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Executive Summary
Vietnams economy has been developing rapidly since 2006 when Vietnam became a member of
WTO. Thanks to positive trading policy of Government, Vietnam has attracted more and more
foreign investors. In company with the development of economy, Vietnameses living standard
is also improved significantly. Demand of goods and services increases and becomes more
diversified. PepsiCo is one of the most popular beverage companies in the world operating in
nearly 200 countries with more than 185,000 employees in total. Despite establishing in Vietnam
for a long time, recently PepsiCo has launched its sport drink Gatorade. Therefore, it is very
important for PepsiCo to make a unique and specific marketing strategy to attract customers.
This report analyzes characteristics of Vietnam market combining with advantages of Gatorade
to find out whether Vietnam is potential market for Gatorade. This report recommends that
PepsiCo continue to invest to develop Gatorade in Vietnam
Julie F05A report on Gatorade in Vietnam
Student ID: 090
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Introduction
PepsiCo has been around for many years in Vietnam but Gatorade has not. Certainly, launching
Gatorade in new market like Vietnam will cause PepsiCo many problems. It cannot be denied
that Vietnam is a potential market with large population. However, Vietnamese customers are
very fastidious about purchasing.
The purpose of this report is to investigate and analyze marketing process, as well as propose
market segmentation, strategy, and positioning which is suitable with consumer market and
industrial market in Vietnam. The scope of this report consists of:
Research on various elements of marketing process
Analyze costs and benefits of marketing orientation
Scan and analyze internal and external environmental factors in Vietnam
Research and propose the best market segmentation and marketing strategy
Research on consumer and organizational buying behavior
Propose new positioning for Gatorade
This report is based on information from books, articles, websites and some former researches
about Gatorade
Despite specific investigation and analysis, this report still has some limitation. Firstly, the
academic knowledge about marketing is limited, so that analysis may not be close. Secondly,
Gatorade has been just launched in Vietnam, so that information about it is not much.

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1.1: Explanation of various elements of marketing process
1.1a: Elements of marketing process
When setting up the business, a firm has to identify customers needs and wants in
order to satisfy them when it brings products to the market. It makes a process called
marketing process which consists of four main stages:
Situation Analysis

