Beverage Company Competition

                              Executive Summary

The American corporation PepsiCo, Inc., which sells its products in more than 200 countries making it an important factor in those markets. When the Pepsi-Cola Corporation and Frito-Lay, Inc. joined in 1965, the company received its name. The corporate offices of the corporation are in Purchase, New York (Union, 1893). According to the organization’s website, it all began in the little town of New Bern, North Carolina, by a local pharmacist named Caleb Bradham. Bradham once referred to Pepsi as “Brad’s Drink,” and he registered the name as a trademark in June 1903. He eventually started offering his drink for sale to street sellers across North Carolina (Union, 1893).
This study examines Pepsi’s options for preserving current market leadership in the beverage and soda sector. We can learn how consumers feel about Pepsi’s sustainability initiative through online surveys and the distribution of questionnaires, and how Pepsi can make use of cutting-edge technologies in e-commerce to boost sales.

Introduction
Pepsi Inc.
Caleb Bradham founded the well-known beverage and soda business Pepsi in 1965. Throughout the years, Pepsi has had many slogans, but as of recently their new slogan is “That’s what I Like.”. For the purpose of priming their drink, they use celebrity endorsements and corporate sponsorships. The organization has made use of social media, or any right movements to build their brand and demonstrate to their audience that the brand is behind them. Pepsi continues to support various causes and has been a significant NBA sponsor for a long time. Pepsi once ran contentious advertisements that the majority of people didn’t like, but despite a few failures, the corporation has grown to be worth billions of dollars and has no plans to slow down. By placing a high priority on branding, encouraging endorsements, communicating with their audience, and learning from their failures, PepsiCo has found success. Pepsi focuses on digital advertising to appeal to consumers through several media, including billboards, radio, and television.
Coca-Cola SWOT Analysis
Strengths: A global market presence and a strong reputation for quality make Coca-Cola one of the most recognizable brands in the world. Customers around the world can easily access Coca-Cola because the company has a strong distribution network. Marketing and advertising campaigns by Coca-Cola are known for creating strong brand loyalty through an emotional connection with consumers. The Coca-Cola Company offers a variety of beverages to suit different consumer preferences, including sparkling drinks, juices, and water.
Weaknesses: In an increasingly health-conscious society, demand for carbonated drinks is declining, which negatively impacts Coca-Cola’s business. Concerns have been raised over packaging waste and water usage for Coca-Cola drinks’ production and distribution. As obesity and related health problems become more common, Coca-Cola is under pressure to provide healthier alternatives.
Opportunities: As consumers’ preferences change, Coca-Cola may consider diversifying its product portfolio to meet the changing needs of consumers, including offering healthier options and functional beverages. The company can expand its operations into new markets where soft drinks and other beverages are becoming more popular. Social media and digital marketing platforms can help Coca-Cola reach a larger audience and engage customers more effectively.
Threats: As the regulatory environment tightens, sugary drinks may be more difficult to produce and distribute, which could negatively affect Coca-Cola. Other soft drink companies, such as PepsiCo and Dr. Pepper compete heavily with Coca-Cola. As consumers become more health-conscious, Coca-Cola’s business could be threatened by the growing demand for healthier and functional beverages.

Monster Energy SWOT Analysis

Strengths: Monster has a stronghold of the market because of their brand recognition and strong following. They provide a range of beverages that cover a wide selection for consumers such as sodas, energy drinks, fruit juices, and many more. They have a great distribution network and are able to provide their product worldwide. All of these strengths coincide together to make this company a strong and reputable brand.
Weaknesses: Their high content of sugar in products is a concern to the health conscious consumer. Energy drinks have also been linked to health problems such as anxiety, insomnia, and heart palpitations. They have a limited market reach because they focus on younger consumers and those interested in extreme sports. They have a highly competitive market and make traditional marketing by being an active sponsor in sporting events. Their competition also has the same USP as Monster, for example Redbull who is one of their main competitors.
Opportunities: There are many opportunities in expanding into a new market place which they have a great track record in doing so. They can also introduce new products to stay up to date with competition and have a product line that is more focused on being healthy. Focusing on their e-commerce through a strong social media campaign could benefit the company. A strong social media presence along with consistent activity is a great way to drive consumers to the company’s e-commerce store.
Threats: Competition will always be a threat to this company. The company has established such a strong presence that new brands shouldn’t affect sales but it is always best to keep up with companies such as Redbull and PepsiCo. When consumers choose to be health conscious, they tend to decrease their use of Monster and look towards healthier alternatives such as Celcius. Government regulations and economic downturns can affect sales as well.

Pepsi SWOT
Strengths: Pepsi has a huge portfolio of over 100 different brands ranging in snack, food, and beverage industries. They have a strong brand recognition not only Pepsi but all the brands that they offer such as Lays, 7UP, Lipton, and Tropicana (Frue, 2020).

