HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES

- INFORMATION TECHNOLOGY
FACULTY OF BUSINESS ADMINISTRATION
---------***--------

FINAL REPORT

AN ANALYSIS OF E-COMMERCE STRATEGIES FOR

PEPSICO MOVING ON TO THE INTERNET

Student’s name:
1. Đỗ Thị Khánh Trâm – 21DH123397
2. Nguyễn Thị Thùy Trinh – 21DH123410
3. Cao Xuân Hồng Phụng - 21DH123298

Instructor: Phạm Thị Mộng Lành

HCMC, 08/2023
Executives Summary:
Almost all of buyers start their internet-based product research by checking out feedback
and comparing characteristics before placing an order. More businesses and current
retailers are opening their own online stores so that customers have more convenience.
Pepsico enters the online market which had included many strong competitors such as
Walmart or Amazone as well as regarding data security of customers. The majority of
previous research regarded online retailers as a homogeneous category, oversimplifying
the market structures that had developed in the internet economy. Our report is to analyze
the way Pepsico moving on to the Internet. Through an analysis, we could understand
obviously those strategies that help Pepsico be successful in e-commerce industry.
Primary market were in EU and USA so we will analyze it as a main market activity.
These markets are mature and competitive, but they also offer a large number of potential
customers. PepsiCo can succeed in these markets by focusing on convenience,
personalization, and technology.

1. Introduction
1.1. Overview :

The e-commerce sector can develop extremely quickly (Feindt et al., 2002). Regardless
of when the market will reach maturity, it is critical that e-commerce businesses get ready
for the pressures of a stronger competitive environment caused by more demanding
customers, experienced e-commerce competitors, traditional retailers, and new entrants
pulled to the expanding online retailing market. Online retailers should be aware of the
best methods employed by successful e-commerce enterprises and accomplish duties as
soon as possible (Pratt, 2002).

PepsiCo, Inc. is an American beverage, snack, and food company with its headquarters in
Harrison, New York. Pepsi was first introduced as "Brad's beverage" in 1893 by Caleb
Bradham, who created it at his pharmacy where the quencher was sold. It lived after
relabeled and after renamed PepsiCola in 1898 after the digestive enzyme pepsin and
kola nuts applied in therecipe. Pepsi-Cola formed a partnership with Frito-Lay,Inc.,
which then routed PepsiCo to manage one of the persons' distributing food and beverage
forces. PepsiCo has dilated and after formed both Tropicana fruits in 1998 and the
Quaker Oats Company in 2001, hence tacking the Gatorade trademark to its portfolio.
PepsiCo is framed up of the legion divider, which includes the PepsiCo drinks of North
America, FritoLay North America; Quaker Foods- North America; Latin America,
Europe,Sub-Saharan Africa; Asia, the Middle East, and North Africa, per. Each of these
separators has kicked in to the hit of the Pepsi trademark.(Union, n.d.-b)
1.2. History development
1893: Caleb Bradham founded Pepsi as "Brad's beverage." at his pharmacy in New Bern,
North Carolina (PepsiCo History Founding, Timeline, and Corners- Zippia, 2023).
1898: The beverage became known as Pepsi-Cola, "Pepsi" because it breathed air to
relieve dyspepsia (indigestion), and "Cola" because it breathed cola air.
1902: The beverage documented so big that Bradham embodied the Pepsi- Cola
Company( The Editors of Encyclopaedia Britannica, 2023)
1903: On June 16, 1903, “ Pepsi- Cola ” came an authorized brand. Bradham listed a
brand for the how in 1903( The Editors of Encyclopaedia Britannica, 2023)
1965: PepsiCo, Inc. was formed by the merger of Pepsi-Cola Company and Frito-Lay,
Inc. The headquarters of the company are located in Clapham, New York (Encyclopedia
Britannica, n.d.- b)
1.3. Mission and vision
The aim at PepsiCo is simple: Eat, Drink, and Spread Smile. Every action and decision
we make must support this aim as we work to realize our objective of becoming a global
leader in the convenience food and beverage industry by reaching pep+.(PepsiCo
Positive, n.d.)
1.4. Competitors
PepsiCo’s main competitors:The Coca-Cola Company,Kellogg,Mondelez
International,Nestle and Keurig Dr Pepper,Britvic,Red Bull,Danone,Conagra Brands.
(Reiff, 2023)
1.5. Profits
One of the biggest wine and chuck companies in the world is PepsiCo. The net profit for
2020 for PepsiCo was $70.372 billion, an increment of 4.78 from 2019. According to
economic forecasts for 2021, PepsiCo will earn $79,474 billion in annual, a 12.93 percent
increase from 2020. The yearly profit for PepsiCo in 2022 was $86.392 billion, an
increase of 8.7 percent from 2021 (PepsiCo's Net Revenue Worldwide, 2022 | Statista,
2023)
1.6. Market share
PepsiCo, Inc., based in Clinch, New York, is one of the companies showcasing foreign
food and beverages. It ranks as one of the largest companies worldwide in terms of query
value, and one of the head dull beverage trademarks worldwide, with a trademark
valuation of nearly 14 billion U.S (Topic: PepsiCo, 2022b).
1.7. PepsiCo in the retail industry
PepsiCo is a blanket train in the viands and drink industry, with produces adored by
consumers further than one billion times a day in else than 200 lands around the world
(About PepsiCo, n.d.). The company generated$ 86 billion in net gain in 2022, run by a
correlative beverage and popular victuals portfolio that includes Lay’s, Doritos, Cheetos,
Gatorade, Pepsi- Cola, Mountain Dew, Quaker and SodaStream1. A broad range of
appealing foods and beverages are part of PepsiCo's labor portfolio, touching legion
iconic trademarks that breed further than$ 1 billion each in valued periodical retail sales
(About PepsiCo, n.d.)
PepsiCo sells its products through a variety of channels, including supermarkets, grocery
stores, extra deposits, living quarters, and internet merchants. The company also has a
strong presence in the foodservice industry, supplying its products to cafes, schools,
Colosseum, and distant forums. PepsiCo is constantly founding and dilating its labor
victims to catch the changing musts of consumers and stay competitive in the retail
industry.(About PepsiCo, n.d.)
Brands: 23 trademarks generating > $1 billion each gain( About PepsiCo,n.d.)
People: More than 260,000 jobholders
Locations: Products allowed across another than 200 nations & niches
Scale: PepsiCo labors are adored by consumers fresh than 1 billion moments a daylight
worldwide
Pepsico carried in Pepsico.Pepsi, Mountain Dew, Gatorade, 7 Up( outside the United
United), Tampa Just Premium credit, Orange Starry, SoBe Lifewater, Tropicana orange
credit, AMP Energy, Naked Juice before; and Izze are some of the trademarks acquirable.
( About PepsiCo,n.d.)

