Core Competency And Sustainable Competitive Advantage Marketing Essay

Critically investigate Strategic marketing management techniques and how it can help organizations in implementing strategic directions

Critically explore at length marketing performance management and role of business balance scorecard

The Research consist on following points

Examination of data and facts to discover and understand cause-effect human relationships, thus providing basis for Tactical marketing management including Key Competency and Sustainable Competitive Advantage

Examinants talents and weakness of Facebook as well as identifying opportunities and dangers of a business.

Identifying Setting and product life cycle strategy of Mountain dew as well as discussing the marketing combine techniques

On the foundation of the marketing strategies techniques, we may find out the marketing performance and business scorecard of Pepsi co.

Company Description

PepsiCo, Inc. has become the successful consumer products companies on earth, with 1999 earnings of over $20 billion and 116, 000 employees. The company includes: Frito-Lay Company, the largest producer and distributor of treat potato chips; Pepsi-Cola Company, the second largest soda business and Tropicana Products, the most significant marketer and producer of branded juice. PepsiCo brands are one of the better known & most respected on the planet and are available in about 190 countries and territories. Some of PepsiCo's brand names are 100 years old, however the corporation is relatively young. PepsiCo, Inc. was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was bought in 1998.

PepsiCo's success is the consequence of superior products, high standards of performance, distinctive competitive strategies and the high integrity of the people.

Core Competency and Sustainable Competitive Advantage

In terms of primary competency, PepsiCo looks for to achieve a distinctive ability to

(1) Provide a distinctive, high-quality one-calorie soda and to provide a high-quality citrus soft drink using Pepsi Company's particular ingredients to charm also to excite contemporary likes for these products and

(2) Deliver these carbonated drinks to the client using effective creation and syndication systems that maintain PepsiCo's quality benchmarks.

To convert these main competencies into a ecological competitive edge, Pepsi Co. works directly with key suppliers and vendors to generate the associations and alliances necessary to fulfill the high flavor standards of our own customers.

Mountain Dew

Mountain dew loved the status of the only real citrus carbonated soda in the beverage market until sprite 3g joined the market. The total market show of citrus CSD's is 14% out which 95% is presented by pile dew and the rest 5% by others. Pile dew is the quickest growing carbonated soda in worldwide and it is also the speediest growing make of Pepsi cola world wide. By 2007, Mountain Dew was the fourth-best-selling carbonated soft drink in the United States, behind only Coca-Cola Vintage, Pepsi-Cola, and Diet Coke. Diet Hill Dew placed ninth in sales in the same 12 months. In Oct 2008, it was released that Pepsi would be redesigning their logo design and re-branding many of their products. The name Pile Dew was first trademarked by two brothers, Barney and Ally Hartman, who ran a bottling flower in Knoxville, Tennessee.


Mountain Dew lists its elements as

Carbonated water


Citric acid

Sodium benzoate (preserves freshness)

Caffeine (55 mg per 12 oz. [approx 330ml])

Sodium citrate


Natural Flavours

Ascorbic Acid

Colour (Tartrazine)

Slogan of the brand is


Target Market

For pile dew every person with a middle class status can be viewed as a potential consumer. Though, in order to target specific markets, hill dew divides the target market into the following market sections

Mountain Dew's Focus on Market

Mountain Dew targets male consumers within this range of 16-18 years of age. This is when mountain dew is marketing to teenagers, which they call as Bull's Vision MARKET. These potential clients still live aware of parents. They count intensely on parents to acquire the product for the coffee lover. These are the key consumers for hill dew because they're ready to adopt excitement, excitement, fun, energy and passion. In this segment, mountain dew is trying to fully capture brand understanding.

Communication target

The communication goal is broad in nature when compared with the target market. Here, pile dew targets the people within the age selection of 16-24 or even 16-35. Communication concentrate on defines the target audience for which the company will advertise, people who will watch the advertisements.

Consumption target

Consumption aim for will be as extensive as possible, because it involves all the individuals who will actually consume the merchandise. Here, no time limit is defined because whoever is consuming the merchandise is their focus on in this section. It could be teenagers, family members, etc.

Market Needs

Mountain Dew captured its market by smartly get together their needs, like

1. Quality Product

Mountain Dew is providing the quality citrus soda. They are strictly meeting the updated ISO specifications, hence meeting the quality needs properly. Apart from this, they may have employed specially trained quality employees who are always involved in the quality checking of the product through the developing process.

2. Product Attributes

Secondly, the product attributes like condition of the container, color of the drink, labelling and packaging are exclusively designed that actually shows the grade of Mountain Dew. The merchandise characteristics were so attractive that it really helped Hill Dew strongly entering into the prevailing CSD market of Pakistan.


