Company Case Notes

Pepsi: Can a Soda Really Make the World a Better Place?

Synopsis

After 23 straight years of running ads for Pepsi on the Super Bowl, PepsiCo skipped the
big game in 2010. PepsiCo isn’t ditching mass-media advertising altogether. But this
move marks a major shift in its promotional strategy. This case focuses on PepsiCo’s
current integrated marketing communications strategy, centered around the Pepsi
Refresh Project. The basis of the project is the funding (through grants) of projects from
individuals and organizations that propose a societal benefit in any of the areas of
health, arts and culture, food and shelter, the planet, neighborhoods, and education. This
may not sound like the centerpiece of a promotional campaign for a major brand.
However, PepsiCo has woven the message of making the world a better place
throughout its advertising and integrated that advertising across PR, point-of-purchase,
packaging, and a groundbreaking social media campaign. Celebrity endorsements also
play a role (projects have been funded for Kevin Bacon, Demi Moore, Jeff Gordon, and
a host of others). It’s all designed to bring people to the www.refresheverything.com
Web site. It may very well be that PepsiCo is the first company of its size to put its
money where its mouth is when it comes to social responsibility. PepsiCo’s CEO firmly
believes that the company can do well by doing good.

Teaching Objectives

The teaching objectives for this case are to:

1. Introduce students to the elements of the promotion mix.

2. Introduce the concept of integrated marketing communications.
3. Allow students to identify a target audience and see how communications
objectives flow from that decision.
4. Allow students to consider the issues involved in designing a message.
5. Allow students to consider the likelihood that a campaign will succeed.
Discussion Questions

1. Consider PepsiCo’s advertising throughout its history. (For a list of Pepsi

slogans over the years, visit http://en.wikipedia.org/wiki/Pepsi#Slogans.)
Identify as many commonalities as possible across its various ad campaigns.
How is this campaign consistent with Pepsi’s brand image?

As the case points out, Pepsi is a brand that has focused its advertising
messages on a “youthful nature.” This is apparent as one examines the list of
slogans over the years. Most all of them have contributed to building Pepsi’s
brand image as the young and hip choice. Some of the more notable slogans
 are, “Taste the one that’s forever young” (2006–2008), “For those who think
young”(1999–2000), “Generation Next” (1997–1998), “Be Young, Have Fun,
Drink Pepsi” (1992–1993), “The Choice of a New Generation” (1984–1988),
and so on and so on. It should also be noted that while many of the slogans may
not overtly scream “young” they were executed in a way that really struck a
chord with youth and young adults of the time. For example, Michael Jackson
singing “Pepsi’s Cool,” Van Halen singing “Right Now,” put forth a consistent
message of Pepsi as THE choice (as in, the choice for those in the know).

The current campaign may seem like a major departure from this long line of
young, hip messages. However, the youth and young adults of today are much
more concerned about social responsibility than their parents or grandparents.
Additionally, it is the current younger generation that dominates the social
media. Thus, PepsiCo has not taken it eye off of its target market. It has simply
shifted gears.

2. List all the promotional mix elements used in the Pepsi Refresh campaign. What
grade would you give Pepsi on integrating these elements into an integration
marketing communications campaign?

 Advertising—Pepsi continues to run TV and print ads. Spot ads on main

networks as well as 30 different cable channels. The ads inform people
about the Pepsi Refresh campaign and direct them to the
refresheverything.com site. Ads also highlight funded projects.
 PR—the very nature of this campaign has garnered incalculable levels of
“free” publicity. But PepsiCo also has engaged in calculated PR tactics,
like purchasing plugs on the Today show.
 Sales promotion—the case does not specify much in terms of classic sales
promotions like coupons or the traditional Pepsi points. But one might argue
that the grant campaign itself is a sales promotion of sorts.
 Direct/digital marketing—this is the bulk of the campaign. The core Web
site, the social media, the sponsorship on Hulu.

Grade: A, if not A+. This campaign satisfies all the criteria established in the
text for IMC. The entire campaign (every element) was designed as a whole.
Each element (contact point) delivers the campaign message. That message is
clear and consistent. The IMC strategy is designed to build customer
relationships (bringing customers in contact with each other as well as with the
brand in an interactive manner).

3. Describe Pepsi’s target audience. Is the Pepsi Refresh campaign consistent with
that audience?

The response to question 1 also answers this question. Pepsi’s message has been

“young, hip, relevant.” Thus, that message appeals to the “young and hip,” the

youth and young adult age segments are the target for Pepsi. As noted, this
 campaign is right on target because this target market is concerned about social

responsibility and is digital savvy.

4. As completely as possible, analyze Pepsi’s campaign according to the steps

listed in the chapter for developing effective marketing communication.

 Identifying the target audience—see responses to questions 1 and 3.

 Determining the communication objectives—the case does not specifically
mention objectives. But in looking at the readiness stages in Figure 14.3, it
is apparent that PepsiCo has focused on various objectives, if not all of
them. This is not simply an awareness campaign. This is a campaign
designed to move people to action. And “purchase” is not the only action.
“Making the world a better place” is the action.
 Designing the message—content (Pepsi has focused on emotional and moral
appeals), structure, and format (without specific ads, these last two are
difficult to assess. See teaching suggestions below).
 Choosing media—TV, print, Internet.
 Selecting the message source—various celebrity endorsers.

5. Will the Pepsi Refresh campaign be successful? Why or why not?

Only time will tell. Pepsi has done this campaign up right. And it is receiving
lots of recognition and kudos. However, this is a very risky strategy. The focal
point of the message is not the product itself or even the brand, but a social
cause. Pepsi is clearly trying to associate the brand with social responsibility.
But even the most notable socially responsible brands (Timberland, Patagonia)
and other companies that have engaged in socially responsible campaigns have
received mixed results. It is also difficult to track the impact of such campaigns.
The bottom line in judging the success of any campaign is whether it meets the
objectives set by the company? Certainly, sales and market share trump
everything. But if the campaign does what Pepsi wants it to do, then it is a
success.

Teaching Suggestions

This case should not be taught without checking in to the www.refresheverything.com

Web site. Look at each category, look at the different funding levels, and examine the
proposed ideas. Look at the “current leaders” and “funded ideas” tabs at the top of the
main page. Go to the http://www.youtube.com/user/Pepsi site to view ads and clips
from some of the celebrity endorsers. Use some of these to assess the structure and
format for “designing the message” above.

This case goes well with the advertising chapter (Chapter 15), with the direct marketing
chapter (Chapter 17), and with the consumer behavior chapter (Chapter 5).