Pepsi: Promoting Nothing

Chapter 15 Company Case

Drink, Drink, Drink! Aquafina

Drink Aquafina
 Competing Companies
 Pepsi Cola and Coca-Cola have been competing
with each other for many years through
numerous taste tests and television ads.
 One of the ideas they came up with is water. In
the early 1990s Evian and Perrier were the
brands that dominated the niche and helped
establish bottled spring water’s clean, healthy
image.
 Pepsi first tried to attack this market with bottled
and sparkling water but failed. In 1994, Pepsi
had the idea of using its bottlers to filter local tap
water and offering the resulting product under
the name of Aquafina.
Background Information
 They experimented with a reverse osmosis process
pushing already filtered tap water at high pressure
through fiberglass membranes to remove even the tiniest
particles.
 This process created a water with no taste or odor. In
addition, because the process used tap water it was
inexpensive and would compete well on price with the
other spring waters in the market.
 Pepsi wanted to target everyone with a unisex,
mainstream water at an everyday price.
 Competitors cash in…
 By 1999, the bottled water market had
boomed and competitors such as Coca-
Cola decided it was time to join the market.
Similar to Pepsi they launched Dasani.
 Dasani was a bottled water filtered locally
by its bottlers but with certain salts and
minerals added to give it a fresh, clean
taste. Having the same motives as Pepsi,
Dasani was content just to build distribution
and not promote water.
 Water Wars
 By 2001, the category was on the way to
becoming the 2nd largest beverage
category.
 By 2004 both companies decided they
needed to promote their waters. This
resulted in a new front called the “Water
Wars”.
 Question 1

What markets should Pepsi target

for Aquafina?
Question 1 Answered…
 The early water products such as Evian, target
women and “high-end” consumers and
positioned themselves as expensive, upscale
products. Pepsi on the other hand wanted to
target everyone with a unisex product at an
everyday price.
 They position the product as having “nothing”!
Pepsi is referring to how the product has no
added minerals or anything and that it is pure.
However, Evian and other natural spring waters
are also positioned as pure.
Possible Target Options
 Pepsi could mimic the other water producers and target
women. But to narrow the targeting even more, it could target
the 20-35 aged, active, on-the-go, health-conscious woman.
 In response to the concerns over teenagers drinking too many
soft drinks, it could position the drink as a substitute for soft
drinks. This would be problematic for Pepsi but could be a
complementary alternative.
 Another option would be to target the 20-35 year old, active,
health-conscious man who is on the go. This might position it
against sports drinks and Pepsi’s own Gatorade.
 It could position it not as a sports drink but simply as a
convenient source of pure water for people on the go or in
situations where good water was not readily available.
 Pepsi has a difficult time finding a good position for Aquafina
that makes sense in terms of its other product offerings.
 An Aquafina bottle doesn’t mention Pepsi on the label so they
could pursue a multi-brand strategy.
 Question 2

