Pepsi Marketing Mix has helped the Pepsi brand and its manufacturing company PepsiCo to boost its brand image, target customers, increase its market share and become the industry leader in the non-alcoholic beverage industry.
The Pepsi marketing strategy focuses on the elements of the marketing mix framework like Pepsi products, product strategy, distribution strategy, pricing strategy, public relations, various brand ambassadors and promotional strategy so that it can analyze the brand, create business and marketing strategies to position itself competitively, take the company forward and help to achieve the desired business goals.
Table of Contents
Introduction: Pepsico / Pepsi
- Type: Cola
- Introduced: 1893 as Brad’s Drink
- Manufacturer: PepsiCo
- Origin Country: USA
- Founded: 1898
- Founder: Caleb Bradham
- Headquarters: New York, USA
- Employees in 2023: 309,000
- Annual Revenue in 2023: 79.470 billion USD
- Net Income in 2023: 7.610 billion USD
- Market Value in 2023: 240.690 billion USD
- Market Cap in 2023: 216.150 billion USD
PepsiCo Inc. was formed with the merger of two great companies Frito-Lay Inc. and Pepsi-Cola Company in the year 1965. It is the 2nd largest company in the food and beverage sector in the world based on net revenues, market cap, and profit.
The multinational company manufactures, markets and distributes all PepsiCo’s products like soft drinks from brands like Pepsi, Mountain Dew, Diet Pepsi and Pepsi Max, fruit juices from brands like Tropicana, bottled water from Aquafina, snacks like potato chips, tortilla chips and corn chips from Lay’s, Ruffles, Quaker Oats and Fritos etc. and beverages like tea from Lipton Teas etc. to the target audience in the target market.
Pepsi from PepsiCo is one of the leading soft drink brands in the world in 2023 based on market revenues. The carbonated drink was originally developed by Caleb Bradham in the year 1893 and introduced as Brad’s Drink. The soft drink was renamed Pepsi Cola and later Pepsi in the years 1898 and 1961 respectively.
The Creation of Pepsi Cola
In 1893, Caleb Bradham introduced Pepsi as Brad’s Drink at his drugstore which was located in New Bern North Carolina. The original recipe had vanilla and sugar and Bradham tried to create a drink that would appeal to everyone, boost energy and help with digestion problems.
By 1910, the drink from New Bern had gained immense brand recognition and had 240 bottlers in 24 states with several bottling plants working for the brand.
In 1923, The Pepsi Cola Company suffered huge financial losses and entered bankruptcy. The Coca-Cola Company was provided with the opportunity to buy the rival brand after the Pepsi failure but it refused.
The Pepsi trademark was eventually bought by Roy C. Megargel and again after another bankruptcy by Charles Guth. After several years Walter Mack was named the CEO and under his guidance, the brand decided to use the white, red and blue logo to represent patriotic feelings during World War II.
Pepsi-Cola started gaining popularity once again after World War II and during the Great Depression under Walter Mack and was again considered a worthy rival of Coca-Cola within a short time. In 1965 it merged with Frito-Lay, which at that time was the largest snack brand in the world.
The merger with Frito-lay paved the way to success for the Pepsi company as it reached new heights and gained immense popularity. Pepsi became the drink of the new generation that wanted to celebrate life on all occasions.
Currently Pepsi brand occupies the second spot in the carbonated beverages market after the Coca-Cola brand.
Target Market: PepsiCo Marketing Mix
Pepsi’s target market is both urban and rural areas although the company shows high sales figures in urban cities where both males and females prefer Pepsi product Pepsi Cola as well as Pepsi Max over other types of soft drinks.
The target audience of the Pepsi brand is the middle-class, upper-middle-class, upper class and working-class people. The targeted customers include the younger generation and middle-aged people between 13 years to 45 years who love soft drinks and carbonated beverages as well as the new generation of health-conscious people that are looking for healthy drinks and sports drinks in the non-alcoholic beverage industry.
Geographically PepsiCo has a market share of 25% in the carbonated beverage industry in the United States. As it has spread its product reach to almost 200+ countries across every region of the world the target customers include both individuals and families.
