Nguyễn Thị Kiều Anh - Snow - F05014 BANKING ACADEMY, HANOI BTEC HND IN BUSINESS (FINANCE) ASSIGNMENT COVER SHEET NAME OF STUDENT REGISTRATION NO UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE Nguyễn Thị Kiều Anh - Snow - F05A F05 - 014 Unit 4: Marketing Principles Gatorade in Vietnam of Ms Doti Chee 19 November, 2012 I, Nguyễn Thị Kiều Anh hereby confirm that this assignment is my own work and not copied or plagiarized from any source I have referenced the sources from which information is obtained by me for this assignment _19th Novermber 2012 Signature Date -FOR OFFICIAL USE (Course Administrator) Assignment Received By: Date: Unit Outcomes Nguyễn Thị Kiều Anh - Snow - F05014 Outcome Evidence for the criteria Feedback Assessor’s decision First attemp t Understand the concept and process of marketing LO1 Be able to use the concepts of segmentation, targeting and positioning LO2 Explain the various elements of the marketing process 1.1 Evaluate the benefits and costs of a marketing orientation for a selected organisation Show macro and micro environmental factors which influence marketing decisions 1.2 2.1 Propose segmentation criteria to be used for products in different markets 2.2 Choose a targeting strategy for a selected product / service 2.3 Demonstrate how buyer behaviour affects marketing activities in different buying situations 2.4 Propose new positioning for a selected product/service 2.5 Merit grades awarded M1 M2 M3 Distinction grades awarded D1 D2 D3 Rewor k Internal Verification Nguyễn Thị Kiều Anh - Snow - F05014 Evidence for the criteria Outcome Feedback Assessor’s decision First attemp t Internal Verification Rewor k Assignment ( ) Well-structured; Reference is done properly / is not done properly /should be done (if any) Overall, you’ve passed / referral………outcomes Areas for improvement:  To achieve a pass, you must meet all the requirements defined in the assessment criteria  To achieve a merit, you must identify and apply strategies to find appropriate solutions and appropriate methods/techniques as well as to present and communicate appropriate findings  To achieve a distinction, you must use critical reflection to evaluate own work and justify valid conclusions as well as to take responsibility for managing and organizing activities  DATE ASSESSOR SIGNATURE / 11 / 2012 NAME: Doti Chee (Oral feedback was also provided) STUDENT SIGNATURE DATE / / NAME : FOR INTERNAL USE ONLY VERIFIED YES NO DATE : VERIFIED BY : NAME : MARKETING AND THE CASE OF PEPSICO Nguyễn Thị Kiều Anh - Snow - F05014 Prepared for: Lecturer, Ms Doti Chee Marketing Principle Banking Academy, Hanoi BTEC HND in Business (Finance) Prepared by: Nguyễn Thị Kiều Anh – Snow - F05A Registration No ITPF05-014 No of words: 4200 Submission date: 19th November, 2012 TABLE OF CONTENTS Nguyễn Thị Kiều Anh - Snow - F05014 EXECUTIVE SUMMARY This assignment contains basic knowledge of marketing as well as analysis and assess the most suitable and effective marketing strategies for Gatorade of PepsiCo in Vietnam This assignment is divided into seven parts as follows: • Explain the various elements of marketing process which effect decision making of PepsiCo • Evaluate the benefits and costs of marketing orientation for PepsiCo • Show macro and micro environmental factors which influence marketing decisions • Propose segmentation criteria to be used for Gatorade in different markets • Choose a targeting strategy for Gatorade • Demonstrate how buyer behaviour affects marketing activities in different buying situations • Propose new positioning for Gatorade The recommendation for PepsiCo is that the company should research about market and its customers to have deeply understanding about them to meet their requirements Therefore, the company will gain more achievements in business operation Nguyễn Thị Kiều Anh - Snow - F05014 INTRODUCTION Starting with ordinary sources, PepsiCo still has survived after bankrupt twice and become the 2nd largest beverage company in the world Today, the global symbol of the Pepsi logo is one of the best known in over the world In 1991, Pepsi Corporation appeared in Vietnam, through 15 years operate; the company becomes the leader in the term of sport drinks with Gatorade product To have his success, Pepsi company have to set a specific marketing strategy to approach Vietnam market For example, product’s tastes were changed slightly in order to become more suitable for Vietnamese Marketing is an important part of any organization If