1 Ben Bourgeois, Max Moll, Emma Parker, Lindsey Whitlow Dr. Lance Porter MC 3031 – Creative Ad Strategies Sept. 23, 2010 Pepsi Max Pepsi Max differs from every other diet soft drink or energy drink in that it offers maximum flavor. We don’t sell “Pepsi Zero” or use any subtractive marketing techniques – we sell fulfilling, full‐flavored soda. Men would usually cringe at ordering a “skinny” latté or a light beer with the number of calories in its title; however, a maximum‐benefit soft drink gives them just what they’re looking for. Consumers don’t want Pepsi without the calories – they want Pepsi with the flavor. And by giving them the flavor and refreshment they demand, we cater to their highest needs, all the while offering a healthier, zero‐calorie soft drink. I) PRODUCT In an increasingly health‐conscious society that still demands sugar, caffeine and great taste, Pepsi Max is in a prime position to steal some market share from industry leader Coca‐Cola. While Pepsi Max lies in a particular niche of this product category, diet soft drinks have several different segments: zero‐calorie, sugar‐free, caffeine‐free or any combination. The diet drink market initially saw few product offerings, most of which were not marketed or positioned any differently than their full‐flavor counterparts. But in recent years, drink manufacturers have begun marketing these products more distinctly, with each product directed toward a specific target audience. For 2 example, market leader Coca‐Cola rolled out its Diet Coke brand in the early 1980s with similar branding and packaging as its flagship product. However, as the drink became more popular, the company released more varieties like Caffeine‐Free Diet Coke and Diet Cherry Coke. Today, Coca‐Cola sells several diet varieties of diet soda under both the Coke and Sprite monikers. A particular trend in the diet drink industry – and one that Pepsi Max plays to specifically – is its appeal to a much larger target audience. Diet drinks were originally directed toward women and other people conscious of calorie and sugar intake. More recently, however, these diet soda manufacturers have marketed their products toward men. For example, Pepsi Max’s spot during Super Bowl XLIII featured men seemingly getting injured playing sports, only to mention the tagline, “I’m Good.” This consumer‐oriented campaign promoted Pepsi Max’s benefit of allowing male consumers to drink a low‐calorie drink they wouldn’t be embarrassed to drink. Marketing We aren’t reinventing the wheel with Pepsi Max’s ingredients, packaging or pricing; however, we market this product distinctly and uniquely. Our ingredients include the standard soft drink components: carbonated water, caramel, color, caffeine, natural flavors, citric acid and panax ginseng extract phenylketonurics. We also package the product very similarly to other products in our soft drink line – Pepsi Max comes in 12‐ounce cans, 24‐ounce bottles and larger two‐liter bottles. However, Pepsi Max features a black label with the word “Max” in 3 all caps, aggressive‐looking sans serif font. The can also features the tagline “Maximum taste, no sugar.” Pricing/Distribution We also price and distribute Pepsi Max very similarly to our other products. A six‐ pack of 24‐ounce bottles costs as little as $3.50, and cans are also sold in standard drink machines. Parent company PepsiCo distributes the product in grocery stores and other retail centers, but Pepsi Max has been slow to appear in restaurants and in fountain machines. Advertising Strategy Pepsi Max is marketed and advertised with the consumer in mind. We don’t list the product’s features (zero‐calorie, sugar‐free etc.) or use a subtractive tagline or product name (Coke Zero). Rather, we promote the consumers’ potential benefits from choosing our product. As indicated below, Pepsi Max by no means lacks the important features necessary in the diet soft drink market – our product contains caffeine and ginseng while offering limited calories and sugar. We are just more concerned with what these features mean for consumers and, ultimately, what needs we satisfy: 4 Features Benefits Needs Met “Manly” Diet Drink Unlike Coke Zero, Pepsi Max Safety, Esteem and Self‐ stresses the flavor of the diet Actualization: Men feel free of drink rather than the calories it others’ criticisms because Pepsi has. Max isn’t explicitly a “diet” drink. They maintain confidence and feel the respect of others. Full Flavor Pepsi Max offers maximum flavor Physiological and Safety: for a diet drink, so consumers can Consumers quench their thirst watch their calorie and sugar and feel their bodies are intake without sacrificing taste. nourished without excess sugar. Refreshing Consumer can enjoy a refreshing Physiological and Safety: drink without health concerns in Consumers quench their thirst the back of their mind. and feel their bodies are nourished without