#FOLLOWTHELEADER

BRAND
History of the Company
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Pepsi is one of the largest global food and beveragw
distributors in the world. Not only does Pepsi sell just Pepsi Cola,
but also it manufactures and sells eighteen brands of beverages
and snack foods and generates over $98 billion in retails sales.
PepsiCo encompasses the Pepsi Cola, Frito-Lay, Tropicana,
Quaker and Gatorade brands and offer products in over 200
countries
Caleb Davis Bradham created Pepsi in 1893. On August 28, 1898 Caleb renamed the soda
Pepsi-Cola, after a combination of two ingredients, pepsin and cola. He believed his
drink was healthy as it aided in digestion much like the pepsin enzyme does. At the start of
the Pepsi-Cola business, Bradham mixed the syrup himself and sold Pepsi exclusively through
soda fountains using the theme line Exhilarating, Invigorating, Aids Digestion. Pepsi Cola
went bankrupted in 1923 and was sold to Roy C. Margargel, a Wall Street broker who buys
the Pepsi trademark, business and good will from Craven Holding Corporation for $35,000,
forming the Pepsi-Cola Corporation.
Throughout the years, Pepsi has changed the face of the brand and the products to
satisfy the wants and needs of the consumer. Pepsi prides themselves on being able to keep up
with the trends and is not afraid of change, as Pepsi is well aware that new generations re-
quire different criteria for being able to satisfy their lifestyles.
Whats Going on Now
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1. The Corporate Social Responsibility Newswire reported that PepsiCos revenue
is more than 65 million.
The company currently has 22 brands that earn 1 billion in sales each year, and
they are globally located in more than 200 countries
Their product categories are very diverse. PepsiCo manufactures and sells car-
bonated & noncarbonated drinks, bottled water, and breakfast cereals. Some
of the companys most popular brands include Quaker, Tropicana, Gatorade,
Aquana Water, Cheetos, Doritos, and Lays.
2. The decline in carbonated drink sales in the U.S. refects in PepsiCos
current net sales. Even though the company is attempting to diversify their market
with various products, they still need to fnd a strong strategy that will help them
sell their soft drinks.
It was projected that [...] soft drink sales [were] projected to decline by as much
as 2.7% by 2012, down $63,459 million in value. (Friesner) With consumer taste
buds changing, the consumption of soft drinks is decreasing.
3. PepsiCos emergence in developing countries helped to increase net sales
within the past years, according to The Wall Street Journal
Healthier snacks only make up 20% of its revenue, while deeming junk food to
be by far the companys single biggest seller with about $20 billion in annual
retail sales globally.
Competitive Analysis
When PepsiCo was created in 1893, their main competitor, Coca-Cola, was booming.
While the company focused on increasing their franchise in 24 states, Coca-Cola was
expanding its brand by focusing on big name endorsers and their packaging. One
can already see the advantage that Coca-Cola had by being introduced in 1886
more than ve years later. In 1979 Pepsi-Cola beat Coca-Colas sales in the supermar-
kets, quickly leading them to the No. 1 spot for the rst time; however, the company
did not remain in that spot for long.
According to an article published by CNN Money, Pepsi-Cola surrendered in the cola
wars, as they now focus on two new markets, health and snacks. U.S. sales of Pepsi-Co-
la and Diet Pepsi fell 4.8% and 5.2% in 2010, according to Beverage Digest, a trade
publication and data service. In 2011 the company sank to the No. 3 carbonated drink,
with Coke and Diet Coke taking the top two spots. Over the past ve years, PepsiCos
Tropicana fruit juices have been losing market share to Cokes Simply juice brand, while
Cokes Powerade continues to chip away at Gatorades dominance.
In this day and age, Coca-Cola still remains as PepsiCos biggest competitor. Nestle,
Groupe Danone and Kraft Foods are listed as some of the others.
Health & Wellness Climate
Times are changing and consumers are now shifting their diet intake from sugary, high-calorie products to more nutrient-dense beverages
and snacks.
1. Consumers are more health-conscious as they desire low-calorie, low-fat, and naturally processed foods, and they are seeking products that
support their transition.
2. Consumers are beginning to change their eating habits by substituting sugar-lled drinks to 100% fruit juices, avored water, whole-grain
snacks, and much more. Pepsi-Co gives consumers healthier options as they transition to a healthier lifestyle by cutting back on non-nutritional
snacks and beverage.
PepsiCo understands that carbonated beverages with high levels of caffeine
and sugar are causing more health concerns, especially among Millenials.
CEO, Indra Nooyi, has supported PepsiCo in focusing on selling more good
for you products, which are snacks and drinks that contain grains, fruit, nuts,
vegetables, and dairy. Nooyi stated, It is not enough to make things that taste
good. PepsiCo must also be the good company. It must aspire to higher val-
ues than the day-to-day business of making and selling soft drinks and snacks
(Seabrook).
