Developing a Marketing Plan
Executive Summary
This report is an analysis of PepsiCo marketing strategy in Cambodian market. The report starts by giving an explanation of the significance of marketing plan for Pepsi. It goes further to state the goals that the company intends to achieve and the mechanism to make them. The current marketing situation analysis gives the facts on the ground about the enterprise. It goes further to illustrate how the company has positioned itself in the market. There is SWOT analysis for PepsiCo. This gives the strengths and weaknesses that the firm has. Working to improve these factors and exploiting the available opportunities will help the company achieve its goals within the set time horizon. How PepsiCo has utilized the marketing strategy of 4 Ps is also illustrated in this report. The action program and control measures that the company would take in a bid to achieve its strategy are discussed too. Finally, the reports give a conclusion to the findings of the enterprise.
Acknowledgement
I concede with gratefulness the enormous intellectual efforts and support by my supervisor for the professional aid that has given fruits of this research. More appreciation to the loyal staff of PepsiCo, who gave the information for the analysis to get results for my research. I am grateful for the support and the peaceful enabling environment for learning and providing guidelines whenever I consulted with them.
Developing a Marketing Plan 2
I. Executive Summary 2
II. Acknowledgement 3
III. Table of Content 4
IV. List of Figures and Tables 5
1.0. Introduction 6
1.1. Purpose of the Report 6
1.2. Company history 6
1.3. Entry into Cambodia market 7
1.4. Product Overview 7
2.0. Current Marketing Situation 7
3.0. SWOT Analysis 10
4.0. Objectives 11
5.0. Marketing Strategy- The 4 P’s 11
6.0. Action Programs 13
7.0. Projected Profit and Loss Statement 14
8.0. Controls 15
9.0. Conclusion 15
V. Appendices 16
VI. References 17
List of Figures and Tables
Figure 1: Brand Performance at PepsiCo 16
Figure 2: Market share for PepsiCo 16
Introduction
Purpose of the Report
A marketing plan can be described as a business document that describes the current market position of the particular firm. It goes further to give the strategy that the company has formulated to achieve business objectives. Through analysis of the past performance of the company, management uses this document to project its future position usually a period of one to five years. The purpose of this marketing plan is to clarify the actions that PepsiCo will use to achieve its objectives in Cambodian market. The strategy of this particular marketing plan is on how the company will increase market share by 20 percent in Cambodian market. Later in this marketing plan, I have outlined goals and mechanisms to achieve them.
Company history
PepsiCo is a global company that belongs to the soft drink industry. It came into existence because of the merging of Pepsi-Cola and Frito-Lay. They produce foods like snacks (Lays) and the favorite carbonated beverages. The company’s headquarters is in New York. It is currently serving almost all parts of the world with carbonated soft drinks. Although Coca-Cola is the king and leader regarding soft drink production, in Pakistan, PepsiCo is dominating the whole of its market for soft drinks. It is currently entering the Cambodian market. Thus, a well-structured and achievable marketing plan will help the company place itself where it wants itself to be in the next five years. If the purpose is achieved and it increases its market share by 20 percent, PepsiCo will be the leader in soft drinks in Cambodian market. The company has been using franchises to reach its customers. The channel of distribution has proved to be the best thus in areas where there are no channels; the management is identifying these places so that it intervenes and offers its products to customers.
Entry into Cambodia market
PepsiCo entering the Cambodia is an expansionary move to increase its market share in the entire market. For more than a century, PepsiCo has been in the industry selling soft drink brand by the name Pepsi-Cola. It entered the Cambodian market in the year 1960. The market was not conducive to all the company carry out its operations there thus it closed after fifteen years of existence (Ali, 2013, p.8). The efforts to revive came again in 1992 where Pepsi-Cola linked to Angkor Beer Company popularly known as Cambrew Limited. This strategy helped the company come up strong in Cambodia.
Product Overview
Pepsi is a carbonated soft drink produced, marketed and distributed by PepsiCo Company. The first brand that was introduced upon establishment of the company was named after the owner Bradham Caleb. It was referred to as Brad’s drink in the first market New Bern, U.S. In his drug store, Bradham was able to produce soft drink and supply to the surrounding neighborhood (Rothaermel, 2015, p.33). He later branded the product Pepsi after the enzyme identified by scientists by the name pepsin and the Cola part was included because of the use of Kola nuts in recipes. The product is currently branded as Pepsi since 1961. The main ingredient used as per the 2014 report is industrial sugar.