2. Pepsico
2.1. Analysis of Pepsico’s strategic position
In terms of strategic position, PepsiCo has a strong competitive advantage due to its scale
and scope of operations. The company has a presence in over 200 countries and
territories, which gives it a global reach that few other companies can match.
The specific location is Seattle in the state of washington, in USA, a city celebrated for its
sustainability ambition, PepsiCo's attachment to environmentally friendly rehearsals
aligns seamlessly. They band with regional recycling agendas, bearing up proper removal
of their products' packaging. Their underscoring on recyclable materials resonates with
Seattle'seco-conscious population, advancing admiring brand associations.
The location's prosperous sustainability accomplishment provides PepsiCo with
expensive consumer insights, allowing them to enhance their packaging strategies further.
By boarding to Seattle'seco-friendly market, PepsiCo not only contributes to local waste
discount sweats but also strengthens its image as an environmentally responsible
corporation. This strategic alignment in Seattle underscores PepsiCo's devotion to
sustainability while capitalizing on a open-minded consumer foothold concupiscent about
conserving the environment. (Admin, 2023)
2.2. Pepsico’s competitive strategy
PepsiCo is one of the major companies in the global food and beverage industry. This
suggests that they are up against severe rivalry from rivals like Coca-Cola and other
businesses in the sector. PepsiCo has used a variety of strategies to keep up its
dominance. Pepsi has utilized a strategy for many years that is built upon two
overarching strategies: cost leadership and broad differentiation (Ferguson, 2023).
The company's fundamental shared competitive strategy is the cost leadership strategy.
The company emphasizes on reducing costs by automating production processes in order
to improve efficiency as well as the company's competitiveness.
(Gupta & Govindaiajan, 2001)
. As a large company with huge economic and scale advantages. In terms of scale,
they can obtain a large amount from suppliers at a low price. Therefore, most PepsiCo
products have lower prices than market leading products. PepsiCo also has vertical
integration. The company collaborates with the bottling team to reduce distribution costs.
For instance, PepsiCo offers low prices based on low operational expenses to compete
with Coca-Cola goods. The business also provides customers with exclusive discounts.
The corporation has expanded its market share in the sector as a result of this strategy.
Although the cost leadership strategy has sparked a price war between PepsiCo, Coca
Cola, and other companies, it is undeniable that it has brought benefits (Business Bliss
FZE, 2023).
On the other hand, PepsiCo views its broad strategy of differentiation as its second level
general competitive strategy. With its distinctive and distinctive product attributes, the
business attracts customers through distinction (Ferguson, 2023). This strategy aims to
invent and provide goods that can deal with health issues (Ferguson, 2023). For instance,
because it lowers fat saturation, the firm promotes Lay's potato chips as a healthy snack.
(Hitt & Ireland, 1987) . By promoting itself as a company interested in health and
nutrition, PepsiCo has won a new market. This strategy focuses on product innovation,
which not only brings differentiation but also provides special products that competitors
cannot provide in the market.
The Pepsi-Cola brand held a market share of just under 9% in 2021 (U.S. Market Share
of The Pepsi-Cola Brand 2021 | Statista, 2022). The brand's market share has been
declining for years in a row. In recent years, PepsiCo's share of the carbonated soft drink
(CSD) industry has also declined. In 2021, PepsiCo's U.S. market share in carbonated
soft drinks was 25.6 %. Coca-Cola's market share in CSD during that time has stayed
constant at around 40%. Based on its strategies, Pepsico still retains its market share but
has not been able to overtake Coca-Cola (M. Ridder, 2022)
 3. Market selection
3.1. SWOT OF USA

