Our Pace EMBA consulting group has been hired to help PepsiCo figure out strategies to revitalize the hydration beverage category and to recommend a new product in this category based on consumer research. We researched hydration industry trends, consumer perceptions of PepsiCo hydration brands, consumers perceived needs in this category, consumer behavior with respect to hydration products, and competing products and companies. From this research, here is our recommendations to PepsiCo regarding the company’s hydration strategy.

1. JABB Consulting – Team 3: Joanne Raffa, Astroon
Robinson, Byron Rocha, and Bill Burkey

2. Executive Summary
• We were tasked with providing a market report to deliver
new opportunities and new product generated
• We researched the hydration drinks industry
• We conducted focus group interviews, brainstorming
sessions and performed concept statement testing
• Ultimately, this lead to the creation of our new product
which we believe will provide increased market share for
PepsiCo in the enhanced / flavor bottled water category

3. Exploratory
Research

4. Exploratory Research - Sample Composition
• 60/40 Male/Female
• Ages: 25-34, 30%, 34 – 44, 44%, other
26%
• Race: Caucasian 48%, African American
22%, Hispanic 21%
• Married 54%, single 24%, other 22%
• 78% work full time, 8% part time
• Focus group: 68 people
• Interviews: 92 people
• Respondents from NY, TX, FL

5. Target Demographic
• Men & Women ages 24 - 44
• Active and health conscious
• Balancing life and a healthy lifestyle
with the challenges of living an
active lifestyle
• Seeking additional nutritional
benefits
• Prefer brands like Vitamin Water,
Activate, Karma

6. Focus Groups:
What they thought:
• “I like to stay healthy, so I
would select water”
• “I would buy and try the new
hydration drinks if they weren’t
so expensive”
• “The Aquafina bottle is boring”
• “I make my own flavored
water”
• “…too many of them have fake
sugar taste”

7. Interview and Focus Group Findings
• Aquafina does not have brand
presence in the enhanced water
category
• All bottles are the same in base
water category
• Local water and origin count
• Refillable stations
• Club stores extremely important
• Package is not attractive
• People want to see new packaging
ideas
• Eco friendly tech for bottles is key
• Labels are misleading
• Enhanced water is not overrated
• Price matters
• Aquafina sponsorships lack
brand awareness

8. New Ideas Generated
• BPA free bottle
• Bottle with gripping design in the
middle
• Metal twist cap
• Inspirational quotes (label /cap)
• Cool designs and colors
• Package with specific sports
themes
• Flatter bottle to fit in one’s pocket
• Glass reusable bottle
• Bottle with a straw
• Branded refillable water stations
• Bottle filter
• Glow in the dark bottle
• Bottle that contains prizes via a
code
• Every bottle earns credits towards
iTunes or Google Play (customer
loyalty program)
• Accessorize the bottle to match
personal style

9. Concept
Testing

10. Concept Testing Respondents and Marital Status
139 Respondents 53% Married, 27% Single,
Divorced 14%, Engaged 4%

11. Concept Testing: Age and Ethnicity
The majority of the respondents, 72%
fell within the age range of 25 to 44
½ of the respondents were Caucasian.
The other ½ were of African descent
and Hispanic

12. Concept Testing: What activities & How often do
you exercise?
Gym, home and work were where most
people drink hydration drinks
Half exercise 2 – 3 times a week

13. Introducing Sparkling Mineral Water!

14. Concept Statement: Sparkling Mineral Water

15. SparQ Concept Statement Rankings
• What do you think of the SparQ Sparkling Water concept
statement?
• 75% of the respondents thought the SparQ concept
statement was Good to Very Good

16. SparQ Name and Label Rankings
71% of the respondents thought the
SparQ labels were Good to Very Good
71% of the respondents thought the
SparQ name was Good to Very Good

17. Name Testing
SparQ was the
name with the
highest
acceptance
within the
sample group

18. SparQ Cans or bottles and the rankings of the
8.75 oz. skinny can
• 65% thought the 8.75 oz. can
was very good to good
• 53% felt that SparQ should be
sold in skinny cans

19. SparQ Buying Rankings
• How likely would you be to purchase SparQ sparkling
water if it were sold at a price you felt was reasonable?
• Only 44% would Probably or Definitely buy SparQ at a
reasonable price.