Current Marketing Situation
This section demonstrates company operations in Cambodian market and overall performance in the terms of revenue generation. For a clear illustration of the current marketing situation for PepsiCo, an analysis of the target market, market positioning, competitor companies and substitutes for its products. Analyzing the current situation allows management to plan for the future of the enterprise. The management comes up with strategies to implement to achieve the laid down plans. This marketing plan is critical as it documents the strategy of where the corporation will be in five years’ time.
The target market for PepsiCo are the youths. These teenagers and young adults who lie in the age bracket of 14 to 30 years. Some strategies exist that a company can use when doing market targeting. In the undifferentiated market, a company will tend to target customers broadly. PepsiCo uses concentrated marketing popularly known as Niche marketing. In Cambodia, PepsiCo is going for niche marketing because it is giving the company a significant market share from the few segments it is supplying with its products (Nigel and Artur, 2009, p. 37). Through creating niches, PepsiCo has gained a strong market position due the vast knowledge about its customers. Interactions with clients allow the company to have a good reputation with the customers making them loyal to consuming their products. The youths are mainly in schools and colleges; the company has managed to capture these clients through strategically getting involved in these places where children are found. The introduction of better options in the niches has allowed PepsiCo to remain valid in competition with Coca-Cola. The introduction of Sierra Mist in 2002 attracted consumers of the sprite from coca cola ending up improving PepsiCo performance seven times more.
Availing products that are appealing to a particular target market that it has not been reaching in the past years. For instance, the closure of the Cambodian market immediately after fifteen years meant that the products it was offering were not wholly appealing and served the customer needs as they expected. Coming up again in 1992, the company had to produce products that were meeting specific needs of the market. Some of the products that have met particular needs of customers by PepsiCo include code red, livewire, and an extension of Mountain Dew, Pepsi Blue, and Pepsi one. Furthermore, PepsiCo is continually countering the declining sales in carbonated soft drinks due to customer health matters awareness through marketing and providing Starbucks products, which are ready to drink (García, Juan, and Alazne, 2003, p.113). The other strategy demonstrating the target marketing is the acquisition of Gatorade and SOBE. To promote their products to the local consumers, PepsiCo incorporates micromarketing in each market niche so that their products remain valid to customers.
Market positioning has contributed most of the success attributed to PepsiCo. In all its target markets, PepsiCo has ensured a continuous increase in the market share that the company has over its competitors. The brand name is also part of market positioning for PepsiCo. In both domestic and international markets, PepsiCo is consistent in its branding something that has increased customer trust and loyalty. The strategy for PepsiCo that aid in its positioning in Cambodian market is differentiation regarding products, image, and channels of distribution (Central Intelligence Agency, 2014, para 4). When you tell someone about Pepsi, what comes into his or her mind is soda. This indeed shows the efforts of the company success in product differentiation. The big rivals in the soft drinks coca cola and Pepsi distribute their products with independent bottlers. The creativity involved in making logos, symbols, signs and color of the products improves the image of the product.
The main competitors for PepsiCo products include Coca-Cola, fresh juices, and energy drinks. These products are indeed serving to satisfy the same needs to all customers thus increased competition. Coca-Cola and PepsiCo are involved in direct competition (Ali, 2013, p. 11). Their products are close substitutes. For instance, vitamin water by Coca-cola and Pepsi perfect are merely serving similar customer needs in Cambodian market.
SWOT Analysis
This is the situational analysis of the company and includes internal and external forces affecting the business operation of the enterprise. For growth of any business, SWOT analysis is vital as it scans the environment thoroughly to ensure the company management makes decisions based on facts on the ground. The strengths that PepsiCo has in the Cambodian market include the high-quality soft drink, Pepsi and the suitability of the brand name (Cravens and Piercy, 2009, p. 8). The name directly refers to the company name thus when people see the product; they can identify themselves with the enterprise. On the mind of many customers, the Pepsi brand has a strong image as it serves a similar purpose as products of coca cola but Pepsi is a bit cheaper. Blue is a color that appeals to most people in the entire world. The packaging of Pepsi product is in blue color thus many people like it more than coca cola brand, which is packaged in red a color symbolizing danger in the literal sense. There are many promotional activities by PepsiCo especially in schools and all social setting involving youths to publicize the company products. Many budgets are spread over advertising so that the corporation products can become famous in the market.
