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College of Business Administration
Cooperative Education Student Report
Marketing Analysis on Mountain Dew
Submitted to
Dr. Ghada Alanany
Department of Marketing
By
Lujain Dakhil
With Cooperation of Beverage services incorporation - PepsiCo International (GCCI BEV)
Tahlia Street
In Partial Fulfillment of the Requirements
of Bachelor Degree in Business Administration
Date dd/mm/2011
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Lujain Dakhi
Marketing
Fall 2010
Beverage services incorporation - PepsiCo International (GCCI BEV)
Jeddah, Tahlia Street
Marketing analysis on Mountain Dew
“I have read this co-op report and agree that it contains no proprietary information and it may be submitted for the Cooperative Education Program at CBA.”
Title: Marketing / PR Manager for GCCI
Business Supervisor’s signature: _________________
Business Supervisor’s name printed: Ibrahim Binaquil
Business Supervisor’s email: [email protected]
Date signed: _______________________
COOP REPORT COMPLETION CHECKLIST:
____ Report is in proper format.
____ Report sources are properly documented (if applicable).
____ Updated resume is submitted with report.
____ I have an additional copy of the student report for the department records.
Certified by:
Department Chairman’s name printed: ___________________________
Chairman Signature: ____________ Date signed:__________________
Approved by:
Associate Dean for Academic Affairs: ___________________________
Date signed: ___________________________
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ACKNOWLEDGEMENT
At the submission of this report, I would like to extend my sincerest appreciations to a number
of individuals that played a role in my life to make this report possible.
First of all I would like to express my enormous appreciation to my supervisor Ms. Ghada
Alanany who gave me some of her precious time from a hectic work routine, inspired and
guided and gave me endless support and motivation to the final draft step by step throughout
the whole process of my Bachelor report program at the College.
Secondly, the management at PepsiCo, especially the marketing department whom considered
me as a team member and their efforts by being patient, providing training, and giving me their
thoughts to make this project possible.
Last but certainly not least, my family members whom supported me and gave me the strength
to accomplish this professional task with accuracy and ease.
I hope this project serves its purpose and helps PepsiCo in increasing its customer growth in the
future.
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Abstract
The following report explains my co-op experience while doing my internship in PepsiCo. This
co-op report deals with the marketing and related aspects of operations in PepsiCo Saudi
Arabia.
The Marketing Plan which is conducted for Mountain Dew, one of PepsiCo’s leading brands, is a
basic concept which is required to make the product more successful in terms of sales and
customer satisfaction. It contains the company’s strategy based on the industry and the target
customer’s trends to make this product boom in the Saudi market.
A marketing plan analysis is frequently prepared because companies want to distinguish the
relevancy of their marketing plan in current market.
This marketing plan analysis contains an industry analysis, company analysis, product analysis,
competitor analysis and the products 4P’s which are very important to understand while
analyzing a product. Mountain Dew has been selected because it’s one of the leading brands in
the carbonated soft drink industry specifically the citrus segment in which every youth is
interested in Saudi Arabia market. This product belongs to PepsiCo, one of the largest well-known
food and beverage companies worldwide.
The report emphasizes on how Mountain Dew established itself in the Saudi market and how it
has made a good brand image among its target consumers.
A competitor’s analysis of Mountain Dew is also included in this report. Reliable sources have
been used throughout the whole process of conducting this study, and based on these sources,
useful recommendations are given in order to help this product improve and for its market
share to increase.
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The report explains the procedures, methodologies and opportunities that were conducted
from the researches. It ends with recommendations and a conclusion. The appendix contains
the sample questionnaire, and the results as well as analysis thereof.
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Table of contents
1. Introduction and literature review about the beverage market in KSA
1.1 Soft drinks in Saudi Arabia
1.2 Health concerns
1.3 Escalating competition in the market
1.4 Trade channels
1.5 Majors players in the market
2. Background about PepsiCo
3. Marketing plan
3.1 Industry analysis
3.2 Company analysis
3.3 Competitor analysis
3.4 Climate key trends
3.5 SWOT analysis
3.6 Market segmentation
3.7 Marketing mix
4. Problem Definition
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5. Research objectives
6. Research hypothesis
7. Data collection and Research Methodology
8. Data analysis and results
8.1 Retailer and consumer surveys
8.2 Findings
9. Conclusion
10. Recommendation
11. References
11.1 Books and publications
11.2 Websites
12. Appendices
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Introduction and literature review about the beverage market in KSA:
According to the marketing strategies used by Coca-Cola, Customers will have diverse
experiences and preferences, given their individual references and location. The Coca-Cola
Company is modifying its approach so that it can strike into these distinctions and provide the
fitting marketing activities, pricing strategies and beverages to be connected with current and
potential customers.
Its "think local, act local" strategy to marketing permissible adopting communications to suit
local and global situations. It wants to offer consumers with beverages to be adaptable with
their different life styles and life stages.
Coca Cola is placing more liability and answerability in the hands of its managers who are
closest to the target market, to create good channels of communication, and gain its loyalty,
and achieve the company marketing and overall goals.
Coca Cola thrives when people are permitted to utilize their insight to construct the business in
ways best suitable to their culture and business conditions. Efforts were made to give flexibility
to managers to be adaptable with the market shocks, and try to make the significant
modifications.
Source :Washington Post (2009)"an article on marketing strategies of coca-cola".Retrieved August 16, 2009.
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Moreover P& G used to utilize a flexible pricing strategy to avoid any loss in market share to
other rivals. it depends in certain scenarios to price its products low and obtain maximum profit
on spare parts, in addition it uses different prices and different price lists for different markets
to extract the fitting one .In other scenarios, it sets price for selected products at 10% below
market leader to maximize sales, and to allow increased production and reduce unit production
cost.
