Thursday, August 8, 2019
Competitive Review of PepsiCo Term Paper Example | Topics and Well Written Essays - 2000 words
Competitive Review of PepsiCo - Term Paper Example PepsiCo is one of the biggest soft drink, beverage, and convenient snacks companies. Pepsi has been bringing refreshments to its customers for over 100 years. It has almost 18 brands in its portfolio. The soft drink and beverage market is highly competitive with changing customer tastes and preferences and therefore to maintain sustainable growth the management constantly has to introduce new marketing strategies, conduct market research and thereby position and reposition their brands or introduce new brands. Introduction of new brands has always been a favorite marketing strategy with PepsiCo management. Ã Pepsi has 18 mega brands available in nearly 200 countries and generates sales at the retail level of more than $1 billion. (See appendix 2 for PepsiCo mega brands and annual retail sales of each) Demand for non-alcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large manufacturers have economies of scale in production and distribution, with average annual revenue per production worker close to $1 million. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. Ã Coca Cola is the worldÃ¢â¬â¢s number 1 producer of carbonated soft drinks is PepsiÃ¢â¬â¢s biggest rival. In the soft drinks industry, Coca Cola and Pepsi together have a market share of 95%. Where Coca Cola has a market share of 43.1% and Pepsi has a market share of 39.2%. Ã The target customers for Pepsi customers are mostly teens and young adults between the ages of 12 to 35 who are fast and lively. They have high expectations in life and are very mobile and active. Pepsi promotes itself as the choice of the Ã¢â¬Å"New GenerationÃ¢â¬ .Ã One of its recent advertisement slogans is Ã¢â¬Å"Taste the one that's forever young ". Ã¢â¬Å"According to the Competitive Advantage model of Porter, a competitive strategy takes offensive or defensive action to create a defendable position in an industry, in order to cope successfully with competitive forces and generate a superior Return on InvestmentÃ¢â¬ (competitive advantage Porter).