Marketing mix introduction

The marketing mix, also known as the 4Ps, is a fundamental concept

in marketing that refers to the four key elements that businesses use
to market their products or services. These elements are Product,
Price, Place, and Promotion. The marketing mix is a crucial tool for
businesses to develop and implement effective marketing strategies
that meet the needs of their target market.

Coca-Cola and Pepsi are two of the most recognizable and successful
beverage companies in the world. Both companies have been in
operation for over a century and have developed a strong presence
in the global market. Despite their similarities, Coca-Cola and Pepsi
have distinct marketing mix strategies that have contributed to their
success.

This project aims to analyse and compare the marketing mix

strategies of Coca-Cola and Pepsi. The analysis will focus on the four
elements of the marketing mix: Product, Price, Place, and Promotion.
The project will examine how each company uses these elements to
market their products and services, and how their strategies differ
from one another. By analysing the marketing mix strategies of Coca-
Cola and Pepsi, this project aims to provide insights into the key
factors that contribute to their success and identify areas for
improvement.
 Company Overview: Coca-Cola

Coca-Cola, founded on May 8, 1886, by pharmacist Dr. John

Pemberton in Atlanta, Georgia, has grown from a small local
beverage to a global multinational corporation. The company's
journey began when Pemberton created a distinctive tasting syrup
and brought it to his neighbourhood pharmacy, where it was mixed
with carbonated water and deemed "excellent" by customers.
In 1888, Asa Candler acquired the Coca-Cola formula and brand,
establishing The Coca-Cola Company. By 1895, Coca-Cola was being
sold in every state in the United States, marking the beginning of its
expansive growth. The company's international expansion began in
the early 1900s, with Cuba and Canada becoming the first countries
outside the United States to bottle Coca-Cola.
Today, Coca-Cola is the world's largest beverage company, operating
in more than 200 countries and territories. The company's portfolio
includes over 500 brands, including Coca-Cola, Diet Coke, Sprite,
Fanta, Minute Maid, and PowerAde. In 2020, the company reported
a net operating revenues of $33 billion, demonstrating its significant
market presence.
The company's global strategy focuses on three key areas:
1. Strengthening its core beverage business
2. Expanding into new beverage categories
3. Developing innovative marketing approaches
Coca-Cola's mission statement emphasizes refreshing the world,
inspiring moments of optimism and happiness, and creating value for
stakeholders.
Key market segments include:
 Carbonated soft drinks
 Water
 Juices and juice drinks
 Energy and sports drinks
 Tea and coffee
The company's global workforce of approximately 86,200 employees
contributes to its continued success and innovation in the beverage
industry.
 Company Overview: Pepsi

Pepsi, a globally recognized brand, was founded in 1893 by

pharmacist Caleb Bradham in New Bern, North Carolina. Initially
called "Brad's Drink," Bradham formulated the beverage as a
digestive aid and energy booster. The name was later changed to
Pepsi-Cola in 1898, a play on the words "pepsin" (a digestive
enzyme) and "cola" (referring to the kola nut).
Pepsi's rise to prominence began in the early 20th century, with its
first franchise operation established in 1905. The company faced
significant challenges, including bankruptcies and ownership
changes, but it persevered and grew steadily. In 1965, PepsiCo was
formed through the merger of Pepsi-Cola and Frito-Lay, creating a
diversified food and beverage company.
Today, PepsiCo is one of the world's leading beverage and snack
companies, operating in more than 200 countries and territories. The
company's portfolio includes a wide range of brands, such as Pepsi,
Mountain Dew, Gatorade, Tropicana, Frito-Lay, and Quaker. PepsiCo
reported net revenues of $70.4 billion in 2020, reflecting its strong
market position and extensive product offerings.
PepsiCo's mission is to provide consumers with a wide range of
beverages and snacks that bring joy, energy, and nourishment. The
company aims to deliver sustainable long-term growth while leaving
a positive imprint on society and the environment.
Key market segments include:
 Carbonated soft drinks
 Juices and juice drinks
 Sports and energy drinks
 Water
 Snacks and food products
PepsiCo's strategy focuses on several key areas:
1. Investing in product innovation and brand marketing
2. Expanding into new markets and categories
3. Enhancing sustainability efforts and corporate social
responsibility
4. Leveraging digital technologies to engage with consumers
The company's global workforce of approximately 267,000
employees is dedicated to driving innovation and growth in the food
and beverage industry. PepsiCo's diverse product portfolio and
strategic initiatives position it as a major player in the global market.
 Product Strategy - Coca-Cola

Coca-Cola’s product strategy revolves around a broad, adaptable

portfolio that meets changing consumer preferences while
reinforcing its iconic brand identity. At its core, Coca-Cola remains
the world’s most recognized soft drink, with offerings tailored to
diverse consumption occasions. The company’s multi-brand strategy
spans four primary categories:

1. Sparkling Soft Drinks: Products like Coca-Cola, Diet Coke, Coca-

Cola Zero Sugar, Sprite, and Fanta cater to fans of both classic
and sugar-free options, providing choices for varied tastes.