Marketing Strategy

Marketing Mix Decision

Implementation and Control

1.1b: Situation Analysis
1.1b.1: Trends
Trends analysis consists of analysis of market, customers, and competition. It
helps company identify exactly what customers need and want, so that the
company will know what it need to produce to satisfy them.
1.1b.2: I nternal Environment
Internal analysis is the process of evaluating factors, elements which affect
directly the company and its business activities such as stakeholders,
competitors, 7s, etc. It identifies companys strength and weaknesses to
evaluate how well the company can deal with them.
1.1b.3: External Environment
External environment consists of technological, economic, political, social
factors. The company needs to pay attention to all these factors in order to
identify its opportunities and threats in the market. Identifying opportunities
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and threats early will help firm catch the opportunities, avoid or defuse the
threats when they come.
1.1c: Marketing Strategy
1.1c.1: Generic Strategies
Generic strategies are strategies the company carries out to create and maintain
one profitable position in marketplace. They consist of three strategies:
Cost leadership: company produces product with low price to
control the market
Differentiate: company focuses on one target in order to create
loyal customers and avoid competition
Focus/Nicheing: company focuses on providing product to
particular segments.
The company has to choose only one strategy to avoid being stuck in the
middle. However, in order to understand its competitive environment, the
company needs to analyze five forces, including bargaining power of suppliers,
bargaining power of consumers, threat of entry, competition from substitutes,
and competition between firms.
1.1c.2: Growth Strategies
Growth strategies consist of four options, which identify development target of
the company:
Market penetration: the company introduces existing product in
existing market
Market development: the company introduces existing product in
new market
Product development: the company introduces new product in
existing market
Diversification: the company introduce new product in new
market.
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1.1d: Marketing Mix Decision
The four main elements of marketing mix are product, place, price and promotion. It
provides a construction to distribute financial resources and workforce to use
effectively, so that company can achieve goals it set up
1.1e: Implementation and control
After making marketing strategy, the company needs to implement it in order to
increase the effectiveness of that strategy. Besides implementing, the company also
needs to control its strategy to ensure that no mistake can happen, as well as it can
change if necessary.
There are some ways to implement strategy, according to Wheeler (2005):
Set aside a day a month
Set the stage with stakeholders
Doing experiment
Reward people who move forward often
There are many elements of marketing process, and company needs to take account of
all of them so that it can make a marketing strategy, which is clear, detailed and safe,
as well as implement and control it effectively
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1.2: Evaluation of costs and benefits of one marketing orientation for a selected
organization
1.2a: I dentification of marketing orientation
Production concept: customers will appreciate products which are
marketed widely with reasonable price. Manufacturers who follow this concept have
to focus on improving productivity and expanding production scale.
Product concept: customer will appreciate products at the highest quality
and newest features. Manufacturers who follow this concept have to focus on
producing and improving products of high quality
Selling concept: customers will not purchase products with a large
number if company does not take any action. Therefore, manufacturers have to focus
on selling and promoting.
Marketing concept: company attract customers only when it is aware of
what customers need and want
Societal Marketing concept: firm does not only provide customers
satisfaction, but also maintain or improve human welfare.
1.2b: Evaluation of costs and benefits.
PepsiCo is now operating in marketing concept for the brand Gatorade in Viet Nam.
Each year, PepsiCo spent nearly 3 billion dollar for marketing activities (PepsiCo,
2012). PepsiCo makes decision after determining customers needs and wants. That
is why all of product can meet real customer needs (Scenario, 2012).
Marketing
Concept
Costs Benefits Opinion
R&D Cost of seeking and
developing new
flavors
Products have flavors
and functions that no
other sport drink
company can produce
Benefits are
higher than
costs
Delivery and
warehousing
- Cost of
delivering
- Fulfill
costumer
Benefits are
higher than
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- Storage facility
cost
orders
effectively
- Improve
protection
level of
product
costs
Price Policy Percentage of profit
paid for distributors
and retailers
- Increase
market
coverage
- Distribute
more
intensively to
support
customers
Benefits are
higher than
costs
Branding Logo and
graphic design
Advertising
cost

- Increase
market share
- Have a
particular
number of
loyal
consumers
Benefits are
higher than
costs
Social
Responsibility
- Training
courses for
employees
- Pay for
investors more
profits
- Maximize
profit for
investors
- Improve level
of workforce
skills

Benefits are
higher than
costs
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2.1: Explanation of micro and macro environmental factors, which influence marketing
decisions.
2.1.1: Brief introduction of micro and macro marketing environment
Microenvironment: consists of internal elements, which directly affect all activities of
a firms business, including stakeholders, competition, 7S and Porters Five Forces.
Macro environment: consists of much larger elements external to a firm, including
political, economical, social and technological factors.
2.1.2: Micro environmental factors
2.1.2a: Stakeholders
Employees: Viet Nams total labor force is over 44 million people.
This abundant and inexpensive workforce helps production decision save
employment cost and expand marketing activities (NationMaster, 2010)
Consumers: Vietnamese personal income per year is from $600 to
$1500 for workers, $1800 to $4200 for office workers (VNO, 2012). With
low living standard like this, Vietnamese people prefer products with cheap
price. It affects price setting of firm.
Government: Corporate income tax in 2011 reduced from 28% to
25% but still high (VNO, 2012). Tax affect directly on price decision. High
tax leads to high input cost so that product price will be high. Customers
will buy less product which makes business sales fall
2.1.2b: 7S
Skills: PepsiCo now has more than 1200 Vietnamese employees
led by full-experienced leadership. It helps transmit information effectively
and clearly, improve productivity (PepsiCo, 2011)
Strategy: PepsiCos strategy is focusing on environmental
sustainability and benefiting to society (PepsiCo, 2012). To do that, all
activities, including marketing decisions have to be related to environmental
sustainability
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2.1.2c: Competition:
The biggest competitor of PepsiCos Gatorade is Coca Colas PowerAde.
Competition affects directly product price. Company often changes price
strategy to capture attention of customer when competitor sets price lower
than it does. It leads to a decrease in business profit.
2.1.2d: Porters Five Forces
Bargaining power of customers: It affects product price when they
have many choices to purchase because there are many beverage companies.
Because PepsiCo determines customers needs and wants before making
decision (PepsiCo, 2012), and it does not have too many competitors which
produce sport drink like Gatorade in Viet Nam. Hence, buyers power is low,
company has chance to get more profit.
Competition between firms: Company usually reduce product price
lower than its competitors to attract more customers. Keeping going that
will reduce its profit. The leading competitor of PepsiCos Gatorade is Coca
Colas PowerAde. The target market of these two products is the same.
Therefore, PepsiCo has to make differentiation by producing new Gatorade
with new flavor, and focus on marketing to appeal to customers
SWOT analysis
Strengths Weaknesses
Strong brand name
Abundant and
inexpensive workforce
Large number of loyal
customers
High product quality
Low buyer power
Low customer
knowledge
Strong competitors
Small scale selling