20. SparQ Price Point
• How much would you be willing to pay for a 8.45 oz. can
of SparQ Sparkling Water
• 63% wanted to pay less than $2.00

21. How many cans would you drink per week?
• How many skinny cans of SparQ Sparkling Water would
you drink per week?
• 56% would drink 1-3 cans a week

22. Introducing: Enhanced Water

23. Concept Statement: Enhanced Water

24. Aquafina+ Concept Testing Results
What do you think of the new Aquafina+ product and concept statement?
More than 80% of the respondents said that they thought the new
Aquafina+ product and concept statement was Very Good to Good

25. How about the name ?
What do you think of the new Aquafina+ name?
Almost 80% of the respondents said that they thought the new
Aquafina+ name was Very Good to Good

26. Name Testing
Aquafina+ was the
name with the highest
acceptance within the
sample group

27. Aquafina+ Purchase and Bottle Results
Almost 90% of the respondents said that
Aquafina+ should be sold in a plastic bottle
69% of the respondents would definitely or
probably purchase Aquafina+ if it were sold at a
price they felt was reasonable

28. 60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Amount Willing to Pay for Aquafina+
58%
Price Point
35%
$2.00
$2.25
$2.00 $2.25 $2.50 $2.75 $3.00
• 58% of survey participants are
willing to purchase Aquafina+
if the price is retailed at $2.00
• 35% of survey participants
intended to purchase
Aquafina+ if the price is
retailed at $2.25
• The price point that would
have the highest probability
of attracting new Aquafina+
consumers is between $2.00 &
$2.25

29. People reached through Advertising and Promotions
• 59% of Millennials (14.2
mill) are able to be reached
through advertising and
promotions
• 41% of Gen X’ers (9.9 Mill)
are estimated to be reached
through advertising and
promotions

30. Average bottle of purchased per week?
• 64% of survey
participants reported
that they would
purchase at least 2
bottles of water a week
on average
• 17% of participants
stated they would most
likely purchase 5.5
bottles of Aquafina+ per
week as well
64%
% consumed per week
17%
5%
1%
70%
60%
50%
40%
30%
20%
10%
0%
2 5.5 9 10

31. Product
Selected &
Competitive
Analysis

32. Target Market
• Aquafina+ is the ideal beverage for adult individuals that live
active, healthy and challenging lifestyles
• Aquafina+ is targeted primarily to adults aged 24 to 44

33. Competive Analysis
Factor AQUAFINA+ ACTIVATE KARMA VITAMIN WATER
Producer PepsiCo Activate Drinks Karma Culture LLC. Coca Cola
Established 2014 2012 2011 1996
Company Location Purchase NY Los Angeles, CA Pittsford, NY Atlanta, GA
# of Employees 168,000 11 to 50 7 71,000
Company Size (Water
Division)
$878 million $5 million $5 million $880 million
Number of Products 5 varieties 10 varieties 5 varieties 6 varieties
Shape of Bottle
Easy grip hole in
the middle
Standard Standard Standard
Powder in Cap & Release
Technology
Yes Yes Yes No
Sweetener ZSweet Stevia Stevia Stevia

34. Competive Analysis (cont.)
Factor AQUAFINA+ ACTIVATE KARMA VITAMIN WATER
Product Prices (16.9 oz.) $2.25 $3.75 $2.82 $2.50
Case Price (12 Pack) $27.00 $44.45 $33.85 $33.00 – $42.50
Product Quality Excellent Good Good Good
Stores/Distributors/Resellers
Grocery Stores, Deli,
Retail Stores,
Convenience Stores,
Membership and
Health Clubs and
Online
Grocery Stores, Deli,
Retail Stores,
Convenience Stores,
and Online
Grocery Stores, Deli,
Retail Stores,
Convenience Stores,
Health Clubs and
Online
Grocery Stores,
Deli, Retail Stores,
Convenience
Stores, Health
Clubs and Online
Brand Development/
Event/Promotion
Radio, Digital
Marketing, Social
Media, Web, Sports
Events (Tough
Mudder, Spartan
Race, etc.), Online
and TV Commercials
Online, YouTube,
Digital Marketing,
Social Media
Online, Universities,
Professionals, Digital
Marketing, Events,
Conferences,
Concerts, Radio
Online, YouTube,
Digital Marketing,
Social Media

