Pepsi-STP
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Transcript of Pepsi-STP
Market Segmentation
As we know that PepsiCo provides varieties of beverages such as carbonated
soft drinks, sport drinks, dairy-based drinks, energy drinks, fruit flavored
beverages, ready-to-drink coffees, ready-to-drink tea, mineral water and
frozen beverage. These products are marketed under brand as Pepsi,
Mountain Dew, Gatorade, Lipton, Starbucks, Tropicana, and so on. With these
products, PepsiCo aims to attract different groups of consumers. There are
two levels in which Pepsi segments its market: Demographic and Niche
marketing.
• Demographic
In focusing on the Pepsi-Cola beverage product, PepsiCo has retained a long
history of concentrating on youth as its main target market – “Generation
Next!” It has spent billions of dollars in trying to woo the young and nearly
young, implying that Coca-Cola is for the older generation. The reason why
Pepsi-Cola has fiercely targeted this market is because it is the largest
amongst its users. Market segment profiles have shown that the majority of
carbonated beverage drinkers are youth and middle age people. Also, Pepsi
continually targets the college market in which they spend huge amounts of
money to compete with Coca Cola in acquiring contracts with universities
(i.e.: CSUF) to have sold representation of their product distribution. Pepsi’s
use this behaviorist segmentation has been a key to the company’s success.
• Niche Marketing
Pepsi focused on varietal differentiation since 1990 by introducing a string of
niche products. To increase volume in order to counter flat coca sales, Pepsi
introduced Sierra Mist in 2002-2003 to take the place of 7-up and go head-
to-head with Sprite. Pepsi has also tried to boost volume by introducing
products that appeal to specific target markets that it currently is not
reaching. Pepsi has introduced Code Red and Live Wire, extensions of
Mountain Dew, Pepsi One, and Pepsi Blue. Finally, Pepsi is countering
declining sales of carbonated drinks through the marketing and distribution
of Starbucks ready to drink products, and the acquisition of SOBE and
Gatorade. The success of Pepsi’s Mountain Dew Code Red launched in 2001
was the most successful soft drink innovation in 20 years and has spurred
even more niche product introductions for PepsiCo as well as other
competitors.
Bases of Segmentation:
Market Targeting
Pepsi customers are mostly Teenagers and Young Adults between the ages
of 14 to 30. It also targets at Schools, Colleges, Universities, Homes,
Restaurants, Hotels, and Stores. Despite the large customer base in the Soft
Drink industry, Pepsi prefers to segment itself as the beverage choice of the
“New Generation”, Generation Next, or just as the “Pepsi Generation”. These
terms adopted in Pepsi’s advertising campaigns are what marketers refer to
as Generation X, which are profiled to be between the ages of 18 to 29. In
addition, Pepsi shifted its focus to the growing American teenage market in
the 1990s by forming exclusive contracts with American schools and
developing advertising campaigns such as “The Next Generation” and the
“Joy of Pepsi”, featuring Britney Spears. Pepsi believes that if they can get
this market to adopt their product, they could establish a loyal customer in a
long run.
Market Positioning
PepsiCo plans to further create positions that will give products the greatest
advantage in their target markets. Pepsi has been positioned based on the
process of positioning by direct comparison and have positioned their
products to benefit their target market.