‘’Source : www.pg.com’’
In recent years a rapid health growth was witnessed in the Saudi Arabian food sector, along
with a few of the local companies reporting massive growth. The food and beverage industry is
being reinforced by the Saudi government by offering financings and grants on designated
equipment, and through the burden of high prices on imports that competes with local
products.
Important sub segments in the Saudi Arabia’s food and beverage processing industry,
comprising meat, dairy, and juice business, which has established to a degree in current years
to the point where they are meeting most of the local demand.
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Soft drinks in Saudi Arabia
In 2007 the beverage market recorded 6% growth of total volume and value. The variety of
products is one of the key factors behind the popularity of soft drinks in Saudi market, along
with their massive availability all over the country. Carbonates soft drinks and bottled water are
the most popular in terms of volume and value; on the other hand, non-carbonated soft drinks
are classified second in terms of value. The most active growth driven by a beverage in 2007
was recorded to be the functional beverages such as energy drinks, which are drinks that are
alternatives for alcohol drinks.
Health concerns
Consumers in the kingdom are becoming increasingly health-conscious. This trend is driven by a
couple of elements, first of all, the effect of the media and the high number of television
programs addressing health problems, and secondly, the influence of foreign expatriates whom
are more conscious when it comes to health matters than local users.
People are b
ecoming more aware of the importance regarding this matter; hence the tendency demanding
for healthier products grew. Comprising bottled water, juices, and low calorie carbonated soft
drinks.
Escalating competition in the market
There is a big competition which is escalating between both international and local players in the Saudi
market. While global products such as Pepsi & Coke are dominating the market of carbonated soft
drinks, and are highly popular in terms of volume and value, Non-carbonated soft drink dominates the
local market including juices and bottled waters. The demand on beverages in the market is usually
measured by a few features; the most important ones are the quality, health assurance, and innovation
followed by price.
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Trade channels
There are three types of trade distribution channels that fast moving consumer goods
(Beverage industries) deal with, The Modern trade channel such as supermarkets, and hyper
markets. And there is the traditional trade channel such as mini markets, and wholesales. There
is also the Eateries channel, which is the fast food chain restaurants.
The Sales volume of total carbonated soft drinks in the Saudi market increased in
modern trade channel by 2% in 2010 vs. 2009
The Sales volume of total carbonated soft drinks in the Saudi market decreased in
Traditional trade channel by -2% in 2010 vs. 2009
The Sales volume of total carbonated soft drinks in the Saudi market maintained flat in
the Eateries channel in 2010 vs. 2009.
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24%
23%
25%
Modern Trade2008 2009 2010
25%
25%
25%
Eateries2008 2009 2010
49%
49%
47%
Traditional Trade2008 2009 2010
MT TT Eateries
2008 24% 49% 25%
2009 23% 49% 25%
2010 25% 47% 25%
Major Beverage Players in the KSA
There are quite large numbers of beverage players in the Saudi market, whereas only some of
them act as trend setters such as (Almarai, Al Rabie, NADEC, NADA, Aujan and Abuljadayel).
There are also a few companies that are not limited in their businesses as they don’t only
operate in the country, but they also export to other countries such as:
Beverage services incorporation, PepsiCo
Al Eysae beverage company (Stream product)
Almarai Dairy Company
Al Rabie Saudi Foods Company
Abuljadayel Beverages
National Factory for Foodstuff Production
NADEC
Al Othman (NADA)
Arrow Juice Company
Aujan Industries Co.
Karim Food Industries
Gulf Union Foods Company
Najdiyah Marketing Co.Ltd
Alsafi danone Company
ALRAI Food Industries
Background about PepsiCo
PepsiCo, Inc. is among the most successful consumer product companies in the world, it’s a
world leader in handy foods, snacks, beverages and fast food franchise businesses with
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revenues of more than $60 billion and an estimated number of almost 198,000 employees
worldwide.
The company has Frito-Lay under its umbrella, this major chips brand is the largest
manufacturer and distributor among its competitors; Pepsi-Cola Company, also has Tropicana
Products, which is the largest marketer and producer of branded juice. PepsiCo products are
considered one of the finest and most appreciated products available worldwide in more than
200 territories. PepsiCo, Inc. was founded in 1965 through the union of Pepsi-Cola and Frito-
Lay.
In 1998 Tropicana was acquired to the company. PepsiCo joined with the Quaker Oats
Company and Gatorade in 2001. Also- in 2001 PepsiCo declared that it has acquires Tasali Snack
Foods, Saudis leader salty snacks in the market, from Savola Snack Foods.
PepsiCo also operates several food franchises (Eateries) throughout the world. Some of
PepsiCo's brand names are 100 years old, but in general the company is moderately young.
Today, the Company sells and distributes various snacks and beverages in Saudi Arabia, through
its subsidiaries, and markets. Brands such as Pepsi, Pepsi Max, Diet Pepsi, 7UP, Mirinda, shani,
Mountain Dew, Aquafina, Gatorade, Tropicana, Lipton Ice tea, Quaker Oats products, Lays, and
Tasali all of these are brands for sale to franchised bottlers in the Saudi markets.
