EXECUTIVE SUMMARY

The proposed research aims to measure the PepsiCo brands consumer perception as healthy within the North
American market and to analyze the results in order to gather data to generate recommendations on the strategic
marketing of the company.
The research will survey a sample of 1,000 people in the US different by age, income, location and personal
preferences for drinks. The population will be selected randomly by a computer by using the grocery store loyalty
programs members as reference. The extent of the research is wide enough to ensure that the survey will give
us a framework of the feelings towards the healthy feature of the PepsiCo brands. A questionnaire will be
administered to the selected sample over the Internet and the results will be collected and analyzed by a computer.
The criteria under which each question of the questionnaire has been conceived cover the main concerns for the
company. For example, does the consumer perceive PepsiCo as provider of healthy drinks or not?.
The research also highlights the main possible outcomes of the survey. For each type of result, the research has
already identified a strategic direction the company should take.
The research is extensive enough to provide a comprehensive understanding of the brand perception. The
accuracy of the research is ensured by the size of the sample, the techniques applied, the different features
of the research which covers both qualitative and quantitative aspects. The internet survey is in fact coupled
with a series of focus groups so PepsiCo can gain a real firsthand knowledge of the opinions consumers have about
the brand.
The research might suffer typical problems of any research as related to personal bias of the surveyed
population. Surveyed people in fact may have issues that can prevent them from answering accurately to
the questionnaire and this possibility has been already addressed by designing the questionnaire in the easiest
and less embarrassing possible way. The possibility of not being able to reach a customer has also been
addressed by setting the computer on the way to select an alternative number to be selected.

Contents

1.

INTRODUCTION

2.

OBJECTIVES

3.

RESEARCH DESIGN

4.

3.1

Sampling Techniques: Qualitative/Quantitative

3.2

Data Collection Method

3.3

Measurement

3.4

Analysis Procedures

EXPECTED RESULTS
4.1

Summary of Secondary Data

4.2

Expected Findings: Primary Research

4.3

Data Organized According to Related Variables

4.4

Findings Implications & Recommendations

4.5

Statistical Significance

5.

RECOMMENDATIONS

6.

CONCLUSION Appendices

Sources

INTRODUCTION

PepsiCos corporate mission is to be the leading global consumer products company with primary focus on
convenient foods and beverages (PepsiCo Annual Report, 2010). Due to growing demand from our customers,
consumer advocacy organizations and heavy political pressure to add healthier snack and beverage products
to our portfolio. More recently, Michael Bloomberg, Mayor of New York City, is pushing for a municipal ban on the
sale of super-sized sugary drinks to help mitigate the growing obesity rate. Other legislators, including the FDA,
are looking at imposing a soft drink tax to also help curb consumption of our primary product base. If we seek to
achieve our mission, we must consistently measure our brands perception of being healthy to target consumer
markets. If we do not, we will fail to meet the growing demand from our customers for new innovative and
healthy food and beverage products.

OBJECTIVES

It is the goal of this research proposal to layout a detailed plan of how to measure this perception and reinforce
the urgency of ensuring PepsiCo is responding to growing trends for healthier food and beverage alternatives.
We will primarily focus our research methods through qualitative marketing research methods to fully divulge
customers understanding, awareness and perception of PepsiCos food and beverage product lines in relation to
what they perceive as healthy. Through this assessment and information gathering, we will be able to deduce
valuable consumer insight into new and current product offerings, the success of current marketing tactics and the
true desire of consumers health demands.

