Marketing Audit Report for Pepsi Max - Case Study Example

Marketing audit report: Pepsi Max Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Marketing audit report: Pepsi Max Introduction It is evident that the right approach in any firm’s marketing strategy is imperative in the attainment and maintaining sustainable competitive advantage in the market. This becomes more paramount when a particular firm is confronted by massive competition in the market which endangers both its short and long-term viability. Consequently, the application of an ideal marketing mix is imperative in the process of identifying the opportunities in the market, launching new products as well as surviving both real and prospective competition in the market. This fact is supported by Anderson (1982, p. 15) who determined that the role of marketing in strategic planning involves the identification of the most suitable long-term positions for the firm which stresses the necessity for proper identification of the opportunities in the current and future market. Against this background, this report will explore the marketing approach the Australian target market of Pepsi Max and the marketing mix which will center in the 4Ps of marketing namely product, promotion, place and price. In addition, it will analyze the aspect of competitive advantage of this product in the market. Nonetheless, it is imperative to first get a summative insight into this particular product aimed at gaining an understanding of the marketing strategy which has been put into utility to instigate and popularize it in the market. Pepsi Max, an overview Pepsi max which was previously known as Diet Pepsi Max until the early parts of 2009 can be perceived as a sugar free, zero-calories and ginseng-infused cola which and is marketed by PepsiCo. This product has managed to penetrate diverse markets in the world including Australia amid extensive competition, mostly in the energy drink market. When Pepsi Max is juxtaposed with other energy drinks in the market, Pepsi Max has been cited as giving a relatively low dosage of caffeine to the consumers which stands at 5.75 mg caffeine per 30 ml package, an attribute which has been exhibited in many advertisements through various channels. The Australian target market A target market can be perceived as a group of consumers to whom the marketing efforts by a certain business are aimed at and ultimately its products. According to Larsen (2010, p. 3), marketers have become cognizant of the fact that there is extensive divergence of the consumers who consume a particular product in regard to tenets like needs, demographics, social affiliations, location and attitudes. This is founded on the fact that most markets are comprised of different individuals and collectives consumers, sub-markets or segments. This has been evident in the marketing strategy of Pepsi Max whereby the market of this product is highly segmented necessitating the focus on particular market segments of the overall market share of PepsiCo. This strategy of segmentation and consumer targeting as utilized in the marketing of Pepsi Max is prudent in permitting the delivery of this product within the target audience wants and needs by the producing company (Pickton and Broderick, 2005, p. 373). The primary market of Pepsi Max in Australia is predominantly male, a fact which is evidenced in the Super Bowl commercial which was aired in 2009 and campaigns in the recent times in televisions and radio media which laid great emphasis on the product being intended to be a men’s diet cola. In addition, based on the increased penetration of this product in the energy drink market as previously mentioned, and with prominent ads featuring football and baseball stars, its marketing strategy has increasingly targeted the young members of the Australian population within the age cohort of 15-35 years who are extensively engaged in sporting activities. Thus, its association with prominent sports personalities makes it ideal for young athletes who need to rejuvenate their energy after strenuous sporting activities. Moreover, there is a secondary target market among the older age groups who also form part of the target market for this energy drink though limited marketing efforts are focused on this group. This is mostly founded on the increased awareness and acceptance of exercises as an ideal mechanism of maintaining fitness and minimizing the prevalence of lifestyle diseases like diabetes among the older members of the Australian population. Thus, the engagements of this group in physical exercises make them another target market for this product. In addition, its zero-calories and sugar free attributes have been used to popularize it among this group of target market, mostly those controlling their weight for health reasons like high blood pressure patients in Australia. It is imperative to note that the common need in all the above target markets is elevated energy levels after various physical activities which are geared towards diverse ends like fitness, excellence in sports among others. Thus, the strong presumption among these target markets about the high capacity of Pepsi Max to rejuvenate their energy makes it ideal for them and thus marketing efforts by PepsiCo are directed towards them. Marketing mix According to Kotler P. , Armstrong, Wong, & Saunders (cited in Riaz & Tanveer, 2012, p. 44), marketing mix can be perceived as a set of controllable marketing tools which a particular firm puts into utility aimed at creating a desired response in the targeted market. These set of variables are basically referred to as the 4Ps of marketing and they constitute product, promotion, place and price. This marketing mix has been extensively used in the marketing strategy of Pepsi Max as will be evidenced in the subsequent analysis. Product Product can be viewed as a goods or services which are offered by a certain company in the market. It is thus offered to the consumers for the purposes of attention, acquisition or consumption and it is aimed at satisfying some specific needs or wants (Riaz & Tanveer, 2012, p. 44). The product in this analysis is Pepsi Max. This product is aimed at satisfying the energy requirements of the target market which was previously explored and it has come out as an ideal solution to people who are usually involved