BANKING ACADEMY, HANOI BTEC HND IN BUSINESS (FINANCE)

ASSIGNMENT COVER SHEET

NAME OF STUDENT REGISTRATION NO. UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE DISTINCTION GROUP Unit 4: Marketing Principles Gatorade Marketing Mix Programme 2 of 2 Doti Chee January 2013

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

________________________________ Signature

_________________________ Date

Serial No 1 2 3 4

Group member (Vietnamese Name) Leader: Le Ngoc Minh Tran Quoc Trung Duong Thanh Tung Nguyen Viet Phong

Group member (English Name) Jin James Tom Phong

Class FO5 A A A A

Student no F05-135 F05-237 F05-245 F05-173

Signature

---------------------------------------------------------------------------------------------------------------FOR OFFICIAL USE (Course Administrator) Assignment Received By: Date:

Marketing Assignment 2 QCF Sept 2012

Unit Outcomes
Outcome Evidence for the criteria Feedback Assessors decision
First attempt Rework

Internal Verification

Explain how products are developed to sustain competitive advantage Explain how distribution is arranged to provide customer convenience Explain how prices are set to reflect an organisations objectives and market conditions Illustrate how promotional activity is integrated to achieve marketing objectives Analyse the additional elements of the extended marketing mix

3.1

3.2

Understand the individual elements of the extended marketing mix LO3

3.3

3.4

3.5

Plan marketing mixes for two different segments in consumer markets

4.1

Be able to use the marketing mix in different contexts LO4

Illustrate differences in marketing products and services to businesses rather than consumers Show how and why international marketing differs from domestic marketing.

4.2

4.3

Merit grades awarded Distinction grades awarded

M1 D1

M2 D2

M3 D3

Marketing Assignment 2 QCF Sept 2012

Outcome

Evidence for the criteria

Feedback

Assessors decision

Internal Verification

Assignment
( ) Well-structured; Reference is done properly / is not done properly /should be done (if any) Overall, youve passed / referraloutcomes Areas for improvement:

To achieve a pass, you must meet all the requirements defined in the assessment criteria. To achieve a merit, you must identify and apply strategies to find appropriate solutions and appropriate methods/techniques as well as to present and communicate appropriate findings. To achieve a distinction, you must use critical reflection to evaluate own work and justify valid conclusions as well as to take responsibility for managing and organizing activities

ASSESSOR SIGNATURE

DATE

/ 1 /2013

NAME: Doti Chee

(Oral feedback was also provided) STUDENT SIGNATURE DATE / /

NAME : ..............................................................................
FOR INTERNAL USE ONLY VERIFIED YES NO DATE : ........................................................................... VERIFIED BY : ........................................................................... NAME : ...........................................................................

Marketing Assignment 2 QCF Sept 2012

Excusive summary
PepsiCo Inc. is an American multinational corporation with interests in the manufacturing, marketing and distribution of snack foods, beverages, and other products. The definition in the market-orientation stage of the company is when it is able to identify what customer want and tailor to all the activities of the firm to satisfy needs as efficiently as possible (Etzel, Walker, Stanton, 2005). Consequence, PepsiCo is famous for many products such as Pepsi, 7UP, Lays potato chips and Gatorade. Gatorade is a brand of sports-themed food and beverage products. Gatorade is manufactured by PepsiCo and available in more than 80 countries. The Gatorade brand was purchased by the Quaker Oats Company in 1983, which its self-bought by PepsiCo in 2001. Gatorade is PepsiCos 4th-largest brand on the basis of worldwide annual retail sales. This report has seven small parts which will be explained as follow: Explain how products are developed to sustain competitive advantage Explain how distribution is arranged to provide customer convenience Explain how prices are set to reflect an organizations objectives and market conditions Illustrate how promotional activities are integrated to achieve marketing objectives Analyze the additional elements of the extended marketing mix Plan marketing mixes of two different segments in consumer markets Illustrate differences in marketing products and services to businesses rather than consumers.