PepsiCo’s soft drink business is divided into three business areas:
PepsiCo Americas Foods (PAF), handling Frito-Lay North America (FLNA), Quaker Foods
North America (QFNA) and all of Latin American food and snack businesses (LAF), plus
Sabritas and Gamesa businesses in Mexico
PepsiCo Americas Beverages (PAB), is responsible for PepsiCo Beverages North America
and all of Latin American beverage businesses
PepsiCo International (PI), which includes several entities worldwide; PepsiCo
businesses in the United Kingdom, Europe, Asia, Middle East and Africa
These businesses are involved in six reportable segments:
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FLNA, Frito-Lay North America QFNA, Quaker Foods North America LAF, Latin America Foods PAB, PepsiCo Americas Beverages UKEU, United Kingdom & Europe MEAA, Middle East, Africa & Asia
Today, PepsiCo continuously carries on to breaking new grounds, introducing new flavors,
products, and packages in different shapes and sizes to fulfill the growing demand for better
and healthier choices.
The success of this huge corporation is the outcome of excellent products, high values of
executions, unique competitive strategies and the high integrity of their people. Its main
concern is seeking ways to guarantee that their consumers find the products they desire, when
and where they want it.
Enhancing the value of their shareholders investment is their prime objective, through
integrated operating, investing, and financing activities. Their strategy is to concentrate their
resources on growing their businesses, both through internal growth and carefully selected
acquisitions. The tactics used by the company is continually fine-tuned to address the
opportunities and risks of the global marketplace. The corporation's success reflects their
continuing commitment to grow and a focus on those businesses where they can drive their
own growth and create opportunities.
The overall mission of PepsiCo is increasing the wealth of the shareholders investments. This is
done by cost control, sales growth, and clever investment of assets.
The company trusts that their profitable success is subject to presenting value and quality to
their customers; offering safe healthy products, Economically Independent and environmentally
friendly and giving reasonable revenues to the investors while devoting to the maximum
principles of truthfulness.
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PepsiCo’s beverage and food divisions are subject to seasonal variations. Throughout the
summer and during the hot seasons, beverage sales increase whereas at the winter and cold
season particular types of food sales increase.
The weekly sales are usually low in the first quarter of the year and higher in the third quarter
of the year caused by seasonal and holidays associated prototypes. Yet, overall, seasonality
does not have a solid effect on our business.
Marketing plan
Industry Analysis
Nonalcoholic markets such as the Saudi market can be divided into two types of soft drinks the
carbonated soft drinks (CSD) and noncarbonated soft drinks. Soft drinks were named “soft”
because they contain no alcohol opposite from the "hard drinks" which contained hard liquors
and alcohol. These types of drinks are normally sweet and may be served at room temperature
or chilled. They are also referred to as the nonalcoholic drinks. Carbonated beverages are often
known as soda drinks, cola drinks, or carbonated soft drinks. It contains the characteristic of
Carbonation which creates bubbles and fizzing in the beverage due to the presence of the
carbon dioxide gas. Common flavors for carbonated soft drinks include cola, orange, grape,
lemon-lime, and ginger. On the other hand, Non-carbonated soft drinks contains no carbon
dioxide gas in it, but contains Some of the many great fruit flavors such as black currant, apple,
lemon, blueberry, mango, strawberry and many more. Also, Ice tea, fruit punch, flavored water,
sports drinks and many more are categorized under the non-carbonated soft drinks.
Company Analysis
The business of PepsiCo is based on its vision of making tomorrow better than today including
suppliers and distributors. The company provides more than 1, 50,000 Jobs for people in Saudi
Arabia.
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It provides a diverse range of products including Pepsi, Mirinda, 7UP, shani, Mountain Dew,
low calorie product such as Diet Pepsi, Pepsi Max, Aquafina, Gatorade, Tropicana, Lipton Ice
tea.
Competitor Analysis
There are three market leading companies who have noticeable presence in the beverage
industry. These market leaders are PepsiCo Company, Coca-Cola Company and Cadbury
Schweppes Company. Coca-Cola’s product line has numerous of popular soft drinks including
Coca-Cola, Diet Coke, Fanta, and Sprite. Cadbury Schweppes product line consists of soft drinks
such as A&W Root Beer, Canada Dry, and Dr. Pepper.
The most important drawback of PepsiCo’s competitors is their promotion and advertisement.
Coca-Cola has less number of brand ambassadors as opposed to PepsiCo.
When looking at Mountain Dew it was one of its kind in the market in terms of taste and flavor,
and the way its positioned to its target audience, till a local competitor named stream appeared
with the same characteristic’s as Mountain Dew. A lot of people whom were X Mountain Dew
decided to shift to stream after the change in pricing which affected its sales noticeably.
The main Saudi competitor who is reducing slightly the market share of Mountain Dew is
‘Stream’ product .Its success in the Saudi market depends effectively on a few main factors:
a. It is a local Saudi product with international characteristics and creative design
b. The taste and flavor is similar to Mountain Dew
c. The Price is only 1 riyal, a competitive price vs. Market leaders.
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SOTM - Total KSA
7.7
8.68.0
0.0 0.1
1.2
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2008 2009 2010
MOUNTAIN DEW Stream
Post pricing, we realized that Mountain Dew’s SOTM in KSA has declined by (-0.6%) points
By end of 2009 and continued to decline in 2010. Other B-brands on the other hand,
particularly (stream) has shown an increase in SOTM within the same period by (+1.1%)
points.
Climate Key Trends (PEST)
Political factor:
From the very beginning The Governments concern was the importance of the society’s health
and their protection. The government has set strict regulations for the beverage business when
it comes to production and the formula’s ingredients. PepsiCo has to go by the book and firmly
follow these regulations.
Economical factor:
Carbonated Soft drinks are not costly and are purchased by the majority of people. This shows
that the beverage industry is not vastly flexed towards the economic influences. But the raw
materials which are applied to the carbonated soft drinks, noncarbonated soft drinks, and
snacks such as sugar, vegetables, fruits, and potato could to an extent affect the production
cost and the profit. Also, the distribution channel and transportation may slightly have an
impact on the production cost.