Failure of Pepsi’s Marketing Strategies
Pepsi’s marketing mix and marketing strategies have been up to the point but still, its plan failed once or twice as it did not consider the targeted customers. Pepsi learned an all-important lesson that unless your business strategies are aligned with the targeted customers the product would not achieve success because, at the end of the day, it is the target audience which makes or breaks a brand and its products.
The Crystal Pepsi failure was a shock for the brand Pepsi as it had created a beverage for the younger generation that was a sure win according to its market research. The cause for the failure of Crystal Pepsi is still unknown but one of the reasons was the launch of “New Tab”, a beverage for the new generation by Coca-Cola. The Price War between both companies Pepsi and Coca-Cola failed both their beverages New Tab and Crystal Pepsi.
Pepsi Marketing Strategy & Marketing Mix (4Ps)
PepsiCo and Pepsi learnt from their mistakes and then started focusing on their marketing strategies and marketing mix elements so that they could align perfectly with the interest of the targeted customers.
PepsiCo is a world-renowned company that has taken over the food and beverage sector with help of the several brands associated with it and the relevant product lines and offerings. Pepsi is one of the most profitable brands of the PepsiCo Company that has reached unimaginable heights of popularity, market gains and revenues.
The PepsiCo marketing mix has created a comprehensive framework that focuses on PepsiCo products, cereals like Quaker Oats, food products, sports drinks, beverages like Mountain Dew and Pepsi, product strategy, distribution strategy, PepsiCo pricing, brand ambassadors and promotional strategies. The parent company has created individual marketing mix strategies like the Pepsi marketing mix so that every brand can work independently and generate revenues by itself.
Pepsi Product Strategy: Pepsi Marketing Strategy
The American company PepsiCo Inc. is associated with the food and beverage sector and is a leading beverage, food products and snack brand in the world. Its brand Pepsi has adopted a customer-centric approach with help of the Pepsi marketing strategy so that it can increase Pepsi products sale in the target market.
Currently, Pepsi is competing on a one-to-one basis with its arch-rival The Coca-Cola Company on almost all fronts and product categories. Pepsi decided to target the young generation as well as the new generation of health-conscious people with different Pepsi Products and variants.
Product Mix: PepsiCo Marketing Mix
Unlike the Coca-Cola brand which is a sole beverage company, PepsiCo products include both food products and beverages so that it can gain a competitive advantage with its various brands like Pepsi, Mountain Dew, Quaker Oats, Cheetos, Lays, Kurkure, Lipton and Tropicana etc. in the market.
Pepsi has paid special attention to product innovation and the tastes of targeted customers in different locations. With time the company has undergone several changes with some becoming instant hits and some seeing failure.
The Pepsi marketing strategy makes sure that the product strategy adopted by the brand is the best and will help the company to sell Pepsi Products in the market. Pepsi is a beverage company that sells different soft drink variants to its targeted customers.
Some product variants from Pepsi include
- PEPSI TWIST
- PEPSI LIME
- CRYSTAL PEPSI
- NITRO PEPSI
- DIET PEPSI
- PEPSI VANILLA
- PEPSI ZERO SUGAR – for health-conscious people
Place Strategy of Pepsi Marketing Mix
PepsiCo has spread its product presence to nearly 200+ countries across almost all urban and rural locations far and wide. The company has 36 bottling plants to manufacture and bottle the Pepsi variants. PepsiCo’s original soft drink product Pepsi Cola was the second-most carbonated drink sold in the United States after Coca-Cola. It has gained a strong share amongst the targeted customers in India.
The company follows a policy of acquisitions and global expansion and has 23 soft drinks, fruit juices and snacks brands like Gatorade, Tropicana, Pepsi, Diet Pepsi, Mountain Dew, Sierra Mist, Cheetos, Aquafina, Pepsi Max, Bubly and Quaker Oats Company with $1 billion sales. Some of the prominent brands formerly owned by PepsiCo include North American Van Lines, KFC, Pizza Hut and Taco Bell etc.