2. Hydration and Sports Drinks: Brands such as Dasani, Smart

water, and PowerAde target health-conscious consumers
seeking hydration and sports performance options

3. Tea and Coffee: Through Costa Coffee, Georgia Coffee, and

Fuzetea, Coca-Cola taps into the expanding tea and coffee
markets, appealing to a wide range of taste preferences.

4. Juice and Plant-Based Beverages: Offerings like Minute Maid,

Simply, and Del Valle meet demand for natural, juice-based,
and plant-forward drinks.

Coca-Cola’s innovation is shaped by health-conscious trends,

focusing on reducing sugar across its portfolio, introducing smaller
packaging, and developing new flavours. The company’s recent
product innovations, like Coca-Cola with Coffee and the expanded
Zero Sugar range, demonstrate its commitment to evolving with
consumer tastes while holding onto its core brand appeal.
By investing in low-calorie options and premium product offerings,
Coca-Cola addresses growing demand for healthier, tailored choices.
This strategy helps it stay competitive, relevant, and flexible,
ensuring that new trends are incorporated without compromising
the brand’s legacy. As Coca-Cola continuously adapts its offerings to
meet evolving health and wellness demands, its product strategy
exemplifies a balance between tradition and innovation, securing its
position as a global leader in the beverage industry.
 Product strategy – Pepsi
PepsiCo’s product strategy centres on diversity, innovation, and
consumer-centricity, aiming to meet a range of tastes and
preferences. The flagship Pepsi brand remains a key part of its
portfolio, yet PepsiCo has expanded extensively to include a broad
mix of beverages and snacks, categorized as follows:

1. Carbonated Soft Drinks: Core products like Pepsi, Diet Pepsi,

Pepsi Zero Sugar, Mountain Dew, and Mirinda provide
traditional and sugar-free options.
2. Non-Carbonated Beverages: Tropicana, Gatorade, Lipton Iced
Tea, and Aquafina target health-conscious consumers looking
for hydration, sports performance, and natural juice options.
3. Snacks and Food Products: Through brands like Frito-Lay
(Doritos, Cheetos, Lay’s) and Quaker (Quaker Oats, Chewy
bars), PepsiCo captures the snack and breakfast market.

PepsiCo emphasizes product innovation to address health-conscious

trends by introducing low- and zero-calorie options, new flavours,
and premium offerings. Recent successful launches include Pepsi
Zero Sugar, Gatorade Zero, and Bubbly, a line of sparkling water with
natural flavours.

In addition, PepsiCo prioritizes sustainability by reducing sugar,

saturated fat, and sodium levels, and adopting eco-friendly
packaging solutions. By maintaining a versatile and innovative
portfolio, PepsiCo stays competitive in the fast-evolving food and
beverage industry, meeting diverse consumer needs while fostering
brand growth and market expansion.
 Product comparisons

Coca-Cola and Pepsi are global leaders with product strategies that
share some key similarities but also highlight distinct approaches.

Similarities:

1. Diverse Portfolios: Both companies offer a wide range of

beverages, including carbonated soft drinks, sports drinks,
juices, and bottled water, appealing to various consumer
segments and preferences.
2. Health-Conscious Options: Responding to consumer health
trends, Coca-Cola and Pepsi both provide low and zero-calorie
choices. Coca-Cola offers Diet Coke and Coca-Cola Zero Sugar,
while Pepsi has Diet Pepsi and Pepsi Zero Sugar.
3. Innovation: Both brands prioritize innovation to keep
consumers engaged, regularly introducing new flavours,
packaging sizes, and variants to stay relevant and expand their
market reach.

