Wednesday, March 25, 2009

Pepsi to steal the thunder: Fizzier Pepsi Vs ThumpsUp??

"A PepsiCo spokesman said the base formulation of the beverage hasn’t been changed while increasing the amount of carbon dioxide to make the drink fizzier" read the e-paper on economic times.. and the first thing I did was to try calling some of my project mates of IMT.. But, their numbers are not available and I turned towards my blog to share it with.

"Looking into the developments that can be made within the domestic resources would be: To launch some product which would capture the PCI share. There had been some differences between the CCI and PCI products (which we came to know in our research) due to which people are attracted towards one’s products and dislike the other products. CCI needs to concentrate upon bringing a new brand or drink (for ex: a drink with less fizz with almost same taste of present Coke) that would capture PCI customers. This sort of improvements would let our customers remain with us and capture the opponent’s customers."
"Ohh!! That's a wonderful strategy and a good suggestion indeed", said the executive from Vodafone. I thought, I have impressed him with this point but later on I screwed up big time by giving confused answers to some of those questions he asked me in the interview.."

I wonder why someone hasn't paid attention to this point 2 years back when we did it as an academic project for the subject Marketing Management-II?? Neither my team mates recognized it nor my Professor of marketing. The only one person who recognized it was the executive who came from Vodafone for final placements at IMT, Ghaziabad during our batch placements. And now seeing Pepsi going on similar lines of strategy makes me feel that actually in reality, "My brain does work sometimes :-) "

One of my strong recommendation in the academic project done on Coca-Cola India for the Marketing Management-II subject was to "Introduce a drink with less fizz and a bit of high sweet content with respect to ThumsUp or Coke as a new brand to capture the market share of the drink Pepsi.." and this is what pepsi had been trying to do these days in some parts of Indian Market. It has introduced fizzier pepsi in the market of Andhra Pradesh to pull out some share of ThumsUp. I finally thought though something has been happening in reality to what my thoughts were at some point of time... But, I feel that Pepsi can do it better that what it is trying to do with this decision.

When you know what's attracting customers towards your competition there are two ways to pull them back to you with one basic strategy behind it. Basic strategy is "To provide similar to what the competition is offering or to provide something better than what competition is offering." And the two ways to do it are "Make your brand offer the same proposition" or else, "Introduce a new brand that can provide that proposition." I think the second way will be better for Pepsi because of a simple reason.

The simple reason being, "There had been some differences between the CCI and PCI products (which we came to know in our research) due to which people are attracted towards one’s products and dislike the other products" and that this customers of Pepsi is a considerable chunk." Customers who prefer Pepsi to ThumsUp do so because they have found some connection in their tastes like less fizz, the amount of sweet content(in terms of taste), etc. So, now the strategy should be to attract new customers while retaining those old ones who are a considerable chunk. This can be done better by introducing a new brand with more fizz and a different sweet content, etc.

Yes, there are negative effects too if you introduce a new brand or some objections to it too. The cost of launching a new brand, the cost to company if the proposition fails in the market, etc.. But, if the product fails wouldn't it affect the image of Pepsi to an extent even if they withdraw fizzier Pepsi later on?? And if the cost of launching a new brand is too costly for Pepsi in these recession times why can't they start it with a limited edition which might have been called "Pepsi+" or "Pepsixyz"?? This might have helped them in covering up the extra costs to launch a new brand, etc and make sure that the product is placed well in the market.


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