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2.1.3: Macro environment factor
2.1.3a: Political
Interest rate: impacts on price decision. Recently, banks cut both
lending and deposit rates to 15% instead of 25% and deploy some
preferential credit packages for firms (VietnamNews, 2012). Lower interest
rate will decrease interest payable, enables customers to purchase more
which helps increase business profit.
2.1.3b: Economical
Unemployment rate: Vietnams unemployment rate is 2.29%,
0.07% increase compared to 2.22% in 2011 (ThanhNienNews, 2012). It
affects directly in price decision. An increase in unemployment rate causes
customers to reduce expenditure so that it will decrease business sales.
Inflation: Vietnams inflation rate is 6.9% over the first half of
2012 compared to 18.13% in 2011 (BusinessTimes, 2012). Decrease in
inflation means that price levels of products will decrease, as well as
moneys purchasing power, enables customers to purchase more.
2.1.3c: Social
Demographic trends of Viet Nam are changing. The number of elderly
people is rising rapidly because of a decrease in birth rate and death rate
(Anon, 2012). It will changes customers taste and preference, as well as
decrease the number of people in working age. More money has to be spent
on health insurance, health care, which causes customers to buy less Pepsis
Gatorade so that business sales are fallen.
2.1.3d: Technological
All facilities are equipped with newest technology and products meet world
quality standard, which enables company to increase productivity (PepsiCo,
2010). Also, the appearance of the Internet helps increase customers to buy
Pepsi products through advertising, home-shopping, online-shopping.
SWOT analysis
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Opportunities Threats
Increase population
Lower corporate taxes
Lower inflation
Lower interest rate
New distribution channel
Changing social trends
Changing population age
Increase unemployment


