Can Indra Nooyi Revive PepsiCo?

Prepared By :Ankit SexenaAbul Bashar mallickChanchal RoiKartik SharmaSwati Sexena

Pepsi Next• Pepsi's biggest product launch in years.

• A “mid-calorie beverage” that contains 60% less sugar than

regular Pepsi-Cola.

• The drink comes as people increasingly move away from

sugary drinks to water and other lower-calorie beverages

because of “health concerns”.

• Tag Line : "Drink It to Believe It“

• “Created for consumers who seek the rich taste of full-calorie

cola” but have “not adopted the flavour profile of a zero

calorie cola”=>The Question Is: Will Wall Street ?

A. Health Issues in North America• Of 22 industrialized countries, the U.S. has the highest

obesity statistics.

• In USA total Obesity amounts to 33.60%.

• 2/3rd of Americans over age 20 are overweight.

• Nearly ”1/3rd of Americans” over age 20 are obese.

• Bottled water accounting 9% to 11% from 2000-2010

• sports drink rose to 2.3%, from 1.2%.

• Diet soft drinks rose from 24.7% to 29.9% in last decade.

B. Nutritional Trend

C. Loss of Market Share (Pepsi v/s

Coke)

• Pepsi’s carbonated Soft

Drinks Share decreases

to 9.5 from 13.5 %. Diet

Share remain Steady at

5.3%.

• Coke is still the top

selling 17% market

share. Diet Coke follows

with 9.9%.

D. Past Failure

• In 2001, Coke rolled out “C2” and Pepsi in

2004 introduced its “Pepsi Edge”.

• Both products also were taken off the

market by 2006 because of “poor sales”.

• Problem was that consumers either wanted

‘regular soda’ or a diet drink with ‘zero

calories’- not something in between.

Indra Nooyi’s Business Strategy

• To more than double PepsiCo's revenue from nutritional

drinks and snacks to $30 billion by 2020.

• Has worked to reformulate PepsiCo's existing products.

• PepsiCo acquired a majority stake in Russian dairy Wimm-

Bill-Dann.

• Maximizing long-term shareholder value and addressing

some of society's biggest problems, such as obesity,

nutrition and health

• Taken out some of the sugar in many of its mainstream

products.

• It has added whole grains, fruits and vegetables to some

of its snacks.

• A different formula to more closely imitate the taste of a

regular soda.

• Come up with “Pepsi Next”.

• Mix of high fructose corn syrup & three

artificial sweeteners.

• Developed the cola by researching the

'taste curve' that consumers experience

when drinking a regular soft drink.

I. PepsiCo Company’s Target Customers

• Teenagers who are health conscious.

• For Overweight adults.

• For obese persons.

• For sportsmen.

• McDonald's has introduced some healthier foods over the years.

II. Other Companies Focusing on Nutrition

Media Campaign Coke v/s

PepsiCo Success of Coke :

Huge Investment in “The Beijing Olympics” : A media campaign

highlighting the country's homegrown athletes.

Sponsoring reality-TV talent contest "American Idol“ for less than

$ 10 million. "Real winner of 'American Idol': Coke”.

Failure of PepsiCo :

PepsiCo rejected “The Super Bowl telecast”.

Excess expenditure of $ 20 million on “The Pepsi Refresh Project”.

"The X Factor," another singing competition, spending up to $60

million for the sponsorship.

New media campaigning Strategy

• By Celebrity Campaigning Actress “Eva LongLongoria”.

• Pepsi NEXT content distribution

approx. 41% of Pepsi NEXT

mentions are currently coming

via Twitter, and 49% via blogs.

• Conversations 79% positive.  Pepsi’s new campaign in

which Funny or Die improv comedians select fans to

impersonate trying the new soft drink was mentioned in

17% of conversations, and those mentions were 100%

positive.

Conclusion• The Pepsi Next comes as people increasingly move away

from sugary drinks to water and other lower-calorie beverages because of health concerns.

• It is also an attempt by Pepsi to revive the cola wars against Coke and others.

• If MsNooyi’s relaunch does not work Pepsi may get a new chief executive. The company seems to be preparing for a possible change at the top

• Pepsi is hoping to win back soft drink consumers with a compromise.