Week 5 Case Assignment
PepsiCo: “Pepsi Sales Bubble with Limited-Edition Soft Drinks” Case Summary:
Pepsi and their partner, Suntory, are using limited-edition soft drinks to boost market share in the $30 billion Japanese beverage market and keep sales bubbling despite a cola war with Coca-Cola and fierce competition for space on store shelves. No new product is a sure thing, but the Japanese market is particularly challenging. Of the 1,500 beverages launched there every year, only the tiniest percentage survives the introductory period because the Japanese convenient stores are small and they make room for only the products that will sell off the shelves quickly. Another reason is because the Japanese consumers crave novelty limited-editions products that are for specific seasons, regions, or reasons. Given, the competitive environment, the pressure from retailers to make new products perform, the speed with which consumer tastes change, and the cost of launching a new soft drink, Pepsi and Suntory are being careful not to overuse their limited-edition strategy. Key Marketing Issues:
Line extension - Development of a product that is novelty, but closely related to their existing product line to meet different customer needs, to reach different target markets. Aesthetic modification - Changes to the sensory appeal of a product. Pepsi changed with berry-flavored Pepsi Blue and Ice Cucumber. Product differentiation – Creating and designing products so that customers perceive them as different from competing products. Pepsi differentiated itself by being offering the Ice Cucumber only during the summer and by limiting the Pepsi Blue.
Personal Case Analysis:
1. Pepsi and Suntory cap their limited-edition soft drink introductions at four per year. What effect is this cap likely to have on the new product development process? By Pepsi and Suntory offering their limited-edition drink introductions at a cap of four per year it...
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