Pepsi Blue Case Study

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During the 1990s, PepsiCo launched new products and engineered a global re-branding campaign in an effort to grow sales volume; reinvigorate their stagnant brand; and to close the increasingly large sales and market share gap between itself and its primary competitor, Coca-Cola. In 1993, Pepsi jump-started its marketing efforts by adding two brands to its portfolio: Crystal Pepsi and Pepsi Max. Crystal Pepsi, which was initially offered in the United States, failed to earn the company more than 2 percent volume share. Pepsi Max, which was launched in the United Kingdom, proved more successful, but because one of its primary ingredients was an artificial sweetener not yet approved by the Food and Drug Administration, it wasn't brought to market in the United States.

Since neither of the products created the measurable sales and market share increase Pepsi needed, PepsiCo International (PCI) executives conceived of a plan to create a new tagline and re-brand all existing Pepsi products, signage, advertising materials and in-store display units. The executives envisioned a simultaneous, global campaign that would create stronger brand equity and resonance in the consumer consciousness.

Executives were assigned four primary tasks: to evaluate the effectiveness of Pepsi's logo; to assign a signature color to Pepsi products; to develop a mnemonic device for advertising and brand recognition; and to further differentiate Pepsi products from Coca-Cola products by making Pepsi products' design more modern and attractive to its primary audience (teenagers).

The executives' solution was Pepsi Blue, which consisted of a futuristically-designed logo for cans, bottles, vending machines, trucks, etc.; an advertising campaign gleaning borrowed interest from celebrity endorsers; and unique, high-exposure sports and event sponsorships to position the brand among teenage consumers.

Pepsi Blue was first test-marketed in Bahrain for three reasons: first, the majority of residents drank Pepsi; second, regional marketers and bottlers had already begun re-evaluating the effectiveness of the company's white logo (which didn't work well in their market); and third, the city was a small test market with a tightly controlled sample population. The Pepsi Blue logo, tagline and new marketing materials were rolled out in half the market and its results were highly successful. Purchasers liked the new logo design and the majority believed that the packaging had improved and the taste remained the same. For those who believed that both the taste and packaging were different, the majority enjoyed the "new" taste.

Using the successful Bahrain test as an impetus for a global roll-out, PCI planned for execution in other markets. But, while Pepsi Blue promised the brand re-invigoration and more appropriate positioning it needed among its core consumer base, the project also brought concerns with it. Chief among them was that Bahrain could be an anomaly: because the brand was already dominant in this market, purchasers would be more open to a new look and it wouldn't affect their buying habits. Some executives then recommended a regional (rather than global) roll-out that either happened in all markets at the same time or started with a lead market and grew. Latin American bottlers worried that because they had recently invested significant capital in their infrastructure, they couldn't afford to invest again in new marketing materials and re-designed bottles. They argued that they couldn't endorse Pepsi Blue until additional funds could be raised, thus thwarting the PCI executives' goal of a global roll-out. Still other executives thought a simultaneous global campaign would be logistically impossible and that the company shouldn't spend money on expensive sponsorships...
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