Marketing Assignment 2 QCF Sept 2012

Prepared for: Lecturer, Doti Chee

Marketing Principles The Banking Academy

Prepared by: DISTINCTION GROUP Class: F05A Submission Date Final Submission: 7th January 2013

Marketing Assignment 2 QCF Sept 2012

Table Contents
Introduction ................................................................................................................................ 8 3.1 Explain how Gatorade are developed to sustain competitive advantage ............................. 9 3.1.1 Feature, Advantages and Benefits (FAB) ...................................................................... 9 3.1.2 Differentiation of Gatorade ........................................................................................... 9 3.1.3 Branding ...................................................................................................................... 10 3.1.4 Packaging..................................................................................................................... 10 3.2. Explain how distribution is arranged to provide customer convenience .......................... 11 3.2.1 Five basic distribution channels .................................................................................. 11 3.2.2. Physical distributions. ................................................................................................. 12 3.2.3 Ethics in distribution .................................................................................................... 13 3.3 Explain how prices are set to reflect an organisations objectives and market conditions 13 3.3.1Organizations objectives of PepsiCo........................................................................... 13 3.3.2 Market condition in Vietnam ....................................................................................... 13 3.3.3Price strategy ................................................................................................................ 14 3.3.3.a Price and promotion .............................................................................................. 14 3.3.3.b Discount Pricing .................................................................................................... 14 3.3.5 Approach to Pricing ..................................................................................................... 15 3.4 Illustrate how promotional activity is integrated to achieve marketing objectives ........... 15 3.4.1 Advertising .................................................................................................................. 15 3.4.2 Sales promotion ........................................................................................................... 16 3.4.3 Public relation .............................................................................................................. 16 3.4.4 Personal selling ............................................................................................................ 16 3.5 Analyze the additional elements of the extended marketing mix: ..................................... 17 3.5.1. People. ........................................................................................................................ 17 3.5.1a. Training: ................................................................................................................ 17
6

Marketing Assignment 2 QCF Sept 2012

3.5.1b. Customer orientation ............................................................................................. 17 3.5.2. Process ........................................................................................................................ 17 3.5.3. Physical evidence ....................................................................................................... 18 3.5.4. Evaluate the effectiveness and efficiency of the 3 Ps based on service quality ......... 19 4.1. Plan marketing mixes for two different segments in consumer market. ........................... 19 4.1.1. First segmentation: Professional sports players.......................................................... 19 4.1.2 Second segmentation: Amateur sports players. ........................................................... 20 4.2 Illustrate differences in marketing products and services to businesses rather than consumers ................................................................................................................................ 20 4.3. Show how and why international marketing differs from domestic marketing................ 22 4.3.1. Reason for going international ................................................................................... 22 4.3.2. Benefits and Risks of going international................................................................... 23 4.3.3. How relationship between USA and Vietnam affects PepsiCo .................................. 23 4.3.4. Differences between domestic marketing and international marketing ..................... 23 Conclusion ............................................................................................................................... 25 References ............................................................................................................................ 26

Marketing Assignment 2 QCF Sept 2012

Introduction
Marketing is very important with any organization. It integrates all the functions of a business and speaks directly to the customer through advertising, salespeople and other marketing activities (Steven Silbiger, 2005). Therefore, an organization which wants to have good outcomes in operation, it should understand deeply about the marketing concept to apply effective. As a marketing executive, the writer will provide readers basic knowledge about marketing and their application on Gatorades marketing activities. The information in the report comes from various sources like books about marketing and in different fields, website and documents which related to marketing and Gatorade. However, because of limitation about time, sources and word, this report only gives general information. The research hopes that in the future ones, those disadvantages will be improved and more detailed information will be provided.

Marketing Assignment 2 QCF Sept 2012

3.1 Explain how Gatorade are developed to sustain competitive advantage 3.1.1 Feature, Advantages and Benefits (FAB) Feature Bottles design Advantages Easier to bring Benefits Portable Competitive advantage The bottles design of some main Made from plastic Cheaper Lighter More fashionable Status competitors such as

Redbull, Lipovital are made by metal difficult to bring, higher price Gatorade has competitive advantages in

gaining customers. Nutrient ingredients More effective in Product Performance replenishing fuel in the muscles than The performance is at a higher other sports drinks Wide products range of Create choices customers level of quality comparing more with the competitors product for Attract more customers.