an organization wants to attract consumer and moreover become a market leader, they must understand deeply about marketing concept to apply it effectively This assignment focus on analyzing the most general aspects of marketing process such as analyzing the factors which PepsiCo effect directly on marketing activities of PepsiCo or understanding buying behavior to build a appropriate marketing strategies to attract customers The information in this assignment is collected from many different resources such as book, websites on the internet and some document which related to marketing knowledge and Gatorade of PepsiCo in Vietnam However, because of limitations about time, words, this assignment only gives general information The researcher hopes that those disadvantages will be improved in the future Nguyễn Thị Kiều Anh - Snow - F05014 CONTENTS I Understand the concept and process of marketing 1.1 Explain the various elements of the marketing process 1.1a Elements of the marketing process Nguyễn Thị Kiều Anh - Snow - F05014 Nguyễn Thị Kiều Anh - Snow - F05014 Marketing process 1.1b Situation Analysis 1.1b.1 Trends Situation analysis requires a thorough study of the broad trends within the economy and society, as well as a detail analysis of markets, consumers, and competitors (BPP Professional Education 2004, p.44) The main purpose of analyzing markets, consumers, and competitors is to help PepsiCo prepare campaigns to adapt to new conditions 1.1b.2 Internal environment Understanding of the organization’s internal environment and its strengths and weaknesses will help PepsiCo recognize strong points to continue exploring, and weak points to overcome those shortcomings 1.1b.3 External environment Analyzing the opportunities and threats help PepsiCo take advantage of opportunities to create more profits and recognize threats to minimize effects 1.1c Marketing strategy 1.1c.1 Porter’s five forces Porter’s five forces include: • Bargaining power of suppliers • Bargaining power of buyers • Threat of new entrants • Threat of substitute products • Rivalry among existing competitors It is a yardstick for assessing industry profitability Five forces analysis helps PepsiCo understand the competitive forces in beverage industry; and assess the Nguyễn Thị Kiều Anh - Snow - F05014 attractiveness, growth opportunities within a new industry Base on these, PepsiCo can give effective strategies to raise the profitability, power and competitive position 1.1c.2 Generic strategy According to Michael Porter, businesses can secure a sustainable competitive advantage by adopting one of three generic strategies: • Cost leadership • Differentiation • Focus/niche marketing In other words, the purpose of generic strategies is to create a competitive advantage In order not to “stuck in the middle”, PepsiCo choose “Focus” as a method to create competitive advantage in the Vietnam market 1.1c.3 Ansoff’s Product/Market Matrix Ansoff’s Product Ansoff’s four strategies are tools used within marketing were developed by Igor Ansoff in 1957 It enables business to decide growth strategy depends on whether to sell new or existing products in new or existing markets 1.1d Marketing mix decision 10 Nguyễn Thị Kiều Anh - Snow - F05014 of Vietnam However, base on this they feel safer technological Competitive when investing in Vietnam Competitions are the biggest barrier of PepsiCo Competitive intensity when investing in Vietnam However, if overcome this threats, company will make more profit in investing these segments Vietnam’s economy develops stably  People’s Environmenta l Exposure to economic demand in these segment increase  Create fluctuations favorable conditions for PepsiCo to develop production In short, identifying and assessing market segmentation in markets: consumer market and industrial market play an important role in success of marketing strategy If marketer research and identify exactly market segmentation, the companies will create competitive advantage in the market 2.3 Choose a targeting strategy for a selected product/ service 2.3a Definition of targeting strategy A target market is a market or segment selected for special attention by an organization (BPP Professional Education 2004, p.163) 2.3b Target strategies for Gatorade There are policy options 21 Nguyễn Thị Kiều Anh - Snow - F05014 Three alternative markets - coverage strategies • Undifferentiated marketing strategy: produce a single product, segmentation is ignored entirely • Concentrated marketing: produce the ideal product for a single segment of the market • Differentiated marketing: introduce several product versions for different market segment Concentrated marketing is the most suitable for markets Gatorade in Vietnam 2.3b.1 Customer market PepsiCo’s target market is young generation who like sports Therefore, PepsiCo focus on this specific target market with developing many kinds of product such as: G series, G series pro, and G natural to satisfy customers 2.3b.2 Industrial market PepsiCo focus on satisfying big company with many products: G series, G series pro and G natural 2.3c Advantages of concentrated marketing • Satisfy the needs of specific consumer segment 22 Nguyễn Thị Kiều Anh - Snow - F05014 • Achieve a strong position in the target market • Specialization in a particular market segment  Increase sales profitability 2.3d Evaluating meet criteria There are criteria need to be considered when choosing a target - marketing strategy: Company resources: Concentrated marketing suitable for small company have • limited resources Although PepsiCo is big company with abundant resources, Gatorade is still a new product in Vietnam market Therefore, choosing concentrated marketing is most suitable for PepsiCo in this situation The degree of product variability: PepsiCo focus on specific target market with • many kinds of product (G series, G series pro and G natural) Product’ life-cycle stage: Life - cycle stage of Gatorade is good From appearing in • Vietnam to today, Gatorade still keep high position • Market variability: Vietnam market is not change in beverage industry • Competitors’ marketing strategies: PepsiCo’s marketing strategies is more effective than PowerAde’s one This is proved in annual revenue of each company (in 2010, PepsiCo’s revenue is 11.8 billion while Coca’s one is 10 billion) In short, with identifying exactly targeting strategy in markets, PepsiCo will know key customers to meet their needs 2.4 Demonstrate how buyer behavior affects marketing activities in different buying situations 2.4a Definition of consumer buying behavior and organizational buying behavior • Consumer buying behavior can be defined as, ‘the decision processes and acts of individuals involved in buying and using products or services’ (BPP Professional Education 2004, p.125) • Organizational buying behavior may be defined as ‘the decision - making process by which formal organizations establish the need for purchased products and 23 Nguyễn Thị Kiều Anh - Snow - F05014 services and identify, evaluate and choose among alternative brands and suppliers’ (BPP Professional Education 2004, p.149) 2.4b The difference between customer buying behaviour and organizational buying behaviour Characteristics Customer behaviour Demand Number of customers Volume Buying influence Nature of buy Supplier relationships Location Negotiations Motivation Individual Smaller Smaller Single More personal Intangible Dispersed Easy Interests and lifestyle Organizational behaviour Organization Fewer Larger Multiple More professional Close Concentrated Complex Purpose of organization Organizational and customer buying comparision (Kotler 1997) 2.4c Consumer buying behavior 2.4c.1 Types of buying situation 24 Nguyễn Thị Kiều Anh - Snow - F05014 Consumer involvement It consists of situations: • Routine problem solving (Low involvement): Habitual decisions • Limited problem solving: Limited decision-making • Extended problem solving (High involvement): Lengthy decisions Consumer problem solving comparisons (Kotle,, 1997) Gatorade is sport drinks with low price so customers not research or put decision making effort when buying these products Therefore, buying situation of Gatorade is low involvement and limited problem solving 2.4c.2 Buying situation effect on buying process and marketing activities 25 Nguyễn Thị Kiều Anh - Snow - F05014 Process of customer buying behavior Buying situation Process Influence on buying process When Limited problem solving product, they will experience Focus more on quality evaluate of products as well as Evaluation of product’s quality If products is advertising alternatives assess high, they will be used customers to attract frequently, and familiar with customers Customers can decide easily Need Low involvement customer Marketing strategies Purchase decision Post purchase whether buy or not Therefore, if distribution expand network they need, they can buy it any over the whole Vietnam time to customers can buy Gatorade anywhere There