Maketing Management Pepsi and Coke Custo

©RHEA
MAUREEN A. MORALITA

Table of Contents:

Abstract ---------------------------------------------------------------------------------------- 5
Introduction ---------------------------------------------------------------------------------------- 6
Company Profile ------------------------------------------------------------------------------ 6
Objectives ---------------------------------------------------------------------------------------- 6

Q1. Identifying Customer Perceived Value for Pepsi ----------------------------- 7
1.1: The Means-end model relating price, quality, & value (Zeithaml, 1988) --- 7
1.2: Typology of the customer (Holbrook, 1999) -------------------------------- 9
1.3 Customer Value Hierarchy Model (Woodruff, 1996) -------------------- 11

Q2. Comparing and evaluating the existing value proposition -------------------- 12
2.1: Pepsi Value Proposition: Customer value model (Piercy, 2009) ----------- 12
2.2: Customer value propositions in Business
Markets (J. Andersons, et al, 1995) ------------------------------------------- 14
2.3: Value Proposition Builder (Barnes et al, 2009) -------------------------------- 15
2.4: Comparison of the evaluation of the existing value proposition ------------- 17

Q3. Benchmarking Value Proposition of Pepsi and Coca Cola Product ----------- 18
3.1: Brand Strength Value ----------------------------------------------------------------- 18
3.2: Most Influential brand and customer satisfaction -------------------------------- 19
3.3: World Most Admired Company (Fortune, 2016) ------------------------- 20

Q4. Identification of the new value proposition ---------------------------------------- 21
4.1: Pepsi New Value Proposition:
Mission & Marketing Strategy (Piercy, 2009) ---------------------------------- 21

Q5. New value proposition implementation plan --------------------------------------- 24
5.1: Marketing plan (7P’s) ------------------------------------------------------------------ 24
5.2: Internal and External Marketing Communication Plan -------------------------- 26

Conclusion ----------------------------------------------------------------------------------------- 28
References ----------------------------------------------------------------------------------------- 29

1

©RHEA MAUREEN A. MORALITA

Appendices:

Appendix 1: Typology of customer value: Extrinsic
(Efficient/Accessibility/Esteem) ----------------------------------------- 32
Appendix 2: Typology of customer value: Intrinsic
(Ethics/Environmental/Spirituality) ---------------------------------------- 34
Appendix 3: List of Pepsi Products (Food & Beverages) ------------------------------ 35
Appendix 4: Environmental Sustainability
Annual Report (2015): Pepsi vs. Coke --------------------------------------- 36
Appendix 5: Internal Customer Benefits (Pepsi, 2016) ------------------------------ 37
Appendix 6: Value proposition (Pepsi & Coke) ---------------------------------------- 38
Appendix 7: Extrinsic Attributes: Brand & Positioning of Pepsi -------------------- 39
Appendix 8: Extrinsic Attributes: Pricing & Advertising of Pepsi --------------------- 40
Appendix 9: Intrinsic Attributes: Flavor, color textures, sweetness ------------------- 41
Appendix 10: Intrinsic Attributes: Pepsi Packaging ---------------------------------------- 42
Appendix 11: Comparison of Product Pricing (Pepsi vs. Coke) --------------------------- 43
Appendix 12: Satisfaction Survey (Singapore) ---------------------------------------- 44
Appendix 13: Brand & Company Capabilities ---------------------------------------- 45
Appendix 14: Most convenient location to purchase Pepsi products ------------------ 46
Appendix 15: Customers who are keen to buy
Pepsi products (Pricing matter) ---------------------------------------- 47
Appendix 16: Perceived Benefits vs. Perceived Sacrifices ------------------------------ 48

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List of Figures Page No.
1 The means-end model (Zeithaml, 1988) 7
2 Typology of customer value (Holbrook, 1999) 9
3 Customer Value Hierarchy Model (Woodruff, 1996) 11
4 Customer Value Model (Piercy, 2009) 13
Customer Value Proposition in Business Markets (J. Anderson, et al,
15
5 1995)
6 Value Proposition Builder (Barnes et al, 2009) 17
7 The trap of competitive box (Piercy, 2009) 24
8 Mission and marketing strategy (Piercy, 2009) 25
9 Marketing Strategies & Marketing Programmes (Piercy, 2009) 27
10 Pepsi Extrinsic Attributes - Efficiency 36
11 Pepsi Extrinsic Attributes - Accessibility 36
12 Pepsi Intrinsic Attributes - Ethics 48
Most convenient location to purchase Pepsi products in Singapore
51
13 (beverages)
Customers who are keen to buy Pepsi products in Singapore (Pricing
52
14 matter)

3


List of Tables Page No.

1 Brand Value & Enterprise Value 20
2 Global Survey Brand Satisfaction 20
3 Most Preferred Brand and Customer Satisfaction 22
4 Most Admired Company (Fortune, 2016) 23
5 Pepsi Extrinsic Attributes - Esteem 37
6 Pepsi products - 22 brands 39
7 Pepsi Sustainability Report (2015) 40
8 Coke Sustainability Report (2015) 40
9 Internal Customer Benefits - Pepsi 41
10 Value Proposition - SWOT Analysis (Pepsi vs. Coke) 42
11 Pepsi Intrinsic Attributes - Flavour, Colour, Textures, and Sweetness 45
12 Satisfaction Survey – Singapore (Pepsi) 47
12 Perceived Benefits & Perceived Sacrifices 48

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Abstract

Customer perceived value is what customer think about your products and services.
In this study, the author will utilize diverse strategic methods and academic references
to identify the perceived value towards the product and the organization itself. The
author will benchmark its value proposition for Pepsi and its leading competitor Coke.
In conclusion, this study will be able to determine relevant new value proposition with
an implementation plan.

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Introduction:

Customers will constantly base their purchasing decision based on the perceived value of the
product or service that company offers (Piercy, 2009). Perceived value is the only reason on
why customers buy a particular product or service. In this study, the researcher will utilize
diverse strategic methods to identify the customer perceived value for Pepsi vs. Coke and its
value proposition in (B2C) segment.

Company Profile:

Pepsi is one of the world's leading food and beverage companies with over $63 billion in net
revenue in year FS 2015 and a global portfolio of diverse and beloved brands. Pepsi has 22
brands which generates more than $1 billion estimated annual retail sales.

Objectives:

The main objectives of the study are to determine the customer perceived value for Pepsi and
assess its existing value proposition against its leading competitor and eventually propose a
new value proposition that will match the desired value measures of the customers.

