EXECUTIVE SUMMARY

The proposed research aims to measure the PepsiCo brands consumer perception
as healthy Within the Egyptian market and to analyze the results in order to
gather data to generate Recommendations on the strategic marketing of the
company.

The research will survey a sample of 1,000 people in Egypt different by age,
income, location and personal preferences for drinks. The population will be
selected randomly by a computer by using the grocery store loyalty programs
members as reference. The extent of the research is wide enough to ensure that the
survey will give us a framework of the feelings towards the healthy feature of the
PepsiCo brands. A questionnaire will be administered to the selected sample over
the Internet and the results will be collected and analyzed by a computer. The
criteria under which each question of the questionnaire has been conceived cover
the main concerns for the company. For example, does the consumer perceive
PepsiCo as provider of healthy drinks or not?

The research also highlights the main possible outcomes of the survey. For each
type of result, the research has already identified a strategic direction the company
should take.
The research is extensive enough to provide a comprehensive understanding of the
brand perception. The accuracy of the research is ensured by the size of the
sample, the techniques applied, and the different features of the research which
covers both qualitative and quantitative aspects. The internet survey is in fact
coupled with a series of focus groups so PepsiCo can gain a real firsthand
knowledge of the opinions consumers have about the brand.

The research might suffer typical problems of any research as related to personal
bias of the surveyed population. Surveyed people in fact may have issues that can
prevent them from answering accurately to the questionnaire and this possibility
has been already addressed by designing the questionnaire in the easiest and less
embarrassing possible way. The possibility of not being able to reach a customer
has also been addressed by setting the computer on the way to select an
alternative number to be selected.

1 INTRODUCTION
PepsiCos corporate mission is to be the leading global consumer products company
with primary focus on convenient foods and beverages. Due to growing demand
from our customers, consumer advocacy organizations and heavy political pressure
to add healthier snack and beverage products to our portfolio.
More recently, Michael Bloomberg, Mayor of New York City, is pushing for a
municipal ban on the sale of super-sized sugary drinks to help mitigate the growing
obesity rate. Other legislators, including the FDA, are looking at imposing a Soft
drink tax to also help curb consumption of our primary product base. If we seek to
achieve our mission, we must consistently measure our brands perception of being
healthy to target consumer markets. If we do not, we will fail to meet the growing
demand from our customers for new innovative and healthy food and beverage
products.

2 OBJECTIVES
It is the goal of this research proposal to layout a detailed plan of how to measure
this perception and reinforce the urgency of ensuring PepsiCo is responding to
growing trends for healthier food and beverage alternatives. We will primarily focus
our research methods through qualitative marketing research methods to fully
divulge customers understanding, awareness and perception of PepsiCos food and
beverage product lines in relation to what they perceive as healthy. Through this
assessment and information gathering, we will be able to deduce valuable
consumer insight into new and current product offerings, the success of current
marketing tactics and the true desire of consumers health demands.

3 RESEARCH
3.1 Sampling techniques
The research will be carried out over a selected sample of the population. Since our
targets are all current Pepsi customers, we cannot perform a random selection.
Instead we will frame a selected population using the loyalty cards of grocery

stores as reference. Those cards in fact represent a powerful marketing tool

because of the data that help gathering. We are able to realize if a customer has
ever purchased a Pepsi drink and therefore if he or she can be included in the
survey population to help Pepsi understand what the perception is among
consumers of different age, gender, income and personal preferences in terms of
drinks.
Quantitative Research
Once the grocery outlets throughout Egypt have been decided, the approach used
will be the systematic sampling. The population will be represented by 10,000
customers of these 4 chains randomly selected and the sample size will be 1,000.
The selection will be performed with a probability method: every tenth person from
the population of 10,000 is selected for the sample. Since the selectee will be
identified by his/her email address, it will be possible to reach him/her over the
email and ask to fill a brief online questionnaire. The computer will also randomly
select a second, much smaller sample (30 people) for the conjoint analysis

Qualitative Research
The probability method will be also used to select participants to the qualitative part
of the research, the focus groups. For the focus groups the sample size is much
smaller since we need 15 people only and the selection will be performed again
using a probability method: this time the 667th person will be called to be part of
the focus group (10,000 / 15). If he/she is not available or cannot be reached, we
will proceed with the 668th and the 666th person.

