Tag: Consumer Behavior

PepsiCo’s Future of Functional Beverages

March 6th, 2025
A Legacy of Innovation and Responsibility

PepsiCo has long been a major player in the beverage industry, offering everything from carbonated soft drinks to functional wellness beverages. As a leader in innovation, the company continues to evolve, aligning its mission with consumer needs by delivering products that bring joy and nourishment. PepsiCo’s strategy prioritizes growth, enhancing capabilities, and making a positive impact on people, communities, and the planet (PepsiCo, 2024a).

Consumers today expect PepsiCo to maintain its reputation for bold flavors and high-quality beverages while addressing the increasing demand for healthier, functional drinks. Additionally, sustainability-focused customers seek transparency, ethical sourcing, and responsible business practices. The growing popularity of alternative beverage options, particularly within the non-alcoholic and wellness movements, presents a significant opportunity for PepsiCo to expand its portfolio (Mintel, 2024; Riebe, 2024).

Target Market: Health-Conscious and Socially Responsible Consumers

Functional beverages primarily appeal to Millennials and Gen Z—demographics that actively seek clean-label, sustainable, and health-beneficial beverages. These consumers prioritize ethical sourcing and reduced environmental impact, valuing brands that align with their lifestyle choices (Mintel, 2024; Riebe, 2024). With the market for ready-to-drink (RTD) teas projected to surpass $75 billion by 2025 (Irigoyen, 2025), PepsiCo is well-positioned to introduce a sophisticated alternative to sodas, energy drinks, and traditional alcoholic beverages.

Introducing Sprixa: Redefining Social Drinking with Sparkling Tea Mocktails

Sprixa is a RTD sparkling tea, blending functionality with indulgence. This botanical-infused beverage is for consumers seeking a refreshing, non-alcoholic option with premium ingredients and wellness benefits.

Some of the Key Features and Benefits include:
- A Premium Sparkling Tea Experience – Using tea as a base infused with sparkling water and botanicals like hibiscus, chamomile, and lemon balm will create a refreshing yet sophisticated flavor.
- Mocktail-Inspired, Alcohol-Free Alternative – This drink will offer an alternative for alcohol, allowing the consumer to enjoy various social settings.
- Health-Conscious Ingredients – Sprixa will be naturally sweetened with honey or agave, free from artificial additives, and the use of herbs or natural flavorings providing hydration and antioxidants (Mintel, 2024).
- Sustainable Packaging & Ethical Sourcing – The teas will be packaged using 100% recyclable glass bottles with aluminum lids, plus fair-trade organic tea sourcing for minimal environmental impact aligning with Pepsi Co.’s sustainability measures (PepsiCo, 2024b).
By launching Sprixa, PepsiCo can bridge the gap between RTD teas, sparkling waters, and non-alcoholic cocktails, creating a new segment in the functional beverage space.

Research Objectives and Design

To ensure a successful launch, data collection and research will focus on key consumer and market insights:

Research Objectives:
- Consumer Preferences – Identify the flavor profiles, ingredients, and functional benefits most appealing to Millennials and Gen Z consumers.
- Market Potential – Evaluate the market size and growth trajectory for non-alcoholic beverages, especially within the RTD tea and mocktail categories.
- Sustainability Expectations – Assess consumer attitudes toward sustainability and ethical sourcing to inform packaging and ingredient decisions.
- Brand Perception – Analyze how PepsiCo’s sustainability efforts and product offerings influence consumer trust and purchasing decisions.
Research Design:
- Primary Research – Utilize Census data for audience segmentation and surveys to gather quantitative and qualitative insights into consumer behavior.
- Secondary Research – Leverage market reports from Mintel, IBISWorld, and Statista to analyze trends in the RTD tea and wellness beverage market, along with competitive positioning.
The Competitive Landscape: How Sprixa Stands Out

PepsiCo faces competition in the RTD beverage market, but its offerings are distinct. While Pepsi has expanded its portfolio with energy drinks and flavored sparkling beverages, it has yet to introduce a sparkling tea mocktail. Coca-Cola and Monster have already made strides in the RTD tea category, presenting both opportunities and challenges for PepsiCo.

