PepsiCo is one of the biggest players of the carbonated and non carbonated soft drink market. This case deals with Pepsi’s market dynamics in the Canadian market. PepsiCo first entered Canada in 1934 by opening its first bottling plant in Montreal. Since then, it had been a long journey for the company as it has more than 10 million loyal customers all across the country. It had employed more than 5000 people all across Canada ,and its primary target was the long term growth of PepsiCo brands that consisted of Pepsi, Diet Pepsi, Pepsi Max,Tropicana,Gatorade,7up,Mountain Dew, Lipton Brisk, Aquafina, Amp, SoBe and Starbucks bottle beverages.
The biggest and the most prominent competitor of PepsiCo was Coca Cola, which was one of the most trusted brands all across the world. In Canada, the market for soft drinks was highly competitive, as there was no clear market leader in terms of net sales. PepsiCo had an overall market share of 45.3% while Coca Cola had a market share of 44.2 %. This made it clear that there was no particular market leader in terms of national sales. Coca Cola had a similar brand portfolio like PepsiCo, and it included drinks like Coke, Diet Coke, Coke Zero, Vitamin Water, Nestea, Simply Orange, Dasani and Powder Ade. This made it quite evident that both the brands had similar product portfolios and were eying a major pie of the Canadian soft drink market. It was seen that in provinces such as Canada, Quebec and Maritimes, Pepsi had beaten Coca Cola in terms of market share, while in Ontario and West; it was Coca Cola all the way. The competition was pretty intense between the two soft drink giants and it was a close race to finish.
The main goal of Pepsi Beverages Canada (PBC), in 2012, was to establish its market leadership in the Canadian market by beating its arch rival Coca Cola. To achieve this, the company had drawn a carefully devised marketing strategy
The brand had positioned itself as a drink for the younger generation and youth. Its concentration was on increasing the sales of its Pepsi brands which included Pepsi, Diet Pepsi and Pepsi Max. This was planned to be achieved by promotions through television advertising, digital media and through the ‘Ultimate Taste Challenge Campaign’.
PBC carefully segmented the consumer market and decided to target the ‘Millenials’, the consumers who were between 16 to 25 years of age, living in urban areas and principally located in low market share areas such as Toronto and Vancouver. By targeting this particular segment, PBC wanted to ensure that it establishes its market leader ship in the Canadian Market. Focusing on this segment, PBC introduced an initiative called “Max it with Millenials”, which was specifically targeted towards the youth and they were the major consumers of ‘Pepsi Max’. Apart from this, PBC also sponsored a television show called “X-Factor” and the Canadian Football league with its “Leverage of Properties” initiative.
Looking at a broader picture, let us analyse the marketing mix that PepsiCo applied in the Canadian markets:
Product: PepsiCo had a wide range of carbonated and non- carbonated soft drinks such as Pepsi, Diet Pepsi, Pepsi Max, Tropicana, Gatorade, 7up, Mountain Dew, Lipton Brisk, Aquafina, Amp, SoBe and Starbucks bottle beverages. Its main focus in Canada was to promote its three Pepsi brands that were Pepsi, Diet Pepsi and Pepsi Max and target young people between 16 to 5 years of age.
Price: Pricing was a key aspect of soft drink industry, and due to high competition with Coca Cola, pricing was similar and kept at affordable levels. Therefore, it was not a source of competitive advantage. For example, price of a Diet Coke and Diet Pepsi was similar, so was that of Coke and Pepsi.
Place: Through its ‘Ultimate Taste challenge’, PepsiCo was targeting to reach about 1.5 million people, particularly the Millennials. Their target location was Toronto and Vancouver, as PepsiCo wanted to expand its customer base in these markets.
Promotion: PBC used several promotional outlets such as television, radio and point of sales campaigns such as ‘Ultimate Test Challenge’ to reach out to its target customers. It tried to organise 15 challenge teams attending local and national events during the course of the summer. Some of the other promotional strategies included sponsoring popular television shows such as X-factor and sports events such as Canadian Football league. Their main idea was to find a way to connect with youth, who were the brand’s biggest target segment.
ANALYSIS OF PEPSICO’S ULTIMATE TEST CHALLENGE
Robb Hadley was the Director of Marketing for Pepsi Beverages Canada (PBC) in 2012, and he had the responsibility of ensuring the success of their ‘Ultimate Taste Challenge’, which was one of the most important marketing campaigns for PepsiCo over several years. This campaign, which was previously known as the ‘Pepsi Challenge’, was one of the main contributors of PepsiCo’s success in the Canadian markets.
However, with the new marketing campaign, the company’s aim was to target 1.5 million customers. This was a pretty ambitious target, and PepsiCo’s director of Marketing, Robb Hadley wanted to combine UTC campaign with the power of social media. Social media has become a very important part of any Brand’s marketing campaign. Social media acts like a democracy in media, as no particular person can control its outcomes. Advertisers can only develop and implement their social media strategies and wait for the results. This was one of the reasons why Robb was concerned about the proposed plan of combining UTC with social media. Moreover, Coca Cola had already begun to challenge PepsiCo by officially sponsoring events such as London Summer Olympics and UEFA Champions League Euro Cup, which were hugely popular among the youth. However, Hadley was confident that with the combination of social media, the UTC platform would be able to achieve its target of 1.5 million taste challenges and increase PepsiCo’s market share. He wanted to form an emotional connect with the Milennials and wanted to utilize the social media platform for this purpose.
