MARKETING MIX OF PEPSI: PRODUCT, PLACE, PRICE, AND PROMOTION
The global beverage giant is the maker of some of the most loved soda brands in the world. Sold across more than 200 countries, Pepsi is a well-recognized and highly popular brand. Rivaled only by Coca Cola, Pepsi has grown to become a leading soda brand loved by the young generation. It has a large portfolio of products of which 22 are billion-dollar brands. Here is the marketing mix of Pepsi that analyses the four P’s including product, price, place, and its promotional strategies.
Pepsi has a large portfolio of products including beverages and snacks. Of these 22 are billion-dollar brands selling internationally.
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 well-known brand all over the world.
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.
Pepsi has an extensive market presence which depends upon its well-set 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
Pepsi with its bottlers and distributors operates the DSD system that allows it to deliver snacks and beverages to the retail stores. Its products are merchandised in the retail stores, which helps it gain maximum visibility and appeal. 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. According to Pepsi’s 2008 annual report, “Our foodservice and vending sales force distributes snacks, foods, and beverages to third-party foodservice and vending distributors and operators. Our foodservice and vending salesforce also distributes certain beverages through our bottlers. This distribution system supplies our products to schools, businesses, stadiums, restaurants, and similar locations” (Pepsico, 2008).
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 the price competition between the two is heavy. 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 in-store promotion, Pepsi also spends heavily on marketing and advertisement of its products. In 2016 its total marketing expenses were higher than $2.5 billion. A significant part of this sum goes to digital advertising. Why despite being a brand name does Pepsi spend so heavily on advertising 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 and spaces are also used by it to keep the customers engaged.