Pepsi-Cola, or commonly called “Pepsi”, was first made in New Bern, North Carolina in the United States in early 1890s by a pharmacist Caleb Bradham. It was initially intended to cure stomach pains. In 1903, “Pepsi-Cola” was trademarked and Bradham established the Pepsi-Cola Company in the same year. In 1965, PepsiCo was founded through the merger of Pepsi-Cola and Frito-Lay. The major products of PepsiCo at that time were: Pepsi-Cola, Fritos brand corn chips and Lay’s brand potato chips.
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PepsiCo offers product choices to meet a broad variety of needs and preference — from fun-for-you items to product choices that contribute to healthier lifestyles. Hence, PepsiCo expands and diversifies their business and range of products over centuries. Tropicana was acquired in 1998 by PepsiCo and the company merged with The Quaker Oats Company, including Gatorade, in 2001. Today, the company consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America.
Hundreds of PepsiCo brands around the globe and generates sales at the retail level of about USD 92 billion. Some of the best know brands are: Frito-Lay Brands, Pepsi-Cola Brands, Gatorade Brands, Tropicana Brands and Quaker Brands. PepsiCo’s mission is “To be the world’s premier consumer products, company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate.
And in everything we do, we strive for honesty, fairness and integrity. ” Also, PepsiCo believes that they have the responsibility to continually improve all aspects of the world in which they operate – environment, social, economic – and creating a better tomorrow than today. Their vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
Chapter 2 PepsiCo Although PepsiCo has hundreds of brands over the world, Pepsi Cola is still the major product of the company since its foundation in 1965. The Milestone of Pepsi-Cola to be internationalized was in 1966 when Pepsi enters Japan and Eastern Europe. Market niche focus is a business level strategy that concentrates competitively on a specific market segment. Hence, Pepsi has a very clear idea on how to promote their product to the target customers.
Pepsi prefers to segment itself as the beverage choice of the “New Generation”. From the advertising theme “Come Alive! You’re in the Pepsi Generation” and “Taste that beats the other cold. Pepsi pours it on! ” in the 60s, to the new idea on the “Generation Next” today. The theme introducing Pepsi Cola as the “New Generation”, PepsiCo shares and applies similar strategies into different markets, like the Advertising materials, Marketing, Slogans, Packages with modifications or adjustments which depends on specific markets.
Hence, PepsiCo successfully develops Pepsi Cola into a well-known brand, and establishes customer’s loyalty as well. “Generation Next” adopted in Pepsi advertising campaigns are referring to the marketers as the “Generation X”. The “Generation X” consumer is profiled to be the teenagers internationally between the ages of 12 to 29. These generations usually have high expectations in life and are very mobile and active. They adopt a lifestyle of living for today and not worrying about long-term goals.
Pepsi introduces Pepsi Cola as stylish and trendy drinks to this generation and tries to establish a loyal customer for life. In order to capture this age group, Pepsi spent 637 million dollars over five years, changing its packaging from red, white and blue into the new rich deep blue coloring. The rich deep blue coloring represents eternal youthfulness and openness. Marketing plans like this made Pepsi one of the coolest brands recognized among teens in the top five and the only beverage product in this category.