its products be higher in luxurious hotels and other executive sectors (PepsiCo Employment Strategy, 2013).

The pricing strategy adopted by the company is quite helpful in helping the company to compete with its largest competitor, Coca-Cola. As part of its price strategy, PepsiCo operates its sales through psychological and promotional pricing strategy (PepsiCo Jobs Strategy, 2013).  The company has also been using price discounts which are aimed at attracting more customers into purchasing the company products.
Tactics that support PepsiCo strategies

To save the target amount, PepsiCo plans on cutting its work force by 8,700 jobs or about a 3% of its current work force. The job loss will be affected in 30 countries. The money which would have been used for salaries and wages will instead be channeled to brand advertisements.  The strategy will focus on 12 brands which includes Pepsi-Cola, Tropicana, Doritos, Gatorade and 7-Up among many other brands. Price cuts are the tactics which PepsiCo has adopted to enhance its pricing strategies. For example, it reduces the prices of its brands during certain seasons after which the price increases (PepsiCo Strategy, 2013).

2. International strategy

PepsiCo’s international activities in Saudi Arabia, China, Mexico, India and Eastern Europe account for more than half of the company revenue and its operating profit. As a result, the company has been increasing its global advertisements all over the 190 countries in which it runs its businesses. The global advertisement is an international strategy used by the company to create brand awareness.

The company has recognized the need to have a careful integration of high standards in its various supply chains and more so at the retail level across the world as a strategy of increasing its competitive advantage (PepsiCo Strategy, 2013). The company also strives to ensure excellence and specifically for the brands or products together with the packaging, advertising and marketing as a way of ensuring customer loyalty and brand loyalty. The rational behind this company strategy is to ensure that all customer get high quality products and this is because quality controls are highly realized in the process of bottling, packaging and from the warehouses to the shelves.

As part of its international strategy, PepsiCo markets its products using the localization process where the local bottlers in the subsequent countries determine which products to pact in order to sell in their locality. The strategy behind this is to ensure that its products are produced in the country where they will be consumed. PepsiCo balances its communication and promotions through celebrity endorsers, newspapers, sponsorships and internet. With this the company is assured of customer awareness in the global market (PepsiCo Business Strategy, 2013).

The company also promotes it products and brand through supermarkets across the world by giving fantastic prizes and discounts to attract the attention of the buyers.PepsiCo has also adopted a new international strategy as a way of getting ahead of its main rival Coca-Cola Company.  The company has been in the recent past partnered with its customers through TV networks across the globe like the NBC and also strategically places its commercials in order to closely relate to its audiences. International expansion has been the main international strategy for Pepsi Company in its bid to beating its rivals (PepsiCo Corporate Strategy, 2013).

Another international strategy adopted by PepsiCo is its brand flexibility where the company tailors its brands to local cultures and tastes. All the international strategies adopted by PepsiCo are aimed at increasing its global operations and global growth. PepsiCo Strategy: Marketing, International, Competitive, Jobs 2013

B. PepsiCo’s competitive strategy

1. Cola wars
Cola wars started back in the 1980 and describe the marketing and advertising tactics which have pitted the Coca-Cola Company against PepsiCo (PepsiCo Cola Employment Strategy, 2013). Even to date, the two soft drink companies continue to battle for the international and the national stages in food service and in retail. Cola wars have made PepsiCo adopt complex and sophisticated advertising and promotions in order to defeat the Coca-Cola Company.

The competitive strategy adopted by PepsiCo as a result of cola wars is the production of healthy drinks. The consumption of carbonated drinks in USA has declined steadily in the past decade due to health concerns in the country where obesity has been a health issue. As a result, PepsiCo has had to devise a new competitive strategy of making a variety of beverages in order to sell the US market.

For example, the company has focused on the production of water juices, sport drinks and teas as a way of targeting US and similar markets.As part of its complex and sophisticated advertising and promotions tools, the company has hired a Global Nutrition Group as its marketing tool. The nutritionists were to direct the company efforts to reduce sodium, sugar and fat in its products.

The nutritionists were also to develop a campaign to create an awareness to consumers on the healthier foods produced by the company. To do this, the nutritionists were required to analyze the sugar, fat and sodium content in each of the products or the drinks and explain to the consumers whether those percentages had any health impact (PepsiCo Strategy, 2013). Cola wars have made PepsiCo diversify its business operations and to increase its reliance on other brands like Tropicana, Frito Lay and Quaker in order to increase its sales revenue.

The company has adopted the complex and sophisticated advertising and promotions as a way of competing for a market share with Coca-Cola. These complex and sophisticated advertising and promotions are mainly to ensure uniqueness in its marketing and differentiate its brands from those of its competitors.

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