3.2 Data Collection Method

Quantitative
For the quantitative part, the questionnaire will be filled out over the internet. The
selected customer will be sent a link over the email: the link will give him/her
access to the questionnaire and by clicking on submit the answers will be
collected and the results processed.
Potential Issues
1) The customers email address might not be valid anymore;
2) The customer might just ignore/trash the email and not fill the questionnaire;
3) The customer might be inaccurate in filling the questionnaire due to inability to
formulate a coherent response or unwillingness to respond accurately due to such

reasons as: time pressure, fatigue, personal bias over privacy or other personal
matters, lack of information, and response style.
These issues are considered in the margin of error and therefore the computer will
select another customer in the place of the unreachable one. While the first two
types of issues can be fixed by the computer, the machine has no control over the
issue no.3 where the problems are connected to the data collection method itself:
the interviewer has no interaction with the customer but also the environment
where the survey is performed can help because the customer is in front of his/her
computer in a location of his/her choice.

Qualitative
For the qualitative research, the customer will be reached over the phone and asked
to participate to a focus group on Pepsi drinks. He/she will be compensated for the
participation with a 100 L.E. gift card.
The focus group will be executed in an ad-hoc location with a one-way mirror behind
which the researcher will sit and observe the reactions of the participants to the
questions asked. The plan is to perform all focus groups in one day, from morning to
evening. The moderator will ask the question and help frame the discussion among
the participants; the moderator will also record the answers on tape. Then the
answers will be put on paper and analyzed by the experts. The focus group should
also include some real time administration of advertising techniques (showing
commercials or printed advertisement) in order to appreciate the immediate
reaction from the customers.

3.3 Measurement
The main aim of this research is to investigate on the brand awareness of Pepsi, to
be specific; our aim is to measure the perception of Pepsi drinks in relation to
health. The first question we would like to address in our research is whether Pepsi
health drinks are conceived as really healthy? The main objectives of administering
this question to the respondents to measure the demand of healthy drinks VS the
various alternatives available in the market, to measure the association of Pepsi to
health concepts and finally to measure the perception of the marketing effort so far
done by Pepsi.
In order to conduct the research, the questionnaire that will be directed to the
respondents/focus group would cover both qualitative as well as quantitative
questions. The key elements that it would include are: Demographic data- such as

the age, gender, location and income, Behavior/ Lifestyle questions which would
cover factors like frequency of consumption, on what occasion the consumption of
the product takes place, if the respondents felt that the product was a post work out
drink or not etc. The next important part of the questionnaire is to figure out how to
re-position the Pepsi brand in the health market, its important in this part of the
questionnaire to understand what percentage of people are social media active
users, whether they are actively participating in the various social media campaigns
etc.
In the entire research procedure, the focus groups are for generating hypothesis and
to test them qualitatively. In order to figure if the respondents actually like the
product or not, ambiguous questions could be asked such as if they consume Pepsi
drink products, how would they rate Pepsi products as far as heath is concerned etc.
The three most important factors that can be researched here are- age, weight and
lifestyle i.e. exercise habits etc.

3.4 Analysis Procedure

The method of analysis that we opted for are MULTI DIMENSIONAL SCALING (MDS)
and CONJOINT ANALYSIS. The reason is because our client Pepsi is a multi product
company so these methods can assist us in understanding what perceptions the
customers have about the products and which is the main driver that is determining
the purchase decisions. Its important to determine how Pepsi is perceived as
compared to its competition. How do people view the brand in terms of its offering,
price and quality? The most important problem here is of positioning its offerings in
an interpretable multi dimensional space, for which Multi dimensional scaling is
used. Today in different places like schools, restaurants, movie theatres etc, there is
a constant battle between Pepsi, Coke and other competitors to place their product
in that place. Another research technique that we would use is the conjoint analysis
where we would administer this technique to a smaller sample size of 20 to 30
people.

