But before going on with how this chapter relates to pepsi, its first important to understand what this strategy is. Inner environment analysis of cocacola cocacola company uses the criteria such as vision, mission, values, performance management. Coke has many different and unique ways that they promote their brand that makes their company so successful. Sold across more than 200 countries, pepsi is a wellrecognized and highly popular brand. This intensive strategy requires offering new products to capture more consumers. Pepsico s secondary intensive growth strategy is product development. Pep are very similar businesses in terms of industry, ideal consumers, and flagship products.
When it comes to product strategy, managing in a borderless world. Below we illustrated a few examples in relation to an often differentiated product womens handbag. Marketing mix of pepsi analyses the brandcompany which covers 4ps product, price, place, promotion and explains the pepsi marketing strategy. Product differentiation helps your organization answer this question and focus on the unique value a product brings to its users. Customerfocus is considered a more modern approach as productfocus risks marketing myopia whereby a firm is adding functions. Pepsicos generic competitive strategy of broad differentiation supports this intensive strategy by offering unique or novel products to attract more consumers and grow the business. Bundling strategy and product differentiation 209 a model with heterogeneous consumers and elastic demand, allowing consumers to buy from more than one supplier. Jan 14, 2019 pepsi is the mass market product which uses undifferentiated targeting strategies in order to be competitive and increase its sales. Pepsico applies market development as its supporting intensive growth strategy. Its product portfolio consists of roughly more than 400 brands. Differentiation looks to make a product more attractive by. If no effort is put into a differentiation strategy, products risk blending in with a sea of competitors and never getting the market hold they need to keep going. Analytics brands career digital marketing 101 news strategy.
Examining cocacola and pepsi brands under the basis of. Segmentation, targeting, positioning in the marketing strategy of pepsi it uses mass marketing strategy to target the groups of the customers of different demographics and geographic regions. Chapter 7 discusses a variety of basesattributes of product differentiation including 1. Pepsico adopted the strategy of offering its products affordable prices to the customers. Pepsi has been targeting its marketing activities for younger audience in order to gain brand loyalty among those who havent yet made their final decision between coke and pepsi.
Aug 21, 20 strategic options for pepsi are frontal attack. The organisation has been able to improve the effectiveness of its business activities through adopting effective costleadership strategy. Product differentiation being the most commonly used one of these two strategic typologies spencer, joiner, and salmon, 2009. Due to the similarity in brands manufactured by the companies, product differentiation has been the main strategy of capturing a. Goods are different but at the same price some consumers will buy one and some will buy other, it really depends on their preferences. Continuous process people values corporate culture preferences strategy. Case study of international marketing strategy in pepsico. Cocacola finds it appropriate to apply differentiated marketing.
But combinations like cost leadership with product differentiation are hard but not impossible to implement due to the potential for conflict between cost. Pepsico has adopted effective growth strategies in the context of global food and beverages industry. Pepsicos focus strategy the case centre, for educators. They have taken promotion to a whole new level by creating the vending machine to sell to people on the go, created santa clause so people would drink their product during summer, they also put a lot of money into having their commercials. Marketing mix is the most tangible and the most flexible. This study tried to identify the impact of operation strategies for cocacola vs pepsi companies to attract their customers. Goods are different and all consumers would prefer one to the other if they were sold at. The report also illustrates the application of the major analytical strategic frameworks in business studies such as swot, pestel, porters five forces, value chain analysis and mckinsey 7s model on pepsico. Pepsicos intensive growth strategies enable the company to effectively use its generic strategy to maintain strong competitive advantage. In its efforts to sharpen focus on its core beverage pepsicola, and snack food. A study on brand personality of cocacola and pepsi a comparative analysis in the indian market. Coca coca pakistan offers vary of product portfolio like as cocacola classic, sprite, fanta, coke diet.
Targeting several smaller untapped or underdeveloped segments like rural areas and small cities of. This is associated with manufacturing and firms that continually improve products to stay relevant in an industry. A companys positioning is the result of whatever the company does. This generic strategy focuses on cost minimization. Jun 03, 2018 for them, product differentiation is definitely the secret ingredient. Planning, implementing, and controlling marketing strategies. Brownell, 2007 and no differentiation in taste, colour or price of the two brands, marketers have to cash in on the selfexpressive value of their product. Industrial organizationmatilde machado product differentiation 3 4. This study comparatively evaluated personality perceptions of the two brands for young. Ko advantages cocacola pursues a differentiation strategy, essay. By successfully adopting the focus strategy since 1997, pepsico has emerged as the second largest consumer packaged goods company in terms of.
Aug 25, 2018 the current marketing strategy adopts by pepsico inc. There are countless variations in the competitive strategies that companies employ. Pepsi, on the other hand, uses multiple agencies and highlights their image as a popular and historical product. Pepsicos success is an indicator of the appropriateness of these strategic directions, especially how the generic strategy supports competitiveness.
Cost leadership strategy a firm which finds and exploits all sources of cost. In general, cocacola follows a differentiation strategy. A differentiation strategy involves the firm creating a productservice, which is considered unique in some aspect that the customer values because the customers needs are. Pepsico business strategy and competitive advantage. Pepsico pursues low price strategy in year 2009, even when the recession ends pepsico inc. Pepsi launched a new product like dew and sting encirclement strategy. Pepsico has introduced several brands in the market depending on the demand of the consumers. Coke reacted by dropping their real thing strategy and introducing. For example, pepsico continues to develop products or variants of existing ones, such as lowcalorie, reducedsalt, or lowsaturatedfat variants of its food and beverage products. This leads to the recycling of campaigns like joy of pepsi which reintroduces. The coca cola company follows a broad differentiation strategy. Rivaled only by coca cola, pepsi has grown to become a leading soda brand loved by the young generation. Product differentiation and mergers in the carbonated soft.
