Introduction
PepsiCo International is a multinational beverage and food firm with a diverse portfolio of brands that serve different market segments. The brands include Tropicana, Quaker, Frito-Lay, and Pepsi, which ensure the company posts impressive earnings each year. The corporation is a strong player in the soft drink industry, and it is famous for its flagship product, Pepsi.
The report covers many digital marketing aspects, including company analysis, buyer persona identification, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, and a marketing strategy plan.
The company analysis will include an external analysis of the micro- and macro-environments, whereas the buyer persona(s) will be identified using the Buyer Persona Spring. The Buyer Persona Spring is essential in providing a representation of the target audience and their needs, decision-making processes, and behaviors. A review of PepsiCo International and the specific brand Pepsi reveals that a clear digital marketing strategy is needed.
Current Literature and Relevant Theories
A critical review of current literature on digital marketing and PepsiCo International’s competitive environment reveals relevant theories and market trends that can help the company succeed. Existing literature shows increasing competition, changing consumer preferences, health and wellness, new drink categories, and sustainability and the environment are trends relevant to the soft drink sector (Kotler et al., 2022). The health and wellness trend indicates consumers are leaning toward the consumption of healthier drink options, leading to declining sugary drink sales. Thus, PepsiCo has launched Pepsi Zero Sugar, which has no sugar and few calories.
Consumers are increasingly concerned about the environmental impact of their purchases; thus, it is critical to ensure an eco-friendly supply chain exists (Belch & Belch, 2019). The company’s market share may shrink due to increasing competition from new drink categories; therefore, the firm needs to innovate and differentiate its products.
Two important theories facilitate the formulation of a digital marketing strategy for the Pepsi brand, including the digital marketing mix and the customer journey. The digital marketing mix is a relevant theory in general marketing and consists of the seven Ps of marketing. They include product, physical evidence, process, people, promotion, place, and price. The digital marketing mix offers a framework for firms to implement and develop digital marketing initiatives considering the unique requirements and characteristics of the digital environment (Kotler et al., 2022).
The customer journey refers to the various stages customers go through before making a purchase, including decision, consideration, and awareness. The digital age has made the customer journey complex since customers rely on multiple information sources and touchpoints to inform purchasing decisions (Belch & Belch, 2019). Therefore, PepsiCo International must create integrated digital marketing strategies that consider the whole customer journey, from original awareness to post-purchase interaction.
Analysis of the Company
Macro-Environment
Economic
Economic factors can impact the soft drink industry, which in turn affects the brand Pepsi and its parent company. Such factors include economic growth, consumer spending, and inflation. Economic growth can have a significant effect on PepsiCo International and its brand, Pepsi. During economic growth periods, consumer spending increases, which leads to higher demand for many products, including Pepsi. As a result, the company can record increased profitability and massive sales.
On the other hand, during an economic downturn, consumer spending will reduce, leading to low demand for non-essential products, including Pepsi (Heinze et al., 2022). Economic downturns can lead to decreased profitability and sales for PepsiCo International and its Pepsi brand.
Inflation can impact PepsiCo International and its Pepsi brand in several ways. For instance, inflation may cause an increase in the price of raw materials as well as other inputs used in Pepsi production. As a result, production costs increase, which passes the cost down to the final consumer, negatively impacting the demand for the Pepsi brand. Inflation may also lead to reduced purchasing power as prices increase (Heinze et al., 2022).
Thus, consumer spending decreases, which includes spending on soft drinks such as the Pepsi brand. Furthermore, inflation may lead to reduced profit margins if PepsiCo International does not pass the increased cost of production to consumers, reducing profits for the brand (Rana et al., 2020). Overall, economic trends, such as inflation, economic growth, and consumer spending, affect the sales of the Pepsi brand.
Technological Trends
Technological advancements, such as e-commerce, social media, and data analytics, are critical aspects of the macro-environment that impact PepsiCo International and its Pepsi brand. The rise of the e-commerce industry has allowed greater competition in the soft drink market. Customers can compare product prices online and purchase them conveniently (Belch & Belch, 2019). The Pepsi brand must have an e-commerce presence to increase sales and compete. Social media technology, including Instagram, Twitter, and Facebook, is integral to PepsiCo International’s operations.
Data analytics is a technological trend that PepsiCo International can leverage to understand consumer preferences and behavior (Dai, 2021). The Pepsi brand utilizes data analytics to track the effectiveness of marketing campaigns and make data-driven decisions. The few examples highlight the effect of technological advancements on the Pepsi brand and the significance of technology in business.
