Free Essay

Marketing Plan Pepsi Canada

In: Business and Management

Submitted By ottaviop
Words 5622
Pages 23
Marketing Plan Pepsi Canada

Contents:

1. Executive Summary...................................................................3
2. Introductio/problem stratement...............................................3
3. External Analyis.........................................................................4
4. internal Analysis.........................................................................8
5. SWOT analysis...........................................................................10
6. target market, Segmentation, Positioning...............................12
7. Strategy........................................................................................12
8. Objectives.....................................................................................13
9. Marketing Mix.............................................................................14
10. Budget.........................................................................................15
11. Peer Assessments .......................................................................19

1. Executive summary

PepsiCo is one of the main players in the beverage markets. The Canadian drinks market exists 16.3% of carbonated soft drinks, PepsiCo is in this market the biggest in Canada, but they want more, even though PepsiCo had a market share of 45.3% in 2011, they feel the competition of Coca Cola (44.2% market share).
PepsiCo is underperforming in comparison to its main competitor Coca Cola in the urban markets, like Toronto and Vancouver. PepsiCo started a marketing campaign in 2012 by reintroducing the Ultimate Taste Challenge (UTC), in which they focus especially on the Millennials between 16 and 25 years of age. Those Millennials get the change to do a blind test in comparing Coca Cola and Pepsi Cola; afterwards the Canadian Millennials choose their preferred taste, which is most likely Pepsi Cola.
In the previous UTC, 8 years ago, social media was not included, it actually was the year Facebook was launched. However, social media became a very important way of connection and communication in the previous years. This is why PepsiCo has to reap the benefits of it. But will the campaign of PepsiCo social enough?
PepsiCo’s sales growths increased by 22.5% over the last two decades, however this growth doesn’t mean the company will keep growing. The competition will become harder because the patents owned by Nescafe will expire in 2013; this means that other companies also may own the recopies of PepsiCo’s beverage products.
Let experience 1.5 million people the UTC by using social media is a short term goal for PepsiCo, also an increase of 15% in sales in Canada will be a one year goal for the company.
Goals up to five years are educating and working together with Pepsi’s suppliers to improve social responsibility performance across the company’s supply chain. Also PepsiCo wants to create a better world by encouraging and supporting environment sustainability programs in Canada. And one of the main goals for PepsiCo is to become market leader in Ontario and West Canada while maintaining market share in other areas.

2. Introduction/problem statement. Pepsi Beverages Canada is devising a new promotion campaign for its products. The company has decided it will employ the market strategy that was successful in previous campaigns “The Ultimate Taste Challenge” (UTC). Moreover, the campaign will be aimed at specific market segments, the “Millennials”, in particular the group of 16 to 25 years of age and 2) the urban areas where Pepsi has so far underperformed in relation to the rest of Canada where Pepsi is the brand leader. To reach its target groups of customers, BBDO, Pepsi’s marketing agency, has devised a campaign that will heavily rely on the new social media. Facebook will be incorporated in all stages of the campaign to lure and involve the target customers in the campaign and to drive them to the UTC booths. The question is whether BBDO has managed to devise a successful new social media campaign or whether the social media has not been sufficiently incorporated into the UTC campaign.

3

3. External / market analysis on macro and meso level

Market analysis and market segmentation

In a study done in 2007 the Encyclopedia of Global Industries stated that the global soft drink industry is almost exclusively a marketing phenomenon.
Because the actual product is simply a mix of water, sweeteners, flavors and other additives, the industry’s genius lies in convincing billions of consumers to drink soft drinks instead of plain water or other beverages.
This is obvious when looking at the amount of advertising conducted by the major companies in the soft drinks market.

The market for soft drinks can be segmented into carbonated soft drinks (CSD), coffee, milk, tea, bottled water, fruit juice, sports drinks, energy drinks and others. CSDs are responsible for 16,3 % of Canadian non-alcoholic beverage sales. (See table below). Carbonated soft drinks (CSDs) continue to account for the largest beverage category both in volume and in per capita consumption in spite of losing ground to healthier and more popular non-alcoholic beverages.

Non-alcoholic beverage by volume in 2009 in Canada:

In recent years the Canadian market has faced fierce price competition among soft drink companies with an increase in private label sales and declining demand for CSDs. The companies used price reductions to maintain sales numbers and market share, but with rising costs of materials this might no longer be a feasible strategy in the (near) future.

External environment analysis

An external environment analysis of Canada using the DESTEP method.

Demographic
The Canadian population in 2009 was 33,7 million. Between 1990 and 2009 the population has grown by 21.8%. This is lower than the world’s population growth in this period of 28,4%. At the moment Canada’s population is around 34,3 million.
According to the Unites Nations Canada’s population will be around 37 million in 2020.

Like many other 1st world countries, the number of children aged 0-14 years has been falling steadily in recent years. Canada's percentage share of that age group is ranked one of the lowest in the world, with just 16.3% in 2008. The largest populations share, aged between 15 and 64 years has actually increased, growing from 68.6% to 68.8% between 2003 and 2008.
Canada has one of the highest percentage shares of the population aged 65 years and older in the world, with 14.9% (2008), the 33rd highest of 227 nations. That figure represents a growth of 2% from five years earlier. They also have one of the lowest population shares of citizens aged 14 years and younger, with 16.3% (2008) the 196th ranking amongst 228 nations.
When looking at demographics specifically for the soft drink market, an interesting statistic is that research has shown that 60% of Canadian CSD sales come from consumers aged 50 or older.

Economic
Canada is an affluent, high-tech industrial society in the trillion-dollar class. The country has many natural resources, a highly skilled labor force, and modern capital plant, which helped Canada enjoy solid economic growth from 1993 through 2007. But due to the global economic crisis, the economy dropped into a sharp recession in the final months of 2008, and Ottawa posted its first fiscal deficit in 2009 after 12 years of surplus. Canada's major banks, however, emerged from the financial crisis among the strongest in the world, largely because of the financial sector's tradition of conservative lending practices and strong capitalization. Canada achieved marginal growth in 2010 and 2011 and plans to balance the budget by 2015.

