International Journal of 360 Management Review, Vol.

07, Issue 01, April 2019, ISSN: 2320-7132

A Study on brand positioning of Pepsi in Hyderabad

B. Chandana
Research Scholar
Department of Business Management
Osmania University, Hyderabad

Abstract
With the standardisation of quality products and with little difference among products to
differentiate in the market characterised by cut throat competition, companies are forced to
find new ways to stand apart to attract customers, positioning is one of them. Positioning has
become an important concept in the current times to make the customers view their product
as the company wants them.

In marketing, positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for their product, brand, or organization.
Brand positioning is at the heart of marketing strategy.

It is the act of designing the company’s offer and image so that it occupies a distinct and
valued place in the target customer’s minds. A good brand positioning helps to guide
marketing strategy by clarifying what a brand is all about, how it is unique, how it is similar
to competitive brands, and why consumers purchase it. Thus, in simple words brand
positioning refers to the position or image which a brand enjoys in the minds of present and
potential customers. It is to associate a product with an attribute, a product feature, or a
consumer feature. Sometimes a product can be positioned in terms of two or more attributes
simultaneously. The price/quality attribute dimension is commonly used for positioning the
products. A common approach is setting the brand apart from competitors on the basis of the
specific characteristics or benefits offered. Sometimes a product may be positioned on more
than one product benefit. Marketers attempt to identify salient attributes.

INTRODUCTION
PepsiCo is one of the largest beverage and food companies in the world, started in America,
its soft drink Pepsi is considered to be the first branded soft drink in the world. It came into
existence in the 19th century, a pharmacist, Caleb Bradham from New Bern, North Carolina
1
was the man behind it, he started experimenting with different soft drink concoctions; It was
named after a digestive enzyme Pepsin and Kola nuts, which were the ingredients in the
recipe. His original intention was to counter act dyspepsia, a kind of indigestion with Pepsi
Cola, initially it was positioned as a medicine, it became a branded soft drink in 1898 and
from then onwards the product and the company have grown to be the one of the most
recognized brand in the world.

It has a wide portfolio of brands like Frito-Lay, Quaker, Gatorade, Pepsi-Cola and Tropicana.
PepsiCo manufactures, markets, distributes and sells a huge variety of beverages, foods and
snacks, through their operations, using authorized bottlers, contract manufacturers and other
third parties.

It has thirty-five beverage and bottling plants and three food plants.

PepsiCo used Lehar Pepsi as its brand name to sell Pepsi when it entered India. It was well
established by the time Coca - Cola re-entered the Indian market.

PepsiCo has different products to satisfy different customer segments and in short, its
positioning is based on multi-segment type and thus focuses and serves individual customer
segments.
PepsiCo uses multi-segment type of positioning and accordingly, it targets more than one
customer segment at the same time with different products or service packages. For
example, Pepsi-Cola is positioned as soft drink that tastes good and has a pleasantly
refreshing impact. May 9, 2016

Pepsis basic positioning has continued to be the same since 1898 the year of its inception as a
refreshing drink targeting the youth, ever-present on every social occasion. Pepsi was able to
create a point of difference by concentrating on those segments which were over looked by
Coca-Cola that is the young generation with its sweet sugary taste which attracted young
consumersaccording to Keller.
Pepsi positions itself as anaction-oriented brand which focuses on future.The image it
portrays attracts youth the most as they connect with it. Every brand positions itself on points
of difference as well as points of parity and so does Pepsi.

Review of Literature
In Keller’s view Good brand positioning guides the marketing strategy by specifying what a
brand is about, how it is distinct and different from the competing brands and answers the
question as to why customers have to purchase and use the particular product.

Tudor Edu and IliutaCostelNegricea have stated that a new product or service should be
different, whether it is sold under an established brand or not. A product is successful when
only when the target market perceives that the product offers something special. A prospect
purchases the offer only when he feels that it will give him more value than the competitive
offers. When a particular offer is valued more than the other offers in the market than it is
said that the offer has, competitive advantage. The competitive advantage helps the product
stay ahead of other products in the market, giving it a superior edge.