Differences:

1. Product Categories: While both focus on beverages, PepsiCo

has a stronger foothold in the snack industry with Frito-Lay and
Quaker brands, adding additional revenue streams and market
diversification beyond beverages.
2. Brand Positioning: Coca-Cola is known for its traditional, classic
image, often creating a nostalgic and emotional appeal. Pepsi,
however, focuses on a youthful and energetic image, frequently
targeting younger consumers with a modern, dynamic brand
personality.
 Price Strategy - Coca-Cola

Coca-Cola employs a variety of pricing strategies to balance

profitability and competitiveness. Key approaches include:

1. Penetration Pricing: To enter new markets or boost market

share, Coca-Cola uses penetration pricing by setting low initial
prices to attract consumers, later increasing prices as brand
loyalty grows.
2. Skimming: In markets with high brand loyalty and minimal
competition, Coca-Cola leverages skimming. This strategy
involves setting high initial prices to maximize profits, then
gradually lowering prices to expand the consumer base.
3. Bundle Pricing: Coca-Cola offers bundle pricing, providing
discounts for multiple-product purchases, such as various sizes
of the same beverage or a combination of Coca-Cola products,
encouraging higher consumer spending.
4. Promotional Pricing: Promotional discounts, coupons, and
special offers help Coca-Cola drive sales, boost brand
awareness, and encourage short-term demand.

These strategies are tailored to specific markets based on

competitive conditions. For example, in highly competitive regions,
Coca-Cola may employ penetration pricing to attract consumers,
while in markets with strong brand presence, skimming maximizes
revenue.

Coca-Cola’s pricing is influenced by its low price elasticity, meaning

demand remains stable despite minor price changes. However,
intense competition from PepsiCo and Dr Pepper Snapple requires a
balanced strategy that is both competitive and profitable.
 Price Strategy – Pepsi

PepsiCo's pricing strategy is designed to achieve a balance between

profitability and competitiveness in a dynamic market. Key elements
of its approach include:

1. Competitive Pricing: PepsiCo closely monitors competitors,

especially Coca-Cola, to keep its prices aligned with market
standards. This helps PepsiCo attract price-sensitive consumers
and maintain its market share.
2. Demographic Pricing: PepsiCo adjusts its pricing based on the
income levels of different market segments. In regions with
higher disposable income, it may set premium prices, while in
price-sensitive markets, it offers more affordable options to
stay competitive.
3. Promotional Pricing: To drive sales and enhance brand
visibility, PepsiCo frequently employs promotional pricing
tactics, including discounts, coupons, and special offers during
peak consumption times or to introduce new products.

Overall, PepsiCo’s pricing strategy leverages competitive insights,

demographic targeting, and promotions to remain relevant, capture
consumer interest, and drive growth in the highly competitive
beverage market.
 Price Comparison

Coca-Cola and Pepsi share similarities and differences in their pricing

strategies as they navigate intense competition while maintaining
profitability.

Similarities:

1. Price Elasticity: Both brands benefit from low price elasticity,

meaning small price changes don’t greatly impact demand,
allowing for price adjustments without significant sales drops.
2. Promotional Pricing: Coca-Cola and Pepsi both use discounts,
coupons, and special promotions to boost sales and brand
awareness, especially during peak consumption periods.
3. Bundle Pricing: Both companies offer discounts on bundled
purchases, encouraging bulk buying and increasing total sales.

Differences:

1. Penetration Pricing vs. Competitive Pricing: Coca-Cola often

uses penetration pricing, setting low initial prices to capture
market share in new or competitive markets. Pepsi, however,
generally favours competitive pricing, aligning or slightly
undercutting prices to retain market share.
2. Skimming Strategy: Coca-Cola employs skimming in strong
markets, initially setting high prices to capitalize on brand
loyalty, then lowering prices over time. Pepsi, on the other
hand, relies less on skimming and focuses on competitive
pricing.
3. Market Segmentation: Coca-Cola segments its market
extensively, offering a range of price points across diverse
products to appeal to varied demographics. Pepsi also
segments but emphasizes consistent competitive pricing within
its product lines.
 Promotion Strategy - Coca-Cola

Coca-Cola’s promotion strategy focuses on building brand loyalty,

enhancing emotional connections with consumers, and increasing
market visibility through a variety of innovative and targeted
initiatives.