When looking at the information above it can be stated that overall Canada has a relatively strong economy. However, rising food and energy prices and the continuing recession have also affected Canada. The economic recession has lead to consumers spending less of their disposable income, even in the typically recession proof drinks and snacks market.

Another economic factor affecting PepsiCo is the rise in prices for raw materials that the company needs for production. Some of the raw materials used include grains such as corn, wheat flour, oats and rice; fruit and vegetable products like oranges, potatoes, and juice concentrates; sugar; and vegetable and essential oils. Changes in the prices of such raw materials impact total production costs and the profit margins. The primary raw materials used by bottlers such as high fructose corn syrup, which is used as a sweetener, aluminum, used to make cans, and PET Resin, used for plastic bottles, are also becoming more expensive.

Social-cultural
The adult prevalence rate of obesity in Canada is 23.1% (2004).
Compared to the world Canada takes 14th place.
In comparison, the US holds place 6 with 33,9%. (2006)

Consumer demand for carbonated soft drinks has been negatively affected by concerns about health and wellness. CSDs are being associated with health problems such as obesity among children and teenagers. This trend has lead to a drop in market share for CSDs.
From 1999 to 2009, per capita consumption of CSDs in Canada declined 14.0% from 121.8 liters to 104.7 liters. Per capita consumption declined by 1.2% between 2008 and 2009

Technological
Advances in computer technology and automation improved all aspects of the soft drink manufacturing industry from inventory control to "smart" vending machines. Companies with computerized operations found both increased profitability and improved product quality.

Another technological advancement could be found on the user end of the soft drink industry, with smart vending machines. These machines can keep track of stock supplies, sales patterns, breakdowns, and other conditions, which help to drive revenue and keep costs low.

Environmental
The Canadian climate varies from temperate in the south to subarctic and arctic in the northern parts of the country. The southern parts also face strong winters each year, but also usually have nice summers. Carbonated soft drink sales tend to be seasonal, with higher consumption during the summer months. An unusually cold or summer can have a negative impact on sales.

In today’s world there is more and more emphasis on the environment and how to reduce damage to the environment and become more sustainable. One environmental issue that food and beverage manufacturers in general have faced is waste remaining from the packaging after the drink has been consumed. Especially in urban areas waste management is an issue as cities are using up their landfill capacity. In Canada on average over 70% of used beverage containers are captured for recycling. This is one of the highest rates for any food product.

Political
Canada has recently granted clearance for the use of caffeine in all CSDs, not just for use in cola drinks, as was previously the case. At the moment there have not been any non-cola CSDs introduced into the Canadian market that have added caffeine.

In general there is a trend to internationalize regulations through general trade treaties, and the industry will face the challenge of looking at regulations that could be harmonized, either with the U.S. or through the World Trade Organization.

Industry Analysis:

Between 1960 and 1990 the market growth for carbonated soft drinks (CSDs) in the United States far outpaced population growth. In this period the per capita CSD consumption increased 2,5 times. Today’s market however, faces a less optimistic outlook.
In the US the CSD segment has lost a big part of market share to bottled water and functional drinks.
Between 1997 and 2002, the share of the segment declined from 72% to 66%. This reflects a shift in consumer taste towards healthier beverages. Apart from health reasons, the fact that there’s a wider choice in non-carbonated and healthier beverages is also a factor contributing to this trend.
Per capita consumption of CSDs has been decreasing while that of other beverages, such as bottled water and non-carbonated soda’s has been increasing.

Competitor analysis:

PepsiCo's main competitors in the food and beverage industry are Coca-Cola, Kraft and Dr. Pepper/Snapple.
In the beverage market Coca-Cola has long been PepsiCo’s biggest rival, with Coca-Cola’s different Cola variants competing with similar Pepsi brand drinks. Worldwide Coca-Cola has a bigger market share in the CSD market. However, a big difference between Coca-Cola and PepsiCo is the fact that the majority of PepsiCo’s revenue does not come from carbonated soft drinks.
PepsiCo’s total revenue is much higher than Coca-Cola’s. This is due to a more diversified product line. PepsiCo operates in many markets where Coca-Cola is not active, such as the snack and convenient foods industry. Coca-Cola on the other hand is essentially a one-product company focusing solely on beverages. Coca-Cola's heavy dependence on beverages, particularly CSDs, makes it more vulnerable than PepsiCo to the growing aversion to soda, which is perceived as fattening and unhealthy. PepsiCo's extensive portfolio of beverages, foods and snacks puts the company in a better position to cope with the trend of healthier eating.

4. Internal analysis 4.1 Current Target Market

PepsiCo current target market consists of customers between the age of 14 and 30. From this age you can conclude that the company targets teens and young adults. They target both male and female who think of themselves as being “hip” or “youthful”.
PepsiCo attracts their young audience by entertainment, fun and excitement. Offering sport tickets, free music videos, contests and freebies.
When you visit www.pepsi.ca you can immediately see the site is clearly designed to attract and entertain teens and young adults, which again is their current target demographic for Pepsi Canada.

4.2 Positioning
Pepsi Canada positions itself on points of difference as well as points of parity. Pepsi’s point of difference is their forward thinking attitude. It all comes to one point, which is image differentiation. Pepsi has the image of being action oriented, which can be seen back in the target audience. Many people playing sports feel attracted to Pepsi Cola because of the image the company creates.
Pepsi also considers themselves as the bold, refreshing, robust cola with a wide selection to fit every lifestyle of consumer. The company created the Pepsi generation by focusing on the user of the drink, never the drink.
Also does the company have several main characteristics; honesty, fairness, integrity and sustainability. The last characteristic is being used a lot to create a certain image and identity towards their target market. Sustainability is a vision PepsiCo Canada will be proud to live by. It is purposeful, concise and memorable. PepsiCo Canada’s goal is to make “Tomorrow better than Today”.