Frito-Lay North America, PepsiCo Beverages North America, and Europe are the
primary generators of revenue for PepsiCo. SWOT analysis should be used to determine
why the USA is Pepsico's main market. We will analyze why USA is the primary market
of Pepsico by using SWOT model.

Strenghts:

The USA has the world's most diverse population comprising of different ethnicities,
races, and cultures.

Gaining the world's highest GDP. According to an estimate, the annual GDP of the US in
2022 was 25.035 trillion US dollars, and it’s the 1st highest in the world

Numerous significant tech giants, such as Apple, Facebook, Google, Amazon, Microsoft,
Walmart, Pepsi, Coca-Cola, Netflix, etc.

The possibility to higher buying power: a high employment rate, which means that people
have a higher level of buying power.

Weaknesses :

Economic recession: The pandemic has pushed the global economy into an economic
recession, and the future of the US economy would be very challenging.

The unequal wealth distribution between rich and poor people

One of the world's most costlier places to live because most prioritize producing their
goods locally.

Opportunities:
Available to the usa increasing exports: The USA should increase the number of supplies
it exports to other regions as a way to widen its market worldwide. In general, they export
automobiles, helicopters, spaceships, aircraft, and enriched and crude petroleum.

New tech products: It could involve in the tech, industrial, financial, pharmaceutical, or
video game industries, among other sectors.

Resolving disputes: The USA has a significant impact on global affairs due to its
financial and technological might. Thousands of people would be saved if they could use
their power and authority to resolve those matters. They would receive a great deal of
acclaim in return.

Threats:

The United States faces competition from an array of nations, including China, Japan,
Singapore, South Korea, the United Kingdom, and Germany. To keep their position of
dominance, they must continually put forth a lot of effort.

High consumer debt: During the pandemic crisis in 2020, millions of citizens lost job
opportunities. People have become reliant on debt more and more in recent years. People
are more reluctant to make purchases when their financial conditions are insecure. A
decrease in spending would result in a reduction in the business. The number of crimes
would rise. The cycle of destruction operates in this manner.

3.2 SWOT OF PEPSICO

Strengths:

Strong Brand Recognition: Pepsi’s iconic logo. This company keeps loyal to with its
main colors, which are red, white, and blue, but all of which still make massive
rebranding improvements. Fritos corn chips and Lays Potato chips which are included in
Pepsico’s product, remain one of the most consuming snacks and food items among U.S.
consumers

Direct-Store-Delivery: PepsiCo uses direct store delivery (DSD) for its supply chain and
distribution network. During few years, this giant food company made investments
extensively in technologies that experienced specific processes and data
analytics. Moreover, PepsiCo has collaborations with several distributors, wholesalers,
and retailers all over the world. As a result, the food company could reach a broader
potential customer who are adapted to the changes consumer patterns and preferences.

Strong Marketing and Sponsorships :This company has consistently collaborated with
notable celebrities because its marketing campaigns aimed at building profound
emotional connections with its target audience.

Customer Loyalty : PepsiCo has a loyal customers who frequently choose its products
even when other options are available, which helps to maintain a consistent flow of
revenue for the company.

Weaknesses

Unhealthy Perception of PepsiCo’s Products: Most of Pepsico’s food products are

considered ‘junk’ food. Nowsaday, younger generation is raising awareness to health
issues regarding the nutritional value of the products they eat. Unfortunately, many of
PepsiCo’s products are highly sugary, leading to various health problems such as obesity,
diabetes, and heart disease.These elements could affect PepsiCo's brand value, as the
unhealthy awareness of customers on these foods can have a negative impact on the
company’s reputation and sales.

Over-dependence on Carbonated Drinks :Despite having a wide range of beverages

and other items, PepsiCo often relies on its carbonated drinks as its main source of
income. According to one report, PepsiCo makes about 30% of its revenue from sales of
North American beverages. To reduce the risk of a total suffering, the company should
diversify their products.

