Maketing Strategy "Pepsi In China" Essay

1303 words - 5 pages

Pepsi in ChinaPepsi, with a global business turnover of $29.292 billion, ranked 92 among the Fortune 500 and first among all beverage makers in 1997. The major product of the company--Pepsi Cola -- is enjoying an increasing popularity among young consumers all over the world.The progress Pepsi has made in China is even more impressive. According to the latest report the China Light Industry Association, Pepsi's sales volume increased by 25% in 1999, far exceeding its rivals in terms of growth rate.Pepsi was among the first soda pop producers to enter the Chinese market. Since its foundation of the first bottling plant in China in 992, Pepsi has set up 15 such factories in the country. In order to further expand its business activities and improve its production capacity in the Chinese market, it even built a concentrate juice factory in Guanzhou. In addition to all these, Pepsi has also invested a fortune since 1998 in its "new-generation spirit" ad campaign increasing its market share in China -- Zhang Guorong and Liu Dehua, pop stars who enjoy unparalleled fame in Asia, have endorsed Pepsi products, while other stars like Guo Fucheng, Wang Fei, Ricky Martin, and Janet Jackson have sung jingles for Pepsi in TV commercials and advertisements.Thanks to these sweeping campaigns, Pepsi has been gaining an increasingly larger share of the "soda pop pie" in China. Coca Cola, which used to have the lion's share in the Guanzhou market, has witnessed a gradual slide in its sales recently. In contrast, Pepsi has been gaining ground year after year in Guanzhou (See Table One and Table Two) and came to win profits in 1999. Guanzhou is not the only battleground where Pepsi has won victories. In a number of large and medium-sized cities (including Beijing), Pepsi has significantly increased its sales volume as well.Table One: Pepsi vs. Coca Cola (Market shares in Guangzhou)Year 1997 1998 1999The Three Brands of Pepsi 10.90% 15.50% 28.50%The Four Brands of Coca Cola 48.80% 51.50% 45.80%l The three brands of Pepsi in the Guanzhou market are Pepsi, 7 up and Minute Maidl The four brands of Coca Cola in the Guanzhou market are Coke, Joy Cola ASprite, and Fanta.Table Two: A Comparison of the Market Shares of Pepsi and Coke in Guangzhou MarketYear 1997 1998 1999Pepsi 6.3% 10.40% 20.78%Coke 34.60% 36.40% 30.40%Apart from Pepsi's successful advertisements and sales promotions, the company's ever-increasing business turnover in China is also due to its correct market positioning and good sales personnel management.Against the background of the modern market economy, it is necessary for the operator of a business to correctly orient its brands toward the needs of various groups of customers. The promotion and popularization of brands requires communication with consumers. But here in lies the difficulty -- consumers of our age are being barraged by information. Ads, news, and a variety of other information carriers come thick and fast and almost suffocate the consumers....

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