The Millenials, as discussed before, were the people between 16 to 25 years of age who lived in urban locations of Toronto and Vancouver. The best way to reach them was through social media platform because it is one of the most productive ways to market a product or a brand. Most of the major brands such as PepsiCo have realised that its target segment starts its purchasing cycle by actively looking for information on the internet through their computers. If during this time, their brand fails to appear or impress, then it drops out from the consumer’s wish list. That is why companies such as PepsiCo are now jumping into the social media bandwagon, and embracing social networks to achieve their marketing and strategic goals.
For a company to develop an effective social media campaign, it is important that it integrates all the social media vehicles effectively and then develop a comprehensive social media plan. The following steps describe how a successful campaign can be developed.
- Out of several social media outlets such as Face book, YouTube, Twitter, LinkedIn, Foursquare, Quora, Google +, Tumblr and Pinterest; selecting those outlets which suit your marketing strategy and target customer.
- Once the social media outlet has been selected, the next step is to put together a social media strategy by using any one or two social media outlets as the central point of the customer- company interaction.
- Start promoting the brand on the selected social media outlets, and highlight those aspects which the company wants its customers to know.
- Start uploading content on these outlets, such as videos, company information, customer reviews, positive feedbacks and contests.
- Keep on analysing the customer feedback and response. This aspect is very important.
- Analyse the customer interaction report and make necessary changes for improvement.
- Understanding and executing the laws and regulations that govern the transactions in cyberspace.
IS THE CAMPAIGN SOCIAL ENOUGH?
The impact of the social media campaign can be measured through reports, customer feedbacks, customer reviews on the social media outlet and finally, by the increase in sales and the customer loyalty.
In case of PepsiCo’s UTC campaign, the responsibility of marketing via social media was give to BBDO. This was one of the world’s leading advertising agencies. BBDO and PepsiCo had worked together for more than 50 years and it was responsible for developing the Pepsi brand worldwide.
BBDO had decided on a social media strategy that identified Facebook as the main social media vehicle. Their main aim was to drive its customers to the Facebook page. Content from UTC would be uploaded by the street teams and would be discussed on Facebook. The Facebook fans could also find out campaign locations and program schedule through this page. It also developed an online website, which would reward its participants with coupons and QR codes. These coupons were redeemable on UTC’ Facebook page via contests.
BBDO utilised Twitter as a secondary social media outlet by utilising it to drive traffic to the Facebook page. One of the good features of this Facebook page was that it allowed users to create their online profiles and take an online taste challenge against another user or against a clock to win prizes. However, these online profiles or ‘avatars’ were not customizable due to limitations of the social media budget.
As per the company records, it was seen that the budget for social media was hardly around 14% of the overall budget. The maximum budget for UTC was allocated to television advertisements. Also, the twitter handle for the campaign was accessible only for the street team and no one else.
If we look at the way BBDO had planned for this campaign, we find that the advertising company had done a commendable job of revamping the booths and merging the new Microsoft technology withthe campaign to enhance user interface. However, the company was relying heavily on social media in this particular proposal.
According to me, BBDO had not done its homework in creating this proposal. There were some major limitations in its social media plans and its choice of a primary social media vehicle, i.e. Facebook. The campaign, if carried forward the way it is, will be moderately successful. It might not achieve its target of 1.5 million taste trials.
Rob Hadley should not proceed with the current proposal. There must be some changes in UCT’s social media strategy.
- If we look at the social media outlets, we find that twitter has overtaken Facebook when it comes to generating good business.
- Twitter was launched in March 21, 2006. Today, there are close to a billion twitter users all across the world. Right from PepsiCo’s arch rival Coca Cola to its other rival Red bull, all of them have a big twitter presence.
- As per recent study, around 45% of the viewers who follow a brand on twitter are more likely to visit that brand’s corporate website. And the percentage of twitter followers of a particular brand that are more likely to purchase its products is more than 70%.
- BBDO should therefore make Twitter as their primary social media outlet and divert all their strategies from Facebook page to its Twitter handle. Moreover, it is much easier to upload pictures and videos on Twitter than on Facebook.
- BBDO needs to increase its social media budget by 20%.
- It is much easier to organise contests on Twitter. The online website featuring virtual taste challenge should be linked to twitter and players must be allowed to tweet their replies.
- DDBO team should try and make #UTC, a national and a worldwide twitter trend. This would ensure that the campaign receives global recognition.
- The campaign’s Facebook page would be the secondary social media outlet and users would be allowed to express their feedback on that page. However, most of the campaign activity will run on twitter.
In this way, Hadley can ensure that UCT campaign becomes an overnight success and even crosses its targets of 1.5 million tastings!
Baldwin,Z& Strachan,P. &Huller, M. (2012). THE PEPSI ULTIMATE TASTE CHALLENGE 2012: SOCIAL ENOUGH? Ontario, Canada. Print.
Wind chimes Communications. (2013). Social media Handbook. Mumbai, India. Print.