RESEARCH

3.1 Sampling techniques

The research will be carried out over a selected sample of the population. Since our target are all current Pepsi
customers, we cannot perform a random selection. Instead we will frame a selected population using the loyalty
cards of grocery stores as reference. Those cards in fact represent a powerful marketing tool because of the data
that help gathering. We are able to realize if a customer has ever purchased a Pepsi drink and therefore if he or she
can be included in the survey population to help Pepsi understand what the perception is among consumers of
different age, gender, income and personal preferences in terms of drinks.
Quantitative Research
Once the grocery outlets throughout the US have been decided (4 different chains that all sell Pepsi drinks), the
approach used will be the systematic sampling. The population will be represented by
10,000 customers of these 4 chains randomly selected and the sample size will be 1,000. The selection will be
performed with a probability method: every tenth person from the population of
10,000 is selected for the sample. Since the selectee will be identified by his/her email address, it will be possible to
reach him/her over the email and ask to fill a brief online questionnaire. The computer

will also randomly select a second, much smaller sample (30 people) for the conjoint analysis (see the measurement
section).
Qualitative Research
The probability method will be also used to select participants to the qualitative part of the research, the focus groups.
For the focus groups the sample size is much smaller since we need 15 people only and the selection will be
performed again using a probability method: this time the 667th person will be called to be part of the focus group
(10,000 / 15). If he/she is not available or cannot be reached, we will proceed with the 668th and the 666th person. See
appendix 1 for Time Requirements and Sampling Process.

3.2 Data Collection Method

Quantitative
For the quantitative part, the questionnaire will be filled out over the internet. The selected customer will be sent a link
over the email: the link will give him/her access to the questionnaire and by clicking on submit the answers will be
collected and the results processed.
Potential Issues
1) The customers email address might not be valid anymore;
2) The customer might just ignore/trash the email and not fill the questionnaire;
3)
The customer might be inaccurate in filling the questionnaire due to inability to formulate a coherent response or
unwillingness to respond accurately due to such reasons as: time pressure, fatigue, personal bias over privacy or other
personal matters, lack of information, and response style.
These issues are considered in the margin of error and therefore the computer will select another customer in the place
of the unreachable one. While the first two types of issues can be fixed by the computer, the machine has no control
over the issue no.3 where the problems are connected to the data collection method itself: the interviewer has no
interaction with the customer but also the environment where the survey is performed can help because the
customer is in front of his/her computer in a location of his/her choice.
Qualitative
For the qualitative research, the customer will be reached over the phone and asked to participate to a focus group on
Pepsi drinks. He/she will be compensated for the participation with a gas reimbursement and a $20 gift card.
The focus group will be executed in an ad-hoc location with a one-way mirror behind which the researcher will sit and
observe the reactions of the participants to the questions asked. The plan is to perform all focus groups in one day,
from morning to evening. The moderator will ask the question and help frame the discussion among the participants;
the moderator will also record the answers on tape. Then the answers will be put on paper and analyzed by the experts.
The focus group should also include some real time administration of advertising techniques (showing

commercials or printed advertisement) in order to appreciate the immediate reaction from the customers.

3.3 Measurement
The main aim of this research is to investigate on the brand awareness of Pepsi, to be specific; our aim is to measure
the perception of Pepsi drinks in relation to health. The first question we would like to address in our research is whether
Pepsi health drinks are conceived as really healthy? The main objectives of administering this question to the
respondents to measure the demand of healthy drinks VS the various alternatives available in the market, to measure
the association of Pepsi to health concepts and finally to measure the perception of the marketing effort so far done by
Pepsi.
In order to conduct the research, the questionnaire that will be directed to the respondents/focus group would cover
both qualitative as well as quantitative questions. The key elements that it would include are: Demographic data- such
as the age, gender, location and income, Behavior/ Lifestyle questions which would cover factors like frequency of
consumption, on what occasion the consumption of the product takes place, if the respondents felt that the product was
a post work out drink or not etc. The next important part of the questionnaire is to figure out how to re-position the Pepsi
brand in the health market, its important in this part of the questionnaire to understand what percentage of people are
social media active users, whether they are actively participating in the various social media campaigns etc.
In the entire research procedure, the focus groups are for generating hypothesis and to test them qualitatively. In order
to figure if the respondents actually like the product or not, ambiguous questions could be asked such as if they
consume Pepsi drink products, how would they rate Pepsi products as far as heath is concerned etc. The three most
important factors that can be researched here are- age, weight and lifestyle i.e. exercise habits etc. See appendix 2 for
sample questionnaire.

