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Pepsimarketingplanandbusinessstrategy

Pepsi marketing plan and business

strategy
As a student of strategic marketing, we have asked to make a marketing plan for an organization
along with its relation to overall business strategy. For this purpose we have chose PEPSI and we shall
be discussing its operations in Pakistan, PEPSI has been market leader in beverage industry since its
launch in Pakistan but bow a major threat is been faces by aggressive marketing strategies by Coke.
In the below mentioned lines we shall be discussing the marketing strategies to overcome such
challenges.
Marketing Plan & Business Strategy
Marketing plan and business strategy are two different things, business strategy or organizational
objectives give the direction that where this organization will be going and how we are going to do
business, in this sense business objectives play the role of very fundamental principles upon which all
the departments establish their operational guidelines. On the other hand marketing plan is the tool
to achieve the business objectives, while business objective tells what we are going to do marketing
plan tells how we are going to do that. This makes a clear relationship between marketing plan and
business strategy, where business strategy plays the role of guiding arrows (Wison, Gilligan, 1999).
Since there are different kinds of business strategies, three of them are more popular, cost
leadership, differentiation and focus. Keeping this in mind there will be different marketing plans if
different organizations within the same industry opt for different business strategies. Competitor
form same industry may have different business strategy thus their marketing plan will differ. Where
ever a marketing plan is made it should have a clear understanding and link with business strategy
otherwise organization will be going in one direction and marketing department will be going in other
direction resulting in complete failure (Aaker, 2008).

Components of a Marketing Plan

A good marketing plan can have several components, ranging from industry analysis to media plan;
however it depends from industry to industry and product to product that what a marketing plan
should include, it also depends on the problem at hand and urgency of the requirement. However
below are few components that marketing should in normal circumstanced, addition and subtraction
is dependent on the situation.

Company Analysis
Company analysis gives the information about the current situation of organization, it comments of
strengths, weakness, opportunities and threats in front of the company, for this purpose SWOT
analysis is always a good tool to work with, BCG Matrix is also and good tool to judge the
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performance of company. Going more deep marketing plan can also or marketing audit report to
judge the current performance of marketing department and then also suggest the ways to improve
it, there are many tools available to do so, details which is not required here.

Industry Analysis
Industry analysis provides the information about the overall industry environment, its dynamics and
level of competition. To have this information PEST and Porters five forces model are widely used
tools to get birds eye view about the industry.

Customer Information
This is a high importance, risky and tricky part, it gives basic information about customers, their liking
disliking, values, decision making behaviors, demographics and consuming patterns of the product.
All this information is later used in construction of marketing plan, and it is also the basic brick for the
segmentation part, If we as marketer fail to know the customer properly, total marketing plan will
lead to wrong decision making.

Competitor Analysis
This part also has a relatively high importance, gives the information about competitors, their
strengths, weaknesses, competitive edge, business strategy, value proposition, positioning and
product features, customers opinions about competitors and their marketing mix analysis. Having
the correct information about competitor, which is not always an easy this to do, can give you a clear
understanding of current market situation and also helps in making better strategically moves.

Segmentation
One of the most important and risky part of marketing plan is segmentation, after getting the
customer analysis done via detailed marketing research, market is divided into heterogeneous
segments, thats where company can make the mistake, since rest of the marketing mix is dependent
of the segmentation, it has be to be done very carefully, any misinterpretation of the information can
lead any component of the marketing mix towards wrong direction.
2nd step in after segmentation is segment selection and making of marketing strategy, there are
different approaches towards selection of selection, one, more or all segments can be selected for
the target, and different marketing mix are made for each segment.

Marketing Mix
Product
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This includes the product description, its working, its brand name and positioning, its value
proposition, how it is better than competitors product, and what advantages it gives to customer for
increasing their value for money. What image we want to produce regarding product in customers
mind. This may also include its packaging information and various packaging options can be given in
this part.

Price
This part deals with the pricing of the product, how we are going to price that product, what is the
relationship of price with overall positioning, how is price is going to be perceived, what are the
discount offering and how we are going to bundle the price, these are questions that may be
answered in this section.

Place
This deals with channel of distribution, what channel is to be acquired, how we are going to handle
intermediaries, what role whole seller and retailer will be playing the distribution of the product,
where we are going open outlets, what is the criteria of outlet selection, what convenience we are
going to give to customer and how we are going to make the availability of the product.

