Pepsico Market Segmentation Essay Example

most of the teenagers and kids love sweetener beverages. In 1960, Pepsi came out an advertisement with slogan: “The Choice of a New Generation”. In 1983, Pepsi signed spokesperson contract with Michael Jackson at 5 million dollar. This is a success campaign strategy by using celebrities to advertise the products in order to attract young consumers. Michael Jackson is so popular at that time, so this advertisement is helpful in influencing the young people to purchase Pepsi products. Thus, Pepsi sales are increasing and become more popular in US. Recently, Pepsi also hire popular star as spokesperson to attract the young people. For example, in China, Pepsi engaged superstars such as Jay Chou, Jolin Tsai, F4 and etc to attract the young Chinese population in Asia (Imeem, 2008). Pepsi used celebrities to advertise the products because those popular celebrities would attract young population to buy the products.

Geography

PepsiCo provides different products in different countries depend on living standard and culture. Therefore, PepsiCo have to do surveys and researches of customers’ needs and their lifestyles and target them with suitable products. Consumers will purchase the products depend on their taste and preference. So, sales of the company may increase if the company provides the products based on consumers’ requirement. “In the Middle East, zero-calorie Pepsi Max posted strong growth, and Mountain Dew surged ahead in markets like Nigeria and Pakistan.In Asia, new marketing drove double-digit growth in non-sugar colas in virtually all markets particularly in China and Thailand…” reported by Michael D. White, Vice Chairman, PepsiCo CEO, PepsiCo International in the Pepsi Co 2007 annual report. Citizens of Middle East preferred Diet Pepsi Max because some of

them drink Pepsi for the purpose of refreshment. If PepsiCo provide Pepsi Free (calories and caffeine free) only in Middle East, then the sales in Middle East is unsuccessful. This showed that PepsiCo has used market segmentation strategy and success in booming the sales.

Socioeconomic

Pepsi was targeted on sport enthusiast, thus it provides sport drinks to fulfill them where it can enter a new market. In year 2007, PepsiCo has engaged with golfer Tiger Woods who is famous on playing golf to advertise this product (Amore, M 2007). After signed the contract, the product name has changed to Gatorade Tiger where this product is mainly for athletes. With the cooperation from Tiger Wood, the first product in the new market has hit store shelves in March 2008. This is one of the strategies of PepsiCo to attract the consumers. Besides, David Beckham is also one of the soccer superstar engaged with PepsiCo in the year of 2004 (David Beckham – Beckham’s Pepsi AD Hits Screens, 2004). He is football’s idol where can attracts those fans to purchase Pepsi products especially when he won the soccer competitions.

Mostly, health experts will not encourage consumers to consume soft drink due to caffeine component inside soft drinks. PepsiCo has done researches on some countries’ population such as Canadians, Australians and etc. They are always treat health as their main concern, so PepsiCo targets those countries by manufacturing new and healthier products such as Diet Pepsi and Pepsi Free in order to enter the market easily. Diet Pepsi is a beverage with low calories and sugar free while Pepsi Free is caffeine free (List of Pepsi Types). These products are more

suitable for on-diet and health concern people. Besides, PepsiCo provides other beverages such as juice, fruit flavored energy drinks and mineral water to fulfill the consumers’ requirements.

Conclusion

As a result, market segmentation is important to companies so that firms can easily enter the market and have a potential growth. If PepsiCo does not target young population in the beginning, it is hard to occupy the market and compete with its competitor which is Coca-cola. Pepsi can continue hire popular celebrities to advertise their products in different market such as David Beckham attracts sport enthusiast and Jay Chou attracts youths where this really can boom the sales. Moreover, Pepsi can come out with as many new innovative products as they can depend on countries’ cultures. With this target, Pepsi can enter many countries’ market to gain more profits.

Reference

1. Amore, M (2007) ‘ PepsiCo Americas Beverages’. Retrieved on 12th October 2008 from http://www. pepsico. com/AnnualReports/07/performance-pab.cfm
2. ‘David Beckham – Beckham’s Pepsi AD Hits Screens’ 2004/ 19th February. Retrieved from contactmusic. com, http://www. contactmusic. com/new/xmlfeed.nsf/mndwebpages/beckham. s%20pepsi%20ad%20hits%20screens
3. Guille, M. ‘How to Find and Sell to Your Target Market’/ About. com, Retrieved on 13th October 2008 from about. com database, http://sbinfocanada. about. com/cs/marketing/a/targetmarket_2. htm
4. Imeem (2008) Pepsi Commercial. Off-air recording. May, 2008. Video List of Pepsi Types.
5. TutorGig Encyclopedia. Retrieved on 13th October 2008 from TutorGig Encyclopedia, http://www. tutorgig.com/ed/Pepsi_Edge
6. Overview (2008)/ PepsiCo. Retrieved on 14th October 2008 from PepsiCo, http://www. pepsico.com/PEP_Company/Overview/index. cfm