are many sport drinks in Have to make Gatorade the market so if Gatorade does become 26 better in Nguyễn Thị Kiều Anh - Snow - F05014 not evaluation meet customer’s customer’s eyes expectations, they will use substitute products immediately 2.4c.3 Factors of buying behavior and marketing activities Factors Characteristics Every country different Cultural Language Influence on marketing activities has Packaging should be language translated into Vietnamese Therefore, Vietnamese will not know imported product how to use, and its benefit The buying decision of Focus Social Reference group Vietnamese on making first usually impression for products based on the people who used to that product Customers of Gatorade Generate Gatorade free for Personal Occupation focus mainly on athletes athletes in competition as a chance to them try to drink Living standard it of Need create products Vietnamese is increasing friendly with environment significantly Psychologica Safety needs l The with nutritious flavors problem about protecting environment and keeping good health is the most concern of people 2.4d Organizational buying behavior 2.4d.1 Buy - class situation • New task: Buyer purchases a good and service for the first time 27 Nguyễn Thị Kiều Anh - Snow - F05014 • Modified re-buy: Buyer wants to modify product specifications, prices, or suppliers • Straight re-buy: Buyer reorders something without any modifications (zainbooks, n.d.) 2.4d.2 How buy - class situation influence on buying process and marketing activities Process of organizational buying behavior Buying situation Steps Influence on process Marketing strategies Buyer always wants to find the Invest best vendor  Need knowing advertising New Task Suppliers search exactly information about internet product to compare to alternative provide product and make decision more on on TV, (website) or information directly Modified Supplier Base on a list of supplier Consider and evaluate re-buy selection attributes such as quality product their proposal to meet 28 Nguyễn Thị Kiều Anh - Snow - F05014 and services, on-time delivery, requirement firm can propose modifying them Buyer will purchase products Contact and ask buyer to Straight re- Performance buy review without modifying if supplier rate meets their requirements their satisfaction, Always follow buyer’s demand to satisfy them 2.4d.3 Fators of buyer behaviour and marketing activities Factors Influence on buying behavior Influence on marketing activities The inflation rate of Vietnam in Need some strategies such as using 2012 was recorded at 6.5% in stimulus Environmental package to attract September of 2012 and it tends to consumers increase in the next few months This leads to the decline in buying the product of each organization Each organization has its own When a supermarket wants to objective, policies This has strong distribute PepsiCo’s product, both Organizational affect the decision - making parties have to sign a long - term process contract or require special credit arrangements The conflict between people in Find out about internal environment Interpersonal organizations This is cause of of target company to give suitable making wrong decisions strategies to approach them Position of the firm assess whether Need find out how target company Individual its purchasing power is large or is, such as small or big, to making small decision efficiently 29 Nguyễn Thị Kiều Anh - Snow - F05014 In conclusion, analyzing effects of buyer behavior play an important in marketing activities If company understands of buyer behavior or in other word, understands of why they buy, what they buy, and when they buy, organization will usually be market leader 2.5 Propose new positioning for a selected product/ service 2.5a Definition of positing Positioning “is the act of designing the company’s offer and image so that it offers a distinct and valued place in the target customer’s mind.” (BPP Professional Education, Marketing, page 182) 2.5b Select a positioning strategy The Gatorade’s current positioning is high quality and high price There are a new propose is given which base on product characteristic and customer benefit Value proposition is more for more customer benefit 2.5c Evaluating meet criteria Criteria Achieve/Not Evaluation achieve Bring a high valued benefit to the target customer (high Important Achieved nutrition to boost of energy for sports performance, best for health) Superior Achieved In customer’s perception, Gatorade is superior