4 EXPECTED RESULTS
4.1 Summary of Secondary Data
Our secondary data research provides us with the following information:
General Information on Carbonated Drinks

U.S. Consumption of carbonated soft drinks has steadily declined in the past
decade, mainly due to alternative beverages now offered by the market

Healthier drinks are growing more popular. Including bottled waters, juice
drinks, teas and sports drinks, bottled beverage sales rose 0.8 percent to
15.2 billion cases in 2011. That represented a slowdown from 2010, when
sales rose 1.7 percent.

According to Beverage Digest, the top four sodas -- Coke, Diet Coke, PepsiCola and Mt. Dew all saw declining sales last year. Of those, Coke's market
share was flat, while the other three all lost share.

There have been several studies recently proving the cardiac problems
aspartame (a fake sweetener) causes, including heart attacks and strokes.
Also, certain studies prove that aspartame is a multi potential carcinogen
causing brain, kidney, breast, liver and lung cancer.

Health consciousness and trends

-

More and more, consumers are making choices based on what helps them
create and manage optimum health. Managing health through food and drink
choice is a growing consumer trend that is already having a huge impact on
purchase behavior.

Food and beverage marketers who recognize the opportunity within this
trend, by developing and positioning their products in support of it will be the
next brand leaders.

consumers are more aware of the fact that the consumption of sugarsweetened beverages is associated with weight and obesity, and that
changes in consumption can help predict changes in weight.

Research suggests a statistically significant inverse relationship between

consumption of carbonated beverages and bone mineral density.

PepsiCos Strategy: The New Health Kick

PepsiCos CEO is trying to redefine the playing field by promoting healthier

drinks and food under the good-for-you and better-for-you slogans. The
company is betting big on creating healthy foods through its Quaker Oats.

Their new group of products is part of a long-term strategy to grow their

nutrition business from about $10 billion in revenues today to $30 billion by
2020.

Ms. Nooyi (the CEO) seeks to refocus Pepsi by stating that lifestyles have
changed and that their company has to modify its products.

4.2 Expected Findings: Primary Research

Basing our research objectives on the information above, we are aiming to obtain
the following information from our marketing research plan:
1) Do consumers perceive Pepsi as a provider of healthy drinks?
1b -Is Pepsis better-for-you campaign effective?
2) Does peoples health consciousness include the consumption of healthy drinks?
2b if so, do they drink Pepsis healthy drinks?
2c if not, what would be the product profile they would consume? Is there a specific
type of drink that would look more attractive to them?
Are consumers engaged and reachable through social media?
3) Should Pepsi carry on with their strategy or should they change it for the sake of
healthy drinks?

These main findings will improve our understanding of the market place and of
Pepsis opportunities.

4.3 Data Organized According to Related Variables

The questions in the questionnaire will be grouped in subsections that satisfy the
same research objective.
-

The responses to questions 3,4 can be summarized in a subsection titled

Customer perception and brand awareness. Once it is obtained, this

information will be useful to see the extent to which the consumers are aware
of the Pepsis focus in health products.

The responses to questions 3,4,5,7 can be summarized in a subsection titled

Healthy Campaign Efficiency. Once it is obtained, this information will be
useful to weight the firms healthy campaign efficiency.

The response to question 5 can be summarized in a subsection titled

Healthy Consciousness Scope. Once it is obtained, this information will be
useful to evaluate how important are drinks in peoples health-perception.

The response to questions 6 can be summarized in a subsection titled Ideal

product profile. Once it is obtained, this information will be useful to
recommend the launch of a specific product.

The responses to questions 3,4,5,6,7 can be summarized in a subsection

titled Strategy decision. Once it is obtained, this information will be useful
to customer perception and brand awareness.

4.4 Findings Implications & Recommendations

After interpreting and discussing the results obtained from the research, these are
the recommendations we will be able to make depending on our findings:
If
a), c), e), h)
b), d), f), g)

then
Pepsi should carry on with their
campaign
Pepsi should change their strategy and
launch a new product with a different
profile.

