Essay on Pepsi Global Marketing Strategy

6956 Words May 12th, 2012 28 Pages
Student author
May 29, 2011
Student author
May 29, 2011
Global Market Entry Strategy
Global Market Entry Strategy

PEPSICO, INC.
PEPSICO, INC.

Pepsi
Pepsi

Market Entry Strategy

PepsiCo, Inc. is currently operating in China. It has been in the country since 1982, when it started its first operation in Shenzhen and later established 30 joint ventures all over the country. Recently CEO Indra K. Nooyi said that China “represents our single biggest opportunity today outside the U.S.” (Einhorn & Balfour, 2009 September 28). Recently PepsiCo is stepping up its investments and interests in the emerging market of China. With 1.34 billion people and a Chinese soft drinks market forecasted to have a $40 billion value by 2014,
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The top spot is taken by Coke’s Sprite, but just looking at the colas, Pepsi is leading (Einhorn & Byrnes, 2009 July 13). All of the weaknesses of the competitors strengthen PepsiCo as it undergoes investments in China and markets its famous beverage Pepsi-Cola.

Given the company’s strengths, their competitors’ weaknesses, and China’s market opportunities, an appropriate market entry strategy will be discussed next. There are many options for market entry including export marketing, licensing, contract manufacturing, joint venture, equity stakes or acquisitions, and global strategic partnerships. Each has its advantages and disadvantages as one can see in the table below.

Disadvantages
Disadvantages
Advantages Advantages
Market Entry Method
Market Entry Method

Although the majority of PepsiCo’s entry strategies have been joint ventures in China, a survey of the other different methods of market entry is in order. First off, there is export marketing. PepsiCo could export the concentrates it makes to China. Other than simply export selling the product “as is,” the company could adapt the product to meet local tastes and preferences keeping export marketing in mind. It could use direct representation in the market, which would give them the advantages of control and communication. Direct representation often involves selling to wholesalers or retailers. Export marketing may be a less risky option,

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