PepsiCos Strategic Marketing in the United Kingdom - Research Proposal Example

Marketing Research Proposal: PepsiCo Executive Summary The proposed marketing research study will seek to measure consumer perceptions regarding the PepsiCo brand as healthy within the UK market, as well as to analyse the findings to collate data required to make recommendations on PepsiCo’s strategic marketing in the UK. The research will interview participants from the UK different by personal beverage preferences, location, income, and age. The population will be collected using purposive sampling from grocery store loyalty card programs as a reference. This research will have an adequate extent to ensure that it provides a framework to understand the perceptions and attitudes of consumers towards health features of PepsiCo products. The information will be collected using secondary and primary data collection methods, in which the latter will be conducted using focus groups. The collected data will then be analysed using grounded theory analysis methods. Table of Contents Contents Page 1. Introduction................................................................4 1.1 Industry Overview...............................................4 1.2 Organizational Background.................................5 1.3 Business Objectives.............................................6 1.4 Problem Statement..............................................6 1.5 Research Aims and Objectives...........................7 2. Research Methodology.............................................7 2.1 Secondary Data Collection.................................7 2.2 Primary Data Collection.....................................8 2.2.1 Qualitative Research...............................8 2.2.2 Sampling.................................................9 2.2.3 Data Analysis Method............................9 3. Conclusion...............................................................10 4. References...............................................................11 Introduction Industry Overview The soft drinks industry in the UK is a mature sector, which includes firms that market non-alcoholic items. Because there are so few opportunities for growth as compared to existing business, most of the companies in this sector seek to diversify existing offerings so as to gain market share and a competitive edge (Santos, 2013: p33). Others also seek to pursue acquisitions and/or lucrative arrangements for distribution of their products to expand their geographic reach, product portfolios, and operations. The largest companies, including PepsiCo and Coca-Cola, offer reliable dividends with an above-average stability of stock prices and regular increases. In addition, for those that are more venturesome, a number of selections exist, such as developing overseas markets and energy drinks in order to serve niche markets. In general, while soft drink manufacturers are able to turn in steady performances across the entire business cycle, stressful economic times and consumer awareness portend threats to their profitability and overall business performance (Walker, 2013: p44). Historically, PepsiCo and Coca-Cola have been the major players in the non-alcoholic beverage industry, distributing well-renowned non-carbonated and carbonated drinks globally using sizeable bottling companies. Related capital spending for these companies amounts to billions of dollars annually. By using lucrative distribution agreements and acquiring smaller players in the market, both companies are able to boost their results, especially as consumers tend to favour the more famous soft drink brands (Tremblay & Tremblay, 2012: p59). Sales, however, are also seasonal and tend to peak during the summer. Moreover, increased awareness of common health issues and their causes, such as diabetes and obesity, have led to an increase in sugar-substitute, low-sugar, and bottled water drinks, which has meant that soda sales have continued to fall. In response, major players in the industry have begun to capitalize on energy drinks, which have also come under scrutiny as regulators fund research into associated risks (Seabrook, 2011: p1). Organizational Background Pepsi Cola was created in 1893 by an American pharmacist, Caleb Bradham, and was sold through localized soda machines. As the beverage gained positive reactions, the founder started to advertise the product. The Pepsi-Cola Company was eventually founded in 1902 and became a success story in the US, after which the company expanded its sales into Mexico in 1907 followed by other countries (pepsico.com, 2014: p1). The company’s decision to invest in sugar backfired when sugar prices collapsed and the company went bankrupt in 1923. It was finally acquired by Loft Inc following a series of failed re-organizations, after which the acquiring company also altered its name to Pepsi-Cola Company to ride on Pepsi’s popularity in 1941. Pepsi begun to pursue a low-price strategy in the 1960s in order to compete against Coca-Cola, while they also introduced Diet Pepsi for consumers concerned about the health effects of soft drinks (pepsico.com, 2014: p1). PepsiCo in its current format was founded in 1965 after the merger between Pepsi-Cola Company and Frito-Lay, now selling a wide