The Pepsi Refresh Project: A Thirst for Change

CASE STUDY- THE PEPSI REFRESH PROJECT: A THIRST FOR CHANGE

1. INTRODUCTION

In 2010, for the first time in 23 years, PepsiCo did not invest in Superbowl advertising for its iconic brand. Instead, the company diverted this $20 million to the social media-fuelled Pepsi Refresh Project: PepsiCo's innovative cause-marketing program in which consumers submitted ideas for grants for health, environmental, social, educational, and cultural causes. Consumers voted for their favour rite ideas, and PepsiCo funded the winners in grants ranging from $5,000 to $250,000. The case highlights the benefits and risks of traditional branding and social media branding, including a discussion of how the Pepsi Refresh Project fits with Pepsi's previous brand positioning. The case discussion focuses on how the brand team should evaluate the initiative's return on investment (from sales to social media engagement), whether they should continue the initiative for 2011, and whether Pepsi is the right brand for this kind of initiative.

1.1 PepsiCo Background

Pepsi Brand was owned and managed by PepsiCo. PepsiCo, Inc. incorporated on November 13, 1986, was a global food and beverage company that diverted variety kind of snack food, beverage and food brand including the Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Sobe Water, 7Up, Mountain Dew, Aunt Jemima and Tropicana. The Pepsi brand had a long and unique history, founded in 1898 as a hand mixed carbonated creation developed to delight the crowd at Caleb Bradham’s North Carolina Pharmacy. Then original Pepsi-Cola drink was join by a low calories drink which is Diet Pepsi which was launch in 1964. Addition, in 2007, Pepsi brand have launch Pepsi MAX, a zero calories, sugar free cola with double the amount of caffeine to form the trademark Pepsi brand family. In 2010, Pepsi have become one of the world most valuable brands. Can be said that their brand have been popular and well known over the world. Pepsi brand equity have reached value at over $14billion, and it ranked 23rd on the Inter-brand ranking of the best global brand.

In the early days, Pepsi Cola was sold as a healthful drink, and during 50’s it started positioned as a drink for youngster and success in winning the young generation heart. A decade later, Pepsi ran award winning advertising campaign that designated the generation then coming of age as “The Pepsi Generation”. The baby boomers who were coming of age were excited, engaged, and enthusiastic and started a movement that transform Pepsi culture. In 1970’s, Pepsi escalated sales began to challenge those of the market leader which is Coca Cola and here “Cola war” began. For that reason, in 1975, Pepsi brand found an effective ways to differentiate Pepsi from Coke. Converting result from blind taste test showing that people tender to choose Pepsi compare to the Coca Cola and it make them as the best-selling soft drink in America supermarket. Pepsi and Coke rivalry was enduring, with the two companies try to win the battle of the best-selling soft drink until nowadays.  

1. BACKGROUND OF CASE STUDY

2.1 Identify the key problems and issues

In the Twenty- First Century, due to changes of the environment, PepsiCo had to face some significant problem, issues and challenge. In this case study, the issues was focuses on the planning, execution, and results of the Pepsi Refresh Project. In this paper, we have analyse and found the major issues and challenge that Pepsi need to face off and also the strategies used in the campaign and the effectiveness of the media used. Leading up to the Pepsi Refresh campaign, their company had been plummeting in market share. Their main competitor and long-time product rival which is Coca-Cola surpassed Pepsi in both Coke and Diet Coke products. This lead to humiliation in the soft drink market. Pepsi wanted their image to be more community oriented and show that they care about the public.

Addition from that, Pepsi also faced an issues on their sales as it keep declining due to the decrease in soda consumption in the United State and it was declining for six straight years. According to the analyst, they expected the volume will keep decline by 1.5 % to 3% for the next ten years. Besides, PepsiCo also faced a challenge from external pressure. By 2010, two-third of American adult and one-third of American children and adolescence where over in their weight and obese. For that reasons, Michele Obama, the first lady have initiate an anti-obesity alternative that require soda manufacture to put calories content in the containers. In respond, the America beverage association pledge to reduce beverage calories in the marketplace with their member companies offering low calories and small portion beverage. This make PepsiCo and Coca Cola company stop selling full calories sweetens drink in US schools.

2.2 Impact of the issues and challenge to PepsiCo Brand

Because of those issues and challenge, the Pepsi companies have founds difficulties in maintaining their selling chart and at the same time competing with their main competitors which is Coca Cola. In 2009, Coca Cola have reformulated Coke by making it to less calories and less sweetened to make it look safer beverage to drink in order to support the anti-obesity campaign created by Michele Obama. This ways have made the customers to switch from Pepsi to Coca Cola as the customers assume Coca Cola is more healthy soda. This turn Coca Cola as the first choice of soda choose by the customers replacing the Pepsi place. As the result, in 2010 Pepsi was losing market share to its rival, Coca Cola for the first time in 20 years and surrender its title as the best-selling carbonated beverage to Coke.

PepsiCo CEO stated that Pepsi brand just could not stay still. They need to find alternative and ways to bring back the Pepsi brand as the first best-selling carbonated drink around the world and at the same time have a bit healthy image in their product. So that PepsiCo started to focus on making their product offerings healthier, low in calories and less sugar. The company began to enhanced its product portfolio with wholesome food and beverage with new approach to segmenting its product line: fun for you product such as Doritos and Mountain Dew, better for you product such as baked Lays and Propel Water with level of fat, sodium and sugar in line with dietary-intake recommendation and good for you product such as Gatorade, Quaker Oatmeal and naked juice that include whole grain, fruit, vegetable and nutrient. In addition, PepsiCo also came with the more big idea in order to increase their brand awareness among the consumer and at the same times improving their brand images and sales, so, they decides to designed the Pepsi Refresh Project to give millions of dollars in grants to fund ideas by average citizens to help promote innovation and progress in small communities in the US.