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Đỗ Thị Huyền Trâm 1
Type Carbonated Soft Drink
Manufacturer PepsiCo
Country of origin United States
Introduced 1893: Brad's Drink
1898: Pepsi-Cola
1961: Pepsi
Variants Diet Pepsi
Caffeine-Free Pepsi
Pepsi-Cola Made with
Real Sugar
Pepsi Vanilla
Pepsi Zero Sugar
…
Đỗ Thị Huyền Trâm 2
Time
1902 1930s-1970s 1980s – Present sometime in the future
Đỗ Thị Huyền Trâm 3
Brad renames the drink ‘Pepsi-Cola’
 Purpose: medicine
(PRODUCT DEVELOPMENT)
Caleb Bradham Đỗ Thị Huyền Trâm 4
 Pre-launch – no sales and profit
are made because the product is still
in development.
 Purchased trademark: $100
 Difficulties:
 Negative cash-flow
 Large research costs
 Development expenditure
Đỗ Thị Huyền Trâm 5
• 1903: Sold 7,968 gallons of syrup
• 1904: Sales increased to 19,848
gallons
Đỗ Thị Huyền Trâm 6
OBJECTIVE
• Enerate initial awareness
• Trial of the product
=> Far excceded targets
PRODUCT
• Launched only a basic product
without bottles
• Sold through soda fountains
located
in Brad’s pharmacies
Đỗ Thị Huyền Trâm 7
PRICE
A simple cost-plus pricing
strategy
• Started with a skimming
strategy
• Recuperated start-up costs
PLACE
ONLY launched Brad’s
pharmacies
Đỗ Thị Huyền Trâm 8
ADVERTISING To generate awareness
PROMOTION
Encouraged consumers to
trial the product
Barney Oldfield
( race-car driver )
Theme "Delicious & Healthful"
Đỗ Thị Huyền Trâm 9
 Increasing Competition
 Lower Prices
 Different Marketing Approach
 Greater Consumer Awareness
 Increasing in Profits
(1930s-1970s)
Đỗ Thị Huyền Trâm 10
 After bankruptcy and becoming acquired by Loft Inc.
 Attracted consumers: 5 cent = 12 ounces of Pepsi-Cola
But 5 cent = 6 ounces of Coca-Cola
Đỗ Thị Huyền Trâm 11
Objectives
 Gained market share
 Encouraged consumers to
use
 Competed with Coca-Cola
Product
 Continually improved the
products
 Made many bottles
Price
 The low price
penetration
strategy
Đỗ Thị Huyền Trâm 12
An extensive distribution
network
 A mainstream
consumer good
Đỗ Thị Huyền Trâm 13
Advertising
 Designed to effectively reach a
mass audience (for example
Radio)
 Rename: ‘Pepsi’
 1975: Pepsi Challenge
marketing campaign
Sales – promotion
 No sales promotion
 Highly competitive price
 Struggled to keep-up with
demand
Đỗ Thị Huyền Trâm 14
3. MATURITY
(1980s – Present day)
 This is THE LONGEST
STAGE & generates
the majority of a
product’s sales and
profits from the late
majority.
 To ‘milk’ the
product for as
much profit as
possible,
EXTENSION
STRATEGIES are
often implemented
to pro-long the
maturity stage.
