MARKETING

Marketing Audit: Pepsi Cola



Marketing Audit: Pepsi Cola

Executive Summary

The purpose of this report is to conduct a marketing audit of the product Pepsi, assessing its performance, and providing recommendations for future consideration. C & A Consulting assessed Pepsi on a local and global level. Successful global marketing plans can be adapted to Australia provided it is consistent with product positioning and suitable for the Australian market(Worth Balestrero 2003 pg. 36).

Pepsi-Co Inc. is the second largest soft-drink company in the world, behind its direct competitor, Coca Cola. Pepsi also faces competition from indirect sources, such as sports drinks, tea, and alcoholic beverages. The major difference between Pepsi and Coke is the target market to which the colas are aimed. Pepsi aims its product specifically to the 'younger generation', whilst Coke aims to appeal to a more general market. A SWOT Analysis, which compared them, identified Pepsi's major strengths such as an experienced management team, a competitive product line, the marketing segment, and high scale revenues. A key opportunity lies in the he huge market beside Pepsi's target market of twelve to twenty-four year olds.

Market research is critical at Pepsi, as it minimises risk. Consumer behaviour issues relevant to the purchase and consumption of Pepsi can be complex and multifaceted, resulting in people consuming Pepsi for reasons beyond satisfying a physiological thirst( Calantone Kim Schmidt 2002 ).

The product and branding strategy of Pepsi focuses on appealing to the 'younger generation', offering a unique flavour, with a better taste than Coke. Extensive research confirms that Pepsi does taste better than Coke, and this has maintained to be a strong selling point over the years. PepsiCo Inc. is consistently involved in developing and introducing new products, following consumer demand for healthier and/or calorie-reduced drinks( Medina Duffy 1998 223-243).

Pepsi delivers a consistently high quality product, at a competitive price. The price of Pepsi, which is mass distributed, varies depending on the Marketing Mix. Customer support is offered through enquiry/complaint handling services. Relationships with consumers are developed and pursued where customers are notified and involved with future promotions.

Pepsi's promotional strategy devotes 60% of marketing funds to advertising. The latest 'Dare for More' campaign is Australia's biggest ever outdoor advertising campaign. In the past year, the total global market shares of Pepsi and Coke decreased by 1.4%. The decrease was the response of consumer attitudes changing to healthier non-sugar based drinks. The Global Pepsi promotional strategy included advertising of sports stars, models and music stars. This drop suggests the "athletic attitude" of Pepsi was not communicated successfully. The most important recommendation to PepsiCo International is to advertise with more sport stars, making the drink appear healthier. If this is correctly implemented Pepsi can attain a market share growth of 1.4% within a year( Calantone Kim Schmidt 2002 ).

The second recommendation is directed to PepsiCo Australian Holdings. PAH need to implement a push strategy, encouraging a better line of distribution. In Australia, point of purchase promotions is very limited, with intermediaries dominated by Coke ...