Trần Thu Uyên - CO3F - CO3-266

THE ADOPTION OF 4Ps BY PEPSICO

I. INTRODUCTION

Marketing is the process of attracting potential customers or customers interested in a

company’s products and services. Marketing helps businesses gain new customers, meet the
increasing needs of users, and build relationships between businesses and customers.
Effective marketing strategies play an important role in building a company's reputation and
connecting with people. One of the most popular and effective marketing strategies is the
“4Ps”. “4Ps” in Marketing is a Marketing model that includes 4 basic elements: Product,
Price, Place, and Promotion. One of the companies which have adopted the strategies
effectively is "PepsiCo" company such as: named among the Most Innovative Companies
(2021), named among Fast Company’s Best Workplaces for Innovators (2020, 2021) ,
noticeable revenue achieved 20,23 billion VND
(https://www.pepsico.com/who-we-are/awards). This report has given basic information on
“PepsiCo” and evaluated the effectiveness of the “4Ps” that the company has adopted after
analyzing the way they have been implemented.

II. THE PROFILE OF PEPSICO

2.1. Kind of business

 The full name: PepsiCo

 Headquater: Purchase, New York, United States
 The kind of the business: Corporation
 Size/Scope: PepsiCo is a multinational corporation with a market capitalization of
more than $200 billion as of 2021. The company operates in more than 200 countries,
employs more than 290,000 people, and has more than 23 billion-dollar brands
(https://medium.com/@mirceaioana850/how-big-is-pepsi-cf6ec0658071)
 Big size and scope

2.2. Development history

 The year of foundation: 1965

  The place of foundation: Purchase City, New York, United States
 The name of founder: Donald M. Kendall, Herman Lay
 Main timeline important of “Pepsico” development:
 1965: PepsiCo is formed through the merger of Pepsi-Cola and Frito-Lay.
 1986: Acquisition of Taco Bell, marking PepsiCo’s entry into the quick-
service restaurant industry.
 1998: Acquisition of Tropicana, expanding PepsiCo’s presence in the juice
market.
 2001: Formation of the PepsiCo International division, focusing on global
expansion.
 2006: Acquisition of Star Foods and Stacy’s Pita Chip Company, entering the
snacks market.
 2010: Introduction of the Performance with Purpose initiative, emphasizing
sustainability and social responsibility.
 2016: Acquisition of KeVita, a leading probiotic beverage company, to
expand into the functional beverages segment.
 2020: Launch of PepsiCo Positive, a sustainability strategy to reduce
greenhouse gas emissions and promote recycling.

(https://thecconnects.com/pepsico-company-success-story/#recognitions-awards)

2.3. Main industry

 Main industry
PepsiCo operates primarily in the food and beverage industry, especially the
production and distribution of foods and beverages. The company has a diverse
product portfolio that includes carbonated and non-carbonated beverages, snacks and
other food items => Sub – sector
 Products that PepsiCo provides
PepsiCo's main service is to provide food products to consumers around the world
including the following product types
 Products Information

Beverage: Pepsi. Mountain Dew, 7Up, Mirinda,

Lipton, Tropicana, Naked Juice, Gatorade,
Aquafina, …

Food: Lay’s, Doritos, Cheetos, Quaker Oast,

Cap’n crunch, …

(https://www.pepsico.com/who-we-are/
about-pepsico)

 PepsiCo’s major market

 North America: In 2021, the predominant source of cash inflow for PepsiCo
originated from its North American beverage business, PBNA, which yielded
an impressive $25.3 billion, constituting 32% of the total revenue.
 Europe: The European segment of PepsiCo engages in a comprehensive array
of beverages, food, and snack products across Europe, making a substantial
contribution of $13 billion to the company's revenue in 2021. This particular
division ranks as PepsiCo's third-largest revenue-generating segment.
 Africa, Middle East, South Asia: The collective market encompassing
Africa, the Middle East, and South Asia played a significant role in PepsiCo's
revenue, contributing $6.1 billion in 2021.
 Latin America: PepsiCo's Latin American division operates an extensive
range of products in the Latin American markets, including beverages, food,
and snack products bearing some of the company's prominent brand names.
This division accounted for $8.1 billion in revenues during 2021.
 Asia Pacific, Australia, New Zealand, China Region: The Asia Pacific,
Australia, New Zealand, and China Region (APAC) assume a crucial role in
 PepsiCo's global endeavors, overseeing the manufacturing and distribution of
key brands such as Cheetos, Doritos, 7UP, Aquafina, and Quaker. This
segment made a notable contribution of $4.6 billion to PepsiCo's overall
revenue in 2021.
(https://www.investopedia.com/articles/investing/052216/how-does-pepsico-
makemoneypep.asp#:~:text=The%20seven%20business%20segments%20of,%2C
%20New%20Zealand%2C%20and%20China )

