PepsiCo, Inc. is one of the largest multinational corporations focused on the manufacturing, distribution, and sale of food and beverages. Founded by Donald Kendall and Herman Lay in 1965, the company is constantly developing and introducing new strategies of marketing in order to stay competitive. Therefore, its success is expressed financially – for the previous fiscal year (2021), PepsiCo’s annual sales were 79.5 billion, and this revenue is almost 13 % higher in comparison with 2020 (PepsiCo Inc. par. 1). The company has a highly diversified range of products, including beverage, food, and daily nutrition lines. The company’s top global product portfolio includes 23 brands that generate approximately $1 billion annually (About the Company par. 1). The most recognizable brands of PepsiCo are Pepsi Cola, Lays, Cheetos, Doritos, Mountain Dew, Gatorade, Tropicana, Lipton, and Aquafina.
The marketing mix of PepsiCo is based on various tactics and strategies the company applies on the basis of its products, sources, and capacities. The 4 Ps of marketing mix include Product, Place, Promotion, and Price, and in relation to the described company they will be the following:
- Product. PepsiCo’s products are soft and energy drinks, bottled water, snacks, cereal, breakfast bars, and sports nutrition.
- Place. The majority of the company’s products are available at non-online retailers, including grocery stores, supermarkets, and convenience stores. However, consumers may order PepsiCo-licensed merchandise, such as t-shirts or tumblers, through retailers’ websites.
- Promotion. In order to attract customers, PepsiCo uses various tactics, including advertising, direct marketing, sales promotion, and public relations. The company advertises its products using online and print media, radio, and TV, invites celebrities for promotion, sponsors public events, and makes agreements with organizations for marketing brands provided at wholesale prices.
- Price. The main strategies used by PepsiCo in relation to prices are hybrid everyday value and market-oriented pricing strategies. In general, the corporation aims to make its prices competitive, however, it frequently adapts prices placing them between everyday and holiday prices to stimulate purchases in non-holiday periods.
According to the company’s vision, its unique brand experiences and delicious products create joyful moments for consumers. Its overall image is associated with fun, youthfulness, innovations, creativity, energy, excitement, curiosity, honesty, and smartness. To project it, PepsiCo targets the young population through its advertising and marketing campaigns and sponsors sports events. In general, the corporation’s target customers are young adults aged 13-35 years old, predominantly Gen Z, from lower-middle to upper class, and with a busy modern lifestyle.
The major competitors of PepsiCo, Inc. include The Coca-Cola Company, Mondelez International, Kellogg, Danone, Nestle, Monster Beverage, Dr. Pepper, and Red Bull. The Coca-Cola Company dominates this list being the most recognizable non-alcoholic beverage company all over the world. Other companies focus on either drinks or snacks as well. In this case, PepsiCo remains highly competitive due to its product portfolio that unites various categories and the strategy of cost leadership.
As a company that exists for more than 50 years, PepsiCo may be regarded as highly successful in its adaptation to demographic changes. First of all, it identifies its target audience and monitors its needs and demands that may change with time in order to address them in the most appropriate way. For instance, PepsiCo considers its consumers’ excessive use of social media and concerns related to health and environmental safety. That is why it uses social media for the promotion of its products, reduces the quantity of sugar in its beverages, introduces sustainable methods of manufacturing and distribution, and supports non-profit organizations occupied with ecological issues for their solution. Attention to its consumers’ needs, a wide range of products, and efficient marketing strategies are among PepsiCo’s main competitive advantages.
In general, on the basis of PepsiCo’s annual report, it is possible to trace the company’s progress. Thus, in 2021, its net revenue was $79,474 which is 13% higher in comparison with the revenue of 2020 which was $70,372 (Annual Report 2021 37). The cost of sales in 2021 was $37,075, while in 2020, it was $31,797 (Annual Report 2021 59). In turn, net income attributable to PepsiCo was $7,618 and $7,120 in 2021 and 2020, respectively – the difference is 7% (Annual Report 2021 43). However, the company’s operating expenses are growing as well – in 2020, they were $60.292, while in 2021, they became $68.312 demonstrating a 13.3% increase.
In general, the report demonstrates that PepsiCo’s sales trending up regardless of the risks related to the pandemic that has already affected the company’s expenses. Companies like PepsiCo are particularly vulnerable to the coronavirus as an infection at even one facility leads to reduced output and decreased profits and sales. However, in this challenging period of time, the company has managed to increase its revenue, and the difference of 13% may be regarded as substantial. In general, it may be connected with consumers’ changing behaviors that were affected by the pandemic-related isolation. In other words, due to stay-in-home continuous trends, people bought and consumed more snacks and other products of PepsiCo.
On the basis of PepsiCo’s financial statements, it is possible to conclude that in the present day, the company may be regarded as viable due to the growth of net revenue and net income. However, growing operation expenses put the corporation’s future viability at risk, especially if they exceed profits. In its annual report, the company identifies major risks that should be addressed including the consequences of COVID-19, the reduction of consumers’ demand, damage to its brand image, failure to provide appropriate quality and attract a qualified workforce, water scarcity, and various political and social conditions. In this case, the company should review its strategies on the basis of the current situation to remain competitive and guarantee its stable growth and development.
The current viability of the company is supported by the situation in the stock. In relation to it, PepsiCo ( NASDAQ: PEP) is traded at a price of $173,76 (MarketWatch). The price is smaller in comparison with The Coca-Cola Company, however, it is greater in comparison with other competitors. Moreover, the graph of the company’s stock performance demonstrates the continuous growth of price from a long-lasting perspective. Thus, it may be regarded as a strong company appropriate for investments due to its consumer loyalty, diversified portfolio, and competitiveness. At the same time, as the company’s history has proved that PepsiCo is able to adapt to economic, political, and social changes and withstand unexpected global events, it may be concluded that it is a viable company that may develop and apply all necessary strategy to guarantee its growth and development in the future.
Works Cited
“About the Company” PepsiCo. Web.
“Annual Report 2021.” PepsiCo, Web.
MarketWatch. “PepsiCo Inc.” Web.
PepsiCo Inc. “PepsiCo’s Revenues Top 12% in Q4 and FY 2021.” Vending Market Watch, Web.