The Life Cycle Of Pepsi Cola

Growth

Explain about the Article on The Life Cycle of Pepsi Cola?

Products and services undergo stages of development just like a business does. The period that a product or service remains marketable will determine its life cycle. This series of stages that a new product or service will go through in the market is the life cycle. The life cycle depends on the situation of the market, and this affects the marketing strategy.

The product or service life cycle has been defined to undergo five critical stages. These are: prelaunch (development stage of the product and little or no sales are made), introduction (development of the market involving few sales and creating awareness for the product or service), growth (trying to increase the market share and building preference for the brand), maturity (this is the longest stage characterized by significant sales and profits from the sales), and decline (market of the product shrinks maybe due to saturation or consumers shifting to other substitutes) (Mackay & Wilmshurst, 2002).

This research is about the product life cycle of Pepsi Cola. We will look at how Pepsi Cola has grown into one of the most preferred brand of soft drink worldwide.

Prelaunch

Caleb Bradham came up with a formula that was designed to help with digestion problems in 1898. The formula, which he named ‘Brads Drink, ended up appealing many of his consumers in the pharmacy. This made him rename the drink to ‘Pepsi Cola’ and buy ‘Pep Cola’™ for $100 (Stuff, 2014). Although this seems like a small amount, if we adjust for inflation, it translates to about $3000 today. This just shows the hardships that go through the prelaunch stage. This stage is characterized by expensive research and development of the product.

In 1902, Brad began sales for Pepsi Cola, which was then very basic that it was even sold without bottles. It was sold through soda fountains that Brad had in his establishment. His aim was to create awareness and test his product in the market. He far exceeded this target by selling 7, 968 gallons of his syrup within the first year.

This stage was between 1930 and 1970. During the great depression, the company underwent bankruptcy Loft Inc. took over. Pepsi Cola gave Coca-Cola completion through its value-for-money, and its sales increased considerably. This low pricing was a good strategy for penetration that ensured that Pepsi Cola gained market share. Also, the product was improved so that it now came in bottles.

During maturity, sales are at peak and profit can be made as much as possible. This has happened for Pepsi Cola since 1980 to date. It has earned PepsiCo an average profit of as much as $20 billion each year (Stuff, 2014). The product has established itself well in the global market and even come up with a variety of the mother product. This includes Pepsi Max that has gained enormous success in the market.

Though sales of Pepsi have neither slowed down nor exhibited signs of such, a reduction could come in the future. It is important that PepsiCo comes up with strategies that will take care if any product decline. This can include reducing the cost of production and cutting advertisement costs to reduce overhead costs.

Monitoring the life cycle of any product is important. Managers should look out for changes in the a strategic planning approach to counter the effects of any stage that the product will go through. 

References

Baker, M. J. (2000). Marketing strategy and management. Basingstoke: Macmillan Business.

Marketing stuff,. (2014). Product Life Cycle of Pepsi. Retrieved 12 February 2016, from https://jugookushal.wordpress.com/2014/09/15/product-life-cycle-of-pepsi/

Wilmshurst, J., & Mackay, A. (2002). The fundamentals and practice of marketing. Oxford: Butterworth-Heinemann.