Political Aspect
The political aspect of the macro-environment refers to taxes, trade agreements, and government regulations that affect the profitability and operations of PepsiCo International and its Pepsi brand. For example, government regulations on the production and sale of beverage and food products, including advertising to children and sugar content, can affect Pepsi’s profitability, sales, and marketing strategies (Belch & Belch, 2019).
Monitoring taxes and their changes are crucial to the growth of the Pepsi brand since they affect digital marketing efforts. Taxes imposed on soft drinks, including those on the Pepsi brand, can increase production costs and reduce the demand for Pepsi products (Chaffey & Ellis-Chadwick, 2019). Therefore, it is significant for PepsiCo International to monitor and understand the political environment in all countries to anticipate and address potential opportunities and risks it presents.
Social Aspect
The social macro-environment refers to the lifestyle, demographic, and cultural trends that impact the demand for Pepsi services and products. Cultural beliefs and trends can shape consumer behaviors and attitudes. For instance, among today’s world population, there is an increasing concern about caring more about wellness and health (Chaffey & Ellis-Chadwick, 2019). As a result, the demand for sugary drinks such as Pepsi is decreasing, which means a strategic solution is needed to address changing buyer needs.
Demographic trends can affect the demand for products in the Pepsi brand and the whole PepsiCo International product portfolio (Dai, 2021). For example, old consumers may be more health-conscious than younger ones. Thus, they may prefer to drink healthier options over sugary ones, such as the Pepsi brand.
Lifestyle trends tend to affect the demand for products in the Pepsi brand. Some trends, such as on-the-go and busy lifestyles, can affect the demand for portable and convenient products. For example, the popularity of energy drinks may impact Pepsi’s sales as customers turn to alternatives that provide a quick energy boost (Helmold, 2022).
Another lifestyle trend is the obsession with healthier products among consumers. Customers pay attention to the nutritional content and ingredients of the products they use, and many want to reduce their calorie and sugar intake (Chaffey & Ellis-Chadwick, 2019). As a result, fewer customers seek to drink sugary drinks because they like healthier refreshments.
To respond to the consumer obsession with healthier product options, PepsiCo International has diversified its product portfolio to include healthier options, such as sports drinks and water (Kotler et al., 2022). In addition, the company has reformulated the existing products to reduce calories and sugar.
The firm has also increased investment in marketing campaigns that emphasize the nutritional benefits of the current product portfolio and encourage a healthy lifestyle (Helmold, 2022). Overall, it is essential to monitor social trends in lifestyle, culture, and demographics to respond to changes in the behaviors and preferences of consumers and remain competitive by meeting customers’ changing needs.
Environmental Aspect
The environmental aspect of the macro-environment focuses on the examination of natural and ecological factors that affect PepsiCo International and the Pepsi brand. The environmental macro factors may include climate change, waste management, and resource depletion (Rana et al., 2020). New challenges arise because of the environmental aspect of today’s business. For example, the increasing awareness among consumers regarding environmental issues has caused a shift in consumer preferences toward products that are more environmentally friendly and sustainable (Kotler et al., 2022).
As a result, PepsiCo International can benefit from the opportunity by positioning itself as a responsible corporate citizen. The company implements eco-friendly initiatives, such as carbon footprint reduction and utilizing recyclable packaging.
Nonetheless, the Pepsi brand faces problems related to consumer expectations and environmental regulations. For example, regulations that restrict plastic packaging use have increased production costs, impacting the overall firm’s profitability (Kotler et al., 2022). Furthermore, today’s consumers demand more eco-friendly products, putting pressure on PepsiCo International to alter its operations and products (Heinze et al., 2022).
To conclude, the environmental aspect of the macro-environment is critical to PepsiCo International and its Pepsi brand and must be considered when developing business and marketing strategies.
Micro-Environment
The micro-environment in external analysis indicates the close and internal factors that affect a company’s decision-making and operations. In the case of PepsiCo International and its Pepsi brand, micro-environment factors include customers, competitors, suppliers, and internal operations.
Customers are a crucial part of Pepsi’s micro-environment. Understanding the behaviors, decision-making processes, and preferences of customers is critical to a company’s success. Consumers can be understood through market research, which enables companies to gather data on customer opinions, buying habits, preferences, and demographics (Kotler et al., 2022).