4.3 Competitive Advantage
There are several advantages that Pepsi Cola has above its competitors:
Firstly, Pepsi Cola has been in this market for almost one century. This means that they are experienced and stationed deeply in people’s mind. Nowadays there is hardly anyone that does not know the brand Pepsi-Cola. Whenever the name Pepsi is heard, people will immediately image a fresh and cool drink.
The beverage business operates in highly competitive markets. PepsiCo competes against global, regional, and private label manufactures on the basis of price, quality, product variety and effective distribution. The chief beverage competitor of PepsiCo, The Coca-Cola Company, has a slightly larger share of carbonated soft drinks consumption in the United States, while PepsiCo has a larger share of chilled juices and isotonics.

4.4 Current Marketing Mix

Product
The Pepsi-Cola drink contains basic ingredients found in most other similar drinks, including carbonated water, corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains the same ingredients but no caffeine.
The PepsiCo Canada follows one quality standard across Canada to ensure the onward trust and confidence in its Cola, which is the base of its success. In order to ensure that consumers stay informed about the global quality of its Cola, the company carries a quality assurance seal on its products.
Price
Pricing decisions are almost always made in consultation with marketing management. Price is the only marketing mix variable that can be altered quickly. PepsiCo Canada is a company, which emphasizes product quality; it tends to sell its products with price range from moderately low to high prices, depending on the use and the targeted customers.
The main reason for deciding a specific price for a can of Pepsi is based on competition. You can think of Pepsi as being a very flexible company, which can bring down its price for Pepsi very quickly. The company is renowned to bring the price down even up to half if needed. But the risk-taking attitude has also earned Pepsi losses. Though lowering the price would attract customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier, but now Pepsi Canada is a full-fledged and growing part of the Company.

Promotion
Promotion is a key element of a marketing program, and is concerned with effectively and efficiently communicating the decisions of a marketing strategy. A company’s promotional efforts are the only controllable means to create awareness among the public about itself.
PepsiCo Canada has advertised its products through many different ways and media. Through the television they have showed different advertisements of Pepsi. Many of these commercials include celebrities, which support Pepsi’s positioning as “The Choice of a New Generation.” PepsiCo Canada also advertises its products by targeting those favorable television programs, like sports and series to promote its products.
Of course one of the biggest promotions PepsiCo Canada has had so far is the blind taste tests, know as the Pepsi Challenge. The challenge is designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical drinks, with no meaningful differences. The challenge takes the form of a taste test. At malls, shopping centers and other public locations, a Pepsi representative sets up a table with two blank cups, one containing Pepsi and one with Coke. Shoppers are encouraged to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or Pepsi. If Pepsi is revealed, the shopper is given a small prize. The implication is that Pepsi tastes better than Coke, and thus consumers should purchase Pepsi.
Place
In October 2008, PepsiCo Canada’s businesses reorganized into two business units, PepsiCo Beverages Canada and PepsiCo Foods Canada. PepsiCo Canada merged its beverage bottling and brand business operations, forming one unified Canadian beverage organization – PepsiCo Beverages Canada.

Personnel
PepsiCo Canada employs nearly 10,000 Canadians and is organized into two business units, PepsiCo Beverages Canada and PepsiCo Foods Canada.
The company is continually looking for ways to make PepsiCo Canada a great place to work. One way is by offering a comprehensive benefits package that is designed to address the health care and financial needs of their employees, both now and into retirement. It is the goal of the company to help PepsiCo Canada’s employees live life well.

4.5 Financial Performance
PepsiCo Canada’s main target is to be committed in achieving business and financial success while leaving a positive imprint on society. They call this strategy “Performance with Purpose”.
PepsiCo Canada has a straightforward approach to superior financial performance: drive shareholder value.

5. SWOT analysis, confrontation matrix

SWOT analysis PepsiCo Strengths Weaknesses
Internal Pepsi expanded to Canada in 1934.
The Pepsi challenge played a key role in driving Pepsi brand leadership in Canada.
PepsiCo is currently the market leader in Canada.
PepsiCo’s products were in more than 10 million households across Canada.
PepsiCo joined great brand recognition with its sub brands.
Fifteen challenge teams are attending local and national events over the course of the summer.
Pepsi’s many sub brands are positioned in different segments in the drinks market.
New technologies had been incorporated to accent the UTC experience.
The Facebook page will allow users to win prizes. The new strategy relied too much on social media.
Last time that Pepsi organized the UTC was executed in 2004.

External Opportunities Threats Pepsi Ultimate Taste Challenge can result in a bigger market share in Canada, by focussing mainly on Ontario and the Western part.
There is tremendous potential for social media to amplify the impact of the traditional UTC experience.
Taste test revealed that Canadians preferred the taste of Pepsi. The sale of carbonated drinks is expecting to decline.
Coca Cola is official sponsor of both the London Summer Olympics and the UEFA Champions League Euro Cup soccer tournament.
Coca Cola was already beginning to challenge PepsiCo’s Canadian market share leadership.
The big competition with Coca Cola may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo.
The Canadian soft drink market is very competitive

Confrontation Matrix

External
Internal O1 O2 O3 T1 T2 T3 T4 T5 S1 0 0 0 0 0 0 0 ++ S2 ++ ++ ++ -- -- - -- + S3 ++ ++ ++ - -- -- -- -- S4 ++ + ++ -- -- -- -- -- S5 + 0 0 0 -- - - + S6 ++ + + 0 0 + 0 ++ S7 0 0 0 0 - - + + S8 ++ ++ ++ -- - + 0 + S9 + ++ ++ 0 0 + 0 + W1 + ++ ++ 0 0 0 -- -- W2 + - - -- - -- -- --

++ Stands for highly beneficial combination
+ Stands for good relation
0 Stands for neutral relationship
- Stands for negative relationship
-- Stands for highly threatening circumstances.
Confrontation matrix strategy
The matrix above shows that PepsiCo has a lot of Strengths and Threats. Through this confrontation matrix analysis we can see that PepsiCo needs to focus on Strengths-threats strategies (survival). Classic examples of this type of strategy include multiple channel promotions and price wars. PepsiCo will have a lot of competitiveness from their main competitor Coca Cola. However, PepsiCo will have a major advantage on Coca Cola, because PepsiCo is the market leader and with their new promotion, they can get a larger market share.