The weaknesses of PepsiCo include that it is selective because all promotional activities are targeting the youths alone. The company is also faced by frail in distribution. It produces the products, give the bottle companies to package, and distribute to the regions of their choice. Failing to offer an incentive to retailers is a weakness as they are not motivated to work. Most funds go to advertising hence very little to provide an incentive to retailers. The company is not emphasizing on potential outlets like hotels and college canteens.
The opportunities that PepsiCo can exploit in Cambodian market include increased consumption of soft drinks due to the hot climate. The population growth due to reduced war in the country is an opportunity that more people will end up consuming their product. The government policies are favorable allowing foreign companies like PepsiCo to enter in this economy and sell their products. Increased cultural activities bring many youths together. Hence, PepsiCo can reach their target customers better.
The threats that PepsiCo is facing include rival companies, particularly coca cola. Due to health awareness, consumers are careful about what they consume. Therefore, the company is threatened to change its production so that it meets the customer needs better than the way it is meeting them now. There have been many substitutes for Pepsi product. These include energy drinks, fresh fruit juices, and vitamin water. In Cambodia electricity is a problem hence production becomes a big problem increasing the costs involved in the production.
Objectives
The primary goal of PepsiCo is to enhance its market share by 20 percent in the next five years and become the leader in soft drinks in Cambodian market. The goal that this marketing plan indents to achieve is to help PepsiCo increase its share and product awareness in Cambodian market. To achieve this objective, the company has to work on the specific goal of satisfying their customers first.
Marketing Strategy- The 4 P’s
Marketing strategy is the action plan that the firm has used to achieve the overall purpose of the enterprise. For PepsiCo, an analysis of the four P’s strategy that the company has used to retain its market share and keep it growing year after another. The utilization of the 4 P strategy by PepsiCo has helped the company gain a competitive advantage over its competitors in Cambodian market.
Product. The most selling product in Cambodian market is the Pepsi Blue. The company is ever changing its products so that it keeps the pace with the change in consumer tastes and preferences. New flavors are being introduced to the market to ensure customers have their needs satisfied. The introduction of Pepsi perfect is a great move as the product is not more of carbonated drink but an energizing soft drink, which is rich in vitamins and other valuable nutritious elements (Hitt, Duane, and Robert, 2012, p.50). Health awareness has changed customer needs and preferences leading change in consumer patterns. PepsiCo needs to produce products that are focusing more on the health of the consumers. The products need to have less carbon and sweet so that it does not affect the health of its product users. The product packaging is given a higher rating by consumers hence keeping the design and making it more appealing will attract more customers.
Price. The company has not been offering discounts and incentive to its product retailer. This has killed their morale for working with PepsiCo. Offering discounts to distributors will allow making them appreciate the company for being concerned about their welfare. Motivated workers are happy and committed to the job (García, Juan, and Alazne, 2003, p. 117). The price that PepsiCo is selling its products at remain fixed for quite a long time. In Cambodian market, the company has control over the price making it operate like a monopoly market structure, which is hated by many customers for being making consumers be price takers.
Place. Referred to as distribution strategy in some books. Collaborating with Cambrew Limited to distribute its products has helped the company share cost. Cambrew Limited is dominant in the Cambodian market, making it easy for PepsiCo to distribute its products across the entire nation. The other distribution channels for Pepsi product in Cambodian market include supermarkets, fast food outlets, restaurants and convenient marts. Using hotels and college canteens will help PepsiCo reach more customers than the current clients it is serving.
Promotion. Most of the expenditure for PepsiCo come from advertising of its products. The company is very creative and original in its advertisements attracting may be people to buy its products. Some elements used in its advertising include music and sports. Many youths are lovers of music and sports thus the company is valid when it puts its advertisements in such channels.
