Pepsi Blue By: John Dehmardan

Pepsi Blue Global launch of a new brand identity and logo $500 million investment Project Blue: Blue vs. Red

PepsiCo $30.4 billion in revenue Ranked 20 in the Fortune 500 Revenues - 35% beverages - 37% fast food restaurants - 28% snack foods

PepsiCo US Beverage sales rose by 7% - Volume growth: 25% - Price increases: 75% International sales rose by 14% - Volume growth: 45% - Price increases: 55%

PepsiCo Pepsi, Diet Pepsi, Pepsi Max - 40% of US beverage sales - 70% of international sales International sales - 29% of total beverage revenue - 18% of beverage operating profits

Rivalry 1930’s :Price oriented campaign - Twice as much for a nickel 1970’s :Taste superiority - Pepsi Challenge - 20 million took the challenge 60% chose Pepsi over Coke

Rivalry 1980’s: image advertising -The choice of a new generation -Teenage target

Rivalry Pepsi Coca-Cola 27% of total RV 23% of total VS Advertising - US: $500 M - Int: $200 M Coca-Cola 35% of total RV 30% of total VS Advertising - US: $1.2 B - Int: $600 M

Rivalry Coca-Cola: Broader and more traditional positioning - Reintroduce classic contour bottle Always Coca-Cola - Sports event sponsorship - Celebrity endorsements Youth market

PepsiCo Brand identity changes (7) Old signs alongside new ones - Different interpretation by independent bottlers - Inconsistent presentation of the Pepsi brand to consumers

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Brand Identity Lander Associates Worldwide photographic audit of Pepsi’s brand presence -2000 photographs from 34 countries

Brand Identity Inconsistencies and lack of integration No particular color except perhaps white Did not express the energy and core essence of Pepsi -Did not work well on the sides of trucks or vending machines -Cans look like motor oil

Brand Identity Blue as a much stronger color than white - Consumers viewed it as modern and cool - Communicates refreshment - Exciting and dynamic

Design: Strengthen the Brand Identity 1- Develop a flexible design 2- Establish blue as Pepsi’s dominant color 3- Develop a mnemonic device 4- Create a modern, even futuristic, look and image to contrast with Coke’s traditional positioning

New Design Unitalicized logotype - Added boldness and stature Reversing colors The ball became globe - Showing only a quarter Larger-than-life personality Futuristic looking

Bahrain Test Project blue launched initially in Bahrain 12 week program Newly designed cans and bottles distributed throughout the city Blue project implemented in one-half of the city

Bahrain Test New advertising slogan: “ New look. Same Great Taste,” Television and print advertising executions during the test was sustained at previously planned levels

Bahrain Test Tracking research was conducted before, during and after the test. Measures of brand attitudes, sales volume and market share increased. No change in taste: 70% Taste changed: 30% (70%: better )

Why Bahrain? Why Project blue launched initially in Bahrain? 1-Experimenting with blue backgrounds 2-Franchisee critical of PCI headquarters 3-Pepsi sales dominated Coke’s by 3 to1 4-Two separate islands enabled PCI to conduct a controlled field test

Global Roll out Positive results persuaded PCI executives that their enthusiasm for Project Blue is well-found Recommendations : Project Blue should be launched along with a creative and expensive communications program to support the worldwide launch

Global Roll out Recommendations : Blue be rolled out in markets accounting for half of brand Pepsi’s international sales volume 20 billion cans and bottles reach store shelves by the end of the year

Global Roll out $500 million marketing program to support the worldwide launch Systemwide conversion of bottles and cans, Coolers and vending machines, and trucks “Change the Script”

Global Roll out Advertising (April 1996) to be seen by 300 million people in 20 countries in first four weeks Television spots featuring celebrities

Global Roll out Public relations initiatives: - Ten city tour of Europe and the Mideast by Concorde jet adorned by Pepsi’s new colors - Sponsorship of the Russian Mir Space Station: “Even in Space- Pepsi is Changing the Script”

Will It Proceed As Planned? Some members impressed but concerned about the magnitude of the proposed communication campaign. Others argued the sales and share trends vs. Coke gives Pepsi no choice. Big new idea is needed.

Will It Proceed As Planned? Concerns about Bahrain results -slower roll out on a region-by-region basis -launch blue in lead market in each region to motivate the other bottlers in the region to follow

Will It Proceed As Planned? Logistical nightmare: get everybody on board US organization’s willingness: not-invented here syndrome Situation with Latin America bottlers: significant capital investment

Questions?