Integrated Marketing Communications

Stephan FloydJason SemalesBrandi Wease

Product IntroductionPepsi Natural is a new, natural product offering that

serves as a healthier alternative to the traditional Pepsi.

Replaces the high fructose corn syrup traditionally found in Pepsi and other soft drinks with natural cane sugar.

Ingredients include: cane sugar, kola nut extract, apple extract, coffee leaf, sparkling water, plain caramel coloring, tantaric acid from grapes and gum arabic from acacia tree.

Pepsi Natural: Sold in Four Packs

•Pepsi Natural is running in ten test markets throughout the United States

•Its British cousin, Pepsi Raw, is running in seven test markets

•Pepsi Natural in Mexico has had a full product launch.

Company Profile PepsiCo International is one of the largest

international consumer foods companies.

Currently, the company boasts annual revenue of $43 Billion dollars and employs over 198,000 people throughout the world.

Soft Drink IndustryIn 2008, the soft drink industry in the Americas was

valued at $63.2 Billion.

The market value is expected to shrink to $61.4 Billion by 2013.

In the United States, Pepsi dominates 28.8% of the soft drink industry’s market share.

Past advertising and marketing brand building efforts have established few, dominant leaders in this industry, where competition is fierce.

Major Competitors (Direct)

ZeviaOogavéRed Bull ColaBoylan’sCoca-Cola

Major Competitors (Indirect)

Hansen’sJones’Izze

All these competitors are independent companies lacking the strong support and distribution power relative to Pepsi.

Current Marketing Mix-AbroadPepsi Raw in UK, already has print ads

and promotional efforts made through food festivals.

Pepsi Natural is also in Mexico and has already seen the implementation of an IMC campaign.

Current Marketing Mix-AbroadPrint Advertising Campaign for British

version of Pepsi Natural, Pepsi Raw:

Current Marketing Mix-Abroad

Example of Mexico’s Pepsi Natural advertisement.

Market Segmentation, Targeting, and Positioning

Because the product is in the introductory stage in the United States there has been little promotional effort or STP.

Only in major metropolitan areas to test the attractiveness of the product to the American Public.

Product is currently being positioned as a natural alternative to regular Pepsi or other soft drinks.

Current Marketing Mix-Domestic

In 2008, Pepsi spent $177 Million on media U.S. media expenditures (not including online media).

ProductPricePlacePromotion

Integrated Marketing Communications

Market Segmentation, Targeting, and Positioning

Concentrated segmentation strategyBenefit segmentationAttractiveness

IdentifiableSubstantialReachableResponsiveProfitablePositioning – new, unique, accessible all natural

soft drink from a trusted, popular, well-known brand

Relevant Consumer Behavior

The VBN (Value Belief Norm) theory.

Theory suggests that consumers begin purchasing organic foods because of a belief that these foods are better for their health.

Relevant Consumer BehaviorConsumer involvement typically higher for organic

foods

Word of Mouth appears to be the most important source of influence on the purchasing of food products.

Consumption behaviorsDespite purchasing natural and organic brands

consumers lean toward natural product offerings from more mainstream and trusted brands.

Relevant Consumer BehaviorDespite the weak economy, organic consumers

are still buying relatively more expensive natural products than unnatural or processed products.

To do this, these loyal consumers are changing their buying habits, including using coupons.

46% of natural foods consumers say that they will buy the same amount of natural foods after economy rebounds and 36% say they will buy even more.

Target Market InformationBasic demographic structure:

Market expanding into various demographic groups and ages

Parents that wish to feed their families unprocessed foods

College-educated, financially stable consumers

Women also buy organics more

Target Market InformationReasons why this is an effective target

market:Recent trend increasing interest and

desire for natural and organic foods, due to heavier emphasis on healthier lifestyles.

Backlash over High Fructose Corn SyrupHeightened public health concernsEnduring Green movement

New IMC CampaignPepsi Natural nationwide product launch.

Primary objective : to raise brand awareness and loyalty among organic consumers.

General IMC ObjectivesCommunications Objectives

Increase product awareness/recognitionCreate unique product imageTo build consumer loyalty

Sales ObjectiveTo obtain significant market share within the

natural soda marketEmphasis on print ads and interactive media.

Communication ProcessInnovation Adoption ModelStage in model: to raise awareness = primary

focusCognitive stage

Desired Response – by trying, buying, purchasing, becoming loyal, positive word of mouth, repeat purchaser.

Implications – Principle focus of campaign to raise awareness to promote purchase and positive word of mouth.

Communication ElementsSource, message and channel decisions

SourceMessageChannel

Basic creative strategy theme: emphasis on natural aspect of drink, simplistic message, use of natural, earth tone colors.

Appeal and Execution StyleUse of natural colors to emphasize natural

components of the productInformational appeal – info about

ingredients and why product is beneficialFeature appeal Straight sale executionImagery execution

Media ObjectivesObjectives

To create product awareness Encourage trial

Use of broadcast and print media.

Media ScheduleContinuity

Broadcast MediaUse of TV and Radio and Why?

Using TV commercials because they reach a broader audience which supports a national product launch, cost effective, selectivity

Specific Programs and Why?Stations that focus on health and parenting.

Use of 15 second TV commercials

Broadcast Media

Advertisement Mock-Up (See PowerPoint)

Print MediaPrint ads in organic/natural lifestyle publications

Natural Health Magazine, Natural Home, Natural Solutions

Vegetarian Times

Print ads in organic/natural lifestyle publicationsParenting, Family Circle, motherhood oriented

publications

Print Media

Support MediaHigh reach and high frequency media.

Breaks through clutter and catches attention.

Difficult to avoid.

Use of outdoor and transit media. BillboardsBio-Diesel Buses

Support Media

Support Media

Support Media

Direct & Interactive MarketingDirect marketing not used because of issues

associated with product/brand image.

Pepsi is a well known and respected brand.

Development of multifaceted website. Higher education, higher income Coupons

Direct & Interactive Marketing

Sales PromotionsSales Promotions Objectives

No risk incentiveShapingBuild brand equityTarget specific segments

Coordination with other sales promotion elementsPairing with coupons

Sales Promotions

Public RelationsNo need to manage brand image

Already extensive press coverage on new, high profile all natural offering from a major soda manufacturer. (no need for buzz)

Talking down to consumer, already aware of benefits of organic products, high product/purchase involvement.

PR has the potential of communication problems with the misinterpretation of the source message.

Personal SellingReserved for high profile, high involvement,

more expensive products with several alternatives

Limited reach

Relevant International, Social Issues

High Fructose Corn Syrup backlash?Sugar, though less processed and ultimately

more natural, is deemed just as harmful as HFCS.

Potential to be labeled as “trend product.”

Review of productReview of Target MarketReview of Marketing Mix