Place and Distribution Strategy: Pepsi Marketing Mix
The Pepsi marketing strategy focuses on distributor relationships so that all the products reach the end customers quickly without any hassles. The company sells the products to distributors, bulk buyers, and big retailers who sell them to marketers. Pepsi has strong distributor relationships to gain a competitive advantage over rival brands in the target market.
The distribution strategy of the beverage brand ensures a vast distribution channel that includes grocery stores, supermarkets, café, restaurants, fast-food chains, cinema halls, petrol pumps, pop and mom stores and convenience store chains.
The distribution strategy in the PepsiCo marketing mix also includes online shopping sites to meet the demand of the targeted customers who love to shop online for everything instead of visiting the grocery stores. Numerous shopping platforms and food delivery apps deliver the product to the doorstep. Thus, the easy availability of the various variants of Pepsi has made the brand a household name all over the world.
Price: PepsiCo Marketing Mix
The PepsiCo pricing policy in the PepsiCo marketing mix ensures that all its brands have adopted pricing strategies relevant to their products. The company understands the importance of a strong pricing policy that is aligned with what the targeted customers are willing to pay.
The brand image of Pepsi is that of an affordable drink and that is what makes it so popular amongst the masses. The company sells products in different sizes and packages like Pet bottles 1L, 2L, 1.5L, 330ml, and 0.5L, Can 300ml and Glass Bottles 1L and 300ml etc so that customers can buy according to their needs and budget.
Pricing Strategy: Pepsi Marketing Mix
The Pepsi marketing strategy encourages bulk sales as the company has kept the higher volumes cheaper than the ones in smaller volumes. This is why the company has bulk buyers and retailers as they can get a good margin price on the products. Moreover, bulk sales mean more profits for the company.
The company has adopted the following pricing strategies for its products
Competitive Pricing Strategy
Value-based Pricing Policy
The Pepsi marketing strategy has adopted a value-based pricing policy where the different sizes and packages are priced differently based on their value to the customers.
Promotional Strategy of PepsiCo Marketing Strategies
The image of Pepsi is that of a drink for the younger and trendy generation as well as an apt beverage for health-conscious people. The Pepsi marketing strategy has adopted niche promotional strategies, creative ideas, catchy slogans, public relations, various brand ambassadors and a unique blue logo to boost the image, visibility and brand awareness amongst the customers.
Pepsi’s promotional strategy includes the use of the following promotional tools
Pepsi is a drink for the masses and it has rightly used traditional media like television, radio, newspapers, magazines, billboards and hoardings to promote the brand across all sections of society.
Celebrity Endorsements and Brand Ambassadors
Pepsi is one of the first few companies that realized the importance of using celebrities as influencers for promoting the company and its products. It has cast Cindy Crawford, Britney Spears as well as Michael Jackson in the Pepsi Advertising campaigns. Film actress Joan Crawford became a spokesperson and brand ambassador for Pepsi and appeared in several advertising campaigns.
Pepsi has made sponsorship deals for several sporting events like National Hockey League, National Football League, UEFA Champions League, Carolina Hurricanes and Major League Soccer etc.
Social Media Platforms
Pepsi uses social media platforms like Facebook, Twitter, YouTube and Instagram by hosting contests, using the hashtag strategy and connecting with the young generation. It also routinely posts recipes that will go perfectly with Pepsi.
Digital Campaigns – Notable Digital Marketing Campaigns
The Choice of a New Generation
This ad campaign of 1984 featuring the pop star Michael Jackson was a huge hit with the masses as sales figures skyrocketed and the company kept on counting dollars.
Joy of Pepsi
The ad campaign “Joy of Pepsi” was once again able to boost brand visibility in the market
New Can 1992
The campaign “New Can” featuring Cindy Crawford was released in 1992 and became hugely popular in no time
key Takeaways from the Pepsi Marketing Mix (4Ps)
The key takeaways from the Pepsi marketing mix and marketing strategy are
- Keep the focus on product innovation as the brand needs more variants in the market to gain an upper hand over other rival brands
- Maintain its value-based and competitive pricing policies
- The connection that Pepsi has been its customers is important and it should maintain it through various campaigns.
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