3.4 Analysis Procedure

The method of analysis that we opted for are MULTI DIMENSIONAL SCALING (MDS) and CONJOINT
ANALYSIS. The reason is because our client Pepsi is a multi product company so these methods can assist us in
understanding what perceptions the customers have about the products and which is the main driver that is determining
the purchase decisions. Its important to determine how Pepsi is perceived as compared to its competition. How do
people view the brand in terms of its offering, price and quality? The most important problem here is of positioning its
offerings in an interpretable multi dimensional space, for which Multi dimensional scaling is used. Today in different
places like schools, restaurants, movie theatres etc, there is a constant battle between Pepsi, Coke and other
competitors to place their product in that place. Another research technique that we would use is the conjoint analysis
where we would administer this technique to a smaller sample size of 20 to 30 people.

EXPECTED RES ULTS

4.1 Summary of Secondary Data

Our secondary data research provides us with the following information: General Information on Carbonated Drinks

U.S. Consumption of carbonated soft drinks has steadily declined in the past decade, mainly due to alternative
beverages now offered by the market (health concerns in the US, primarily related to obesity problems).

Healthier drinks are growing more popular. Including bottled waters, juice drinks, teas and sports drinks,
bottled beverage sales rose 0.8 percent to 15.2 billion cases in 2011. That represented a slowdown from 2010, when
sales rose 1.7 percent.

According to Beverage Digest, the top four sodas -- Coke, Diet Coke, Pepsi-Cola and Mt. Dew
-- all saw declining sales last year. Of those, Coke's market share was flat, while the other three all lost share.

There have been several studies recently proving the cardiac problems aspartame (a fake sweetener)
causes, including heart attacks and strokes. Also, certain studies prove that aspartame is a multipotential carcinogen
causing brain, kidney, breast, liver and lung cancer.

Health consciousness and trends in the US

More and more, consumers in the US are making choices based on what helps them create and manage
optimum health. Managing health through food and drink choice is a growing consumer trend that is already having a
huge impact on purchase behavior.

Food and beverage marketers who recognize the opportunity within this trend, by developing and positioning
their products in support of it will be the next brand leaders.

US consumers are more aware of the fact that the consumption of sugar-sweetened beverages is associated
with weight and obesity, and that changes in consumption can help predict changes in weight.

The FDA strictly regulates carbonated drinks and bottled water as a food product. Bottled water companies must
adhere to the FDA's Quality Standards, Standards of Identity (Labeling Regulations) and Good Manufacturing
Practices. The FDA has recently banned certain chemicals (sweeteners, coloring agents), on the grounds that
theyve been shown to be carcinogenic and/or toxic to the consumers, cause obesity or other diseases.

Research suggests a statistically significant inverse relationship between consumption of carbonated

beverages and bone mineral density.
PepsiCos Strategy: The New Health Kick

PepsiCos CEO is trying to redefine the playing field by promoting healthier drinks and food under the good-foryou and better-for-you slogans. The company is betting big on creating healthy foods through its Quaker Oats,
Gatorade and Tropicana divisions.

Their new group of products is part of a long-term strategy to grow their nutrition business from about $10 billion
in revenues today to $30 billion by 2020.


Ms. Nooyi (the CEO) seeks to refocus Pepsi by stating that lifestyles have changed and that their company has
to modify its products.

PepsiCos Struggle

In March 2010, Pepsi slipped to become the third most popular soda in America, behind Coke and Diet Coke.

Cokes Consistent Strategy Wins the Cola War:

Cokes beverage volume in North America dropped only 2% last year.

In comparison, Pepsis beverage volume in the same region plunged 8%.