Social factor:
Today, consumers have become extremely responsive regarding advertisement. Mountain Dew
is all about acceleration adventure and extreme sports, which shows that people who drink
Mountain Dew are people with adventurous spirits and extreme attitudes that forces them to
continuously push themselves to limits of physical challenges.
Therefore, PepsiCo’s targeted audiences are from the youth and youngsters; in addition, they
are able to distinguish between them.
A lot of people nowadays have become health conscious, and are aware of caffeine and its side
effects which might lead them to have negative expectations about carbonated soft drinks.
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Moreover, others believe that carbonated soft drink companies spread toxic waste in the
process of manufacturing. There for, PepsiCo has a part on its website stating their corporate
social responsibilities. Each and every brand in PepsiCo has its own responsibilities.
PepsiCo, doesn’t only care about doing business and gaining revenues, but also giving back to
the communities. Some of the contributions that PepsiCo offers to the public are:
Grants : PepsiCo has an old admired history of helping and backing communities where they
do their businesses. They show their support through generous contributions, by giving out
donations to non-profit local organizations and associate volunteerism.
Humanitarian Aid: PepsiCo offers financial assistance, when a tragedy occurs, such as, in-kind
product donations and human resource contributions to help those whom got affected from
the community.
Corporate Contributions : At 2009 PepsiCo started a program of corporate contributions by
supporting and funding a variety of global organizations, from arts and culture groups to
social services and educations.
PepsiCo Division Contributions : at 2009 PepsiCo came up with a program for providing
offerings and contributions from diverse divisions within PepsiCo to several global
organizations, from arts and culture groups to education and social services.
Programs : PepsiCo involves in helping the community by engaging with other organizations
to develop innovative projects for the youth of the community.
Technological factor:
Technology for manufacturing and packaging of a product, transportation of raw material or
delivery of a product is changing from time to time, and thus it also affects the production cost,
transportation cost, and unskilled labor. Technology still plays a big role in the packaging and
designing process of a product.
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SWOT Analysis
This section will be about analyzing Mountain Dew’s strength, weakness, threats and
opportunities.
STRENGTH
The main key strength of mountain dew is that it’s a brand that belongs to one of the most
competitive and internationally distinguished companies in the world. Pepsi the mother brand
contributed significantly in building Mountain Dew’s name and reputation in the beverage
market of Saudi Arabia. It also raised its creditability.
WEAKNESS
The main weakness in mountain dew is mainly competition from other brands in the local
market such as (Stream).
OPPORTUNITIES
One of the best opportunities for mountain dew is that the consumers are now losing interest
and gradually beginning to feel fed up of the usual cola drinks and other obtainable CSD’s,
hence powerfully moving their attention and interest towards the citrus segment, specifically
mountain dew.
THREATS
The main threat for mountain dew emerges from its competitors such as Stream and in many
cases other energy drinks such as red bull, giving the fact that it could fall under the same
category as mountain dew in terms of its market consumers. Before Stream brand, Mountain
Dew had got the monopoly in the citrus line of Carbonated Soft Drinks’ industry. Now, the
rivalry is relatively high between the two brands. Secondly, from the Pepsi’s viewpoint,
Mountain Dew can be a threat for the mother brand.
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Market Segmentation:
A Group of individuals whom own the same needs and alternatives stand for a segment of
market. Mountain dew has segmented itself chiefly on the foundation of demography and
lifestyle in a niche market of explorers, thrill seekers, and extreme sports. In this niche market
the majority of the customers are the main characteristics of this market
Age :
Mountain dew is focusing on the target market of consumers aging between 16 and 26 which
means the youth, teenagers, and youngsters. Chilled CSD’s are very popular in this age group
and became a component of their way of lifestyle. In the expression of life stage this age group
represents youth, teenagers, and youngsters whom resides with their families and are
depending on their parents economically in our culture. To reach this targeted age group,
Mountain Dew is making its accessibility easily to customers in diverse volumes.
Lifestyles :
Lifestyles are taken into consideration in market segmentation of mountain dew and it is
obviously shown in their advertisements. The main and key consumers of mountain dew are
the youth who are eager to take on enthusiasm, extreme sporting, and exploratory route. They
are daring, love the entertainment, positive and energetic. It is targeting the consumer’s
propensity of bravery.
Income Level :
It is not concentrating on income levels because what’s acknowledged about their target
consumers is that they have the ability to purchase the product, but at the same time it might
concern the brand manager’s, considering the consumers whom come from lower classes
specially the youngsters and the ones that don’t make their own living.
Targeting :
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Mountain Dew is targeting customers which are generally college students and youngsters.
From our observation we have noticed quite a shift from Mountain Dew to a competitor brand
(stream) which led us to conduct a questionnaire in order to find out if the change in pricing
had an impact on its target audience from the young group whom don’t make their own living.
And as we know this is a niche market of adventurous, daring, and extreme sports lover and
most of the people that fall in this category are from the young group.
Positioning :
Positioning Mountain Dew is the company’s selection of the target market.
Wherever there is a possibility to compete among other competitors. Positioning
declaration of Mountain Dew by PepsiCo is: Consumers between the age of 16 and
26 year old who are eager for enthusiasm, adventure and enjoyment, Mountain
Dew is the best tasting citrus carbonated soft drink that excites like no other brand
because it simply quenches the thirst, and has a unique citrus flavour.
Mountain Dew will target and make a great effect among the people who are
daring, exhilarating, adventurous, thrill seekers and heroic. It is also positioning
itself by promoting itself as a high energy and citrus flavour drink.
