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Running Head: Mountain Dew
Mountain Dew
Marketing Management
Nicholas Nunez
Anderson University
Mountain Dew
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Running Head: Mountain Dew
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Corporate Background
PepsiCo and The Coca-Cola Company have been competitors from the get go. CocaCola has been the front-runner with their front running product, Coke as the industry
leader. PepsiCo has the number two spot with their drink, Pepsi, a cola that has a different
taste style than Coke and has been right on the heels of Coke for a very long time. Both
companies have battled for almost 70 years now for market share and drink popularity.
The competition has driven the two companies past their primary drink to create diet
sodas, flavored sodas and other styles of carbonated soft drink. Both companies expanded
to include Sprite for Coca-Cola and Mountain Dew for Pepsi.
Mountain Dew is a beverage included in the PepsiCo Company. The Hartman
Beverage Company in Knoxville, TN originally created it in the 1940’s. It quickly grew
popularity on the eastern coastline as well as into Kentucky, Tennessee, the plains of
Minnesota and the Dakotas. It didn’t catch on very much in the large cities in the area and
was consumed more by rural people. The drink was very popular with the fans that
enjoyed NASCAR. PepsiCo purchased Mountain Dew in 1964 and began increasing the
Dews popularity. It was seen as a “flavored” soft drink and this was new compared to the
rest of the Pepsi line up and was directly going to compete with Sprite and 7-Up.
Strategy
PepsiCo has always tried to differentiate its products from its biggest competitor
Coca-Cola. Coke will not change, in a million years Coke will not change and that gives Pepsi
the advantage. Pepsi has always said that their flavor is bland and boring like that of Coke
product lines. Pepsi has a sweetness to it that directly attacks the bitterness of Coke and
Mountain Dew
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Mountain Dew has a sweet citrus flavor that Sprite cannot even begin to try and compete
with.
From the beginning, Mountain Dew has been about a taste difference and the better
experience that comes with it. It includes caffeine and a little more sugar, which gives it a
little bit more excitement than Sprite. That is exactly the kind of advantages PepsiCo likes
to have with their carbonated soft drinks. The goal is to have the difference in taste be
unique, exciting, and more fun. The idea being that If Pepsi and all of its beverages provide
a better beverage experience across the board Pepsi can overtake Coca-Cola and be the
number one brand in the carbonated beverage industry.
Marketing
Marketing for Mountain Dew originally played off of the normal consumer and their
characteristics. Mountain Dew did not think that their consumers were “hillbilly,
Backwoods” people but personifying the brand with that brand image made it easy for
their customers to identify with Mountain Dew. Almost none of their first consumers were
from big cities. It was popularized by people who did not live in cities and therefore could
relate to the country lifestyle. The NASCAR fans were a large part of the consumer base and
that is exactly where Mountain Dew started to advertise the most.
Since the 1960’s the brand has changed very much. It is now popular in big cities
and has spread to much more of the U.S. and globally. It has changed from a Hillbilly Willie
character to a theme of extreme sports. They have changed to sponsor extreme sports
event such as the X Games and similar venues. However with the growing saturation of
large companies entering into sponsorship deals with extreme sport athletes and
competitions PepsiCo is contemplating focusing their advertising elsewhere.
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Running Head: Mountain Dew
Customer Analysis
Target Market
The drink now targets male teens with a more broad focus on 20-39 year olds with
cross-over appeal. The teenage years are where purchasing rituals can be rooted and
create a lifelong customer. During the teenage years is when decisions can be more
impulsive and daring. A quick moving teenager requires a drink that can move as fast as
they can.
Company
Taste
Product Variety
Alcohol mixing
Score
Carbonated Beverage Industry
Weight
Pepsi
0.6
8
0.2
8
0.2
5
1
7.4
Coca-Cola
5
8
10
6.6
Cadburry-Shweppes
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1
3
5
I feel across the board Pepsi beats out Coke and the only cola beating any of Pepsi’s
products is Dr. Pepper. Coke has tried to emulate both Dr. Pepper and Mountain Dew with
Pib Extra and Mello Yellow respectively but neither has been very successful.
Pepsi and Coca-Cola basically have the same product breadth with small differences
here and there. Dr. Pepper and 7-UP have a great disadvantage here.