Failed Marketing: In 2017 PepsiCo’s advert featuring Kendall Jenner was accused of
trivializing political and social movements. It received significant backlash from
consumers and critics alike. Ultimately, Pepsi removed the advertisement and
apologized.The failure of these marketing campaigns simply serves to emphasize how
crucial it is to comprehend and respect cultural and social norms.

Opportunities

E-Commerce and Online Customers: A substantial amount of consumers are online

consumers turn to online channels for their purchasing needs. This means that by
leveraging big data, PepsiCo can gain more insight into this customer base and satisfy
their needs. This enormous beverage corporation has already made progress in reaching
its online audience by collaborating with well-known online merchants like Amazon and
Walmart to make its items easily accessible.

Health and Organic Foods/ Beverages Market : Due to the widespread perception that
PepsiCo's goods are unhealthy, PepsiCo has suffered slight reputational damage. PepsiCo
has already made progress in this area by enhancing its image with its acquisition of the
plant-based snack firm Bare Snacks. In addition to satisfying consumer demand,
PepsiCo's sustainability goals could be fulfilling via its entry into the plant-based and
vegan food industries. This offers an exclusive opportunity that could help PepsiCo
increase its target audience while improving its reputation.

Consumers in Developing Markets : The North American market accounts for a

sizeable portion of Pepsi's sales, as was already established. The global market for soft
drinks, which was estimated to be worth $416 billion in 2021 and is predicted to increase
at a rate of 5.2% annually, means that it is missing out on a sizable market. Consumers in
Developing Markets offer the organization an immense potential for growth and
expansion. The demand for PepsiCo's products will probably rise as more people in these
markets have access to financial resources to spend.

Threats

Tense Competition: The profitability and market share of PepsiCo are in

hazardous situations due to fierce competition from competitors like Coca-Cola, Nestle,
Dr. Pepper, Unilever, and others. The rivalry also poses a risk to long-term profitability
and sustainability by raising the price of maintaining customers through marketing,
promotions, and discounts while protecting market share.

Economic Slowdown or Recession: PepsiCo might suffer losses in a situation of

recession since its line of products has a significant bias towards items that consumers
frequently cut back on first in times of financial stress. Pepsi had to lay off roughly 3300
jobs during the 2008–2009 recession as a result of a decline in soft drink sales. Due to
market uncertainty, the company was compelled to abandon its full-year prediction for
the fiscal year 2020–2021.

Government Laws and Regulations: In order to lessen the number of illnesses and
disorders related to unhealthy and processed foods, governments have recently enforced
more pro-health legislation. Since PepsiCo's product line consists primarily of harmful
soft drinks and snacks, the trend's amplification could eventually threaten the company's
profitability, viability, and possibly existence.

4. Market Segmentation
4.1 General Market Segmentation
4.1.1 Pepsi Demographic Segmentation
Males and females aged 15 to 45 are both represented in PepsiCo's demographic data.
Young children and the elderly, who are less likely to enjoy strong caffeinated beverages,
are typically excluded from the broad age range of PepsiCo consumers. However, it also
covers those who are single, newlyweds who are childless, and couples who are raising
kids and teenagers (PepsiCo Segmentation, Targeting and Positioning, 2016). People
between the ages of 15 and 45 typically demand carbonated beverages, and Pepsi's flavor
and market reputation appeal to them. They frequently direct their marketing efforts
toward this niche market's concentration in places like schools, theaters, and
entertainment centers (Preo, n.d.-b). PepsiCo has shifted its focus to the growing youth
market by signing exclusive contracts with schools. And develop advertising campaigns
for the next generation and PepsiCo Fun with celebrities as the main characters. PepsiCo
also divided the market into revenue-based segments by making compact packaging. As a
result, they suggest Pepsi to customers at various price points and income levels. Due to
the low pay of tractor drivers, Pepsi created a 200 ml bottle for 12 takas so that anyone
could readily purchase Pepsi.
4.1.2 Pepsi Geographic Segmentation
Pepsi is available in more than 200 nations and is popular with both urban and rural
people (Carmely, 2023b). PepsiCo operates in all geographical regions, such as states,
regions, countries, and neighboring regions (Kotler & Keller, n.d.). However, depending
on the geographical region, they may change their taste and packaging to achieve their
goals in that region. For example, they sell cookies, chips, and Sabritas branded snacks
under the Gamesa brand in Mexico. In response to the invasion of Ukraine in 2022, the
business left the Russian market (Carmely, 2023). The four global divisions of PepsiCo
are American Pepsi, American Pepsi, European Pepsi, and Pepsi in Asia, the Middle East,
and Africa.

