Introduction
Businesses play an integral part in facilitating economic development in the world. Most of the operating businesses deal with processing and manufacturing of different products and services, aimed at satisfying customers’ needs. Some of the businesses benefit from the economies of scale because they have large capital share and market niche. Other businesses operate in small-scale level because they have minimal capital share and market niche. Although businesses differ in terms of operations, productivity, market niche, capital share, profit margin, and other constructs, they all understand the importance of incorporating effective marketing plan in their operations (Rudelius, 2001). Marketing remains one of the fundamental aspects that help businesses expands their productivity, profit margin, win consumer loyalty, and trust as well as compete effectively in the business. Firms that employ an efficient and cost effective marketing plan tend to outweigh their arch rivalries by maintaining cordial relationship with consumers, improving firm’s image and reputation, and performance. On the other hand, firms that fails integrating an effective marketing plan in their operations record low profits thus lowering firm’s development and productivity.
With the current stiff competition in business cycle, many companies in the beverage and food industry strive expanding their market niche, profit margin, and productivity by introducing new products that satisfy needs and add value to consumers life. Pepsi Incorporation is one of the leading multinational companies in the food and beverage industry dealing with production, marketing and distributing of snack foods and other beverage products. Since its invention in 1965, the company has expanded its operations and has opened many branches in more than two hundred countries worldwide. The company resulted from amalgamation of Pepsi Cola Incorporation and Fitro-Lay incorporation in 1965 (Brady, 2010). Over the years, the company has dominated in beverage industry market because of its Pepsi brand name that stands for various brands such as Pepsi diet, mountain dew, aquafina water and Tropicana juice drinks, to name but a few. As a result of this fact, the company has managed to compete effectively with its arch rivalries in food and beverage industry. Coca-Cola Company, McDonalds, and Starbucks remain some of the leading companies that pose a challenge to Pepsi Incorporation.
However, the company has managed to expand its market niche, profit margin, maintain its reputation and identity to the public, by introducing new products. In the recent past, the company has introduced a new product known as Pepsi Next that is widely distributed in Australia and other parts. Pepsi next brand differs from other brands because it contains less than thirty per cent sugar content and other food preservatives. However, the company needs to develop an effective marketing plan that will ensure that Pepsi Next product thrive in the market and satisfy consumers, needs, preference and taste.
Analysis of the company
Before developing a marketing plan, it is imperative to conduct an internal analysis (SWOT Analysis) of Pepsi Company. The abbreviation SWOT stands for strengths, weakness, opportunities, and threats. SWOT analysis helps the business maintain its performance by creating a balance between its internal and external environments, and Pepsi is no exemption.
Strengths
Brand Strength: Pepsi has more than eighteen brands that have dominated in the beverage and food industry for many years. Millions of customers across the globe purchase these brands with the intention of satisfying their needs and adding value to their life. Some of the commonly available brands include; Pepsi dew, Miranda Orange, diet Pepsi and Pepsi cola, to mention but a few. By introducing pepsi next brand, the company will continue to expand its market niche, enjoy economies of scale, and increase it profits because customers will tend to associate the newly introduced product with the existing ones.
Effective distribution channels: Pepsi has employed an effective distribution channel for many years with the intention of lowering the company’s operation cost. This goal is achieved when the company distributes different brands using one channel. In a similar vein, Pepsi next brand will be distributed using same distribution channels; an idea that will enhance efficiency and productivity.
Weaknesses
Influence of inelastic demand: The food and beverage industry is highly competitive because beverage products have inelastic demand. On this assertion, the company has not managed to outdo Coca Cola Company; which remains the leading beverage and food company globally. The management should address this issue so that to improve company’s performance when it introduces Pepsi next product.
Opportunities
Increasing demand for fast food and beverages: Many people prefer consuming fast foods and beverages while at workplace, home and conferences; an aspect that increases market niche for the new brand. By introducing Pepsi next, the company will increase its profit margin because of the available market.
Technology: Following the introduction of computers and wide usage of internet, the company will use internet and other communication channels to market its products. Use of social networking sites such as facebook and twitter will help the company market its products to consumers and increase its sales volume.
Threats:
Stiff competition: The Company faces stiff competition from other companies such as Coca Cola, Starbucks, and Delmont, which have existed in the industry for many years. Based on this fact, it remains clear that the introduction of Pepsi next brand will face same challenges. The market plan will be developed with the intention of overcoming such shortfalls and enhance company’s performance.
