Cola wars begin again

Pepsi is relaunching its cola wars ad from 1995 with a new generation twist. (Click here).
Interestingly they are comparing Coke Zero with Pepsi Max.

Interesting sections of the NY Times news article:

Introduced in Britain and Italy in 1993, and widely available in Europe ever since, Pepsi Max was not introduced in the United States until 2007. The sugarless cola, which is sweetened with a combination of aspartame and acesulfame potassium, contains nearly twice the caffeine of Diet Pepsi, and also contains ginseng.

A 2009 report by Mintel, the market research firm, said the soda’s sales had been “impressive,” even during the economic downturn, “likely by attracting price-sensitive energy drink users.”

I had earlier blogged (in November 2008) about the potential of Pepsi Max in the US market (click here) due to the attractiveness to price-sensitive energy drink users. I am pleased to see that variant doing well.

Also interesting to note, from the same NYT article:

Diet Pepsi is more popular with women, but about 60 percent of Pepsi Max drinkers are men, according to Lauren Hobart, chief marketing officer of the sparkling brands division of PepsiCo. Diet sodas popular with men, like Pepsi One, Pepsi Max and Coke Zero, which many in Europe refer to as “bloke Coke,” avoid a word to which marketers believe men are averse: “diet.” (It is a widely held view in the weight-loss industry that men are more apt to say they need to “get in shape” than “go on a diet.”)

Among the company’s sugarless brands, Pepsi Max is popular with Gen X and Diet Pepsi with baby boomers.“Boomers generally grew up drinking Diet Pepsi but Gen X has been raised with more choices, and we’re trying to provide more choices that may meet their needs differently,” Ms. Hobart said.

Its interesting how demographic (gender, age) segments have distinct choice preferences and how product names can play a big role in product choice. Brand managers at both Pepsi and Coca Cola must be busy poring through their Usage & Attitude (U&A) studies to understand the segmentation better and to better target their products... Watch out for interesting positioning moves in the cola variants!!

Update on Pepsi rebranding effort

I had blogged in late November about Pepsi's rebranding effort (click here). I had said at that time:

" I think these are bold moves that will revitalize the CSD market as well as position Pepsi favorably in the non-carbonated beverages market.

Some of the products launched by Pepsi recently are very notable (Diet Pepsi Max, flavored AMP variants). As a traditional Diet Coke fan, I was surprisingly attracted to the taste of Diet Pepsi Max. I personally witnessed a free sample promotion for Diet Pepsi Max outside Grand Central station in NYC in mid-October and the reviews appeared good. Pepsi has opened up a new segment in the CSD market by adding ginseng to cola. This will attract consumers who want a rush of energy with few calories at a price point below energy drinks."

Pepsi launched a new website called "Refresh Everything". Its Superbowl ad and the theme song also carried the same theme. Compete.com's PRO Daily Reach report, which tracks online visitors based on their panel, has reported that the Pepsi website generated significant web traffic in January (click here).

Pepsi and Coca Cola have released their first quarterly results after the rebranding was launched. Pepsi Americas Beverages (click here) reported a 6% decline in volume, a 10% decline in sales and a 16% decline in latest quarter division core profit. Meanwhile The Coca Cola Company (click here) reported only a 3% decline in volume in North America, attributing its relative CSD outperformance to its 'three-cola' strategy and the success of Coca Cola Zero.

Does this mean that Pepsi's rebranding has gone off to a bad start? Not really. The newly branded products began shipping at the end of the quarter. The true impact of the branding should be evident in this current quarter.

cheers....

The brand new face(s) of Pepsi ;-)

Pepsi announced that it is rejigging its brands at the Morgan Stanley Global consumer & retail conference last week. The key elements of the brand redesign and repositioning are:

• New logos for all the Pepsi beverage brands which supposedly leverage Pepsi's design heritage, humanity, and simplicity. The logo re-design efforts are being led by Arnell Group (the same agency that re-branded Reebok as Rbk, and Donna Karan as DKNY).
• Clear sub-segmentation of the hydration 'need state' into simple hydration (Aquafina), body wellness (Propel, SoBe), and performance hydration (G2, Gatorade). Pepsi seeks to expand ('democratize') the brand appeal of Gatorade from athletes to exercisers.
• Repositioning of Tropicana for the breakfast occasion and Trop50 for calorie-conscious consumers
• Targeting of Lipton and Tazo RTD teas at specific demographic and need sub-subsegments within the Nourish need state
• Launching hybrids of the energy drink AMP (with tea, lemon) to incorporate consumer feedback of unfamiliar taste and lack of thirst-quenching in the Transform need state

I think these are bold moves that will revitalize the CSD market and well as position Pepsi well in the non-carbonated beverages market.

Some of the products launched by Pepsi recently are very notable (Diet Pepsi Max, flavored AMP variants). As a traditional Diet Coke fan, I was surprisingly attracted to the taste of Diet Pepsi Max. I personally witnessed a free sample promotion for Diet Pepsi Max outside Grand Central station in NYC in mid-October and the reviews appeared good. Pepsi has opened up a new segment in the CSD market by adding ginseng to cola. This will attract consumers who want a rush of energy with few calories at a price point below energy drinks.

The ball is now in Coca Cola's court...