in energy draining physical activities like sports. In addition, based on the fact that it is sugar free and has zero-calories, it satisfies the needs of consumers who want as little sugar in their diets for health reasons and thus becomes an ideal solution in satisfying this need. Pepsi Max can be categorized under shopping type of product based on the fact that based on the price and quality of this product when compared with other brands satisfying similar needs in the market (energy drinks), the consumers compare the prices and quality offered by different manufacturers as well as doing a brand comparison which informs their purchasing decision. Thus, advertising campaign to inform the consumers about the advantages of Pepsi Max when compared with other products is fundamental and thus, brand building becomes an integral aspect for the marketing of Pepsi max which falls under the shopping products. The rationale behind choosing this category is founded on the fact that this category requires extensive marketing efforts by the manufacturer if at all the brand is to effectively penetrate the target market and gain sustainable competitive advantage in the Australian market. This is unlike some other product categories like specialty type which requires limited marketing efforts. The attributes of Pepsi Max which are most important to the needs of the consumers are its high energy levels, minimal sugar and calories level. This is based on the fact that these attributes effectively satisfy the inherent needs of the target market previously analyzed. In regard to the core product, Pepsi max is endowed with both status and convenience. In regard to status, based on the fact that Pepsi max is produced by PepsiCo which is a global drinks producer endowed with a high reputation, Pepsi Max has a high status based on this virtue. In regard to convenience, Pepsi Max has been perceived as being ideal in satisfying the needs of the target consumers in the market, in terms of energy rejuvenation as well as low sugar and calories levels for the health sensitive consumers. In regard to the actual product, based on the status nature of Pepsi Max, this product has high quality and its price is relatively high when compared with other energy drinks in the market. In terms of convenience, the target consumers are bound to get a value of their money when they purchase this product in terms of needs satisfaction. Lastly, in terms of augmented product, PepsiCo has undertaken extensive efforts to enhance the quality of this particular brand in order to effectively meet the needs of the target market and thus enhance its value. This product can be perceived as an effective brand based on the rationale of its brand name whereby its association with PepsiCo which is a highly successful company makes it have a strong brand image in the market. This fact is supported by Cohli and LaBahn (1995, p. 1) who determined that a brand name is the foundation of the brand’s image. In terms of packaging, the new Pepsi Max has a two tone color of black/silver which generally shifts from the female perspective of blue which encompassed the female population. In addition, the removal of the word ‘diet’ from the new package presents the new brand as the ideal energy drink for men as opposed to the previous brand. The key marketing function of this packaging is that it reveals a gradual target shift from the overall population which included female consumers to predominantly male target market, based on the color and the message portrayed in the package. This packaging delivers extensive differentiation in terms of the gender approach and the color and message components of the package makes it more inclined towards the male target consumers. When put in the Product Life Cycle (PLC), Pepsi Max is in the growth phase based on the fact that it has already been launched and the producer is making extensive efforts to make it realize the maximum market share in the target market (Komninos, 2002, p. 6). It is worth noting that the distribution, promotion and pricing strategies of Pepsi Max are consistent with the growth phase based on the fact that they tend to show all the offerings of this product and tend to differentiate it from other energy drinks in the market. In addition, the distribution efforts by PepsiCo are aimed at increasing the availability of this product in the market and the cost efficiency in terms of pricing has been imperative in gaining the confidence of the consumers in the market. Promotion In a rudimentary level, promotion can be defined as the means of informing the consumers on what a certain product does and what it can do (Sharma & Bhardwaj, 2009, p. 464). The promotion efforts of Pepsi Max are predominantly personal communications whereby there is no personal contact between the sender and the receiver (Laitinen, 2009, p. 15). In this instance, media like televisions, social networks, radio, internet and event magazines are put into utility. The Pepsi Max ad on the television which was aired during the NBA finals in the US between Oklahoma City Thunder and Miami Heat is just an example of a T.V advert which attracted a wide viewing and when it was uploaded on You Tube, it was watched by around 10 million viewers who liked it and eventually generated massive interest on Twitter (Buss, 2012, p. 1). This reveals a profound inter-linkage of T.V, the internet and the social media in the promotional efforts of Pepsi Max. The choice of the NBA finals event is based on the rationale that it is predominantly a male event and also, it is a sporting activity whose participants and followers are the primary target market of Pepsi Max. In regard to magazines, Pepsi Max ads have been predominant in major magazines around the world, mostly those which target men, for instance Maxim magazine which is the largest men’s magazine brand in the world and available in Australia. These mediums are used by Pepsi based on their popularity among the target market as well as their affordability, for instance, the social media. These forms of communication are effective in reaching the target communication based on the fact that they are popular among the young males, for instance, the Maxim magazine and the social media as well as older males, for instance, sporting activities on television. The producer of