3.1.2 Differentiation of Gatorade - Consumer market In responding to consumers desire for healthier choices, PepsiCo made its products with all-natural ingredients, increasing the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in certain of its products and taking steps to reduce the average amount of sodium, saturated fat and added sugar per serving in certain of its products (PepsiCo,2011). Satisfied consumers demand for healthier products Achieve more consumers Companies succeed in competitive advantage. - Organizational market. Products can be sold for cash or on credit terms. The credit terms, which typically require payment within 30 days of delivery in the U.S., and generally within 30 to 90 days internationally, and may allow discounts for early payment. PepsiCo has a policy which will remove and replace damaged and out- of-date products from store shelves to ensure that consumers receive the product quality and freshness they expect.
9

Marketing Assignment 2 QCF Sept 2012

 Show customers the responsibility of PepsiCo and maintain consumer confidence in products increase the competitive advantage. 3.1.3 Branding Gatorade is a brand leader in sport drink industry. According to the figure below:

Popular brand increase the confidence of customers in the product when making buying decision appeal more customers competitive advantage. 3.1.4 Packaging Physical protection of contents: Design of product is very helpful to protect the ingredient inside keep the products fresh and flavorful for longer time. Distribution: PepsiCo pay customers for performing merchandising activities on its behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices. As a result, PepsiCo has a large chain of distributors that can easily deliver product to customers. Selling: in 2010, PepsiCo redesigned to simplify the bottle, namely by replacing the brand name with the letter G which intended to appeal new customers. User convenience: Gatorade bottle is designed so that customers can easily bring and clip on bicycles or bags.

10

Marketing Assignment 2 QCF Sept 2012

3.2. Explain how distribution is arranged to provide customer convenience PepsiCo uses the agent to sell their products in Vietnam. This type of distribution will help the firm to sell the products to any places without high cost and saving the time for both customers and suppliers. Distribution channel of PepsiCo
Manufacturer Agents Retailer Consumer

3.2.1 Five basic distribution channels Distribution channels in organizational market Factor PepsiCo distribution Customer convenience Display In Vietnam, manufacturer - PepsiCo Providing more (agents)

promotes 7up, Sting, and Gatorade on information for the agents many newspapers and magazines such as easier to choose the Vietnam Sport magazine, Football products.

newspaper as well as on the some channels on television like VTV3, VTV1. Promotion campaign PepsiCo held many trade shows to - Helping customers to attract consumers, retailers, wholesalers, choose the appropriate

such as: the trade show in Giang Vo, products by experiences Hanoi on 9/6/2012 (Le, 2012) with many during the trade shows music stars with the aim to widespread - The promotion campaign the popularity of Pepsis products helps PepsiCo to gain more customers more profit the agents also gain lots of advantages

including Gatorade.

Transportation

Manufacturer, create a transportation Saving time and expenses group to deliver their products to the big for the customers

retailers in Hanoi like Fivimart, BigC, increasing profit for the Metro. retailers.
11

Marketing Assignment 2 QCF Sept 2012

Local knowledge

PepsiCo has penetrated into Vietnam The

agents

can

get

since 1994 and became one of the leaders product easier due to the in the drink market with many successful well-known of PepsiCo brands like Pepsi, 7up. Therefore, the about the market. firm can understand the market of Vietnam and support the right products.

Stockholding and storage

Some big supermarkets in Vietnam have Available for customers to their own warehouse to store the purchase all the time.

products. For example, BigC Hanoi has a warehouse supermarkets. right inside their

3.2.2. Physical distributions. Physical distribution of Gatorade Factors Organizational markets uses trucks to Benefit deliver -Saving time for the

Transportation -PepsiCo

Gatorade to their customers for a short customer -> maintain the distance and small quantity. good relationship.

-PepsiCo uses trains as well as ships to -Lowering the transferred deliver Gatorade to customers for a long cost for PepsiCo and saving distance and large quantity. Location warehouse time for the retailers. for the

of The big retailers who sell Gatorade in -Available

Vietnam like Fivimart, BigC, Metro all consumers to purchase all have their own place to store Gatorade the time -> increase the before selling to the consumers. profit - Speed up and improve HP vital business processes,

Logistic management

Physical distribution: Using incorporation

networking to deliver. (HP.com, 2012.)

including order processing, billing and logistics for distribution to thousands of retail customers.

Materials management:

Cutting

the

cost

to

12

Marketing Assignment 2 QCF Sept 2012

- Bottling plants made by G&J Pepsi- improve the flexibility of Cola Bottling Inc (G&J) . business

3.2.3 Ethics in distribution According to PepsiCo annual report, 2011. The firm ensure to support the products in the right time and will be take responsibilities if they cannot do it. Moreover, PepsiCo compromise to replace the out of date products with the new one to make sure that their retailers will have the best business performance.

