Kickstand is advertised to present an “alternative to traditional morning beverages – one that tastes great, includes real fruit Juice and as Just the right amount of kick to help them start their days” (whom. Kickstand. Com). This plan analyzes Kickstand’s APS (Finch, 2013) which are important to understand when analyzing this product and provides recommendations for improvement. General business situation Organizational strengths and weaknesses PepsiCo has world renown brand name, a reputation for solid brands and a deep and wide product line in the international and domestic markets. Simon & Sullivan, 1993). With revenue of more than $66. 5 billion, PepsiCo is a world-wide leader in the beverage industry (Bryon York, 2012; Witling, 1992). According to its annual report, he international brand, innovative capabilities, and strong distribution network define PepsiCo as a market leader and are its strengths (wry. PepsiCo. Com; Valentine, 2001). One of the strength identified for PepsiCo is its franchise system (wry. PepsiCo. Com). A consistent brand and advertising campaign coupled with a consistent marketing strategy for promoting its brands is also a strength.
PepsiCo further has a strong global presence as it sponsors major sporting events (wry. PepsiCo. Com). It also has a focus on one of the most important customer trends, I. E. , customer satisfaction (Finch, 2012; Valentine, 2001). PepsiCo is ahead of some of its main competitors, for instance Coca-Cola, on both the international market and domestic market (Basin, 2013). Approximately 50 percent of PepsiCo gross revenue from sales comes from its line of snacks including its Frito-lay products (wimpiest. Mom), making this a weakness. Should the snack market slow, however, the diversification of PepsiCo product offerings (both beverages and snacks) will become increasingly important and is therefore a current strength. Environmental opportunities and threats Food is essential for every person, globally and domestically, so there are markets onto which Kickstand can expand. The market to attract health conscious consumers is growing as consumers are moving towards choosing healthy food (Finch, 2012; Valentine, 2001).
The fastest growing part of the food and beverage industry is Marketing Plan for Kickstand By belligerency beverage market from competitors such as Coca-Cola, Academy Cheapest, Kraft foods and some smaller boutique firms. Consumers worldwide are moving towards healthy food and these competitors, as well as PepsiCo, are taking advantage of this opportunity as well (Tarter, 2011; Valentine, 2001). Industry trends The beverage market can be divided into alcoholic and nonalcoholic, and then into soft drinks and fruit Juice (Changes in the Big Beverage Market (Changes), n. A. , 2011).
Some common soft drinks are flavored water, sweet tea, iced tea, fruit punch and lemonade (Changes, n. A. , 2011). The incorporated and carbonated drink industry is further subdivided into soft drinks (Changes, 2011). Carbonated drinks include beverages such as cola, oranges, and lemon flavored drinks as well as non- carbonated drinks (water and fruit Juices) (Changes, 2011). The total size of the food industry worldwide is $3. Trillion and soft drinks Juices and carbonated beverage) (Changes, 2011) represent approximately $1 billion. The international and domestic soft drink market is dominated by PepsiCo and Coca-Cola (Basin, 2013).
The consumption of non-alcoholic soft drinks is trending high (Bayle & Emerson, 2002; Basin, 2013). The demand for energy drinks is trending towards increasing 17% in 2011 and the popularity of soda is trending downward. (McRae, 2013). For Kickstand, these industry trends can be leveraged significantly. Climate Key Trends (PEST) In terms of the PEST Analysis, political factors (Finch, 2012; The Secret Marketer, 011) suggest that there is little governmental regulations regarding the non- alcoholic beverage industry domestically. There is evidence to suggest that politicians and consumer advocacy groups have asked the U.
S. Food and Drug Administration to investigate the safety of the high levels of caffeine in energy drinks for younger people (Choc, 2013) and that other companies are under investigation for these concerns but this does not present a barrier to the marketplace. Economically, soft drinks are not expensive and they are consumed by most everyone. The soft drink industry is not influenced significantly by economic influences. However, the raw materials used to create soft drinks and in Juices like sugar, fruits and vitamins may affect production costs and PepsiCo costs of production and the profit margin (Finch, 2012).
The distribution channel and transportation also affect the price of the product and the commercial tax rates can vary (Finch, 2012). Socially (Finch, 2012), people today are sensitive towards the content of advertisements. Taking this into account, PepsiCo is targeting the next generation of consumers, and they differentiate between consumers based on age. Other segments are conscious about levels of caffeine (mothers, guardians, etc. So negative perceptions about Kickstand may arise.
However a 16-ounce cup of Struck coffee contains 330 milliards of caffeine, while a Dunking Donuts’ coffee with a “turbo shot” of caffeine contains 436 milliards, while Red Bull energy drink has 1 55 milliards, and Monster Energy drinks range from 135 milliards to 235. Kickstand, however, only has 92 milliards (McRae, 2013). The 16-ounce can has only 80 calories, making it easy to use the boost of energy to burn off the calories it contains. (McRae, 2013). Also, socially conscious consumers think that soft drinks companies spread pollution and use valuable water applies while in the manufacturing process.