6. Target Market, Segmentation, Positioning
Target Market:
From the outset it was Pepsi’s decision to aim its marketing efforts at certain target markets, defined: Demographically, aimed at “millennials”, especially young people around the 16 to 25 years of age.
Geographically, aimed at markets where there is an underperformance of PepsiCo in comparison to its main competitor the Coca Cola group, viz. urban markets, like Toronto and Vancouver.
By selecting a group of potential customers upon whom the company will target its marketing efforts, Pepsi has apparently determined that this target market comprises the main group of consumers to which it will ultimately sell its merchandise.
Market Segmentation:
Pepsi has targeted a market segment based on specific age characteristics, viz. the 16 to 25 years of age market. By selecting this age group its marketing strategy could be adjusted to that target group’s wishes, behavior, values and lifestyle. By narrowing the choice specifically to this well-defined group of customers it will be easier to develop a marketing strategy. This may be the key to success.
Positioning:
Positioning is the aggregate perception that the target group has of a company or product, relative to their perception of the competitor in the same industry.
The decision to use the Ultimate Taste Challenge in a central role of the marketing campaign is based on Pepsi’s opinion that it can positively influence its positioning, relative to that of Coca Cola, in the target markets. That opinion is the result of previous campaigns in which UTC proved to be very successful in promoting the company’s products. In the new campaign Pepsi will employ new technology and use the new media to adjust to the behavior and lifestyle of its target audience, but the campaign remains based on the UTC, which seeks to influence the notion of how customers see a product or a company, relative to its competitors. This is their positioning.

7. Strategy

For PepsiCo to succeed in the Canadian market, it needs to implement a clear and feasible strategy to compete with its current competitors.
PepsiCo targets ‘Millennials’, those within the ages of 16-25, and employs social media in their marketing. With the rising popularity of social media websites such as Facebook, Twitter, Instagram, it is very important to keep up to date with fierce competitors, active on the social media sites as well. They should be actively using it to give customers updates on products or feed them links to events. Therefore, using the UTC campaign is a very good way to attract and discover new customer groups. These events prove to people that their beverages are indeed differentiated from Coca Cola for example. Thus, they are using the Product Differentation strategy, and are trying to become the most favoured brand in the Canadian industry. Also, sponsoring X-Factor and the Canadian Football League, watched by millions of Canadians and Americans, provide good instruments by which brand awareness via the television can be raised.
PepsiCo should invest more into Market Research and find out exactly what it can do in order to attract Coca Cola consumers. In this way, they will be able to tailor to the needs of local customer groups. PepsiCo should invest part of its marketing budget in raffles, in-store giveaways and outdoors (City center, amusement center, university, stores) giveaways, contests and polls, and prizes for those who like and share a Pepsi advertisement via Facebook and attract the most people. The most important thing for them would be the popularity of the Ultimate Taste Challenge, and having a large fan base on social media sites will be a driving force in generating new customers, and sharing experiences and reviews by participants. PepsiCo should not only focus on Millennials said to be between 16-25 but to all consumers of sodas so a more realistic age group would be 16-70. And they must improve sales channels to make it as convenient as possible to serve to their consumers. One way to do this is to use the Facebook or other social media site marketplaces either for large orders or for stocks to be reinvested into its marketing.
To improve market share in Ontario and the Western part of Canada, 250,000 Pepsi National Challenges, 1.25 million regional-and-500-customer challenges, are planned for the year. Pepsi should take into account all the positive and negative feedback and comments that customers may have, and see to it that they improve in those areas.

8. Objectives

Short-Term goals (up to one year)
-Pepsi-Cola Canada wants to increase market share by 15% over the next 12 months.
-Have 1,5 million people experience the UTC by using social media.

Long-Term goals (up to five years)
-Educating and working together with Pepsi’s suppliers to improve social responsibility performance across the company’s supply chain.
-Encouraging and supporting environment sustainability programs.
-To become market leader in Ontario and West Canada while maintaining market share in the other areas.

9. Marketing Mix

PepsiCo will focus on serving its products to Millennials, particularly those 16 to 25 years of age, in urban, lower-share markets, principally in Toronto and Vancouver. The 22 different food and beverage brands of PepsiCo, which are positioned in different segments, will create value for the customers.
PepsiCo want a significantly increase its investment in its Pepsi brand. They will do this by two big initiatives, by firstly the “Own Taste this Summer” the ultimate taste challenge and “Leverage our Properties” this is sponsorship of the television show X-Factor and the Canadian Football League.
Pepsi also wants to integrate social media in to the UTC in order to allow customers to share their experience beyond the booth.
Product
The current products of PepsiCo will not be changed, in the coming year. The Pepsi product line is very wide with Pepsi, Pepsi Max, Pepsi Natural, Pepsi Next, Pepsi One, Pepsi Throwback, Pepsi Wild Cherry, Caffeine Free Pepsi, Diet Pepsi, Diet Pepsi Lime, Diet Pepsi Vanilla, Diet Pepsi Wild Cherry and Caffeine Free Diet Pepsi.
Even though PepsiCo will not change its products in the fallowing year, the company is continually innovating, creating new products, new flavours and new packages in varying shapes and sizes to meet the growing demand for convenience and healthier choices. Pepsi is constantly on the lookout for ways to ensure their consumers get the products they want, when they want them and where they want them.

Price
The price of the PepsiCo products will be affected by the unfavorable economic conditions, increased volatility in foreign exchange rates and the shortages of raw materials and other supplies. Probably this will not affect our competitiveness, expecting that our competitors also will have to deal with those circumstances.
Place
PepsiCo will keep it system of direct store delivery through both company-owned and independent bottlers at least for the next 3 years in the United States and Canada. Due to the greater speed, simplicity and flexibility this system will eventually result in better store-level customer service.
Promotion
After the Ultimate Taste Challenge in 2012 has been completed PepsiCo will publish the expected positive results. This will be done through:
Television 46% (of the UTC promotional budget).
Grassroots 28%
Radio 8%
Digital 4%
Other 14%
Pepsi will show the results of the UTC through these media, even though these ways of promotion are all different, PepsiCo will connect to its social media network.

