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Pepsi One Case Study Journal Essay

PepsiCo, along with Coca-Cola, are two firms dominating the U. S beverage market with almost 76% collectively in 1998. This rivalry became more serious as PepsiCo released Pepsi One in order to increase its market. By properly applying the market audit, Pepsi One has succeeded in expanding the market, considered as a Pepsi core displays. Business structures of rivals, PepsiCo and Coca-Cola are virtually similar. As customers demand delicious products, firms have turned to marketing service companies, reducing their role as manufacturers.

Its American operations have been transformed into sales and development markets. Innovation and technology departments are established, taking responsibilities of generating new products, packaging, and equipment. PepsiCo and Coca-Cola have the same business objectives which are strengthening brand image, expanding market, and beating their rivals in the beverage market, particularly for carbonated soft-drinks. PepsiCo’s marketing goal was to enhance customer’s awareness of its brand image, inform them about its new products, and reduce the consumer resistance to buy the products.

In order to obtain these goals, PepsiCo has applied the market audit. Basing on the current results, it was founded that beverages with cola flavor witnessed a downward trend in sale as the customers were expecting a better tasting soft-drink. Hence, the concept for the new product was to develop a low-calorie drink that was similar to sugared soft-drink while avoiding the bitter aftertaste. Subsequently, by utilizing market analysis, particularly market segmentation and market targeting, the marketing department figured out who was going to be Pepsi One’s market.

Pepsi One was then considered as a soft-drink for young men in their 20s and 30s who are afraid of the word diet and the bitter aftertaste. By conducting these tests, Pepsi believed their new product would reach a whole new audience. The role of marketing department in achieving PepsiCo’s marketing goals was undeniable since it is important to comprehend the market trend before launching a new product, the innovation and technology departments also had a significant role because being creative and to differentiate the products is markedly demanded in a highly competitive market.

These departments advocated Pepsi One by using a unique marketing strategy to capture the market. At this point, the chairman of PepsiCo (1997) claimed “This is a real-time business, and we’re going to be a real-time company”. It is clear that Pepsi One flourished due to the contribution of these two departments. In conclusion, Pepsi One has succeeded in the soft-drink market. This is derived from understanding the market through market audit and using an appropriate market strategy. Pepsi One has helped its firm to gain the market and beat its rival Coca-Cola at low calorie soft-drink market.

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