The place that the brand occupies in the mind of the consumer is brand positioning. Any
seller would want the target market to perceive his products in a particular way, to achieve
this he will try to portray that his products are better than the competitor, so that his products
will be thought of by the consumers in a specific way. Positioning does not mean the way in
which the seller wants to be remembered by the target market (here we speak about the
positioning approach) but it has to do with what the customer has understood about the brand
or the particular seller.

In order to be remembered by the target market, a brand should offer something special, this
can be achieved by giving a market benefit or better conditions can be offered in comparison
with the competitors.

The positioning approach according to them should start with the segmentation criteria,
which are used on the respective market that is geographic, psychographic, demographic and
behavioural criteria. The segmentation process includes the demand selection criteria and also
the methods for the offer or product to stay compliant to these criteria. The marketing mix
elements: products, price, promotion and distribution play an important role in shaping the
positioning outcome.

For positioning to be successful, the element of differentiation must be: unique, important to
the target market, easily communicable, easy to understand and remember and sustainable
through the company’s communication using the marketing mix elements. According to
Tudor Edu and IliutaCostelNegricea, the positioning tool is designed in a way to guide the
enterprises in assessing the situation and to build a competitive positioning strategy no matter
in whichever market the company is present.

The main author of the book” Differentiate or Die’, Jack Trout, together with Al Ries, who
earlier wrote the marketing classic,” Positioning: The battle for your mind” state that, to
succeed the first step is to position or place the brand in such a way in the target customers
mind that their perception of the brand is distinctive and offers a customer value better than
its competitors, in other words, it is called competitive advantage. In this era of intense and
killer competition and insane brand proliferation, companies need to differentiate their
products or die.

Positioning starts with an understanding or mapping of prospective consumers mental

perceptions of a product. The mind is cluttered with many brand names for different
categories and seems as if the consumer has made his own mental map of his or her needs
and wants and has given different products and brands, different points on that map, to satisfy
those needs. The company strategy should therefore be to create a perception in the target
customers mind about their brand so that it distinctly stands apart from the competitor’s
brands and is much closer to what the prospective consumer wants.

According to Subroto Sengupta positioning actually is less what we do to the product and
more of what we do to the consumers’ perception of the product.

A brand thus can only think of at best occupy such a position in the consumers mind as a
mere tenant for periods that will depend on the quality and quantity of the marketing efforts
that are put in, in support of the brand. Other brands like other renters would keep coming
forth with tempting offers and would approach the owner of the site. Hence, we should devise
a strategy and create such a perception in the consumers’ mind that it is distinct from the
competing brands and is close to what the consumer desires. We should occupy the space in
the consumers mind and stay put as if we have taken a long-term lease and not let squatters
in.

The position of a brand is the perception it brings about in the target customers mind. This
perception reflects the essence of the brand in terms of the benefits it provides both,
functional and non- functional, according to the consumer.

Ansari (et al., 1994) is of the opinion that to effectively formulate a positioning strategy
firms need to do an analysis of competitor and consumer behaviour simultaneously. In order
to position a product/ brand firms need to go for positioning analysis as positioning is all
about buyers’ perception about existing or potential brands in a market; this analysis will help
managers to understand how customers perceive their market and give a realistic view, which
may be different from their own views. This is essential as it helps them to comprehend the
product market and also differentiate their product (Perreault & McCarthy, 2006).

According to Cravens & Piercy, (2009) the objective is to match the organization’s unique
capabilities with the customer value requirements in each target market. (How do we want
the target customers to perceive us?). We can get the desired result by gaining a distinct,
relevant and enduring position that is considered important by the targeted customers. And
then the positioning strategy has to be implemented (marketing program) for the target
market.

Research Methodology
Sources of data
 The study made use of both primary and secondary sources.
 The primary data was collected through a structured questionnaire, given to the
consumers drawn from different outlets through random method. Interview method
was also used.
 For secondary data, magazines, books, journals of famous authors and govt. records
were used.
Techniques of Data Analysis

 The data was analyzed using Mean, Standard deviation, Variance and other statistical
techniques like Multiple Correlation, Multiple Regression, Chi- square Analysis,
ANOVA, and Factor Analysis etc.