For this reason, PepsiCo has a section of their website devoted to their social responsibility activities (wry. PepsiCo. Com). Perspective of manufacturing and packaging off product. It also includes the cost of the transportation of raw material, the delivery of a product, the production cost and the cost of any of its unskilled labor. Technology has a role in the advertisement, packaging, and ultimate design off product (Finch, 2012). In Kickstand’s case, the PEST analysis (Finch, 2012) discloses no significant barriers to the Kickstand product The Secret Marketer, 2011).
Direct and indirect competition PepsiCo has a competitive market share domestically but is facing tough competition from Coca-Cola (Basin, 2013; Witling, 1992; Zamia, 2011). Products of Coca Cola include Sprite, Coca-Cola, Fauna and these directly compete with products of PepsiCo in the soft drink market (Basin, 2013). Kickstand competes with other caffeinated energy drinks from its competition but Kickstand advertises less caffeine than competitive energy drinks ? 92 milliards for a 16-ounce can for Kickstand. This is less than either Red Bull or Monster (Choc’, 2013).
Approximately 16 ounces of regular Mountain Dew has 72 milliards of caffeine, 16 ounces of Amp energy drink has 142 milliards (wry. PepsiCo. Come), according to the Center for Science in the Public Interest (2012). A 16-ounce cup of Struck coffee has approximately 330 milliards of caffeine. (Choc, 2013) A can of Kickstand has 80 calories, PepsiCo says (Winchester. Com). According to Choc (2013), the market for energy drinks has increased 17 percent in 2011 and there is an overall decline in the general soft drink market (Choc, 2013).
PepsiCo has a 14. 8% market share of the carbonated soft-drink étagère for 2010 (Zamia, 2011) and competes directly with Coca-Cola which has a 23. 9% market share for 2010. In 2011, the demand for energy-promising drinks increased 17% while soda’s popularity declined McRae, 2013). Organizational mission and forecast performance goals Marketing Strategy Segment and target potential A market segment is, according to Finch (2012) and Shaw (2012), a group of individuals identified as possessing similar needs and making similar choices in a segment of the market.
Kickstand has identified its market segment as the youth (age) and the lifestyle of youthful adventurers and extreme sports participants/ enthusiasts (wry. PepsiCo. Com). In this niche market (Finch, 2012) most of the consumers are in the 12-28 age bracket which includes college students and young executives (Shaw, 2012). Energy drinks are popular with this age segment and these became a part of their lifestyle (Choc’, 2013, Bayle, 2002). In the term of life stage, this age group falls into the youth or teenage category who live with their parents and are dependent on their parents for financial support.
To target this age group, Kickstand makes it easily available to consumer in a volume similar to other energy drinks such as Monster and Red Bull. Kickstand targets lifestyles of their segment and it is reflected in their advertisements. The main consumers of Kickstand are ready to take on excitement, extreme sporting and adventure. They are daring, fun loving, confident and energetic (Choc, 2013). This lifestyle advertising targets the consumer’s tendency of fearlessness (Choc’, 2013).
Kickstand does not appear to concentrate on income levels because their target consumer can easily purchase the product. Its price is competitive, I. E. , $2. 19 for 16 ingredients that contain 5% Juice, Vitamin B and Vitamin C, Kickstand does not contain NY of the questionable ingredients Red Bull and Monster contain. (McCrae, 2013). In terms of positioning, PepsiCo has chosen to place the product in areas where it already has positioned its other products. This allows it to place the product where it can directly compete and leverage its existing placements over that of its competitors (Finch, 2012).
Kickstand positions itself to the youth who embrace excitement, adventure and fun in the same places other similar drinks appear. Kickstand is considered a carbonated soft drink that gives “a fresh alternative to energize” (Winchester. Mom), and is a fresh alternative to the standard morning coffee or tea (wry. PepsiCo. Com). Integrated marketing mix Products and/or services. Marketing mix is defined by Finch (2012) and Zinfandel & Philips (2007) as a concept that takes into account the four AS, I. E. , factors that are at the core of a product’s marketing plan.
In terms of the product itself, Kickstand is available in one size (16 ounces) and its ingredients include: 5% fruit Juice, high fructose corn syrup, artificial sweeteners, sugar alcohols, glycerol ester of rosin, orange Juice, carbonated water, caffeine, B vitamins, and A vitamins (Bonanza, 2013). A 16 ounce serving provides 80 calories (Bonanza, 2013). There are several ways to look at the product component of the APS (Finch, 2012). Core benefits are the first reason why consumers purchase the product (Finch, 2012). In this case, Kickstand gives a quick start to the day.
The Kickstand product is a caffeinated drink with vitamins and flavors (Winchester. Com). The expectations of the consumer (Finch, 2012) for Kickstand is that the consumer is drinking a soft drink which energize well and taste good to the consumer. The augmented part of the product in the APS for Kickstand is that Cocktail ivies more energy and taste to their customer by providing them more caffeinated juice. The potential product that Kickstand can give to its consumers is that this product can undergo all sorts of possible changes in its design features, it flavor features and its caffeinated features.