Last year, Coke brands commanded 41.9% of the total market last year compared to PepsiCos
29.9%. While both brands have been declining, Pepsi is doing so at a slightly faster rate. Coke, among others, continues
to steal market share away from Pepsi.

4.2 Expected Findings: Primary Research

Basing our research objectives on the information above, we are aiming to obtain the following information from our
marketing research plan:

1
1b
2
2b
2c

Do consumers perceive Pepsi as a provider of healthy drinks?

Is Pepsis better-for-you campaign effective?
Does peoples health consciousness include the consumption of healthy drinks?
If so, do they drink Pepsis healthy drinks?
If not, what would be the product profile they would consume? Is there a specific type of drink that
would look more attractive to them?
Are consumers engaged and reachable through social media?
Should Pepsi carry on with their strategy or should they change it for the sake of healthy drinks?

These main findings will improve our understanding of the market place and of Pepsis opportunities.

4.3 Data Organized According to Related Variables

The questions in the questionnaire will be grouped in subsections that satisfy the same research objective.

The responses to questions 3,4 can be summarized in a subsection titled Customer perception and brand
awareness. Once it is obtained, this information will be useful to see the extent to which the consumers are aware of
the Pepsis focus in health products.

The responses to questions 3,4,5,7 can be summarized in a subsection titled Healthy Campaign

Efficiency. Once it is obtained, this information will be useful to weight the firms healthy campaign efficiency.


The response to question 5 can be summarized in a subsection titled Healthy Consciousness Scope. Once it is
obtained, this information will be useful to evaluate how important are drinks in peoples health-perception.

The response to questions 6 can be summarized in a subsection titled Ideal product profile. Once it is obtained,
this information will be useful to recommend the launch of a specific product.

The responses to questions 3,4,5,6,7 can be summarized in a subsection titled Strategy decision. Once it
is obtained, this information will be useful to customer perception and brand awareness. See Appendix 3 for Summary
Table: Customer Perception and Brand Awareness.

4.4 Findings Implications & Recommendations

After interpreting and discussing the results obtained from the research, these are the recommendations we
will be able to make depending on our findings:
IF
a), c), e), h)
b), d), f), g)

THEN
Pepsi should carry on with their campaign
Pepsi should change their strategy and launch a
new product with a different profile.

4.5 Statistical Significance

The margin of error will be checked for all the data gathered to ensure the validity of the answers and appropriate to
make recommendations based on them. Outliers will be removed and the systematic method will ensure the
participants are randomly selected for the study.

RECOMMENDATIONS

Based on the results of the survey, PepsiCo will be able to choose between keep pursuing the current strategy or
changing it in order to enhance the perception of its drinks as healthy drinks. In case a change is recommended, the
company will also be able to infer from the results of the survey what specific features the customers want in a drink
(about taste, flavors etc.). The changes can happen in the product development line or the new product launch.
Another recommendation PepsiCo will be able to draw from the results is whether the company should invest more in a
social media campaign as adverting media for the next future and how the social media efforts can be modified in
order to guarantee a deeper penetration of PepsiCo message. In this particular case, PepsiCos top management
can gain an idea of which social media are worth more the investment effort and which are worth less.
Even if the results will project an image of PepsiCo as already healthy, there will still be margins of improvement that
can be appreciated from the market research performed (new flavors, different advertising). In this specific case, the
focus groups will provide most of the insights.