3.3 Explain how prices are set to reflect an organisations objectives and market conditions 3.3.1Organizations objectives of PepsiCo According to PepsiCo, Inc. 2011 Annual Report, following are some objectives of PepsiCo related to their setting price: PepsiCo Objective Widespread Gatorade brand to Asia market Increase market share of Gatorade Series 3 from 30% to 40% in the first six months of 2011

3.3.2 Market condition in Vietnam Large number of competitors Potential of Vietnams market

Coca-Cola TRIBECO Beverages Redbull Energy Drink TAN HIEP PHAT Beverage Group Other beverages are imported from Korea, Europe, etc.

Intensity of competitiveness

High level of competitiveness Domestic drinks are cheaper Gatorade is too new for customers Vietnam's population is very large and increasing Huge demand for drinks and diversity Gatorade is the exclusive product PepsiCo has a good reputation in Vietnam
13

Marketing Assignment 2 QCF Sept 2012

3.3.3Price strategy 3.3.3.a Price and promotion Information to the market High Low

High

Rapid skimming

Slow skimming

Price

Low

Rapid penetration

Slow penetration

PepsiCo should choose Rapid penetration, because in Vietnam market PepsiCo still focuses on encouraging current customers to buy the product frequently. Besides, implicating competitors customers move to buy their product, furthermore, encouraging people who never buy their product to start buying. Price: In general, the income of Vietnamese is not as high as other countries as other country set the low price to attractive customer is best solution for Gatorade in this market, the recent price of Gatorade is lower than its original price when it first appeared in Vietnam. (13.000 VND/1 bottle 500ml) Promotion: Market penetration is enhanced by the combination of low price and high levels of promotion. PepsiCo should launch a wide range of advertisement for Gatorade with the presence of some famous athletes and singers to attract consumers. Such as Messi, Kevin Durant, Tom Brady, etc.

3.3.3.b Discount Pricing PepsiCo should create more discount program to customers: In the major sports leagues: such as Seagames, VTV Cup Volleyball, V-League. Discount if large amount of products are purchased Commercial discounts it when organizations want to do reseller 3.3.3.c Pricing and competitive edge

14

Marketing Assignment 2 QCF Sept 2012

Price has invisible power in marketing mix, besides there is many ways to price a product. When PepsiCo has new product, the competitors will introduce new product too. To overcome the competitors in the sport drink market, PepsiCo should keep the current price and affirm the quality of product and the after sales services. Besides, applying the mass media to introduce new product and give more promotion.. 3.3.5 Approach to Pricing Four Approach to Pricing Cost plus pricing Target pricing Perceived pricing value Competitor related pricing

In four approaches to pricing, PepsiCo should apply perceived value pricing for Gatorade. The market segment of Gatorade is for athletes and dynamic people, it focuses on people who really need it. Gatorade is not a common beverage that it is really effective when users are athletes or sports players. Because of the function, convenience, and appearance, Gatorade cannot discount too much so it also motivating PepsiCo should choose perceived value pricing to attract customers. By contrast, these Gatorade's product of PepsiCo has many competitors like Powerade, Samurai, Redbull, etc.

3.4 Illustrate how promotional activity is integrated to achieve marketing objectives According to PepsiCo, Inc. 2011 Annual Report, PepsiCo's marketing objectives are mainly: Gaining more customers for the Gatorade Series in Vietnam by advertising through the mass media Increase company-wide advertising by 23 percent in 2011 Increase market share of Gatorade Series 3 from 30% to 40% in the first six months of 2011 3.4.1 Advertising PepsiCo should press release for Gatorade, besides using mass media such as TV, magazines, posters, internet, radio, etc. Gatorades advertisement mainly focuses on famous sports magazines, newspaper, enews, etc. In Vietnam such as: The Thao 24/7 Newspaper, Van Hoa & The Thao Newspaper, VnExpress.net, 24h.com.vn, etc.
15

Marketing Assignment 2 QCF Sept 2012

Gatorade should put advertisements on website of some famous sport teams as well as the sport competitions. Setting up Social Network accounts with fan page to increase awareness among consumers, such as Facebook, Twitter, YouTube, etc. For example, Gatorades fan page on facebook.com has more than 5 million fans.

