MKTG1025 – Marketing Principle – A3

INTRODUCTION

Founded in 1965 in the USA, PEPSI is a beverage and food multinational corporation. The brand was first introduced as a nationally distributed diet soda in the USA with over 22 brands under its name ranging from beverage to snacks. The company is considered to be in the top 100 global brands around the world, being enjoyed by millions of people in about 200 countries a day. In 2019, the brand generated a total value of $67 billion in 2019 (PEPSI 2019, Brandirector 2020). In Vietnam, PEPSI entered the market in 1991, being one of the biggest beverage companies in the country in 2005 (Suntory Pepsico nd). Recently, PEPSI has introduced a new product which is called “PEPSI zero calories” in 2020, adding more to its diversified portfolio of brands. This report will analyze the product through SWOT analysis, target segmentation, differentiation, and positioning in order to have potential recommendations from market perspectives for the product, especially on Valentine’s Day of 2021.

SWOT ANALYSIS

1, Strengths

The first strength of Pepsi zero calories is that it has a very strong and well-known parental brand which is PEPSI.  In 2019, the brand was chosen to be 1st for “The Most Trustworthy Non-Alcoholic Beverage Company in Vietnam (Suntory Pepsico 2019). The brand also stays in the first place for top soft drink companies in Vietnam with over 30% as it has focused on on-trade consumption and corporate social responsibility programmes (Euromonitor 2020). PEPSI has also opened a large number of marketing and advertising programs with well-known advertising agencies on special days in the country (Ladigi 2020). The second strength of PEPSI zero calories is the product itself, which is stated with zero calories, suitable for people, especially young ones who are worrying about their diets and appearance, focusing on calories while still providing full energy for different types of activities during the day.

2, Weaknesses

The first weakness of PEPSI zero calories is that it has been new in the market. Although the product itself has been in other markets around Asia for a long time, it was introduced in Vietnam in 2020. Therefore, it still has lacked activities to connect and attract customers compared to other competitors. Moreover, when it comes to soft drinks, many people think that they have a lot of calories and the product will make many people skeptical about whether they can trust in or not (Warwick 2019). This is even special when they now have a lot of choices from fruit juices, water and smoothies for their healthy diet while still providing them good calories for their activities.

3, Opportunities

Vietnamese people, especially young people nowadays are having the tendency of keeping fit for themselves. There are a large number of online groups and pages on social media (Instagram, Facebook and Youtube) for people to follow with the topics focusing on diets, exercising, product choice for good appearance. They prefer organic, low calories products and meals with enough calories for themselves. Moreover, they are willing to pay more for organic and healthy products since they believe that they are investing for a lifetime health for themselves and their families since this will affect all the aspects of their life: work, family, marriage and studies (Nam Anh 2020).

4, Threats

It can be clearly shown that now there are tons of product competitors and alternatives for customers to choose when it comes to healthy products. Therefore, it will be much harder for the product to stay successful in the market (Curtis nd). On the other hand, due to the appearance of COVID-19, Vietnamese people will highly prefer premium organic drinks as well as drinks made at home for safety and healthy diets. Many people think that canned products mean unhealthy since they have chemicals and processed ingredients (Tatarski 2017).

TARGET CUSTOMERS

Demographics ●       Age: 18 to 25 years old

●       Status: Not married, single/ have boyfriends, girlfriends

●       Students at university, line officers

●       Live in urban and semi urban areas: Ho Chi Minh, Ha Noi, Da Nang, Hai Phong

●       Income: Middle income

Psychographics ●       They want to have good fitness to show that they are strong, active and outgoing in front of their friends and seek good jobs.

●       They prefer low calories product while still providing them enough energy for their active daily lives: gym, sports, work, studies at anytime of the day

●       They want to make drinks and food by themselves for their daily life, but often they are too busy or cannot follow consistently for a long time (Tuoi Tre News 2019).

Behaviors ●       They are well-educated so they will take time to search for the information of the product before buying them by analysing their ingredients, asking friends, seeking reviews and reading information on online channels, especially social media platforms (Mai & Tran 2016).

●       They use social media platforms a lot: Facebook, Youtube, Instagram and they can be easily influenced by influencers who have good habit for health and appearance (Saigoneer 2018; VERO 2019)

DIFFERENTIATION AND POSITIONING

PEPSI zero calories has a differentiated image based on its ingredients, packaging and product itself. First of all, for PEPSI zero calories, the sweetener helps the taste buds feel sweet but it is not high in calories. However, for regular PEPSI, the sugar and calorie content in cans is 35g and 133kcal, respectively (Bachhoaxanh nd). This not only helps customers to gain energy for their daily activities but also helps them to digest food easily. After exercising, the body will become dehydrated and a Pepsi zero calories will both refresh and regain the energy needed to continue exercising harder (Bachhoaxanh nd). This is also connected to the product’ slogan which is “Sang Khoai Tot Dinh, Bung Het Chat Minh (Coolest cheary, freely express yourselves) (PESI Vietnam 2020). On the other hand, the product has a distinctive outer shell that is different from other traditional Pepsi lines. From the traditional green color, PEPSI zero calories now has a lemon flavor with a matte black crust that stands out for its personality. With unique translucent packaging and can design makes it easy for people to store and carry: picnics, competitions, school, work, movies,.. (see Appendix A).

