PepsiCo, Incorporated: A Soda Behemoth and Staple of American Culture

By Jarrett Bregler

Hi, everyone,

Pepsi is a Fortune 500 company with a long history in the beverage industry. “It engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide” (Berger, 2023). It has seven divisions to uphold its global product provision. “Twenty-three of the company’s brands generate more than 1 billion in annual retail sales” (Devoe-Bice, 2023). Its primary demographics entail an age range of adolescents to middle aged consumers, and the company strategically appeals to all genders and geographic segmentations. “Its global marketing strategy emphasizes lifestyle and providing traditional products combined with health-conscious alternatives” (Berger, 2023). Although highly successful, it often ends up second to the more notable rival of Coke.

Expanding Innovation for a Brighter Future for All

The younger demographics in today’s market of Millennials and Generation Z consumers are more health-conscious with respect to food choices however, they endorse the consumer value of nostalgia which includes soda consumption. In addition, they expect companies to uphold the tenet of environmental consciousness in their product development. Moreover, their lifestyle value involves advancing inclusivity in product interfacing and enjoyment. While it is often second fiddle to Coke and its products, Pepsi was chosen as a final project as it is understatedly successful in its own right and could use an infusement of notoriety in its industry. Furthermore, Pepsi could utilize these demographic groups to advance their position within the industry by aligning the company’s values with theirs for a progressive strategic direction.

Pepsi was also selected as it possesses a secret weapon, its mission. It exemplifies a commitment to product innovation, a relationship marketing approach, an investment in diversity and inclusivity, and a responsibility to “…conserving nature’s precious resources and fostering a more sustainable planet for our children and grandchildren” (Fink, 2024) as part of a global code of conduct. As Pepsi has a gap area in customer engagement compared to Coke, a product upgrade that addresses three pertinent values of two demographics with significant purchasing power seems like a solid strategy to address this gap and align with the consumers that will propel them through the next couple of decades. This will additionally thrust their product to the top of their portfolio, a needed priority given that they have been prioritizing the promotion of corporate partners’ products in recent years. This strategy would not only illuminate Pepsi as an integral and sustainable product of the portfolio, it would enhance it by attracting newer corporate partners with which to expand their current offerings.

Solidifying Meaningful User Engagement and Environmental Consciousness

An essential aspect of product development for companies like Pepsi is product design. Product design catapults the existing product to the next level for consumer interaction. This interaction facilitates ongoing consumer engagement, progresses customer retention, and cultivates brand loyalty. However, product design is part of the product and exceeds visual engagement. The beverage is “…one part, but its functionality is an equal part of the product and how it is provided” (Kelley, 2024). Usability, accessibility, and overall satisfaction of use are of fundamental importance. While Pepsi has made gains in innovation in product expansion and redesign for consumer connection, it has fallen short in diversified “…consumer outreach and in achieving sustainable packaging targets” (Kanioura, 2023). Not all consumers can partake in its product due to disabilities and chronic health conditions. Further, it needs to focus on the discarding of bottle caps as its overall recyclable packaging efforts. Bottle caps “…impact the planet’s well-being and human health” (Klauss, 2023). Companies like Coke are addressing this issue with caps that are fused to the plastic ring around the bottle. However, it hasn’t alleviated this issue. Many consumers work to remove them due to an interruption in “…drink consumption from scratched lips” (Mancini, 2023) and the ability to enjoy the beverage without obstructive interference. The caps further require additional manipulation to keep them pushed back. This creates an opportunity for Pepsi to launch its own initiative and to set the tone for the entire industry.

A new product that can mitigate these concerns involves a sippy bottle design with a Flip Sip Soda Cap in which the top flips open with a small straw poised upwards for easier consumption and alleviation from obstruction. This is for their twenty fluid ounce portable bottle and will build on Pepsi’s foray into inclusivity design that originated in 2020 with making its two liter bottles easier to grip for users. It will advance this progress and make the product more user-friendly in its ability to be consumed in a more transportable manner. It will also preclude bottle caps from ending up in landfills. Acting now is timely as presently;  beverage companies are being mandated by the European Union for the provision of the plastic ring fused caps among all beverage bottles and the United States is following suit. This new product would exemplify the company’s commitment to innovation, positive customer engagement, and would not exceed the production expense increase required by the plastic ring environmental practice. Lastly, this alteration to the bottle cap promotes inclusivity as it endorses the incorporation of user-experience design (UX) practices in product development and the accompanying diligence in insuring more customers, including those with special needs can partake in the product thereby expanding the customer base and the profit generation. 

Advancing Social Responsibility through Research for a Lucrative Tomorrow       

Marketing research would be critical to this process especially in relation to the product development’s objectives. Given Pepsi’s status as a longstanding Fortune 500 company, it will be imperative to institute tools that ensure the intended outcome of progressive innovation and usability that also entails redefining the competitive landscape. A primary marketing research method conducted would be online focus groups given the seven divisions Pepsi has and their global reach. The intent would be to discern how best “…to meet the needs of all customers” (Babin & Zikmund, 2019, p. 6). As the product alteration involves a redesign with two outcomes of product use, focus groups would enable consumer responses to be elaborated on and participants can build off the responses of the group to enhance the data collection process. The application of qualitative data will evoke attitudes and beliefs relative to the product interaction and research objectives can be more comprehensively addressed through the facilitator’s ability to tailor the discussion towards their exploration. Focus groups also cultivate feedback pertaining to competitive analysis to ensure that Pepsi’s company direction meets the unique needs of their customers. In preparation for addressing any issues raised in recommending the product idea, two strategies would be implemented. In the execution of the focus groups, there will be an incorporation of a prototype to ensure understanding of the product and its use. Moreover, clarifying questions will be included as part of the overall dialogue. This is to ensure comprehension of the purpose of the product in relation to the two production outcomes. The predominant intent is to assure an objective understanding in the gathering of the participants’ feedback in data acquisition.

Surveys will augment the qualitative data collection with quantitative results which are more measurable and factual and can ensure that the company is gleaning a thorough and enhanced understanding of the product design’s performance. Interviews would also be conducted relative to market sizing in order to assess product demand, viability, and growth potential in product acquisition and distribution. This data collection would align with qualitative research goals. Both of these would be predominantly online to ensure a larger response rate and the ability to utilize data automation and artificial intelligence processing for expedited analysis and data use. Moreover, an option for audio and video responses would be included to ensure inclusivity and to expand outreach efforts. For secondary marketing research, resources attained include trade and industry reports, Fortune 500 competitor analysis, social media performance monitoring metrics, UX Academic Studies analysis, and industry environment product development and impact reports. Secondary research will validate primary research findings, will discern if additional strategies for user interfacing and recyclable efforts are warranted, and will uncover other trends that should be considered in product development execution and distribution for company and competitor benchmarking.

Hope this topic elicits excitement in the potential for Pepsi as a market dominator and an industry leader committed to the social good of its customers and environment. Stay tuned for a new blog coming your way soon.