 Whatrecommendations would you make for

advertising objectives, message strategy, and
message execution for Aquafina?
Question 2 Answered…
 Consumers already know about the product and the
category’s success has demonstrated the primary demand for
the product. The focus for advertising objectives should be on
persuading or on building selective demand.
 Pepsi wants to build brand preference and encourage both
new users and brand switching. Persuasive advertising
includes persuading customers to purchase now, to receive a
sales call, and convincing customers to tell others about the
brand.
 The first step in creating effective advertising messages is to
decide what general message the company wants to
communicate to consumers. This flows from the positioning
statement stressing the idea that the positioning statement
guides development of the marketing mix.
Question 2 Answered…
 The message should convey the product’s benefits and flow
from a “creative concept”. Pepsi problem arising because they
are positioning the product as “nothing”.
 If Pepsi wanted to target active people who drink water, a core
benefit could be summarized as “Pure water. Wherever you
are.” Although there are many pure positions, the author is
stressing the convenience of bottled water especially in out-
of-the-way places. The stated advertising appeals should be
meaningful, believable, and distinctive.
 For message execution there are a number of different styles.
Pepsi initially used a “slice of life” style in depicting “real”
people drinking Aquafina. If this were the case then selecting
lifestyle ads that depict active people using the product in
unusual places is a good method.
 Question 3
 Whatadvertising media recommendations
would you make for Aquafina, and how would
you evaluate the effectiveness of those media
and your advertising?
Question 3 Answered…
 If Pepsi is targeting “everyone” then any media would
work. This is why the company should really narrow its
focus which will help it select which media opportunity to
pursue.
 If the company targets active people with the
pure/convenient positioning stance they can use media
that serves various sports and outdoor enthusiasts.
Pepsi could advertise in hiking magazines or on
television shows that featured outdoor activities and
themes. It could develop an Aquafina Web site that
offered information on outdoor activities and
education/advice on outdoor activities.
Question 3 Answered…
 Pepsi wants to generate a trial of Aquafina and a potential
switching from other products. The print ads might contain
coupons for free or reduced price Aquafina that consumers
could redeem at stores. Each coupon could have an
identifying code so Pepsi could determine which print media
contained the coupon.
 The Web site could also have similar offers through
downloading coupons. Television ads could also include
promotional offers. All of these steps could help Pepsi
measure both communication effects and the sales effects of
the individual media.
 Focus groups and other marketing research techniques could
help measure overall brand awareness and communication
effects. Pepsi could also experiment with different promotional
programs in different market areas and compare the results
with those in other areas.
 Question 4
 What sales promotion and public relations
recommendations would you make for
Aquafina?
Question 4 Answered…
 Pepsi could promote Aquafina in grocery stores with end-of-
aisle displays and special pricing. It could give away sample
drinks in the stores. It could have contests whereby entrants
could win various promotional items like Aquafina coolers and
bottle holders. It could offer trade promotions to encourage
stores to stock and feature the water.
 They could also develop a loyalty program, In a category
where switching is so easy, such a program could be
important. Evian has a program whereby a consumer goes to
its Web site and enters a code on the Evian bottle. This earns
the consumer points that are redeemable for merchandise.
 For public relations, Pepsi could sponsor various athletic and
outdoor competitive events, such as 10K runs where it would
supply water for the participants. Community charity events,
like walkathons for a charity would also be good candidates.
 Question 5
 What recommendations would you make for
promoting Aquafina Sparkling and
FlavorSplash?
Question 5 Answered…
 Given that Pepsi has established the name and selective demand
for Aquafina, it is much cheaper for it to build off that rather than to
start over to build marketing support for another new brand name.
 Both brands stayed true to the healthy traits that were propelling
water sales (no calories, carbs, or sugar). But Pepsi designed each
to satisfy different needs within the market. Aquafina Sparkling was
carbonated, unsweetened, and came in unflavored and lightly
flavored varieties. FlavorSplash was noncarbonated, unsweetened
with Splenda, and had heavier doses of flavor, with Raspberry,
Citrus Blend, and Wild Berry varieties.
 These should be positioned as an alternative to bland water. “Add
some zing to your water” might be a tagline suitable for these
products. The target in this situation is the water consumer who is
looking for some variety.
 Pepsi can still pursue a health-orientated positioning. Promotions
aimed at health-conscious people, especially those who like to
exercise or go to health spas.
 For both products, generating trial is an important promotional task.
 Question 6

 To what extent is Aquafina’s sales growth

attributable to advertising and promotion
versus the growing dynamics of the market?
Question 6 Answered…
 By 2006, the beverage market trends had intensified. In
our opinion Aquafina’s sales growth at the moment is
attributed to the dynamics of the market since it has
boomed. However Pepsi was one of the first to
recognize that the consumer was moving to
noncarbonated products, and they innovated
aggressively. In that respect its advertising and
promotion has helped its sales growth because Pepsi is
doing better than competitors such as Coca-Cola. In
addition the consumer is becoming more geared towards
noncarbonated products.
 Only time will tell…
DRINK WATER, BE HAPPY!

The END