Since pepsi came out at a time when coke or cocacola already have a head start in the market, its market strategy and the business plan began with differentiation an attempt to establish its product as one that is unique in taste. Product differentiation there are two types of product differentiation. The company has superior quality beverage products, packaging, high brand image and recognition, the. Due to the similarity in brands manufactured by the companies, product differentiation has been the main strategy of capturing a larger market share in the global markets kavilanz, 2007.
Cocacola and pepsico follow different competitive strategies and focus on various elements of the corporate culture in order to help consumers differentiate the brands and their missions along with the brands images. A companys offer has to be distinct from those of its competitors and should fulfill the requirements of the customers of its target markets. They do this by altering the objective properties of those products or services they sell each and every day. The global beverage giant is the maker of some of the most loved soda brands in the world. The restructuring was aimed at achieving improved focus on the companys core beverage pepsi cola and snack food operations fritolay. Ko advantages cocacola pursues a differentiation strategy. Integration with swot in general, cocacolas strategy. Integration with swot in general, cocacolas strategy is effective in the context of its threats and opportunities. Pepsicos generic and intensive growth strategies panmore institute. To understand the particular features of the companies competition, it is necessary to focus on differences in the corporate cultures. Product differentiation and cost leadership are like twin strategies, which has similar concepts. Targeting several smaller untapped or underdeveloped segments like rural areas and small cities of pakistan. Product differentiation and the characteristics and features.
Both cocacola and pepsico are global leaders in the beverage. Jun 28, 2007 pepsi attacked coke with a sweeter version the pepsi challenge and a brilliant youth strategy choice of new generation. Our full range of food and beverages are designed to bring a smile to anyones face, anytime, anywhere. Product differentiation of coca cola and pepsi free essays. Pdf the strategic positioning of cocacola in their global. Functional human resources accounting manufacturing marketing. Discussions the objective of this study was to determine the brand personality of cocacola and pepsi. The company is most wellknown for its soft drink, coke. By successfully adopting the focus strategy since 1997, pepsico has emerged as the second largest consumer packaged goods company in terms of revenues in the world. Pepsi marketing mix 4ps pepsi marketing strategy mba.
A differentiation strategy offers important advantages and disadvantages for firms that adopt it. Report contains more detailed discussion of the companys business strategy. For masculine as well as feminine facets, both men and women have come to similar or same scores. Pepsi has undergone significant change since it was introduced to the american market in 1898 and in india in 1989. By 1989, cadburyschweppes had acquired canada dry, hires. Product differentiation is the secret ingredient pepsi vs. The product differentiation comes from established marketing campaigns that have created brand identification and loyalties. As the definition states, product differentiation is the process of differentiating a service or product from other competitors products to make it more attractive to meet certain target market. By acquiring leading beverages company like tropicana products july 1998, south beach beverage company october 2000 and quaker oats december 2000, the company has. Pepsi came with pepsi challenge strategy where blind taste test were hosted by pepsi in order to differentiate itself as a better tasting product compare to coke. Product differentiation is a marketing strategy that creates differences from other competiting products by focusing on its unique characteristics and features. 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. Nowadays, economies are becoming more entwined than ever, any possible method that can be used in supporting the building of. Coca cola first brand positioning patent medicine cure to headaches and fatigues tax imposition in 1898 and coca colas change of category.
The restructuring was aimed at achieving improved focus on the companys core beverage pepsicola and snack food operations fritolay. For them, product differentiation is definitely the secret ingredient. A differentiation strategy is the development of a product or service that offers unique and differentiating attributes which are valued by customers and perceive to be. Pepsicos generic and intensive growth strategies panmore. As of 2020, there are several marketing strategies like productservice innovation, marketing investment, customer experience etc.
Brand differentiation coca cola and pepsi cola market. Product differentiation is a marketing process that showcases the differences between products. Differentiation mastering strategic management 1st. Pepsico uses cost leadership as its primary generic competitive strategy. A strategic perspective on product differentiation. Cocacolas better tasting competitor pepsi has taken a slightly different approach to the branding of its coladrink. Pepsi beverage company pepsico europe pepsico asia, middle east, africa. Delivery affords many opportunities for differentiation, especially if the product is an impulse purchase or if the customer needs it immediately.
Product differentiation is a business strategy whereby firms attempt to gain a competitive advantage by increasing the willingness of customers to. The five generic competitive strategies semantic scholar. Feb 21, 2011 product differentiation is a business strategy whereby firms attempt to gain a competitive advantage by increasing the willingness of customers to pay for the products or services they sell. Chapter 7, product differentiation, really had a lot of good information regarding this strategy. On the other hand, females have scored honesty as the highest. Productfocus is an approach to business that defines strategy, operations and metrics in terms of products. A differentiation strategy is the development of a product or service that offers unique and differentiating attributes which are valued by customers and perceive to be better than or different from the products of the competition.
Endogenous horizontal product differentiation under bertrand and. Pepsi attacked coke with a sweeter version the pepsi challenge and a brilliant youth strategy choice of new generation. Marketing strategy of pepsi pepsi marketing strategy. In the nonalcoholic beverage market, it has positioned itself as a young, vibrant and passionate brand which challenges the conventional things. The organizations target one market segment or the entire market by using this strategy. Brand positioning positioning defines where your product stands in relation to others offering similar products and services in the marketplace as well as the mind of the consumer.
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