PepsiCo wants to prove to consumers that they are aware and concerned with
their well-being in regards to the products that they sell. In result, the company
entered into a market that produces healthier products that align with the new
consumer trend: healthy eating. This allowed the company to gain market share
while the trend of becoming more health conscious is on the rise.
Changing Demographic Shifts
In lieu of the consistently changing media, fads, and common trends, any growing business
would be wise to place focus on these societal adjustments to help them continue having their
consumers fnancial and public support.
Pepsi has always been recognized for its young and current personality in its campaigns
and branding. However, the key now is for Pepsi to examine the cultural changes that are taking
place within the Millennial demographic in order to keep up with the growing and changing
consumer.
The average consumer description is not so much the same today in America as it was in the
90s or even very early 2000s. Based on a panel series hosted by NPR News hosted by Mi-
chelle Norris, with Mr. Jimmy Smith, (Creative Director, TBWA/Chiat/Day, and Mr. Roberto
Orci (President, Acento Advertising Inc.): The consumer market is made up of much more of a
blend than just White American consumers.
Consequently, advertisements are beginning to look much different in the media in refection of Americas
consumer demographic change.
The essence of a marketing campaign relies largely on how it is being executed to reach the audience. If
Pepsi wants their consumer leaders to understand their brand and feel connected to their identity, they must
conform uidly to the cultural and social changes of how that consumer looks today and what they will be in
the future. It is important that Pepsi can grow along with its millennial leaders over time.
Pepsi needs to continue their distinct reputation for being a young lifestyle brand while also plugging in the
changes in how this young demographic now looks. Generally, demographic shifts are more inclusive of
various color and culture.
For example, NPR host Michelle Norris reports that, The disposable income controlled by minorities is grow-
ing at a much faster rate than for white households. Hispanics alone control $1 trillion in purchasing power.
According to advertising gurus like TBWA Creative Director Jimmy Smith, The advertisers () they under-
stand that more than just white America is buying their products. So theyre trying to reach all cultures and
all races, whether its Latino, black, Asian or, you know, Native American. It doesnt matter. They just see
that as another opportunity to sell their product. Pepsis market would greatly benet from culturally expand-
ing their Pepsi leader audience.
Media & Technology Shifts
Every year there are either new social media platforms created or existing platforms are being signifcantly changed, reformed and
updated to accommodate the latest trends and form of communication.
In the early 2000s, social media channels such as MySpace, or even music/blog sites (Napster, musician-sites, etc.) were assumed only
for a young demographic. However, now social media has spread to masses of people even internationally as an overwhelming amount
of people use Facebook, for example, in almost every country.
Not only has the social media use become current for differ-
ent nationalities, but also consumers of different ages.
Pepsi must position itself with their target consumers to be that
generational, fresh and current brand that anyone of any age
and culture can reach for whenever they want to be apart of or
associated with that representation.
1. Cellular devices and applications are also a huge market-
ing tool for advertisers.
2. Similar to social media via computer, Pepsi leaders want to
feel connected to their favored lifestyles and brands through
every current stream of media they use.
3. Perhaps creating cellular apps for Pepsi in locating the
Pepsi promotional cars or events sponsored by Pepsi for
example, are also great ways to engage Pepsi with the mil-
lennial leaders and consumers.
Company Opportunity
As America changes, Pepsi has to continue their tradition as a trendy brand to growing generations. It is necessary for Pepsi
to consider the values and cultures of many nations because they will play a major role in this shift.
Pepsi is learning that if you want to remain relevant with this new type of consumer, you have to be where they are, you have to
talk their language and you have to connect with them in a way that keeps them feeling like they want to be part of your brand.
Marketing allows opportunity to start developing tactics and strategies that will communicate effectively with the younger multi-
cultural community.
Social media marketing is becoming increasingly dependent on user-generated content, meaning reviews, comment, or any
other input from customers. Peer inuence has a measurable impact on consumer purchase decision, especially among Millenni-
als.
Understanding this, Pepsi has created a new digital dashboard on their Pepsi.com place page to support the Live For Now
campaign, highlighted by user-generated messages from Facebook and Twitter that include the #LiveForNow hashtag.
Mobile devices are also rewriting the marketing playbook for even the most established companies. While many brands are
still casting a wary eye at social media for business, Pepsi has embraced the technology, carving out an ambitious social strat-
egy aimed at building relationships with the Millennial generation, soon to be the largest consumer group in US history.
With generations slowly changing and emerging in todays society, Pepsi has to appeal to the global truth of the human experi-
ence. Feeling a sense of belonging is at the core of human consumer behavior to motivate them to purchase a good or service.
