I found it quite interesting that PepsiCo, which has been hit by the rising US dollars and lagging sales will refocus its spending from alternative drinks back to carbonated soft drinks (CSD).
PepsiCo announced Friday that it would renew its focus on carbonated soft drinks with a marketing campaign to be launched in 2009. That would be a reversal of its strategy to move away from soda and toward more expensive alternatives, such as sparkling juice, energy drinks and ready-to-drink teas.
Mr. Goodman said the company had been planning the campaign over the last several months as a response to the consistent declines in sales volume in the U.S.
I find this interesting because for years now PepsiCo has invested heavily in ‘Better For You’ products and promoting their Smart Spot initiative.
The main reason for this shift seems to be economics.
“We’re looking at re-engaging consumers, keeping the ones we have and making sure we’re getting additional consumers into the fold,” Mr. Goodman said, adding that a lot of carbonated soft drinks “are very affordable.”
I am not sure exactly how they will allocate their money. But from a consumer perspective, they will see more TV spots, in-store promotions and sponsorships on the less healthy CSD. Though this move may provide some short term benefits, this could potentially undo years of work trying to change the image of PepsiCo as a supplier of healthier products.
October 15th, 2008 at 10:38 am
@Malcolm, I see a good connection between this post, and the previous one. I think, in tough times, companies do step back and look at their cash cows, and existing customer base, and say “lets hang on to what we already have”.