To start a successful digital marketing campaign, PepsiCo International must understand the wants and needs of target customers. Competitors are intense in the soft drink industry, and the Pepsi brand must evaluate how strong and weak its competitors are. For instance, Coca-Cola is a major competitor of PepsiCo International, and it is a well-established brand with a strong market presence. Pepsi and Coca-Cola must understand each other’s marketing strategies, target audience, and product offerings to remain competitive.
Suppliers and internal operations are a part of the micro-environment and should be considered before developing a digital marketing strategy. Suppliers provide resources and raw materials required for PepsiCo International’s production processes. The firm must foster good relationships with its suppliers to enhance reliability and cost-effectiveness in the supply chain.
Internal operations, such as distribution, marketing, and production, are required for a company’s success (Heinze et al., 2022). PepsiCo International’s internal operations determine the effectiveness and efficiency of various processes, which may impact the quality and cost of products under the Pepsi brand. Thus, the firm must commit to continuous improvement to remain competitive.
The Company’s Buyer Persona(s)
The Buyer Persona Spring helps understand the motivation, decision-making processes, challenges, and goals of the target audience. The Buyer Persona Spring includes various elements, such as behavior patterns, pain points, and demographic information (Heinze et al., 2022). In the case of Pepsi, young adults, parents, and sports enthusiasts form the buyer personas.
Young adults are a population segment that is likely to be attracted to the Pepsi brand. The persona is characterized by several factors, which include needs, preferences, and behaviors. The persona represents people in their late teens and early twenties seeking an exciting and fun drink to enjoy with friends. Young adults seek products that align with their values and lifestyles. In addition, they look for beverages with a strong brand identity and are refreshing.
The “young adult” person prefers Pepsi for its branding and unique taste. They are often drawn to Pepsi’s images as an energetic and fun drink and its wide availability. Young adults enjoy socializing with friends and are highly active (Belch & Belch, 2019). They frequently purchase Pepsi in the presence of friends, at quick pick-me-ups, or at sporting events. The persona is highly likely to be influenced by celebrity endorsements and popular culture.
The “Parents” buyer persona represents people who are responsible for purchasing drinks for their families. They may be looking for an affordable and convenient drink option for their family. Parents are on the go and busy, so they want an easy-to-consume drink that is quick to grab and go.
Additionally, they prioritize the well-being and health of the children; therefore, they should likely look for non-sugaries, unlike Pepsi. Parents are value-driven and price-conscious, so they can be enticed by promotions and deals on purchases. Furthermore, they tend to be loyal and choose a brand due to personal preferences and past experiences (Heinze et al., 2022). They are characterized by multitasking and busy nature; therefore, they may look for social media recommendations and shop online.
The “Sports Enthusiasts” buyer persona consists of individuals who have a passion for sports and are highly active. The group prioritizes the need for hydration and energy during and after physical activities. Thus, they may look for products that assist in recovering and performing better.
The persona prefers energy and sports drinks over beverage options and is often loyal. They like products that are reliable, portable, and convenient to fuel physical activities (Chaffey & Smith, 2022). Sports enthusiasts highly engage in physical activities and connect with like-minded individuals.
SWOT Analysis
A SWOT analysis evaluates the strengths, threats, opportunities, and weaknesses of a company. PepsiCo International and its Pepsi brand have several strengths that provide a competitive advantage. First, the company has a strong brand reputation and recognition acquired through years of delivering high-quality products.
Second, the firm has a wide product range that caters to various buyer personas. The product offerings allow PepsiCo International to diversify its sources of income and reach a huge number of customers (Dai, 2021). Finally, the corporation has a robust distribution network that allows its products to reach consumers efficiently and timely.
Despite the advantages, PepsiCo International and its Pepsi brand have several weaknesses. First, the company’s dependence on the shrinking carbonated soft drink market is a challenge. Second, the entry of new firms into the beverage market increases competition, making it difficult to earn profits. Third, the negative perception of the health effects linked to sugary drinks may reduce sales (Belch & Belch, 2019). When people know a product contains sugar as an ingredient, they may avoid it due to perceived adverse health effects.
PepsiCo International and the Pepsi brand face various opportunities and threats. The opportunities include the growing demand for healthier soft drinks and expansion into new segments and markets. Additionally, the growing popularity of fitness and sports culture, as well as increasing interest in flavored and functional beverages, present an opportunity for the company (Kotler et al., 2022).
The threats faced by the Pepsi brand include stringent government laws on sugary drinks and increased health consciousness among customers (Dai, 2021). In addition, the brand faces increased competition from healthier soft drinks as well as economic fluctuation and instability in commodity prices.
Digital Marketing Plan
Key SMART Objectives
- To increase brand awareness among young adults using social media by 20% in six months.
