Pepsi Slips To Number 3

2010 Coke and Pepsi Market Shares, courtesy of adage.com

A few weeks ago, Beverage Digest posted the latest market share statistics for the US carbonated soft drinks (CSD) category and we found out that Pepsi had slipped to number 3 (see stats here). Industry analysts had predicted that this market share change was coming as Pepsi had lost share in the last few years, as Coca-Cola has stayed the course with their beverage unit and maintained marketing Diet Coke in traditional media (TV/print/radio) while Pepsi started promoting other beverages in traditional media, and invested in other forms of marketing

It seems that as Pepsi sought to maintain a balance beverage portfolio by promoting other beverages (such as Pepsi Max, Sierra Mist, Aquafina Plus10, Mtn Dew, Gatorade, etc) that they forgot to keep promoting Pepsi itself.  Their NFL sponsorship was recently changed from Pepsi to Pepsi Max, Superbowl advertisements followed the same course, and even the main TV commercials started promoting a Coke Zero vs. Pepsi Max cola war instead of focusing on Coca-Cola vs. Pepsi.

Was this the right decision for Pepsi – to focus on other beverages instead of their core product?  Despite Pepsi’s balanced portfolio making them more formidable to withstand declines in any one category if they promote other products, the CSD category is still the largest beverage category.  Even within the CSD category, promoting Pepsi Max, Mtn Dew, and Sierra Mist helps these brands gain traction and spread their risk if any one product sees slow sales.  However, CSDs as a category is in decline, and Pepsi has been declining more than the category.  And according to the Beverage Digest rankings, it’s not just Pepsi that lost market share, it’s also Diet Pepsi.  Your two core products are in decline, while your competitor’s two core product maintain market share in a declining market, meaning they now own a bigger share in the CSD category.  Even Sprite, another core product for Coca-Cola passed Diet Pepsi in the market share rankings.

Although this decline cannot be fully traced back to any one particular issue, I would answer that Pepsi’s decision to experiment  with their marketing and promote other brands was a bad decision.  The core of your business where you make the most money is still Pepsi and therefore you should be promoting Pepsi.  In the largest marketing venues, Pepsi should be promoted and not Pepsi Max.  Though whether they should allocate more spend at the expense of other brands is still questionable, promoting their core product more and through effective traditional media is a must.

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Coca-Cola Launches New Smaller and Slimmer Minicans

222ml Coca-Cola Classic - courtesy of canmuseum.com

Coca-Cola has recently made a decision to launch the 222ml 90 calorie slim-line mini-cans to replace their 100 calorie 237ml minicans.  Unlike the 237ml mini-cans, the slim-line minis will only be available in Coke Classic, Diet Coke, Coke Zero, and Sprite.  That leaves out Canada Dry Gingerale, unless it is confirmed that they will also be making the gingerale in the 222ml cans as well.

These cans are an interesting development on multiple fronts.  For one, this new package size will attract the attention of  calorie-conscious consumers – those that want the beverage but still within a low-calorie setting.  Much like how 100 calorie snacks were the craze a few years back, the same calorie controlling options has slowly permeated the beverage industry.  Not that low-calorie beverages are anything new, but these extra 10 calories has strong psychological implications for consumers.  Consider how 99cents is considered drastically less expensive than one dollar because it is just under the dollar threshold.  Similarly, 90 calorie beverage alerts the consumer psychologically that they are taking in minimal calories – once you reach 100 calories, you are in a whole new calorie threshold.

Another interesting point is the packaging itself.  The cans themselves are not only slim and petite, but the also simple with red and white.  That said, the message that consumers see is the white script of the brand/product, and the nutritional information when the turn the can around.  This product reinforces the Coca-Cola brand equity as they condition consumers to only rely on the color to locate and pick up the product.

Third of all, what happens to Canada Dry Gingerale?  The 237ml Canada Dry Gingerale sells fairly well as store clerks indicate to me that it moves faster than Coke Zero, Sprite and sometimes even faster than Diet Coke.  Does this mean that they continue making the 237ml Canada Dry and stock it on the same shelf space beside the new 222ml Coca-Cola products?  Or does some other manufacturer now make this package for Canada Dry?  Or worse yet, is this a package that will be discontinued?

222ml Coke Mini Moment - courtesy of strategyonline.com

In any case, it is noted that the positioning of the new slim-line mini-cans are targeting young mothers and primarily Canadian women over the age of 30.  Print advertisements along with point-of-sale displays will start showing up in grocery stores (such as Loblaws, Sobeys, Save on Foods and Walmart) starting in April and continue throughout the year.  That said, for those that really like the 237ml minicans, pick them up while you can because once they’re gone from the shelves, they will put the new slim-line 222ml minicans in their place.

glaceau smartwater: Jennifer Aniston Has a Sex Tape

Jennifer Aniston doesn’t really have a sex tape, but the original name for her video ad that she made for smartwater was named a sex tape, that’s all.  glaceau smartwater has been using Jennifer Aniston as their spokeswoman for some time and the water company has been known to come up with entertaining advertisements for some time now.  This new video shows their creativity in getting people’s attention again.  The video features a kid lip-syncing a popular song, puppies, babies dancing, double rainbow plug, groin kicks, and cheesy porn music – each element being successful in getting viewer’s attention online lately, all rolled into one satirical video.  And then it finishes reminding you about smarrtwater being pure.