 

When it comes to positioning, it can be clearly seen that PEPSI’s main competitor in the market is Coca Cola. Coca Cola also has the product of Coca Cola. Coca Cola has also introduced Coca Cola Zero sugar and Diet Coke in the country. However, the price of Coca Cola is also the same as PEPSI zero calories (around 10-15,000 for a bottle of 330 ml). However, this time, it is evaluated that PEPSI zero calories’s packaging is more attractive and elegant than Coca Cola zero sugars, which would be more suitable for young people. Besides, other products that can be replaced for PEPSI zero calories include O Long Tea Plus, Zero Degrees Drink Tea, Herbal Tea. However, these products still contain sugar ingredients but the packaging is not as attractive for young people as PEPSI zero calories.

CURRENT 4P PERFORMANCE

1, Product

  1. Product levels and services

Core value:

The sweetener ingredients only help the taste buds feel the sweetness of the water and it contains almost no calories. In addition, it has a mild gas flavor, not too harsh when drinking. On the other hand, PEPSI also applies a product line when introducing a limited edition of PEPSI lemon zero calories with refreshing lemonade tastes for customers to choose.

Actual value:

PEPSI zero calories is packed in a very elegant, trendy and minimalism packaging for customers with a light package, making it easy to carry on.

Augmented value:

On the other hand, all the ingredients are clearly stated out with the information of customer service and company in case customers need to know more about information and ask for support (see Appendix B).

2, Price

The price of the product is around 11,000 to 15,000 in the market (Tiki nd), which is affordable. Moreover, customers can choose to buy a box with 6 to 8 bottles for more discount. This is the connection of cost-based pricing, competition-based and customer-value based pricing as PEPSI has to understand the market, competitors, customer requirements as well as the current situation of the company itself to come up with the suitable price for the product.

3, Place

PEPSI zero calories has been distributed in a lot of places in both rural and urban areas of Vietnam ranging from convenience stores, supermarkets, hypermarkets and small shops for customers to buy easily. The product also appears on social media channels, especially Facebook as well as ecommerce channels including Lazada, Tiki and Shopee, which are three main ecommerce platforms in the country (Similarweb 2020). The product was made in 5 factories in Vietnam around the country ranging from the North to the South, making it easy to distribute and meet customer’s high requirements (Nguyen 2017).

4, Promotion

Moreover, PEPSI zero calories has collaborated with Blackpink, the top Korean pop music band in Asia, especially famous in Vietnam for young people to promote the new product (Cosmolife 2020). Recently, in terms of sponsors, the product itself has appeared in the latest famous shows for rappers, attracting a huge attention of young people in both genders (see Appendix C). On the other hand, the product itself has been largely introduced through different social media platforms including Facebook, Youtube and website of the company (see Appendix D) with interactive content for customers. PEPSI also collaborates with a lot of social influencers on Youtube to review the products and becomes active on review groups (especially about food and drinks for customers) with food reviewers and food bloggers (see Appendix E&F).

MARKETING OBJECTIVES

The main marketing objective of the product itself is to gain the trust of  young people from 18 to 25 about the benefits of PEPSI zero calories in the market, which is on the consideration stage. Vietnamese people are used to PEPSI for a long time, but it will take efforts to gain the trust of young people about a product of zero calories which is totally beneficial for themselves. Therefore, it is completely important to gain their love and trust with the product. The marketing object would be to increase the trust of young people about the benefits of PEPSI zero calories by 5% in three months from February to April in 2021.

RECOMMENDATIONS

The first recommendation for PEPSI zero calories focuses on the place itself. Usually now young people often come to restaurants or food stores to buy products for themselves. They often find it hard to find the product focusing on healthy ingredients while still having energy and tasty, even though they are having parties with their friends or that is a special occasion Moreover, small food and drink restaurants, even street vendors are the places that young people in the country often come. Therefore, it is recommended for the product itself to be distributed in these types of places. This will become an outstanding point for those who are afraid of gaining weights with unhealthy food while still wanting to enjoy the moments with friends or their lovers’ ones. This would help them have more choices based on their specific requirements and needs.

 

The second recommendation focuses on the promotion part of PEPSI zero calories. It is recommended to have an integrated marketing and communication campaign during the Valentines’ Day. On this day, besides couples and lovers, there would be many young people who are single coming in groups to go out together to play, eat and drink. Therefore, it is recommended to focus on these target customers with the campaign “No lover, there’s a problem. No calories, no problem ”. The campaign will spread the message that having a healthy diet, healthy friend relationship as well as social approval is much more important than only having boyfriends or girlfriends. The channels will be Facebook, Youtube and events for young people. On Facebook and Youtube, there would be interactive content with mini games, post sharings from customers and an Interview about having a boyfriend/girlfriend and having a healthy image with friends for young people to choose. Channels will also announce that the product itself now has been appearing in different restaurants and local ones for young people to easily enjoy their healthy diets with friends.

 

CONCLUSION

In conclusion, it can be seen that PEPSI zero calories has been very attractive for young people in the country with outstanding features and packaging. However, the product itself is still doubted by many people about whether it is good for health or not. Therefore, it is recommended to focus on place and promotion with more optional drinks in local restaurants and shops for young people to enjoy with their friends while having a marketing and communication campaign on Valentine’s Day.

 

 

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