excess sugar. Ginseng/Invigorating What Pepsi Max may be lacking in Physiological and Safety: caffeine, it makes up for in herbal Consumers quench their thirst content. and feel their bodies are nourished without excess sugar. Sugar‐Free Those watching their sugar intake Physiological and Safety: can enjoy Pepsi Max worry‐free Consumers quench their thirst knowing they aren’t developing a and feel their bodies are bad eating or drinking habit. nourished without excess sugar. Our product’s most appealing feature is that it’s a healthier, invigorating diet drink that promises maximum. Because it tastes great first, men should have no qualms about drinking a diet drink. For example, ordering a “skinny” coffee could be embarrassing for a man watching his calories, but ensuring “max flavor is nothing to hide. Other than the product’s benefits and the needs it satisfies, Pepsi Max excels in its superior features and product offerings. For example, Pepsi Max contains Ginseng and more caffeine to help energize consumers all the while maintaining low sugar and zero calories. As a zero‐calorie, low‐sugar drink, Pepsi Max offers the cool, crisp refreshment of a soft drink without many of the health drawbacks. 5 II) MARKETPLACE Pepsi Max resides in an incredibly crowded marketplace. While the soda market in general has been suffering at the hands of more health‐conscious consumers, these companies have began to meet demands by producing low‐calorie alternatives. The big players in our target market include products like Coke Zero, Sprite Zero, Diet Coke, Diet Dr. Pepper and Diet 7UP. Although these competitors produce widely different products aimed at widely different types of consumers, Coca‐Cola manufactures three of the five. Our main focus should remain on Coca‐ Cola and their large share of the consumer market. Pepsi Max also competes in the energy drink market. The competitors in this market include products like Monster, Red Bull and Amp. While consumers may not identify with our product as an energy drink, our enmeshment in both the soda and energy drink market puts us at an undeniable advantage. We will be able to target the energy drink market by emphasizing our soda‐like qualities and we’ll be able to attract the soda consumer by emphasizing the qualities of our product that can be found in energy drinks. Indirect competitors to our product include the regular versions of these products such as Coca‐Cola, Sprite and Dr. Pepper. We also face indirect competition in juices like Minute Maid, Snapple and Motts; flavored soft drinks like Fanta, Sunkist and Crush and sports drinks like Powerade. This indirect competition generally targets niche‐oriented markets and, due in part to consumer choices based on nutrition and preference, won’t have a huge impact on our share of the market. PepsiCo also produces a wide variety of juices and 6 sports drinks to compete with these indirect threats, making them less of a concern Pepsi Max specifically. The brand faces somewhat of an uphill battle, as our largest competitor Coca‐Cola is a branding powerhouse. Consumers widely recognize Coca‐Cola throughout the world, and Coke has dominated the market for a long period of time. While this may hold true, PepsiCo is not far behind as a global corporation. Our total revenues have reached $48.55 billion annually. This number easily overwhelms Coca‐Cola’s annual revenues that amount to about $31.75 billion. Also, our past quarterly revenue growth stands at an impressive 39.7 percent while Coca‐Cola’s remains stagnant at 4.9 percent. These numbers, coupled with share prices that are almost ten dollars higher than Coca‐Cola’s, help to illustrate that the opportunities to develop Pepsi Max as a product seem endless. Pepsi Max as a specific product is not as widely known in the United States as other competitor products. Pepsi Max has been in production for about three years while our comparable competition, like Coke Zero and Sprite Zero, have been in production for closer to five. While still in the infancy stages of our product cycle in the US, Pepsi Max has been in production internationally for 17 years. We can utilize this long‐term global experience as a foundation for our product’s growth in the United States. Positioning In regards to positioning ourselves, we must take advantage of the fact that our product competes in two different markets. We must make sure to highlight the aspects of both energy drinks and regular sodas, as well as emphasize the nutritional benefits of the product. When it comes to the competitors in the energy 7 drink market, our position should be that Pepsi Max is more nutritional because it provides all of the energy without any of the sugar of regular energy drinks. Also, with energy drink prices averaging well over three dollars for a 16‐ounce can, Pepsi Max gives the budget‐conscious consumer a much more inexpensive alternative.