Please refer to the following stand


PepsiCo Products

Competing Products



Coca Cola


Mountain Dew

Sprite 3G

Lemon Line






Positioning Strategy:

The positioning strategy is the center of the brand strategy. Positioning affirmation typically identify the group of associations (benefits, quality, user imagery) that the brand should own, the support for declaring these associations, as well as perhaps the build or personality by which the brand should speak to its prospects about these ideas. Positioning statements will be the quarrels for the brand in accordance with the other brands in the category and derive from abstracted associations. For instance, the positioning statement of Hill Dew employed by PepsiCo is really as follows

"To 16-18 yr old males, who embrace enthusiasm, adventure and fun, Hill Dew is the great tasting carbonated soft drink that exhilarates like no other because it is energizing, thirst quenching, and has a original citrus flavour. "

This statement defines the prospective in terms of age and psychographics and then directs the creative to communicate a laundry set of benefits: it's exhilarating and energizing effects, its thirst quenching potential and its own distinctive citrus flavour.

Positioning Against Competitor

Who's the biggest game around? We are able to learn a great deal about ourselves, the marketplace, and our market share by inspecting our competition. A lot can be achieved by asking some probing questions.

- Who's doing what we're doing?

- Who are their customers?

- Are they the same people we're endeavoring to attract?

- How exactly does our product or service compare in terms of price and quality?

. . . etc.

By properly responding to all these questions, we can better understand our competition and can formulate better setting strategy against our key rivals. In the current scenario, Pile Dew has placed itself against its key opponents on the basis of product attributes. For instance, they introduced the unique beer bottle design, then your usage of colored container and drink, and lastly they have strongly positioned them predicated on the amount of caffeine containing drinks used. Since, caffeine containing drinks gives energy, hence their setting strategy strongly concentrates what like, males, who embrace enthusiasm, experience and fun, great tasting carbonated soda that exhilarates like no other because it is energizing.

"A 12 ounce can of Mountain Dew contain 55 milligrams of levels of caffeine. What surprises many people is the amount of caffeine in Pile Dew - at 55mg it is significantly higher than any other existing CSD. "

The strength of Mountain Dew's setting strategy is that they very smartly and aggressively deliver the positioning strategy in their advertisings as well. The advertisements are incredibly much attractive for the prospective audience as they are in a position to see what they are actually prepared to see. The ads are full of excitement, excitement, fun, energy and excitement.

PepsiCo divides its CSD's into 4 main segments

1) Cola's : Pepsi

2) Citrus : Mountain Dew

3) Lemon-lime : 7-up

4) Orange : Miranda

Mountain Dew comes in to the citrus section of PepsiCo's CSD product combination. Its major competition is Sprite 3G.



Since the mother brand is so strong, it helped mountain dew a whole lot in creating its name in beverage market. In addition, it increased the creditability of the mom product. The principal and key power of hill dew is that it's the brand of one of the strongest and globally known company that is Pepsi. Since, the mom brand is so strong, it helped pile dew a great deal in creating its name in the drink industry.


The increasing inflation rate in globally may lead to the next weakness for Pile Dew. Secondly, fragmentation in the beverage industry of UK is another weakness. Finally, and most essentially, Mountain Dew's popularity can damage the reliability of the mother brand, Pepsi. Brand extension is not there.


One of the greatest opportunity for mountain dew is usually that the people are actually completely fed up of ordinary cola's and other existing CSD's, hence strongly moving their interest towards the citrus segment like hill dew.


The biggest risk for pile dew is form its competition Sprite 3G and other energy drinks like red bull etc. Before Sprite 3G, Hill Dew liked the monopoly in the citrus section of CSD's industry. Now, the competition is high between your two brands. Subsequently, from the Pepsi's point of view, Mountain Dew can be a danger for the mother brand.

Product Life Cycle

Product Life Circuit Management is the succession of strategies used by management as something undergoes its product life circuit. The conditions when a product comes changes as time passes and must be handled as it moves through its succession of stages.

A product's life routine (PLC) can be divided into several stages characterized by the revenue made by the product. The life circuit concept may apply to a brand or to a category of product. Its length may be as brief as a couple of months for a gimmick item or a hundred years or even more for product categories including the gasoline-powered auto.

Introduction Stage

Is the product is the result of NPD or copy competitors? Which pricing strategy to take up penetration or skimming? Spending a great deal on advertising and sales promotion to stimulate trial purchase, sales promotion. Build stations of distribution, selective distribution. Any USP, stress onto it. Educate the market about the merchandise benefits and features. The product for the time being is a reduction maker.

