Pepsi Max. Pepsi Max differs from every other diet soft drink or energy drink in that it offers

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1 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 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 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 sixpack 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 4 Features Benefits Needs Met Manly Diet Drink Unlike Coke Zero, Pepsi Max stresses the flavor of the diet drink rather than the calories it has. Safety, Esteem and Self Actualization: Men feel free of others criticisms because Pepsi Max isn t explicitly a diet drink. They maintain confidence and feel the respect of others. Full Flavor Refreshing Ginseng/Invigorating Sugar Free Pepsi Max offers maximum flavor for a diet drink, so consumers can watch their calorie and sugar intake without sacrificing taste. Consumer can enjoy a refreshing drink without health concerns in the back of their mind. What Pepsi Max may be lacking in caffeine, it makes up for in herbal content. Those watching their sugar intake can enjoy Pepsi Max worry free knowing they aren t developing a bad eating or drinking habit. Physiological and Safety: Consumers quench their thirst and feel their bodies are nourished without excess sugar. Physiological and Safety: Consumers quench their thirst and feel their bodies are nourished without excess sugar. Physiological and Safety: Consumers quench their thirst and feel their bodies are nourished without excess sugar. Physiological and Safety: Consumers quench their thirst and feel their bodies are 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 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 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 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. In positioning ourselves against Coke Zero, Pepsi Max offers maximum Pepsi taste with 50 percent more caffeine than Coke Zero. In comparison to Sprite Zero, Pepsi Max gives the consumer more of a boost with added Ginseng and 100 percent more caffeine. In regards to positioning ourselves against regular soda, Pepsi Max offers a healthier choice with none of the calories or sugar that come with purchasing regular soda. III) THE TARGET MARKET Taking into consideration age, gender and income level, our target market is 20 to 35 year old men in the middle class of all ethnicities. We will focus on this demographic because men of that age group and socio economic standing do not like the concept of dieting, but rather want to live life to the max. Pepsi Max gives these men the opportunity to remain health conscious, while at the same time not compromising taste. Our consumers are semi sole users. They will buy our product, but there are alternatives they believe are just as good. We must convince our consumers to become sole users of our product based on the benefits they receive. One sub segment that exists is college students. They fall within the age range but have specific needs. Our product contains ginseng and 50 to 100 percent more caffeine than our closest competitors. This feature is helpful to the busy and sleep

8 8 deprived college student, giving them energy and focus. It also has less sugar and is cheaper than an energy drink. Therefore, the budget and health conscious among them can still receive the benefits of vitality and concentration. In terms of psychographics, our target audience shares similar attitudes toward diet colas. In their minds, women drink diet colas not men. While they may show interest in being health conscious, they concern themselves more with flavor. The focus on taste subconsciously conflicts with the idea of diet products, which tend to produce sub par taste and pleasure. They also hold similar values. Our target market values the idea of men being manly. Men can handle anything and do not show pain, as evidenced by Pepsi Max s Super Bowl spot. They value the idea of putting on a brave face despite their situation. Someone who represents our target market is Peyton Manning. He has a sense of humor that is appealing to most audiences. Manning is also a manly man one who could easily star in one of our I m good commercials. For instance, men can take anything, even a hit from an NFL linebacker, except the taste of diet soft drinks. He is within our target age group and exemplifies the attitudes and values of our male audience. Buying Strategy Based on the Foote, Cone, and Belding model, Pepsi Max is a Feel Do Think product, using low thinking and low involvement (lower right quadrant). How people react when they first see the products side by side is the feeling. Without diet in the product s name, we have the feeling advantage in our market over Diet Coke, but competition remains with Coke Zero. When men see the 0 carbs, calories,

9 9 sugar part of our packaging, compared to Coke Zero, whose packaging implies that you can taste zero calories, they purchase our product ( Do ). After they have purchased and consumed the product, they think about the price and health benefits, leading them to purchase the product again ( Think ). Of the 20 men we interviewed, most said that a good value in a diet drink is that it tastes similar to the original. The value for our perceptual map will be how similar the taste of diet drinks is to the original flavors of their counterparts. The service will be fulfilling the need for a manly diet drink. Fourteen of the 20 said that Pepsi Max is closer in flavor to Pepsi than Diet Coke or Coke Zero is to Coca Cola. Nine of those 14 said Pepsi Max is manlier than either Coke product. Taste (y axis) Pepsi Max Coke Zero Diet Coke Manliness (x axis)

10 10 Pepsi Max s intrinsic qualities give us a great opportunity to take significant market share from Coca Cola. By exploiting the benefits of our product in two distinct marketplaces, we will be able to situate ourselves as a top contender in two markets. With successful targeting of a demographic whose tastes match up with the identity of our product, we will be able to mold Pepsi Max as an individual brand while, at the same time, increasing our consumer base. If we successfully embody and market our product s persona as laid out in this analysis, we ll increase our product recognition enough to control two extremely profitable markets.

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