LIVE CLIENT – Pepsi in the 'Make My Own' Market

 

The Gist:

Presented a marketing plan showing Pepsi how to use its 'creation' positioning within the MMO market to overcome the consumer perception that Coca-Cola is a better brand. 

The Ask:

Develop a new marketing strategy for Pepsi Homemade that is compatible with its partner SodaStream.

 

RTD vs. MMO:

The 'Ready to Drink' section of the beverage industry is what you normally think of when you think of most beverages: bottled and canned drinks. On the other side of the beverage industry, you have the 'Make-My-Own' section. The difference between the two sections is that the latter involves the customer. 

 

Within this MMO industry, the products fall under one of two positions: one of replication or one of creation. For right now, let’s focus on Pepsi and Coca-Cola. Coca-Cola is about replication, while Pepsi is about creation.

 
Replication vs. creation chart.png
 
“THE ADVANTAGES OF AT-HOME SOFT DRINKS MACHINES LIE, NOT IN REPLICATION, BUT IN EASIER AND MORE DIVERSE PRODUCTION AND CONSUMPTION” – Euromonitor Research, April 2014
 

The positioning: 

Creation over replication. 

 

The Objective: 

Change the perception of Pepsi. 

 

The Strategy: 

Allow customers to create their own Pepsi Experiences.

 

The Goals: 

Goal #1: Higher level of customization

– 68% want to have more control of the amount of syrup used
– Encourage creation
– Provide more opportunities to create

Goal #2: More control of what goes into their bodies 

– The "Better-for-You" mentality
– Achieve transparency 

Goal #3: Create a new brand defined by your customer

– Give customers something to own
– Establish a dialogue

Goal #4: Price and cost control

– Reduce product limitations
– Achieve cost efficiency

 

We came up with two options...


Option 1: 

The Sleeve:

 

The App: 

 

The Microsite: 

 

Option 2: 

Change the Pods to Cartridges:

This will save storage space, and will match the intuitiveness of another aspect of daily life: changing printer ink cartridges. 

This will save storage space, and will match the intuitiveness of another aspect of daily life: changing printer ink cartridges. 

The New and Improved Machine:

Encourage experimentation and start a conversation by making it as easy as possible to share recipes. 

Encourage experimentation and start a conversation by making it as easy as possible to share recipes. 

A Customer-Owned Brand: 

 

 

THERE's STILL ONE BARRIER...

 

The 3 reasons why sodastream is too risky of a partner:

1. a poor public image that could only hurt pepsi

2. A clash in cultures & company beliefs

3. mismanagement of core business functions   

 

Three Possible Paths: 


Path 1: The Sleeve Option (the 'quick buck' path)

Utilizing the tactics in option one to make the most money possible without a long term or sizable investment.

Low risk. Low reward. 
 

Path 2: Purchase SodaStream

PERFECT TIME TO PURCHASE: 

Market cap is around $300 million.

A healthy buyout premium would be another $200 million.

Total, this is 1/4th the original rumored price tag of $2 billion.

PEPSI CAN MAKE THIS MARKET PROFITABLE AGAIN:

Global branding expertise and brand equity. 

Retail channel strength and price control. 

House of brands.

Medium risk. High reward.

 

PATH 3: PEPSI GOES ITS OWN WAY

Become a direct competitor against SodaStream by releasing its own machine and line of Pepsi Yours products. 

PROS:

Reduced original costs. 

Complete control.

 

CONS:

Slower entry to market. 

Potential patent and product lawsuits.

Hostile relationship with SodaStream. 

High risk. High reward.

 

Let's make Pepsi, Yours.