Power of One
"The combination of our snack and beverage portfolios creates
signicant value for our shareholders through synergies driven by a
common customer base and distribution platform, supplier leverage
and shared infrastructure.
PepsiCo Chairman and CEO, Indra Nooyi
PepsiCo believes that beverages and snacks should be jointly advertised because consumers tend to ingest them
together. With this idea in mind, the company launched a new strategy, Power of One - Americas Council in 2011 with
the goal of connecting to our consumers better.
The company announced that John Compton, CEO of PepsiCo Americas Foods, would lead it with the assistance
of eight executives. Power of One - Americas Council is designed to leverage the companys most popular foods and bev-
erages in businesses across North, South and Central America. The Global Snacks Group was created to nd innovative
ways to expand the companys portfolio of global snack food brands by inventing international marketing strategies. The
Council will also aide PepsiCo in using innovation to equally market snacks and beverages in stores.
Power of One Americas Council was developed because analysts began to question whether or not PepsiCo
knew how to effectively market both categories. Some have suggested that the company split in two (Shultz). Net sales
show that our beverage market is not doing so well, while our snack portfolio is booming. The revenue that our global
snack market brings in continues to grow in developing countries where the up and coming middle class is purchasing
the products. This deems us as the dominant snacks player globally (Shultz). We use an adopted model that promotes
global advertising campaigns.
Recent accomplishments for this strategy include PepsiCo aligning Frito-Lays Natural products with Sierra Mist Natural
and Doritos with PepsiMax in advertisements.
Follow the Leader Internationally
PepsiCo is an international brand that manufactures, markets, and sells
food and beverage products in Europe, Asia, the Middle East, and Africa.
PepsiCo has decided to implement the Follow The Leader initiative in the top
four developing countries and continents that we believe will increase PepsiCos
net sales and market share in the beverage and food market, along with the strat-
egies and customization products that are tailored to each country and culture.
China
The CEO of PepsiCo, Indra Nooyi stated in an interview, "China will be
the largest consumer market in the next decade, and PepsiCo aims to be the larg-
est food and beverage company in the market.
The company understands that in order to increase consumption in China, dif-
ferent avored items such as hot-and-sour sh soup potato chips, white fungus
oatmeal and blueberry Gatorade must be created. PepsiCo wants the world to
Follow the Leader and understands that each culture has different tastes and a-
vors they are accustomed to and PepsiCo is making it their mission to make sure
each consumer is getting the products that will satisfy their needs.
India
Operating in India since 1989, PepsiCo has managed to account for 37%
of carbonated soft drink sales in 2011, according to market-research company
Euromonitor International. Globally, India is one of PepsiCos largest markets.
In 2013 it was reported that PepsiCo planned to spend $5.5 billion in India by
2020. PepsiCo is trying to produce products that will appeal to India natives
taste buds, ultimately meeting their needs; this strategy is called Innovation. The
company invented a healthy snack-pack that is lled with nutrients to sell to low-
income citizens that lack adequate vitamins and minerals in India as PepsiCo be-
gins to focus more on inventing healthier products and selling them in rural areas
while revamping the infrastructure.
Africa
Africa is the new Asia, said Sanjeev Chadha, head of
PepsiCos operations in the Middle East and Africa. According to
Chadha, PepsiCo can be successful if they take the right business
approach by choosing to produce an affordable product for all
classes, instead of promoting a niche product for the upper class
who can afford it.
Pepsico feels strongly about bringing the Follow the Leader
campaign to Africa because of its increase in popularity over the
recent years. PepsiCo views Africa as an agriculture opportunity by
utilizing their land and crops to produce products that promote long-
term health. This idea reverts back to PepsiCos innovation element
of the Follow the Leader campaign which is providing customiza-
tion to each consumer based on their needs and environment.
Europe
Today, PepsiCo Europes estimated net revenue is $13 bil-
lion. The continent has proved to be more than successful as they
hold the No. 1 spot in several categories including: savory snacks
company, juice company; RTD tea with Lipton JV, cola company
and leading dairy company. The introduction of new products such
as bread-based snack, crab-avored chips, and dairy products has
been a lucrative investment.
Follow the Leader With Social Responsibility
It is imperative that Pepsi incorporates responsible behavior in their marketing and product that ft thematically with the Follow the Leader
campaign.
1. Pepsi will be developing a product called Pepsi-Refresh; that will cater to the millennial society in which their media and sales operate. Despite
the numbers of people who may have unhealthy diets, there is an overwhelming wave of leaders (in more specic demographics) who are con-
science about what they are putting into and using on their bodies.
