The article PepsiCo Pops for China, written by Ruthie Ackerman and published by Forbes.com, reviews Pepsis decision to invest billions into the Chinese market

Technology

Another example that affects PepsiCo is technology. Technological advancements are happening at a faster pace than ever in the 21st century and companies must be ready to take advantage of them or be left behind. Advertising decisions [a]must be made with technology in mind, such as making use of electronic billboards vs. the old standards, which can appeal to PepsiCo’s technologically savvy target audience in China – youth and young adults.

The money that Pepsi plans to invest will also enable the company to develop new products and expand local research and development efforts. In order to cater to the Chinese audience, technology plays a role in developing products due to the use of computers and other equipment.[b]

Comparing Views

Social responsibility and ethics

Ackerman (2008). seems to believe that PepsiCo’s move to invest heavily in the Chinese market can appear to be “bullish,” yet “optimistic.” The author points out negatives concerning the venture, such as the value of the dollar in the market, economic downturns and sinking financial profit reports. However, perception of the author’s view of the company’s social responsibility is high, since she states that investing in China will create new employment opportunities due to expansion of R& D facilities, manufacturing capacity and sales force. “Thousands of new jobs are expected to be created in China because of the investments” (Ackerman, 2008, para. 11).

Ethically speaking , providing employment to the unemployed, especially in poor regions, will increase quality of life for the Chinese, while at the same time, increasing revenue as more people are able to afford to purchase Pepsi products. Not only that, Ackerman states that the company is “business driven,” which typically suggests a business model where a company takes ethics into mind. Since Pepsi has been able to invest in global markets, created jobs and improved quality of life standards in the past, the company shows that it holds to an ethical guideline by striving to repeat success in new global markets.

Another view of Pepsi’s social responsibility and ethical stance by Michael Useem proves to be positive as well. The article covers Pepsi’s CEO Indra Nooyi, her personal views and her vision and goals for the Pepsi Corporation’s future (Useem, 2008). Taking into consideration the struggles with obesity that the United States faces, Nooyi convinced the company to sell Pizza Hut, KFC and Taco Bell in 1997, acquired the Tropicana company in 1998 and helped engineer a $14 billion takeover of Quaker Oats, maker of Gatorade in 2001 in order to be able to offer healthy alternatives to PepsiCo’s consumers (Useem, 2008). Nooyi and PepsiCo have pledged by 2010 that “half of the firm’s U.S. revenue will come from healthful products” and that the company will “eschew fossil fuels in favor of wind and solar” (Useem, 2008, para. 7). The company will also campaign against obesity.[c]

According to Landi (2008), the Pepsi Bottling Group has maintained significant environmental and ecological commitments. So far the company has been able to save over 300 million gallons of water, 16,000 tons of plastic, and has been able to offset “100% of the company’s U.S. electricity” by making conscientious manufacturing, technological and operations decisions. In a savvy public relations move, Pepsi includes in its marketing strategy the release of an environmental annual report to generate positive publicity about its commitment to citizenship, responsibility and ethics.

After reviewing the Ackerman, Useem and Landi articles, the writer’s view of PepsiCo’s stance on social responsibility and ethics is positive. Pepsi’s efforts to consider the environment, increasing employment in oppressed countries, and taking on health initiatives bolsters the company’s social image.

Accuracy

        The Ackerman (2008) article quotes Pepsi CEO Nooyi saying “We are enormously confident in the continued prosperity of China.” Confidence is found in this statement and confidence seems to have been used in the qualitative and quantitative data gathered to make the marketing decision to invest in China. When such a stance is taken and a company, in this economy, makes such a significant financial decision, the factual data outlined in the article can be concluded be fruitful.  The article provides past examples of Pepsi’s ventures into foreign markets that provided success and the statement that “its business is driven by building platforms ahead of demand to some extent and continuing to support platforms even during times of economic weakness" sums up the company’s strategy because it shows the company properly plans ahead, using past successes as a foundation (Ackerman 2008).

        Useem’s (2008) article showed how the background and positive personal beliefs of PepsiCo’s CEO have flowed over into the positive marketing, manufacturing and socially responsible decisions of the company. The article also touched on the growing mentality of the United States and global market attitudes on important issues that make a global impact, including health and environment.

        Landi (2008) reported specifically on the company’s environmental efforts, which are beginning to shape the company for the future, which looks positive. Reporting specifically in numbers the results of Pepsi’s efforts to strive to be a company focused on citizenship, social responsibility and ethics help support the writer’s conclusions.  

Conclusion

PepsiCo strives to remain one of the leading beverage and snack companies in the United States and abroad and takes into consideration the environmental factors, both domestic and global, that affect the company’s marketing and business decisions. Pepsi’s plan to invest in the Chinese market will prove to be a successful venture due to past achievements in similar markets. PepsiCo has been able to make positive and profitable marketing decisions without sacrificing social responsibility and ethics in the process.[d]

References:

Ackerman, R. PepsiCo Pops for China. Retrieved May 26, 2009 from

NationMaster. (2009). American People Stats and Chinese People Stats. Retrieved May 26, 2009

from  and  respectively.

Useem, Michael. (2008). New ideas for the Pepsi generation. Retrieved May 26, 2009 from the

EBSCOhost database.

[a]Make sure that you do not interchange the word “marketing” with “advertising”.  In this case, I would say that marketing decisions must be made…..  In other words, the new technology tools take into consideration more than just traditional advertising.  Yes?

[b]As well as the new technology tools (mobile) that enable our new communication.

[c]Yes, what about the issue of health and PepsiCo products?  Their drinks and fast food do not necessarily put the Chinese on a fast track to healthy eating….  Is this not an ethical issue too?

[d]I think based on the notes that I made earlier, that you might want to revise this statement?