Promotion
This part deals with actually promoting the product, this should discuss the sales promotion offers,
long term or short term promotional strategies, integrated marketing communication strategies,
media selection and its relationship with target market. Reach and effectiveness of each medium
selected. A brief media plan can also accompany this section.

Marketing Plan and Risks

There are several risk that one can face while constructing the marketing plan, one of the risk is lack
of required information, we need information from within company, we need information from
industry and most importantly we need information from our competitors, this amount of
information is not readily available, some time it is really hard to get secondary data, while have not
sufficient information it is risky to make critical decision and that puts the entire marketing plan on
stake.
One another aspect of risk is the correctness and validity of information, secondary data is a good
source but at the same time it is a risky proposition to make your decision on the basis of the
information which is doubted to be valid. The above mentioned both risk deals with industry
information as well as competitor information.
One another risk is also there which is lack of understanding of information, that mainly deals with
the customer analysis part and affects the segmentation that in result affects the entire marketing
mix, misunderstanding the research or taking the research into wrong direction are main reasons
with this.
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The final risk is the lack of managements consent on the marketing plan, in some cases marketing
department works in on direction and entire company works in other direction, this risk also deals
with non-compliance of marketing plan with business objectives.

Marketing Plan-PEPSI
PEPSI has been the market leader in cola industry in Pakistan, here their business strategy is low cost
leadership, below presented marketing plan is made keeping in mind the business strategy.

Company Analysis
PEPSI has been the market leader in beverage industry in Pakistan; it has gained this position by
leveraging first movers advantage and then maintained this position with its aggressive marketing
and channel management techniques. Its strengths are a well established brand name, a well
managed distribution channel, and strong financial backing. Its weakness are inability to cope with
local beverage producers as they take them lightly and now they are becoming a threat, more over
cokes aggressive marketing is also a threat to PEPSI.

Industry Analysis
Beverage industry in Pakistan has been a highly competitive industry since the emergence of other
player like Coke and some local manufacturers. With almost zero switching cost, relatively very low
differentiation in taste and wide variety of available substitutes makes the cola customer very difficult
to make brand loyal. Increasing advertising and operational cost along with every day increasing
power of retailer making the competition more intense where price and brand is not the only factor
which can give them the success. Now the power rests with customer and retailer as there are many
substitutes available to cola drink, not only direct substitutes but also indirect substitutes are also
available when come to satisfaction of thrust.

Customer Analysis
Since company has been on mass marketing strategy then everybody is a prospect customer,
everybody who gets thirsty is a customer of PEPSI, cola drinks are kind of product which is presented
with food and to guests, so the main purpose is not satisfying the thrust but having a little bit more
luxury in drinking. Keeping this thing in mind we come to know that cola customer will be using this
product on some special occasions like family get together, or having food or presenting it to guests.
So at while drinks are not presented in original bottle customer will be less brand concisions.
Pakistani market is always been price sensitive, so is the case with cola. However it is highly affected
by the availability factor.

Competitor Analysis
This is highly competitive market, with more substitutes and zero switching costs. During the last
decade Coke has been a tough competitor for PEPSI, with its aggressive marketing campaigns,
increasing and aggressive channel of distribution and a good positioning coke is emerging a well
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established widely accepted and preferred brand especially in metropolitan cities. Another emerging
competitor is a local producer which is not really a major threat for PEPSI but yes it has all the
capabilities required to become and major competitor, its brand name is Gourmet Cola, a private
brand of a local bakery chain, this chain is getting being widely accepted in metropolitan and its
growing like anything

Segment Selections
Apparently there are not much difference in the customer of cola, the same taste is accepted
everywhere in the some variation, there is a minor segment which is diet conscious and want a zero
calorie cola drink. If we talk about the segment selection then company should go for and its has
been going for mass marking, standard marketing mix for everyone, for diet conscious customers
diet Pepsi should be introduced. Right now we shall be talking about standard cola drink and its
marketing.