- To amplify engagement through digital promotions and campaigns by 15% in nine months.
- To increase website accessibility and visibility by 50% in twelve months.
Note. The numbers on the horizontal axis represent the days taken to complete a task.
The Gantt chart shows the task name, start date, and overall duration. The three objectives are expected to take no more than a year to achieve if executed successfully. The digital marketing strategy is aimed at increasing the reach of the Pepsi brand as well as making it easy for consumers to interact with the company.
Clear Strategic Recommendations
Utilizing “Young Adults” Buyer Persona
The strategy targets young adult consumers through influencer marketing and social media initiatives. For social media campaigns, PepsiCo International can create engaging content, such as images or short videos, that captures the motivations and interests of young adults (Kotler et al., 2022). Content promotion can be done through popular social media sites such as TikTok, Snapchat, and Instagram.
On the other hand, influencer marketing can involve the Pepsi brand partnering with persons with a significant following on social media and can promote the brand to their followers (Chaffey & Smith, 2022). The method is effective if the Pepsi brand collaborates with influencers who resonate well with young consumers to help increase brand credibility and awareness among the group.
Improving Website Accessibility and Visibility
Although current PepsiCo e-commerce tools are updated, they lack high visibility and accessibility. Thus, it is important to focus on improving the area by making it easy for users to find, interact, and navigate a website and its content. For instance, the Pepsi brand can invest in search engine marketing and optimization to drive traffic to the website and enhance visibility (Kotler et al., 2022). PepsiCo International can focus on optimizing the user experience, layout, and design of its website (Chaffey & Smith, 2022). In addition, the website can be well-written and informative, which can increase conversions, engagement, and traffic to cater to sports enthusiasts.
Utilizing the “Parents” Buyer Persona
The Pepsi brand can use the “Parents” buyer persona to collaborate with leading e-commerce platforms that cater to the purchasing needs of parents in target markets. The purpose of the strategy is to make it easier for parents to buy products online for their families (Kotler et al., 2022). Market research should be done to estimate the demand for online shopping of Pepsi products (Helmold, 2022). In addition, promotions such as discounts should be used to attract parents who are value-driven and want to save some money for their family.
Further Digital Analysis
There are three recommendations PepsiCo International and its Pepsi brand can take to inform marketing strategy. First, the firm should conduct market research continuously to comprehend the latest preferences and trends for all three buyer personas (Kotler et al., 2022).
Second, PepsiCo International can analyze and monitor consumer behavior on website analytics and social media platforms to enhance online campaigns (Chaffey & Smith, 2022). Third, the company can use advanced digital tools such as machine learning and artificial intelligence to measure success and optimize campaigns.
Conclusion
In summary, an analysis of the Pepsi brand highlights the need for a digital marketing strategy for the parent company’s success. The discussion focuses on external analysis, with a specific emphasis on macro and micro-environments. In addition, the current paper explains the buyer personas and key SMART objectives for the Pepsi brand.
Finally, a digital marketing plan is formulated from external analysis, buyer personas, and SWOT analysis. Pepsi is a huge brand that needs continuous improvement to remain competitive through digital marketing.
References
Belch, G., & Belch, M. (2019). Advertising and promotion: An integrated marketing communication perspective (12th ed.). McGraw-Hill Education.
Chaffey, D., & Ellis-Chadwick, F. (2019). Digital marketing: Strategy, implementation and practice (7th ed.). Pearson.
Chaffey, D., & Smith, P. R. (2022). Digital marketing excellence: Planning, optimizing and integrating online marketing (6th ed.). Routledge.
Dai, Y. (2021). Comparison of emphasis point towards marketing strategies between Pepsi & Coca-Cola. 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021), (pp. 79-83). Atlantis Press. Web.
Heinze, A., Fletcher, G., Rashid, T., & Cruz, A. (Eds) (2022). Digital and social media marketing: A results-driven approach (2nd ed.). Routledge.
Helmold, M. (2022). Performance excellence in marketing, sales and pricing: Leveraging change, lean and innovation management. Springer.
Kotler, P., Keller, K. L., Chernev, A., Sheth, J. N., & Shainesh, J. (2022). Marketing management (16th ed.). Pearson Education.
Rana, N. P., Slade, E. L., Sahu, G. P., Kizgin, H., Singh, N., Dey, B., Gutierrez, A., Dwivedi, Y.K. (Eds.). (2020). Digital and social media marketing: Emerging applications and theoretical development. Springer.