2.4. Management board

(https://www.organimi.com/organizational-structures/pepsico/)
2.5. Vision/ Missions/ Objectives of PepsiCo

2.5.1. Vision statement of PepsiCo

PepsiCo vision statement is “To Be the Global Leader in Beverages and Convenient Foods
by Winning with PepsiCo Positive (pep+)”. This vision seeks to position PepsiCo as the
premier provider of convenient food and beverage products around the world while
emphasizing an emphasis on achieving success through purposes that are bigger than just
profits. To accomplish this goal, PepsiCo has set three aspirations: FASTER, STRONGER,
and BETTER.

 Faster: Growing faster by winning in the marketplace, being more consumer-centric

and expanding investments

 Expanding portfolios with new foods and beverages

 Strengthening North American businesses

 Accelerating international expansion and focusing on “right to win” markets

 Stronger: Become a stronger, more unified Pepssico by transforming capabilities and

costs, and by using new technologies to advantage

 Managing costs so we can reinvest and win in the marketplace.

 Developing and scaling core capabilities through advanced technology.

 Investing in talent and creating an inclusive workplace culture.

 Better: Pepsico even more for our planet and communities by integrating a sense of
purpose into their business strategy.

 Using their global reach and expertise in areas where they can make the
biggest environmental impact: Agriculture, Water, Packaging, Products,
Climate Change and People.

(https://www.pepsico.com/who-we-are/mission-and-vision)

2.5.2. Mission of Pepsico

Create more smiles with every sip and every bite

  For consumers: By creating joyful moments through our delicious and nourishing
products and unique brand experiences.
 For customers: By being the best possible partner, driving game-changing
innovation and delivering a level of growth unmatched in industry.
 For associates and communities: By creating meaningful opportunities to work,
gain new skills and build successful careers, and maintaining a diverse and inclusive
workplace.
 For planet: By conserving nature’s precious resources and fostering a more
sustainable planet for our children and grandchildren.
 For shareholders: By delivering sustainable top-tier total shareholder return and
embracing best-in-class corporate governance.

(https://www.pepsico.com/who-we-are/mission-and-vision)

2.5.3. Objectives of PepsiCo

 PepsiCo also aims to grow its business in a socially responsible manner, by providing
health and wellness programs and innovations.

(https://hbr.edu.vn/marketing/chien-luoc-marketing-cua-pepsi-doi-thu-truyen-kiep-
cua-coca-cola.html)

III. THE ADOPTION OF 4Ps STRATEGY IN PEPSICO COMPANY

3.1. Common theory related to the theory

3.1.1. Definition of marketing

Marketing is all the activities that bring products or services from the place of production to
the consumers, including many different activities, from market research to understanding
customer needs and developing products or services.

3.1.2. Definition of marketing mix strategy

Marketing Mix is the combination of basic marketing elements such as products, prices,
distribution policies, and promotion. Marketing Mix is an important tool that helps businesses
determine effective marketing strategies, elements to meet customer.
3.1.3. Definition of 4Ps

4Ps in Marketing is an important concept that describes the basic elements of a marketing
strategy, including Product, Price, Promotion and Place.

