Free Custom «New Product Launch: PepsiCo Inc.» Sample Essay

«New Product Launch: PepsiCo Inc.»


Developing a new product is one of the strategic measures of overcoming competition and increasing the growth of firm in the market (Harvey and Griffith 2007). Developing a new product requires adequate research and development in order to launch a product that meets the market demands.  The process of new product development requires creative ideas to come up with a product, which appeals to most consumers in the market. In this paper, focus will be on launching a new beverage product for Pepsi Corporation. A description of the new product shall be given including the diagrams for the product to be launched in Hong Kong by PepsiCo. The analysis will identify the main customers for the new product of beverage as well as its Unique Selling Proposition. Additionally, the non-market forces affecting the launch of the new product shall be examined. Thus, the paper will explore various strategies that can be used to overcome these non-market forces and ensure a successful launch of the product.

Company Profile

PepsiCo Inc. is a multinational company that offers food and beverage products. The company is headquartered in New York, United States. The company's major business segments include marketing, manufacturing and distribution of beverages, snack foods and other food products (Capparell 2007). PepsiCo was founded in 1965 after a merger of Pepsi Cola Corporation and Frito-Lay Incorporate. Since then, the company has diversified its production and offers its products in different countries of the world such as China. The company operations are spread in America, Europe, Middle East and Asia. Currently, PepsiCo Inc. is the largest beverage and food business company based on annual net revenues. As in 2013, the company generated a total of $ 66.415 billion revenues and employed approximately 274,000 employees. The main beverage products of PepsiCo include Tropicana beverages, Miranda, Lipton teas, Gatorade and Pepsi coke.

Product Idea


The new product to be launched at the Hong Kong Market combines various ingredients that make it ideal for use for all persons including those with medical issues. The new product shall be referred to as “Enerdrink" due to its huge composition of energy giving ingredients, vitamins, minerals and medicinal products. The main reason why we are launching this kind of product in the Chinese market in Hong Kong city is due to the growing concerns of beverage products that are harmful to the health of the consumers. This product shall undergo various medical tests to ensure that its ingredient composition is ideal to the consumers and that no side effects are reported. The new product shall come in various flavors, colorings and packages to enable the users to choose from a variety of the market brands.  Ideally, this will enable to capture the huge population of Hong Kong, who has a high demand for beverage products, to use the product. Also, there will be special brands of the product designed for persons with health complications. These products will receive the approval of qualified medical personnel before their launch in the market. The product will contain appropriate sugar levels and balanced vitamin composition to ensure its safety use by persons with medical issues.

Target Customers

The main customers for this product are the athletes, footballers and other persons doing strenuous activities, although the product can still be used by other persons. The main reason for choosing this target customer for the product is due to the fact that the product has energizing properties, which make it ideal for use after and when undertaking rigorous activities. Thus, the product will target such persons since it provides the best energizing properties. The main strength of this product relative to other beverage products currently used by athletes and footballers is the effectiveness of the product. The product will be utilized by the body to generate immediate energy that enhances the performance of the athlete or footballer. Besides, the product will be used by persons who are under special medications and who are prohibited from using other beverage products. This is due to the fact that its ingredients are balanced and shall be subject to examination by qualified medical personnel before their launch in the market.

The Unique Selling Proposition

The unique selling proposition of this product is enhancement of healthy living though beverage drinks. Different from other beverage products, which contain basic ingredients such as sugar and limited amounts of vitamins, Enerdrink comes in different packages that cater for the demands of each customer preferences. These include special drinks for persons with medical complications while maintaining an appropriate level of vitamins and minerals. Another unique selling proposition of this product is its ability to provide instant energy to the athletes and footballers since its components are easily broken down into its building blocks to provide the energy needed in performing strenuous activities. This will ensure that the product cuts across all consumers segment groups in Hong Kong and beyond (Richter 2012).

Non-Market Forces

Main Forces

Non-market forces that influence the success of a new product launch are those forces that act without the market system. In the Hong Kong market, Enerdrink is likely to face non-market forces related to social and cultural institutions of the Chinese as well as the organizational framework within the organization (Fisher 2013). Chinese cultural practices are far the greatest non-market forces that influence the success of the newly launched product. This is due to the fact that the belief systems and practices of Chinese determine the choices of products that it deems ethically and morally right. If the Chinese cultures, practices and customs have a certain dislike for the Enerdrink, then the new product launch is likely to fail. Consequently, the individual preferences and tastes of a new product determine its success in the market. In addition, the social institutions prevalent in a certain society such as the family associations and religious affiliations determine the success of a product in a certain market segment (Richter 2012). For example, certain products such as alcoholic drinks are regarded as bad products on the basis of certain religious practices in specific societies. Therefore, these products cannot achieve a successful launch in a society that does not appreciate their usage. Consequently, the family ties and associations determine the demand for household products. If most of the families in a given society have a culture of dislike for certain types of household products, then their launch shall be effectively affected.

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A major product that suffered negative customer perceptions was the Mosquito Magnet product launch of American Biophysics Company. The company spread the awareness that the product used carbon dioxide to lure mosquitoes into a trap. As a result, the popularity of Mosquito Magnet spread all over the United States and it became a major selling product. Due to its abrupt and huge growth, the company stretched its wings and began mass production of Mosquito Magnet in the Chinese market (Richter 2012). Within a short duration, the quality of the product declined due to mass production and its effectiveness towards mosquito declined. This resulted in mass customer dissatisfaction and a consequential decline in the annual revenues generated by the product. The company was forced to close its business and was later acquired by Woodstream Incorporate for a price of $ 6 million down from its annual revenues of $ 70 million.