Decision Process of a Customer Influenced by Pepsi

Need recognition/ Problem awareness

Promotion of Pepsi as “Essential” for parties

Information search

Strong Distribution channels ensures easy availability

Evaluation of alternatives

Affordable pricing of Pepsi

Purchase

Addictive taste and Fuzzy drink

Post purchase evaluation of decision

Data Analysis and Interpretation
Frequency of Purchase: The respondents were asked how frequently they buy beverages;
the responses are furnished in the following table.
Valid Cumulative
Description Frequency Percent
Percent Percent
Once a day 8 5.8 5.8 5.8
Once a week 37 26.3 26.3 32.1
More than once a
36 25.5 25.5 57.6
week
Once a month 59 42.4 42.4 100.00
Total 140 100.0 100.0
Source: Primary Data
Majority of the total sample respondents have indicated that they purchase beverages once a
month, followed by 26.3 respondents who purchase beverages once a week and 25.5 % of
respondents buy more than once a week and a least with 5.8% of respondents buy once a day.

Taste of Pepsi is sweet: The respondents were asked if the taste of Pepsi is sweet, their
responses are given in the following table.

Valid Cumulative
Description Frequency Percent
Percent Percent
Strongly Disagree 13 9.6 9.6 9.6
Disagree 27 19.0 19.0 28.6
Agree 78 55.4 55.4 84.0
Strongly agree 22 16.0 16.0 100.0
Total 140 100.0 100.0
Source: Primary Data
55.4% of the total sample respondents have agreed with the statement that Pepsi tastes sweet
and 16% strongly agreed but 19% have disagreed and 9.6% strongly disagreed with the
statement that Pepsi tastes sweet.
Pepsi, a brand for youth: The respondents were asked if Pepsi is a brand for youth, their
responses are given in the following table,

Valid Cumulative
Description Frequency Percent
Percent Percent
Strongly Disagree 18 12.5 12.5 12.5
Disagree 58 41.7 41.7 54.2
Agree 50 35.7 35.7 89.9
Strongly agree 14 10.1 10.1 100.0
Total 140 100.0 100.0
Source: Primary Data
41.7% of the total sample respondents have disagreed with the statement that Pepsi is a brand
for youth and 12.5% strongly disagreed while 35.7% agreed and 10.1% strongly agreed with
the statement that Pepsi is a brand for youth.

Advertisement’s influence on soft drink purchase: The respondents were asked if after
watching an advertisement of the soft drink they purchase it, the responses are given in the
following table
Valid Cumulative
Description Frequency Percent
Percent Percent
Strongly Disagree 15 10.4 10.4 10.4
Disagree 62 44.1 44.1 54.5
Agree 56 40.7 40.7 95.2
Strongly agree 7 4.8 4.8 100.0
Total 140 100.0 100.0
Source: Primary Data
44.1% of the total sample respondents have indicated that they do not purchase a soft drink
after seeing its advertisement, 10.4% strongly disagreed with the above statement while
40.7% agreed that they do buy soft drinks after seeing the ads.
Influence of a celebrity in soft drink purchase: The respondents were asked if they get
influenced by a celebrity, advertising a soft drink while purchasing, the responses are
furnished in the following table.

Cumulative
Description Frequency Percent Valid Percent
Percent
Strongly Disagree 32 22.9 22.9 22.9
Disagree 63 45.1 45.1 68.0
Agree 35 25.0 25.0 93.0
Strongly agree 10 7.0 7.0 100.0
Total 140 100.0 100.0
Source: Primary Data
45.1% of the total sample respondents have expressed that they disagree and 22.9% strongly
disagreed with the statement that a celebrity/celebrity influences their decision to buy a soft
drink after seeing him advertise it, while 25% agreed and 7% strongly agreed that they do get
influenced by a celebrity while purchasing a soft drink.

Soft drinks, high price versus good quality: The respondents were asked if high priced soft
drinks are of good quality, the responses are mentioned in the following table.