2.2: Propose segmentation criteria to be used for products in different markets
2.2.1: Market Segmentation definition
Market Segmentation is the subdividing of a market into distinct subsets of
customers, where any subset may conceivably be selected as a target market to be
reached with a distinct marketing mix (BPP, 2010).
2.2.2: Proposal of one base for segmenting markets
This research only focuses on geographic base. Specifically, markets will be divided
into two segments, including Ha Noi and Ho Chi Minh City.
2.2.3: Benefits of geographic segmentation
Geographic segmentation is simple and clear so that every member of the
company can easily understand.
The danger of market changing over time is very small so that geographic
segmentation is easy to monitor.
Market expansion: when markets are segmented geographically, PepsiCo
focuses on developing two territories, and it is also easy for the company to expand
to nearby territories.
2.2.4: Evaluation segmentation based on criteria
Criteria Consumer market Industrial market
Accessibility Communication: 90% people
living in Ha Noi and Ho Chi
Minh City have television
Communication: PepsiCo
can promote Gatorade to
resellers through fairs of
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and computer accessed with
the Internet (Vietnamonline,
2011). This enables PepsiCo
to bring Gatorade to
customers through TV and
the Internet.
Distribution: through system
of supermarkets, groceries,
stores, etc locating in these
two territories.
consumer goods.
Therefore, PepsiCo can
meet resellers and sign
contracts
Distribution: PepsiCo only
needs to deliver Gatorade
to big resellers like Metro,
BigC, etc. Smaller ones
rebuy from big ones.
Measurability The number of sport centers
increases because Vietnamese care
more about health.
Many new supermarkets appear
due to increase in demand from
the market.
Actionability Product: provide Vietnamese
customers with types of
Gatorade they appreciate
such as flavor of lemon,
tropical storm
Price: must be reasonable
because of Vietnameses low
living standard
Place: PepsiCo needs to
supply Gatorade to system of
resellers in two cities,
especially place where
people often play sports such
as stadiums, football clubs
Promotion: Gatorade can
reach customer through
advertising on TV, the
Internet, hanging poster in
Product: offer resellers
product with long expire
date to help them not
worry that Gatorade may
be spoiled.
Offer warranty service so
that resellers can easily
return Gatorade, which is
out of date or spoiled.
Price: provide resellers
Gatorade at lower price
than real price to ensure
resellers can make profit
from it.
Place: to supermarkets,
PepsiCo can provide them
Gatorade directly, but to
groceries, stores, Gatorade
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supermarkets, groceries, etc. is provided through
supermarkets.
Promotion: give reseller
free items with Gatorade
logo posted on it such as
umbrellas, cloths, hats.
Substantiality Population of Ha Noi and Ho Chi
Minh city is around 13.6 million
(Vietnamonline, 2011). Besides,
Viet Nam has young population. The
number of people who play sports is
very large. This is a potential market
for PepsiCo to make profit.
There are 70 supermarkets in Ho
Chi Minh city, 90 in Ha Noi and
thousands of groceries, stores.
This will lead to a large number
of Gatorade being supplied to
resellers (F-event, 2009)

2.2.5: Evaluation of market attractiveness
Market size: Population in Ha Noi and Ho Chi Minh City is 13.6 million
which accounts for 15% overall population in Viet Nam. The size of this segment is
large which may increase potential for sale growth.
Customer loyalty: PepsiCo has been around for many years, its brand is so
popular that people usually think about it when making purchase. Besides, there are
a large number of people playing sports regularly in Ha Noi and HCM city. These
two factors enable PepsiCo to attract more loyalty customers in this segment.
Competitive intensity: there are not many companies, which produce sport
drink in Viet Nam. The main competitor of PepsiCos Gatorade is Coca Colas
PowerAde. However, Coca Cola stood at disadvantageous position compared to
PepsiCo in Viet Nam because PepsiCos beverage is sweeter than Coca Colas and
Vietnamese people prefer sweet one. It is an advantage of PepsiCo, enables it to
attract more customers.
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2.3: Choose a targeting strategy for a selected product / service
2.3.1: Target market and targeting strategy
Target market is a market or segment which company selected for special attention
by an organization (BPP, 2010).
This research will focus on concentrated marketing. PepsiCo will concentrate on
producing Gatorade for big cities, including Ha Noi and Ho Chi Minh City. This
segments includes people who play sports regularly.
2.3.2: Advantages of concentrated marketing
Concentrated marketing enables PepsiCo meets customers needs and
wants specifically in one segment.
Using concentrated marketing, PepsiCos resources will focus on one
segment and will not be wasted.
Help Company save advertisement cost.
2.3.3: Evaluation targeting strategy based on criteria
Criteria Consumer Market Industrial Market



Company
resources
PepsiCo now has around 12,000
Vietnamese employees with profit
of over $100 million in 2011 (Pepsi
Vietnam, 2011). With large
number of employees and big
turnover, PepsiCo has enough
resources to meet all the needs of
customers
PepsiCo has 2 big factories in
Southern and Northern, which
are close to Ha Noi and Ho Chi
Minh city. This helps distribute
Gatorade to resellers more easily
and save the delivery cost.
Degree of
product
variability
Very high because customers are
much sensitive with product
changes, and always want to try
new things.
Quite low because resellers care
much about which kind of
product brings the highest profit
for them


Gatorades life-cycle stage in
Vietnam now is introduction stage.
To resellers, Gatorade is in
growth stage.
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Products
life-cycle
stage
Product: offer basic product
to limit the variation of
Gatorade in order not to
confuse the customers.
Price: usually high to help
company recover
development costs.
Place: focus on supplying
middlemen like resellers
with Gatorade to ensure
customers will be easy to
get it.
Promotion: build
customers awareness about
Gatorade through
advertising its features,
uses, benefits, etc
Product: offer new
features, service or
warranty so that resellers
can easy to return
Gatorade bottles which
are out of date or spoiled
Price: maintain pricing
Place: increase the
number of resellers
Promotion: PepsiCo can
attract more resellers
through holding fairs of
consumer products to
meet them.

