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Cola Wars 2011: Pepsi Execs Plot Brand Comeback

Posted by Dale Buss on March 23, 2011 02:00 PM

PepsiCo just saw its Pepsi-Cola flagship brand slip into the No. 3 position in the U.S. soft-drink market for the first time in two decades, a slip that its executives aren't wasting any time trying to rectify.

Barely days after the bitter news about 2010 sales results, the company is starting to firm up its plans to revive Pepsi.

Massimo d’Amore, CEO of Pepsi Beverages Americas, is shoring up marketing to start reversing the slide for Pepsi, which ended 2010 third (with 9.5% US market share) in sales behind both Coca-Cola (19%) and Diet Coke (9.9%).

This year's increased marketing includes plans to spend 30% more to pitch the company’s beverages to U.S. television viewers, with a previously announced commitment to Simon Cowell's post-American Idol TV event this fall.

His team, d'Amore says, is "totally committed" to engineering a turnaround. A cornerstone of that strategy fwill be X Factor, Cowell’s talent show that will debut on Fox this fall. The company will spend $60 million to sponsor the show and attempt to establish it as a fitting counter to Coca-Cola’s commanding presence on American Idol, which also, of course, airs on Fox.

D’Amore also promised that PepsiCo will try harder to field Pepsi varieties with better-tasting low-calorie natural sweeteners and make other tweaks to its lineup in an attempt to hoist Pepsi back into the No. 2 spot.

At the recent South by Southwest Interactive conference in Austin, PepsiCo reportedly spent $1 million on various promotions including an ongoing series of panels (including one promoting its Pepsi Refresh project) to appeal to the teeming digerati in attendance at SXSW, the leading interactive-technology confab and festival.

Of course, it's just a start. The new-generation sensibilities of PepsiCo management have been well established by CEO Indra Nooyi, d’Amore and others, who took a calculated risk last year by shaking up its advertising and marketing strategy.

The Pepsi brand skipped the 2010 Super Bowl  to focus instead on social media with the Pepsi Refresh project, a closely-watched move that hit a few rough patches, even while boosting goodwill through good works.

PepsiCo execs have proven that they has the chops to reverse brand slides: witness the comebacks of Doritos and Gatorade. Their challenge now, as they turn their laser focus back on Pepsi, is not only a matter of resources — it’s a matter of will, strategy and execution.


Blas Gibler Mexico says:

Living in a country where product wars have been waged fiercely for years, it is easy for our International Business students to grasp the meaning of "cola" wars, specially since the last link of the "chain", is the little corner store that must decide which brand to sell. Today, with Government involved in an intense effort to lower carbohydrate intake by school children who buy products (drinks and otherwise) that contribute to a serious obessity problem in the country, the "cola wars" turn to other tactics and the battle fields are the proving grounds for "newer" and better weapons of all types to win the war.  The CEO of Pepsi, was recently in Mexico to promote a plan to use sunflower seed oil to prepare the "snacks" that her company sells to the children, while at the same time provide much needed income to poor farmers who are having a hard time with traditional crops.   An interesting turn in the "Cola"wars that maybe your BrandChannel investigators should look into.

March 23, 2011 03:18 PM #

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