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1.0: Identifying Customer Perceived Value for Pepsi:

Customer perceived value is the buyer’s general assessment of the product based on
perceptions of what is received and what is given (Zeithaml, V.A. 1998). Calculating the
customer perceived value of the product using formula: Customer Perceived Value =
Perceived Benefits - Perceived Sacrifices (Monroe, 1991). Application were revealed in
(Appendix 16: Perceived Benefits vs. Perceived Sacrifices).

Apparently, Pepsi has a common features and similarities with its leading competitor (Coke).
In this study the evaluation and analysis will focus on the value proposition of Pepsi that
perceived by customer values using models below:

1.1 The Means-end Model relating price, quality, and value.

In this model, it permits the organizations to comprehend the correlation among the concepts
of perceived quality, price, and perceived value from the customers perspective (Zeithaml,
1988).

Extrinsic Attributes:
Affordable; Appealing Intrinsic Attributes:
Advertisement; No. 2 world Attractive packaging;
rank in Beverages industry; recycle & reusable
Intrinsic Attributes: Recognized as the 2nd of the packaging; ecological
Great tasting; very best soda (Nor Cal, 2005) friendly (Zmuda, 2013).

refreshing; thirst
quenching; high quality;
worth what it costs; goes

well with meals and snacks
(Lahore S.E., 2014).

Price: 7% lesser cost
(Paul R., 2012)

Figure 1: The Means-end Model (Source: Zeithaml, 1988 & Author's work, 201

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In analyzing this model, there are attributes that need to be examined and evaluated such as
the customer value and the perceived value (Woodruff, 1977). Apparently, every consumers
evaluates its product based on its extrinsic and intrinsic attributes (Jacoby, 1972 & Olson,
1977).

Drive factor for the customers to purchase Pepsi products can be divided into its extrinsic
attributes that consists brand, positioning, pricing, and level of advertising (Appendix 7: Brand
& Positioning of Pepsi; Appendix 8: Pricing & Level of Advertising) and its intrinsic attributes
comprising of flavor, color, textures, degree of sweetness, and packaging (Appendix 9: Pepsi
Intrinsic attributes: Flavor, Textures, Color & Degree of sweetness; Appendix 10: Pepsi Intrinsic
Attributes: Packaging).

The extrinsic attributes for Pepsi are, ranking as 2nd placer of worldwide food and beverage
industry, its pricing that contains 7% less cost than its leading competitor, and the aggressive
level of advertising comprising of billboards, attractive and appealing celebrities, game
sponsorships, etc.

While the author is analyzing the customer perceived value for Pepsi, obviously the company
is utilizing excellent strategy to engaged to its customers in which the company is having
outstanding extrinsic (Appendix 7: Brand & Positioning of Pepsi; Appendix 8: Pricing & Level
of Advertising) and intrinsic attributes (Appendix 9: Pepsi Intrinsic attributes: Flavor, Textures,
Color & Degree of sweetness; Appendix 10: Pepsi Intrinsic Attributes: Packaging). In which in
this case the customer will choose to purchase Pepsi products. This lead may be a result of
Pepsi's ability to quickly diverse its product that focus more on diet sodas and bottled water.
Contrasting to Coke, as it perceived to be less healthy options.

In conclusion to the above analysis (the means-end model), if customers are in focus only on
intrinsic attributes (Appendix 9: Pepsi Intrinsic attributes: Flavor, Textures, Color & Degree of
sweetness) then the customer perceived value will be favorable for Pepsi. However, if
customer will go after the premium pricing or the extrinsic attributes (Appendix 7: Brand &
Positioning of Pepsi; Appendix 8: Pricing & Level of Advertising), then customer perceived

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value will may or may not favorable to Pepsi, since its leading competitor (Coke) is in the top
and most valuable brand globally (The Statistics Portal, 2016).

1.2: Typology of customer value (Holbrook, 1999)
In this framework, it enables to determine different typologies of values perceived by the
customers. This value typology emerged from a prolonged analysis of literature (Holbrook,
1999).
Orientation Extrinsic Intrinsic
(Appendix 1) (Appendix 2)
Self-Oriented: Efficient: Wide range of availability (e.g. Fun: Hydrate; Refresh; Boost
Active restaurant, supermarkets, mini store). energy; relaxation' quench the
Accessibility: Fast response from customer thirst; feeling young (Nor Cal,
support if issue occurs (Leo, 2013) 2015).
Self-Oriented: Excellence: Quality of taste, sweet and citrus Aesthetics: Less carbonated
Reactive flavor (Lubin 2012). (Zmuda, 2013).

Other Oriented: Status: Top 2 of customer choice of soda Ethics: Environmental &
Active beverage worldwide (Nor Cal, 2005). ecological conscious (e.g. waste
reduction, recycling, etc.) Pepsi,
2016
Other Oriented: Esteem: Considering the global issue of obesity Spirituality: Alcohol content (e.g.
Reactive (e.g. Pepsi increase whole grains, fruits, Religion like Islam forbids them
vegetables, nuts and low-fat dairy incorporated from any beverages with an
in their food products) Pepsi, 2016. alcohol content). (Kinninigan,
2011).

Figure 2: Typology of customer value (Source: Holbrook, 1999 & Author's work, 2016)

Conjoining the distinctions produces of the typology of customer value illustrated above
(Figure 2) the author has provided diverse customer perceived value with relevant sources
from the articles, journals, books, etc. discussed further in (Appendix 1: Typology of customer
value: Extrinsic Attributes; Appendix 2: Typology of customer value: Intrinsic Attributes).

From the above analysis, Pepsi differentiate its brand on the basis of having sweeter taste
(Appendix 1: Typology of customer value: Extrinsic Attributes) and more environmental and
economical favorable (Appendix 2: Typology of customer value: Intrinsic Attributes). In fact,
Pepsi won the "blind taste test soda challenge" held at several shopping centers (Pepsi
Challenge, 2009).

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The extrinsic attributes of Pepsi are the wide range availability of its product comprising to
diverse distribution network; accessible efficiency (self-oriented active) which contains the
fastest response rate of (00:19 seconds) waiting time for after sales service (Leo, W. 2013),
and the social consideration in global obesity issue by diversifying its product to healthier food
and beverages.

The intrinsic attributes comprising of environmentally and economically favorable in which
Pepsi has a positive social and environmental impacts (Appendix 2: Typology of customer
value: Intrinsic Attributes; Appendix 10: Intrinsic Attributes: Pepsi Packaging). Additionally, in
spirituality matter, particularly (Islam) religion forbids any alcohol content coming from food
and beverages (Holy Quran, Surah Maida 5:19).

