Table of Contents
Marketing is one of the most challenging business activities. This is because it is done under highly unpredictable market conditions that require subsequent application of different principals. These principals may be altered even before they are applied. This implies that an organization needs to have the best knowledge about a certain market in order to succeed in such markets. This paper represents a report on a study dome on Pepsi, a soft drink manufacture whose reputation is global (Haig, 2011). However, the company is facing enormous challenges when it comes to marketing it products in this region. Therefore, this was the driving force behind the research question, which sought to evaluate potential factor behind Pepsi’s brand poor performance compared to other companies dealing with similar products. The research was done using thirty respondents y use of questionnaires. Questions in the questionnaires were open ended to give room for maximum collection of the necessary data.
The hypothesis of the study was founded on the fact that different companies around the world make serious mistakes when marketing their products. Pepsi being one of such organization is vulnerable to making such mistakes. In 1980s, Pepsi made a colossal mistake in its brands by introducing a product called Pepsi AM, which had two times caffeine levels compared to other caffeinated drinks (Haig, 2011). This decision was after its marketing mangers decided to do so. However, this move was ill destined because no impact was made on its sales because people needs were different. In this sense, the company manufactured a need, which is expensive to satisfy. Therefore, the current weaknesses identified in Pepsi are because of poor strategic ideas that do not observe the local market appropriately. The Pepsi brand is facing a number of marketing problems thus making it unpopular compared to its competitors. Some of the most conspicuous issues are aggressive competition from its competitor, poor distribution channels, weak advertisement techniques, and poor pricing among other problems.
The research methods used for the study were derived from descriptive research applications. This is because the research method is mainly concerned with finding out about certain phenomenon by answering the questions why, how, where, who and when. The data obtained using this method is highly accurate, factual, and systematic since the factors behind certain situations are described. Since this is a business research that covered marketing, the design was inclined towards finding out why the brand was doing badly in the markets. Therefore, factors such as price, packaging, advertisement, competition, collaborators, were considered for evaluation and analysis with an aim of establishing the real factors behind the trends observed with the brand. Therefore, the research used questionnaires as the method of collecting data. This involved thirty respondents who were requested to fill in the questionnaires containing the questions that revolve around the main research question. The questions used were open-ended meaning that respondent were given the opportunity to answer them independently. This means that there were no predetermined answers, which the respondents were to choose. However, several stages were involved before setting to conduct.
The population used in the research was mainly consumers because they understand various products better than the manufactures. This ensured that accurate data was collected thus making the result reliable. In this regard, random sampling was used to arrive at the thirty respondents. This means that issues such as gender and age were considered whereby distribution was ensured. Therefore, errors that could result into bases were avoided using random sampling. A reasonable sampling method is that which is homogenous and representative of many potential sources of information. According to Adler and Clark (2010, p. 117), this method of sampling ensures that each member of the population has an equal probability of selection’ meaning that the data can be reliable. This implies that the data obtained was all-inclusive and thus more accurate.
This stage was the most crucial for this research because it influences the quality of research findings. Questionnaires were use in this research for the sake of accuracy associated with them. The questions were e open ended and conducted on a randomly sampled population. Questionnaires are usually easy to administer to the respondent, and they give them freedom to express themselves (Jack & Clarke, 1998). This is true particularly when using open-ended questions. In this regard, the method is cost effective and saves time too. However, the most salient thing is that data collected is of the highest degree of accuracy as no respondents are directed towards answering the questions in a certain way.
Use of closed ended questions creates a room for ambiguity and bias because the questions do not allow respondents to state their wishes. The compelling atmosphere created by the questions can compromise the data collected. In such questionnaires, the agenda is usually set by the researcher meaning that incase the researcher is wrong about certain facts; there is no room for correction (Walonick, 2000). However, this research used the open-ended questions to make sure that no bias of ambiguity of the answers given room. In addition, this choice was mainly founded on the diverse views that the respondent would give on individual perceptions, attitudes, and preferences about the brand. Investigations on such issues require that the respondents be given a genuine opportunity to express themselves thus giving the best the best information, which is practical.
