LIVE CLIENT – Pepsi in the 'Make My Own' Market
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.
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.
“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
Creation over replication.
Change the perception of Pepsi.
Allow customers to create their own Pepsi Experiences.
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...
Change the Pods to Cartridges:
The New and Improved Machine:
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.
Reduced original costs.
Slower entry to market.
Potential patent and product lawsuits.
Hostile relationship with SodaStream.
High risk. High reward.