1. Emotional Branding: Coca-Cola is renowned for its emotional

marketing campaigns, emphasizing happiness, togetherness,
and shared experiences. Iconic campaigns like "Open
Happiness" and "Share a Coke" create positive, memorable
connections with consumers, encouraging brand loyalty.
2. Sponsorships and Partnerships: Coca-Cola invests heavily in
sponsorships, aligning with major global events such as the
Olympics, FIFA World Cup, and other sports events. These high-
profile partnerships allow Coca-Cola to engage with a massive
audience, reinforcing its image as a symbol of celebration and
unity.
3. Advertising Across Channels: Coca-Cola uses a multi-channel
approach for advertising, including television, print, digital
platforms, and social media. This broad reach ensures that
Coca-Cola remains visible across various touchpoints, catering
to a wide demographic.
4. Promotions and Discounts: Coca-Cola frequently uses limited-
time offers, discounts, and in-store promotions to drive sales,
especially during key seasons and holidays. Special edition
products and packaging also encourage consumer excitement
and engagement.
5. Digital and Social Media Marketing: Coca-Cola has embraced
digital transformation, using social media platforms and
influencer partnerships to reach younger, tech-savvy
consumers. Interactive campaigns like personalized bottles
further strengthen its digital presence.
 Promotion Strategy – Pepsi

Pepsi’s promotion strategy is centred on youth culture, innovation,

and creating strong connections with consumers through engaging,
dynamic campaigns.

1. Youth-Oriented Branding: Pepsi positions itself as the choice

of younger, energetic consumers. Its campaigns often feature
pop culture icons, celebrities, and music, aligning the brand with
modern trends and youth lifestyle. Famous campaigns like
"Pepsi Generation" and collaborations with artists such as
Beyoncé and Kendall Jenner reinforce this youthful, vibrant
image.
2. Sponsorships and Partnerships: Pepsi is heavily involved in
sponsoring high-energy, popular events such as the Super Bowl,
music festivals, and sports leagues, including the NFL and
NBA. These partnerships allow Pepsi to engage directly with
large, diverse audiences, boosting brand recognition and
affinity.
3. Digital and Social Media Campaigns: Pepsi has adapted well
to the digital age, leveraging social media platforms, influencer
marketing, and viral campaigns to connect with younger
audiences. Interactive promotions and challenges on platforms
like TikTok and Instagram are integral parts of Pepsi’s strategy.
4. Limited-Edition Products and Contests: Pepsi often
introduces limited-time products or special edition packaging,
creating a sense of exclusivity and urgency. The brand also runs
contests and giveaways, encouraging consumer participation
and increasing brand interaction.
5. Discounts and Bundles: Like Coca-Cola, Pepsi uses
promotional pricing strategies, offering discounts, coupons, and
bundled products to boost sales during peak periods.
 Promotion Comparison

Comparing the promotion strategies of Coca-Cola and Pepsi reveals

both similarities and differences in their approaches to engaging
consumers and boosting brand visibility.

Similarities:

1. Celebrity Endorsements: Both Coca-Cola and Pepsi leverage

high-profile celebrities and influencers to create emotional
connections and reach broader audiences. Coca-Cola uses
iconic figures in its advertisements, while Pepsi focuses on pop
culture icons and music stars to appeal to younger consumers.

2. Event Sponsorships: Both companies invest heavily in

sponsoring major events like sports tournaments (e.g., the FIFA
World Cup, the Super Bowl, and the Olympics), reinforcing their
global presence and association with celebration and
entertainment.

3. Digital and Social Media Marketing: Coca-Cola and Pepsi both

actively engage consumers on digital platforms, using social
media, influencer partnerships, and interactive campaigns to
connect with younger, tech-savvy audiences
Differences:

1. Brand Positioning: Coca-Cola’s promotions focus on emotional

connections, often promoting values of happiness,
togetherness, and nostalgia. In contrast, Pepsi emphasizes
youthfulness, energy, and pop culture, frequently aligning with
music and entertainment.

2. Promotional Tactics: Coca-Cola often relies on limited-time

offers, discounts, and special editions to drive excitement.
Pepsi, while also using discounts and contests, leans more into
viral digital campaigns and exclusive collaborations with
celebrities.