range of soft drinks and snacks in more than 190 countries. Recent PepsiCo commercials have included famous young personalities as PepsiCo’s way of emphasizing that Pepsi caters for the new generation (Fromm & Garton, 2013: p29). Business Objectives At PepsiCo, the company believes that responsible corporate citizenship is the right thing for their business. Their main business objective is to be a global premier consumer products manufacturer with a focus on beverages and snacks. They also seek to provide their investors with financial rewards and opportunities for enrichment and growth to their business partners, employees, and communities that they operate in (pepsico.com, 2014: p1). The performance with purpose objective pursued by PepsiCo seeks to deliver sustainable growth through investments that ensure a healthier future for the environment and the consumer. Their responsibility involves the continuous improvement of economic, environmental, and social aspects of their business for a better tomorrow. Indeed, their vision is to make operational their sustainability program by focusing on environmental stewardship and activities of benefit to the society, while also building shareholder value (pepsico.com, 2014: p1). By addressing issues that are of interest to society, such as their health, the company seeks to drive shareholder value and sustainability. Problem Statement The corporate mission for PepsiCo is to be a global leader in consumer products, focusing primarily on beverages and convenient foods. Because of significant political pressure and demand from consumer advocacy groups and consumers to add healthier beverage products and snacks to the company’s portfolio, PepsiCo has to make their products more acceptable to health-conscious consumers (Conley, 2012: p1). Recently, the New York City Mayor’s office began a push for municipal bans on selling sugary drinks in super-sized packaging, which is expected to be picked up by other major cities in the fight against obesity and diabetes across the developed world (bbc.com, 2012: p1). In addition, regulators in the EU are seeking to impose taxes on soft drinks to aid in curbing of consumption across PepsiCo’s primary product base. As a result, in order for PepsiCo to achieve its business objectives, it is essential to measure brand perception consistently, especially regarding health perceptions to the target markets. Failure to do this will mean that PepsiCo will not meet growing consumer demand for healthy beverage and food products (Bauerlein, 2011: p1), resulting in a failure to meet business objectives. Research Aims and Objectives The goal of this marketing research will be to produce a detailed plan for measuring consumer perception, as well as reinforcing the urgency to make sure that the company responds to consumer trends towards healthier beverage and food alternatives. Primarily, the focus of the qualitative marketing research will be to divulge consumer perception fully, awareness, and understanding of PepsiCo’s beverage and food product lines in the UK regarding what is perceived as healthy. The gathering of information and its assessment will enable the researcher to deduce valuable insight on how consumers perceive current and new offerings, the true desire and preferences of consumer health demands, and the effectiveness of current marketing strategies. Research Methodology Secondary Data Collection Secondary data will be collected from previously reported information and data from magazines, journal articles, and industry reports. These resources will be mainly sourced from the internet regarding PepsiCo and general beverage industry data. Secondary data involves information that has already been collected for another purpose other than the current study, although it has significant utility and relevance for the research (Olsen, 2012: p33). Secondary data can be from external sources or internal sources. With regards to internal sources, the data exists and is stored by PepsiCo, while external data will be sourced from other organizations or people from PepsiCo’s external environment. Internal sources of data will include previous marketing research studies by PepsiCo, inventory records, and sales figures. External data will be sourced from media reports including internet, print, and broadcast sources, professional, business, and trade associations in the beverage industry, corporate filings including reports from health authorities and agencies, think tanks, and commercial data services. Generally, secondary data collection is cheaper than primary data collection, while it also requires less time (Maxwell, 2013: p38). Primary Data Collection i. Qualitative Research The research design for this study will be a descriptive design, which is a good fit for obtaining information about the current status of a specific phenomenon, as well as to describe what exists in relation to conditions or variables in the healthy drink and food phenomenon (Aaker, 2013: p43). For qualitative research, consumers will be reached via telephone calls and will be asked to take part in a focus group on the healthy nature of Pepsi drinks. The collection of qualitative data will be a good fit for the current market research because it enables the researcher to discover