PepsiCo planned the next UTC in 2020, since in every 8-year period the Millennials from 16 to 25 years old will be a new group of people.

10. Profit & Loss Statement and 3 Year Budget

PepsiCo generates money from its beverage portfolio consisted of some of the world’s most popular brands: Pepsi, Pepsi Max, Diet Pepsi, Tropicana, Gatorade, 7up, Mountain Dew, Lipton Brisk, Aquafina, Amp, SoBe, and Starbucks bottled beverages. The company targets its product to everybody. Since PepsiCo went to Canada in 1934, they have been the market leader in Canada.
Canada 2009 2010 2011
Sales PepsiCo $1,996,000,000 $3,081,000,000 $3,364,000,000 With a sales growth of 54.4 per cent in 2010, PepsiCo has managed to grow with 9.2 per cent in 2011.

The company believes that, with the Pepsi Taste Challenge, they will manage to increase their revenues with 15 per cent in the year of 2012. However, this growth will probably rise slightly less each year, followed by 12 per cent in 2013 en 10 per cent in 2014 in Canada. PepsiCo assumes that this will occur, because Coca-Cola is sponsoring the Uefa Champions league and the Olympics held in London. Despite the fact that there are a lot of competitors, the corporation will maintain its clients and even attract more customers, because PepsiCo has many loyal customers and with the Ultimate Taste Challenge, more potential clients will get familiar with the company.

Total budgets for Marketing

2012 2013 2014

Expected revenue $3.868.600.000,00
$4.332.832.000,00
$4.766.115.200,00 Marketing Operation(10% in 2012, 2013 and 2014)

Digital Advertisement(4%)
Advertisement via Grassroots(28%)
Advertisement via Radio(8%)
Other Advertises(14%)
Advertisement on the television(46%) $386.860.000,00

$15.474.400,00
$108.320.800,00
$30.948.800,00
$54.160.400,00
$177.955.600,00 $433.283.200,00

$17.331.328,00
$121.319.296,00
$34.662.656,00
$60.659.648,00
$199.310.272,00 $476.611.520,00

$19.064.460,80
$133.451.225,60
$38.128.921,60
$66.725.612,80
$219.241.299,20
New Inventory (10%) $386.860.000,00 $433.283.200,00 $476.611.520,00
Product development (5%) $193.430.000,00 $216.641.600,00 $238.305.760,00
Safety budget (5%) $193.430.000,00 $216.641.600,00 $238.305.760,00

Total budget for the action program

$1.160.580.000,00

$1.299.849.600,00

$1.429.834.560,00
Projected revenue growth in percentages 15% 12% 10%

Marketing Operations uses 10% of the company’s projected budget in the years 2012, 2013 and 2014. The budget for marketing operations will be spent on different business aspects. Marketing operation will focus on maintaining and creating a long-term relationship with the consumers. PepsiCo aims to be present on advertisements on TV, Radio and much more. Over the course of the three years, the company aims to reduce the respective amount of the marketing operations expenses.

Source: Internal Company Data

New Inventory (10%) refers to the new projected line extension, when that will be necessary. Until the New Inventory is not necessary, PepsiCo will use this money as a budget.

Product development (5%): Line extension calls for implementations on the products of PepsiCo. A product development budget is needed to engage continuous improvement of the product. However, only a small percentage is spent on product development, as PepsiCo will currently focus on its target group.

Safety budget 10% Since PepsiCo knows that there is a lot of competition, and if it occurs that the company’s sales are not increasing according to the goal, the budget will help out.

2012 2013 2014
Total Costs Marketing action program expenses $ $1.160.580.000,00 $1.299.849.600,00 $1.429.834.560,00

Wages $541.604.000,00 $606.596.480,00 $667.256.128,00
Transport $154.744.000,00 $173.313.280,00 $190.644.608,00
Manufacturing $232.116.000,00 $259.969.920,00 $285.966.912,00
Other expenses $77.372.000,00 $86.656.640,00 $95.322.304,00
Taxes $431.735.760,00 $483.544.051,20 $531.898.456,30
Total costs 2.598.151.760,00$ $2.909.929.971,20 3.200.922.968,30 Expected Net Income
For the year 2011 $1.270.448.240,00 $1.422.902.029,00 $1.565.192.232,70

The total costs were calculated after the total marketing budget for the marketing plan. The total costs are added together as shown in the figure above.

The taxes account for 11.16%, wages for 14%, transport for 4%, manufacturing costs for 6% and other expenses for 2% of the expected total revenues.

These values are subtracted from the expected revenue, and as a result the expected net income is calculated which is $1.270.448.240,00 for the year 2012, $1.422.902.029,00 for the year 2013 and $1.565.192.232,70 for the year 2014.
http://www.pepsico.com/annual11/downloads/pep_ar11_2011_annual_report.pdf

Similar Documents

Premium Essay

Pepsico Marketing Plan

...environment: 5 Internal Analysis 7 SWOT Analysis Pepsi case: 9 Objectives 10 Marketing Strategy 10 Marketing Plan 12 Product 12 Place 14 Price 14 Budget & Control 15   External Analysis: Macro environment: The environment is constantly changing and therefore also influencing PepsiCo’s operations. Environmental changes which are not directly involved with the company but do influence it can be put in six categories: economic, technological, political, cultural, natural and international changes. These changes and their influence on PepsiCo Canada are described per category. Management R. L. Draft, M. Kendrick, N. Vershinina, the general environment page 85-91. Economic In March 2012 Canada’s economy was ranked 11th of the world with a GDP of $1,759 billion. Canada is a wealthy nation with a very high standard of living and is also one of the world’s top trading nations. Since the 2008 world financial crisis Canada has emerged as one of the strongest developed economies in the world. The GDP growth of Canada in 2010 was more than 3% even though most of the World’s Western countries were in an economic recession. The stability of the Canadian economy even during a World financial crisis makes Canada a great country to operate in for a multinational like PepsiCo. http://www.rediff.com/business/slide-show/slide-show-1-worlds-20-economic-superpowers/20120312.htm http://www.economywatch.com/world_economy/canada/?page=full Technological The last decade......

