PepsiCo is a global consumption goods company with a very diversified portfolio. The company focuses on beverages and “junk” food. When it comes to brand value and numbers of sold cola beverages, Coca-Cola Co has a unique market share. Especially on the cola-market, both companies are the most successful competitors worldwide.
In Germany, Pepsi-Cola has not been as long on the market as Coca-Cola. None-theless, Pepsi proved to be a strong opponent by initiating clever marketing cam-paigns. However, the German market for cola products is much more competitive than the US-market.
The strategic planning analysis of PepsiCo, using Kotler’s four P’s, shows, how much Pepsi-Cola’s suffers from its lack of image compared to Coca-Cola. Pepsi-Cola is very present in retails and commercials, but does not have a trustful brand image.
Pepsi-Cola’s image as a cheap cola drink is a threat to its future deveopment, because a decline in the product-life-cycle is possible. PepsiCo’s focus on the German beverage market needs to include a product development, that show consumers, that Pepsi-Cola can be a tasty as well as a sustainable product. The strategy of product diversification must not contain Pepsi-Cola as the main beverage drink of the company.
Table of Contents
1 Introduction
1.1 Problem definition
1.2 Aim of the Assignment
1.3 Scope of Work
2 Analysis of Marketing-Mix
2.1 Definition of Marketing-Mix
2.2 Product
2.3 Price
2.4 Promotion
2.5 Place
3 Application of Marketing-Mix
3.1 Promotion of Pepsi-Cola
3.2 Evolving the product
4 Conclusion
Objectives and Topics
The primary objective of this assignment is to analyze the performance of Pepsi-Cola within the German market using the marketing-mix framework to derive strategic recommendations for improving the brand's competitive position.
- Application of Kotler’s four P’s (Product, Price, Promotion, Place) to Pepsi-Cola.
- Evaluation of the brand image and its impact on German consumer purchasing decisions.
- Analysis of the product-life-cycle and the necessity for strategic diversification.
- Examination of comparative advertising and its effectiveness in the "Cola War".
- Assessment of the competitive relationship between Pepsi-Cola and Coca-Cola in Germany.
Excerpt from the Book
2.3 Price
The price of the product is very important not only for the producer but also for the consumer and the relationship between each other. From the producer’s point of view, the price determines, how much profit he might get out of product sales. The consumer is directly influenced by the price, because his decision to buy a product is a result of his evaluation of his personal cost-benefit-balance.11
Neither Coca-Cola Co nor PepsiCo sell their products directly to the consumer.12 Therefore, a pricing strategy is part of consultations between producer and retailer. But in the end, every retailer decides about the price himself.13 Consequently, PepsiCo’s has to find a consensus between its goal of pricing and the discount strategy of the retailer, before they agree on a partnership.14 Due to the fact that the German beverage market is very tough to handle for PepsiCo a comparative behavior seems to be necessary.15
In the 1930s, Pepsi-Cola tried to influence the demand for cola in the United States. The company sold larger bottles at the same price Coca-Cola offered their standard-sized bottles.16 During the Great Depression, this strategy proved to be successful, but it also led to an image of “cola for the poor”.17 In Germany, the price for Pepsi-Cola compared to Coca-Cola varies depending on the retailer and their distribution region.18 But also the competition between cola-producers affects the pricing of retailers. In total, there is no obvious hint proving a skimming or penetration strategy. Nevertheless, PepsiCo is more likely penetrating the German market by a lower pricing, which is followed by discount markets like Lidl.19
Chapter Summaries
1 Introduction: This chapter defines the research problem, outlines the aim of the assignment, and establishes the scope of work regarding the analysis of Pepsi-Cola’s market position.
2 Analysis of Marketing-Mix: This section provides a theoretical overview of the marketing-mix and applies the four P’s to Pepsi-Cola’s operations, focusing on product characteristics, pricing, promotional strategies, and distribution channels.
3 Application of Marketing-Mix: This chapter investigates specific marketing challenges for Pepsi-Cola in Germany, including brand image issues and the dynamics of the product-life-cycle.
4 Conclusion: The final chapter summarizes the analysis of PepsiCo’s strategy and offers insights into how to improve the market value and brand perception of Pepsi-Cola.
Keywords
Pepsi-Cola, Coca-Cola, Marketing-Mix, Product-Life-Cycle, Brand Image, Pricing Strategy, Comparative Advertising, German Market, Consumer Behavior, Brand Value, Strategic Planning, Beverage Industry, Diversification, Market Share, USP.
Frequently Asked Questions
What is the core subject of this assignment?
The paper focuses on the marketing strategy of Pepsi-Cola specifically within the German market.
Which central themes are examined?
The work covers branding, market competition, product development, and the application of the marketing-mix (the four P’s).
What is the primary goal of this research?
The aim is to identify how Pepsi-Cola can overcome its current brand image challenges to improve its competitive standing against Coca-Cola.
Which scientific framework is used?
The assignment primarily utilizes Kotler’s four P’s framework and the product-life-cycle model.
What is covered in the main section?
The main section analyzes the components of the marketing-mix for Pepsi-Cola and discusses the necessity of evolving the product and promotional strategies.
Which keywords define this work?
Key terms include Marketing-Mix, Brand Image, Pepsi-Cola, German Market, and Product-Life-Cycle.
Why does Pepsi-Cola struggle in the German market compared to the US?
The market in Germany is described as significantly more competitive, and Pepsi-Cola suffers from a "cheap" brand image linked to its discount retail distribution.
Does the author suggest a specific strategy for the future?
The author recommends that PepsiCo should move away from a dogmatic diversification strategy and focus on increasing the product value to avoid the decline phase of the product-life-cycle.
- Citation du texte
- M.A. Benjamin Pommer (Auteur), 2014, Analysis of key marketing themes for Pepsi-Cola, Munich, GRIN Verlag, https://www.grin.com/document/279086