Limitations of the research methods
Sampling formula was probably the first potential limitation that the research faced. Using a sample size of thirty respondents is in itself limiting given the number of existing consumers of the brand. This means that much information could have been left out since the sample used does not represent the views of all consumers or targeted population. Using questionnaires was also limiting because of low response observed in some respondents. This could have introduced a weakness in the strength of the data collected, implying that a lot of information could have been left out too. According to Jack & Clarke (1998, p. 179), low response rates that may result from using questionnaires is a statistical curse that can lower the accuracy of data dramatically.
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Using descriptive research was also limiting because the design allows a study to answer questions such as why, how, where, who and when. Answering the question in such a fashion may not allow the researcher to explore other pertinent factors such as the emotional response. Such information could be used in interpreting the data. Although this was a business research, it borrowed much from social research, implying that some social phenomena such as culture could be a contributing factor in how the product was doing in the market. However, the research design could not be able to investigate such phenomena because the questionnaires did not have the ability to address such issues. It is arguably true that one to one engagements with the respondents could serve better in investigating such factors. This implies that some interviews should have been conducted. Therefore, choosing to use questionnaires alone could be limiting in such sense.
The major mission that this research set to establish was the factors behind the poor performance of Pepsi brands compared to other famous brands like coca cola. The weaker performance of this brand means that it faces problems or lack opportunities and, therefore, would benefit from marketing research. Although this brand is hugely popular in different countries, its performance in this market is lower compared to other competitors, this means that the brand could do better that the way it is doing right now. Different findings were observed, which are perhaps the chief causes of these trends in the market.
Poor Utilization of Relationship Marketing
Major issues around the brands performance were related to marketing strategies that the company uses in advertising its products. It was established that the company was under utilizing relationship marketing. Relationship marketing is a form of marketing strategy that utilizes a mutually beneficial exchange between the business and other partners (Sorce, 2002). Partners include marketing agents such as the print media, electronic media, and other channels of selling such as the use of sales representatives. This method requires a persistent personal communication with consumers. One of the most effective methods of ensuring this was the use of digital printing since it has a high ability of establishing personalize relationship between the brand and the consumers. The end effect is a robust customer-brand relationship that is characterized by complete loyalty.
One problem that the Pepsi brand faces in marketing is the wrong choice of these partners. It was established that the company relies more on electronic media such as television and the internet to advertise. This choice has jeopardized its relationship marketing because these channels seem to reach a certain section of the populations. In addition, the company relies more on the internet to advertise. Therefore, the youths are the most popular with this brand compared to the older population. This means that the brand is not reaching the whole population thus blocking the senior potential consumers. This may be a powerful factor because the youth are dependent on their parents for financial support. This means that the adult population was in a better position to buy these products, given their financial abilities. Therefore, loyalty to the product among the adults is low, compared to what is in the youths.
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According to Sorce (2002, p. 11), relationship marketing works best when the print media is used. This includes printing adverts in the newspapers and other printed media. This is because the adverts are likely to be seen by many people. Therefore, many people will become aware of the brand and could probably purchase them. Most respondents were admitted that the brand is not adequately advertised in the local dailies. That could be the reason why they were not aware of their presence. Therefore, it was evident that relationship marketing in relation to using the choice media was not utilized properly.
Neglect of Non-Customer Stakeholders
According to Aaby & McGann (1999, p. 19), many organizations neglect non-customer stakeholders. This has made it difficult for many of such organizations to experience a breakthrough in their marketing. Most respondent overwhelmingly acknowledged that Pepsi brands were not publicized much compared to others similar products. This was associated with the company’s poor choice of advertising channels, choosing to use the electronic media other than print media, which is more effective.
Socioeconomic and Cultural Factors
The Pepsi brand is renowned all over the world. This means that the company had dealt with consumers from different places. This means that the company understood most of the needs of the consumers especially in the markets where it had experienced a breakthrough. However, this research revealed wide disparities when it came to understanding t heeds of the population. Most respondents suggested that the company was doing little in going along the socioeconomic and cultural characteristics of the population. According to Kaynak (1993 p, 19), cross-cultural and cross-national traits are particularly valuable when it comes to making decisions that affect people from different backgrounds. Pepsi is remarkably successful in the western world meaning that is likely to apply similar strategies it uses there in most of its markets. This means that some of these strategies may not work in other parts. Therefore, the manner in which respondent pointed out disregard to the local practices as a reason they do not use the brands is self-explanatory. This means that the company was applying a general marketing formula in many of its markets, oblivious of the fact that such strategies do not work for all markets.