Valid Cumulative
Description Frequency Percent
Percent Percent
Strongly Disagree 23 16.6 16.6 16.6
Disagree 66 47.0 47.0 63.6
Agree 41 29.2 29.2 92.8
Strongly agree 10 7.2 7.2 100.0
Total 140 100.0 100.0
Source: Primary Data
47% of the total sample respondents have reported that they disagree with the statement that
high priced soft drinks are of good quality and 16.6% strongly disagreed however 29.2%
agreed and 7.2% strongly agreed with the statement that high priced soft drinks are of good
quality.
Chi-Square Tests
Pepsi, brand for youth against Frequency of Purchase
In order to understand whether the purchase frequency is independent of the fact that Pepsi is
a brand for youth, Chi-square analysis is conducted with the following hypothesis and the
results are given in the following table.
Ho: Frequency of purchase is not independent of the fact that Pepsi is a brand for youth

Asymp.Sig
Value df
(2-sided)
Pearson Chi-Square 46.389a 16 .000
Likelihood ratio 38.807 16 .001
No of valid cases 140
a. 11 cells (44.0%) have expected count less than 5. The minimum expected count is .00.
Source: Primary Data
Since the Chi-square value is found to be significant, the null hypothesis is rejected and the
alternative hypothesis is accepted. Thus, the Frequency of purchase is independent of the fact
that Pepsi is a brand for youth.

Chi-Square Tests
Sweet taste against Motivation for buying beverage brand
In order to comprehend whether the motivation to buy beverage brands is independent of
sweet taste of Pepsi, the Chi-square analysis is conducted with the following hypothesis and
the results are shown in the following table.
Ho: Motivation to buy beverage brands is not independent of sweet taste of Pepsi

Asymp.Sig
Value df
(2-sided)
Pearson Chi-Square 35.725a 12 .003
Likelihood ratio 24.877 12 .072
Linear-by-linear
5.882 1 .015
Association
No of valid cases 140
a. 14 cells (56.0%) have expected count less than 5. The minimum expected count is .05.
Source: Primary Data
Since the Chi-square value is found to be significant, the null hypothesis is rejected, and the
alternative hypothesis is accepted. Thus, the motivation to purchase beverage brands is
independent of the sweet taste of Pepsi.

Findings
Frequency of Purchase: When it came to frequency of purchase, maximum no. of
respondents about 42.4% of the total sample respondents have indicated that they purchase
beverages once a month, followed by 26.3 respondents who purchase beverages once a week
and 25.5 % of respondents buy more than once a week and a least with 5.8% of respondents
buy once a day. Therefore, it is suggested that the companies should focus on the segment of
buyers who buy more than once a week.

Taste of Pepsi is sweet: Almost three fourth of the sample respondents have stated that they
find taste of Pepsi, sweet, hence it is advised that the company should offer less sweet
versions and also keep up with the demand for healthy beverages as people are becoming
more health conscious.

Pepsi, a brand for youth: More than half of the sample respondents do not believe that
Pepsi is a brand for youth, therefore, it is suggested that the company should position itself to
attract youth and focus on activities that will reiterate the fact that Pepsi is a brand for youth.

Advertisement’s influence on soft drink purchase: The respondents were asked if after
watching an advertisement of the soft drink they purchase it. Fifty percent of the total sample
respondents have indicated that they do not purchase a soft drink after seeing its
advertisement.

Influence of a celebrity in soft drink purchase: Majority of the sample respondents do not
get influenced by a celebrity, advertising a soft drink while purchasing it. Hence it is
suggested that the companies should explore further as to what influences the consumers the
most and employ them to attract people.

High Priced soft drinks are of good quality: Majority of the sample respondents do not
believe that High Priced soft drinks are of good quality. Therefore, it is suggested that
companies should desist from pricing their beverages on the higher end just to create an
image of high quality and should explain the reason and what additional benefits they are
offering if their beverages are priced more than their competitors.

Conclusion
By adapting its positioning to the changing scenario and taking into consideration taste, price
and positioning which the consumers are influenced by Pepsi can continue to generate profits
in this extremely rivalrous industry. This strategy, in the end, will allow Pepsi to grow and
sustain above-average returns and thus succeed in gaining a major hold in the beverage
industry.

A strong brand, with a socially responsible outlook, focus on the younger generation with
good corporate beliefs, PepsiCo will continue as one of the most powerful company’s in the
world.

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