Pepsico & Aquafina

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1. An Introduction to the Brand3
PepsiCo. Background3
The change of logo throughout time3
Aquafina, the sub-branch 4
2. Marketing Issues4
3. DENTPCS Analysis5
4. Case Questions7
5. Conclusion & Recommendations12
1. An Introduction to the Brand

PepsiCo. Background

PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.

PepsiCo (symbol: PEP) shares are traded principally on the New York Stock Exchange in the United States. The company is also listed on the Amsterdam, Chicago, Swiss and Tokyo stock exchanges. PepsiCo has consistently paid cash dividends since the corporation was founded.

PepsiCo World Headquarters is located in Purchase, New York, approximately 45 minutes from New York City. The seven-building headquarters complex was designed by Edward Durrell Stone, one of America's foremost architects. The building occupies 10 acres of a 144-acre complex that includes the Donald M. Kendall Sculpture Gardens, a world acclaimed sculpture collection in a garden setting.

The change of logo throughout time

Aquafina, the sub-branch

Aquafina is a popular brand of bottled water. It was first distributed in Wichita, Kansas in 1994, was distributed across the United States and Canada by 1997 and Turkey, and as of 2003, had become the United States' top-selling bottled water brand in measured retail channels. The water is standard tap water but goes through an extensive purification process that includes charcoal filtration, reverse osmosis and ozonation. Aquafina uses PepsiCo's own purification system, which it calls HydRO-7. PepsiCo states in marketing material that this system removes substances that may be in other brands of bottled water.

PepsiCo produces several other products under the Aquafina label:

* Aquafina Sparkling, carbonated flavored water, available in Berry Blast (Raspberry), and Citrus Twist. * Aquafina FlavorSplash, flavored water (without carbonation), available in Grape, Citrus Blend, Wild Berry, and Raspberry. * Aquafina Alive, a low calorie, vitamin-enhanced water beverage, available in Berry Pomegranate, Peach Mango and Orange Lime.

2. Marketing Issues

There are several marketing issues Pepsi needs to deal with. Pepsi is placed in a market which is rather mature and not growing very rapidly. This makes it more challenging for the company to find new fronts which will generate new sales and new customers. Another marketing issue concerns Pepsi's Aquafina promotion mix. Aquafina is water with no taste or odor, which makes it difficult to differentiate from the market. Given that their products are placed in a market with over 800 competitors, the big question for Pepsi is how to promote Aquafina effectively. Pepsi already tried several initiatives to attack the market, with both spring water and sparkling water, but each failed. Moreover, subsidies such as Evian and Perrier have already established a much stronger image and brand which makes them more dominate in the water market. This makes it difficult for Pepsi to find a niche for Aquafina and a new responding target group. Later on in 2003 this marketing issue was solved through effective promotional strategies, Pepsi doubled its promotion budget to $40 million the year before, which increased their market share and put them up market. Due to the fact that many consumers shop based on price which automatically creates a higher bargaining power for them. This means that it is difficult for Pepsi to build a brand or brand loyalty, which is most important in such competitive market. Therefore Pepsi needs to develop a promotion mix that creates a stronger brand across...
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