Tuesday, June 29, 2010

Pepsi moving away from big brand marketing

As social media continues to change the landscape of traditional marketing, huge players like Pepsi are taking notice. Here is a recent release from Hufflington Post talking about some of the changes at Pepsi international

PepsiCo moves away from "big brand" marketing

NEW YORK: PepsiCo, the soft drinks giant, is seeking to move away from marketing based on a "big brand" philosophy and towards an approach that connects with its target audience in a more direct way.

Frank Cooper III, chief consumer engagement officer for PepsiCo's US beverage arm, argued that changing preferences and habits mean many traditional methods of advertising now seem outdated.

"We want to become a catalyst in the culture rather than act like a big brand announcing something," he said.

As part of this process, the owner of Gatorade and Tropicana is trying to build stronger bonds with its dedicated customers, who can often be ignored in favour of attracting new buyers.

"One of the most valuable – yet underrated – assets any company has is the wisdom and passion of its most loyal consumers," said Cooper III.

Stimulating online and offline conversations with, and between, brand advocates can help encourage positive word of mouth, a currency that is always at a premium in the FMCG sector.

PepsiCo estimates that 90% of shoppers place the most trust in recommendations from sources like friends and family, while 70% have a similar confidence in user-generated reviews on the web.

"We found that our consumers' social relationships serve as the foundation for our most effective marketing," said Cooper III.

One recent such effort was the DEWmocracy platform developed for Mountain Dew, which gave netizens the chance to pick between three potential brand extensions.

"This campaign resulted in Mountain Dew Voltage, one of the most successful product launches in PepsiCo beverage history, new consumers being brought into the Dew franchise and massive amounts of earned media," said Cooper III.

PepsiCo recently rolled out a second phase of this co-creation drive, which empowered internet users to an even greater degree by involving them in every stage of the innovation cycle.

In doing so, it has leveraged sites like Twitter, Facebook – where Mountain Dew's number of fans has grown from 150,000 to 800,000 – and a private online community, DEW Labs, which has 4,000 members.

In January, PepsiCo also unveiled the Pepsi Refresh Project, through which it pledged to give $20m (€16.2m; £13.7m) in grants to schemes conceived by individuals or groups aiming to rejuvenate local communities.

Social media has been the primary marketing channel for this initiative, which has seen three million unique visitors log on to RefreshEverything.com thus far, casting 16 million votes for 3,500 ideas.

"Rather than focusing on how to sell the product attributes to our consumers, we looked to add value to a community or a real-life social network," said Cooper III.

"While DEWmocracy focused, in a sense, on the ‘wisdom of crowds' the Pepsi Refresh Project celebrated the power of the individual."

A major benefit of this strategy is starting a two-way conversation with shoppers, who are also able to take "ownership" of Pepsi in a way that was not previously possible.

Moreover, it has "expanded" the perceptions people had about the Pepsi brand, which has long been associated with pop culture and youth but now carries an extra "sense of purpose".

In terms of the corporation's long-running rivalry with Coca-Cola, Cooper further suggested that the rise of digital media has enabled Pepsi to take advantage of its status as a challenger brand.

More specifically, he argued that while Coke's online programmes have pushed through "a clear message about what their brand stands for," Pepsi has looked to exploit a "bottom up" model.

Data sourced from Huffington Post/Econsultancy; additional content by Warc staff, 31 May 2010

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