Coca-Cola: Strengths and Weaknesses

Google. (2025). Simply Pop [Image]. Retrieved from Google.com

Coca-Cola holds a strong market presence with popular brands like Gold Peak and Honest Tea, along with newer innovations like Simply Pop, a prebiotic soda designed to support gut health (The Coca-Cola Company, 2025). However, Coca-Cola’s environmental record, particularly its status as the world’s top plastic polluter, presents a significant challenge in today’s eco-conscious market (Dairy News Today, 2025). This lack of commitment to sustainability could put PepsiCo at a competitive advantage, particularly among consumers who prioritize ethical sourcing and sustainability.

Monster’s Nasty Beast: A Different Target Market

Google. (2025). Monster Nasty Beast Hard Tea [Image]. Retrieved from Google.com

Monster’s Nasty Beast Hard Tea targets a different demographic, appealing to consumers looking for a bold, alcoholic tea option (Monster Energy, 2025). While Nasty Beast’s appeal lies in its energy-boosting qualities, Sprixa will focus on wellness, sophistication, and mindful drinking, positioning it as a premium, alcohol-free alternative. This distinction allows Sprixa to capture the growing segment of consumers interested in non-alcoholic beverages for social occasions, a niche not fully addressed by competitors like Monster.

Other Factors Impacting Sprixa

Government

Laws related to labeling and health claims for food and beverages, especially non-alcoholic products, might require Sprixa to adhere to specific guidelines for advertising its health benefits or alcohol-free status.

Economy

Economic conditions impact how much consumers are willing to spend. In tough times, people might seek more affordable alternatives, while in better times, they may splurge on premium options like Sprixa. Growing interest in health and moderation could also drive demand for functional drinks (Riebe, 2024).

Environment

Environmental factors can play a significant role in shaping consumer preferences. As sustainability becomes a larger concern, consumers are increasingly looking for products that align with their eco-conscious values. Sprixa’s packaging and ingredient sourcing will need to reflect these values, ensuring that it appeals to environmentally-minded consumers (Mintel, 2024).

Technology

Digital marketing and e-commerce platforms can provide Sprixa with a powerful way to engage with consumers, especially the younger, more tech-oriented generations. Using consumer insights to tailor Sprixa’s offerings and marketing messages can also enhance consumer engagement.

Conclusion: A New Era for Non-Alcoholic Beverages

Sprixa is poised to capitalize on the growing demand for non-alcoholic, functional beverages. By aligning with consumer preferences for health-conscious ingredients, sustainability, and social responsibility, PepsiCo can establish itself as a leader in the evolving wellness beverage market. With the right marketing and research-backed product development, Sprixa has the potential to thrive in a competitive landscape, offering a premium, mindful drinking experience that caters to the modern consumer.

What are your thoughts on this exciting new concept? Let me know in the comments below!

References

Dairy News Today. (2025, February 20). Corporate Climate Goals Under Scrutiny: Coca-Cola, Nestlé, and Unilever Scale Back Sustainability Commitments. Dairynews.today. https://dairynews.today/news/corporate-climate-goals-under-scrutiny-coca-cola-nestl-and-unilever-scale-back-sustainability-commit.html

Irigoyen, F. (2025, February). Tea Production in the US. Ibisworld.com. https://my.ibisworld.com/us/en/industry/31192b/performance

Mintel. (2024, June 30). Functional Drinks – US – 2024. Mintel. https://clients-mintel-com.eu1.proxy.openathens.net/report/functional-drinks-us-2024?fromSearch=%3Ffreetext%3Dherbal%2520drinks%26resultPosition%3D12

Monster Energy. (2025). Green Tea – Nasty Beast Hard Tea | Monster Brewing LLC. Beast Unleashed. https://beastunleashed.com/nasty-beast/green-tea/

PepsiCo. (2024a). About PepsiCo. Pepsico; Pepsico. https://www.pepsico.com/who-we-are/about-pepsico

PepsiCo. (2024b). Mission & Vision. PepsiCo. https://www.pepsico.com/who-we-are/mission-and-vision

Riebe, S. (2024, December 31). Alcohol Alternatives – US – 2024. Mintel. https://clients-mintel-com.eu1.proxy.openathens.net/report/alcohol-alternatives-us-2024?fromSearch=%3Ffilters.category%3D29%26last_filter%3Dcategory%26resultPosition%3D2

The Coca-Cola Company. (2025). Discover Simply Pop Prebiotic Sodas – Bubbly New Flavors with No Added Sugar! Coca-Cola.com. https://www.coca-cola.com/us/en/brands/simply/products/pop
The Coke vs. Pepsi Rivalry: From Traditional Tactics to Praising the Competition

February 3rd, 2025

WordPress. (2025). Coke vs. Pepsi. [Image]. In AI Generator.