Growth Stage

Sales increases if the new product gain popularity, production rises, device costs land. Here, the merchandise starts to deliver profits and opponents are attracted. Businesses must put more focus on the brand name of the product since individuals are now alert to the product's benefits. Distribution should are more intensive-enter new distribution channels. Prices may be researched in case a skimming rates strategy was used. Companies should lower the prices to attract the next part of price very sensitive buyers and finally a firm must try to maximize market show.

Maturity Stage

This is the level of brutal competition. Sales development slowdown. Most products spend most of their time in the maturity stage of the PLC. Profits are good. Improve product quality and add new product features and improved styling. Add new models and flanker products (i. e. provide products of different sizes, flavours etc that protect the primary product). Enter new market segments and defend market talk about. Gain competitor's customers-For example, Pepsi Cola is continually luring Coca-Cola users to switch to Pepsi Cola, tossing out one task after another. Secure more support and screen in the exiting retailers. Re-positioning of the product in the mind of customers may be a valid option as well.

Decline Stage

In the declining level, sales may show up rapidly. Companies should keep up with the sales of the product so far it is contributing to earnings or enhances the potency of the product mix. Re-positioning may be conducted to extend life routine. Marketing combine must be adjusted accordingly. Harvesting-gradually lowering something or business cost while attempting to maintain sales-reduce sales team size, R&D costs, vegetable and investment costs, advertising expenditures and slowly taking out of the business enterprise. Rejuvenate something with the addition of value to the original declining product-Yamaha Pianos.

"Mountain Dew falls among the introductory & development stage of the merchandise Life Pattern. Since, Mountain Dew is a New Product Category, hence it is moving toward the development stage. If it gains popularity, the sales increase more that will brings about the increasing production process and finally the machine cost will be reduced. This thing can lead to the risk of more competitors in the future. They may emphasize generally on the brand name because the consumers will be familiar with the product's profit and they may need to focus more intensive distribution. "

Marketing MIX


The product includes the liquid inside and the packaging also. Soft drink satisfies the necessity of thirst (center advantage). However, people are always different; some want more some want less. Therefore hill dew has made allowances for the by providing many sizes.

Mountain dew like its mother company Pepsi, looks for the image by concentrating on individuals and also introversive people. Hill dew targets male teenagers those who are ready to embrace excitement, experience, fun, energy and enthusiasm. As the caffeine ratio is very high in hill dew as compare to other CSD's it caters the necessity of these who like to rest less. It has gone through a design renaissance in the year 2008. The looks of the product is eye finding with bright yellowish green color and semi opaque. As the merchandise is associated with activities it is marginally bigger, unlike its rivals, to offer more to the buyer.

The quality of the soft drinks is required to be regularly high. mountain dew strictly meets the I. S. O expectations and these requirements placed by Pepsi cola international. It has also been given regular award presented by "H. S. E". Aside from this the company have hired specially trained employees who are always involved in the quality checking of the merchandise throughout the Making process. The merchandise is convenient i. e. just purchase it and ingest it. The bottles are light, with adaptable packaging, so they don't crack of drip, and are not overweight to causally walk around. The canes are also light and safe. The brand is not going right through expansion in Pakistan because it is growing stage and the economic conditions are not very favourable.


All the factors mentioned before are area of the product from the drink to the image. Through campaign mountain dew seeks to create elegance for this. Brand uses both ATL (press) and BTL (consumer related) activities for advertising.

At enough time of its re -launched pile dew conducted massive sampling to produce brand recognition in the year 2003, according to their abrasive estimation, they come to approximately 2 million in UK with the different samples of green luggage, inexperienced T-shirts, key chains, caps etc. As per their assertion people still keep in mind their substantial sampling techniques to set their root base firmly in CSD market in Pakistan.

Mountain dew uses "Take STRATEGY "in their promotion. For instance they pay "slotting allowances" in the excellent store. Mountain dew is highly mixed up in sponsorship of programs that exactly match the theme and principles of their products and which their consumers like to watch. For example mountain dews sponsoring "living on the advantage" on the Musik route presenting DJ Waqar who is an icon for teenager and is also himself an hostile enthusiastic entertainer.

Previously these were sponsoring "survivor series" in addition they conduct occasions like rock and roll concerts in which young adults participate with full energy, patience and enjoy with there full potential.

Half of the full total cost is promotional cost.


Mountain dew is using "direct distribution" method. Pile dew floods all possible shops with the product. They use 1. 5 formulas i. e. if there is a need of 10 bottles in a shop they offer 15 bottle to that shop. The "numeric availableness" is 87%.

The brand in addition has developed "marketing relationship". It offers its big customer calendars and certificates. There is a complaint cell and responses from customer is regularly considered. Company uses its own fleet of vehicles & warehouses. The expense of logistic is high but it is compensated in off season by merging of routes. To avoid channel issues exclusivity funds are given to the customer. The distribution cost is 8-9% of the full total cost like the incomes of sales division.