Segmentation Table :
Marketing
Mix
A
marketing mix is a term that was found by Neil H. Borden. The marketing mix is a mixture of
marketing tools that are used to fulfill the customer’s satisfaction and the company’s
objectives.
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Age 16-26
Life Stage Youth and teenagers
Who College Students and Young Executives
Lifestyles daring, Extreme Sports, heroic
Positioning accelerating and excitement drink
The marketing mix is also known as the four P’s in marketing it is controlled by the following
categories:
Product
Price
Place (Distribution)
Promotion
By using the above categories, it will be easy to reach a huge amount of consumers within the
targeted market.
The development of a successful marketing mix increase the outcomes, usually requires several
learning factors such as market researches and experiments.
While conducting the study, researchers shouldn’t depend only on a single mix but explore
several avenues. The combination of these different categories is much more beneficial than
just depending on one.
To put off prospective consumers from getting diverse messages which might direct to
misunderstanding, the marketer has to consider several things such as confirming that all
categories are correctly coordinated, and the marketing mix contain the same message. The
achievement of any marketing program is the aptitude to work efficiently in shaping marketing
mixes that get together to the nature and requirements of specified target market.
PRODUCT
Mountain Dew is available in different Stock Keeping Units:
1.75 Liter PET Non-Returnable Bottle
2.25 Liter PET Non-Returnable Bottle
300 ML Glass Non-Returnable Bottle
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2002-2004 2005 2006 2007 2008 2010
355 ML Non-Returnable Can
500 ML PET Non-Returnable Bottle
Ingredients:
Regular glass bottle contains carbonated water, high fructose, corn syrup, concentrated orange
juice and other flavours, citric acid, sodium benzoate, caffeine. Sodium citrate, gum arbic,
erythorbic acid, calcium disodium EDTA, brominates vegetable oil and yellow 5. For a regular
glass bottle it provides calories (kcal) 110 and caffeine 35mg.
Product Level:
All marketers have to focus on five types of product levels for the sensation and success of their
product.
Core Benefit: The primary purchasing reason of that product by customer. The core
benefit is to satisfy their thirst (need for liquids).
Basic Product: Basic product is the fundamental components of that product. Mountain
Dews basic product is carbonated water with some extra flavors.
Expected Product: it offers more power, energy, and taste to customer.
Augmented Product: It offers more power, energy, and taste to their consumer by
providing them more caffeine.
Potential Product: It can use special creative and innovative ways to reshape and redesign the
bottles in order to attract the youth and youngsters.
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Product Classifications:
Durability and Non Durability: Mountain Dew is non-durable goods because it has been
utilized on usual basis by the customer
Consumer-Goods Classification: it falls in the convenience goods classification as it is very
effortlessly available and needs less search endeavor.
Product Differentiation:
Shape: It is distinguishing itself in the market by the size and shape of its 300ml bottle glass. The
bottle is well designed in a different unique shape unlike other drinks, whereas the neck of the
bottle is thin and long. This different shape adds to the uniqueness of this drink in terms of taste
and flavor a different feel which attracts the teenagers and youth whom are the target
audiences.
Image Differentiation: It has completed a dissimilar representation in consumer mind
by its efficient advertising. Their ads normally comprise of extreme sports and
Adventure by which it is reaching its target market.
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PepsiCo Product
CSD NCB Sports
Drink
Bottled Water Snacks
Pepsi Tropicana Gatorade Aquafina Lays
Miranda Lipton Ice tea Cheetos
7up H2O Tasali
Mountain Dew
Shani
Product Mix and Product Line Analysis:
Product Mix: The width of Mountain Dew mix or the numeral of product line provided
by Pepsi in Saudi Arabia is 5 and the length of product mix is 14. These all product lines
of Pepsi are reliable and related to each other as they all are drinks or snacks.
Product Line Analysis: In product line analysis we can categorize mountain dew in
‘specialties’. Because the lower the sales the higher the promotions.
Product Depth: Mountain dew comes in different SKU’s as we mentioned earlier so its
product depth is 5.
Product Life Cycle:
Company modifies its marketing plan and strategy as product’s life stage modifications, so it is
important to be familiar with that product, at which stage of the life cycle. Soft drinks industry
is a very old industry in Saudi Arabia. It is now drenching and stepping towards maturation
stage.
Price
Mountain Dew initial price was 1 riyal till the mother company has changed the global pricing
strategy and increase its products prices by 50%, the price reached 1.5 Riyals, and this change
has effected slightly the percentage of market share due to existence of real competitor who
copied the shape (the external appearance), the taste, and even the colors of can. Stream, the
new competitor, has used the shift of target market toward this unique taste, and created same
product .The strength points that Stream depend on are: Saudi product with international
features, and cost differentiation.
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Place (Distribution):
Mountain dew has an enormous supply channel network, and through these channels it
performs the distribution role. Mountain dew is obtainable through concentrated distribution
because it is easily accessible at everywhere. It has executed this concentrated distribution to
supply infiltration revelation of the market by utilizing all reachable channels.
That’s why Mountain Dew is obtainable in large retail stores, shops, and departmental stores.
There can be 0 to 5 levels of mediators associated in the whole supply chain before product
attains to the end consumer. This is because Saudi Arabia is a large country and PepsiCo don’t
actually have an extensive network of sales agents, brokers, and supplementary force which is
very imperative and is just right for compose product amicable to the markets. This work is
completed by distributors, wholesalers, and retailers. The gross profit margins kept by these
mediators sort from 2% to 5%. PepsiCo moved its products from 43 mechanized units which are
in disconnect parts of Saudi Arabia via diverse agents or stores to distributors who additionally
sell it to the stock owners who finally sell it to the retailers. Since the soft drinks industry is
highly unbalanced and vivacious therefore, products should be obtainable in markets at all the
time. The supply of a product focuses upon the quantity needed by retailers and it can be
completed on the usual basis or after some periods.