The organization framework of Pepsi Corporation in Hong Kong provides a major non-market force that is likely to influence the successful launch of the Enerdrink beverage product. For example, lack of adequate preparation on how to reach the target market by the organization may lead to unsuccessful launch of the product. Indeed, most companies spend too much time designing and making new products without paying much attention to the marketability of the product (Fisher 2013). Thus, this non market force determines the level of willingness on the part of the consumers to test and use the newly launched product. Organization preparedness in the launch of the new product also relates to the dissemination of consumer education on the effectiveness, advantages and ease of use of the new product. Lack of substantial education can lead to failure of the new product in the market.

A major example involving an unsuccessful launch of a new product due to lack of adequate preparedness was Microsoft. When Microsoft launched a new product of Windows Vista in 2007, the company thought that it had met the market expectations in launching a product that could enhance compatibility to other software of customers and solve their computer performance problems. The company allotted a total of $ 500 million to finance its marketing and also forecasted that 50 percent of its users will shift to the new product within a period of two years (Richter 2012). However, even its most loyal customers had remained adamant in using the new product. This was due to the fact that social media sites such as YouTube and Twitter had gained a lot of popularity and had spread hate messages regarding the new Vista product by Microsoft (Pujari, 2006).

Another major non-market force that determines the launch of Enerdrink beverage product is the prevailing political and legal climate in China. Political and legal factors determine the ways in which the benefits and costs of the new product to be launched in the market shall be shared (Wiryana and Nugroho 2008). For example, it determines various strategies in which the company can enjoy the returns of the new product in the market. Policies such as taxation affect successful launch of a new product since a firm may shy away from launching a product due to huge taxes that are demanded by the government in case of its success. Also, the process of obtaining patents and copyrights for a newly launched product determines its success. An effective and simplified system of obtaining the licenses and patents enhances an effective launch of the new product. On the other hand, complicated processes of obtaining the license, copyrights and patents deter a firm form launching the product in the market.

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Type of Impact of the Non-Market Forces

Non market forces determine the perceptions of the consumers in regard to the product. For example, the cultures and practices of a certain society determine their value for a certain product (Cova and Cova 2002). If the product relates to the culture and practices of the given society, then the product is likely to gain a successful launch. On the other hand, if a product portrays a negative image in relation to a given society, then its successful launch in the market will be affected. For example, a launch of pork products in an Islamic region will meet excessive resistance and, thus, the product launch will be regarded a failure. Similar, the society culture sets the standards of behavior on what is ethically and morally right and wrong. As a result, a society may dislike a certain product based on its beliefs which leads to an unsuccessful launch.

Another impact of the non-market forces is the creation of negative images through the spread of false ideas if adequate awareness is not created by the company (Grunert 2005). Social media sites such as Facebook and Twitter have proved to be very influential in this perspective. When rumors are spread via the social media sites about a particular product, then its marketability will also be affected. For example, when positive news about the product are disseminated, then it is likely that the product will acquire a breakthrough in its marketability and usage. Consequently, negative propaganda has the effect of causing unsuccessful launch of the product. Finally, the political climate and existing regulations on the processes of acquiring copyrights and patents affects the speed in which the firm is able to launch the product. If the legal system is highly regulated, then effective launch of the product shall be affected and vice versa.

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How to Overcome the Market Forces

A firm can overcome the non-market forces by carrying out adequate research on the market before designing, manufacturing and launching a new product. Market research should focus on understanding the target consumer group dynamics in terms of cultural values, practices, religion and social ties. Undertaking market research enables the firm to determine the products that are likely to be accepted in the society based on their social and cultural values. Understanding a given society also enables the firm to determine the main strategies to adopt in order to create awareness on the product.

Another strategy to ensure a successful launch of a new product is to test the product in the market before making a full scale launch (Pattikawa, Verwaal and Commandeur 2006). The test market comprises a small section of the market in which the product is to be launched. The population targeted in the test market is observed on their likes and dislikes of the new product in terms of price, colors and tastes. Also, the test market is allowed to give their views regarding the product as well as offer various ways in which the firm can improve the quality of the product. Upon gathering adequate market information about the product, the firm can then incorporate the suggestion of the test market responses in the final product design and launch.

In addition, the firm should create a comprehensive marketing plan on how to reach the market (Henry 1997). These include strategies to deal with resistance about the product and ways of handling customers complains. Also, the firm should collaborate with regulatory agencies to speed up the process of acquisition of licenses, patents and copyrights. This seeks to ensure that the new product is protected from copying and duplication by the firm competitors and other third parties.


To sum up, the paper has discussed the launch of a new product of beverages by PepsiCo Inc. in Hong Kong. The new product to be launched shall be referred to as Enerdrink due to its huge energy content. The product will be available in different packages and will also be useful for persons with medical complications. The main target market for Enerdrink is persons involved in rigorous activities such as athletes and footballers due to the energy value of the drink. The product is formed on the unique selling proposition of enhancing healthy lifestyle through beverage product. The main non-market forces that impact on successful launch of a new product include cultural practices, social institutions and individual perceptions. Other non-market forces relate to the level of organizational preparedness in regard to the new product as well as the prevailing political and legal environment. The forces impact on the launch of new product either negatively or positively. The non-market forces can be overcome by carrying the market research to understand the market forces, adequate corporate preparation and collaboration with regulatory agencies.



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