MANAGING MARKETS

The Managing Markets

Executive Summary

The macro-environment consists of larger societal forces that affect entire micro-environment. The six forces making up the company's macro-environment include demographic, economic, natural, technological, political/legal, and social-cultural forces. Companies must constantly watch and adapt to the marketing environment in order to seek opportunities and ward off threats. In this report, use PEST to analyze macro-environment forces how to impact on PepsiCo in China. As we know, the PepsiCo was the first U.S. Company to distribute its products in China after China implement reform and opening up policy in 1979. Through many years business operation in China, the company fully understands their development worldwide must adapt China's macro-environmental various forces and must put into practice their localization strategy “Think local, Act local”.

The Managing Markets

Part A

1.0. Introduction

According to Kotler and Keller (2005), in the demographic environment, marketers must be aware of worldwide population growth, changing mixes of age, ethnic composition, educational levels and the move to micromarketing and away from mass marketing. In the economic arena, marketers need to focus on income distribution and levels of savings, debt, and credit availability. In the social-cultural arena, marketers must understand people's views of themselves, organizations, society, nature and the universe. They must market products that correspond to society's core and secondary values, and address the needs of different subcultures within a society. In the natural environment, marketers need to be aware of raw materials shortages, increased energy costs and pollution levels, and the changing role of governments in environmental protection. In the technological arena, marketers should take account of the accelerating pace of technological change for innovation, varying R&D budgets, and the increased governmental regulation brought about by technological change. Finally, in the political-legal environment, marketers must work within the many laws regulating business practices and with various special-interest groups. This report uses PEST to analyze macro-environment forces how to impact on PepsiCo in China will be presented. Through many years business operation in China, the company understands their development worldwide must adapt Chinese macro-environmental various forces and must put into practice their localization strategy “Think local, Act local”.

2.0 Company Profile

PepsiCo was founded in 1965 through the merger of PepsiCo and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001. PepsiCo is a world leader in convenient foods and beverages, with 2006 revenues of more than $35 billion and 168,000 employees. PepsiCo presence in China dates back to the earlier days of the nation's reforms. In 1981, PepsiCo became one of the first American investors in China by signing an agreement with the Chinese government to build a bottling plant in Shenzhen.

3.0. Macro-environment

3.1. Impact on Marketing Activities of PepsiCo

In analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization's supply and demand levels and its costs. A PEST analysis is one of them that are merely a framework that categorizes ...