Pepsi NaturalIntegrated Marketing Communications

Product Introduction

• Pepsi Natural is a new, natural product offering that serves as a healthier alternative to the traditional Pepsi.

• Replaces the high fructose corn syrup traditionally found in Pepsi and other soft drinks with natural cane sugar.

• Ingredients include: cane sugar, kola nut extract, apple extract, coffee leaf, sparkling water, plain caramel coloring, tantaric acid from grapes and gum arabic from acacia tree.

Pepsi Natural: Sold in Four Packs

•Pepsi Natural is running in ten test markets throughout the United States

•Its British cousin, Pepsi Raw, is running in seven test markets

•Pepsi Natural in Mexico has had a full product launch.

Company Profile

• PepsiCo International is one of the largest international consumer foods companies.

• Currently, the company boasts annual revenue of $43 Billion dollars and employs over 198,000 people throughout the world.

Soft Drink Industry• In 2008, the soft drink industry in the Americas was valued at $63.2

Billion.

• The market value is expected to shrink to $61.4 Billion by 2013.

• In the United States, Pepsi dominates 28.8% of the soft drink industry’s market share.

• Past advertising and marketing brand building efforts have established few, dominant leaders in this industry, where competition is fierce.

Major Competitors (Direct)

• Zevia• Oogavé• Red Bull Cola• Boylan’s• Coca-Cola

Major Competitors (Indirect)

• Hansen’s• Jones’• Izze

• All these competitors are independent companies lacking the strong support and distribution power relative to Pepsi.

Current Marketing Mix-Abroad

• Pepsi Raw in UK, already has print ads and promotional efforts made through food festivals.

• Pepsi Natural is also in Mexico and has already seen the implementation of an IMC campaign.

Current Marketing Mix-Abroad

• Print Advertising Campaign for British version of Pepsi Natural, Pepsi Raw:

Current Marketing Mix-Abroad

• Example of Mexico’s Pepsi Natural advertisement.

Market Segmentation, Targeting, and Positioning

• Because the product is in the introductory stage in the United States there has been little promotional effort or STP.

• Only in major metropolitan areas to test the attractiveness of the product to the American Public.

• Product is currently being positioned as a natural alternative to regular Pepsi or other soft drinks.

Current Marketing Mix-Domestic

• In 2008, Pepsi spent $177 Million on media U.S. media expenditures (not including online media).

• Product• Price• Place• Promotion

New IMC Campaign

Integrated Marketing Communications

Market Segmentation, Targeting, and Positioning

• Concentrated segmentation strategy• Benefit segmentation• Attractiveness– Identifiable– Substantial– Reachable– Responsive– ProfitablePositioning – new, unique, accessible all natural soft

drink from a trusted, popular, well-known brand

Relevant Consumer Behavior

• The VBN (Value Belief Norm) theory.

• Theory suggests that consumers begin purchasing organic foods because of a belief that these foods are better for their health.

Relevant Consumer Behavior

• Consumer involvement typically higher for organic foods

• Word of Mouth appears to be the most important source of influence on the purchasing of food products.

• Consumption behaviors

– Despite purchasing natural and organic brands consumers lean toward natural product offerings from more mainstream and trusted brands.

Relevant Consumer Behavior

• Despite the weak economy, organic consumers are still buying relatively more expensive natural products than unnatural or processed products.

• To do this, these loyal consumers are changing their buying habits, including using coupons.

• 46% of natural foods consumers say that they will buy the same amount of natural foods after economy rebounds and 36% say they will buy even more.

Target Market Information

• Basic demographic structure:– Market expanding into various demographic

groups and ages– Parents that wish to feed their families

unprocessed foods– College-educated, financially stable consumers– Women also buy organics more

Target Market Information

• Reasons why this is an effective target market:– Recent trend increasing interest and desire for

natural and organic foods, due to heavier emphasis on healthier lifestyles.

– Backlash over High Fructose Corn Syrup– Heightened public health concerns– Enduring Green movement

New IMC Campaign

• Pepsi Natural nationwide product launch.

• Primary objective : to raise brand awareness and loyalty among organic consumers.

General IMC Objectives

• Communications Objectives– Increase product awareness/recognition– Create unique product image– To build consumer loyalty

• Sales Objective– To obtain significant market share within the

natural soda market

• Emphasis on print ads and interactive media.

Communication Process• Innovation Adoption Model• Stage in model: to raise awareness = primary

focus– Cognitive stage

• Desired Response – by trying, buying, purchasing, becoming loyal, positive word of mouth, repeat purchaser.

• Implications – Principle focus of campaign to raise awareness to promote purchase and positive word of mouth.

Communication Elements• Source, message and channel decisions

– Source– Message– Channel

• Basic creative strategy theme: emphasis on natural aspect of drink, simplistic message, use of natural, earth tone colors.

Appeal and Execution Style

• Use of natural colors to emphasize natural components of the product

• Informational appeal – info about ingredients and why product is beneficial– Feature appeal – Straight sale execution– Imagery execution

Media Objectives

• Objectives– To create product awareness – Encourage trial

• Use of broadcast and print media.

• Media Schedule– Continuity

Broadcast Media

• Use of TV and Radio and Why?– Using TV commercials because they reach a

broader audience which supports a national product launch, cost effective, selectivity

• Specific Programs and Why?– Stations that focus on health and parenting.

• Use of 15 second TV commercials

Broadcast Media

• Advertisement Mock-Up (See PowerPoint)

Print Media

• Print ads in organic/natural lifestyle publications

– Natural Health Magazine, Natural Home, Natural Solutions

– Vegetarian Times

• Print ads in organic/natural lifestyle publications

– Parenting, Family Circle, motherhood oriented publications

Print Media

Support Media

• High reach and high frequency media.

• Breaks through clutter and catches attention.

• Difficult to avoid.

• Use of outdoor and transit media. – Billboards– Bio-Diesel Buses

Support Media

Support Media

Support Media

Direct & Interactive Marketing

• Direct marketing not used because of issues associated with product/brand image.

• Pepsi is a well known and respected brand.

• Development of multifaceted website. – Higher education, higher income – Coupons

Direct & Interactive Marketing

Sales Promotions

• Sales Promotions Objectives– No risk incentive– Shaping– Build brand equity– Target specific segments

• Coordination with other sales promotion elements– Pairing with coupons

Sales Promotions

Public Relations• No need to manage brand image

• Already extensive press coverage on new, high profile all natural offering from a major soda manufacturer. (no need for buzz)

• Talking down to consumer, already aware of benefits of organic products, high product/purchase involvement.

• PR has the potential of communication problems with the misinterpretation of the source message.

Personal Selling

• Reserved for high profile, high involvement, more expensive products with several alternatives

• Limited reach

Relevant International, Social Issues

• High Fructose Corn Syrup backlash?– Sugar, though less processed and ultimately more

natural, is deemed just as harmful as HFCS.

• Potential to be labeled as “trend product.”

Conclusion

Review of productReview of Target MarketReview of Marketing Mix