4.1.3 Pepsi Behavioral Segmentation

According to Kotler and Keller (2012), behavioral segmentation divides buyers based on
their knowledge, usage or response to a product. The target market consists of devoted
and regular product users. They choose Pepsi because they need to enjoy the delicious
taste, and Pepsi has become one of their lifestyle habits. 78% of the audience buys soda at
the grocery store, 74% at big box stores, while 62% purchase at convenience stores and
44% at vending machines (Carmely, 2023b). For loyal customers, it is difficult for them
to change their habits. Loyalty status is where advertising and marketing match, and
PepsiCo can put itself in a higher position. PepsiCo Challenge - PepsiCo's successful
strategy has attracted some Coca Cola’s customers with its taste and price (Administrator,
2018).
4.1.4 Pepsi Psychographic Segmentation
Psychographic segmentation according to PepsiCo involves those who are from a
particular class. The Pepsi target audience includes members of the working, middle and
upper classes, with easygoing, determined and ambitious personalities. Pepsi continues to
appeal to a dependable and expanding number of customers who desire options for sugar-
free colas. In 2021, Pepsi Zero Sugar (known as Pepsi Max outside of the US) grew sales
by 22% in the US, representing 0.8% of US market share. (Carmely, 2023)
One of the most viewed events in the country is the "Super Bowl Halftime Show" and
Pepsi has sponsored the show for a long time. The corporation uses the halftime
performance to connect with a sizable young adult and millennial audience. (Krishna)
4.2. Online market segmentation
With the development and popularity of technology, consumers' needs and shopping
habits are gradually shifting towards online shopping. Catering brands are also turning to
e-commerce platforms. PepsiCo, the world's largest food and beverage industry, also has
its own e-commerce strategy. PepsiCo utilizes various digital channels to enter its niche
markets. According to PepsiCo's strategy, we can see segmented markets on the internet:

4.2.1 Pepsi Online Demographic Segmentation

Since the COVID-19 pandemic, PepsiCo's e-commerce has flourished to meet its
customer goals. Online shoppers are young people who are proficient on the internet and
enjoy the convenience of online shopping. They also enjoy keeping up with the new
trends brought by Pepsi. (Onar, 2023)

4.2.2 Pepsi Online Geographic Segmentation

In the field of e-commerce, Pepsi's market segmentation is domestic and foreign. They
have a convenient e-commerce platform that can reach consumers who cannot directly
enter retail stores. PepsiCo collaborates with transportation companies to deliver products
to consumers in the most effective way possible.
4.2.3 Pepsi Online Behavioral Segmentation
Pepsi's target in this market segment is businessmen who use its products and access the
Internet. Therefore, they provide a seamless online experience to increase the possibility
of buying on e-commerce platforms (Tbh, 2023). Pepsi is geared to loyal customers. The
company's social media activities share product content and emphasize the company's
commitment to social responsibility and sustainable development.

4.2.4 Pepsi Online Psychographic Segmentation

The Pepsi target audience includes members of the working, middle and upper classes,
with easygoing, determined and ambitious personalities (Carmely, 2023).

"Pepsi Live": the campaign offers live streaming of sporting events and concerts. The aim
is to provide an immersive experience by allowing customers to not only watch concerts
and sporting events online, but also actively interact with other fans through real-time
interaction. (Krishna)

Figure 4.2-(1). Market segmentation

For these segmented markets, the following are

PepsiCo's strategies, and we can see their specific
customer segments. PepsiCo has launched an advertising campaign on Facebook calling
for 'click on messenger'. Pepsi targets the market segment: young people, active shoppers,
fascinated with the convenience and ease of e-commerce.

PepsiCo has created a social e-commerce platform that utilizes chatbot technology to
connect with customers. The company seized the opportunity to create an online store for
PepsiCo. A conversational media platform with an AI-powered chatbot, It can interact
with customers on Facebook Messenger, and through its interface, customers can
comfortably purchase Pepsi’s products at home. Such is the shipping address, the

Figure 4.2-(3) Chatbot on pepsi's facebook messenger

ure 1
amount, and the product model. The brand's logistics division will then receive orders
placed through Facebook Messenger immediately, creating a smooth ordering process.
Over 16000 converses have already begun. The message-to-order conversion rate is 5%,
which is 50% greater than the average market level. Due to the assistance of this activity,
PepsiCo was able to grow its online sales, and in November and December of 2020, its
advertising expenditure profit was 1.6 times that of PepsiCo (MMA Case Study Hub |
Pepsi’s Social Ecommerce Platform, n.d.).

