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Campaign Deck Campaign Deck Justin Bachmeier, Ayla Benjamin, Brianna Dunn, Jennifer Schmuck, Soo-Min Lee, & Angie Beauchamp Summary Executive Summary Despite the success of Diet Pepsi - a strong industry presence; dedicated customers who identify closely with the brand; a product that provides refreshment without calories - market share has been in a slow decline. To counter this negative trend, Diet Pepsi will aim to grow sales by 2% by increasing repeat purchase of the soda. Current drinkers of diet soda aged 25-40 are the target the campaign aims to hit. They are highly motivated, bright, and influential individuals. Our targets are aware of Diet Pepsi as a beverage option, but they have yet to commit their loyalty to any particular brand of diet soda. They work hard and enjoy recognition for their accomplishments. To successfully reach the targeted audience, Diet Pepsi will take an uncharted position in the mind of prospective consumers that focuses on the appeal of the moments spent drinking Diet Pepsi. Current competitors of Diet Pepsi (Diet Coke, Diet Mountain Dew, Diet Dr. Pepper) use taste-oriented consumer promises that focus on refreshing, delicious taste. Diet Pepsi will be the first brand in the category promising to celebrate moments big and small. In order to reach our potential consumers, our media objective is to increase weekly frequency by 10% over historical Diet Pepsi levels. We will run television, print, outdoor, and digital advertisements on a continuous media schedule. To meet our media objectives advertisements will be strategically placed in targeted media spots. Placing ads on LinkedIn - a networking site frequented by professionals, inTouch Weekly - a magazine read frequently by our target, or in transportation hubs - where our target often spends time on the way to and from work – will allow us to reinforce the promise of celebrating moments in multiple ways. 2 Situation Analysis Research I. Industry Analysis The carbonated soft drinks market consists of cola, diet cola, fruit-flavored carbonates and mixers. From 2007-2011, the carbonated soft drinks market experienced a steady decline. The market is expected to grow again in 2012. The market is projected to experience a steady increase over the next four years, reaching a volume of 59.5 billion liters by 2016 (Carbonated Soft Drinks). The carbonated soft drinks market is highly concentrated. The top two brands, Coca -Cola and PepsiCo, account for over 75 percent of the total market value (Carbonated). Because of the strength of these strong players, it is difficult for new entrants to succeed in the soft drinks market. Hypermarkets and supermarkets are the primary distribution channel for carbonated soft drinks in the United States, accounting for 80.4 percent of the total market volume. Other distribution channels include convenience stores and specialist retailers, contributing 4 and 3.2 percent, respectively, to the total market volume (Carbonated). Recently, the carbonated soft drinks industry has been criticized for contributing to the high obesity rates in the United States. New York City approved the first plan to ban the sale of soft drinks larger than 16 ounces in restaurants, stadiums, and movie theaters. The plan was widely criticized by both the beverage industry and consumers, who felt that consumer choices were being limited. In response to the new regulation, Coca-Cola, Pepsi and Dr. Pepper agreed to build new vending machines with more low-calorie options and nutritional information clearly posted (Soda Industry). In addition to the new vending machines with nutritional information, Coca-Cola has also recently launched new “fountains of the future” in restaurant establishments such as Davanni’s and Dairy Queen. These new touch screen fountains allow consumers to select and mix various Coca-Cola brand soft drinks, and are said to offer up to 125 varieties (Stych). This new development allows consumers to customize their soft drinks and is gaining popularity in the industry. 3 Situation Analysis Research II. Brand History & Analysis Background on Brand Caleb Bradham of New Bern, North Carolina opened a pharmacy in 1893. In his pharmacy he would mix fountain sodas for his customers. He developed a popular formula and coined the term Pepsi-Cola for it in 1898. By 1902, he left the pharmacy business and began the Pepsi-Cola Company. Advertising for Pepsi-Cola began in 1903 (Dietz). The company went into bankruptcy twice before 1931. In order to become a real competitor to Coke, Pepsi began selling a 12-ounce bottles for five cents. Sales began to double, and the company began to become profitable once again (Dietz). In 1963, Pepsico test-marketed their first diet soda under the name Patio (Neuman). In 1964, PepsiCo rebranded the drink as Diet Pepsi and released it to the market. The soft drink had no sugar and no calories, and was the first