Market
variability
Being under introduction stage,
market variability is not stable
because customers are not still
clear about Gatorade and its
benefits.
Quite stable because PepsiCo
now has a particular number of
resellers signing contracts with
it.
Competitors
marketing
strategies
There is now no company having
marketing strategies, which focus
on target customers in Ha Noi and
Ho Chi Minh city like PepsiCo in
Vietnam. This is an opportunity for
PepsiCo to control these segments.
Resellers care about profit so
that they will order products,
which make them profit.
Therefore, beverage companies
focus on offer them many
profitable products which makes
PepsiCo have many competitors

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2.4: Demonstrate how buyer behaviour affects marketing activities in different buying
situations
2.4.1: Buyer Behaviour
Buyer behaviour is the decision-making processes of buyers in purchasing and using
goods and services (Dictionary Business, 2010)
2.4.2: Difference between Consumer and Organizational buying behaviour
Consumer Buying Behaviour Organizational Buying Behaviour
More potential buyers Less potential buyers
Less close relationship between buyers
and sellers

Close and long-term relationship
between organizational buyers and
sellers
Less rational More rational
Consumer buying/selling is less risky Organizational buying/selling is more
risky

(Source: arifsari.net)
2.4.3: Different types of buying situations in buying process
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Consumer Buying Process Organizational Buying Process
2.4.4: Different types of buying situation in buying process
2.4.4a: Customer buying process
There are three types of buying situation in customer buying process,
including low involvement purchases, high involvement, and limited problem
solving. This report will focus on two different types of situation, including
high involvement and low involvement, and their effect on marketing
activities
High involvement: Customers require a lot of information about
Gatorade, so that PepsiCo has to focus on providing them information. To do
that, PepsiCo can do marketing activities like publish catalogues, or
brochures, so that customers will have enough information about Gatorade.
Low involvement: Customers do not need much information.
Instead of publishing brochures, PepsiCo needs to focus on building
customers awareness of need. It can concentrate on product advertising
activities to attract people to buy Gatorade.
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2.4.4b: Organizational buying process
There are three types of situation in organizational buying process, including
straight rebuy, modified rebuy, new task. This report will focus on two
different types of situation, including straight rebuy and modified rebuy, and
their effect on marketing activities
Straight rebuy: organization only needs two stages, including
evaluation of product relative to specification, and evaluation the product and
supplier performance. It is important for PepsiCo to conduct marketing
activities to make resellers order Gatorade frequently. It can focus on
advertising and keep its good image with resellers by delivering them on time
with high quality products, as well as offer them some service or discount.
Modified rebuy: Besides two stages like straight rebuy, this
situation may have other stages in buying process. PepsiCo need to do
research about taste of people in each area to anticipate buying power of
resellers by doing surveys.
2.4.5: Factors affecting marketing activities
2.4.5a: Consumer buying behaviour
Reference groups: affects customers evaluation of alternatives and
purchase decision. Opinions of these groups are always appreciated because
they have more experience about it. Therefore, PepsiCo need to ensure that
the advertisement matches Gatorades real quality. If Gatorade does not have
high quality or benefits like in advertisement, customers will lose their trust in
it.
Motive: It affects customers need recognition. PepsiCo need to do
product advertisement to attract customer. When customers feel thirsty, the
company show them advertisement in which there are people drinking
Gatorade to reduce thirst. This will give customers desire of buying Gatorade.
Perception: affects directly stage of post purchase behaviour in
form of customers expectation. If Gatorades characteristics meet his
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expectation, he will be satisfied, and continue to buy Gatorade. Marketers
can have some activities to minimize the number of customers who are not
satisfied. They can make instruction documents, which are easy to
understand, or publish magazines of the company to promote their latest
products.
2.4.5b: Organizational buying behaviour
Competitive development: The appearance of many domestic
beverage companies makes PepsiCo have to focus more on marketing
activities to maintain existing resellers, and attract new ones. It can provide
them extra items on which Gatorade logo is posted such as umbrellas, chairs,
tables, etc.
2.5: Propose new positioning for a selected product/service
2.5.1: Positioning and repositioning
Positioning is the act of designing the companys offer and image so that it offers a
distinct and valued place in the target customers mind (BPP, 2010)
Repositioning is the major change in positioning for the brand/product
(MarketSegmentationStudyGuide, n.d.)
2.5.2: Positioning strategy
This report focus on proposing one new positioning strategy, which is Pay more for
more value proposition strategy. This strategy mentions two dimensions, including
price and flavor.
2.5.2: Perpetual mapping

