Marketing Failed Product - Crystal Pepsi

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Prepared by Yeo & Ong
March 5, 2009

There was a marketing fad in early 1990s equating clarity with purity. Just to name a few, Miller Brewing Co. came up with Miller Clear(March 1993), Coors Brewing Co. came up with Zima Clearmalt (1992), Procter & Gamble came up with Ivory clear liquid hand cleanser and Colgate-Palmolive came up with Clear Sparkling fresh dishwashing liquid. Last but not least, PepsiCo came up with Crystal Pepsi in April 1992. Company Brief Description

Pepsi Company (PepsiCo) owns many brands of beverages, snacks and other foods. Its major product, Pepsi Cola, is one of the most popular carbonated beverages. Besides that, PepsiCo owns the brands Quaker Oats, Gatorade, Frito-Lay, Tropicana, Mountain Dew, Naked, Mirinda and SoBe. In order to maintain, or preferable expand, its market share, PepsiCo constantly introduced new products under its brands. This is a marketing strategy known as Product Development. By modifying the formulas and ingredients, PepsiCo had invented and marketed more than 50 types of carbonated beverages under the brand of Pepsi. To name a few, Pepsi Free introduced in 1982, Pepsi AM introduced in 1989, Pepsi Tropical introduced in 1994, Pepsi Blue introduced in 2003, Pepsi Edge introduce in 2004, Pepsi Lime introduced in 2005, and Pepsi Ice introduced in 2007. Some of the products survive and being accepted by consumers, however large number of the new formula Pepsi had failed and been removed from the market shelves in as short as 6 months.

Product, Price, Distribution, Promotion
Product (A good, service or idea to satisfy the consumer’s needs): Crystal Pepsi was introduced to the market from April 1992 to 1993 in United States and Canada. It was formulated differently from the original brown cola, and the new colorless cola was 100% naturally flavored with no preservations and no caffeine. It did have a lighter taste than the original Pepsi. According to Tom Pirko, who runs a beverage consulting company in Los Angeles called Bev Mark, figured that there are two reasons Pepsi decided to bring out this Crystal Pepsi product (Pepsi Product ‘Crystal Pepsi’ is Clear, 1992). The first reason was due to competition with Coca-Cola whereby this new idea was intended to obtain a great deal of attention from the market. PepsiCo has been head-to-head positioning with Coca-Cola for many years and thus, they were considering differentiation positioning to expand their business. The second reason was due to society’s perception in 1990s towards healthier beverages based on its taste, its ingredients and its clear look. But, in actual fact, it was still not a healthier drink because it was still sugar and water with little bit of flavoring. PepsiCo tried to rescue Crystal Pepsi’s negative positioning in the market performance by adding citrus flavor to its clear cola. The company also decided to shorten its name to just Crystal and added “from the makers of Pepsi” on the packaging. The steps taken were intended to reinforce that Crystal was a completely different formula and brand from Pepsi-Cola. However, the product still failed eventually. Although Crystal Pepsi was short-lived, it cannot be considered a mistake, because the innovative product will allow for favorable consumer attitudes toward the Pepsi name (Lavinsky, 1993). Crystal Pepsi was voted the best new grocery product of 1992 in a poll by Richard Saunders international (Erickson, 1994). Voters did not taste, try or use the product; it was just ranked based upon how interested the voters or consumers were buying the product, how creative the product was and how good a value the product was. Price (What is exchanges for the product?):

Crystal Pepsi was sold at regular cola prices, which were usually less than two thirds the cost of current new age drinks, ranged from 89 cents to more than one dollar. Crystal Pepsi came in both clear bottles and...
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