2. According to csrworld.net, Pepsi has built a positive reputation with markets like India in contributing to their focus on building Corporation
Social Responsibility (CSR) for their native consumers. One of multiple strong partnership focuses of PepsiCo and CSR India is responsible
marketing. The company takes a conscience stand on encouraging networks and food companies to put effort into promoting healthier, children-
appropriate food and beverage consumption. Although they cannot control when children see unhealthy commercials, PepsiCo (along with CSR)
works to ensure that channels and other media that is targeted to children remain responsible and only market products that are healthy for kids.
Pepsi-Refresh falls in line with these international efforts in supporting healthier choices.
3. The new Pepsi beverage is a refreshing product in a totally different ingredient format that is a different and healthier option than their carbon-
ated beverage. Similar to their efforts overseas in India, although the Pepsi brand is known largely for their non-healthy beverage, they are active
in promoting healthy options. Hence, the emergence of Pepsi-Refresh will support their evolution in leading in the trend of healthier consumption
choice. While competing carbonated beverage companies are pushing their unhealthy, sugary drinks, Pepsi is pushing an innovative, forward-
driven product that is blending with the current interest and needs of their target leaders.
Follow the Leader With Employee Relations
By empowering employees to make their own judgments
and decisions on certain projects helped develop the skills of more
ambitious employees, as they are often the ones who get promoted.
Company culture, through diversity and inclusion, involves the
body of work concerned with maintaining employer-employee
relationships that contribute to satisfactory productivity, motiva-
tion, and morale. At PepsiCo, they dene diversity as all the unique
characteristics that make up each of us: personality, lifestyle, thought
processes, work experience, ethnicity, race, color, religion, gender,
gender identity, sexual orientation, marital status, age, national
origin, disability, veteran status or other differences. PepsiCo wants
the Follow the Leader campaign to not only be for consumers, but
to integrate the same idea of innovation and customization in their
own work place.
Through the Follow the Leader Campaign, we at PepsiCo want the
workplace to be more transparent and all the employees to fll as though
their voice matters. Everyone is a mini leader contributing to producing and
manufacturing the PepsiCo brand and being a part of the PepsiCo family. All
employees should be able to get the work environment that they nd ideal and
enjoyable. Here at PepsiCo we want our employees to produce great work and
great work comes from a happy work environment. PepsiCo wants the new inno-
vation and customization to start at home so that the community can fully believe
in the Follow the Leader initiative.
Follow the Leader
Follow the leader is specically targeted to Millenials to leverage customization,
technology shifts, and diversity that make up this demographic. However, #followthe-
leader has the mass appeal and can be easily customized to address the needs of
diverse audiences. For instance, the follow the leader initiative is all about customiza-
tion, so each consumer can have their own experience with Pepsi. The great aspect
of follow the leader is that the consumers are leading Pepsi into what they want to
see Pepsi create and innovate.
Whats Next?

1. PepsiCo should continue to advertise their carbonated drinks in a way that promotes healthy living. The company can possibly focus
on why the cola, Pepsi, was created in the rst place, which was to promote health and well-being. Secondly, the company should focus
more on emerging countries because this is where they are receiving roughly half of their revenue from. The company can do this by
introducing Pepsi Mini and Pepsi Pure internationally.
2. The Millennial consumer is going to change. According to Neilson, in only a few short years, by at least 2025, over half of all fami-
lies with children will be multi-cultural. Neilson also revealed that the United States will experience very minor growth in per household
spending as the Baby Boomers age, and birth rates decrease. This means that the brand must consider product cost and unique ways to
engage with diverse cultures and integration in lifestyle.
3. PepsiCos Creative will continue to feature print ads on public transportation, billboards, and popular magazines. This will allow a
great fraction of the targeted demographic to be exposed to future campaigns. The focus will be on continuing to portray the Pepsi Mini
as sophisticated and nostalgia, yet modern and youthful leveraging among our audience. We want to continue to emphasize fun, innova-
tion, and ways to create customized experiences.
4. If Pepsi Pure is successful and resonates with Millenials, the company will launch a campaign that features a new avor of Pepsi Pure.
In comparison to #FOLLOWTHELEADER, the campaign will be interactive and engaging. Ultimately, PepsiCo will hire a product ambas-
sador solely for Pepsi Pure. Someone who is young, fresh and upcoming would be best suited for the position. Examples include Arianna
Grande and Kendrick Lamar.
5. Lastly, Pepsi Swoop will combine a premium travel experience with technology. The delivery service will proceed to make the self-driv-
ing car a reality, which means the prospect of a eet of driverless cars shuttling consumers to and from work, school, fun, errands, and
home will no longer be purely in the realm of science ction. Pepsi Swoop will no longer be limited to mini vehicles; it will feature new
modes of transportation. By implementing private air planes, chartered party buses, and premium boat rides the Pepsi Swoop rider will
experience the world and travel through the lens of a premium Pepsi experience.