to similar sport drinks PepsiCo Preemptive Achieved has long history  some product’s characteristics difficult for competitors to imitate such as processing techniques flavoring Make big differences with competitors For example, Distinctive Achieved Gatorade replaces sodium losses more effectively than PowerAde does (Kim, 2012) Communicable Achieved Communicate easily to customer through advertising on TV, internet along with large distribution system 30 Nguyễn Thị Kiều Anh - Snow - F05014 Affordable Achieved Profitable Achieved Sport drinks  Cheap cost whatever its differences  Buyer have afford to it Meet customer’s requirements  increasing profit is possible 2.5d Position mapping 2.5d.1 Perceptual mapping There are two characteristics of this gap, namely: taste option, and health Many taste option Gatorade PowerAde Low healthy High healthy Samurai Red Bull Few taste option Perceptual mapping As can be seen, PowerAde is main competitor of Gatorade with many taste option and high healthy 2.5d.2 Gap in the market According to businessdictionary, “Identification of gaps in the market is an important step in increasing market penetration” In the mapping above, the 31 Nguyễn Thị Kiều Anh - Snow - F05014 gap is “many taste option - low healthy” The most important thing that customer concerns when buying products is whether it is healthy or not Therefore, although that product have more options, it is still less likely to exist in the market As a consequence of this, there are not any firms inside this gap 2.5e The influence of positioning over marketing mix factors “Many taste option - High healthy” is the aim positioning of most of company Therefore, this position has some influence on marketing mix factors of PepsiCo Use good materials (fruits, etc) to produce Gatorade  high healthy Product Improve the production line to satisfy enough customer’s needs and wants Place Price Should focus more on big city where have high living standard (Hanoi, HCM) Cost for researching and finding material is high  Reduce unnecessary costs  Reduce product’s cost Should focus more on advertising bring high benefits, for example besides Promotion business activities, the company concern more about social activities, charities such as: sponsorship, promotion funds, In short, without a clear positioning strategy, firm will waste many time and money but actually, it not bring the desired result Therefore, building brand’s value in customer mind is very important and need to be more concerned 32 Nguyễn Thị Kiều Anh - Snow - F05014 CONCLUSION Business operation in any fields also has competitions, whatever its size so a right business strategy is essential for every company It will help the company deal flexible and timely and exactly with the changes of business environment Pepsi Corporation is a large corporation specializing in the fields of production and supply of sports drinks for the Vietnamese market over 15 years Gatorade product of PepsiCo is interested by many countries in over the world, one of them is Vietnam Moreover, opportunity to develop production is high when Vietnam joins WTO Knowing customers needs, PepsiCo produce sport drinks with the analysis of the business environment, opportunities, analysis SWOT, product positioning, Porter strategic, marketing mix and so on; Finally, PepsiCo produce products attract customers Through the analysis above as well as firm’s efforts, PepsiCo is considered as one of the leading brands in term of sport drinks in Vietnam 33 Nguyễn Thị Kiều Anh - Snow - F05014 REFERENCES BPP Professional Education (2004) Marketing Supporting Foundation Degrees 1st ed, London:BPP Professional Education Aldine House, Aldine Place Christopher (n.d.) What Type of Organizational Structure Does Pepsico Have? Retrieved 2011, from http://www.ehow.com/facts_5547544_type-organizational-structure-pepsico.html PepsiCo (2012) GIỚI THIỆU CHUNG Retrieved from http://www.pepsicocareer.com.vn/vi/jobseekers/news/cate/35A4EDA1 PepsiCo (n.d.) PepsiCo to Invest $250 Million in Vietnam over Next Three Years Retrieved from http://www.pepsico.com/PressRelease/PepsiCo-to-Invest-250-Million-in-Vietnam-overNext-Three-Years08162010.html QuickMBA (n.d.) PEST Analysis Retrieved from http://www.quickmba.com/strategy/pest/ Rodrigues (n.d.) Retrieved November 2019, from http://vi.scribd.com/doc/34085882/Pepsico Tuan (n.d.) Thuế thu nhập doanh nghiệp 25% trước năm 2010 Retrieved June 18, 2003, from http://vietbao.vn/Kinh-te/Thue-thu-nhap-doanh-nghiep-se-chi-con-25-truoc-nam2010/10822890/87/ VIBOnline (n.d.) Năm 2008 thu nhập đạt 1.024 USD/người Retrieved January 1, 2009, from http://tintuc.vibonline.com.vn/Home/Thong-tin-kinh-te/2064/Nam-2008-thu-nhap-da-dat1024-USDnguoi Kim (2012) Gatorade vs Powerade: battle of the beverages Retrieved July 2012, from http://faculty.washington.edu/crowther/Misc/RBC/QandA3.shtml 34 Nguyễn Thị Kiều Anh - Snow - F05014 35 [...]