Market Management Assessment Answer

Part 1

Introduction

Broadening the business horizon of an organization is an imperative approach that should always be prioritized by the managerial authority of a company in order to ensure its financial sustainability. In this particular case study, the organization that is taken into consideration is PepsiCo and the market that PepsiCo is going to enter is Latin America. The study would encompass microanalysis under which geodemographic targeting and consumer journey mapping is elaborately discussed. Aside from that, value chain analysis, competitive advantages, strategies through which international market entry can be feasible for the organization are also meticulously analyzed throughout the course of the study.

Brand Evaluation

PepsiCo, a multinational corporation, is renowned for its vast assortment of consumables, including but not limited to, the likes of Tropicana and Gatorade, which have garnered immense popularity across the globe. The brand's refreshing beverages and delectable snacks have earned it a formidable position in the market as a tough competitor (Yadavalli, 2021).

PepsiCo's notable prowess lies in its robust brand recognition and reputation, forged through years of efficacious marketing endeavours and unwavering product excellence. Furthermore, the corporation has evinced a steadfast dedication to sustainability and social responsibility, evident in its diverse initiatives aimed at curbing its carbon footprint and empowering local communities.

Despite its formidable market position and robust brand recognition, PepsiCo has garnered criticism for its utilization of high-fructose corn syrup and synthetic ingredients in its consumables, as well as its contribution to the plastic waste epidemic (Zhang, 2019).

Brand Identity

PepsiCo's preeminent forte lies in the robust recognition of its brand, which is estimated to be worth more than $18 billion, according to Forbes. The triumph of the brand is attributable to its nimble adaptability and innovation, as exemplified by the introduction of novel products, including Pepsi Max and Mountain Dew Game Fuel (Chen, 2022).

PepsiCo's dedication to sustainability is a crucial facet of its brand image, with the corporation establishing ambitious objectives to curtail its carbon footprint and allocate resources towards renewable energy sources. In the year 2020, PepsiCo declared that it had diminished its greenhouse gas emissions by 40% since 2015 and had expended over $10 billion in sustainable ventures. This serves to highlight PepsiCo's unwavering commitment to promoting environmentally conscious practices and exemplifies its role as a responsible corporate entity.

PepsiCo's endorsement of social responsibility is further manifested through its backing of regional communities and initiatives aimed at embracing diversity. In the year 2021, the brand vowed to allocate a sum of $570 million towards a worldwide campaign that endorses enterprises owned by black individuals (Rossolatos, 2019).

CFA Analysis:

Snacks division is the largest segment of the company hence; it make sense to expand the market using its strongest division.

Macro Market

PepsiCo UK operates in a fiercely competitive and heavily regulated market. The macro-environmental analysis reveals that the UK market is characterized by an escalating emphasis on health and wellness, evolving consumer preferences that favor nutritious food and beverages, and the implications of Brexit on the supply chain. To maintain competitiveness, PepsiCo UK must prioritize innovation, adaptability, and agility to cater to the dynamic demand for healthier products. The company must also confront the challenges brought forth by Brexit, including potential trade barriers and regulatory changes that may affect its supply chain and operations. Additionally, the organization must regard sustainability as a strategic imperative, particularly in light of the burgeoning environmental concerns among consumers and investors (Sahoo, 2022).

Volume and Value

In accordance with Statista, PepsiCo generated net revenue$70.37 billion in 2020 which can necessarily be translated into the fact that it experienced a steep decline of 4.8% with respect to its previous year’s performance. The company's largest segment is its snacks division, which generated $28.26 billion in net revenue in 2020.PepsiCo sold almost 4.8 billion unit cases of beverages worldwide in 2020, with the Pepsi brand commanding the company's highest beverage brand popularity. Furthermore, the company's snacks division demonstrated robust volume growth, with its top-selling snack brand being Lay's potato chips. Notwithstanding the pandemic's adversities, PepsiCo's brand value, diversified portfolio, and astute acquisitions continue to position the organization as a preeminent leader in the food and beverage sector (Roetzel, 2019).