Words: 3700 - Pages: 15

Premium Essay

Pepsi Marketing Plan

...changing and therefore also influencing PepsiCo’s operations. Environmental changes which are not directly involved with the company but do influence it can be put in six categories: economic, technological, political, cultural, natural and international changes. These changes and their influence on PepsiCo Canada are described per category. Management R. L. Draft, M. Kendrick, N. Vershinina, the general environment page 85-91. Economic In March 2012 Canada’s economy was ranked 11th of the world with a GDP of $1,759 billion. Canada is a wealthy nation with a very high standard of living and is also one of the world’s top trading nations. Since the 2008 world financial crisis Canada has emerged as one of the strongest developed economies in the world. The GDP growth of Canada in 2010 was more than 3% even though most of the World’s Western countries were in an economic recession. The stability of the Canadian economy even during a World financial crisis makes Canada a great country to operate in for a multinational like PepsiCo. http://www.rediff.com/business/slide-show/slide-show-1-worlds-20-economic-superpowers/20120312.htm http://www.economywatch.com/world_economy/canada/?page=full Technological The last decade many technological advancements and new innovations have been implemented in people’s life. This is also greatly affecting businesses. Internet, mobile phones and interactive TV are just examples of the many changes in technology that have occurred......

Words: 3660 - Pages: 15

Premium Essay

Business Case Analysis

... BUSINESS CASE ANALYSIS Professor Dan Nicholes Business Cases (Spring) BUSI 4003 Yorkville University Table of Contents Lululemon Athletica Inc.....................................................................................................................5 Pepsi Canada: The Pepsi Refresh Project.......................................................................................9 2. LULULEMON ATHLETICA INC. 1 Kelly Huang (Arman) wrote this case under the supervision of Professor Dante M. Pirouz solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2014, Richard Ivey School of Business Foundation Version: 2014-10-17 Near the end of November 2013, Lululemon Athletica Inc. (Lululemon) found itself at the centre of a viral firestorm......

Words: 8347 - Pages: 34

Free Essay

Pepsi in Uk

...[pic] Managing Multinational Corp. Pepsi in UK Company History PepsiCo’s beverage business was founded at the turn of the century by Caleb Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi-Cola. Today consumers spend about $33 billion on Pepsi-Cola beverages. Brand Pepsi and other Pepsi-Cola products – including Diet Pepsi, Pepsi-One, Mountain Dew, Slice, Sierra Mist and Mug brands – account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $60 billion. Pepsi-Cola also offers a variety of non-carbonated beverages, including Aquafina bottled water, Fruitworks, and All Sport. Pepsi-Cola’s mission statement is to be the world's premier consumer product’s company focused on convenient foods and beverages.  They seek to produce healthy financial rewards to investors as they provide opportunities for growth and enrichment to their employees, their business partners, and the communities in which they operate.  And in everything they do they strive for honesty, fairness, and integrity. Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. Operations grew rapidly beginning in the 1950s. In addition to brands marketed in the United States, major products include Mirinda and Pepsi Max. Pepsi-Cola North America includes the United States and Canada. Key international markets include Argentina, Brazil, China, India, Mexico, Philippines, Saudi Arabia, Spain,......

Words: 2534 - Pages: 11

Premium Essay

Pepsi

...have had different fads over the years too. The top ten are oat bran, crock pot meals, cupcakes, fondue, deep-fried everything, space aged snacks, gelatin, bacon, TV dinner, and low or no carbs (Ronca, 1998-2014). These are just a few of the different ones over the years. In the early 1990’s there was a marketing fad offering clarity with purity. Some of the companies involved just to name a few are Miller Brewing Company (March 1993), Coors Brewing Company (1992), Procter and Gamble and Colgate-Palmolive (Failed Product Report: Crystal Pepsi, 2014). Pepsi Company (PepsiCo) was part of the marketing fad when it released Crystal Pepsi. Crystal Pepsi was colorless cola with 100% natural flavor with no preservations and no caffeine (Failed Product Report: Crystal Pepsi, 2014). It had a lighter tasted than regular Pepsi. The cola came in regular and diet. Pepsi remove the cameral color out of the cola in doing so it made consumer think that it was healthier to drink. It started for the product begin in the early 1990’s. Before it released in 1992 Pepsi had test markets in Denver, Sacramento, Dallas and Providence with a positive response (Failed Product Report: Crystal Pepsi, 2014). Test markets were hold for nine months in these cities. It launch...

Words: 1228 - Pages: 5

Premium Essay

The Cola War

...The Cola Wars are a campaign of mutually-targeted television advertisements and marketing campaigns since the 1980s between soft drink manufacturers Coca-Cola Company and PepsiCo Incorporated. * | [edit]Competition Many of the brands available from the three largest soda producers, The Coca-Cola Company, PepsiCo and the Dr Pepper Snapple Group, are intended as direct, equivalent competitors. The following chart lists these competitors by type or flavor of drink. Flavor/type | PepsiCo | The Coca-Cola Company | Dr Pepper Snapple Group | Cola | Pepsi | Coca-Cola | RC Cola | Diet Cola | Diet Pepsi / Pepsi Light Pepsi ONE Pepsi Max Pepsi Next | Diet Coke / Coca-Cola Light Tab Coca-Cola Zero | Diet Rite Diet RC | Cherry-flavored cola | Pepsi Wild Cherry | Coca-Cola Cherry | Cherry RC | "Pepper"-style | Dr Slice | Mr. Pibb / Pibb Xtra | Dr Pepper | Orange | Mirinda Tropicana Twister Tango Slice | Fanta Minute Maid | Crush Sunkist | Lemon-lime | Teem Sierra Mist 7 Up (in countries other than US) | Sprite Lemon & Paeroa | 7 Up | Other citrus flavors | Mountain Dew Kas Izze | Mello Yello Vault Fresca Lift Lilt | Sun Drop Squirt | Ginger ale | Patio | Seagram's Ginger Ale | Canada Dry Schweppes Vernors | Root beer | Mug Root Beer | Barq's Ramblin' Root Beer (until 1995) | A&W Root Beer Stewart's Rootbeer Hires Root Beer | Cream soda | Mug Cream Soda | Barq's Red Creme Soda | A&W Cream Soda | Juices |......

