Can Indra Nooyi Revive PepsiCo? Prepared By : Ankit Sexena Abul Bashar mallick Chanchal Roi Kartik Sharma Swati Sexena
Pepsi Next• Pepsis biggest product launch in years.• A “mid-calorie beverage” that contains 60% less sugar than regular Pepsi-Cola.• The drink comes as people increasingly move away from sugary drinks to water and other lower-calorie beverages because of “health concerns”.• Tag Line : "Drink It to Believe It“• “Created for consumers who seek the rich taste of full-calorie cola” but have “not adopted the flavour profile of a zero calorie cola” =>The Question Is: Will Wall Street ?
A. Health Issues in North America• Of 22 industrialized countries, the U.S. has the highest obesity statistics.• In USA total Obesity amounts to 33.60%.• 2/3rd of Americans over age 20 are overweight.• Nearly ”1/3rd of Americans” over age 20 are obese.B. Nutritional Trend• Bottled water accounting 9% to 11% from 2000-2010• sports drink rose to 2.3%, from 1.2%.• Diet soft drinks rose from 24.7% to 29.9% in last decade.
C. Loss of Market Share (Pepsi v/s Coke)• Pepsi‟s carbonated Soft Drinks Share decreases to 9.5 from 13.5 %. Diet Share remain Steady at 5.3%.• Coke is still the top selling 17% market share. Diet Coke follows with 9.9%.
D. Past Failure• In 2001, Coke rolled out “C2” and Pepsi in 2004 introduced its “Pepsi Edge”.• Both products also were taken off the market by 2006 because of “poor sales”.• Problem was that consumers either wanted „regular soda‟ or a diet drink with „zero calories‟- not something in between.
Indra Nooyi’s Business Strategy• To more than double PepsiCos revenue from nutritional drinks and snacks to $30 billion by 2020.• Has worked to reformulate PepsiCos existing products.• PepsiCo acquired a majority stake in Russian dairy Wimm-Bill-Dann.• Maximizing long-term shareholder value and addressing some of societys biggest problems, such as obesity, nutrition and health• Taken out some of the sugar in many of its mainstream products.
• It has added whole grains, fruits and vegetables to some of its snacks.• A different formula to more closely imitate the taste of a regular soda.• Come up with “Pepsi Next”.• Mix of high fructose corn syrup & three artificial sweeteners.• Developed the cola by researching the taste curve that consumers experience when drinking a regular soft drink.
I. PepsiCo Company’s Target Customers• Teenagers who are health conscious.• For Overweight adults.• For obese persons.• For sportsmen.II. Other Companies Focusing on Nutrition• McDonalds has introduced some healthier foods over the years.
Media Campaign Coke v/s PepsiCo Success of Coke : Huge Investment in “The Beijing Olympics” : A media campaign highlighting the countrys homegrown athletes. Sponsoring reality-TV talent contest "American Idol“ for less than $ 10 million. "Real winner of American Idol: Coke”. Failure of PepsiCo : PepsiCo rejected “The Super Bowl telecast”. Excess expenditure of $ 20 million on “The Pepsi Refresh Project”. "The X Factor," another singing competition, spending up to $60 million for the sponsorship.
New media campaigning Strategy• By Celebrity Campaigning Actress “Eva LongLongoria”.• Pepsi NEXT content distribution approx. 41% of Pepsi NEXT mentions are currently coming via Twitter, and 49% via blogs.
• Conversations 79% positive. Pepsi‟s new campaign in which Funny or Die improv comedians select fans to impersonate trying the new soft drink was mentioned in 17% of conversations, and those mentions were 100% positive.
Conclusion• The Pepsi Next comes as people increasingly move away from sugary drinks to water and other lower-calorie beverages because of health concerns.• It is also an attempt by Pepsi to revive the cola wars against Coke and others.• If MsNooyi‟s relaunch does not work Pepsi may get a new chief executive. The company seems to be preparing for a possible change at the top• Pepsi is hoping to win back soft drink consumers with a compromise.