In conclusion from the above analysis, the buyer perceived value for Pepsi are the wide
availability of Pepsi products, efficiency on its customer service, and the sweeter taste which
contains citrus flavoring. These customers perceived value will be favorable for Pepsi.
However, buyers who are from (Islam) religion will be unlikely favorable for Pepsi due to its
alcohol content (0.01%) inside (Peter, 2012).

So what Holbrook's framework does is the ability to identify the key values of customers, and
in the case of Pepsi, whilst it can be stated that the customer perceived value is
multidimensional.

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1.3: Customer Value Hierarchy Model (Woodruff, 1996)
This model shows that goals are organized hierarchically with the buyer’s ends goals or
customer values at the highest level, the consequences in the middle, and the product
attributes at the lowest level (Parasuraman, 1997; Woodruff, 1997).

Customer Satisfaction with
Desired Customer Value
Received Value
Customers’ goals
Goal-based Satisfaction

& purposes

Desired
consequences in
Consequence-based satisfaction
use situation

Desired Product Attribute-based satisfaction
attributes &
attribute
performances

Figure 3: Customer Value Hierarchy Model (Source: Woodruff, 1996 & Author's work)

Following this model, it focuses on the formation of value of products. In here, consumer’s
significant perceived judgment towards Pepsi product attributes (Appendix 8: Extrinsic
Attributes – Pricing & Advertising of Pepsi; Intrinsic Attributes – Flavor, color textures,
sweetness; Appendix 10: Intrinsic Attributes – Pepsi Packaging).

In conclusion, in the application of Woodruffs model, these perceived attributes by
consumers are concrete descriptions that shows Pepsi products entails or possesses.
Consequences denote to the outcomes from these product attributes and the values which
is linked with the consequences. These consequences refers to the perceived benefits and
perceived sacrifices shown in (Appendix 16: Perceived Benefits and Perceived Sacrifices).

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2. Comparison and evaluation of existing value proposition of Pepsi against Coca Cola.

2.1 Pepsi Value Proposition: Customer Value Model (Piercy, 2009)
Below (Figure 4) represents Pepsi value proposition by using the Customer Value model
(Piercy, 2009).

Market Mission and Values:
To provide delicious, affordable &
convenient food & beverages.
Aim to deliver top tier financial
performance.

Competitive Differentiation:
Pepsi diversified its products to
Competitive Positioning:
food/snacks in which 63% is food & 37% Packaging use for the products are
is for beverages (22 brands worldwide). recyclable that can save tons of raw
materials (Appendix 4).
Pepsi understand, exploit, invest to create
and sustain their core competencies (eco- Strong brand with reasonable costing.
friendly & waste to wealth program).

It has a wide range of distribution channel
and attractive advertisement.

Market assets:
Strong brand worldwide (rank 2)
Robust customer relationship;
Inexpensive and diversified products.

Figure 4: Customer Value Model (Source: Piercy, 2009 & Author's work)

Significant value proposition of Pepsi is holding a wide range of availability of Pepsi products
(Bailey, S. 2014). However, its leading competitor (Coke) has also a wide range of distribution
in the market as well.

Since, Pepsi aim provide delicious, affordable, convenient food & beverages (Pepsi, 2016) and
aim to create products that perceived quality by customer. As a point of differentiation to
Coke which offers beverages with premium pricing (Appendix 11: Comparison of Product
Costing Pepsi & Coke).

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Another point of differentiation, Pepsi has a robust customer relationship (internal customer)
in which Pepsi offers more than a salary (Appendix 6: Internal Customer Benefits: Pepsi & Coke
2016) compared to (Coke) which focus more on external customers only (Vendredi, 2012).

One more comparison, considering the competitive product positioning of Pepsi (Appendix 9:
Intrinsic Attributes - Packaging, Appendix 4: Pepsi Environmental Sustainability Report, 2015
and Appendix 13: Brand & Company Capabilities), Pepsi is a powerful brand due to its social
connections and environmental and ecological favorable company compared to Coke
(Appendix 5: Environment Sustainability Annual Report, 2015 - Pepsi vs. Coke), however both
(Pepsi and Coke) are actively working to become environment friendly (Borras, Jo. 2015).

In Singapore, the author conducted satisfaction survey with 80 respondents held in Singapore
by random sampling method comprising of verbal interview only (Appendix 12: Satisfaction
Survey - Singapore). Pepsi will need to strengthen more its value proposition in terms of
nutritional contents, looks, packaging appearance, advertising, and customer relationship
engagement so that Pepsi can continue competitive advantage against its leading competitor
(Coke).

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2.2 Customer value propositions in Business Markets (J. Anderson, et al, 1995)
This model (Figure 5) illustrates the comparison of value proposition of Pepsi against Coke. In
here, there are three forms of value proposition: favorable points of difference, all benefits,
and resonating focus which are very significant segments.

Figure 5: Customer Value Proposition in Business Markets (Source: J. Anderson, et al, 1995 & Author's
work)

Under "all benefits" type that consists of internal and external customers, Pepsi has wide
range of offerings for its external customers which contains attractive factors such as sweet
taste, healthy product, wide range of availability, and diversified products which is shown in
(Appendix 9: Intrinsic Attributed: Flavor, Color, Textures, and Sweetness; Appendix 10:
Intrinsic Attributes: Packaging; Appendix 2: Typology of Customer Value - Intrinsic: Ethics,
Environment, and Spirituality). In this case, customers who are after with healthier products
with several variation of offerings will be attracted accordingly.

Favorable Points of Difference: In this segment, Pepsi has a stronger and competitive
advantage against Coke because Pepsi diversified its product to food and beverage and Coke

14


still in focus of beverage product only. In fact, 63% of Pepsi products contains food and the
remaining 37% consist of diversified beverages (Appendix 3: List Pepsi Products).
Another point of difference is the affordable pricing cost (Appendix 11: Comparison of
Product Pricing). So in this segment, Pepsi has higher market attractiveness than Coke.

Resonating Focus: Both Pepsi and Coke has less sugar content to its product, Coke also goes
environmentally and ecologically friendly too. However, the market attractiveness is based
on its extrinsic and intrinsic attributes, although both company has a very similar value
proposition. Coke has the capability to showcase its attributes to the market (Appendix 6:
Value proposition: Pepsi & Coke; Appendix 1: Brand Equity: Pepsi & Coke and Appendix 13:
Brand and Company Capabilities), and the customer perceived value for Coke is higher. So
in this segment, Pepsi is deprived in terms of company capabilities.