Pepsi Max utilizes both direct and online communications, for instance, interactive consumer websites, online display ads and fliers among others. These are aimed at providing information about the product as well as the outlets where the consumers can get it. The communication messages exhibit Pepsi Max as the most high quality product, as well as being a cost-effective energy drink for the target market which can be found in diverse outlets (product, price and place tenets of marketing mix). The promotion of Pepsi Mix is related to the PLC in the sense that it seeks to expand market share of this product in the target market, and thus all the distribution, promotion and pricing strategies tend to show all the offerings of this product and tend to differentiate it from other energy drinks in the market. Place In regard to the distribution, scholars like Bucklin (1966) have determined that this process is aimed at accomplishing the task of delivering specific products in the market at the right time, quantity, place and at a minimum cost. PepsiCo primarily uses indirect distribution strategy which includes dealerships, franchising and licensing among others in the distribution of Pepsi Max. This strategy has been chosen based on the fact that it ensures that there is an efficient flow of the product to the consumers, these intermediaries often promote the product in place of the producer and thus lowering the promotional cost and lastly, based on the fact that PepsiCo is established in various countries, the price of direct investment in distribution outlets in all these countries in massive and thus indirect distribution strategy becomes more favorable. This distribution strategy helps in satisfying the needs of the consumers in the sense that it ensures that they get the products in time and on the other hand, the feedback from the distributors in different regions helps in enhancing the product through tailoring it to fit the actual needs of different consumers in terms of cultural preference. This distribution strategy is appropriate for the product life cycle (PLC) that Pepsi Max is in in the sense that it will eventually culminate to a widened market share of the product in the global market. Price The pricing strategy of Pepsi Max is basically aimed at making this product to be affordable in the target market through offering prices which reflect both the quality of the product as well as assuring the consumers that they are getting a value of their money. The comparison between price and competitive product is that high quality products which are delivered to the consumers at an affordable price make the product to remain competitive and maintain a favorable niche in the market amid competition. In terms of prices, Pepsi Max 8 x 150ml costs $ 5.77 and thus one Can costs $0.7. On the other hand, Pepsi Max 6 x 250ml costs $6.07 and thus one Can is valued at $1.01. Lastly, Pepsi Max 4 x 330ml Cans costs $3.15 and thus one Can is valued at $1.26. Based on this pricing, it is evident that price of Pepsi Max increases as the quantity increases. These variations in quantities and prices which are evident in the above price analysis are aimed at ensuring that all the target consumers can be able to afford this product depending on the financial capacity. In this regard, men from different income classes can be able to conveniently afford this product in different outlets. The pricing strategy of this product is in line with the PLC stage in the sense that it reflects the it does not encompass extensive discounts which are associated with introducing a product in the market but in its place, the relatively low price of Pepsi Max is prudent in ensuring that this product capture a sizable market share in the market. In addition, this product is consistent with PepsiCo’s strategy in relation to the 3Ps in the sense that the product is endowed with high quality, can be found in diverse outlets around Australia and also advertised in different outlets (product, place and price). Competitive advantage Ehmke (2008, p. 1) perceived this as an advantage which a particular firm gains over the competitors through offering the consumers with a higher value or through the provision of additional benefits and services which rationalize similar, or in some cases, higher prices. The competitive advantage of Pepsi Max is founded on its quality whereby majority of the consumers have perceived it as being ideal in conveniently satisfying their needs, as well as having great taste, color and packaging. In addition, the price of this product convinces the consumers that they are getting a value for their money in the sense that when compared with other energy drinks like Coca Cola Zero, Pepsi Max is relatively cheaper. In addition, quantity discounts in promotions make the consumers to prefer for groups, as well as being available in diverse outlets. Thus, PepsiCo has differentiated the marketing mix in terms of price, promotion, product and place which has culminated in the consumers in the target market perceiving it as being better when compared with other energy drinks in the market. Conclusion From the above discourse, it is apparent that marketing plays an imperative role in the overall performance of an organization. In regard to Pepsi Max, the primary market target in Australia is the young members of the Australian population within the age cohort of 15-35 years who are extensively engaged in sporting activities, In addition, older members of the Australian population who are health sensitive also form part of the target market. PepsiCo has extensively integrated its marketing mix in terms place, product, promotion and price. Lastly, price and quality are some of the tenets of this product which reveal high differentiation the marketing mix in terms of price, promotion, product and place which has culminated in the consumers in the target market perceiving it as being better when compared with other energy drinks in the market. Reference Anderson, PF, 1982, ‘Marketing, strategic planning and the theory of the firm’, Journal of Marketing, Vol. 46, No. 1, pp. 15–26. Bucklin, LP., 1966, A Theory of Distribution Channel Structure, IBER Special Publications Berkeley, CA. Buss, D., 2012, ‘Pepsi Max takes Uncle Drew Viral video to TV and the NBA finals’, retrieved 07 December, 2012, Read More