Advertising products in the TV programs, game show.

=> By implementing these advertising activities, PepsiCo can achieve their objective to gain more customers and increased market share as well as the company-wide advertising. 3.4.2 Sales promotion PepsiCo can organize programs to launch Gatorade. For example, a small of the net profit from each bottle of Gatorade in support of the national team Vietnam. Attracting customers through vouchers, discounts, lucky gifts, scratch for big presents, etc. Offer policy discounts to organizations customers. Hiring celebrities as brand ambassador, such as famous athlete, singer or actor.

=> By launching the sales promotion camping, PepsiCo can reach all the objectives mentioned above. 3.4.3 Public relation PepsiCo should use PR for corporate and brand imagine, such as participate in charitable activities like Charity golf tournament Pepsi donated 1.7 billion help the victims of typhoon affected Quang Nam (baomoi.com) Funding financial and beverages for the major sports leagues or live concerts in Vietnam.

=> By using Public relation, PepsiCo can Gain more customers for the Gatorade Series in Vietnam 3.4.4 Personal selling Using personnel selling is suitable. PepsiCo should send sales staff to marketing for organizations which has demand for Gatorade products. The sellers can easily to persuade the organization customers and they can give the advice to help them have the suitable product => By using Personal selling, PepsiCo Increase market share of Gatorade Series 3.
16

Marketing Assignment 2 QCF Sept 2012

3.5 Analyze the additional elements of the extended marketing mix: PepsiCo needs to run relevant service activities, results in different elements of the service marketing such as the extended marketing mix (3Ps additional: people, process, physical evidence) and the characteristics of service marketing to sell Gatorade. 3.5.1. People. 3.5.1a. Training: - Puts new employees through a strict training regime in their first 2-4 weeks on the jobs include customer knowledge, and retail skills

- Management trainees attended classes for 8 to 12 weeks. Their training went much deeper, covering not only the information imparted to baristas but also the details of store operations, practices and procedures as set forth in the company's operating manual, information systems, and the basics of managing people 3.5.1b. Customer orientation According to PepsiCo (2011) these are the responsibilities of its deliver staff: Appearance: Delivery salesperson and order takers have polite serving attitude and wear uniform with Pepsi logo through telephones, emails or over the counter This helps the company make a strong impression on the customers Attitude: Care the customers, check carefully before delivering to make sure that there are no out-of-date products provided to the customers. Get trust and loyalty from customers therefore they impress customer and make them remember the products first when thirsty. Behaviour: They have cheerful customer service representatives available to answer all of customers questions. People can reach their customer service department by e-mail, phone, fax or mail. The attitude of employees contribution to satisfaction of customers, ensuring their coming back and help the company familiar to the customers

3.5.2. Process PepsiCo applies the international standard ISO for its products Standardize the process and increase the efficiency.

17

Marketing Assignment 2 QCF Sept 2012

PepsiCos beverage product is Gatorade and they are willing to sell this product at the lowest price possible to retail and wholesale organisations in order to have competitive advantage. Pepsi is then distributed within retailers, distributors and bottlers in order to reach the customer. Finally, Pepsi is promoted through heavy advertisements and sponsorships. This process helps PepsiCo position their product and target a market where they can successfully have most of the market share

Technological processes include the process of manufacturing goods and adapting them for the needs of clients. Guarantee the standardization of process, the quality of products to make sure the perfection of Gatorade and satisfy the customers. Customers are reliable on the prime quality and believe that all Gatorade bottle has good flavour.

Investing in technology to increase the productivity and increase the product quality.

3.5.3. Physical evidence Packaging At PepsiCo, they continually think about new ways to package and deliver our products to minimize our impact on land. In this effort, they strive for the "5 Rs"to reduce, recycle, use renewable sources, remove environmentally sensitive materials and promote the reuse of packaging in the entire process of packaging selection, design and procurement (PepsiCo, 2011). Brochures - Brochures of Pepsi appear in many sports magazines and online newspapers such as: Vietnam Sport Magazine, Football Magazine of Vietnam, The Thao 24/7 Newspaper, Van Hoa & The Thao Newspaper, VnExpress.net, 24h.com.vn, etc. - PepsiCo also put many brochures in stadiums, bus stations and airports Widespread the brand images. Paper work In many sports events, tickets have PepsiCos logo printed on them or the invoices and dispatch notes as well.