35. Unique Bottle
• The new Aquafina+ comes in a unique and functional
bottle with a hole in the middle, providing the consumer
with an easy grip
• Aquafina + is available in 16.9 ounce plastic 100%
recyclable bottles
• It can also be sold in 6 packs, 24 packs as well as in a
variety pack with 6 and 24 units

36. ZSweet Sweetener Benefits
• 100% Organic
• Aid in weight control
– Zero calories per serving and no carbohydrate fillers
• Aid in good oral health
– Contains non-cariogenic properties and it helps fight tooth decay
• High digestive tolerance
– Absorbed in the small intestine quickly
• Healthy for people with diabetes
– Does not increase blood glucose levels

37. Electrolytes (Lemon/Lime)
• Calcium to help maintain electrolyte and mineral balance
• Potassium to help maintain electrolyte and fluid balance
• Sodium to help regulate the total amount of water in the
body

38. Energy (Watermelon)
• Green tea extract to provide a natural source of caffeine
that supports health and wellness
• Potassium to help regulate the heartbeat, function of
muscles and maintain electrolyte and fluid balance
• Phosphorus to help increase endurance
• L-Tyrosine to help stay alert and
focused and to also reduce fatigue
and anxiety

39. Protein (Strawberry/Banana)
• Whey Protein to reduce the risks of heart disease, cancer
and diabetes and to stimulate protein synthesis to help
speed up recovery from exercise and boost muscle
volume
• Potassium to help regulate the heartbeat, function of
muscles and maintain electrolyte and fluid balance

40. Weight Control (Berry)
• Vitamin C to help turn fat into fuel
• Tangerine to increase your sensitivity to insulin, which
burns sugars
• Cucumber, and grapefruit to help to make you feel full

41. Vitamins (Mango)
• Vitamin A for growth and development and to maintain
the immune system and good vision
• Vitamin B3 to help increase levels of HDL in the blood
• Vitamin B5 to help synthesize and metabolize proteins,
carbohydrates and fats
• Vitamin B12 to help normalize the brain and nervous
system function

42. Aquafina Plus+ Vitamins - PepsiCo Canada
• In 2009 PepsiCo Canada introduced Aquafina Plus+ in Canada
• Currently only sold in Canada
• We significantly improved the product as follows
– Improved shape of the bottle
– Replaced sweetener with ZSweet
– Added a powder twist and release technology
– Vastly perfected overall look and feel of product
• PepsiCo can leverage the trademark Aquafina+
which PepsiCo already owns

43. Marketing
Plan

44. Media Plan Overview
• Radio Advertisement
• Out of home
• Digital Advertising
• Sponsorships
• Influencers campaign

45. Radio & Magazine : Precision and targeting platform
Digital Radio:
Print:
Precision targeting buy via internet and
satellite radio
8-16 weeks per year
Heavy advertising weeks: (1 ,2, 17, 18,
26, 27, 48, 49)
Soft advertising weeks: (20, 21, 23, 24,
31, 34)
Influencers radio ads
Specific buys in magazines that target
our demographic
6 publications / 2 feature formats –
product feature & Influencer articles
2 month buy during introduction, then
on & off

46. Out Of Home
• All major metro markets NY,
LA, Chicago, DC, SF, Boston,
MIA, PA
• Times Square signs & buses
• Billboards in key markets near
colleges, sports arenas and
stadiums
• Bus shelters & metro stations

47. Digital
• Rewards program with ITunes
• Banner ads: YouTube, Hulu,
Bodybuilding.com, yoga,
sports related
• Viral video creation: YouTube,
Vimeo, Facebook.
• Banner ad buy in heavy traffic
websites for target market
• Sponsored ads with Google to
feature Aquafina+