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Despite the fact that Pepsi is a successful multinational brand, the strategic marketing of the company was not conversant with the abilities of the consumer to manipulate critical issues surrounding product. The modern technology has made it possible for consumers to manipulate prices of many products (Ferrell, & Hartline, 2010, p. 3). This is because they can access information easily, make comparisons, and make decisions on their purchase. Most respondent suggested that they were aware of other similar products from other companies that were cheaper compared to those of Pepsi. This indicates that the company was not aware of the fact that its products were higher in price compared to other similar products. It is also possible that competitors chose to lower their prices slightly to win the loyalty of the consumers. The freedom to choose was also a motivating factor since other competitors such as coca cola has more brands compared to Pepsi. This means that product selection was a serious deterrent factor for Pepsi in trying to achieve the best because the consumers were aware of other varieties that were cheaper.
Most respondents asserted that they chose the most advertised product. This was regardless of the medial used in advertising. It was also evident that other competitors are more aggressive when it comes to winning the loyalty of the people. The most notable factor here was the competition aspect. More than two thirds of the respondent pointed out aggressive advertising of other companies as the reason they would prefer their products. This is because they were convinced easily about the values associated to products by such advertising. Such aggressive strategies can be traced back to management teams since they with design and execute marketing strategies. According to Paley, (2006, p. 18), marketing strategies entail a battle of the minds among competing managers, who happen to be competitors. This does not mean that Pepsi has an incompetent management team per se, but there could be some weaknesses in their aggressiveness in invading the market. Therefore, it would be advantageous if the managers go back to the drawing board and design, techniques that are more aggressive compared to what they have now. A more aggressive strategy means that the company will increase awareness about its products and thus increase its sales. In addition, this will also give the company a commanding ground over its competitors and thus gain the ability to sustain its position in the market.
It was also clear from the respondents that Pepsi had fewer outlets in the area under study, compare to its competitors who had more outlets. This means that the company cannot avail its brands to the consumers consistently even if the demand for them is high. More than two thirds of the respondents stated that they would not go to a far distance looking for some of products sold by Pepsi, despite the fact that they preferred them. In addition, few of them would dare buy take-away and keep them at home for use. These findings are a clear indication that the market could be available but due to poor distribution structures, very little is achieved. Therefore, availability emerged as one of the strongest let downs Pepsi was facing in marketing its products. According to Rice (1991, p. 77), having many distribution outlets could result into more expenses since hiring of new staff will be mandatory. This means that Pepsi could be out of choices on how to avoid such expenses and thus choose to remain with fewer distribution channels.
Doing business in the world is not the same as it was five or ten years ago; therefore, it is wise for a business to adjust its marketing strategies to fit a market. In this regard, Pepsi should device proper marketing strategies that are not general. This implies that the company needs to design culture sensitive strategies that will respect and compliment the local cultural practices. Therefore, the use of the global marketing strategy will help much in solving the cultural problems that clash with the marketing strategy. This should involve avoiding following of the global strategies, but choosing to follow the local trends in perceptions and attitude, which are mainly derived from the cultural background. Therefore, a modular strategy of marketing will work better for the company. This is because the method will help the company in designing strategies for the market. Adapting such flexible approaches will improve its performance in the market; thus, improve its profitability.
The pricing factor was among the prime reasons why the company was experiencing unpleasant trends in sales. This means that consumers are highly conscious about price ad would sway towards the cheaper options. Therefore, the company needs to come up with better marketing strategies that are price sensitive. One of the best ways the company can achieve this is by reducing their prices slightly, just to give its competitors a run for their money. The company should do this with an aim of maximizing sales, which will obviously result into higher profit margins when they are in large volumes. The multinational should also ensure that the information about its attractive prices is availed to the market using the best relationship marketing strategies like the printed media. In addition, online advertising of the same should be intensified.
Location was one of the reasons that stood out in the findings as a major challenge. Therefore, the marketing managers need to address the problem by first trying to increase the distribution outlets. In line with this, the y should consider minimizing of the costs that come with such methods. Costs can be reduced by looking for partnerships with other traders who deal with similar products at the wholesale level. This will avoid the cost that may come with hiring new managers and supervisors of the additional outlets. Similarly, training cost for such employees will be avoided thus helps the company increase its market share.