... effort.” (Kotler & Armstrong, 2 010 ) 11 Nguyễn Thị Kiều Anh - Snow - F05 014 • Marketing concept: “The marketing management philosophy which holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.” (Kotler & Armstrong, 2 010 ) • Societal marketing concept: “The idea... Armstrong, 2 010 ) 1. 2b Marketing orientation for PepsiCo in Vietnam Marketing concept is the most suitable marketing orientation for PepsiCo’s Gatorade in Vietnam The reason is that applying marketing concept will help PepsiCo define ways to approach Vietnam’s market and then understand customers’ needs and wants to satisfy them as efficiently as possible To analyze exactly the costs and benefits of marketing. .. Competitors’ marketing strategies: PepsiCo’s marketing strategies is more effective than PowerAde’s one This is proved in annual revenue of each company (in 2 010 , PepsiCo’s revenue is 11 .8 billion while Coca’s one is 10 billion) In short, with identifying exactly targeting strategy in 2 markets, PepsiCo will know key customers to meet their needs 2.4 Demonstrate how buyer behavior affects marketing activities... http://www.quickmba.com/strategy/pest/ Rodrigues (n.d.) Retrieved November 2 019 , from http://vi.scribd.com/doc/34085882/Pepsico Tuan (n.d.) Thuế thu nhập doanh nghiệp sẽ chỉ còn 25% trước năm 2 010 Retrieved June 18 , 2003, from http://vietbao.vn/Kinh-te/Thue-thu-nhap-doanh-nghiep-se-chi-con-25-truoc-nam2 010 /10 822890/87/ VIBOnline (n.d.) Năm 2008 thu nhập đã đạt 1. 024 USD/người Retrieved January 1, 2009, from http://tintuc.vibonline.com.vn/Home/Thong-tin-kinh-te/2064/Nam-2008-thu-nhap-da-dat1024-USDnguoi... policy options 21 Nguyễn Thị Kiều Anh - Snow - F05 014 Three alternative markets - coverage strategies • Undifferentiated marketing strategy: produce a single product, segmentation is ignored entirely • Concentrated marketing: produce the ideal product for a single segment of the market • Differentiated marketing: introduce several product versions for different market segment Concentrated marketing is... Kiều Anh - Snow - F05 014 According to Stanton, marketing mix is a combination of four elements (4Ps): product, place, price, and promotion Marketing mix play an important role in the firm’s enterprise The purpose of marketing mix is to satisfy customer’s needs and wants by creating products with innovative features in right place, with reasonable price and flexible promotion 1. 1e Implementation & control... Retrieved 2 011 , from http://www.ehow.com/facts_5547544_type-organizational-structure-pepsico.html PepsiCo (2 012 ) GIỚI THIỆU CHUNG Retrieved from http://www.pepsicocareer.com.vn/vi/jobseekers/news/cate/35A4EDA1 PepsiCo (n.d.) PepsiCo to Invest $250 Million in Vietnam over Next Three Years Retrieved from http://www.pepsico.com/PressRelease/PepsiCo-to-Invest-250-Million-in-Vietnam-overNext-Three-Years0 816 2 010 .html... political, economical, social, and technological (PEST factors) These factors affect on the whole micro environment and firms’ marketing decisions 14 Nguyễn Thị Kiều Anh - Snow - F05 014 12 3 4 Macro environment 2.1b Micro environment Micro environment Stakeholders Explanation how effect marketing decisions Employees has important role in manufacturing Management is a key factor in developing strategy Internal... Snow - F05 014 II Be able to use the concepts of segmentation, targeting and positioning 2 .1 Show macro and micro environmental factors which influence marketing decisions 2.1a Environmental factors Marketing activities of any businesses is affected by many factors, that factors form a firm’s business environment Marketing environment includes macro and micro environmental factors • The micro environment... the marketing process which is considered as the result of process of building marketing strategy After implementing plan, the firm can evaluate whether the marketing strategy meet customer’s demand or not Base on this, the company will adjust it become more suitable to reach objectives In conclusion, defining elements of marketing process will help company know ways to analyze, evaluate and form marketing