APPENDIX
Appendix 1: Time Requirements & Sample Process
Location framed: the US;
Time needs for the sampling process:
a) Time necessary to perform the selection of the population and the sample: 1 week; b) Time necessary to send the
questionnaire and allocated time for response: 1 month; c)
Time necessary to select participants, send RSVPs and
schedule the focus groups: 1
month.
Whereas task b) obviously follows task a), tasks b) and c) can be performed simultaneously.
Grocery store chains

Population extracted

Sample selected

Grocery store chain no.1

2500

250

Grocery store chain no.2

2500

250

Grocery store chain no.3

2500

250

Grocery store chain no.4

2500

250

Total

10,000

1000

Appendix 2: Sample Questionnaire

Name:
Location:
1) Do you consume Pepsi drink products?
Yes/ No
If yes, name some products that you consume
2) How often do you consume these drinks?
o Everyday
o 2-3 times a week
o Only on certain occasions

3) Are you aware of Pepsis better-for-you healthy drinks offering? Can you name one?

Age: Gender:

4) How would you rank Pepsi in terms of its healthy drink offerings?
1
Extremely
health-focused

2
Very health-focused

moderately
health-focused

Barely healthfocused

Unhealthy brand

5) Rank healths importance for you in your life?

High

Moderate

Low

If high, do your health concerns include drinking healthy drinks in a regular basis? Yes/No
6) Describe the best healthy drink you can imagine. What attributes would make you consume
it?

7)
Are you an active social media user? If yes, what are the different social media accounts that you have?
o Facebook
o Twitter
o LinkedIn
o Other

Appendix 3: Summary Table: Customer Perception & Brand Awareness

Customerperceptionandbrandawareness
Related questions: N 3,4
Potential Findings:
a) Pepsi is perceived as a healthfocused brand
b) Pepsi is NOT perceived as a healthfocused brand
HealthyCampaignEfficiency
Related questions: N 3,4,5,7
Potential Findings:
c) The campaign is penetrating
d) The campaign is not penetrating
HealthyConsciousnessScope
Related questions: N 5
Potential Findings:
e) People include healthy drinks in their
understanding of healthy lifestyle
f) People dont think of healthy drinks
when it comes to living a healthy life
Idealproductprofile
Related questions: N 6
Potential Findings:
g) Peoples idea of healthy drinks differ
from Pepsis offering
h) Peoples description of healthy drinks
coincides with Pepsis offerings
Strategydecision
Related questions: N 3,4,5,6,7
UltimateFindings:
i) Pepsi should carry on with their
campaign
j) Pepsi should change their strategy

SOURCES
http://www.bbc.co.uk/news/world-us-canada-18285462
http://www.pepsico.com/Brands.html
http://finance.yahoo.com/news/pf_article_113026.html

http://www.fda.gov/Food/ResourcesForYou/Consumers/ucm046894.htm

http://www.usatoday.com/news/health/wellness/fitness-food/story/2012-02-23/Pepsis-mid-caloriesoda-aims-to-win-back-drinkers/53220558/1

http://abcnews.go.com/blogs/health/2012/03/09/coke-pepsi-skirt-cancer-warning-label/
http://www.self.com/health/blogs/healthyself/2012/03/coke-and-pepsi-avoid-cancer-warning-5healthy-alternatives-to-soda.html
http://www.mpwhi.com/coke_pepsi_make_changes_to_avoid_cancer_warning.htm
http://grist.org/scary-food/2011-02-16-aspartame-soda-caramel-bpa-diet-soda-kill-you/
http://www.newyorker.com/reporting/2011/05/16/110516fa_fact_seabrook
http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/FoodLa
belingNutrition/ucm063136.htm
http://www.ehso.com/ehshome/DrWater/drwregs.php
http://beforeitsnews.com/story/1878/276/Coke,_Pepsi_Makes_Changes_to_Avoid_Cancer_Warnin
g:_with_aspartame_still_causes_cancer.html
http://www.natural-health-information-centre.com/aspartame-lawsuits.html
http://articles.marketwatch.com/2009-08-04/industries/30733041_1_pepsico-chief-executive-indranooyi-pepsiamericas
http://management.fortune.cnn.com/2012/02/13/pepsi-indra-nooyi-earnings/
http://www.investmentu.com/2012/February/are-the-coke-vs-pepsi-cola-wars-over.html