Following the journey of PepsiCo’s marketing evolution has been insightful and enlightening with their successes and failures spectacularly playing out in the public arena. Despite all the glitz and glamour of their promotions, they have remained laser focused on what marketing is, as summed up by Kotler (2011) “the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.”
PepsiCo uses both in and out bound marketing to reach its consumers across all its 22 brands, building on a strong market presence, with cohesive, through the line, promotional campaigns.
“the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return“
Kotler et al., 2011
PepsiCo is the second largest non-alcoholic beverage company after Coca-Cola. Together they control approximately 75% of the US carbonated soft-drink and beverage industry (Maverick, 2022). But if you have look at total company revenue, PepsiCo eclipses Coca-Cola at nearly 80 billion USD with Coca-Cola sitting at 38.66 billion USD (Ridder, 2022). This has a lot to do with PepsiCo’s successful diversification model; 55% of PepsiCo’s revenue comes from convenience foods, the rest beverages; Coca-Cola is exclusively beverage (Beersheba Research, 2022). Both companies have competitively gone head-to-head for many years. Back in 1940, Pepsi responded to the tough economic conditions, created by the Great Depression, by releasing a 12 oz bottle instead of 6.5 oz (like Coke) for still only 5 cents. (Rowntree, 2013).
Pepsi tuned up the heat with The Taste Challenge, which revealed most Cola drinkers preferred the taste of Pepsi. A rattled Coca-Cola responded by changing its formula and launching “New Coke” on the market. It proved to be an epic failure, their loyal consumers were outraged, and the original Coke was back on the shelves within months (Adams, 2022).
PepsiCo’s target market is aged between 13 and 35 years old, so their marketing campaigns reinforce their youthful, fresh, and energetic brand image (AM Collective). Traditionally, their advertising campaigns have centred on TV, radio, billboards as well as sponsorships, endorsements, and product placement. They have seen huge marketing success with celebrity collaborations to promote its products (Young, 2017). This started with Michael Jackson in an advertisement introducing “the choice of a new generation” through music and dance, to a younger audience (Sievers, 2020). And has continued with Britney Spears, Cindy Crawford, Beyonce, Cardi B and many more, resulting in multiplying the overall sales of the brand (Athul, 2021).
Another key aspect to PepsiCo’s promotional activities is public relations, such as sponsorships with the NFL and NBA. They are particularly well-known for their Super Bowl halftime show attracting internationally renowned musicians such as Beyonce, Jennifer Lopez, Justin Timberlake and Snoop Dog. Although still a hugely popular event, viewers are declining and last year Pepsi tweeted “After 10 years of iconic Pepsi Super Bowl Halftime Show performances, we have decided it’s time to pass the mic.” and will not be renewing its agreement (Williams 2022). This is in line with PepsiCo’s marketing focus turning more towards digital promotions in response to a market shift towards digital trends.
“After 10 years of iconic Pepsi Super Bowl Halftime Show performances, we have decided it’s time to pass the mic.”
PepsiCo
PepsiCo has a adopted a cleverly integrated marketing approach, using its social media platforms to promote its TV ads (Pratap 2021). An example of this is their promotion of a new Mango-flavoured cola as a “Perfect Match” on social media alongside a new reality TV dating show “by bringing unexpected pairings on surprising dates to try to find that elusive perfect match, just like Pepsi Mango! (PepsiCo, 2021). An equally inventive approach can be seen in how they tackle the challenge of viewers skipping ads; PepsiCo paired with Fox to promote it’s Pepsi Wild Cherry cola by launching a fun game show inspired by the brand. But they didn’t stop there, they also sponsored a virtual hip-hop competition on Triller, where dancers can upload their videos using Pepsi Wild Cherry #YourWildestDreams (Williams, 2020). This interactive promotional approach is an effective way of pulling their audience toward their brand and engaging with it.
To combat a market shift away from sugary soft drinks towards more healthier options, PepsiCo has put more emphasis on its food and snack categories, as well as its healthier beverages such as Gatorade. For example, PepsiCo has renewed is sponsorship rights with the NFL for brands like Frito Lay, Tostitos and Gatorade (despite dropping the Superbowl Halftime) (Young, 2022).
During the pandemic PepsiCo realised they needed to meet the changing needs of their customer and promptly launched two direct-to-consumer sites PantryShop.com and Snacks.com (Fleming, 2020). This investment in e-commerce and digital technologies is part of their effort to keep up with customer needs and shifting market trends.
PepsiCo has demonstrated through their past promotional successes that they are a marketing powerhouse. Their advertising has strengthened their sharp, fresh and vibrant brand image. But their inventive and surprising use of the digital space has positioned them as masters of the art of optimising and integrating their inbound and outbound marketing activities.
Reference List
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