Coca-Cola and Pepsi have spent over a century battling for supremacy, and even if you do not drink soda, you have probably picked a side. Their rivalry has done more than sell fizzy drinks; it has shaped how companies market their products. But, what if the secret to success lies not in competing, but in complimenting?

Let us dive in and find out!

Doane, M. (2020). Coke vs. Pepsi Challenge [Image]. In Google Images.

Traditional Rivalry: The Battle for Soda Supremacy

Coke and Pepsi have been locked in a game of one-upmanship for decades. Think back to the Pepsi Challenge in the 1970s, where Pepsi set up taste tests and claimed most people preferred their soda. Coke’s response? New Coke.

Spoiler: It flopped.

However, these kinds of direct attacks made the rivalry legendary.

Pepsi leaned into being the challenger, aligning with youth culture and big moments like the Super Bowl halftime show. As the classic leader, Coke focused on nostalgia and Americana (remember the “I’d like to buy the world a Coke” ad?). This back-and-forth gave each brand a unique identity, forcing consumers to pick a team (Adams, 2022).

The Coca-Cola Company. (2025). I’d Like to Buy the World a Coke [Image]. In The Coca-Cola Company.

Traditional rivalry strategies are inherently competitive and appeal to consumers who enjoy the drama of corporate battles. They also reinforce brand differentiation, meaning you know exactly what each brand stands for. However, this approach risks alienating younger and socially conscious consumers who might find such tactics outdated or overly aggressive (Gatesman, 2024).

Why Try a Different Approach?

Recently, brands have realized that constant combat might not be the best look, especially in younger generations or when consumers are more socially conscious (Gatesman, 2024).

Enter: competitor praise.

Instead of tearing each other down, brands sometimes nod to their rivals. For instance, in the past, Coca-Cola acknowledged Pepsi’s win in taste during the cola wars that challenged them to reformulate their product. To modern times, where Pepsi makes a shout out towards Coke, leaving consumers smiling (Adams, 2022; Zhou et al., 2022).

Google. (2025). Pepsi Tweet [Image]. In Google Images.

Why does this work?

It works because it taps into thin-slice theory, which is a fancy way of saying people make quick judgments based on small bits of information (Peracchio & Luna, 2006). When a brand praises a competitor, it comes across as confident and humble, traits we naturally gravitate toward. That positive vibe can boost engagement and drive sales (Zhou et al., 2022).

Moreover, this strategy appeals to younger audiences who value authenticity over corporate sniping. By acknowledging a rival’s strengths, a brand positions itself as secure and trustworthy, fostering deeper consumer loyalty (Gatesman, 2024).

When Praising the Competition Pays Off

Imagine seeing an ad where Coke says, “Pepsi did a great job with that halftime show.” You would probably think, “Wow, that was so nice of them to say!” Considering they are rivals. By acknowledging a rival’s strengths, a brand can position itself as secure and trustworthy. This tactic works particularly well in low-stakes situations where the tone can remain lighthearted.

For example, when a restaurant recommends a competitor down the street for a dish they do not serve, you trust them more. Similarly, when Coke and Pepsi collaborated on sustainability initiatives like reducing plastic waste, it signaled a shared commitment to a higher cause. These moments of cooperation show that collaboration can sometimes be as powerful as competition (Adams, 2022; Zhou et al., 2022).

When It Might Backfire

Of course, praising the competition does not always mean success. A compliment might feel like waving a white flag if you are locked in a fierce battle for market share or dealing with a highly competitive industry. For example, if Pepsi had praised Coke during the New Coke fiasco, it might have been perceived as opportunistic rather than genuine. Moreover, if the praise comes off as fake or self-serving, it can backfire, making consumers roll their eyes instead of reaching for your product. Brands must strike the right balance, ensuring their compliments are timely, genuine, and relevant (Gatesman, 2024; Zhou et al., 2022).

Finding Balance: Lessons from Coke and Pepsi

Brands need to strike a balance to appeal to diverse audiences. Traditional rivalry can energize loyalists who love the competition, while moments of praise resonate more with younger generations seeking authenticity and collaboration (Gatesman, 2024). When done right, these approaches can build both trust and excitement.

Coke and Pepsi are venturing into new territory, addressing significant challenges like sustainability. By joining forces on issues like reducing plastic waste, cooperation sometimes beats competition. However, do not worry. The playful rivalry is not going anywhere. These two will keep finding creative ways to stay in our heads and carts (Adams, 2022).