the reasoning behind specific behaviours and preferences, particularly because the researcher can use the consumer’s behaviour and language to make inferences (Liamputtong, 2013: p56). In addition, it is flexible as a consumer can add onto a question, allowing the researcher to further a specific idea. A focus group will be used in collecting this data, in which selected consumers will be guided through a discussion by the researcher using interviews to collect information. Using a focus group will benefit the current study as it will allow the researcher to go beyond superficial answers to gain more insight into the behaviour and attitudes of the consumer (Belk et al, 2012: p44). ii. Sampling The current research study will be conducted using a selected population sample who will all be consumers of Pepsi beverages and snacks. As a result, random sampling will not be useful in this case and purposive sampling will be used. This sampling technique is reliant on researcher’s judgment in relation to selection of the units. Some of its benefits to the current study will be that it will select the most suitable participants for the study, meaning it will be less time consuming and sampling projects will be less constantly (Belk et al, 2013: p32). In this case, holders of loyalty cards in grocery stores will be contacted to select the participants. By using the loyalty cards, it will be possible to realize whether the consumer buys soft drinks, especially Pepsi drinks, and, therefore, whether they can be included in the study to help in understanding the perception and attitude towards Pepsi from consumers of different preferences, income, gender, and age. iii. Data Analysis Method The collected data will then be analysed using the grounded theory analysis method, which will enable the researcher to develop a theory that offers an explanation regarding the population’s main concern about healthy drinks and snacks, as well as how the concern can be processed or resolved (Olsen, 2012: p42). After collecting the data from the focus groups, information will be coded by identifying anchors to enable key points from the data to be collected. These codes will then be grouped into concepts, in which codes with similar content will be collected to enable grouping of data. Next, the researcher will use broad groups containing similar concepts about consumer perceptions on healthy beverages and snacks to generate a number of categories. Finally, these categories will be used to generate a theory that details the research project’s subject (Olsen, 2012: p43).   Conclusion PepsiCo will need to pursue a strategy of marketing that will stay current alongside fast changes to the beverage market concerning spending habits, consumer preferences, and sources of information. As a result, this marketing research project will be important in the acquisition of information and knowledge that is representative of the foundation for all strategic decisions and discussions for the top management at PepsiCo. It will be the intent of this marketing research to identify the true attitudes and perceptions of PepsiCo’s brand image with regards to perception of health, while also using the findings to aid in steering the company’s corporate strategy in a dynamic consumer market to enable ongoing success. References Aaker, D. A. (2013). Marketing research. Hoboken, NJ: John Wiley & Sons. Bauerlein, M. E. (2011, June 28). PepsiCo Wakes Up and Smells the Cola. Retrieved October 15, 2014, from Yahoo Finance: http://finance.yahoo.com/news/pf_article_113026.html bbc.com. (2012, 31 May). New York mayor proposes ban on big sugary drinks. Retrieved October 15, 2014, from BBC News: http://www.bbc.com/news/world-us-canada-18285462 Belk, R. W., Askegaard, S., & Scott, L. M. (2012). Research in consumer behaviour. Bingley: Emerald. Belk, R. W., Fischer, E., & Kozinets, R. V. (2013). Qualitative consumer & marketing research. London: SAGE. Conley, M. (2012, May 9). Coke, Pepsi Skirt Cancer Warning Label. Retrieved October 15, 2014, from abc News: http://abcnews.go.com/blogs/health/2012/03/09/coke-pepsi-skirt-cancer-warning-label/ Fromm, J., & Garton, C. (2013). Marketing to millennials: reach the largest and most influential generation of consumers ever. New York: AMACOM, American Management Association. Liamputtong, P. (2013). Qualitative research methods. Oxford: Oxford University Press. Maxwell, J. A. (2013). Qualitative research design: an interactive approach. Thousand Oaks: SAGE Publications. Olsen, W. K. (2012). Data collection: key debates and methods in social research. London: Thousand Oaks. pepsico.com. (2014). Brands You Love. Retrieved October 15, 2014, from PepsiCo.com: http://www.pepsico.com/Brands.html Santos, C. R. (2013). Consumption culture in Europe: insight into the beverage industry. Hershey, PA: Business Science Reference. Seabrook, J. (2011, May 16). Snacks for a Fat Planet: PepsiCo takes stock of the obesity epidemic. Retrieved October 15, 2014, from The New Yorker: http://www.newyorker.com/magazine/2011/05/16/snacks-for-a-fat-planet Tremblay, V. J., & Tremblay, C. H. (2012). Industry and firm studies. Armonk, N.Y.: M.E. Sharpe. Walker, S. (2013). Soft drinks (carbonated & concentrated). Teddington, Richmond upon Thames: Key Note Ltd. Read More