2.3 Value Proposition Builder (Barnes, C. et al, 2009)
In this model, as illustrated in (Figure 6) the articulation of the measurable value of the
experience that an organization or individual will get from offering, where value = benefits
- cost (Barnes et al, 2009).

6 2

5
3
4

Figure 6: Value Proposition Builder (Source: Barnes et al, 2009 & Author’s work, 2016)

15


So in here, the author explains the diverse value proposition as follows:

Market: In the market sector, Coke target segment focus on people on all ages (Coke, 2016).
While Pepsi on the other hand, focus on new generation (Nooyi, I., 2016) target segmenting
pertaining to young adults and teenagers. The perceived values are the extrinsic and intrinsic
attributes of each brand (Pepsi vs. Coke). So in this segment, Pepsi is unable to cater those
desired values from customers in different ages. In addition, Coke is the most known soda
in every part globally, due to its aggressiveness production and distribution of its product
availability in every food chain worldwide. In fact, the red and white logo (Coke) is
recognized by 94% of the world's population (Steel Media: Business Insider, 2015).

Value experience & Offerings: In terms of customer service value experience & offerings,
Pepsi provide customer service support efficiently which (00:19) response time (Appendix
1: Extrinsic Attributes: Efficiency).
Benefits & Alternatives and Differentiation: Most of Pepsi food and beverage products are
good for health (Appendix 3: List of existing Products) with affordable pricing (Appendix 11:
Comparison of Product Pricing & Appendix 6: Value Proposition). Coke on the other hand,
focuses only to beverages products which contains diverse brands more than to Pepsi
(Appendix 13: Brand & Company Capabilities.

Proof: As Pepsi and Coke are on the top competitive and most powerful brand worldwide
(Appendix 7: Brand and Positioning - Extrinsic Attributes; Appendix 13: Brand & Company
Capabilities - Coke & Pepsi). Based on the above analysis on this model, Pepsi has limited
differentiations against Coke.

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2.4 Comparison and evaluation of existing value proposition

Based from the two value proposition analysis above, Pepsi value proposition proven the
limitation of market segmenting and Coke has focus on beverages with full blast of
diversification from energy drinks, water, sports, diet, nutrition drinks, etc. that cater all
ages. In general rule (value=benefits-cost), Pepsi can enhance and develop its brand
positioning through product diversification (food & beverage), brand acquisition, 100%
environment and economical commitment and provide wide range distribution than Coke.
In addition, advance training for customer service through solution wise basis (Appendix 6:
Value Proposition SWOT Analysis - Pepsi & Coke) could possibly lead to a great competitive
advantage as well.

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3.0 Benchmarking the two value proposition
Apparently, Pepsi and Coke companies are both having a giant brand name consisting of
partaking a narrow structure type of company. The author will compare and contrast the two
companies based on the following attributes and come up with a justified conclusion.

3.1 Brand Strength Value
In here, below is the comparison on the brand value which illustrates the statistical point of
view on the category of which particular brand customers preferred. Clearly, in this table
report shows that Coke has higher brand and brand enterprise value than Pepsi (Table 1).

Brand Value & Enterprise Value:
Pepsi Coke
Brand Value $19 billion $174 billion
(Forbes, 2015)
Brand Enterprise Value $168 million $18 billion
(Stock Analysis, 2015)

Table 1: Brand Value & Enterprise Value (Source: Stock Analysis, 2015 & Forbes, 2015, and
Author's work, 2016)

So in this table report, it matches the value proposition of Coke in terms of (Brand Value &
Enterprise Value) from the evaluation of existing value proposition of Pepsi and Coke in
section 2 above analysis.

Global Survey Brand Satisfaction (World Versus, 2016)
PEPSI COKE
Factors # of respondents Percentage (%) # of respondents Percentage
(%)
Value for money 160 59% 110 41%
Better service 152 56% 118 44%
Trust 97 36% 173 64%
Status 126 47% 144 53%
Quality of taste 154 57% 116 43%

Table 2: Global Survey Brand Satisfaction (Source: World Versus, 2016 & Author’s work, 2016)

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Above qualitative data shows the number of respondents favorable on a particular factor.
This data was conducted by (WordVersus, 2016) an online database that holds wide range of
comprehensive data survey for certain companies.

Based on the above data, Coke has a higher trust value as perceived by customers. However,
the quality of taste of Pepsi has the highest favorable attributes that matches the customer
value identified in the value proposition of the company. In here, based from 270 total
respondents, 57% of the respondents appears to like Pepsi. In this analysis, Pepsi will need to
work more on trust of its customers by providing better service and quality products.

3.2 Most Influential Brand and Customer Satisfaction
In here, the author gathers and analyze the information on feedback reviews on social media
and discussion sites such as Facebook (Pepsi: 34 million likes and Coke: 96 million likes),
Instagram (Pepsi: 423 thousand follower and Coke: 1.1 million followers), twitter (Pepsi 2.7
million followers and Coke 3.2 million followers), and other social media sites. Listed below in
a table manner for easy visualization are the value proposition factors which includes extrinsic
and intrinsic attributes buying factors (Table 4).

Table 3: Most Preferred Brand and Customer Satisfaction (Source: Social Media Analysis, 2016 & Author's
Work, 2016)

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Above accumulated data are based from several social media sites mentioned above, social
media is very significant tool to engage and interact with customers. The satisfaction rate was
measured based on 1000-point scale method. Result shows that the overall customer
satisfaction rate goes to Coke.

So in conclusion from benchmarking the two value proposition (Pepsi & Coke), considering
major areas that needs improvement are the convenience, availability, accessibility, brand
image reputation, performance, customer service in solution bases, and society engagement,
so that Pepsi can have the competitive advantage against (Coke).

3.3 World Most Admired Companies (Fortune, 2016)

Another study focusing on the key attributes of reputation as conducted by (Fortune, 2016),
will be revealed in (Table 4) below:

Pepsi Coke
(Global Rank) (Global Rank)
Innovation 2 5
People Management 3 2
Use of corporate assets 3 2
Social responsibility 3 1
Quality of management 2 2
Financial Soundness 2 2
Long Term Investment Value 2 3
Quality Products / Services 3 3
Global Competitiveness 3 2

Table 4: World’s Most Admired Companies (Source: Fortune, 2016)

Based from the table above, innovation and long-term investment will need development as
it contributes to the reputation of Pepsi.

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4.0 Identification of the new value proposition
The author will develop a compelling new value proposition based from the evaluation and
analysis of the existing value proposition of Pepsi (shown in section 2 and 3).