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2.5.3: Gaps in market
Almost beverage companies stand in quarter of low price and limited flavors. There
is no company in quarter of high price and limited flavors because there are no
customers who spend a lot of money buying products with limited choice in flavors.
Only one company stands in quarter of low price and multi-flavor. It is hard for
companies to choose this quarter because finding many flavors costs a lot of money,
but product is at low price, so that the profit will be very small. That profit is not
enough for research and developing flavors. This report will propose new
positioning for Gatorade, which is high price and multi-flavor. This quarter is
completely empty, and Gatorade will have no competitor in this sector. Moreover,
this sector is much more profitable than others.
2.5.4: Evaluation of criteria
Important: The most two popular product lines PepsiCo offers its
customers are Gatorade G and G2 with 17 different flavors (PepsiCo, 2011). Despite
Multi flavors

Ga torade

Number One

Low price High price
Red B ull
Red Dragon

Samurai

Vodik

Limited flavors
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having different flavors, PepsiCo ensures that all kinds of Gatorade to have the same
quality and benefits such as rehydration level, amount of vitamins and sodium, etc.
Superior: Gatorade has vitamin and sodium content which is much higher
than other sport drink. That helps customers rehydrate faster and better. This
demonstrates that Gatorade is superior to other brands in providing vitamins and
sodium.
Distinctive: Gatorade has a diversity of flavors, not only normal fruit
flavor but also new refreshing ones such as Frost Glacier Freeze, Frost Cascadade
Crash, etc (PepsiCo, 2011).
Pre-emptive: Gatorade is number one sport drink about flavor diversity. It
has so both fruit flavors and non-fruit flavors. This makes it hard for other company
to copy because Gatorade uses natural flavors, which take a lot of research and time
to develop.
Affordable: Despite standing out from same product from competitors, the
price of Gatorade is reasonable with many people because they often think high
price goes with high quality.
Profitable: Large young population leads to a large number of people
playing sport regularly. This enables PepsiCo to make profit from selling Gatorade.
2.5.5: Using 4Ps to influence new positioning
Price: Price should maintain or increase a little bit. This will stabilize
customers mind because decreasing price makes them think that Gatorades quality
is no longer high which may cause a decrease in number of customer buying
Gatorade.
Place: Selling Gatorade at place where there are many people playing
sport such as sport center, sport clubs to attract them. This will increase contact
level between Gatorade and customers.
Promotion: Using TV or Internet advertisements to promote the diversity
of flavors. Gatorade with a lot of flavor will be shown at the end of advertising video
to introduce customer flavors Gatorade has. This will make customers curious about
Gatorades flavors.
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Product: Producing Gatorade with flavors Vietnamese prefer and
introduce new ones for them to try. This ensures Gatorade to be appreciated and
diversify Vietnameses taste.
Conclusion
This report has identified and analyzed various elements of marketing process, as well as
proposed market segmentation, strategy and positioning for Gatorade in Vietnam. I believe that
after investigation, Gatorade can compete with other sport drinks from many companies and
develop in Vietnam. This report will be better next time because of lack of information and
sources about Gatorade in Vietnam.
















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