Pricing strategy is the previous part of marketing combine. The brand uses "value centered pricing". It means that when consumer is buying hill dew they are simply not just purchasing the drink but also the image which complements it. Prices usually don't fluctuate nevertheless they may suffer from sometimes because of the prices of opponents or increase in the costs of raw materials.

Trade offers like price off and free products are given to the stores. Final individuals are also given discount on special occasion like Eid, Easter new 12 months charismas etc. UTC (under the crown) techniques are usually launches on these events; e. g final individuals are given discounts.

Performance Management and Business Scorecard

Indra Nooyi, CEO of the drink-and-snack giant, says a long-term focus on the well-being of customers worldwide is getting healthy earnings in trim times.

The US current economic climate showed the quickest enlargement for six years with expansion of 5. 7pc in the fourth one fourth. For Ms Nooyi, the chief professional of PepsiCo, the $43bn (27bn) food and beverage conglomerate with 198, 000 employees, it looks like things are looking better for the consumer.

Where Pepsi need to see recovery, and they hopeful, is in america and Mexico, and European and Eastern European countries. That four-area block is where we have to see improvement. "

Food staples tend to be somewhat immune system to the macro-economic pattern, people will eat crisps (PepsiCo possesses Walkers and Doritos) and drink Pepsi and Mountain Dew regardless of the talk about of the GDP characters. Actually, the more folks stay at home to save lots of money, the more the food conglomerates that provide the larder mainstays can depend on sales.

Ms Nooyi needs to outline a whole new strategy for PepsiCo, the one that might come as a bit of a impact to those who dismiss the US company as a manufacturer of salty snacks and sugary fizzy beverages.

"In the Western world there is matter about lifestyle issues - sedentary lifestyles which have led to weight problems resulting in cardio-vascular issues and diabetes. People want to manage their health better.

"We could also a lifestyle business so we have to capitalise on this opportunity and do what's right for the consumer. "

At present, PepsiCo profits $10bn of its profits from what it describes as good-for-you products such as Quaker Oats and fresh fruit juice such as Naked Juice and Tropicana. That's compared to more than $30bn on fun-for-you products including Pepsi itself, Walkers crisps and, in the US, Frito Lay chips.

Ms Nooyi desires that $10bn amount to go up to $30bn in the next 10 years, a three-fold increase. For the company that has experienced some analyst criticism for conventional growth trajectories on its staple products, it seems an ambitious target.

"The $10bn to $30bn is a goal, it's vivid, but I believe it is an objective that is do-able with some ingenuity, "

Ms Nooyi said. In the UK, earnings from the good-for-you runs, according to Neilsen characters, was roughly 300m, with total UK sales of more than 1bn. If the same Nooyi solution was applied to the UK market, that could see an increase to 900m in good-for-you revenue alone.

"We're not heading to do it under Pepsi's name, we're going to get it done under Quaker and Tropicana. You will see a great deal of new products under those brands. "

PepsiCo can point to an extended record of earning their "treat" items healthier. In the UK, salt levels in Walkers snack foods and crisps have been reduced by between 25 and 55pc and fats by 70 to 80pc. Since 2006, the company has spent all their soft-drink advertising budget promoting zero calorie products. A lot more than 61pc of PepsiCo soda sales in the united kingdom are of the non-sugar kinds and Tropicana sales have increased from 95m in 2005 to 270m in 2008.

"A carrier of crisps in the united kingdom has less salt than a slice of white loaf of bread, " Ms Nooyi's says proudly.

Ms Nooyi shows that the balanced rating card, with long run measures measuring permanent returns and cultural impact, could be put into quarterly income but, in a world that demands transparency, it could to difficult to move from regular reporting.

Transparency will come in many guises and PepsiCo, like a great many other companies, is gingerly sense its way in a new digital world. Through the entire interview, Ms Nooyi's BlackBerry intermittently vibrates, a regular reminder that on the planet outside her small collection at the Belvedere Hotel, someone, somewhere, probably desires something.

"Most established companies are run with a era who didn't expand up with that technology, " Ms Nooyi said, speaking of a complete gamut of digital platforms.

"Many leaders today are looking at digital warily, the price of failure is high, if you make a blunder the whole world knows it immediately. Social networking will change our business in serious ways, I believe we can make use of it a lot more interactively than we could today, we can use it as a test market, we can get consumers to tell us what things to create. "


In the I love to say that Pepsi need to be very, careful to match brands with product. Adding oatmeal under Pepsi is not suited, it is not befitting the Pepsi customer who is going to be placed off which is not appropriate for the oatmeal consumer who's going to be confused.

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