18

Marketing Assignment 2 QCF Sept 2012

3.5.4. Evaluate the effectiveness and efficiency of the 3 Ps based on service quality With the people that were trained carefully and the process which is efficient and consistent all the time, the delivery service of PepsiCo will be high advanced in reliability, responsiveness and competence. The friendliness and politeness of the staff increase the courtesy in the service quality.

4.1. Plan marketing mixes for two different segments in consumer market. 4.1.1. First segmentation: professional sports players are the group of people need a high quality sport drink to provide enough energy. Additionally, the demand as well as the income of this segments is high, therefore they can purchase Gatorade frequently. Marketing mixes Product Professional sports players are always - Attracts more sport players due to in high intensity need to refuel the high quality of the products. faster and more effectively plan to - Create a unique products to increase the content of replenish overcome the competitors. ingredients. Place -Corporate with popular sports - Gain more customers due to the Plan Advantages

accessories companies such as Nike, cooperation with others famous Adidas, Puma, Fila, etc which will be brands. closer to professional sports players - Get closer to customers through than PepsiCo. -Distribute Gatorade to the stadiums, sport centre, gyms. Price Professionals always need high Strengthen and maintain quality product Perceived value customers perception of a high pricing set a affordable price along quality product. with the quality of the products. Promotion Sponsor Gatorade and money for - Increase the brand expansion. professional sports events to advertise - Appeal more customers more product and bring it to sports players. profit. the places of public activity.

19

Marketing Assignment 2 QCF Sept 2012

4.1.2 Second segmentation: amateur sports players are the group of people play sport in their leisure time. Therefore, they do not purchase Gatorade usually. Marketing mixes Product Focus more on the taste of Gatorade - More effective product attracts instead of the contents inside. more amateur sport players. - Create a unique product to overcome the competitors. Place Implement vending machines - Customers are easier to buy products retain more customers. Plan Advantage

nearby the places of public activities.

- Increase the numbers of small - Reduce the cost of advertising as distributors. well as labour cost.

Price

Lower the price to an affordable level - Create the competitiveness with to widespread the popularity of this other cheaper sports drinks brand in the amateur sport players competitive advantage. group as well as compete with other - Affordable for regular customers cheap products in the sport drink more customers more profit industry.

Promotion

- Offer famous sports idols to be the - Customers tend to follow their idol representative of Gatorade. obtain more customers more

- Advertise through mass media like profit. sport channels and sport magazine to - People are usually impressed by expand the brand the advertisement of TV or on some famous magazines gain more customers.

4.2 Illustrate differences in marketing products and services to businesses rather than consumers The difference between marketing products and services to businesses and marketing products and services to consumers of Gatorade Factors Marketing products and services Marketing to consumers products to and

services to business
20

Marketing Assignment 2 QCF Sept 2012

Classification

Convenience goods: focus on the

Capital goods Accessories Raw material Components Supplies Business service

professional sport players group who has a high demand of energy sport drink PepsiCo should

concentrate to expanding brand name.

Unsought goods: Gatorade for

normal people doing activities who do not realize Gatorade as their usual need -->Gatorade

focus on attractive advertising such as posters, banners, etc.

Product

Low unit value Low requirement for tech Regularity of purchase

High unit value High requirement for tech Irregularity of purchase

Target marketing

Difficult to identify the needs and wants of consumers by individualbecause there are too many customers to research difficult to satisfy all consumers.

Easy

to

identify

business

market segments because the data is readily available in the government statistics easy to satisfy all organization. Pre-sales services: technical

Marketing Mix Packing for self-services Product Fixed-build for instant usage

advice, quotations, opportunities to see products in action and free trials After-sales: delivery, just-in-time service and

maintenance and guarantees Custom-built: greater degree Packing for protection

21

Marketing Assignment 2 QCF Sept 2012

Price Place

Fixed price Complex distribution channels because consumers buy Gatorade from many different channels like wholesalers, retailers, groceries, etc. Large number of buyers Gatorade

Negotiable price Direct organizations distribution buy Gatorade

directly from manufacturer Small number of buyers

Promiton

uses

DIPPAS

Gatorade uses Personal selling, Public relation, Advertising, Sales promotion to promote their Small Long-term Decision Making Units Short time product to the

promotional activity to promote the products in order to widespread the popularity of its brand. Large Temporary Individual Long time

organizations market Size of market Relationship Decision making

Generally, there are many differences between marketing product and services to consumer market and to organizational market which are be shown as above. However, PepsiCo should take deep look into both markets to balance their business performance as well as gaining as much profit as possible.

