MARKETING MIX OF PEPSI: PRODUCT, PLACE, PRICE, AND PROMOTION
Pepsi, the global beverage giant makes and sells some of the most popular soda brands in the world. Sold across more than 200 countries, Pepsi is a well-recognized and highly popular brand.
Rivaled by Coca Cola, Pepsi is a leading soda brand and among the favorites of the young generation.
It has a large portfolio of products including 22 billion-dollar brands.
Here is a marketing mix of Pepsi analyzing the four P’sincluding product, price, place, and its promotional strategies.
Product Mix of Pepsico:
Pepsi has a large portfolio of products including beverages and snacks. Of these 22 are billion-dollar brands that sell internationally.
Here is a list of the most popular products in Pepsi’s portfolio.
The most well-known brand from Pepsi. The drink was created in 1898 by pharmacist Caleb Bradham.
The lay’s brand of chips is a globally well-known snacks brand.
Flavored carbonated soft drink
The number 1 sports drink in the US.
Leading producer and marketer of fruit juices.
Low-calorie carbonated drink.
Multi billion-dollar brand of carbonated beverage, highly popular outside US.
Quaker oats: Breakfast cereals.
Mirinda: Orange flavored carbonated beverage.
Ready to drink teas: A venture in partnership with Lipton to make ready to drink teas.
Ruffles: Potato chips made from fresh potatoes, prepared in as less as 24 hours after potatoes are brought from the farms.
Cheetos: A range of gluten-free products by Frito lays.
Tostitos: Another one of many gluten-free products by Frito lays.
Aquafina: Mineral water purified through a seven-step process.
Pepsi Max: Zero-calorie beverage by Pepsi and a very fast-growing brand outside the US.
Brisk: A brand of drinks produced through a joint venture between Pepsico and Unilever.
Mist Twist: Lemon-lime flavored soda with a twist of real juice.
Diet Mountain Dew: The low-calorie version of Mountain dew.
The product range by Pepsi is larger and there are many more brands in its portfolio.
The company also invests in research and development to continuously improve its product portfolio and to grow its attractiveness.
In 2020, it spent $719 million on research and development.
Pepsihas an extensive market presence and a global distribution network.
The brand uses a variety of distribution systems based upon the customer needs, product characteristics as well as local trade practices.
The types of distribution systems it uses are:
- Direct Store Delivery
- Customer warehouse
- Foodservice and vending distribution networks
- Ecommerce channels.
Pepsico, with its bottlers and distributors operates the DSD system to deliver snacks and beverages to the retail stores.
Its products are merchandised in the retail stores, which helps it gain maximum visibility.
This system is most suitable for the products restocked more often and for promotion and merchandising.
It delivers some of its products from its manufacturing plants to customer warehouses and retail stores. Pepsi also sells products directly to customers through ecommerce channels including company owned and third party websites.
The company distributes several of its products through third party distributors.
Pepsi’s food service and vending business distributes products to restaurants, businesses, schools and stadiums through third party food-service and vending distributors and operators.
Due to the level of saturation in the non-alcoholic beverages industry, the price competition is intense. Coca Cola and Pepsi are archrivals and so there is strong price competition between the two.
The two brands price their products competitively. Pricing strategy is mainly aimed at driving customer loyalty by keeping the products average priced and accessible for a larger customer segment without creating an impression of low-quality products.
Moreover, the larger the size of the purchase, the lower is the price. A customer can get a larger discount if he purchases in bulk.
Apart from Coca Cola, there are several more brands in the market that compete with Pepsico including health drink and energy drink brands as well as food and beverages brands.
Among some of the leading competitors of Pepsico are Red Bull, Dr Pepper Snapple, Monster beverages, and Nestle.
However, if Pepsico has been able to maintain its leadership position in the beverages industry successfully, part of the credit goes to its competitive pricing strategy.
This helps maintain strong sales and maximize revenue growth through higher customer loyalty.
Apart from in-store promotion, Pepsi also spends heavily on marketing and advertisement of its products.
In 2020, Pepsi’s total marketing expenses were equal to $4.6 billion. A significant part of this sum goes to digital advertising.
Why despite being a brand name does Pepsi spend so heavily on advertising? It is because of the intense competition in the soda industry.
Apart from driving sales, marketing is aimed at customer engagement and CRM. The brand uses television as well as internet and social media channels to connect with its customers.
The traditional advertising and marketing channels are also used to keep the customers engaged and driver higher awareness of new and old products.
Pepsi enjoys strong brand awareness globally, which is bolstered through the use of digital and traditional marketing methods.
One of the main marketing methods used by the company is video marketing. The beverages brand also invests in philanthropy to maintain a strong social image.
With time, social media channels have taken centre stage in terms of marketing and customer engagement for the beverages brands including Pepsico and its archrival Coca Cola.
Pepsico has taken an innovative and highly creative approach to digital marketing.
It has run several successful campaigns in its history.
The company is equally successful in terms of branding, which is clear from the high level of brand awareness it enjoys globally.
The soda industry is marked by intense competition, where Pepsi’s arch rival Coca Cola sells several similar products.
A lot of focus remains on marketing to achieve differentiation and help its products stand out from their rivals.