4.1 New Value Proposition of Pepsi: Mission and marketing strategy model (Piercy,
2009)
This model illustrates the new value proposition of Pepsi (Figure 7) comprising of new mission
statement which is completely aligned to the customer's expected value.

NEW MISSION STATEMENT:
To provide delicious and nutritional food and beverages that
cater all ages and become committed for sustaining and
caring for environment and natural resources.

NEW OBJECTIVES:
To diversified and add new products to satisfy the customers
expectations. To advance and develop customer relationship
management.

NEW MARKET STRATEGY:
To develop and improve product availability in all states
which may comprise of various vending machines which will
be easily acquired and consumed (rural and urban).
NEW MARKET PROGRAMMES:

Maintain affordable pricing in which the benefits will be
greater than the costs.

Figure 7: Mission and marketing strategy (Source: Piercy, 2009 & Author’s work, 2016)

So to come up with this new value proposition, the author put herself into the target
customer’s shoes and identify from customer’s view point perspective what value of the
product and service need to develop by Pepsi Company. Based from the value proposition
evaluation and analysis conducted in section (2 and 3) above. The new value proposition
options selected by the author in which the benefits are more than the cost which matches
more closely the customer value of the business:

21


• Pepsi will provide more nutritional content which is high in fiber for food products.
• Pepsi has the largest and widest selection of Pepsi beverages (e.g. water, milk and
dairy-based beverages, soy based, 100% juices, soft drinks, sports drinks, and energy
drinks).
• Pepsi has a friendly, efficient and well trained customer service associates that will
assist customer’s aftersales service with a comprehensive solution.
• Pepsi delivers only quality products with a customized pricing for every product that
will suits consumers expected value.
• Pepsi is an environmental and ecological favorable company which focus more on
sustainability.
• Pepsi is 100% committed to environment sustainability.
• Pepsi gives internal customers work-life balance, outstanding perks and benefits,
leadership, career development, motivation, etc. to its employees.
• Pepsi will cater all ages as new target market.

Furthermore, the author will consider utilizing the competitive box model shown in
(Figure 8) below:

Figure 8: The trap of the competitive box (Source: Piercy, 2009)

22


This model illustrates that the risk is getting trapped inside the competitive box while the
important changes occur outside the box due to market are organic and not fixed (Piercy,
2009).

In U.S. the soft drink manufacturing company is dominated by three top players: The Coca
Cola Company (28.6% total market share in 2010), PepsiCo Inc. (26.8% total market share in
2010), and Dr. Pepper Snapple Group (8.6% total market share in 2010). The remaining 36%
of the market includes many small soft drink manufacturing companies (Data Source:
IbisWorld, 2012). So in this case, Pepsi will need to monitor closely new types of competitors
as this will be likely to get on top of the market leaders.

In conclusion to the new value proposition selected, Pepsi will need to review closely with
regards to its new and existing customer base and the potential new competitors arising due
to the organic or not fixed structure of the market.
So the implementation process will need to monitor closely by the top management of the
company, re-think the market boundaries as high priority and evaluate the impact in an
appropriate manner.

However, for the implementation of the new value proposition, Pepsi will need to have
significant innovation on their internal and external marketing plan. This will be examined in
next segment below.

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5.0 Implementation Plan of the New Value Proposition
The implementation of the new value proposition of Pepsi, the company will have to improve
its marketing strategies and marketing programmes (the marketing mix) as revealed in (Figure
9) below:

Figure 9: Marketing Strategies & Marketing Programmes – Market Mix (Source: Piercy, 2009)

In here the critical success factors of Pepsi are: catering to changing consumer preferences;
estimating demand for new products; improving ROI and out of store promotional activities;
formulating digital strategies to improve consumer engagement; managing commodity and
raw material price fluctuations; and improving operational efficiency. These will be discussed
further with the utilization of 7P’s in the next segment.

5.1 Marketing Plan (7P’s)
The author will provide a new marketing plan as follows:

Product: Pepsi will need to introduce healthier product choices to expand their target
segmenting which cater all ages, as Pepsi is in negative publicity (Lilly, J. 2015) due to its
unhealthy drinks that can cause obesity (Appendix 1: Intrinsic Attributes – Typology of
customer value). Thus, addressing global nutrition challenge will need to takes place by
developing using natural and organic ingredients.

Price: Pepsi pricing will need to be aligned competitively with the value of its product and
geographic segment, if Pepsi will introduce new product that cater healthier choice of food
and beverage apart from its existing products (Appendix 3: List of Pepsi Products & Appendix

24


11: Comparison Product Pricing), Pepsi can utilize the combination of penetrating and
psychological pricing strategy which comprise with psychologically less in customer minds,
for an instance (0.99 cents per bottle).

As the author conducted a simplified random sampling method which is shown in (Appendix
15: Customers who are keen to buy Pepsi products in Singapore – Pricing matter), it was
proven that 42% out of 80 respondents In Singapore, preferred to buy Pepsi beverages
products for ($0.99 cents) below, followed by (27%) who are willing to purchase the product
for ($1-$2). Thus, pricing will need to be completely aligned with value of the product and its
geographic segment.

Promotion: Although Pepsi is very aggressive with regards to promotional activities (Nooyi, I.
2013), by focusing more on seasonal promotions, there will be a holiday and festive season
with different date as per country and religion. Pepsi will not need to offer unwise huge
discount offers because it will surely affect the company earnings.

Place: Although Pepsi has a wide range of availability and distribution of its product (S. Bailey,
2014), consistency on monitoring its channel distribution place by place will need to put
highest attention and priorities to ensure its availability worldwide. In study conducted by the
author, analysis was revealed in (Appendix 14: Most convenient location to purchase Pepsi
products), it was clarified that (31%) customer preferred to purchase the product in
supermarket, followed by convenience store which contains (21%) and (19%) came from
restaurant and food court location.

People: As Pepsi after sales customer service has a positive feedback from internal customers
(Appendix 5: Pepsi Internal Customer Benefits) and from its external customers in terms of
response rate accessibility (Appendix 2: Extrinsic Attributes – Typology of customer value),
Pepsi will need to advanced its customer service relationship in sales division too. Internally,
Pepsi will need to make certain that all departments will need to work cooperatively to ensure
timely delivery of goods. Externally, Pepsi will need to deal with the intermediaries who are
the sales channels.

25


Process: Pepsi will need to restructure its overall process in accordance to the compliance
and advance way of communication.