 Product: Products can be goods or services. Marketers in businesses must identify

key product lines to focus on investing and building product strategies
 Price: This is a factor related to the price of the product, it is necessary to determine
the appropriate pricing strategy. Factors that impact price include production costs,
marketing costs and competition.
 Promote: Before deciding to buy a product, customers must know its existence.
Therefore, an effective marketing campaign cannot lack advertising activities or trade
promotion strategies. Thereby, customers will have access to product information and
at the same time create trust in the brand.
 Place: Place has an important role in increasing the sales efficiency of a business. A
good place will help deliver products to the right customers.
(https://www.pace.edu.vn/tin-kho-tri-thuc/marketing-la-gi#4p-trong-marketing-
la-gi)

3.2. Analysis

Pepsico company has adopted this strategy successfully. In detail:

3.2.1. Products strategy of PepsiCo

 PepsiCo is always proud to have a diverse product portfolio for customers around the
world.
 Some of PepsiCo’s beverage products include: Pepsi-Cola, Tropicana, Aquafina, 7Up.
Mirinda, … These are all convenient drinks that can be used immediately when
opened. They have a refreshing and digestive effect but are not addictive.
 In addition, PepsiCo has lauched sugar-free pepsi for dieters to expand the
consumption market
 Regarding packaging, Pepsico's products include glass bottles, plastic bottles, and
cans with many different capacities. There is full information about manufacturing
date and expiration date.
  Besides drinks, Pepsico has also food such as snacks and cereals that are convenient
for consumers.

3.2.2. Price strategy of Pepsico

 In the fizzy battleground of non-alcoholic beverages, where Coca-Cola's shadow

looms large, PepsiCo knows competitive pricing is key. They offer a range of sizes
making their products attractive to budget-conscious consumers.
 PepsiCo chose the strategy of pricing products lower than the common level. That
helps PepsiCo quickly achieve its goal of attracting a large number of Vietnamese
consumers.
 They understand that price is a powerful tool, and they wield it skillfully to attract and
retain customers such as Premium offerings or discounts.

3.2.3. Place strategy of PepsiCo

Place is another essential element in the marketing mix.

 Offline
 PepsiCo has widespread a net work of distribution and retailers placing their
products in supermarkets, convenience stores, gas stations, and even vending
machines.
 In addition, Pepsi also uses a distribution strategy based on marketing system:
combining with fast food restaurant KFC, meaning customers eating here can
order drinks such as Pepsi, 7Up, Mirinda, …
 Online
 PepsiCo has an official website in Vietnam where customers can learn about
PepsiCo products. On this website, customers can find product information,
view promotions and learn about the PepsiCo brand.
 PepsiCo has appeared on popular e-commerce platforms in Vietnam such as
Shopper, Lazada and other shopping websites. Customers can find PepsiCo
products and purchase online through this platform.

3.2.4. Promotion strategy of PepsiCo

Pepsi can understand the "Know - Understand - Like - Believe - Buy" stages in the consumer
interaction process and has developed effective solutions based on that awareness.

 Multi-channel marketing
 With a customer base of young, dynamic people, PepsiCo is constantly
innovating and collaborating with influencers

E.g: In 2020, Pepsi launched a TVC advertisement with the appearance of Vietnam's
top male singer Son Tung M-TP with the viral slogan "What are you waiting for?"
After the ad was released, many users appreciated it.

 Outdoor advertising
 Outdoor advertising signs are a convenient means for PepsiCo to attract
customers.
 PepsiCo advertising signs are often designed with youthful, eye-catching
colors and bring a feeling of activity and fun.

E.g: Outdoor advertising with the slogan "#SayItWithPepsi" has attracted a large
number of customers, especially young customers.

(https://hbr.edu.vn/marketing/chien-luoc-marketing-cua-pepsi-doi-thu-truyen-kiep-cua-
coca-cola.html)

(https://www.edrawmind.com/article/pepsico-marketing-mix-analysis.html)

(https://congdongdigitalmarketing.blogspot.com/2018/05/chien-luoc-marketing-4p-cua-
pepsi-tai-viet-nam.html)

(https://123docz.net/trich-doan/1452911-mo-hinh-4p-cua-san-pham-pepsi-
suntorypepsico-viet-nam.htm)

3.3. Evaluation

PepsiCo's marketing strategy in the market in recent years has been implemented very well.
PepsiCo has connected with the community and customers, attracted the media, thereby
strengthening the brand image in the mind. client. Besides, PepsiCo also brought home many
outstanding achievements and awards such as: In 2020, the brand's revenue reached more
than 17.2 billion VND; in 2022, reaching more than 23.7 billion VND.
(https://cafebiz.vn/suntory-pepsico-dang-kiem-duoc-bao-nhieu-tien-tai-viet-nam-moi-
nam-17623111020492966.chn)