5. E-commerce strategies for the market

5.1. Porter’s five forces theory

When coming to e-commerce, we will use Porter’s five forces theory to analyze the
market and give the best strategy for entering e-commerce market of Pepsico. Moreover,
we will give some methods for Pepsico to resolve five forces.
Back in the year 1979, Michael E. Porter introduced Porter’s five forces (Jung & Jeong,
2021; Porter, 2008). It is a widely used theory in terms of strategic management
(Stonehouse & Snowdon, 2007). If a company understand the forces within its industry, it
will be able to create a businesslevel strategy to help the company take advantage or
protect itself from the forces (Baxter, 2019). Therefore, Porter's principle of five forces
can be used to recognize the degree of competition and how attractive the industry is,
assess the industry’s position, and reach a competitive advantage through strategies
(Barutçu & Tunca, 2012).

Porter’s five forces consist of threat to entry, the power of suppliers, the power of buyers,
the threat of substitutes, and rivalry among existing competitors (Porter, 2008).

Threat of new entrants: Threat to entry defines the easy it is for new rivals to get into
the market (Barutçu & Tunca, 2012). When the threat is high, the industry should lower
the price or raise the investment to create barriers to new competitors. PepsiCo is
investing heavily in technology to develop new e-commerce platforms and services. The
company is also acquiring smaller e-commerce companies to expand its reach.

 2021, PepsiCo launched Snacks.com, a direct-to-consumer (DTC) website where

customers can buy snacks and drinks from PepsiCo brands.
 2022, PepsiCo announced plans to invest $1 billion in e-commerce over the next
five years.

Bargaining power of buyers: emonstrates how easily they can compromise on a price
decrease (Barutçu & Tunca, 2012). PepsiCo is offering a wide variety of products and
services on its e-commerce platforms as well as providing excellent customer service to
build loyalty among its customers.

Bargaining power of suppliers: A supplier is considered powerful if it has significant

authority to regulate an industry, and the majority of companies rely strongly on the
supplier (Porter, 2008). PepsiCo is negotiating long-term contracts with its suppliers to
lock in prices and ensure a steady supply of goods. The company is also diversifying its
supply base to reduce its reliance on any one supplier.

Threat of substitutes: The threat of substitutes refers to how the easy the products or
services can be substituted with others in the market (Handrian & Mansoor,
2021). PepsiCo is innovating new products and services to keep its offerings fresh and
appealing to consumers. The company is also pricing its products competitively to make
them more attractive than substitutes.

Rivalry among existing firms: The last one is rivalry among existing competitors, which
refers to the industry’s existing competitors (Porter, 2008). PepsiCo is differentiating its
products and services to compete with other e-commerce companies. The company is
also expanding into new markets to grow its business.

5.2. E-Commerce strategy of Pepsico

5.2.1. Concept

Electronic commerce, commonly known as E-commerce, is trading in products or

services using computer networks, such as the Internet. Electronic commerce draws on
technologies such as mobile commerce, electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data collection
systems (Shahriari et al., 2015).

5.2.2. The e-commerce strategy

5.2.2.1. Key product and key decisions:

Product portfolio: Products from PepsiCo's diverse line of goods involves foods, snacks,
and beverages. To ensure that sure it is satisfying both consumer and market demands,
the organization continually evaluates the range of products it offers.

Pricing: PepsiCo sets competitive prices for its products by considering the prices of its
rivals, the cost of production, and the perceived value of its goods.
Distribution: Several channels, including supermarkets, convenience stores, and vending
machines, are used by PepsiCo to distribute its products. Additionally, the business
supplies direct-to-consumer channels, which include a website and mobile app.

Marketing: PepsiCo markets its products through a variety of channels, including

advertising, public relations, and social media. The company also invests in research and
development to create new and innovative products.

Sustainability: PepsiCo is committed to sustainability. For example, the company is

working to reduce the environmental impact of its packaging and to source its ingredients
more sustainably.

 In 2018, PepsiCo launched a new line of plant-based snacks called "KIND

Snacks." This was a strategic move to meet the growing demand for plant-based
products.
 In 2019, PepsiCo introduced a new line of zero-sugar beverages called "Pepsi Zero
Sugar." This was a response to the increasing popularity of low-sugar beverages.
 In 2020, PepsiCo launched a new direct-to-consumer platform called "PepsiCo
Shop." This platform allows customers to purchase PepsiCo products online and
have them delivered to their homes.

5.2.2.2. The e-commerce approach of Pepsico

PepsiCo is in an excellent spot to expand distribution via online channels once the
pandemic threatens the United States in the first half of 2020 because to those ecommerce
operations (Jones, 2021). PepsiCo approaches e-commerce distinctly than merchants
since the company is a CPG business. PepsiCo breaks down e-commerce into three main
categories:

- “Pure play” online sellers: Pepsico has partnered with large online retailers like
Amazone to sell their products. These are e-commerce sites like Amazon or
 Walmart.com that assemble orders in a warehouse and ship via a common carrier
like the US Postal Service or UPS..
- E-grocery (or Grocery Ecommerce) includes online business activities of grocery
products such as food (both fresh and prepackaged), household products,
healthcare, personal care, etc. Product display, ordering to pay, and shipping are
all done on the website of eGrocery businesses. (Diep, 2022)
- “Concierge” services: These are on-demand services that deliver orders in one or
two hours.This category includes app-based delivery services such as Instacart.

