Pepsi Refreshes its Branding With an Old vs. New Approach

The cola wars appear to be resurfacing as Pepsi takes a new stab at grabbing market share with its latest brand refresh. For quite some time, Pepsi has attempted to distinguish itself from competitor Coca-Cola by appealing to the younger generation with trendy campaigns (“The Choice of a New Generation” – 1985 anyone?), flashy packaging and youthful/modern beverage options. The drawback to this approach is that many of these branding shifts can convey a feeling of reactionism or impermanence to the Pepsi line of products. Is brand equity something worth sacrificing on the altar of “coolness”? Let’s analyze some of the latest shifts Pepsi has made in its branding and packaging and see for ourselves.

New Pepsi Logos

As part of Pepsi’s “Refresh Everything” campaign, all sacred cows were challenged including the company logo that has stood for so many years. The classic undulating red white and blue logo of yesteryear was so recognizable that even closely cropped representations immediately called to mind Pepsi Cola and the American classic drink enjoyed by generation upon generation.

The logo many of us grew up with.

Modern renditions and campaigns attempted to create variations of the Pepsi logo as spheres crashing through icy fields that scream “REFRESHING!!!” at first sight. Of course the attempt to appeal to a younger generation accustomed to extreme sports and energy beverages is reflected in such renditions.

But with the change of the guard and a new younger generation making its voice heard in the latest election, Pepsi rode the coattails of “Change” and refreshed its entire line of packaging and the time-tested logo with these renditions:

A shifting logo? What?

That’s right, Pepsi kept their original colors but changed their ocean wave shape to a smile. See, Pepsi makes you smile, and apparently it makes you smile more if you drink Pepsi Max as opposed to Diet Pepsi. While the intent was to modernize packaging and simplify the logo the drawback is a loss of perceived brand longevity. Shifting/changing logos are a moniker of instability reminiscent of quick to rise and quick to fall dot com companies from the late 90′s. The typography is clean, beautiful and elegant, and it does compliment the logo nicely, but I don’t think folks will buy cola based on typefaces. While the logo refresh is modern and certainly impactful – their attempts to create bold new packaging fall very flat.

New Pepsi Packaging

New Pepsi packaging

Yeeesh. Plain solid color bottles, no texture, nothing of interest. Sadly, it just feels generic. Now, to give credit where it is due, the Mountain Dew packaging has a lovely background texture, the font is modernized but not so much as to reinvent the branding, and it still uses its hallmark green/vermillion colors. While the Mountain Dew refresh is a visual success in my opinion, the others are uninspiring and flat.

Riding Coattails of Change

In addition, as other designers have noted, the new logo seems to be a rather shallow attempt to piggy-back on the success of the Obama “Change” campaign. I wasn’t originally sold on this reaction and I felt it was a bit of a stretch until I started to see the new Pepsi advertisements on the side of the road.

Yes, that’s a pretty big tip of the hat toward the youthful excitement about our new president. But then again, perhaps Pepsi is onto something. If, after all, the younger generation is enthused about hope, and embracing slogans like “change”, perhaps this campaign will indeed capture new market share for Pepsi Co. Market research is indicating that product messaging surrounding nostalgia is resonating with shoppers right now, giving them a sense of stability in times of such uncertainty. Shoppers don’t want brands that they grew up with to go away or change. I get the feeling that this campaign will fall as flat as “New Coke” did for Coca-Cola.

Throwback – Isn’t that a Genetic Anomaly?

Along with the newness of Pepsi’s brand refresh, they’ve also blasted to the past with Pepsi Throwback – an old formula of Pepsi Cola that is based on good old fashioned sugar, not high-fructose corn syrup that almost all beverages are currently made from. Even the packaging uses their classic logo that was around even before the undulating wave logo. Take a look.

The choice of the old generation.

While Pepsi Throwback and Mountain Dew Throwback are limited time offers, they give a mixed message in terms of branding. Is Pepsi trying to be modern and retro at the same time? Are they trying to appeal to the new “change” generation and not lose the older, nostalgia-driven, “grew up in the 70′s” generation of consumers? If you ask me, it’s a mixed message and it makes their brand statement even more convoluted. Additionally, “throwback” isn’t a word I would ever want associated with food.

Our Evaluation

The lesson to be learned in Pepsi’s brand refresh is that brands should make powerful, relevant statements to consumers. Launching campaigns to make such statements can definitely build brand recognition and market share, however; changing your entire brand in order to create relevance is a move that stinks of desperation. Shoppers pick up on that – especially with brands as old as Pepsi. Time will tell whether the new “smile” logo will stick around, or revert back to our old classic we grew up with.

But in the meantime, I think we can all agree that black is a terrible color for food packaging. Don’t you agree?

Black tuxedos - yes. Black drinks - no.

The Coffee Storm’s a’Brewin

I just love watching this storm brew between Starbucks and McDonald’s new McCafe drinks. I’m not sure why it fascinates me so much. Maybe because it’s entertaining to see McDonald’s (of all places) giving Starbucks a run for their customers. Or maybe it’s because I happen to like the idea of getting my coffee for less while sitting in my car at the drive thru.