Google. (2025a). Halloween Advertisement [Image]. In Google Images.

The Bottom Line

Rivalries like Coke and Pepsi are iconic for a reason, but today’s consumers want more than a fight. They respond to brands confident enough to praise their competitors, savvy enough to make it feel genuine, and smart enough to know when to dial it back. Whether through old-school rivalry or unexpected camaraderie, the ultimate goal is the same: win our loyalty and maybe even our hearts.

References

Adams, P. (2022, May 3). How Coke and Pepsi’s rivalry shaped marketing — and where it goes next. Marketing Dive. https://www.marketingdive.com/news/coke-vs-pepsi-rivalry-brand-marketing-metaverse/621711/

Doane, M. (2020). Coke vs. Pepsi Challenge [Image]. In Google Images. https://writinginbound.com/content/images/2020/11/coke-vs-pepsi-challenge-1.png

Gatesman. (2024, April 26). Purchasing Behavior: Gen Z Reframed. YouTube. https://www.youtube.com/watch?v=Wlek91AUKUw

Google. (2025a). Halloween Advertisement [Image]. In Google Images.

Google. (2025b). Pepsi Tweet [Image]. In Google Images.

Peracchio, L. A., & Luna, D. (2006). The Role of Thin-Slice Judgments in Consumer Psychology. Journal of Consumer Psychology (Taylor & Francis Ltd), 16(1), 25–32. https://doi.org/10.1207/s15327663jcp1601_5

The Coca-Cola Company. (2025). I’d Like to Buy the World a Coke [Image]. In The Coca-Cola Company. https://www.coca-colacompany.com/content/dam/company/us/en/about-us/history/coca-cola-hilltop-ad.jpg

The Street. (2025). Coke vs. Pepsi What’s Really the Difference? [Image]. In Google Images. https://www.thestreet.com/.image/t_share/MTY3NTQxNTYyNDAxMTA1ODA2/pepsi-vs-coke-whats-really-the-difference.jpg

WordPress. (2025). Coke vs. Pepsi. [Image]. In AI Generator.

Zhou, L., Du, K. M., & Cutright, K. M. (2022). Befriending the Enemy: The Effects of Observing Brand-to-Brand Praise on Consumer Evaluations and Choices. Journal of Marketing, 86(4), 57–72. https://doi.org/10.1177/00222429211053002
Exploring Market Segmentation

January 15th, 2025
Dreamstime. (2025). Market Segmentation. In Dreamstime.com

What exactly is market segmentation? According to Babin and Harris (2021), it is the process of dividing a market into distinct groups of consumers who have unique demand patterns. But before a company can successfully segment its market, it first needs to understand the products or services it offers and the value it brings to consumers. Without a clear value proposition, companies can’t effectively connect with their target audience (Babin & Harris, 2021).

Now that we have a clearer understanding of market segmentation, let’s examine how it works in the real world.

Not long ago, I decided to try a ready-to-eat meal service from Factor. When I came across an ad for Factor on social media and clicked through to their website, I immediately recognized the value they were offering. Their meal plans, approved by dieticians, and the convenience of ready-to-heat meals really appealed to me.

And just like that, I saw market segmentation in action! Factor crafted a service and marketing strategy specifically aimed at people like me who seek healthy, low-effort meal options. This made me think about how well Factor understands its market segments and tailors its approach to meet the needs of various consumer groups. Here is what I found!

Market Segments Identified

Kessel, S. (2024a). Factor Meals. In summerthedietitian.substack.com.

Factor (2025) targets several key market segments.
- Health-Conscious Consumers: Factor caters to individuals focused on health, offering meal plans.
- Busy Professionals: Factor appeals to professionals who lack the time to cook and offers catering services for business meetings by delivering healthy, ready-to-eat meals.
- Fitness Enthusiasts: Its meals are easy to find nutritional information on, making it ideal for those who journal their food to meet fitness goals.
- Individuals with Dietary Restrictions: Factor provides options for people with dietary restrictions, including gluten-free, dairy-free, and vegan meals.
Now that we have identified these market segments, let us examine some strategies used to reach them.

Segmentation Strategies

According to Ladd (2020), market segmentation strategies involve dividing a broad market into smaller, more manageable groups of customers with similar traits. These traits can include geographic, demographic, and psychographic factors, behaviors, usage rates, and benefits sought. Segmenting the market enables companies to tailor their marketing efforts to address the specific needs of each group.