4.5 Statistical Significance

The margin of error will be checked for all the data gathered to ensure the validity
of the answers and appropriate to make recommendations based on them. Outliers
will be removed and the systematic method will ensure the participants are
randomly selected for the study.

5 RECOMMENDATIONS
Based on the results of the survey, PepsiCo will be able to choose between keep
pursuing the current strategy or changing it in order to enhance the perception of
its drinks as healthy drinks. In case a change is recommended, the company will
also be able to infer from the results of the survey what specific features the
customers want in a drink (about taste, flavors etc.). The changes can happen in the
product development line or the new product launch.
Another recommendation PepsiCo will be able to draw from the results is whether
the company should invest more in a social media campaign as adverting media for
the next future and how the social media efforts can be modified in order to
guarantee a deeper penetration of PepsiCo message. In this particular case,
PepsiCos top management can gain an idea of which social media are worth more
the investment effort and which are worth less.
Even if the results will project an image of PepsiCo as already healthy, there will
still be margins of improvement that can be appreciated from the market research
performed (new flavors, different advertising). In this specific case, the focus groups
will provide most of the insights.

6 CONCLUSIONS
PepsiCo needs to pursue a marketing strategy that stays current with the fast
changes in the market as far as consumer preferences, spending habits, sources of
information etc. For this reason, this market research is essential to acquire that
knowledge that represents the foundation for any strategic discussion for PepsiCos
top management.
It is the intent of our marketing research team to find the true perception of
PepsiCos brand image in relation to healthy perceptions and use these findings to
help steer corporate strategy for ongoing success in an ever-changing consumer
market.

APPENDIX
Appendix 1: Time Requirements & Sample Process
Location framed: Egypt
Time needs for the sampling process:

a) Time necessary to perform the selection of the population and the sample: 1
week;
b) Time necessary to send the questionnaire and allocated time for response: 1
month;
c) Time necessary to select participants, send RSVPs and schedule the focus groups:
1 month.

Appendix 2: Sample Questionnaire

Name:

Age:

Gender:

Location:

1) Do you consume Pepsi drink products?

Yes/ No

If yes, name some products that you consume ________________________________

2) How often do you consume these drinks?

o
o
o

Everyday
2-3 times a week
Only on certain occasions

3) Are you aware of Pepsis better-for-you healthy drinks offering? Can you name
one?
____________________________________________

4) How would you rank Pepsi in terms of its healthy drink offerings?
1 -Extremely health
2-very health
3- Moderately health
4- Barely health
5 unhealthy brand

5) Rank healths importance for you in your life?

High
Moderate
Low
If high, do your health concerns include drinking healthy drinks in a regular basis?
Yes/No
6) Describe the best healthy drink you can imagine. What attributes would make
you consume it?
________________________________

7) Are you an active social media user? If yes, what are the different social media
accounts that you have?
o Facebook
o Twitter
o LinkedIn
o Other ________________________________________________

Appendix 3: Summary Table: Customer Perception & Brand

Awareness
Customer perception and brand awareness
Related questions:
N 3,4

Potential finding
a) Pepsi is perceived as a health
focused brand
b) Pepsi is not perceived as a health
focused brand

Healthy Campaign Efficiency

Related questions:
N 3,4,5,7

Potential Findings:
c)The campaign is penetrating
d) The campaign is not penetrating

Healthy Consciousness Scope

Related questions:
N 5

Potential Findings:
e) People include healthy drinks in their
understanding of healthy lifestyle
f) People dont think of healthy drinks
when it comes to living a healthy life

Ideal product profile

Related questions:
N 6

Potential Findings:
g) Peoples idea of healthy drinks differ
from Pepsis offering
h) Peoples description of healthy drinks
coincides with Pepsis offerings

Strategy decision
Related questions:
N 3,4,5,6,7

i) Pepsi should carry on with their

campaign
j) Pepsi should change their strategy