Promotion:
Advertising :
Strong positioning coupled with the best scoring Ads slogans to express Mountain Dew’s unique
identity.
The type of media being utilized by mountain dew is mentioned below:
Television
Radio
Internet
Newspaper
26 | P a g e
Car Park Ram Lava
Cheetah Driver Target Practice
Others
Sales Promotion :
Mountain dew is not utilizing diverse type of sales promotion because it is in a niche
market and consumers are dedicated. It is utilizing some competitions on its website to
generate awareness about product and the price for right answers is free exploit tour
which is also appropriate to its positioning.
Events and Experiences :
Events are the significant part of its promotion as it is targeting teenagers. It is making
many bike racing, mountain riding events where teenagers contribute word of mouth.
This is the vital way of promotion where pleased customers give confidence to other people who come
in his contract. Mountain dew is mastering this tool of promotion because it is teenagers and youth
targeted drink and satisfied customers themselves support it as a good drink amongst his friends.
Problem definition
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Sales decline in Mountain Dew is the main problem due to the new pricing strategy used by
PepsiCo which is changing the consumer price from S.R 1 to S.R 1.5.
This new pricing strategy has affected the product severely which led to shifting a percentage of
its consumers to other competitor brands despite their loyalty, this act have had a negative
impact on Mountain Dew’s sales. I will conduct a study on the business and its competitors, and
give new preferred recommendations which could help in driving the market share of the
product to increase once again, keep the old customers, and give a chance for new potential
customers.
Research objectives
Gaining a better understanding on the market strategies and planning used by the
company for marketing the product of Mountain Dew.
Comprehending how key trend affects the industry and Mountain Dew as one of
PepsiCo’s products and how a consumer buying behavior affects the product.
To Understand and differentiate between the market segmentation, positioning and
target audience in order to develop an effective marketing plan, and achieve the overall
objectives of the company.
Examining the pricing plan designed for Mountain Dew and give recommendations to
help increase its sales size.
Understanding how and what are the tactics to kill Mountain Dew’s strong competition
is the main reason of this report.
Research hypothesis
H0:
There is no significant relationship between the new pricing strategy and the sales
decline.
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There is no significant relationship between the taste of Mountain Dew and the
purchasing of the product
There is no relationship between advertising and purchasing of the product.
Data collection and Research Methodology
This type of data is typically generated from two kinds of tools, the primary and secondary
sources. Both tools shall be compiled together after analysis and used to collect the desired
data.
Primary Data:
The primary data is a study that will focus on an observation, quantitative and qualitative
research. We usually consider the observational research method when planning to develop a
product or alter it which has a human interaction. This tool helps in generating new concepts
that exceeds custom constrains. Observing how people communicate with one another is very
important, mostly paying close attention to the human component to all the products that are
being developed. In order to get perfect results the researcher needs to analyze things by
observing with his own eyes and ears. Put himself in the place of the consumer to make a new
opinion on the product. After analyzing the findings of the observation and fixing them, changes
should be applied to the product.
The Quantitative research Method demonstrates the consumer’s opinion about the product in
an organized manner in order to come up with statistics to guide the researcher through the
study. To find accurate results, it’s a must to have a huge number of consumers that represents
the target audience of the product surveyed.
This type of research usually contains both customer questionnaires and surveys. There are
several ways conducting a survey either face to face on papers and its used when you need to
explain and show the product to the consumer, via the telephone isn’t quite preferable because
not all people have the time to speak over the phone, through post and emails might require
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offering incentives to consumers in order to encourage them to participate in filling up the
questionnaire, or via the website. When conducting the survey, questions must be measured
accurately in order to get a meaningful outcome.
What does quantitative research show?
If there’s a market for the product
Type of awareness of the product
Number of people interested in the product
whom are the best customers
What are the consumers buying habits
How are the needs of the target market changing
Qualitative research methods show the consumers behavior, attitudes, and experiences
through the following:
In-depth interviews: are ideal for gathering information on individuals’ personal
histories, perspectives, and experiences, mainly when sensitive topics are being
discovered.
Focus group discussions: are effective in eliciting data on the cultural norms of a group
and in generating broad overviews of issues of concern to the cultural groups or
subgroups represented.. It attempts to get a detailed view about the product from
consumers. As it is attitudes, behavior, and experiences which are important, very few
people participate in the qualitative research, but the contact with these people tends
to last a lot longer.
Secondary Data:
Collecting useful data from books, magazines, the Internet, and having contracts with external
research company’s which provides up to dated data such as Retail Audit which is the study of
a selected sample of retail outlets, provided as subscription-based service by market research
firms Retail-audit service providers gather information on a brand's sales volume, sales trends,
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stock levels, effectiveness of in-store display and promotion efforts, and other associated
aspects ACNielsen is a good example on a research company that measures and monitors
what consumers are buying and what are their behaviors. They also offer a unique set of
tools that examine key business trends by product, category, or market using retailer scanner-
based sales and causal information gathered weekly from tens of thousands of retail outlets.
This information enables PepsiCo to identify the “why” as well as the “what” behind changes
in product sales for fine-tuned marketing strategies.