nationally distributed diet soft drink in the United States. The first competitors to Diet Pepsi in 1960s and 1970s were Tab, distributed by the Coca-Cola Company, and Diet Rite, which is produced by Royal Crown (PepsiCo). In 1982 Diet Coke entered the market and became the primary competitor to Diet Pepsi (The Diet Coke Story). As of 2011, Diet Pepsi’s market share declined four and a half percent, while Diet Coke did not decline. Although Pepsi is still the second biggest brand in the soft drink industry, Diet Coke surpassed sales of Pepsi in 2010 and is now the second biggest holder of market share within the category (Beverage Digest). In 2010, Diet Pepsi held 5.3 percent of the market share, while in 1996 the market share was 5.8 percent. In summary, the market share trends for Diet Pepsi have been slowly declining (Beverage Digest). Diet Pepsi’s logo evolution from it’s beginnings as Patio Diet Cola in 1963 to it’s current logo in 2012. 4 Situation Analysis Research II. Brand History & Analysis Brand Evaluation As with most soft drinks in its class, Diet Pepsi is competitively priced. Individual product prices vary based on size, quantity, container, and location of purchase. Diet Pepsi is a caffeinated cola drink with zero calories, zero fat, zero sugar, and zero carbohydrates. The “diet” aspect of the soda (zero calories) is due to the use of low calorie sweetener, aspartame. The drink also contains trace amounts of potassium (20 mg/per 8 fluid ounce serving), phosphorus (27 mg), and sodium (25 mg) (Pepsico). Product features of Diet Pepsi’s top competitor, Diet Coke, are similar, varying only with slightly higher levels of sodium (30 mg) and caffeine (31 mg) (The Coca-Cola Company). Compared to non-diet cola soft drinks, Diet Pepsi has comparable amounts of sodium (Coca-Cola classic weighs in at 30mg). Non- diet colas, such as Coke Classic, contain 100 calories per serving, and contain no less than 27 grams of sugar, depending on the variety. With approximately 700 manufacturers and 100,000 distribution routes worldwide PepsiCo serves 10 million outlets in over 190 countries. Pepsi uses three distribution networks to bring the product to the marketplace. Direct-store- delivery (DSD), customer warehouse, and foodservice and vending distribution networks are used depending on the product characteristics and customer needs (PepsiCo). 5 Situation Analysis Research II. Brand History & Analysis Advertising Analysis From 1964 to 1970 Diet Pepsi and Pepsi Cola were marketed together under the tagline “Pepsi Cola Either Way”. Diet Pepsi’s first individual campaign, “Girl Watchers” emphasized the cosmetic benefits of a low calorie cola. The tagline of the campaign was “The girls, girl watchers watch, watch what they drink”. The television spot showed men looking at attractive women who are thin because they drink Diet Pepsi. The musical theme of the television ad was eventually recorded to be played on the radio and became a top 40 hit (Pepsi FAQ’s). Diet Pepsi continued to promote the cosmetic benefits of the beverage over the years but also incorporated musicians, professional athletes, and other celebrities. Diet Pepsi’s most recent advertising campaign ran heavily during the summer months featuring Sofia Vergara and David Beckham. One reason the carbonated beverage category has been declining over the recent years is consumers growing health concerns. PepsiCo has been focusing on promoting low sugar drinks spending over 38 million on Diet Pepsi alone in 2011 compared to $147,000 over the same period in 2010 (Ad Spender). A print ad from Diet Pepsi’s most recent campaign, “Nothing Refreshes Like a Diet Pepsi.” 6 Situation Analysis Research II. Brand History & Analysis Advertising Analysis In the most recent campaign, approximately fifty percent of the advertising budget was used on Network Television. The current campaign with Sofia Vergara as Lola operates under the theme line “Nothing Refreshes like a Diet Pepsi.” The creative was handled by Omnicon Group and communicates the power of controlling your health. A recent commercial featuring Lola on the beach appeals to both men and women because men find Lola attractive and many women are envious of her physical appearance. In the spot Lola is not phased by the presence of David Beckman and would rather enjoy a Diet Pepsi. Pepsi is showcasing Lola ‘s confident and powerful role while enjoying the product. The 2012 version of the campaign communicates a similar message while still using Sofia Vergara as the main character. The spot is set in a crowded nightclub and Lola has to charm her way through the crowd to reach a refreshing Diet Pepsi. Both commercials also Sofia Vergara for Diet Pepsi. include a song with the lyrics “Whatever Lola wants, Lola gets”. The initial television spot ran during the NBC broadcast of the Golden Globe Awards along with print advertisements in Time magazine.
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