Market Trends

After meticulously analyzing the existing market trends of PepsiCo the pivotal trends that can potentially change the course of PepsiCo’s financial stability are mentioned as follows:

1. An analysis of market trends reveals that PepsiCo is favorably situated to exploit the burgeoning demand for more wholesome and environmentally responsible food and beverage alternatives. The corporation has been channelling resources into developing and promoting goods that cater to these trends, including beverages and snacks with reduced sugar and calorie content and crafted from natural ingredients. Furthermore, PepsiCo's acquisition of enterprises such as Bare Snacks and SodaStream underscores the company's commitment to furnishing consumers with more nourishing and sustainable options.
2. PepsiCo is attuned to another emerging market trend, namely, the surging desire for convenience among consumers. To this end, the company has been augmenting its e-commerce and delivery infrastructures, while also directing resources towards the development of smart vending machines that proffer individualized product recommendations. These initiatives are geared towards enhancing the accessibility of PepsiCo's offerings and furnishing customers with a frictionless shopping experience (Dana et al. 2021).
3. PepsiCo is suitably positioned to capitalize on the burgeoning demand for more salubrious, eco-friendly, and readily accessible food and beverage alternatives. The company has been diligently investing in the development and promotion of products that cater to such inclinations, including low-sugar and low-calorie beverages and snacks made from natural constituents. Furthermore, PepsiCo has been expanding its e-commerce and delivery capabilities, as well as investing in smart vending machines, which offer personalized recommendations to customers. These endeavors manifest the company's commitment to providing customers with more nourishing, sustainable, and accessible options (Raut et al. 2019).

Micro Analysis

Upon conducting a micro market analysis of PepsiCo, it has been ascertained that the organization operates within a notably competitive industry, wherein it confronts fierce competition from both established and emerging players. However, PepsiCo's brand recognition, diversified product portfolio, and astute marketing endeavours have facilitated its consistent stance as a frontrunner in the food and beverage sector. PepsiCo's foremost market segment has been its snacks division, characterized by the presence of well-known brands such as Doritos as well as Cheetos. Nonetheless, the company has been channelling resources into the development of its beverages segment; featuring renowned brands such as Gatorade as well as Tropicana, to leverage the surging demand for healthier drink alternatives. PepsiCo's operational activities span diverse geographical regions, with its primary revenue generators being North America and Europe. Notwithstanding, the conglomerate has been endeavouring to establish a strong foothold in emerging markets like Latin America, which hold immense potential for expansion and progress (Fatehi & Choi, 2019).

Geodemographic Targeting

PepsiCo has adopted a geo-demographic targeting approach to capture the Latin American consumer market. This strategy involves pinpointing specific regions and demographic clusters and customizing marketing tactics and product portfolios to cater to their unique preferences and demands. Such an approach enables PepsiCo to effectively engage with the target audience and enhance its brand loyalty, thereby augmenting its market share and revenue growth prospects in the region.

PepsiCo has strategically aimed to capture the burgeoning middle-class consumer market in Latin America, which is anticipated to propel significant growth in the region's economy. The corporation has implemented a geo-demographic targeting approach, tailoring its marketing tactics and product portfolios to specific regions and demographic clusters within the area. By providing reasonably priced snacks and beverages that are popular among the middle-class demographic, PepsiCo's strategy aims to enhance brand loyalty and augment market share and revenue growth prospects in the region (Mosteanu, 2020).

PepsiCo is also directing its focus towards younger consumers in Latin America, who have a proclivity for healthier and more sustainable food and beverage options. The company is investing in developing and promoting products that are aligned with these trends, such as low-sugar and low-calorie beverages and snacks made from natural ingredients. In terms of geographical targeting, PepsiCo is concentrating on the key markets in Latin America, such as Brazil, Mexico, and Argentina, which present significant growth potential. Additionally, the company is leveraging its extensive distribution network to reach consumers in remote areas where access to food and beverage products may be limited.