Physical Evidence: Pepsi will need to monitor and develop its website, pages, articles,
journals, blogs, etc. thus these will provide a wealth information of the company and its
products. In terms of packaging, Pepsi will need to produce clarity on packaging philosophy
that cater recycling, reducing, reusing, removing, and renewing.

With regards to the above implementation, this must be adopted in a timely manner subject
to monitoring and attention of top management of the company.

5.2 Internal and External Marketing Communication Plan
In this area, the following are the internal and external marketing communication plan in
accordance to the above mentioned processes stated by the author:

Internal Marketing Communication Plan:
Employees of the Company: In here, regular quarterly training will be significant to the
organization for the adaptation of new substantial marketing and implementation plan so as
to be able to add value to the success and brainstorming of the process plan through diverse
attributes pertaining to innovation, customer service training and support and many more.

Board of Directors: The intended marketing plan and new value proposition strategy will need
to be discussed thoroughly and well presented to the Board of Directors for better
understanding and collaboration subject to approval. As to this study will be likely to be
approved by the Board of Directors, the content and all other relevant information referring
to the subject matter will need to disseminate to the employees of the company in diverse
methods such as meetings, memos, and e-newsletters.
Implementation: The implementation of the above mentioned strategies will need to have
different executives in charge for better execution and progress.

26


Monitoring: The monitoring process will be lineal and need to be managed in a timely manner
thus in such circumstances, for an instance, unforeseen uncertainty, will be managed right
away by the top management.

External Marketing Communication Plan:
Public Relations: As Pepsi is becoming more aggressive on advertising, Pepsi management
will need to engage more and sustain its public relations through diverse approaches, its
corporate reputation really makes to the value of the company. Thus, managing risk to
corporate reputation must need to acquire high priority because of the high impact to the
company reputation that will mainly affect to the public relationship.

Internet page or social media sites: As of today’s generation, customer use social media sites
to communicate to the company whenever an issue arise or any after sales disputes. Pepsi
must ensure to sustain its accessibility through this social media sites and improve its
customer service with efficiency and effectivity.

27


Conclusions:
As the study focuses primarily on the customer perceived value and eventually analyze the
value proposition of the company and was properly evaluated by the author by identifying on
how it will gain a competitive advantage against its rival in customer’s view point. This study
will therefore conclude that Pepsi will need in regular basis to monitor its customer feedback.
In this way, Pepsi will need to reassess each value proposition in order to provide customer
satisfaction and good corporate reputation.

28


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31


Appendix 1: Typology of Customer Value: Extrinsic (Holbrook, 1999)

Efficient:
Wide range of availability.

Figure 10: Pepsi Extrinsic Attributes – Efficient (Source: Sharon Bailey, 2014)

Understanding its efficiency, the company distributes its product in more than 200 countries.
The Pepsi products reaches its customer through three distribution networks in reference to
the above illustration. With this, there is a wide range of product availability that can serve
customers efficiently.

Accessibility:
Fast Response from customer support, if issue occurs.

Figure 11: Pepsi Extrinsic Attributes – Accessibility (Source: Leo Widrich, 2013)

Above collected statistical analysis was conducted from social customer service, Pepsi has the
highest and fastest response rate ahead from its leading competitor Coke.

32


Esteem:
Overall number of percentage of obesity issues.
Number of %
North America 36%
Central and South Africa 30%
Europe and Central Asia 37%

North Africa and Middle East 36%
Sub-Saharan Africa 27.5%
Asia Pacific Region 30%

Table 5: Pepsi Extrinsic Attributes - Esteem (Source: World Obesity Federation, 2015)

The bottom line here, the worldwide increase in obesity have already led to a chronic disease,
a trend that threatens healthcare system, economies, and individual life. Thus, Peps
considered this global issue by increasing its products on more nutritional ingredients.

33


Appendix 2: Typology of customer value: Intrinsic (Holbrook, 2005)

Ethics:
Environmental Conscious.

Social Impacts: Environmental Impacts:

- 164, 931 people trained
- 2,726 new jobs created by recycling
- Individual income increased by - 2,202,430 kWh of electricity saved
$2,150 - 6,219 barrels of oil saved
- Revenue of recycling organizations - 6,534,774 BTU of energy saved
increased by $47,926. - 12,140 cubic yards of landfill saved

Figure 12: intrinsic Attributes – Ethics (Source: Pepsi, 2016 & Author's work, 2016)

Pepsi has this waste to wealth program that enables to establish a solution that can take care
of the environment and at the same time improve the quality of life and work of recyclers.
With this positive output, the customers were impressed from the extraordinary results of
the program.

Spirituality:
Religion forbidden alcohol content

In this part, the researcher will not partake innate analysis on the beliefs of Islam religion. The
reason is not to intentionally harm them. Prior research (Peter, 2012) reveals that soda has
this alcohol content in which Muslims are not allowed to drink any drink holding alcohol on it
(Holy Quran, Surah Maida 5:91).

34


Appendix 3: Pepsi products and 22 brands

Pepsi 22 Brands:
Pepsi Company has 14 billion dollar beverage brands and 8 billion dollar snack brands in which
8 are carbonated (called sparkling) and 6 are non-carbonated (called still). The table below
lists the company’s brand by category.

Sparkling Brands Still Brands Food Brands

Pepsi Gatorade Lay’s
Diet Pepsi Tropicana Walkers
Pepsi Max Aquafina Doritos
Mountain Dew Lipton Ruffles
Diet mountain dew Brisk Fritos
7 Up Starbucks RTD beverages Cheetos
Sierra Mist Tostitos
Mirinda Quaker

Table 6: Pepsi products - 22 Brands (Source: Pepsi, 2016 & Author’s work, 2016)

35


Appendix 4: Environmental Sustainability Report, 2015 (Pepsi vs. Coke)

Pepsi Environment Sustainability Report, 2015
Environmental Sustainability Savings
Water Efficiency 14 billion liters or $15 million cost saving
Energy Efficiency 9.6% improvement of energy efficiency
Fuel Efficiency (Fleet) $3 million productivity savings

Table 7: Pepsi Environment Sustainability Report, 2015 (Source: Pepsi, 2015)

Environmental sustainability is finding innovative ways to cut costs and minimize the impact
of the company on the environment through energy and water conservation as well as
reduced used of packing materials. Pepsi awarded as the energy star award for 9th
consecutive year.