3. Campaign Tone: Coca-Cola’s tone tends to be sentimental and

heart-warming, while Pepsi’s is lively, youthful, and
contemporary, often tapping into the latest trends and cultural
moments.
 Public Relations and Corporate Social
Responsibility

Both Coca-Cola and PepsiCo have established strong Public Relations

(PR) and Corporate Social Responsibility (CSR) strategies aimed at
enhancing their public image, contributing to society, and addressing
environmental and social challenges. Here's a comparison of how
each company approaches these areas:

Coca-Cola:

1. Public Relations:
o Brand Image Management: Coca-Cola focuses on creating
positive associations by aligning itself with happiness,
community, and unity. Through emotional marketing and
storytelling, the brand fosters a strong connection with
consumers.

o Crisis Management: Coca-Cola maintains a proactive PR

strategy, often responding quickly to any controversies,
such as concerns over health impacts or environmental
issues, to protect its reputation
 2. Corporate Social Responsibility (CSR):
o Sustainability Efforts: Coca-Cola is committed to
sustainability, focusing on water conservation, reducing
carbon emissions, and improving packaging by aiming for
100% recyclable packaging. It also strives to reduce its
environmental footprint by using renewable energy and
supporting water stewardship initiatives.

o Community Impact: Coca-Cola invests in community

development programs, including education, women’s
empowerment, and disaster relief efforts. Its "5by20"
initiative aimed to empower 5 million women
entrepreneurs globally by 2020.

PepsiCo:

1. Public Relations:
o Health and Wellness Advocacy: PepsiCo often addresses
concerns related to the healthiness of its products
through efforts to offer healthier options and highlight its
commitment to reducing sugar and sodium levels in
products.

o Crisis Management: PepsiCo maintains a similar proactive

approach to PR, addressing issues swiftly, such as
negative publicity related to its marketing or health
concerns regarding sugary drinks.
 2. Corporate Social Responsibility (CSR):
o Environmental Sustainability: PepsiCo focuses on
reducing plastic waste, water use, and carbon emissions.
The company has made strides towards sustainable
agriculture and aims to improve the sustainability of its
supply chain.

o Social Initiatives: PepsiCo’s CSR programs emphasize

diversity, inclusion, and education. Its "PepsiCo
Foundation" supports global communities with initiatives
in health, education, and disaster relief.

Comparison:

 Focus Areas: Coca-Cola places a strong emphasis on water

stewardship and community empowerment, while PepsiCo is
focused on health and wellness and sustainable agricultural
practices.

 Sustainability Initiatives: Both companies are committed to

sustainability but have different focal points. Coca-Cola
emphasizes water usage and recycling, whereas PepsiCo
targets sustainable sourcing and reducing plastic waste.

 Public Image: Coca-Cola's PR focuses on emotional branding

and positive community impact, while PepsiCo often addresses
more direct societal concerns like health and environmental
sustainability.
 Conclusion and Recommendations

Both Coca-Cola and PepsiCo are leaders in the global beverage

industry, each with well-developed strategies in terms of product
offerings, pricing, promotion, and public relations. Coca-Cola is
known for its emotional branding, strong community connections,
and premium offerings, while PepsiCo emphasizes youth-oriented
marketing, health-conscious initiatives, and diversified product lines,
including snacks. Both companies engage in sustainability efforts and
corporate social responsibility, with Coca-Cola focusing on water
stewardship and community development, while PepsiCo prioritizes
sustainable agriculture and health improvements.

Despite their similarities in engaging marketing and global reach, the

two companies have distinct approaches to market segmentation,
branding, and CSR. Coca-Cola tends to focus on a timeless, emotional
appeal, while PepsiCo positions itself as youthful, trendy, and socially
responsible. These unique strategies help them cater to different
segments of the market, with each brand maintaining its loyal
customer base.

Recommendations:

1. For Coca-Cola:
o Expand Health-Conscious Options: As consumers
increasingly focus on health, Coca-Cola can benefit from
further expanding its portfolio of low-calorie, organic, and
functional beverages to match the growing demand for
healthier options.
 o Strengthen Digital Presence: While Coca-Cola’s
traditional marketing is powerful, a stronger, more
interactive presence on digital platforms (e.g., social
media challenges, influencer partnerships) can help the
brand connect with younger, tech-savvy consumers.

2. For PepsiCo:
o Enhance Premium Offerings: PepsiCo can further expand
its premium and artisanal product lines, capitalizing on
the trend towards high-quality beverages and snacks. This
could allow the brand to appeal to more diverse market
segments, including health-conscious and upscale
consumers.

o Focus on Sustainability Communication: While PepsiCo

has made significant strides in sustainability, it should
enhance its communication around its green initiatives to
strengthen its corporate image, particularly around
environmental sustainability and its eco-friendly
packaging efforts.

Both companies should continue leveraging their respective

strengths while also adapting to shifting consumer preferences, such
as the growing demand for healthier products and sustainable
practices.