Pepsi ChallengePepsi
Pepsi is picking a fight.
The cola maker is renewing a campaign from the heyday of the cola wars. In Canada this summer, the company will be kicking off a new instalment of its Pepsi taste challenge – a blind taste test meant to show consumers' preference for its fizzy drink against competitor Coca-Cola – targeting 1.5 million Canadians.
The effort is part of a global push by PepsiCo Inc. , which announced in February that it would increase its marketing budget this year by $500-million (U.S.) in an effort to build the brand. This month it also launched its first ever global campaign, called "Live for Now" including ads in the U.S. featuring rapper Nicki Minaj.
"Worldwide, the carbonated soft-drink category is a hyper-competitive category," said Robb Hadley, director of marketing for Pepsico Canada. "We need to make sure our big businesses are healthy and growing."
The boost in marketing spending comes after a strategic review by the company. The Pepsi brand will be one of the major targets of the increased marketing activity, along with Mountain Dew, 7UP, and Gatorade as well as chip brands such as Doritos and Tostitos.
Pepsico's flagship soft drink is in need of rejuvenation. While Pepsi is sold around the world, it has a 10-per-cent global market share globally compared with Coke's 25 per cent, according to Ad Age.
Coke has said it would not increase its marketing spending in response to Pepsico's new aggressiveness. Buckingham Research Group analyst Alice Beebe Longley wrote in a research report at the time that the dominant soft-drink maker is expected to continue to gain market share, despite Pepsi's growing investment.
So Pepsi faces the challenge of putting itself in front of consumers. In Canada, it's using an old tool – the taste challenge has been conducted with roughly nine million people in this country since it was first launched in 1976.
To bring it into this century, Pepsi is shipping a truck across Canada with five Samsung devices that are like giant tablets – touch-screen tables measuring roughly 3 feet by 4 feet. The tables make the taste test more shiny and technological; rather than revealing the can picked, the screens will show consumers their choice. But they also plug the challenge into the increasingly crucial platform of social media. Where Pepsi could only hand out taste challenge t-shirts and buttons in past years, now the moment people do their taste test, the table will send them an e-mail with their results and offer them the opportunity to instantly share with friends on Facebook.
Using such an old campaign was a concern for Pepsi. To test whether it is still relevant, the company did small tests at the Grey Cup and the World Junior Hockey championships last year, and found demand was high for people to line up and take the test.
"That iconic idea of two heavyweights going head to head is something that captured the imagination," Mr. Hadley said.
But the heavyweight bout is happening in a very different world from the one that existed in 1976. There are far more types of bottled drinks on the market today. And with consumers increasingly concerned about the health effects of pop, soft-drink consumption has been falling. Soft-drink consumption in Canada fell 18 per cent from 2006 to 2010, according to data from Statistics Canada.
With its main truck and smaller regional teams, Pepsi is targeting the challenge to 1.5 million Canadians this summer. While part of its millions in marketing spending this year is designed to reignite the cola wars with Coke, Pepsi's real challenge is to give consumers a taste for soda.