Because the product is targeting youth, a recommendation is it can modify its tall thin can shape into some different and innovative way so its target can be attractive enough to match their lifestyle. A new can design pulling into it more easily contactable to its consumer base may increase its product attractiveness. The Kickstand product is a “convenience good” because it is readily available and requires little to no search effort. Kickstand differentiated itself from other products in terms of the quality of its ingredients and its standardized size.
It has created a differentiated impression in the minds of its customers by its advertising. Kickstand’s advertisements usually depict youthful people engaging in extreme sports and in adventure-rich images (wry. Kickstand. Com) and PepsiCo encourages images of persons using this product (wry. Kickstand. Com). As for the product mix, the number of products offered by Pepsi is in excess of 22 wimpiest. Com). All 22 brands of product offered by PepsiCo are all consistent and well-branded products of Pepsi and related to each other as they mostly drinks.
In the analysis of the entire range of products, Mountain DeWs Kickstand is in a ‘specialty grouping because it has lower sales with higher promotion (Annual Report, PepsiCo, wry. PepsiCo. Com). The product life stage is moving from growth to easily available in urban areas as well as rural areas. Pricing. In terms of pricing, market segmentation, positioning and competition are taken into account when setting a product’s pricing strategy (Finch, 2012). In arriving at the price of a product a company should analyze the consumer’s buying behavior to purchase that product on the basis of price (Finch, 2012).
PepsiCo must consider reference price, price-quality inferences and price cues of consumers. Reference pricing analysis tales into account what other competitors are charging for the same or substantially similar product and Kickstand is priced at the same price as the others products of the same category which are also available in the marketplace (Finch, 2012). The price-quality analysis suggests that consumers take price as an indication of quality and Kickstand is a PepsiCo product and PepsiCo has a good image of offering products that are of good quality at a low price (Finch, 2012).
The price cues are those perceptions of the consumers that play an important role in setting a price (Finch, 2012) and in Kickstand’s case, consumer perception that they are getting a deal occurs when the price ends in a 5 or a O. In setting the price, PepsiCo needs to take some steps to define the price of Kickstand. The pricing objective for Kickstand is to make revenue off of this product because the competition within the average industry is robust (Finch, 2012). Also, in order to increase their market share, the price needs to be set competitively (Finch, 2012).
Consumers of the target segment for Kickstand are less price sensitive and the low price of the product does not necessarily correlate to demand (Finch, 2012). Also, before establishing the price of a product, PepsiCo should account for the costs related to production and distribution of the ingredients, bottling, packaging, promotion and advertising, and transportation (Finch, 2012). The prices set by PepsiCo competitors are roughly the same as Kickstand (Winchester. Mom). Promotion and advertising.
For advertising, multiple methods of media are used to include social media, television, radio, internet, newspaper and others. Action shots are a key backdrop as are sunsets (depicting the start of the day) and throughout the day to show that this drink can be consumed at any time of the day. (Winchester. Com). Advertisements of this product are aligned with the product as it shows images of adventuresome activities while relate to how powerful the drink is (wry. Kickstand. Com). The niche market that is being targeted uses online promotions and contests to secure loyalty Winchester. Mom) to create awareness about the product. Sponsoring events is an important feature to its target market. Advertising Kickstand using consumer’s word of mouth advertising is also a way to promote the product. Distribution and location. Post-production of Kickstand, PepsiCo must decide on distribution and placement of the product. PepsiCo already has an existing and extensive network for its products. Through these channels, PepsiCo includes positioning its products at Wall- Marts and grocery stores making the product easily available to nearly everyone.
PepsiCo appears to have properly and consistently positioned its products by using all of it channels of distribution. This is why Kickstand is available in all parts of the country that are both rural and urban, in the large retails stores, supermarkets, and in department stores. In terms of intermediaries (Finch, 2012), there are many levels involved in the supply chain. This supply chain includes sales agents, third-party the Kickstand product must be available in the market at all times. In this instance, Kickstand is effectively using its distribution channels and is effectively placing its product.
Conclusion and Recommendations Based on the above analysis, transformational communication appeals (Finch, 2012) to its market segment should be used as the competition for carbonated beverages and caffeinated energy drinks is fierce. Advertising heavily in adventures events and road shows will appeal to its consumer base. Additional features should be considered in terms of a more stylish shape of the can design and expansion of the flavors. Reconsidering the ingredient mix using various levels of caffeine and natural products can also appeal and differentiate it from the current energy drink market.
Differentiating this product with various segments of the market who are socially aware, emphasizing issues like pollution, population, and water supply can further segment the market on the basis of cryptographic elements. Bundled purchasing with other products (offering a free pack of the product with the purchase of a skateboard, surfboard, etc. ) is the price aspect of this recommendation. Promotion through its brand ambassadors, the youth, is a key strategy so signing with current extreme sports enthusiasts or competitors is recommended. It should also be placed near colleges and high schools.
In the beverage industry, personal selling is not effective, however, sponsoring an adventurer program and associating with them is more effective and in line with the vision of the product. The soft drink industry is estimated to grow at a double-digit rate so strategically partnering with existing food industry companies would enhance this product’s placement in the market. Enhancing marketing in rural markets is also a recommendation through the smaller retail shops in these areas. After analyzing and describing the marketing strategy plan for Kickstand, PepsiCo is doing well in its target markets.