Marketing Mix
Product
The product is a standard cola drink, that satisfies the need of thrust and more it works a drink to be
presented with the food and on get together occasions. It is positioned as a drink which relates to
personal achievement, its focus will be I being the personal achievement. It will be positioned as
drink of youth, the drink of successful youth. The element of excitement and emotions will be
included in the positioning. It will be presented in various packaging, for example pet bottle, half
letter, one litter and 2.5 litters, this packing variation will increase and help its use on various
occasions.

Price
Since it has been a high price competitive industry, price of PEPSI will be kept at par of the industry,
some discounts will be introduced in the bulk buying and on one litter and more packaging. Since
colas are affected with the push of retailer, good dealer and retailer margins will be given to retailer
and distributer, so that they can make sure the availability and push the product, since brand loyal is
low in this product, retailer push is always required and helpful in getting the desired results.

Channel of Distribution
This part is one of the most important parts of the entire marketing plan. Here in Pakistan retailer has
the power in the channel more than any other industry, colas has more substitutes, low brand loyalty
and zero switching cost, customer will drink whatever cola brand is available on the retail shop, that
scenario gives more power to retailer. So we shall be focusing in the improving our strength in retail
channel, building the relationships with retailers, making sure the availability and leveraging the

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exclusivity on retail shops, and giving them more commission so that they can maintain the
exclusivity and push the product to customer, once retailer push and exclusivity is achieved there will
be no problem with customer to buy the product.

Promotion
This is another high importance component of marketing plan; more focus will be given on this part
as well. PEPSI will focus on building brand and up to some extent brand loyalty among youth by
focusing on its positioning and also by maintaining brand recall. More sales promotions will be
offered during local occasions like EID etc. followed and good spend on the media especially during
the promotional period.

Mitigation Strategy
There are few elements in plan that are of high risk, one the positioning factor that needs to be
handled in a careful manner, the individual success positioning can turn back, on the other hand
Cokes positioning is we the family and get together, if positioning can is not handled properly its
can be a disaster. The second risky elements is the increasing power of retailers, we are at the same
time exploiting the retailer power but on the other hand giving more power to them by adopting
push strategy, if more and more power is given to retailer then in the end they will be able to
blackmail us on their own conditions. To handle this risk brand should be build so strong that it can
generate pull.

Plans Relation with Strategic Objective

Business strategy is cost leadership, since PEPSI is a market leader is has to maintain its position and
at the same time they want to reduce costs. Now if we look at the marketing plan it focuses on the
push strategy, building relationships with retailers, giving them incentives for push and winning
exclusivity on the retail out lets, if this plan is executed well we can reduce out marketing cost without
compromising or even increasing on sales and market share. This plan also suggest that PEPSI should
get exclusivity on the large cash and carry retail stores like, METRO, MACRO & Hyperstar where
customers buy in large quantities, if they are able to do so their marketing cost will decrease and
sales will increase noticeably. One can argue that plan also supports the brand building which is an
expensive thing to do, I would answer that brand building and getting mindshare is something
unavoidable, this is not a luxury spending of marketing budgets but it is in return creates the pull for
the brand and pays in the longer run.

Agreement and Plan Tracking

The success of the plan depends on the total consolidated effort by the entire company that is why
managements approval and consent will be required to get whole organization
on board. This plan

will be presented to all stake holder and if management

approves
then all other departments will be
Dissertation
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management
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cut cost then they are do so with
when youwant
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a better management of supply chain, similarly
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a full
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achievement of strategic objectives.

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Success of the plan will be tracked at every

execution
step with continuously monitoring, on the
Claim
Offer (/discounts-offers/)
brand side studies will be conducted to monitor the achievement of brand related targets like top of
the mind brand recall, retailer relationship management will be monitored that ho successful we have
been bringing retailers on boards and winning exclusivity. A relationship of these tracking studies
with overall market share and sales will be established that will determine the success of this plan, if
problem found and targets are not achieved then strategy will be review and necessary actions will be
taken to improve the performance.

Conclusion
Making a strategic plan is a tricky this, challenge is to keep the department on the track provided the
top management while producing the workable and successful solution, at the same time direction of
the other stake holders is also required to be in the same direction.
While every care is taken even then there are chance that plan is based on some misunderstanding of
information required or required information is also not provided, these are the greatest challenges
that a strategic marketer has to face. For getting the plan worked a continuous monitoring is required
on its execution part. Some very good strategies tend to fail while in execution, that is another care
that a strategic marketer has to be careful about.

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