Another type of data which is always used by organizations is the Key Performance Indicator
(KPI) which is an industry term for a type of measurement of performance. They are commonly
used by an organization to evaluate its success or the success of a particular activity in which it
is engaged. A very common method for choosing KPIs is to apply a management framework
such as the balanced scorecard strategic performance management tool - a semi-standard
structured report supported by proven design methods and automation tools that can be used
by managers to keep track of the execution of activities by staff within their control and
monitor the consequences arising from these actions. Millward Brown, the leading global
research agency specializing in advertising, marketing communications, media and brand equity
research is a good example for an agency that provides KPI data.
Data analysis and results
This section of the report contains two parts
Retailer and consumer surveys:
As we mentioned earlier in the Data collection and research methodology, a quantitative and
qualitative methods have been designed for collecting information from people to analyze the
characteristics, behaviors, attitudes, and perceptions of target market.
Findings:
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This part will show the results generated from the survey that was distributed to both the retailers and
customers. A statistical analysis will be conducted to overcome the results showing whether the
hypothesis is confirmed or not.
My name is Lujain, I am currently working on my coop training report which is about Mountain Dew’s
Marketing analysis. I have prepared this survey and would very much appreciate your time and effort
in filling it up in order for me to be able to complete my data collection and see whether the
hypothesis in my report is confirmed, disconfirmed, or inconclusive.
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The accessibility of the data in this survey will only be by the researcher, and it won’t be shared by
anyone else.
Retailler questionnaire:
1. What is your first impression about Mountain Dew’s taste?
a. Unique taste
b. Refreshing taste
c. Perfect taste
d. New taste
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10
5
10
15
20
25
30
35
40
45
unique tasterefreshing tasteperfect tastenew taste
2. What type of business are you in?
a. Eateries (Fast food restaurants)
b. Modern Trade (supermarkets, hypermarkets)
c. Traditional Trade (Mini markets)
d. Wholesales
10
5
10
15
20
25
30
35
40
EateriesModern TradeTraditional TradeWholesales
3. What type of soft drinks do you sell?
a. Coke
b. Pepsi
c. Mountain Dew
d. Stream
e. Sprite
f. 7 UP
g. Fanta
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h. Mirinda
i. Other, Please specify
10
5
10
15
20
25
30
35
40
cokepepsimountain dewstreamsprite7 UPFantaMirindaOthers
4. Do you have cold space (coolers) available in your store?a. Yesb. No
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10
10
20
30
40
50
60
70
80
90
100
YesNo
5. If yes, are these soft drink coolers provided by the company?a. Yes b. No
10
10
20
30
40
50
60
70
80
YesNo
6. If yes, which companies are providing coolers?a. Pepsib. Coke
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c. Others, Please specify
0
10
20
30
40
50
60
70
80
PepsiColaothers
7. The majority of buyers are from which gender?a. Malesb. Females
0
10
20
30
40
50
60
70
80
MalesFemales
8. The majority of buyers are from which age group?a. Younger than 16
b. 16-20
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c. 20-26
d. Over 26
0
5
10
15
20
25
30
35
40
45
Younger than 1616-2020-260ver 26
9. When do you usually get your stocks?a. Every dayb. Every two weeksc. Every monthd. Every three month
0
10
20
30
40
50
60
every dayEvery two weeksEvery monthQuarterly
10. What is the most selling brand from the bellow?a. Coke
b. Pepsi
c. Mountain Dew
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d. Stream
e. Sprite
f. 7 UP
g. Fanta
h. Mirinda
i. Other, Please specify
0
5
10
15
20
25
30
35
40
cokepepsimountain dewstreamsprite7 UPFantaMirindaOthers
11. In length period of a month how many times do you get “Out Of Stock” issue?a. Onceb. Twicec. Three timesd. More
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0
10
20
30
40
50
60
OnceTwiceThree timesMore
12. Do you ever get complains about the prices of a soft drink?a. Yesb. No
0
10
20
30
40
50
60
70
80
90
100
yesno
13. Many customers have shifted from PepsiCo products to other B-brands after the new pricing strategy.
40 | P a g e
Neither agree nor disagree
DisagreeStrongly Disagree
Strongly Agree Agree
0
10
20
30
40
50
60
70
Agreestrongly agreestrongly disagreeDisagreeNeither Agree or Disagree
14. How favorable or unfavorable to the consumers are both stream and Mountain Dew’s
Adventism’s?
Poor Fair Good Very Good Excellent
Mountain Dew
Stream
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Excellent Very good good fair poor0
10
20
30
40
50
60
70
80
MDStream
Consumer survey
1. What is your gender?
a. Female
b. Male
0
10
20
30
40
50
60
70
femalemale
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2. In what age group are you?
a. Younger than 16
b. 16-20
c. 20-26
d. Over 26
0
5
10
15
20
25
30
35
40
45
Younger than 1616-2020-260ver 26
3. What is your current salary:
a. Below 1000SR
b. Between 1000-5000
c. Between 5000-10000
d. 10000 and above
0
5
10
15
20
25
30
35
40
45
50
Below 1000Between 1000-5000Between 5000-1000010000 and above
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4. How many members are in your family?
a. 1-3
b. 4-6
c. 7-9
d. 10 and above
0
5
10
15
20
25
30
35
40
.1-3
.4-6
.7-9
.10 and above
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5. What is your occupation?
a. Housewife
b. Student
c. Businessman
d. Employed by a local company
e. Employed by a multinational company
0
10
20
30
40
50
60
HousewifestudentbusinessmanEmployed/localEmployed/multi
6. Which type is your favorite drink?
a. Carbonated Soft Drinks
b. Non-carbonated Soft Drinks
c. Non-alcoholic beer
d. Shakes
e. Mineral waters
f. Sparkling water
g. Flavored water
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Carb
onated So
ft Drinks
Non-ca
rbonated So
ft Drinks
Non-alcoholic
beer Sh
akes
Minera
l wate
rs
Spark
ling w
ater
F
lavored
water
0
5
10
15
20
25
30
35
40
7. If you choose carbonated soft drinks, which brand is your favorite?
a. Coke
b. Pepsi
c. Mountain Dew
d. Stream
e. Sprite
f. 7 UP
g. Fanta
h. Mirinda
i. Other, Please specify
coke pepsi mountain dew
stream sprite 7 UP Fanta Mirinda Others0
5
10
15
20
25
30
35
40
45
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8. What is the alternate brand if your favorite drink is not available?