Looking at the breakdown:
1. Demographic Segmentation: Factor can segment its audience based on age, income, and family size. For example, young professionals might prioritize convenience, while families might seek a wider variety of meal options to cater to different tastes.
2. Behavioral Segmentation: Factor can also segment customers based on their purchasing behavior, such as frequency of orders and meal preferences. Regular customers may be offered loyalty rewards, while new customers might receive personalized promotions.
3. Psychographic Segmentation: This is where value comes into play. Factor focuses on customers who value health and wellness. The company emphasizes the nutritional benefits of each meal, positioning itself as a solution for people seeking a balanced lifestyle without the hassle of meal preparation (Factor, 2025).
4. Geographic Segmentation: Factor can use this segment to narrow down and focus its efforts on more health-conscious regions, such as urban vs. suburban vs. rural.
Considering these segmentation strategies, companies should remember several essential principles when implementing segmentation efforts to ensure success.

Key Points to Remember When Implementing Segmentation Strategies
- Focus on High-Value Customers: Applying the 80/20 rule reveals that 20% of consumers often generate the majority of revenue. Targeting this consumer segment can lead to better results (Ladd, 2020).
- Use Data for Personalization: Collecting and using customer data to personalize experiences ensures that businesses meet customers’ unique needs (Ladd, 2020).
- Maintain Consistent Quality: Offering high-quality products or services helps build trust and customer loyalty (Babin & Harris, 2021).
- Be Flexible and Adapt: To stay relevant, regularly review and adjust strategies based on data and customer feedback (Babin & Harris, 2021).
As the market for eco-conscious products continues to grow, it presents a new opportunity for companies like Factor to expand their reach. One such emerging segment is the sustainable shopper.

A New Market Segment: The Sustainable Shopper

In my recent online shopping experiences, I have noticed an increasing demand for environmentally conscious and sustainable brands. Consumers are becoming more focused on eco-friendly and ethical products, a trend that shows no signs of slowing down. Many customers now seek companies that align with their values, particularly concerning sustainability and reducing food waste (Gharib, 2024).

Creating a Segmentation Strategy for the Sustainable Shopper

Pinterest. (2024). Sustainable Shopper. In Pinterest.com

Factor is already making strides with implementing recyclable materials into their shipping. However, to tap further into this growing market segment, Factor could develop a strategy with the following steps:
- Promote Eco-Friendly Sourcing: Consumers who prioritize sustainability would be attracted to Factor’s sourcing practices. The company could highlight using locally sourced, organic, and ethically grown ingredients in its marketing materials.
- Form Partnerships with Sustainable Brands: Collaborating with eco-friendly brands or organizations would help Factor build credibility within the sustainable shopper segment.
As sustainability becomes a higher priority for consumers, Factor can build on its existing segmentation strategies by embracing eco-friendly practices. This shift could not only align the brand with consumer values but also position Factor as a leader in the emerging market for sustainable meal services.

Conclusion

Factor was my example of how a company can implement effective market segmentation strategies to meet diverse customer needs. By focusing on demographic, behavioral, psychographic, and geographic segments, Factor can ensure that its meal plans resonate with the right audiences, myself included. Looking ahead, Factor has the opportunity to expand the growing eco-conscious consumer segment. By adopting sustainable practices such as eco-friendly packaging and sourcing, Factor can attract environmentally minded shoppers and further enhance its brand.

References

Babin, B. J., & Harris, E. (2021). CB (9th ed.). Cengage Learning US. https://mbsdirect.vitalsource.com/books/9798214339405

Dreamstime. (2025). Market Segmentation [Image]. In Dreamstime.com

Factor. (2025, January 5). Factor. https://www.factor75.com/

Gharib, P. (2024, February 4). Meal kit market: Size, delivery services, and opportunities. ProfileTree Web Design and Digital Marketing. https://profiletree.com/meal-kit-market-size-delivery/

Kessel, S. (2024a). Factor Meals [Image]. In summerthedietitian.substack.com.

Ladd, D. (2020, August 20). Marketing: Customer segmentation. Maximize your marketing efforts through segmentation. LinkedIn Learning. https://www.linkedin.com/learning/marketing-customer-segmentation/maximize-your-marketing-efforts-through-segmentation?u=2106393

Pinterest. (2024). Sustainable Shopper [Image]. In Pinterest.com