48. Social Media
• Interaction with consumers using top
social platforms: Facebook, Twitter,
Snapchat, and Instagram
• Selective feed to target demographic
• Develop a two way communication
channel using social media
• Engage consumers to talk about
Aquafina+ during their daily lives
• Spark #AquafinaPlus conversations
and achieve 100,000 likes on
Facebook
• Aquafina+ Facebook Page

49. Influencers Program
• Feature of short videos, radio
stories and articles of Aquafina+
Influencers
• Influencers can be celebrities or
regular people. They can be unique
or represent millions, highlighting
individuals in everyday moments,
showing the target market how
Aquafina+ supports and promotes
healthy hydration & nutrition
• Digital radio, Social media, Digital
TV & Print adds

50. Sponsorships
• Sponsor events that demand
training and preparation
• Unconventional urban sport
events
• Make Aquafina+ part of the
culture and build brand
awareness
• Leverage sponsorship using
social media and out of home
banners

51. Budget
• The majority of the budget will
be spend on digital and
sponsorships
– Precision marketing target,
maximizing exposure and
generating brand awareness
– Improve ROI
– Digital is important due to Gen X
and Millennials
– Sponsorships will build brand
awareness with the rest of the
target market
Digital and
TV ads
35%
Sponsorships
20%
Influencers
15%
OOH
15%
Radio
10%
Other
5%

52. Sample Print Ad

53. Sample Print Ad

54. Additional Sample Banner Ads

55. Sales Forecast

56. Competitive Price Analysis
FACTOR AQUAFINA+ ACTIVATE KARMA VITAMIN WATER
Product Prices (16.9 oz.) $2.25 $3.75 $2.82 $2.50
Case Price (12 Pack) $27.00 $44.45 $33.85 $33.00 – $42.50
• Based on our competitive analysis, we believe Aquafina+ will be priced
aggressively against its competitors in order to capture market share
immediately after launch

57. Price Recommendation
• We recommend that Aquafina+ be sold at the suggested retail price of
$2.25, per 16.9 oz. bottle
Rationale:
– The Aquafina+ product is being targeted to a more demanding and
health conscious consumer
– The addition of flavor enhancers, vitamins and innovative packaging
– Aquafina + should be priced above the price of the standard bottled
water products
– Aquafina+ is positioned as an alternative to caffeinated energy drinks

58. Projected Unit Sales of Aquafina+
•In the first full year,
Aquafina+ is forecasted to
have unit sales over 266
million
•Second year sales are
projected to increase to
approximately 293 million
units, with a steady growth
projection of 10%, year-over-year
295,000,000
290,000,000
285,000,000
280,000,000
275,000,000
270,000,000
265,000,000
260,000,000
255,000,000
250,000,000
266 Million
293 Million
1 2

59. Projection of Sales Revenue
• Projected profit in the first
year is $26.6 million
$58,548,435
Profit
• Second year profits will
increase to $58.5 million $26,612,925
$70,000,000.00
$60,000,000.00
$50,000,000.00
$40,000,000.00
$30,000,000.00
$20,000,000.00
$10,000,000.00
$-
1 2

60. Projected Expenses & Profit
First Year Second Year
Sales $ 266,129,250.00 $ 292,742,175.00
Operating Expenses $ 186,290,475.00 $ 204,919,522.50
Advertising $ 26,612,925.00 $ 29,274,217.50
R&D $ 26,612,925.00
Profit $ 26,612,925.00 $ 58,548,435.00
• 70 % of our sales revenue will go towards operating expenses
• 10 % will go towards Advertising
• 10 % for first year R&D

61. Conclusion

62. Recommendation
• We absolutely recommend that PepsiCo commercializes
• We recommend that Aquafina+ be sold at the suggested retail price
of $2.25, per 16.9 oz. bottle
• Total market should include both Gen X and Millennials
• Benefits of ZSweet as a sweetener
• A unique and functional bottle with a hole in the middle
• Wide variety of flavored enhancers
• Unique media and marketing campaign