a. Coke
b. Pepsi
c. Mountain Dew
d. Stream
e. Sprite
f. 7 UP
g. Fanta
h. Mirinda
i. Other, Please specify
coke pepsi mountain dew
stream sprite 7 UP Fanta Mirinda Others0
5
10
15
20
25
30
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9. Which kind do you prefer?
a. Regular drink
b. Diet Drink
c. Sugar Free drink
d. Fresh fruit drinks
0
5
10
15
20
25
30
35
40
45
50
RegularDietSugar freefresh fruit
10. Where do you usually purchase your drink from?
a. Eateries (Fast food restaurants)
b. Modern Trade (supermarkets, hypermarkets)
c. Traditional Trade (Mini markets)
d. Wholesales
Eateries Modern Trade Traditional Trade Wholesales0
5
10
15
20
25
30
35
40
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11. What other improvements do you suggest for the brand?
a. Incentives (discounts)
b. Broaden the target market
c. Change the design of bottle
d. Change the formula, flavor
e. Change the color
f. Change the name
g. Add a New distribution lines
h. Potential outlets (Hotels ,colleges, schools)
Incentives (discounts) Broaden the target market Change the design of bottle Change the formula, flavor Change the color Change the name Add a New distribution lines Potential outlets (Ho-tels ,colleges, schools)
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12. Do you read the ingredients on your drink before drinking it?
a. Yes
b. No
0
10
20
30
40
50
60
70
80
90
yesno
13. From a scale of (1 to 5) how loyal are you to your favorite drink?
1 2 3 4 5
scale 5 scale 4 scale3 scale2 scale10
10
20
30
40
50
60
70
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14. How often do you drink a soda
Never Rarely Sometimes Often All the time
all the timeoftensometimesrarelynever
15. When picking a drink, you look at the price before purchasing it
Neither agree nor disagree
DisagreeStrongly Disagree
Strongly Agree Agree
Agreestrongly agreestrongly disagreedisagreeneither
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16. You would prefer drinking an international drink over a local one
Neither agree nor disagree
DisagreeStrongly Disagree
Strongly Agree Agree
Agreestrongly agreestrongly disagreedisagreeneither
17. Any comments?
Most comments were focusing in necessity of offering real incentives for customers as a gift for
their loyalty, and introducing new flavors to differentiate its taste from other rivals.
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Findings:
Most consumers prefer Mountain Dew over other brands
Most customers are students and teenagers ,and their financial budget is always limited
to a monthly salary from their parents
Important share of customers are supporting Stream due to its price, and as it is a Saudi
brand.
Most customers described the great similarity between Stream and mountain Dew, and
that both products have same taste, and same look.
Necessity of introducing new flavors ,and effective promotional campaigns which match
target market expectations
Most customers are loyal for Pepsi company products, even though the products are
higher than other rivals products prices.
Mountain Dew is targeting a selective market, and it should broaden its target.
The pricing strategy used by Mountain dew has a slight effect on reducing the market
share by approximately 8% to other competitors. More advertising and promotional
activities should be conducted depending on the product value and popularity. Social
activities are recommended to be more involved with the Saudi society and life .
Conclusion and recommendation
Conclusion
Mountain Dew is a well famous brand and it has preserved its position well by accepting the
client psychology, by confirming quality, by introducing originality in products, by increasing its
product base, by taking into consideration the economic factors in view and by powerful and
flashy advertisements. Whenever and where ever there is a attention event, Mountain Dew
must figure in all important occasions in the Saudi market.
Mountain Dew is a popular drink in Saudi market, and it has a very established name and
reputation due to its taste, and appearance. The new pricing strategy used by PepsiCo has
53 | P a g e
affected the level of sales and market share of mountain dew, as more than 8% of current
customers have shifted to a very similar Saudi product which copied the same taste, and the
same bottling shape. Even of the shifting in the price of product, most people are still loyal for
Mountain Dew as it is a global brand coming from a well known company.
Recommendation
Mountain dew should offer sort of incentives and discounts for retailers
It should broaden the target market in its promotions
Should participate in society activities ,and support the environment avoiding disposable
bottles
Should establish outlets inside colleges and schools.
Create an events related to youth ambition and adventure spirit, like car racing
Should consider the health factor in its products, and show the benefits of its product
ingredients
Increase the quality and quantity of advertisements to increase the demand for this
product
Build effective distribution network.
Make agreements with restaurants (alliances ),which will increase its sales effectively.
Repositioning is also recommended
Proposed: to all ages ,youth or mature, energetic, challengeable male and female,
special soft-drink consumers who have little time for sleep, Mountain Dew gives you
energy as it has higher scale of caffeine. you can stay well concentrated and keep
going even when you are not ready. or ‘’Give you power and energy more than other
competitors’’
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Appendix
Philip K. and Gary A. (2005) Principles of Marketing ,
McGrawhill Publications
Business to Business Marketing by Victor L. Hunter, David Tieytan,
Published 1997, McGraw Hill Publications.
Philip K. and Kevin L. K. (2005) Marketing Management,
McGrawhill Publications.
URL: http://pepsico.com www.pg.com
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