This ad’s been getting a lot of negative attention from the internet viewers, saying that the ad isn’t creative and tacky.  The claim is that the video doesn’t really have any creativity – all it does is have a celebrity spokeswoman and an attention-grabbing video title.  However, how do you define the success of any advertisement, wouldn’t getting attention be deemed successful?  Looking at alternate video sensations, aren’t Old Spice, Paul Vasquez (double rainbow guy), and Volkswagen’s Mini Darth Vader successful because of their ability to get your attention?

If we were to look at it in the traditional way of AIDA (attention, interest, desire, action from the university advertising textbooks), this video may be considered a success.  It has gained instant attention and interest given its title and has many people searching out the video online to view it to find out what this “Jennifer Aniston sex tape” is all about.  On the desire spectrum, this video may fall short because in the entire video only about 30 seconds are spent to tell you what the product is all about (purest tasting water there is).  For action, the sales results will measure will show how successful this ad is with sales before and after the video ad.

Another way to look at it, despite negative attention is the overarching goal of advertising.  Companies advertise to get your attention and peak your interest in their product, and increase it’s share of mind.  The video has shot up internet video ranking charts and has more people aware about the product; not sure about knowledge of the product’s benefits itself, but it has certainly made more people know it’s out there.  So if that’s the main goal of advertising, I would say that it’s pretty successful.  If smartwater were executing a multiple-phased ad campaign, then this would definitely be phase one where people are made aware of the product itself (and then later phases educating the consumer on the product’s benefits on how pure the water is and how it’s been manufactured).

Only smartwater’s marketing guys can truly tell you if this video has been a success or not, but the video has already gotten 6.5 million youtube views in a little over a week’s time.  Not too shabby.

update: Advertising Age says that the Jennifer Aniston video ranks as this week’s top viral video (most unique views).   See article and ranking chart here.

Dr Pepper Joins The Low-Calorie Soda War

Dr Pepper recently launched Dr Pepper 10, joining Coke Zero and Pepsi Max in competing for consumers’ dollars in this low-calorie beverage market.  Launching is six American markets (Denver, Colorado Springs, Des Moines, Kansas City, San Antonio, and Austin), Dr Pepper markets this drink as only for men.

The main points of differentiation for Dr Pepper’s low calorie option is that Dr Pepper specifically targets men and only contains 10 calories (per 355ml serving) and is outwardly targeting men.  While Coke Zero and Pepsi Max have strong sponsorships with male-oriented events (Nascar and NFL, respectively) and advertise with a strong focus on male consumers, they have never out right said that it’s a beverage for men.  Doing so would alienate a large of female potential consumers.  Yet Dr Pepper sees that this may be a potential niche market that they can own.  Furthermore, Dr Pepper says that having 10 calories gets the beverage’s flavor as close as possible to the natural flavor of Dr Pepper.  So will this work for Dr Pepper?

Given men’s association with dieting, marketing this beverage would be quite a challenge – if they had actually included the word “diet” and cut out all calories.  By leaving some calories in order to closely replicate the Dr Pepper taste, they have also created their own market for low-calorie soda options.  Recognizing that they are joining the low-calorie market late and having to deal with all the competition from Coke Zero and Pepsi Max, Dr Pepper was smart in creating their own market to reach out to consumers.  While Coke Zero and Pepsi Max have both been successful as zero-calorie options, there may be still male consumers out there that perceive this as a diet beverage and stick with the regular Coca-Cola and Pepsi.  Though these consumers may be brand loyalists, Dr Pepper 10 might appeal as an alternate option to those that consider a soda without any calories is impossible, or even that there is a different taste.

Though currently only in test markets, Dr Pepper’s Director of Marketing Dave Fleming says that Dr Pepper 10’s marketing budget is significant, and will give off the feel that it is a national launch in those six test markets.  A Dr Pepper 10 branded trailer will appear in these test markets at sporting events or car shows offering male consumers the opportunity to play video games and watch TV.

Dr Pepper 10

As it stands, the low-calorie soft drink market is growing in its importance while the overall carbonated soft drink category is stagnating.  This sub-category of low-calorie sodas may give the category the boost that it needs so it will be kept top-of-mind with consumers that are looking to refresh themselves (versus water, energy drinks, tea, and juices).  No word on whether it will come up to Canada, but if Coke Zero and Pepsi Max are any indication, Dr Pepper 10 will see at least moderate success that justifies its need to be launched in Canada.