Consumer Insight

The consumer insights of the target market are herby mentioned below:

1. The Latin American consumer market is witnessing a gradual shift towards the procurement of healthier and eco-friendly food and beverage alternatives.
2. In addition, the affordability and accessibility of products play a significant role in consumer purchasing decisions in the region.
3. Brand awareness and loyalty are critical factors that hold immense importance for Latin American consumers.
4. Furthermore, younger consumers in Latin America tend to favor healthier and environmentally sustainable options, such as natural ingredient-based low-sugar and low-calorie products (Ahmad & Ahmad, 2019).

Psychological behavior

The psychological behavior of the target consumers is mentioned in the following segment:

1. Latin American consumers exhibit a strong emotional connection to food and beverage products, which can significantly impact their purchasing behavior.
2. Family and community values hold great importance for many consumers in the region, and they prefer products that reflect these values.
3. Social norms and cultural traditions are highly influential in determining food and beverage choices among Latin American consumers.
4. The desire for social recognition and status can also play a significant role in their purchasing behavior.

Customer Journey Mapping

1. Awareness: The customer becomes aware of PepsiCo's products through various channels, including advertising and social media recommendations.
2. Consideration: The customer considers purchasing PepsiCo's products based on factors such as brand reputation, pricing, and availability. They may also research the products online or ask for recommendations from friends and family.
3. Purchase: The customer decides to purchase PepsiCo's products, either in-store or online, based on their preferred channel.
4. Consumption: The customer consumes PepsiCo's products and experiences the taste, texture, and other sensory attributes.
5. Advocacy: In the event of customers experiencing an exceptionally satisfying encounter, they may transform into brand advocates for PepsiCo's products, thereby promoting them through various channels such as social media, word-of-mouth recommendations.
6. Repurchase: The acquisition of positive experiences with PepsiCo's products by customers is likely to result in their future repurchase and consequent contribution to the revenue growth of the company (George, Walker & Monster, 2019).
7. Feedback: PepsiCo can elicit feedback from consumers through various channels, such as surveys, social media, or other means, to enhance their offerings and amenities, predicated on customer requisites and inclinations.

Macro Industry Analysis

Direct indirect Analysis

Direct Analysis:

PepsiCo operates in the food and beverage industry, with a portfolio of brands including Gatorade, Frito-Lay and Quaker. PepsiCo has invested in sustainability initiatives in Latin America, including efforts to reduce water usage and carbon emissions.

Indirect Analysis:

The economic and political milieu prevailing in the Latin American region can exert significant influence on the operations and profitability of PepsiCo. The shifting consumer inclinations and evolving social trends, particularly the escalating demand for healthier and eco-friendly alternatives, can significantly impact PepsiCo's sales figures and brand image. Furthermore, intense competition from both established and nascent players in the food and beverage sector can potentially erode PepsiCo's market share and revenue growth prospects (Tien, 2019).

Competition Positioning and Competitiveness

PepsiCo is a formidable contender in the Latin American market, holding a significant share thereof. The company's diverse portfolio of brands, encompassing renowned names such as Frito-Lay and Quaker, is widely consumed in the region. In this context, pricing constitutes a critical determinant of PepsiCo's competitive standing, as the corporation must balance the provision of competitive pricing with the maintenance of profitability in a milieu characterized by frequent economic volatility and currency fluctuations. The quality of PepsiCo's products is pivotal to its market position, with the corporation investing in research and development endeavours aimed at devising novel products that cater to the exigencies of Latin American consumers, including offerings that are healthful and sustainable (Bryson & George, 2020).