Weaknesses: The main weakness of the company is their competitors mainly being Coca-Cola. They both have been in heavy competition and they both cover the same market. “If the consumers shift to a healthier conscious lifestyle they could shy away from the brand” (Frue, 2020). All companies in this market are damaged from this decision because they do not provide healthy products. Even though Pepsi has a diversified portfolio, they rely heavily on its soft drink products. They have a strong presence in “some regions” but don’t have a big reputation globally. They have also had many negative publicity events over the past few years (Frue, 2020).

Opportunities: Healthier products can open a new market and cover a wider audience. This coverage could potentially keep consumers that shift to a healthier lifestyle. This can also tie into entering markets to have a stronger global presence (Frue, 2020). Pepsi can expand their snack and beverage portfolio so that it wouldn’t have to rely so heavily on their soft drinks.

Threats: An economic downturn can potentially be a huge threat to the company. People tend to save money during this time and deem Pepsi products as not necessary. Healthy alternatives regarding their snack and beverage portfolio is a viable threat as well. This will continue to slowly decrease their sales so it would be best to get ahead of this problem while they still can.Their most consistent threat is their competition with Coca-Cola and Nestle.

Keurig Dr. Pepper (SWOT)
Strengths:Dr Pepper has many strengths that allow it to have an advantage over other competitors. Dr. Pepper holds a strong presence in the American market through diverse brands. Most especially with acquiring Snapple(a brand of tea and fruit juice drinks). Keurig Dr. Pepper has many different kinds of beverages, making it a well-known brand. It is notorious for attracting different audiences because of the variety of teas or fruit juices with Snapple. Adding to the product line, Canada Dry and then 7UP also helped boost sales. Dr Pepper indeed has a wide range of beverages in the world, creating a strong market. It has managed to have a strong brand reputation and a high level of brand awareness as it is also widely available in retail stores and online marketplaces.
Weaknesses:A weakness is the fact that there are too many product lines in the Dr. Pepper mix, which makes the individual product positioning unclear, allowing competition to outperform Dr. Pepper in most product areas within their mix. It’s difficult for Dr Pepper to make decisions because of the small amount of shares they have in the brand. This complicates the task of managing multiple brands in a unified manner. Since Dr Pepper handles bottling for many other competitors, this causes many third-party retailers to erode profit margins and Dr. Pepper also has almost no presence in international markets.
Opportunities:The incorporation of antioxidant waters, teas, and coconut water into the product mix has enormous potential in the healthier option categories. Dr. Pepper claims that by 2025, it will have reduced drink calories in all of its drinks by 20% per consumption. This is great news since now more and more people are finding alternatives to sugary drinks. There are now more ways for online platforms to invest largely in online channels that have opened up the brands to the younger generation. Dr. Pepper is now prepared to tap into the massive online purchasing segment for all of its brands. There is also a push to obtain international licenses to help boost market share and expand availability.
Threats: There is insufficient marketing as a result of an inaccurate distribution system that does not allow Dr Pepper products from releasing into retail outlets for consumers to view and purchase. Dr. Pepper ranks third in the global beverage market (Farooq, 2019). Pepsi and Coca-Cola both have a wider marketing budget to which Dr. Pepper stays behind because of competitive pricing.
Customer Analysis
Pepsi’s customer analysis focuses on many factors. It targets teenagers, young – middle aged adult consumers in America and internationally. Pepsi demographics include consumers from ages 15 – 45, both male and female and is considered a caffeinated beverage so consumers, including children and the elderly, are unlikely to consume this beverage (Carmely, 2022). It also appeals to those interested in low calorie and low sugar options. Diet Pepsi is a great choice for this target market. Pepsi’s target audience consumes the beverage on a regular but most especially at any family gathering or special occasions (Carmely, 2022). Pepsi consumers range in income, and include people from all professions (Carmely, 2022). Consumers who choose to indulge in Pepsi are either loyal to the taste or are just in for the refreshment. Consuming Pepsi is part of their lifestyle.

                  Industry Comparison between PepsiCo and Its Competitors

Pepsi is currently the second most valuable soft drink brand, which places it between Coca-Cola and Keurig Dr. Pepper (Trefis Team, 2022). Monster Beverage would rank fourth on this list, although it competes more directly with Red Bull in the energy drink subcategory of carbonated beverages. Coca-Cola continues to dominate due to its legacy brand-recognition (Arthur, 2021). Both companies have diversified into non-soft drink beverages, such as juices and sports drinks, along with a few entrants into the energy drink market. Keurig Dr. Pepper has shown growth over the last several years, but this is primarily due to its growth in the coffee market (Trefis Team, 2022). Monster also differentiates itself by focusing on energy drinks specifically, targeting a more specific audience. Conversely, the target market for both Coca-Cola and Pepsi is extremely broad regarding age, culture, race, and gender. The only demographic that avoids these beverages is the health-conscious crowd. However, this is an increasing demographic overall, especially as more people are becoming concerned about sugar intake.