Đỗ Thị Huyền Trâm 15
MATURITY
Most profitable, as a Cash
Cow
Extension strategies, the
disastrous Pepsi Raw
$20 billion in
annual revenue
PepsiCo and Coca-Cola do
not enter price-wars, the price
rarely fluctuates
A global distribution Objectives
Đỗ Thị Huyền Trâm 16
MATURITY
ADVERTISING: The main focus on differentiate the brand
Celebrity endorsements
Position the product as a younger & edgier alternative
SALES – PROMOTION: Value increasing and value adding offers
Ex: offering larger bottle sizes
Đỗ Thị Huyền Trâm 17
No signs of
slowing down in
the immediate
future
(sometime in the future)
 Pepsico have the
following strategies
→ Implemented when
the product entering
decline
Đỗ Thị Huyền Trâm 18
4. DECLINE
Objectives: cost - redution to
remain profitable
Product: The range should become
rationalized, leverage economies of scale &
minimize costs
(sometime in the future)
Đỗ Thị Huyền Trâm 19
Price: Discount price
Place: Focus on profitable stores
Advertising & Sales Promotion: cut
them
Đỗ Thị Huyền Trâm 20
Đỗ Thị Huyền Trâm 21

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The product life cycle of Pepsi

  • 2. Type Carbonated Soft Drink Manufacturer PepsiCo Country of origin United States Introduced 1893: Brad's Drink 1898: Pepsi-Cola 1961: Pepsi Variants Diet Pepsi Caffeine-Free Pepsi Pepsi-Cola Made with Real Sugar Pepsi Vanilla Pepsi Zero Sugar … Đỗ Thị Huyền Trâm 2
  • 3. Time 1902 1930s-1970s 1980s – Present sometime in the future Đỗ Thị Huyền Trâm 3
  • 4. Brad renames the drink ‘Pepsi-Cola’  Purpose: medicine (PRODUCT DEVELOPMENT) Caleb Bradham Đỗ Thị Huyền Trâm 4
  • 5.  Pre-launch – no sales and profit are made because the product is still in development.  Purchased trademark: $100  Difficulties:  Negative cash-flow  Large research costs  Development expenditure Đỗ Thị Huyền Trâm 5
  • 6. • 1903: Sold 7,968 gallons of syrup • 1904: Sales increased to 19,848 gallons Đỗ Thị Huyền Trâm 6
  • 7. OBJECTIVE • Enerate initial awareness • Trial of the product => Far excceded targets PRODUCT • Launched only a basic product without bottles • Sold through soda fountains located in Brad’s pharmacies Đỗ Thị Huyền Trâm 7
  • 8. PRICE A simple cost-plus pricing strategy • Started with a skimming strategy • Recuperated start-up costs PLACE ONLY launched Brad’s pharmacies Đỗ Thị Huyền Trâm 8
  • 9. ADVERTISING To generate awareness PROMOTION Encouraged consumers to trial the product Barney Oldfield ( race-car driver ) Theme "Delicious & Healthful" Đỗ Thị Huyền Trâm 9
  • 10.  Increasing Competition  Lower Prices  Different Marketing Approach  Greater Consumer Awareness  Increasing in Profits (1930s-1970s) Đỗ Thị Huyền Trâm 10
  • 11.  After bankruptcy and becoming acquired by Loft Inc.  Attracted consumers: 5 cent = 12 ounces of Pepsi-Cola But 5 cent = 6 ounces of Coca-Cola Đỗ Thị Huyền Trâm 11
  • 12. Objectives  Gained market share  Encouraged consumers to use  Competed with Coca-Cola Product  Continually improved the products  Made many bottles Price  The low price penetration strategy Đỗ Thị Huyền Trâm 12
  • 13. An extensive distribution network  A mainstream consumer good Đỗ Thị Huyền Trâm 13
  • 14. Advertising  Designed to effectively reach a mass audience (for example Radio)  Rename: ‘Pepsi’  1975: Pepsi Challenge marketing campaign Sales – promotion  No sales promotion  Highly competitive price  Struggled to keep-up with demand Đỗ Thị Huyền Trâm 14
  • 15. 3. MATURITY (1980s – Present day)  This is THE LONGEST STAGE & generates the majority of a product’s sales and profits from the late majority.  To ‘milk’ the product for as much profit as possible, EXTENSION STRATEGIES are often implemented to pro-long the maturity stage. Đỗ Thị Huyền Trâm 15
  • 16. MATURITY Most profitable, as a Cash Cow Extension strategies, the disastrous Pepsi Raw $20 billion in annual revenue PepsiCo and Coca-Cola do not enter price-wars, the price rarely fluctuates A global distribution Objectives Đỗ Thị Huyền Trâm 16
  • 17. MATURITY ADVERTISING: The main focus on differentiate the brand Celebrity endorsements Position the product as a younger & edgier alternative SALES – PROMOTION: Value increasing and value adding offers Ex: offering larger bottle sizes Đỗ Thị Huyền Trâm 17
  • 18. No signs of slowing down in the immediate future (sometime in the future)  Pepsico have the following strategies → Implemented when the product entering decline Đỗ Thị Huyền Trâm 18
  • 19. 4. DECLINE Objectives: cost - redution to remain profitable Product: The range should become rationalized, leverage economies of scale & minimize costs (sometime in the future) Đỗ Thị Huyền Trâm 19
  • 20. Price: Discount price Place: Focus on profitable stores Advertising & Sales Promotion: cut them Đỗ Thị Huyền Trâm 20