Organizational mission and forecast performance goals
Every company has a mission statement that conveys its goals, objectives, and values to the public. In this scenario, the market plan will focus on the company’s mission and objectives and articulate how it will work towards achieving them. The company’s mission is to become the leading producer and distributor of quality beverage and food products in the world. The marketing plan will aim at achieving the following objectives:
- Increase the company’s sales volume by twenty five per cent before the end of 2014. In 2012, the company collected a total of $43.7 million as revenues, but it is anticipated that this value will increase by 25% after introducing Pepsi next brand.
- Expand the market niche of Pepsi next brand in the region and the world.
- Enhance consumers’ awareness about Pepsi next brand and its usability.
Market strategy
Market segmentation: The plan will apply market focus strategy that aims at satisfying the needs of a given segment of population better than other competitors (Wind & Mahajan, 2001). In this case, the market plan will focus on youths who contribute more than sixty per cent of the world’s population. Additionally, it is anticipated that youth’s population will increase by 30% by the end of 2020; an idea that creates ready market for the company’s product. Based on this fact, the marketing strategy will mainly focus on youths from all occupations and in different regions. The current marketing plan has failed to segment customers based on age, preference and taste constructs; aspects that will be articulate in this new marketing plan.
Marketing mix
In this scenario, the marketing plan will blend product differentiation strategy and cost leadership strategy so that to achieve goals and objectives of the company. Both models articulate aspects of products and services, pricing, promotion, advertising, distributions and geographical locations; constructs that help in expanding the market niche.
Pricing: The plan intends to expand the market niche of the brand by offering affordable prices. This move will help consumers purchase more quantities and in the process increase sale volume and profits. Consumers who purchase the product in bulk will be given discounts and after sales services. Under pricing strategy, the plan will also focus on market price penetration and neutral pricing strategies. These strategies articulate how “reference value” and “differential value” influence consumer-purchasing behavior (Wise, 2010). This plan will balance the two strategies with the aim of achieving organization goals and objectives.
Advertisement and promotion mix: Numerous advertisements will be aired through the media especially on televisions, radios and other communication channels. The advert will involve celebrities, artists, and prominent personalities in the society who will help in marketing the product. Promotion will also involve organizing for concerts, exhibitions, and road shows where consumers will have an opportunity to ask questions, seek clarification and win gifts. Following the introduction of computers coupled with internet, the plan will use social networking sites such as facebook and twitter to engage consumers and market the product. Consumers will also have an opportunity to place orders, post complains, suggestions and comments about the product in question.
Distribution and location is another aspect that this marketing plan will address effectively. Pepsi Company has effective distribution channel that ensures that its products reach in the market on time. Wholesalers, retailers and agents are involved in the distribution channel. On this basis, Pepsi next brand will be distributed using the existing distribution channels. Additionally, this plan will involve restaurants and hotels owners who will be authorized to sell the company’s product. In remote areas, the company will establish mobile depots that will supply consumers with the products thus expanding market space. The plan recommends that more branches should be established in other regions where Pepsi Company has not reached. Sales representative and marketing managers should be trained on how to implement this marketing plan in a cost effective manner. The plan recommends that a feasibility study should be done immediately after launching the new product in the market. Research findings will help managers make necessary adjustments in the marketing plan.
Therefore, implementing an effective marketing plan based on organization mission, goals, and objectives will help the company expand its market niche, increase its profit margin, and win consumer loyalty and trust.
References
Rudelius, H. (2001). "Marketing, The Core. New York: McGraw Hill Publishing.
Ryan, D., & Jones, C. (2009). Understanding digital marketing: marketing strategies for engaging the digital generation. London: Kogan Page.
Wind, Y., & Mahajan, V. (2001). Digital marketing global strategies from the world's leading experts. New York: J
Wise, P. (2010, February 3). Cross Cultural Marketing Blunders | articles | cultural services. The Translation Agency for a complete Professional Translation Service. Retrieved May 8, 2013, from http://www.kwintessential.co.uk/cultural-services/articles/crosscultural-marketing.html
Brady, J. (2010, February 4). PepsiCo Americas Beverages | PepsiCo.com. PepsiCo Corporate Site | PepsiCo.com. Retrieved May 8, 2013, from http://www.pepsico.com/Company/Global-Business-Units/PepsiCo-Americas-Beverages.html