Industry Analysis and Trends
The soft drink market is estimated at $413 billion (Straits Research, 2022). The main trend in the soft drink industry is the need for diversification, at least among the top three brands of Coca-Cola, Pepsi, and Keurig Dr. Pepper. They cannot rely on their core soft drink products because of the growing avoidance of soft drinks due to health concerns. Thus, all three have branched out by offering alternatives, while Monster focuses specifically on the energy drink market. Keurig Dr. Pepper has had the most success following its merger of Dr. Pepper and Keurig Green Mountain, as the demand for coffee continues to remain high. Coca-Cola faces the same challenge as PepsiCo, but retains its general advantages of being a legacy brand that retains a dominant market position. While PepsiCo has purchased subsidiaries that provide alternatives to soft drinks, such as Gatorade and Tropicana, it may have additional success if it competes with Keurig Dr. Pepper more directly by offering some type of coffee-related product as well. The main trend in the soft drink industry is a gradual decline in demand of a more health-conscious public, requiring industry leaders to diversify their offerings.

Formulation of Research Problem
Although Pepsi has acquired various new beverage brands that satisfy new consumer trends, there is still a massive untapped market of health conscious consumers that Pepsi hasn’t targeted. Those in this market have lost interest in the soda beverages because they do not meet their nutritional goals to live a healthy lifestyle. Consumers now look for products that proactively boost their wellbeing (Newhart). Not only has these new consumer ideals been focused on improving their own health, but also improving environmental health. Consumers, nowadays, are actively aware of the process that comes with making and delivering their beverages. Therefore, consumers are ready to change their shopping habits to contribute to the minimization of the “carbon footprint” associated with the manufacturing of these products. Each year, PepsiCo sells about 60 billion plastic bottles, making it the second most prevalent waste product found in annual sea water and beach clean up in 45 countries making it a global leader in plastic pollution (TheClimateCapitalist 2022).

Formulation of Research Problem
• What sustainability plan does PepsiCo have in place to reduce the carbon footprint it leaves behind and how will it increase their consumer base?
• How much should PepsiCo invest in R&D department to create new beverages that satisfy new consumer trends?
• What strategies can Pepsi change due to competitive pricing. Coca-Cola and Pepsi are known to compete with each other.

Objectives
• To develop a sustainability plan that reduces PepsiCo’s carbon footprint and attracts environmentally conscious consumers.
• To create new beverages that appeal to health-conscious consumers and expand PepsiCo’s market audience.
• Creating strategies that repair and enhance PepsiCo’s brand image to increase brand loyalty.
Hypotheses
• Implementing a plan that PepsiCo can reduce its carbon footprint and attract environmentally conscious consumers. This will result in increased sales and brand loyalty.
• Investing in research and development so PepsiCo can create new beverages that satisfy the needs of health-conscious consumers and increase its market audience.
• Creating strategies that repair and enhance PepsiCo’s brand image which can increase brand loyalty and attract new consumers.

Citations

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Union. “Where We Started.” Pepsi Born In The Carolinas, 1 May 1893,
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Korab, Harry Edward, and Mark Jeffrey Pietka. “PepsiCo, Inc..” Encyclopædia Britannica, Encyclopædia Britannica, Inc., 12 Feb. 2023,
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Arthur, R. (2021). Always Coca-Cola: Coca-Cola tops soft drinks brand rankings. Beverage Daily. https://www.beveragedaily.com/Article/2021/08/20/Coca-Cola-tops-soft-drinks-brand-rankings
Straits Research. (2022). Soft drinks market. https://straitsresearch.com/report/soft-drinks-market#
Trefis Team. (2022). This beverage giant seems better placed compared to PepsiCo. Forbes. https://www.forbes.com/sites/greatspeculations/2022/01/04/this-beverage-giant-seems-better-placed-compared-to-pepsico/?sh=f5fa5ed11028
Newhart, B. (2019, September 16). The last 30 years in beverages: How have consumers changed? beveragedaily.com. Retrieved April 6, 2023, from Newhart, B. (2019, September 16). The last 30 years in beverages: How have consumers changed? beveragedaily.com.
Ed Hebert – The Blue Ocean theblueocean.com. (n.d.). PepsiCo’s Big Green Lies. The Climate Capitalist. Retrieved April 6, 2023, from https://theclimatecapitalist.com/articles/pepsicos-big-green-lies
Farooq, Umar. “SWOT Analysis of Dr Pepper Snapple Group.” Marketing Tutor, 6 Nov. 2019, https://www.marketingtutor.net/dr-pepper-swot-analysis/.
Frue, Kiesha. “PepsiCo SWOT Analysis: Industry Domination with a Massive Portfolio.” PESTLE Analysis, 17 Sept. 2020, https://pestleanalysis.com/pepsico-swot-analysis/
Shastri, Aditya. “Elaborated SWOT Analysis of Monster – 2023 Case Study.” IIDE, 27 Oct. 2022, https://iide.co/case-studies/swot-analysis-of-monster/