4.3. Show how and why international marketing differs from domestic marketing 4.3.1. Reason for going international In 90s, PepsiCo was already a market leader in the domestics sport drinks industry because at that time, many biggest fast food brands such as Pizza Hut, KFC, Taco Bell, etc used PepsiCos products. PepsiCo needs to penetrate into a bigger market to expand its business. Moreover, in the same period of time, Coca-Cola, which is the biggest opponent of PepsiCo, had expanded its business into international market and gained a lot of profit.

22

Marketing Assignment 2 QCF Sept 2012

 High demand for PepsiCo going oversea to remain competitiveness with its opponent. 4.3.2. Benefits and Risks of going international Benefits Risks Global market for product Exaggerate differences in labour costs firms control such as purchasing habits and business environment Higher profit margins The necessary adaption to the product will diminish the effects of economies of scale Receive orders for info from potential Difficult to sell excess stock at marginal cost overseas customers Excess production Stakeholder expectations Firms prestige due to anti-dumping duties

Seasonal fluctuations may be leveled out due Profits may be affected by factors outside the to the variety of the market

4.3.3. How relationship between USA and Vietnam affects PepsiCo Before 1994, The US government had set a barrier for entering into Vietnam economy for the overseas company. PepsiCo could not penetrate into Vietnam to launch their business. In 1994, the economic sanctions have eliminated by the US government Open a path for PepsiCo to enter in Vietnam a developing country, provide a potential market with large population. In 2011, PepsiCo has obtained 22 billion dollars from some developing countries including Vietnam. 4.3.4. Differences between domestic marketing and international marketing Factors Domestic marketing International marketing Marketing mix Product Extend the existing image of Create a basic image of products Research & products for new market Development: Research & Development: difficult to identify needs and wants of local people because of lack of

easy to identify needs and wants of people due to the knowledge about the home country as well as the good human resources and

knowledge about the new market along with weak

23

Marketing Assignment 2 QCF Sept 2012

equipment that did successful in the past cost less time and expenses. Place Use existing

foundation of labour and equipment cost more time and expenses.

distribution Create channel

new

distribution

channel

Maintain the relationship with Build up new relationship the retail and wholesale with retail and wholesale organizations

organizations Price: Price is determined by local market American Pepsi: $ 4.99/each

Vietnamese 10,000 ($ 0.5)

Pepsi:

VND

conditions Standard of living High level of income as well Consider before setting the as high level of living, hence PepsiCo set a high price for its product to increase profit price. For example: the income and standard of living of Vietnamese are low, thus the price of Pepsi is cheap.

Promotion

PepsiCo has launched a very In some countries where effective promotional sports do not get much attention from people,

campaign by sponsoring for famous sport team such as LA

sponsorship is not effective types may of be

Galaxy Football Club and Some sport association likes NBA. The popularity of mass media leads to effective advertising.

advertisement

unfamiliar to the target market. For example:

directed mail in Vietnam or newspaper in low level of literacy areas

24

Marketing Assignment 2 QCF Sept 2012

Conclusion
This report provide basic knowledge about marketing which including its concepts, characteristics, elements as well as cost and benefits of doing marketing in Viet Nam. This information will be helpful with every organization, specifically Gatorade in this situation. Gatorade is the leader in sport drinks market of Viet Nam; therefore, it will have many benefits that the other has to dream about. By applying effectively theory of marketing on the activities, Gatorade is able to bring their products to the customers and meeting their needs and wants which will lead to the profit for company and its stakeholders