For pure-play e-commerce:

PepsiCo provides specific product variations for online retailers on pure-play e-

commerce websites. PepsiCo develops packages especially for e-commerce that are
rewarding, shippable, and consistent with consumer preferences. Creating multipacks and
diversity packs is frequently necessary.

For example, PepsiCo created a 36-count

variety pack of its Doritos 3D corn
chips for Amazon and Walmart.com.
Another is a six-flavor sampler pack
of Mountain Dew Rise soft drinks, which
it sells in that configuration exclusively
on Amazon. (Jones, 2021).

Figure 5.2.2-(1)- 36-count variety pack of its Doritos 3D corn chips

For e-grocery:
 Figure 5.2.2-(2) Pantry web performance

E-commerce has grown in prominence as a means of procuring groceries for people who
are either restricted or unwilling to leave their homes. PepsiCo is launching two direct-
to-consumer websites where shoppers can order an assortment of the company’s
products: PantryShop.com and Snacks.com

PantryShop.com allows consumers to order specialized bundles containing PepsiCo’s

top selling pantry favorites from brands including Quaker,
Gatorade, SunChips and Tropicana within categories such as “Rise & Shine,”
“Snacking,” and “Workout & Recovery.” (Doering, 2020).
The other site, Snacks.com, enables shoppers to choose from more than 100 of their
favorite Frito-Lay products like Lay’s, Tostitos, Cheetos and Ruffles, as well as dips,
crackers and nuts. Regardless of the Frito Lay website, Snacks.com has been used to
support customers in purchasing products from Frito Lay's extensive portfolio, such as
Tostitos or Cheetos, some of which may consist of harder-to-find SKUs. PantryShop.com
emphasizes on unique consumer requirements at the same time (Doering, 2020).

By applying a combination of PepsiCo's technology, data analytics, resources, and

inventory, Snacks.com and PantryShop.com were developed from concept to operation in
less than 30 days in order to rapidly meet the ever-evolving requirements of consumers.

For concierge One site, multiple retailers :

Instacart introduced a brand-new approach to convenient home delivery along with

online grocery purchasing over a decade ago. For more than 1,400 retail banners spread
over more than 80,000 sites, they currently provide retail enablement solutions. In 2018,
Instacart acquires Unata, a Toronto-based digital platform which runs food e-commerce
websites, and launches its first enterprise product for retailers, involving groceries. In
2022, Instacart will introduce Instacart Platform, an extensive set of end-to-end solutions
that will assist retailers expand their operations.

Figure 5.2.2-(4) Instacart Platform

Overall: PepsiCo is still in the early stages of its journey to the internet, but it also
continues to move forward. PepsiCo has invested heavily in technology to develop new
e-commerce platforms (Snacks.com, PantryShop.com). Moreover, it also uses artificial
intelligence to personalize the shopping experience for customers which help recommend
products for them. By the aim to provide the convenience for customers, when they
buying on Pepsico E-grocery, they would be given free shipping and same day deliveries.
Therefore, all step or strategies Pepsi made is on the right way and it would be successful
to be in the top of company in online retail industry.

6. Conclusion and recommendations

In concluction, this analysis thoroughly sweat Pepsico's e-commerce strategies as they

transitioned to the online platform. The study reaffirmed the critical business of
accomplishede-commerce strategies in modern business. Pepsico's successful entry into
e-commerce was supported by its use of digital platforms to increase its market attract,
optimize supply chain operations, and provide customers with tailored service based on
data insights. The significance of this investigation goes beyond PepsiCo, providing
insightful information for companies moving into the digital space. It highlights that
adopting e-commerce is a strategic requirement to be competitive and adapt to changing
customer behaviors, not merely a choice. Pepsico's peregrination exemplifies how
employinge-commerce's potential can lead to growth and customer loyalty. As industries
abide to develop, this case serves as a illuminant coaching businesses toward originative
and impactfule-commerce strategies in an ever- connected public.(“ECommerce Is
Booming — Learn How PepsiCo Is Staying Ahead,” 2020)

To succeed in the competitive world of e-commerce, an F&B retailer should develop a

stoner-friendly website with easy navigation and clear product descriptions. A secure
payment system is essential to insure safe deals for guests. exercising social media to
engage with guests and promote products can help attract new guests and retain being
bones . Conducting request exploration to understand client requirements and
preferences, and continuously perfecting thee-commerce strategy grounded on client
 feedback and request trends, can help the retailer stay ahead of the competition. These
recommendations are clear, practicable, and result- accustomed, playing up the breadth
for coming probation.