Words: 1022 - Pages: 5

Premium Essay

Cadbury

...Macro Factors * Competition and Competitors * Industry Trends * Customer Analysis * SWOT Analysis * Recommendations * Implementation Plan | 2334557881011 | EXECUTIVE SUMMARY: History: The company was started in 1783 in London as the world’s first soft drink maker. In 1880s Schweppes expanded worldwide and in 1960s the company diversified into food products. In 1969 Schweppes merged with Cadbury which was a cocoa making business started in England in the 1830s. Year | Acquisition | 1986 | Canada Dry soft drink brands | 1989 | Certain soft drink brands and purchased Gini brand of Belgium. | 1989 | Crush brand from Procter & Gamble for $220 million. | Cadbury Beverages, Inc., a beverage division of Cadbury Schweppes PLC acquired the Procter & Gamble brands namely Crush, Hires and Sun-drop in the year 1989. They had to re launch those brands into the market because those products were paced out by their competitors. This case especially deals with the Crush brand(an orange drink). Kim Feil who joined the division in 1989 as a Senior Product Manager for managing the re launch of Crush soft drink brand. There had been a lot of discussions regarding the crush brand. After making a thorough industry review, competitors positioning and the image which Crush has on its customers mind the senior marketing executives at Cadbury Beverages, Inc decided to focus initial attention on the Crush Brand(fruit flavoured carbonated beverage). PROBLEM......

Words: 2621 - Pages: 11

Free Essay

Industrie Boissons Gazeuses Au Canada

...TRAVAIL 2 SUR LES MODELES DE DISTRIBUTION AU CANADA: INDUSTRIE DES BOISSONS GAZEUSES AU CANADA ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- MRK-6085 ------------------------------------------------- Politique de distribution ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Faculté des Sciences de l’Administration ------------------------------------------------- Université Laval, Québec ------------------------------------------------- Table des matières INTRODUCTION 3 I- PRESENTATION DE L’INDUSTRIE DES BOISSONS GAZEUSES AU CANADA 3 1- Présentation globale de l’industrie : chiffres clés 4 2- L’analyse PESTEL 5 3- Les acteurs du marché 8 4- Les stratégies marketing 11 II- LA CHAINE D’APPROVISIONNEMENT 15 1- La production 15 2- Le processus......

Words: 9376 - Pages: 38

Premium Essay

Pomlife Marketing Plan

...1027 – Marketing Plan of PomLife May 1, 2006 MARKETING PLAN FOR TROPICANA POMLIFE Presented to: Larry Graham Marketing Program Professor George Brown College Presented by: Nitasha Pania Turgut Tezir Lynn Raposo Shilpi Kapur Abhishek Mandal Business Marketing Analysis Program Students George Brown College May 1, 2006 Kapur, Mandal, Pania, Raposo, Tezir ­ 7 ­ MARK 1027 – Marketing Plan of PomLife May 1, 2006 Kapur, Mandal, Pania, Raposo, Tezir LETTER OF TRANSMITTAL DATE: May 1, 2006 TO: Larry Graham, Marketing Program Professor FROM: The PomLife Group SUBJECT: MARKETING PLAN FOR TROPICANA ‘POMLIFE’ One of Canada’s biggest manufacturers of juices ­ Tropicana, will launch Pomegranate juice called “PomLife” for the varied consumers ranging from 14­50 years. This marketing plan analyses the following: Company Analysis: About Tropicana as a Company, all the other products that it produces and its market position Competition: Four major beverage companies, their products and market share has been taken into account as they are the prime competition Target audience: All age group of people and from all different walks of life are target audience for Tropicana’s new product. Anyhow, a complete analysis on different target segments has been carried out Market environment: Demographics, psychographics, economic, political, technical and cultural factors that would effect the launch of PomLife and eventually its success Marketing Mix: A complete package of marketing......

Words: 2266 - Pages: 10

Premium Essay

Open Happiness, Refresh Everything

...Open Happiness, Refresh Everything Brian Helton University of St. Mary Marketing Management – MGT704 Instructor: Marc Lyncheski April 14, 2012 There are certain companies that through the use of exceptional marketing programs and well as aggressive business strategies have become recognized the world around. Many of these are part of our everyday life and if not then we see them every day in our comings and goings. Two of these world-wide brands that many of us know are also extremely similar in both product as well as marketing strategy. Those two brands are The Coca-Cola Company and PepsiCo, Inc. On May 8, 1886, a pharmacist named Dr. John Pemberton carried a jug of Coca-Cola syrup to Jacobs’ Pharmacy in downtown Atlanta, where it was mixed with carbonated water and sold for five cents a glass. (Our Heritage, 2012) Three years later in the summer of 1898 a young pharmacist named Caleb Bradham began experimenting with combinations of spices, juices and syrups, trying to create a refreshing new drink to serve to his customers. His success came in the form of the beverage now known around the world as Pepsi-Cola. (Pepsi Legacy, 2005) And from that day forward the rivalry between Coca-Cola and Pepsi would become legendary. These two beverage companies are competing for the top spot in a massive global market. The cola and carbonated beverage industry reaches to nearly every corner of the planet, and......