Coke Environment Sustainability Report, 2015

Environmental Sustainability DETAILS
Water Efficiency 40 billion gallons of water consumed each
year
Energy Efficiency 9% improvement of energy efficiency
Fuel Efficiency (Fleet) Operates the largest heavy hybrid electric
commercial truck

Table 8: Coke Environment Sustainability Report, 2015 (Source: Coke, 2015)

36


Appendix 5: Internal Customer Benefits (Pepsi & Coke 2016)
Pepsi ™ Coke ™
1. Health and Insurance ü ü
2. Medical ü ü
3. Dental ü ü
4. Life Insurance ü ü
5. Durability Insurance ü ü
6. Wellness ü
7. Company funded retirement plan ü ü
8. 401(k) retirement plan ü ü
9. Work Life Benefits ü ü
10. Education assistance ü
11. Child and Elder support ü
12. Auto & home insurance assistance ü
13. Career development ü ü
14. Generic rewards ü

Table 9: Internal Customer Benefits (Source: Pepsi & Coke Careers, 2016 & Author's work 2016)

Pepsi provides more than a salary. It covers almost all benefits that the individuals will look
for. Thus, retention and employee’s productivity will increase and become more effective.

In terms of salary and wages, Pepsi and Coke has the same average pay for their employees
from lower level to middle management level (Glassdoor Coke & Pepsi, 2016).

37


Appendix 6: Value Proposition (Pepsi & Coke 2016) – SWOT Analysis

Strength Weaknesses
Coke Pepsi Coke Pepsi
Successful marketing
campaigns: celebrity Declining market share Declining market share
Most valuable brand endorsers since year 2000 in beverages
World's largest brand in 2nd Rank largest F&B
beverage ($74 billion Worldwide ($22 billion Negative publicity
brand worth) brand worth) Negative publicity
Product diversification Low market share in
with more than 500 Extensive global distribution Price pressure from mass fountain accounts: 20%
brands network retailers vs. Coke 69%
Focus on beverage Price pressure from mass
Strong emerging markets Forward Integration: 80% product only retailers
Low production and
material cost:
Extensive global Environmental & Low in health beverage Product damaged due to
distribution network economically favourable. product recalled Pepsi products.
Forward integration: 90%
Opportunities Threats
Growing nutrition snacks and beverages Changes in customer tastes and preferences
Innovative offerings tailored to local tastes Intense Rivalry
Global expansions Threat of substitutes
Expand and modify line Price pressure from mass retailers
Enlargement product base Price pressure from international bottlers
Increasing demand for healthy products Potential negative impact on government regulations.
Bottled consumption growth Water scarcity
Savory snacks consumption growth Decreasing in gross profit margin

Table 10: Value Proposition – SWOT Analysis (Source: Angela T., 2015 & Author’s Work, 2016)

38


Appendix 7: Extrinsic Attributes – Brand & Positioning of Pepsi

Pepsi position and differentiate itself for being forward thinking attitude. Pepsi has the image
of being action oriented and the wide selection to fit every lifestyle of consumer (Nooyi, I.,
2014). To name a few, Pepsi consist of regular Pepsi, Pepsi max with more caffeine, Pepsi
cherry vanilla, caffeine free Pepsi, diet Pepsi, and Pepsi zero.

This positioning strategy they followed up to 1960 and after analyzing that it is very difficult
to capture whole population as whole (Young, D., 2015). So Pepsi after 1960 started targeted
marketing and choose a different way to promote and to attract new customers by using huge
marketing campaigns along the years and creating brand personality associated to the
adventure. Pepsi’s goal is to attract a certain set of customers to buy the product by
associating itself with young people who are energetic, fun loving and daring (Ovid, J., 2016).

Pepsi retains its brand image through promotions. Pepsi targets mainly youngsters through
various Brand ambassadors. In fact, in India, the brand ambassadors have been the best
celebrities as well as sports person of the country including Sachin tendulkar, M S Dhoni,
Amitabh Bacchan, Ranbir kapoor and others.

39


Appendix 8: Extrinsic Attributes – Product Pricing & Advertising of Pepsi

Below are the extrinsic attributes of Pepsi in term of product pricing and advertising:

Product Pricing: Approaches used to set prices are analysed in this element of the marketing
mix. PepsiCo’s main pricing strategies are as follows: Market oriented pricing strategy and
hybrid everyday value pricing strategy in which Pepsi Pricing scale is very competitive and
affordable.
Advertising: This segment, showcasing advantage in which is aimed communication to Pepsi

customers. Packaging fulfils all the criteria for a successful advertisement.

So in this segment, Pepsi focus on being aggressive on advertising and target particular
audience and a lot sufficient fund for advertising purposes alone. The creativity which involves
the concept of having skinny shape (Anita, W., 2013) of a particular model has an excellent
impact to the target audience which are the soda lovers who are health conscious at the same
time.

40


Appendix 9: Intrinsic Attributes – Flavor, Color, Textures, Sweetness (Pepsi)

According to Malcom McDonald (2003), recognizes intrinsic and extrinsic attributes as a form
of added-value. In this segment, the researcher will focus on intrinsic attributes of Pepsi, this
influences the customer’s perceptions of the Pepsi brand’s actual performance.

Pepsi has various intrinsic attributes comprising of great tasting with a sweeter taste. Pepsi
soda drink can also quench thirst easily by having very refreshing feeling taste and it also
goes well with meals and snacks combination.

1 Great tasting
2 Very refreshing
3 Thirst quenching
4 High quality
5 Worth what it costs
6 Goes well with meals and snacks
7 Citrus and lemon flavor
8 Sweeter taste
9 Has real cola taste
10 Has an unforgettable taste
11 Revitalizes

Table 11: Pepsi Intrinsic Attributes – Flavor, Color, Textures, and Sweetness (Source: Zoe, P., 2014)

41


Appendix 10: Intrinsic Attributes – Pepsi Packaging

In continuation of the intrinsic attributes of Pepsi, the challenge for Pepsi was how to have
them differentiated in terms of packaging, with distinct brand identity, grounded in consumer
insight and with creativity (Eaton, 2013).

So in here the intrinsic attributes through package design, Pepsi captured each brand equities
by developing and redesigning of new bottles that fits brand and consumer needs increases
growth, brand equity, brand health and appeal. Also the consistency with current
manufacturing requirements and packaging specifications. For an instance, the packaging
design linked individually to Pepsi brand.

So the packaging design elevated profile reflected the brand’s attributes and youthful spirit,
in capturing the excitement of Pepsi consumers and was widely received from retailers and
consumers (Lewis, S., 2016) due to the distinct, clarity, uniqueness of the packaging with
recyclable bottle packaging content.