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1. Introduction........................................................................................................................2
1.1. Overview :................................................................................................................................2
1.2. History development................................................................................................................3
1.3. Mission and vision....................................................................................................................3
1.4. Competitors..............................................................................................................................3
1.5. Profits.......................................................................................................................................3
1.6. Market share............................................................................................................................4
1.7. PepsiCo in the retail industry...................................................................................................4
2. Pepsico................................................................................................................................5
2.1. Analysis of Pepsico’s strategic position....................................................................................5
2.2. Pepsico’s competitive strategy..................................................................................................5
3. Market selection.................................................................................................................6
3.1. SWOT OF USA........................................................................................................................7
3.2 SWOT OF PEPSICO................................................................................................................8
Strengths:..........................................................................................................................................................8
Strong Brand Recognition: Pepsi’s iconic logo. This company keeps loyal to with its main colors, which are
red, white, and blue, but all of which still make massive rebranding improvements. Fritos corn chips and Lays
Potato chips which are included in Pepsico’s product, remain one of the most consuming snacks and food
items among U.S. consumers..............................................................................................................................8
Direct-Store-Delivery: PepsiCo uses direct store delivery (DSD) for its supply chain and distribution
network. During few years, this giant food company made investments extensively in technologies that
experienced specific processes and data analytics. Moreover, PepsiCo has collaborations with several
distributors, wholesalers, and retailers all over the world. As a result, the food company could reach a broader
potential customer who are adapted to the changes consumer patterns and preferences.....................................9
Strong Marketing and Sponsorships :This company has consistently collaborated with notable celebrities
because its marketing campaigns aimed at building profound emotional connections with its target audience.. 9
Customer Loyalty : PepsiCo has a loyal customers who frequently choose its products even when other
options are available, which helps to maintain a consistent flow of revenue for the company............................9
Weaknesses.....................................................................................................................................9
Unhealthy Perception of PepsiCo’s Products: Most of Pepsico’s food products are considered ‘junk’ food.
Nowsaday, younger generation is raising awareness to health issues regarding the nutritional value of the
products they eat. Unfortunately, many of PepsiCo’s products are highly sugary, leading to various health
problems such as obesity, diabetes, and heart disease.These elements could affect PepsiCo's brand value, as
the unhealthy awareness of customers on these foods can have a negative impact on the company’s reputation
and sales.............................................................................................................................................................9
Over-dependence on Carbonated Drinks :Despite having a wide range of beverages and other items,
PepsiCo often relies on its carbonated drinks as its main source of income. According to one report, PepsiCo
makes about 30% of its revenue from sales of North American beverages. To reduce the risk of a total
suffering, the company should diversify their products......................................................................................9
Failed Marketing: In 2017 PepsiCo’s advert featuring Kendall Jenner was accused of trivializing political
and social movements. It received significant backlash from consumers and critics alike. Ultimately, Pepsi
removed the advertisement and apologized.The failure of these marketing campaigns simply serves to
emphasize how crucial it is to comprehend and respect cultural and social norms...........................................10
Opportunities................................................................................................................................10
 E-Commerce and Online Customers: A substantial amount of consumers are online consumers turn to
online channels for their purchasing needs. This means that by leveraging big data, PepsiCo can gain more
insight into this customer base and satisfy their needs. This enormous beverage corporation has already made
progress in reaching its online audience by collaborating with well-known online merchants like Amazon and
Walmart to make its items easily accessible.....................................................................................................10

4. Market Segmentation.......................................................................................................11
4.1 General Market Segmentation................................................................................................11
4.1.1 Pepsi Demographic Segmentation........................................................................................................11
4.1.2 Pepsi Geographic Segmentation...........................................................................................................12
4.1.3 Pepsi Behavioral Segmentation.............................................................................................................12
4.1.4 Pepsi Psychographic Segmentation......................................................................................................12
4.2. Online market segmentation..................................................................................................13
4.2.1 Pepsi Online Demographic Segmentation............................................................................13
4.2.2 Pepsi Online Geographic Segmentation...............................................................................13
4.2.3 Pepsi Online Behavioral Segmentation.................................................................................13
4.2.4 Pepsi Online Psychographic Segmentation...........................................................................14
5. E-commerce strategies for the market...............................................................................15
5.1. Porter’s five forces theory......................................................................................................15
5.2. E-Commerce strategy of Pepsico............................................................................................17
5.2.1. Concept..................................................................................................................................................17
5.2.2. The e-commerce strategy.....................................................................................................17
5.2.2.1. Key product and key decisions:........................................................................................................17
5.2.2.2. The e-commerce approach of Pepsico..............................................................................................18

6. Conclusion and recommendations.....................................................................................22

References............................................................................................................................23