Words: 6544 - Pages: 27

Premium Essay

Pepsi Marketing Plan

...Pepsi Marketing Plan External Analysis: Macro environment: The environment is constantly changing and therefore also influencing PepsiCo’s operations. Environmental changes which are not directly involved with the company but do influence it can be put in six categories: economic, technological, political, cultural, natural and international changes. These changes and their influence on PepsiCo Canada are described per category. Management R. L. Draft, M. Kendrick, N. Vershinina, the general environment page 85-91. Economic In March 2012 Canada’s economy was ranked 11th of the world with a GDP of $1,759 billion. Canada is a wealthy nation with a very high standard of living and is also one of the world’s top trading nations. Since the 2008 world financial crisis Canada has emerged as one of the strongest developed economies in the world. The GDP growth of Canada in 2010 was more than 3% even though most of the World’s Western countries were in an economic recession. The stability of the Canadian economy even during a World financial crisis makes Canada a great country to operate in for a multinational like PepsiCo. http://www.rediff.com/business/slide-show/slide-show-1-worlds-20-economic-superpowers/20120312.htm http://www.economywatch.com/world_economy/canada/?page=full Technological The last decade many technological advancements and new innovations have been implemented in people’s life. This is also greatly affecting businesses. Internet, mobile......

Words: 321 - Pages: 2

Premium Essay

Cocacola

...Competition in the Soft Drink Industry: Case Study of Coca-Cola, Pepsi, and Dr. Pepper Krisadee Rungsatcha MBA 500: Essentials of Business Management June 23, 2013 Larry Frazier Abstract The beverage industry nowadays is very competitive. Each brand pushes all strategies to be the number one in the market and try to win more consumers and achieve their goals. The main competitors in these industries are Coca-Cola Company, PepsiCo, Inc., and Dr. Pepper Snapple Group. Coca-Cola is the largest beverage company in this market and provides the most market share that PepsiCo, Inc. PepsiCo is the second leading company, and Dr. Pepper Snapple Group is the third leading company in soft drink beverage industry. This paper presents three main competitors and focuses on competitive strategies, market strategies, and overall strength of the companies. Also, it discusses a recommendation to improve the Coca-Cola Company’s competitive position. Company Summaries Coca-Cola Company. The Coca-Cola Company is the largest beverage company in the world. The Coca-Cola Company is the leader in the market of nonalcoholic beverages and owns market shares than 500 beverage brands, including sparkling drinks, juice drinks, ready to drink, teas, coffees, and energy drinks, such as vitamin water and Powerade. The Coca-Cola Company also owns the leading brands of the diet and light beverage market, such as Diet Coke and the top five soft......

Words: 5869 - Pages: 24

Premium Essay

Squirt Marketing Case

...Marketing Strategy Squirt Case Squirt - Nature of industry, market, and buyer behavior In the United States, people consume more carbonated drinks than tap water. Research has shown that the average American drinks about 53 gallons of soft drinks per year. However, soft drink consumption has declined over the past few years. The soft drink industry has three major participants in the production and distribution; concentrate producers, bottlers, and retail outlets. Concentrate producers are responsible for consumer advertising and promotion programs, product development and planning and market research. The bottler’s responsibility is to set up local and retail trade promotions. Among this is selling and servicing retail outlets, placements and maintenance of advertisements, and the restocking of retailer’s shelves and vending machines. Competition in the soft drink industry is mostly relevant among the top three companies; Coca-cola, Pepsi-Cola, and Dr. Pepper/Seven Up. Each of these companies offers a product similar to Squirt, but each has their own variation. Coca-Cola’s Fresca is also a grapefruit flavored carbonated rink, but it has sugar and is caffeine free. Coco-cola also offers Mello Yellow and Surge. Pepsi-Cola has the largest carbonated citrus drink called Mountain Dew. The Organization Squirt Brand carbonated drink is a caffeine-free, low sodium soft drink that is a blend of grapefruit juices mixed with carbonation. It is the best selling carbonated......

Words: 1139 - Pages: 5

Premium Essay

Gatorade Marketing

...MARKETING PROJECT – SECTION I SUBMITTED BY: Anish Ghosh C.R. Mahesh Malavika Vilas Datar Nishant Kumar Thukral Puneet Sehgal Shelly Taneja (GROUP 5) ACKNOWLEDGMENT We would like to extend our heartfelt gratitude to Prof. Chinmaya Kulshreshtha, our Project Guide and professor for giving us an opportunity to conduct this project. We would also take this opportunity to thank her for the constant guidance, feedback and mentoring throughout the course of this project. We thank her for her time in helping us achieve our objective of completing this project to the best of our abilities. EXECUTIVE SUMMARY Gatorade is a brand of sports food and beverage product built around the line of sports drinks. It is manufactured by Pepsico and is distributed in 80 countries worldwide. The beverage was first developed in 1965 by researchers at the University of Florida, to replenish the combination of water, carbohydrates, and electrolytes that the school's student-athletes lost during rigorous athletic competitions. Its name was derived from the collective nickname of the university's athletic teams, "the Gators". Gatorade has been an admired brand of beverage in the United States and the main thing that has worked for the brand is the advertising strategy, which involves popular sports stars and clubs associated with the brand. We intend to present the positioning of Gatorade, to understand the various strengths, weaknesses, opportunities and threats of the brand in......

Words: 1692 - Pages: 7

Premium Essay

Hello

...Carl Johansson International Business Environment MIRBIS Exchange Student, Sweden 2011-05-16 Cola Wars; Going global 1. Compare and analyse market strategies of Coca Cola and Pepsi in the following ways; Country Market entry strategy China Coke used a three-step strategy where the first sold concentrate to franschised Chinese bottle-owners who were fully responsible for production and distribution. This step made Coke their name in China. In the second step Coke bought shares in the bottling business to reduce the effect of uncertainty and to restrict opportunistic behaviour of its local partners. During the third stage Coke merged with two local producers and broadened their production line to tea drinks, fruit juices and carbonated sodas. Pepsi established joint ventures with local companies in an early stage. They had to enter the market pretty aggressively since Coke was already well established. Pepsi addressed the Chinese government and built a strong network with local companies. Via these local companies they got access to other markets such as beer and wine. The joint ventures signalled long-term commitment and fair strategies to the Chinese government. They also expanded their savoury snack sister company who proved profitable. Mexico Coke was “first” in Mexico, as early as 1903 and to access the Mexican market in an easy way they provided “free” refrigerators to restaurants to encourage the distribution and brand. Their......

Words: 1386 - Pages: 6