25

Marketing Assignment 2 QCF Sept 2012

References 1. Adweek.com (2011) Pepsi Ads Return to TV. [online] Available at:

http://www.adweek.com/news/advertising-branding/pepsi-ads-return-tv-132987 [Accessed: 6 Jan 2013]. 2. baomoi.vn (2012) Gii golf Pepsi t thin tng 1,7 t ng gip ng bo Qung Nam b bo l. [online] Available at: http://www.baomoi.com/Giai-golf-Pepsi-tu-thientang-17-ti-dong-giup-dong-bao-Quang-Nam-bi-bao-lu/55/1224921.epi [Accessed: 6 Jan 2013]. 3. Business Insider (n.d.) In Gatorade War, Pepsi Seems To Have Deliberately Given Up Market Share To Coke. [online] Available at:

http://www.businessinsider.com/why-gatorades-10-point-loss-of-share-to-cokespowerade-is-not-a-total-disaster-2012-2 [Accessed: 6 Jan 2013]. 4. Friesner, T. (1965) Pepsi Marketing Mix. [online] Available at:

http://www.marketingteacher.com/case-study/pepsico-case-study.html# [Accessed: 6 Jan 2013]. 5. Learnmarketing.net (n.d.) HND Business Marketing Principles Unit 4. [online] Available http://www.learnmarketing.net/HND_Business_Marketing_Principles_Unit_4.htm [Accessed: 6 Jan 2013]. 6. New York Post (n.d.) Pepsi big bets on companys chips. [online] Available at: http://www.nypost.com/p/news/business/pepsi_big_bets_on_company_chips_zNI7r5y yoMPUDTVn5TDa0J [Accessed: 6 Jan 2013]. 7. Solution, L. (2004) PEPSI - S la chn ca th h mi - Thng hiu hng u LANTABRAND Total Brand Solution. [online] Available at: at:

http://www.lantabrand.com/cat4news2509.html [Accessed: 6 Jan 2013]. 8. Baomoi.com (2012) PepsiCo gi trin vng pht trin 2012 - Sohanews. [online] Available at: http://www.baomoi.com/PepsiCo-giu-trien-vong-phattrien-2012/45/9562787.epi [Accessed: 18 Nov 2012].

26

Marketing Assignment 2 QCF Sept 2012

9. Baomoi.com (2012) Pepsico Vit Nam m nh my mi ng Nai SaigonTimes. [online] Available at: http://www.baomoi.com/Pepsico-VietNam-mo-nha-may-moi-o-Dong-Nai/45/8067279.epi [Accessed: 18 Nov 2012]. 10. Baomoi.com (2012) PepsiCo Vit Nam nhn gii thng DMK-Donald M. Kendall - SGGP. [online] Available at: http://www.baomoi.com/PepsiCo-VietNam-nhan-giai-thuong-DMKDonald-M-Kendall/45/1533807.epi [Accessed: 18 Nov 2012]. 11. Marketingteacher.com (2012) Marketing Environment. [online] Available at: http://www.marketingteacher.com/lesson-store/lesson-marketingenvironment.html [Accessed: 18 Nov 2012]. 12. Marsdd.com (2003) Implementation Toolkit MaRS and | control: MaRS. Kotler [online] on marketing at:

|Entrepreneur's

Available

http://www.marsdd.com/articles/implementation-and-control-kotler-onmarketing/ [Accessed: 18 Nov 2012]. 13. Mindtools.com (1980) The McKinsey 7S Framework - Strategy Skills Training from MindTools.com. [online] Available at:

http://www.mindtools.com/pages/article/newSTR_91.htm [Accessed: 18 Nov 2012]. 14. Netmba.com (2002) Marketing Process. [online] Available at:

http://www.netmba.com/marketing/process/ [Accessed: 18 Nov 2012]. 15. Vcci.com.vn (2012) S c hn 500 siu th mi ti Vit Nam - u t ti chnh - VCCI - Phng Thng mi v Cng nghip Vit Nam. [online] Available at: http://vcci.com.vn/dau-tu-tai-chinh/20121171199940/se-co-hon-500-sieu-thimoi-tai-viet-nam.htm [Accessed: 18 Nov 2012]. 16. Vi.scribd.com (2008) Market Segmentation. [online] Available at:

http://vi.scribd.com/doc/6757511/Market-Segmentation [Accessed: 18 Nov 2012]. 17. Vietbao.vn (2005) Pepsi VN ti tr 1 t ng cho T bng U23 . [online] Available at: http://vietbao.vn/The-thao/Pepsi-VN-tai-tro-1-ty-dong-cho-DT-

bong-da-U23/70018566/134/ [Accessed: 18 Nov 2012].

27

Marketing Assignment 2 QCF Sept 2012

18. Dibb, S. (1997) Marketing concept and strategies. Houghton Mifflin 19. Kotler, P (2001) A framework of management. New Jersey

28

Marketing Assignment 2 QCF Sept 2012