Action Programs
The work program that PepsiCo has invested in remain geared towards the achievement of business objective revolve around research, credit provision, partnerships and sponsorship activities. The priority for any business remains customers (Cravens and Piercy, 2009, p.9) solely. Hence, PepsiCo is initiating a research that will identify customer needs so that they meet them better. The other program is a change of flavors in its products so that they do not affect the health of its consumers. Maintaining the packaging design and making it more appealing will attract more customers. Changing the company culture so that they offer a discount to the company retailers will expand the brand to reach more regions as distributors will be motivated to work harder (Hitt, Duane, and Robert, 2012, p.52). Collaborating with local brands to operate as one company will offer PepsiCo an opportunity to remain in the market by reducing competition from local products. Engaging in social responsibility and sponsoring activities like sports and NGOs will allow the company to gain much popularity.
Projected Profit and Loss Statement
Currently, the profit and loss statement has changed its name to the income statement (Piercy 4). The following data was retrieved from PepsiCo and shows the P & L statement as per the year 2015.
Period Ending Dec 26, 2015
Total Revenue 63, 056,000
Cost of Revenue 28, 384,000
Gross Profit 34, 672,000
Operating expenses
Selling general and administrative (24, 885,000)
Non-recurring (1, 359,000)
Others (75,000)
Operating Income 8, 353,000
Income from continuing operations
Total Other Income 59,000
EBI&T 8, 412,000
Interest Expenses (970, 000)
IBT 7, 442,000
IT Expense and minority interest (1, 990,000)
Net Income 5, 452,000
(Source: Central Intelligence Agency)
In the future, the projection that the PepsiCo has projected to achieve this marketing plan goal of 20 percent market share rise is reducing expenses and increasing sales through venturing into new markets and improving company products.
Controls
The management can apply these measures in case the planned actions fail. They include offering commissions regarding percentages when the local brands fail to collaborate with us. This will ensure reduced competition from local brands. It will also help management in reducing costs. To sponsor events, the company will also involve the current sponsors directly. The government and NGOs are offering support to some projects hence intervening to provide extra support is a kind of sponsorship. Public schools are densely populated with students, being a target market for PepsiCo the facilities that are not adequate the company will offer support hence becoming part of the project at the same time making sales.
Conclusion
For quite a long period, PepsiCo has been widely known internationally for its products. The company concerns to society, environment and health has made the company famous in Cambodian market. Depending on country’s culture, PepsiCo can come up with innovative products that best suit its customer needs. Through innovativeness, the company will achieve its objective as stipulated in this marketing plan. Employing strategies like the ones on the action program will allow PepsiCo increase its market share. Addressing the weakness that the company is facing will make the company strong in the Cambodian market. For PepsiCo to remain stable and gain popularity in all the markets it is serving, undertaking more research will help the business understand its customers and their needs fully. Staying relevant to all market segments will reduce the risk of dealing with youths alone.
V. Appendices
Appendix 1. Brand Performance at PepsiCo
Figure 1: Brand Performance at PepsiCo
Source: PepsiCo financial report 2011, Available at http://www.slideshare.net/ahsanfightingfalcons/pepsi-perfect-marketing-plan
Appendix 2. Company market share
Figure 2: market share for PepsiCo
Source: www.slideshare.net/ahsanfightingfalcons/pepsi-perfect-marketing-plan
References
Ali, Ahsan. 2013. "Pepsi Perfect Marketing Plan." Slideshare.net. Available at http://www.slideshare.net/ahsanfightingfalcons/pepsi-perfect-marketing-plan
Central Intelligence Agency. The World Factbook 2014: Cambodia. CIA Official Website Retrieved June 20, 2016, from <https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html>
Cravens, D. W., & Piercy, N., 2009. Strategic Marketing (Vol. 7). McGraw-Hill, pp.7-13.
García, Iñaki, Juan J. Gibaja, and Alazne M., 2003. "A study on the effect of cause-related marketing on the attitude towards the brand: The case of Pepsi in Spain." Journal of Nonprofit & Public Sector Marketing 11(r1), pp.111-135.
Hitt, Michael, Duane, Ireland, and Robert, H., 2012. The Management of Strategy: Concepts. 10 ed. Cengage Learning, pp.50-54.
Nigel Piercy, and Artur Baldauf., 2009. "Management framework guiding strategic thinking in rapidly changing markets." Journal of Marketing Management 25(2), pp.31-49.
Piercy, F., 2006. "The strategic sales organization." The Marketing Review 6(1), pp.3-28.
Rothaermel, Frank T., 2015. Strategic marketing and management. McGraw-Hill, pp.32-41.
