EBA 609 – Marketing Strategy
Midterm
Lance J. Wilson
June 24, 2013
Synopsis
Pepsi-Cola was created in 1898 by Caleb Bradham, a New Bern, North Carolina pharmacist1.
Today, Pepsi-Cola is one of the five megabrands owned by PepsiCo, Inc., a publically held company
based out of Purchase, New York. The company sells and distributes a wide variety of foods and
beverages through its operations, authorized bottlers, contract manufacturers, and other partners2.
PepsiCo has made it their mission to be worlds premier consumer products company focused on
convenient foods and beverages4. They have a holistic vision to continually improve all aspects
(environment, social, and economic) of the world in which they operate thus creating a better tomorrow
than today4. Through this approach they hope to build shareholder value and sustainability4.
The Pepsi-Cola megabrand is considered to be part of the soft drinks industry (Exhibit 1). The
global soft drink and bottled water manufacturing industry produces bottled, tinned, and canned
beverages for human consumption5. It is comprised of establishments engaged in one or more of the
following: manufacturing carbonated soft drinks; purifying and bottling water; and manufacturing of
other beverages, such as energy and sports drinks5. The soft drinks industry is the largest segment of the
global beverages industry accounting for 38.2% of the industrys total value with revenue of $670 billion,
of which PepsiCo’s share was 1.9%6. In 2012, the U.S. soft drink market leader was the Coca-Cola
company with a dominating 42% share of the market, PepsiCo is the market challenger with 28%, and Dr.
Pepper Snapple has 17% with many other market followers and nichers making up the balance (Exhibit
2).
PepsiCo has a presence in over 200 countries but a key presence in North America7. Globally,
Pepsi-Cola products are sold primarily in super/hypermarkets, on-trade, through independent retailers,
and convenience stores (Exhibit 4). Because of the breadth of brands under the Pepsi-Cola megabrand,
192 in total7, and their global presence, Pepsi-Cola’s target market is people of all geographic and
demographic segments. However, their marketing efforts seem to be focused on Generations Y and Z,
especially with their “Live for Now” global campaign. “Live for Now” invites Pepsi fans to live each
moment to the fullest through a breadth of global, pop-culture platforms, including relationships with
music and entertainment brand evangelists, digital innovation, epic events, and unique partnerships9. The
campaign is meant to embody a mind-set that is true of Pepsi loyalists around the world, while connecting
with a large and growing number of consumers who share the same values9. It enables the brand to
deepen its global brand equity and inspires a differentiated way of thinking about the brand9. Pepsis
global campaign launched in the U.S. with “Pepsi Pulse”, the digital embodiment of “Live for Now”9.
This interactive digital platform operates in real time, curating and serving up trending pop-culture
content, entertainment news, and consumer incentives9. Pepsi Pulse has several features including an
interactive display of pop-culture news content and interaction with celebrities9. Pepsi has also launched a
version of Pepsi Pulse targeting bi-cultural, Hispanic consumers, called “Mi Pepsi” that features relevant
content for this audience9. As part of the “Live for Now” platform in the U.S., Pepsi will present a series
of exclusive Twitter-enabled concerts featuring major music artists9. Additionally, Pepsis first of its kind
Twitter music partnership will enhance consumers music experiences and bring them closer to what is hot
in music today9.
PepsiCo is organized into four business units: PepsiCo Americas Foods, PepsiCo Americas
Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa which are comprised of six
reportable segments: Frito-Lay North America, Quaker Foods North America, Latin America Foods,
PepsiCo Americas Beverages, Europe, and Asia, Middle East and Africa3. From all business units and
segments PepsiCo had net revenues of $65 billion in 2012, which was down 1% from 20113. 51% of
PepsiCo’s revenue stream comes from food products and the balance, 49%, comes from beverages
(Exhibit 9). Furthermore, 51% of PepsiCo’s total sales are generated within the U.S.
PepsiCo Americas Beverages (PAB) is PepsiCos beverage business unit that’s engaged in the
marketing, selling, and distribution of beverage related products like carbonated soft drinks, juice drinks,
ready-to-drink teas and coffee drinks, bottled water and enhanced waters under various Pepsi-Cola brands
including Pepsi, Mountain Dew, Sierra Mist, and Mirinda throughout the Americas8. The divisions