Don’t get me wrong, I like Starbucks. I go to Starbucks. I can get my coffee with Soy milk at Starbucks. Starbucks is everywhere and my drink will always taste the same no matter which location I’m at.

So what does Starbucks have to fear with the McCafe finally coming to fruition in the U.S.? (The McCafe concept has been around for a while now internationally. Last May, I ordered a mocha from a McCafe in the Frankfurt airport. It even came with a tasty little European chocolate.) Is it the perfect storm for Starbucks? With consumers strapped for money in the current economy will they turn to McDonald’s for a less expensive coffee fix?

Or will consumers continue to frequent Starbucks because it’s about the experience just as much as the drink? The décor, the music, the service, the customization, the status of carrying a Starbucks cup into your morning meeting versus a McCafe cup? Starbucks claims their consumers won’t defect but are coming in less often.

McDonald’s can’t hold a candle to the status and atmosphere Starbucks offers so will they be able to gobble up any of the market share? You won’t see people heading to McDonald’s in the evenings with their friends for conversation over coffee. After all it is a fast food joint. The way I see it, McDonald’s stands to win over some morning traffic looking for convenience, those who want to save a buck, moms who don’t want to get the kids out of the car, and upgrading current patrons.

There’s a lot of speculation lately whether consumers are downgrading or buying less. Are they willing to sacrifice brand for price? Status for savings? Service for convenience? Along the same vein, will JCPenney entice Macy’s shoppers with exclusives such as Cindy Crawford Style and Joseph Abboud launching this fall? Will Walmart’s newly re-designed consumer electronics departments woo over Best Buy shoppers looking to save?

Only time will tell.

Weblinks to note:
http://www2.mcdonalds.com/mccafe/index.html?TargetSection=Products
http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsCompany
http://online.wsj.com/article/SB124139141624581429.html

Join bds mktg at the Bentonville Supplier Education Lunch

bds mktg is pleased to be presenting:

Doing More With Less: 4 New Rules to THRIVE at Retail

Bentonville Chamber Supplier Education Lunch
Wednesday, April 15
11:30-1:00pm
Holiday Inn & Suites
Bentonville, AR

Speakers:
Aimee Mozingo, VP Sales & Marketing, bds mktg
Carol Spieckerman, President, newmarketbuilders (Special Guest)

Registration:
This event is hosted by the Bentonville Chamber of Commerce. For registration details, email us at letstalkretail@bdsmktg.com.

Session Overview:
Welcome to the incredible shrinking world of retail! Fewer suppliers are providing fewer brands in fewer stores that have less floor space … and chances are, you’re being challenged to navigate this environment with fewer resources! You’ll walk away from this information-packed session armed with concrete tactics for redeploying current resources; and in ways that speak to your retail partners’ renewed and relentless focus on in-store execution. Session includes Q&A where you will have the opportunity to bring some of your toughest business challenges to our top retail strategists. The rules have changed. Will you change with them?

Themes from PMA’s Integrated Marketing Conference

This past week, the Promotion Marketing Association hosted their Annual Integrated Marketing Conference in Chicago. After two full days of insightful sessions, we noted several recurring themes.

Of course, the overarching theme was integrated marketing. By definition, integrated marketing is “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time” – according to the American Marketing Association. Meaning that brands are working to ensure that they are sending consistent and relevant messages using the most relevant media methods to reach their audience and all other plans, whether they be sales, operations or dealer, must be integrated into the marketing plan as well. Marketing can no longer be tacked on at the end of the planning process to “add some creativity” to it. Although some would argue that marketing by nature, should be “integrated,” as  Mark-Hans Richer, CMO of Harley-Davidson pointed out during his keynote presentation.

Other notable themes included:

• Value-Add – In this economy, shoppers are looking for quality and value in their purchases. As marketers, we must demonstrate a product’s value to the shopper in order to drive purchases. Product differentiation, creativity, and innovation all create value in the shopper’s eyes. And only those brands that can prove it, will stay in the game.
• Power of People – At bds mktg, we deeply believe in the power of people to bring brands to life at retail, both by activating brands to shoppers and retailers, and by inspiring your corporate employees. This point was emphasized by many during the conference.
• Shopper-Focus – More than ever, today’s brands must be truly shopper focused. We must understand how shoppers live their lives. What life stage are they in? Simply knowing a demographic won’t cut it any longer.
• Social Media – Social media is here to stay. Shoppers have embraced social media, they participate in it and so must we. Brands must find out where their shoppers are online and discover how they can target them, according to Penry Price, VP of Advertising Sales for Google.
• Creating Content isn’t Enough – Mr. Price also stated that “if you build it, they won’t come.” Implying that marketers can’t just produce content and expect customers to find it. We are all aware that shoppers are overwhelmed with messaging. When producing content, we need to decide where and how we are going to push it out to our audiences.
• Experiential Marketing – In this new day of shopping, another key way for brands to connect is through experiences. David Brot, SVP of Leo Burnett, explained that experiential marketing is an essential method of cutting through the “visual pollution” of over-messaging. Brands such as Apple and Jeep are finding ways to offer more than just a product through experiences such as the Apple Genius Bar and Camp Jeep.