42


Appendix 11: Comparison of Product Pricing (Pepsi & Coke)

Pepsi is in an industry which is dominated by the two giant companies – Coca cola and Pepsi.
Thus the pricing of Pepsi is very competitive.
Pepsi is known to give promotional discounts as well as discounts on bulk buying. For
customers, as the container size rises, the discounts also rise. Thus a 2 liters’ bottle of Pepsi
will be relatively cheaper per 100ml as compared to a 250 ml pack contrasting to Coke which
having premium pricing scale.

For distributors, the discount is based on the quantity as well as the payment terms. However,
Pepsi has to lower its price for the top retailers and bulk buyers. For an instance, in Indian
retailers like Big Bazaar, Reliance fresh, as well as hyper city are bulk buyers. Similarly fast
food chains like Mcdonalds, KFC are also bulk buyers.

These bulk buyers negotiate with the soft drink brands on the basis of price and sell their
products in huge quantities. Thus, Pepsi drop its prices in these places which affects the
operating margin of the brand. The margins of the company are better through the
distributors and lesser through bulk buyers. However, the sales of the company are higher to
bulk buyers as compared to distributors.

43


Appendix 12: Satisfaction Survey (Singapore)

This section illustrates in a table manner for easy visualization, the random sampling method
conducted by the author while utilizing verbal interview with 80 respondents in Singapore.

Pepsi Coke
Satisfaction with the nutrition 49% 51%
contents
Looks 36% 64%
Packaging appearance 45% 55%
Customer relationship 44% 56%
Social Engagement 48% 52%
Taste 50% 50%

Table 12: Satisfaction Survey – Singapore (Source: Author’s Work, 2016)

This simplified method of verbal interview conducted with mix ages ranging 15 years to 45
years old, as survey was very narrow and could possible lead may lead to bias judgment.

44


Appendix 13: Brand & Company Capabilities (Pepsi vs. Coke)

In this segment, analyzing in detail, the core competencies of Pepsi and Coke, by evaluating
the effect on the strategy adopted by the organization.

Tangible resources: In this section, Pepsi has strong financial backbone to support its
aggressive marketing strategies, promotional campaigns, and social activities. It works in
collaboration with various governments in the countries as well. It also has operational ties
with various civic authorities (Nooyi, I., 2015).

For the intangible resources held by Pepsi under three components:

Human resources: Has the best minds in industry by providing every employees enough
financial and non-financial motivation (Nooyi, I., 2015).

Reputation resources: In study conducted, it was seen that Pepsi as a brand enjoys a good
reputation with customers (News Creed, 2015). The quality perception is generally high.
However, most of the customers see it as drink second to Coke. One area wherein Pepsi
scores over its rivals is the social initiatives like contract farming and positive water balance.
Due to this, it has a very strong reputation with its suppliers.

Capabilities: Pepsi as an organization, has survived strong competition from its leading
competitor (Coke) Company, due to the following capabilities that it has:

Muscular Global Brands and Customer Goodwill: Pepsi with its portfolio of global brands has
built platforms growth. Its current portfolio holding 22 brands that generates more than $1
billion in annual retail sales (Sure Dividend, 2015). Pepsi has been successful in entering into
licensing ventures with other well-known names, such as Starbucks and Lipton, and has a
huge success with global promotions by linking with globally recognized brands.

45


Appendix 14: Most convenient location to purchase Pepsi products

35%
% MOST CONVENIENT LOCATION
30%
31%
25%
20% 22%
19%
15%
10% 12%
5% 8% 8%
0%
Convenience Supermarket Petrol kiosk Vending Restaurant or Mall kiosk
store machines foodcourt
LOCATION / PLACE

Figure 13: Most convenient location to purchase Pepsi products in Singapore
(Source: Author's work, 2016)

This study was conducted by the author through random sampling method and verbal
interview focusing on target respondent’s ages ranging from 15 years to 45 years old with a
total of 80 respondents.

46


Appendix 15: Customers who are keen to buy Pepsi products (Pricing matter)

45%
40%
42%
35%
% KEEN TO BUY
30%
25%
27%
20%
15% 18%
10%
5% 2% 4% 7%
0%
$10 and above $8 - $9 $5 - $7 $3 - $4 $1 - $2 $0.99 cents and
below
PRICE COSTING RANGE
Figure 14: Customers who are keen to buy Pepsi products in Singapore (Pricing matter)
(Source: Author's work, 2016)

Above illustrated graph was conducted by the author through random sampling method and
verbal interview focusing on target respondent’s ages ranging from 15 years to 45 years old
with a total of 80 respondents. Clearly, results show that customers are favorable to purchase
Pepsi beverages for ($0.99 cents) below, having 42% or almost half of the respondents are
likely favorable on the price matrix.

47


Appendix 16: Perceived Benefits & Perceived Sacrifices (Pepsi)

Perceived Benefits Perceived Sacrifices

Attributes of core products & services: Customer costs involved in purchasing
such as: time, travel, effort, psychic cost
Quality: Freshness of products are carefully Money: Customer find Pepsi products
monitored so customers knows every item was are more affordable than Coke (Nor Cal,
carefully checked before it reaches them 2005).
(Noria, C. 2015)
Price: Customers get great saving when Time: The amount of time for customers
purchasing bulk orders (Nor Cal, 2005). to look for Pepsi products are
convenient (Christine, W., 2015)
Convenience: Pepsi has a wide range of Effort: The effort or the physical energy
availability for its customers (Leo, 2013). devoted by customers to find Pepsi
products that match their needs takes
less effort due to wide range of
availability (Leo, 2013).
Psychic cost: Shopping is stressful, based
from the fact that Pepsi allotted more
than 30% its product (food & beverage)
through supermarkets (Sharon, B. 2014).

Table 13: Perceived Benefits & Perceived Sacrifices (Source: Author's Work, 2016)
In this table, it shows the customer perceived value based from the customer's evaluation of
all the benefits gained against all the cost of a product or service of Pepsi. So in other words,
customer perceived value is the benefits gets by the customers after its sacrifices.

48

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List of Tables Page No.

1.1 The Means-end Model relating price, quality, and value.

Quality of taste 154 57% 116 43%

3.3 World Most Admired Companies (Fortune, 2016)

Table 4: World’s Most Admired Companies (Source: Fortune, 2016)

NEW MARKET PROGRAMMES:

Europe and Central Asia 37%

Social Impacts: Environmental Impacts:

Sparkling Brands Still Brands Food Brands

Advertising: This segment, showcasing advantage in which is aimed communication to Pepsi

Perceived Benefits Perceived Sacrifices

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