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Market Analysis

Market Segmentation

As we know that Pepsi is provided among a huge population which is called market. To distribute it and
increasing the revenue the market should be segmented.Pepsi has segmented their market keeping four
major segmentation variables in their mind which are:

 Geographic

 Demographic

 Psychographic

 Behavioral

Geographic Segmentation:

Geographic segmentation means dividing the market into different geographical units such as nations,
regions, states, countries, cities or even neighborhood. Pepsi has put little emphasis to segment their
market geographically. They are doing business almost in maximum places around the world.

Demographic Segmentation:

Despite the large customer base in the Soft Drink industry, Pepsi prefers to segment itself as the
beverage choice of the “New Generation”, Generation Next, or just as the “Pepsi Generation”. These
terms adopted in Pepsi’s advertising campaigns are what marketers refer to as Generation X, which are
profiled to be between the ages of 18 to 29. In addition, Pepsi shifted its focus to the growing American
teenage market in the 1990s by forming exclusive contracts with American schools and developing
advertising campaigns such as “The Next Generation” and the “Joy of Pepsi”, featuring Britney Spears.
Pepsi believes that if they can get this market to adopt their product, they could establish a loyal
customer in a long run.

Psychographic segmentation:

Psychographic segmentation divides buyers into different groups based on social class, lifestyle or
personality characteristics. People from samedemographic group can have very different psychographic
makeups. Pepsi’s segmentation has also been emphasized psycho graphically. Their beverages are very
much focusing towards lower and upper middle class as they can afford to drink Pepsi. They have a
product like“Mountain Dew” a particular drink which is focused especially who has adventurous
personality.Their campaign of this drink totally focuses to adventurous young people.
Behavioral segmentation:

Behavioral segmentation divides buyers into groups based on theirknowledge, attitudes, uses or
responses to a product. In this segment, Pepsi has been concentrating carefully. Because they offer in
every special occasions, for the people who seek for benefits off their products, to their loyal customer
base. Occasional cases like religious festivals; special days like mothers’ day, valentine’s day, friendship
day, any individual’s birthday or marriage ceremony or anniversary in a word in every special occasions
there are people to whom buying Pepsi for celebration is must.

Market Postioning:

PepsiCo plans to further create positions that will give products the greatest advantage in their target
markets. Pepsi has been positioned based on the process of positioning by direct comparison and have
positioned their products to benefit their target market.

Positioning Strategies of Pepsi:

To find points of differentiation, Pepsi have followed some strategies which have differentiated
themselves from others. Usually marketers try to differentiate along the lines of following things

• Product Differentiation

• Channel Differentiation

• Image Differentiation

Pepsi have differentiated themselves in the field of Product Differentiation, Channel Differentiation and
Image Differentiation. Theunique characteristic of their product and their brand image has differentiated
themselves from the other beverages in market.

Product Differentiation:

Product differentiation comes into play for sure in the case of Pepsi. When looking at Pepsi, people think
of soda.

Channel Differentiation:

Coke and Pepsi distribute their drinks through independent bottlers. These firms make the ingredients
for the drinks and then ship them to the local bottlers, who pretty much finalize the product. After this is
done, this bottler has the right to distribute whatever brand it wants to a specific region. On the other
hand, a brand such as Canady Dry does something much different. Canady Dry packages its product in
several locations and then ships them to wholesale grocers who distribute them to the local grocery
stores and outlets. This is a great example as to why Canady Dry is strong within local grocery stores, but
why they are not present in vending machines like Pepsi is. Furthermore, I found it really interesting that
since the vending machine market is dominatedby Pepsi and Coke, that Canady Dry actually has to be
purchased in order to get into a vending machine; something that doesn’t happen too often.
Image Differentiation:

Creating a strong and distinctive image requires creativity and hard work. Symbols, signs, logos and color
are used to create strong-company or brand recognition and image differentiation.

Positioning statement for Pepsi:

As we discussed earlier that “Pepsi positions itself on points of difference as well as points of parity.
Pepsi's POD is their forward thinking attitude. According to that Pepsi’s positioning statement is

“To new generation, those who want the best taste in drinks, Pepsi is a cold drink which gave
the best taste, low fat in a reasonable spending.”

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