The following example essay on “Manufactured By Pepsi-co” is a market analysis of a multinational food and beverage corporation. The essay tells the story of the company and considers the target market.
Pepsi is manufactured by Pepsi-Co. It is first created and developed in 1893 by Caleb Bradham and then it is introduced as a Soft drink. It was renamed as Pepsi-Co in August 28, 1898 after that as Pepsi in 1961. It is originated by the USA. Pepsi has lots of Variants like, Diet Pepsi, Pepsi Twist, Pepsi Lime, Pepsi Wild Cherry, Crystal Pepsi, Caffeine-Free Pepsi, and Pepsi-Cola Made with Real Sugar, Pepsi Vanilla and Pepsi Zero Sugar.
In the year 1931, due to the Great Depression, the Pepsi Company entered as a bankruptcy in large part due to financial problems incurred by fluctuating sugar cost as a result of World War one. Between 1922 and 1933 the Coca Cola brand offered the opportunity to purchase the Pepsi Company. Pepsi-Cola first earned popularity in 1936 for 12 ounce bottle with the help of radio advertisement campaign.
At a time, the campaign succeeded in boosting Pepsi’s status all over the world from 1936 to 1938 with a double profit.
Target market refers to divide the market into segments on the basis of occupation, salary, environment, age, gender etc. different firms choose their target market to increase their sales and focused on particular segment of the market which results smooth fully running of business.
Pepsi target to youth of the world to sell their products, Pepsi also launch many varieties of its products like diet Pepsi, flavoured Pepsi, normal Pepsi.
Pepsi made its products for all type of people includes health conscious people. Almost every person consume Pepsi product at least one time in a week.
Pepsi launces many events, sponsor many games to attract the customers. Pepsi also conduct quizzes and give awesome prices to winners. Teenager are attracted towards the products of Pepsi because of its taste or launched games.
Pepsi give a tough competition to Coca-Cola and other brand of drinks industry. Pepsi use different methods to attract customers like distribute its logo t-shirts and other accessories.
Pepsi focused on the people of every age group or the people of every type of mentality after that Pepsi launches its products by keeping that study in mind which result in raising profits or increasing sales day by day.
The brand image is one of the huge strengths of PepsiCo. The brand has dominated all over the world and its products are popular in more than 200 nations. Currently, Pepsi has only one major rival in the world, Coca Cola. However, its strong image and reputation have helped it manage the competitive pressure very well. Moreover, the brand invests a lot in marketing as well as reputation management. Apart from advertising and marketing, it also invests in CSR and sustainability to retain its popularity and trust.
Moreover, Strong financial performance is also a key strength of Pepsi. In 2017, its net income boost by more than 2%. This performance was based on the last five years of efforts and investments it made into marketing, digitization and other areas. Its net revenue grew to $63.5 billion dollars. It was a growth of around 725 million dollars over the previous year. High level of net revenue and income allows the brand to spend more on marketing as well as Research and Development.
Overdependence on the US market: Despite everything the brand still depends on the US market for a major part of its revenue. In 2017, Pepsi earned more than 58% of its revenue from US and only 42% from outside US. To reduce its dependence on the US market, it would need to release more suitable products into the local markets internationally and particularly Asia. However, the brand has also felt the bite from a stronger dollar.
Technological innovation down the distribution network: The brand has a lot of opportunities that can help it grow its brand and businesses. Technological innovation and digitization offer the brand growth opportunities in several areas from supply chain management to production as well as marketing and distribution network. Digitization offers major opportunities of growth and can help its distribution network expand and become more efficient. Investing in R&D as well as digital innovation offers easier opportunities of growth and market expansion for Pepsi.
Growth through acquisitions: The brand can also find faster growth through acquisitions and by acquiring smaller and related brands.
Legal and regulatory threats: Legal and regulatory threats pose a major risk to big businesses like Pepsi. Compliance risks can sometimes result in major fines and lead to losses. It is why big bands like Pepsi focus especially on compliance and have compliance teams that take care of legal and regulatory risks. Noncompliance can cause losses that can run into billions.
Competitive pressures: Competitive pressures also pose major risks to the brand and its business. Coca Cola is its biggest competitor and the two brands remain engaged in very tight battle which keeps raging and getting in tenser. Both brands invest heavily in marketing and if any of Pepsis new products flops, then it can lead to losses as well as increased competitive pressure.
The Pepsi is using breakfast in its foods section which is also increasing its demand.
Price- Coca cola and Pepsi are two biggies which are dominating the Pepsi industry. So, pricing in Pepsi is competitive. Still, Pepsi is lower in its price for the top retailers and Grocery stores. To epitomize, Indian retailers like, Bib Bazar, Reliance Fresh as well as easy day are Grocery stores. Similarly, junk food chains like McDonalds, KFC are also bulk buyers. These bulk buyers associate with the soft drink company on the basis of price and sell their products in vast quantities. So, Pepsi has to reduce prices in these sectors which affects the beginning margin of the company.
Promotion- Promotion is one of the most important reason to retain its brand image. Pepsi advertises its products through social media. There are various Brand ambassadors like sports person, celebrities who promote the Pepsi. The main reason to use the celebrities is that youngsters easily attract towards famous personalities, because they are their role model. Pepsi uses all media channels for its promotions. Pepsi cannot grow without Promotions.
Place- Place plays a crucial role for any product to be present in every corner of the country to increase its sales. There are two modes of distribution:
The popularity of Pepsi is increasing continuously. It is mainly used by the age group 18-40. If we saw towards its revenues, we can estimate that it has a bright future. The revenue of Pepsi in 2016 was $62.99 billion which was increased to $63.525 billion in 2017. In 2018, its sale was increased to $65.25 billion. Its target market mainly focus on Youngsters, due to which teenagers are attracted towards it. According to overall research, it can be said that popularity of Pepsi would grow in upcoming time.