Part 2

Value Chain Analysis

Critical Success Factors

The establishment of robust brand recognition and reputation is vital for PepsiCo's technology development endeavours in Latin America. This involves ensuring a diverse portfolio of products that caters to the needs and preferences of consumers in the region. Innovation and research and development efforts are necessary to create novel products and stay ahead of evolving consumer trends. Effective marketing and advertising campaigns that resonate with the Latin American audience are also crucial. Additionally, the company must maintain competitive pricing while ensuring profitability. Strong collaborations with suppliers, distributors, and retailers are also necessary to ensure efficient and effective supply chain operations (Mustafakulov, 2020).

Competitive Advantage and USP

PepsiCo's operations in Latin America require a multifaceted approach to brand recognition, technological innovation, and supply chain management. This necessitates the implementation of a comprehensive distribution network and the establishment of robust relationships with suppliers, distributors, and retailers. In addition, effective marketing and advertising campaigns that resonate with Latin American consumers are essential for success in the region. Finally, tailored strategies that cater to the unique preferences and needs of consumers in each Latin American market are necessary for achieving sustainable growth and profitability (Roetzel, 2019).

International Market Entry

The target market is Latin America which comprises of Brazil and Argentina primarily.

BPS Modifications

Few noteworthy potential Business Process Standardization modifications that PepsiCo could make to improve its operations in Latin America include:

1. It can implement more efficient supply chain management processes to optimize delivery times and curtail costs.
2. Streamlining production processes can minimize wastage and boost productivity.
3. PepsiCo can leverage technology to obtain better insights through data analytics, thereby gaining a deeper understanding of the market trends and consumer preferences.
4. To maintain a workforce that is highly skilled and motivated, investing in employee training and development is essential.
5. By collaborating with local companies, PepsiCo can boost its market position and gain better insight into the region's market dynamics.
6. Finally, focusing on sustainability initiatives can improve brand reputation while minimizing environmental impact in the eyes of Latin American consumers (Dana et al. 2021).

Key Entry Strategy

1. To achieve sustainable growth and profitability in Latin America, PepsiCo must adopt a comprehensive approach that encompasses brand recognition, technological innovation, and supply chain management. This entails establishing a robust distribution network and forging strong partnerships with suppliers, distributors, and retailers.
2. Moreover, it necessitates the implementation of effective marketing campaigns that resonate with Latin American consumers, as well as a commitment to sustainability and corporate social responsibility to foster consumer trust and loyalty.
3. Additionally, PepsiCo should forge partnerships with local companies and focusing on sustainability initiatives is also paramount.
4. Leveraging technology to enhance data analytics and insights is also critical, enabling PepsiCo to better understand and respond to consumer preferences and market trends (Sahoo, 2022).

Conclusion

To conclude it can be stated that the prospect of PepsiCo's expansion into Latin America presents a momentous opportunity for advancing growth and augmenting market share. The region's vast and varied consumer base, coupled with PepsiCo's established brand recognition and reputation, provides the company with a favorable position for triumph. However, to fully capitalize on this opportunity, PepsiCo must undertake a comprehensive assessment of the market and consumer insights, and execute strategic adaptations to its business processes, supply chain, and product offerings. By adjusting to the unique demands and preferences of Latin American consumers, and prioritizing innovation, sustainability, and sound partnerships, PepsiCo can establish a robust presence in this vital and burgeoning market.

References

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Bryson, J., & George, B. (2020). Strategic management in public administration. In Oxford Research Encyclopedia of Politics .

Chen, Y. (2022). Twitter-a new pathway to access product innovation ideas-Can machine learning help PepsiCo identify innovative ideas in User-Generated Content platforms? (Bachelor's thesis, University of Twente).

Dana, L. P., Kumar, S., Pandey, N., & Sureka, R. (2021). The journal of small business management: A bibliometric overview of 1996–2019. Journal of Small Business Management , 59 (sup1), S215-S236.

Fatehi, K., & Choi, J. (2019). International business management . Springer.

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