At the end of the day, shoppers are shopping differently and so we must learn to market differently – or risk being left behind!

Questions to Ponder – Part 3 of 3

This is the second posting of a three-part series on our Questions to Ponder. Review part 1 and part 2 for more information.

How fast is retail moving and will it get even faster?

Retail is moving so quickly, specifically with fast program turns, when will it stop? Will it get even faster? Is that possible? Product development windows are shrinking so fast that is has to stop somewhere. Eventually the pendulum will have to swing back to more realistic program turn times. Where will it go from here and how will brands be executing retail programs in future?

Questions to Ponder – Part 2 of 3

This is the second posting of a three-part series on our Questions to Ponder. Review part 1 for more information.

What is the role of independent retailers in my overall brand strategy?

As we watch the retail consolidation with major players such Circuit City and Mervyn’s closing their doors, one has to wonder if the role of independent retailers will shift. Will independent retailers make a comeback? Many large retailers have become brands in and of themselves resulting in less brand control at retail for vendors. Think of Target, Macy’s and Best Buy. For vendors managing their brand strategy, independent retailers may take on a more important role in their distribution as they often allow brands more control in-store.

Questions to Ponder – Part 1 of 3

Following the Let’s Talk Retail^SM seminars that have taken place so far this year, we thought it would be valuable to share with you the top 3 questions that were asked by the industry leaders who attended. We are all facing the same challenges in the retail industry, and we’d like to hear your thoughts…

What should I do about the rapidly changing world of print media?

This issue was raised multiple times. As ad pages are cut back and print advertising moves to digital, marketers/vendors/brands are questioning where to spend those funds. But which alternative spends will have the same impact? While traditional print media may seem archaic, it’s the way significant numbers of shoppers prefer to get content. How do you meet the needs of your retailers and shoppers by participating in print advertising, such as weekly circulars, while also investing in new advertising methods that will be more relevant in the future?

Study on Consumer Purchasing Behaviors – Part 3

This is the final posting of a three-part series on our Street Intelligence^SM report titled Selling Differently: The New Value Equation at Retail. Review part 1 and part 2 for more information.

Key Finding 3: Branding still matters – but how?

One of the questions many product managers are asking in the current electronics marketplace is whether the brand of the product matters to the shopper.  What we find, is the importance of brand is more so for retail sales associates versus for shoppers. In every instance shoppers place brand reputation significantly lower on the list than price/value, or features, and overall quality. When questioned if brand really matters, 85% of sales associates responded that brand does matter when purchasing a television; 77% said the same of buying a portable GPS and 72% agreed that brand really matters when buying a digital camera.

To request a copy of the complete report titled Selling Differently: The New Value Equation at Retail (The Retail Shopping Experience for Digital Imaging, GPS, and TV), contact bds mktg.

Study on Consumer Purchasing Behaviors – Part 2

This is the second posting of a three-part series on our Street Intelligence^SM report titled Selling Differently: The New Value Equation at Retail. Review part 1 for more information.

In our last posting we discussed how downgrading to less expensive purchases, while a concern in this uncertain economic time, is not yet a significant issue. Another finding of this study revolves around placement in the store and its effect on recommendation rates.

Key Finding 2: Placement can impact recommendations.

Whether directly impacting or not, the results of the shopper interviews show a clear link between the visibility of the brand on the show floor and the rate of recommendation.  The message to the brands is clear; make doubly sure to secure top seating for your product, as the sales associates will likely reinforce this placement.

To request a copy of the complete report titled Selling Differently: The New Value Equation at Retail (The Retail Shopping Experience for Digital Imaging, GPS, and TV), contact bds mktg.

Study on Consumer Purchasing Behaviors – Part 1

As part of our Knowledge Services, bds mktg provides Street Intelligence^SM programs for our clients that capture on-the-floor retail insights. In a recent proprietary study, bds explored consumer purchasing behaviors and the impact of in-store marketing activity.

The study, titled Selling Differently: The New Value Equation At Retail (December 2008), examines interactions between shoppers and retailers and evaluates if and how consumer purchasing behaviors are changing in light of the current economic conditions. With the Consumer Electronics marketplace facing perhaps the most significant downturn ever, this study assesses why consumers are, or are not buying, what the importance that brand has on their purchase decision, and also provides insights and recommendations to be successful in 2009.

In this 3 part series, we reveal key findings from this study:

Key Finding 1: Downgrading is not yet an issue.

While the majority of shoppers still place the price/value equation at the top of their purchase consideration list, there has not yet been a significant incident of downgrading taking place in consumer electronics retailers. On the contrary, in some categories retailers are actually upgrading shoppers in an effort to boost the price/value equation with feature-rich products.

To request a copy of the complete report titled Selling Differently: The New Value Equation at Retail (The Retail Shopping Experience for Digital Imaging, GPS, and TV), contact bds mktg.