Pepsi Marketing Plan

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Pepsi has a huge distribution network and it is selling globally in almost 138 countries. This is the biggest advantage that the brand gets to introduce new products and reach out to its potential customer as well as existing market. The existing brand loyalty and trust secures the risk of acceptance of the new products.

Also, it has a large network of the supply chain with retailers across the globe and especially in the US, with all the major retailers as well as the brick and mortar grocery stores. This association with stores enabled Pepsi to take its product to the most remote areas as well. Along with these, Pepsi has a strong financial situation. In the 2016 financial year closing, it reported a current ratio of 128%, cash ratio of 76%, gross margin of 55%, a profit margin of 10% (NASDAQ, 2017). These ratios show that company is generating a lot of revenues and has been profitable but with high operating expenses and a large debt. It has made huge investments in its asset showing the company has the cash to operate.

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Source: http://www.nasdaq.com/symbol/pep/financials?query=ratios

Weaknesses:

One of the internal weakness lies in the advertisements of Pepsi. The company targets its advertisements to youngsters and include celebrity marketing as well to promote their products. However, their advertisements are not focused towards the value-adding aspect of life whereas the archrival Coca-Cola focusses on attracting customers with advertisements that are more meaningful and add a positivity to live with some prudent social or cultural value or message involved. This really impacts in creating a brand or product positioning (Webster, 2017).

Another weakness is that Pepsi greatly depends on the franchised bottling companies for the distribution of its products. It has outsourced the packaging to franchise companies to bottle its beverages and has given a substantial power or voice that influences its strategies. It is not easy to introduce a new product if the bottling agencies oppose it. Coca-Cola started investing in its own bottling company with different plants for bottling and packaging located throughout the world for over two decades. This affects the growth of Pepsi and also creates a roadblock in the expansion of its product line (Hays, 2017).

SWOT Analysis

Strengths

Weakness

- Brand name and image

- Current market share and wide product line.

- Strong distribution channel, supply chain, and global presence.

- Product innovators and strong financial situation.

- Alliance, acquisitions or mergers of big brands make Pepsi a key player.

- Pepsi Challenge for better taste.

- Use of celebrity portal for marketing and advertising to target customers.

- Diversified brand.

- Customer and brand loyalty.

- High EPS of $110, which is double than its rival shows a good financial condition( Nasdaq, 2017)

- Unhealthy products

- Poor nutritional value

- Ecological issues

- Entry to health food industry is volatile with the existing market.

- Lower global penetration as compared to rivals.

- Volume sales have been lower than its biggest competitor Coca-Cola.

- Smaller market share than its rivals.

- Negative brand image due to product recalls.

- High revenue and income but high operating expense and debts.

- Product focus on a large pool of products.

- Brand positioning is not innovating.

Opportunities

Threats

- Acquire brands with healthy products.

- Use the global presence to expand its current foreign business to generate more revenue.

- Soft drink industry is declining, but still, it is the faster-growing industry. It could revitalize this situation.

- Introduce products that meet the current demand of healthier drinks to counter health issues and to compete with rivals.

- Invest on smart media advertisement and marketing.

- Sponsorship or target sports, music, cultural events and tournaments.

- Invest in R&D concentrating towards expansion into healthier beverages.

- Marketing campaigns for a more target audience such as millennials.

- Sustainable development to protect and conserve the environment.

- Consumer trends resulting in declining demand.

- Increased Competition: Market is a red ocean.

- Health issues.

- The growth of carbonated drinks sector with more available alternate drinks.

- Environmental issues relating to packaging and production.

- Economic issues like change in price influenced by costs of raw materials, exchange rates, currency, etc.

- Focusing on new product line could affect the sales of its trademark products.

Recommendations

- Satisfy consumer needs with demanded products- Pepsi should focus on an innovative product line that aligns with the current consumer tastes and demands. Consumers are looking for healthier drinks as they are getting more aware instead of just a cold pop to cool down. Carbonated sodas consist of high calories and ingredients that negatively affect the human body. As consumers are looking for healthier options now, Pepsi should change its existing product line to best suit the needs.

- Expand globally with country-specific products- Pepsi can also try out different