Alcohol mixing was a difficult one to measure because there are still many places
that carry Pepsi products and sell alcoholic drinks that people enjoy. When a mixed drink
connoisseur asks for a drink they will asked for their favorite liquor and Coke or Sprite.
That is just a small factor on why Coca-Cola holds such a tight grip on the market. Their
more subtle bitter taste mixes better with alcohol. And no one on earth tries to mix much
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Mountain Dew
with Dr. Pepper but 7-UP can be used easily.
Competitive Analysis
5 Forces Models
The Carbonated Soft Drink industry
Buyers
Buyers have so much power in this industry. Switching costs are zero, just depends
on what you want to drink with lunch that day.
Sellers
The ingredients necessary to make soda are very simple and they supply ingredients
that can be considered commodities. Very little power.
Entry
The largest barrier to entry will be the marketing expense necessary to actually
become relevant enough to compete with the 3 large companies in this industry.
Companies like Jones’ Soda can exist within niche markets and be comfortable there but
could never compete large scale without a tremendous increase in the marketing and
advertising budget.
Substitutes
Substitutes are everywhere, water, teas, sports drinks, and energy drinks.
Fortunately for PepsiCo they own many companies that produce these substitutes. For
Mountain Dew specifically the threat of substitutes is very high.
Level of Rivalry
Rivalry between companies is intense for market share, product doesn’t change
much, even no products do not happen much, most rivalry comes from perception and
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Running Head: Mountain Dew
brand awareness. Rivalry is most noticeable through marketing and advertising.
Attractiveness
The market would be attractive for a niche market soda company similar to Jones’
Soda. To be able to compete with the three largest companies would take more capitol than
anyone has or could be justifiable to spend.
External Environment
Opportunities Available
Opportunities that could still be expanded could include looking for new fountain
drink dispenser option. Coca-Cola has started to put new Coke machines in some fast food
restaurants and it would be cool to combat that with similar machines.
Mountain Dew has already explored many flavors and different styles of packaging
promotions like bottle cap rewards and game codes for free stuff for online gaming.
Continuing this promotion but changing the target market would allow for some cool
possibilities.
Threats
The biggest threat would be that energy drinks are becoming very common and
have much more energy in them. Mountain Dew might need to rethink their target market
as well as their strategy when it comes to finding the best way to approach the new market
they decide on.
Competitor Strategy
Coca-Cola is currently running an commercial on TV about how when you are young
you can experience more flavors than when you grow older. Coke then encourages younger
people to experience the broad tastes that Coke has before they grow older and lose their
Mountain Dew
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sensitive taste. This is exactly what Pepsi has been doing for a very long time towards Coke.
I wonder if it will really work for Coke.
Driving Factors
1. Support newest fad
2. New types of Mountain Dew
3. Advertising and marketing has to be new and exciting
4. Advertising has to be pertinent to target market
5.
Key Success Factor
Consistency with the syrup formula and being able to keep fountain and bottled
drinks to taste the same is key. Also, Mountain Dew should make it a point to stay up to
date with new artists within specific genres. Give to charity, keep a good image.
Marketing Mix
Product
Mountain Dew, MD: Code Red, MD Livewire, MD Voltage, MD White Out and MD
Vintage.
Place
Grocery stores, restaurants, gas stations, sponsored events (music/sports), online
orders
Price
Price can be very different, anywhere between the $.89 Ricker’s fountain pop to a
case of 36 12 oz. cans for $35.00.
Running Head: Mountain Dew
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Promotion
Promotion includes a $55 million budget to make TV commercials and other
medium ads including advertising during the Superbowl.
Typical Buyer
Teenage male, probably 16, risk-taking lifestyle, enjoys extreme sports and video
gaming.
Parents/guardians of previously stated teenage male.
Persons 18-34 with kids, they need energy but does not want an energy drink
Current Strategy
Strategy includes Dew Dudes doing extreme stunts in commercials and promoting
Mountain Dew. Most if not all commercials include the Dew Dudes. Other promotions
include sponsoring events, mostly extreme sporting events.
Problem/Decision Statement
Mountain Dew has had the same marketing strategy for the past 7 years, this needs
to be updated, tweaked or changed. What is the new direction should Mountain Dew go in?
Will it include new campaigns or modifications of old?
Critical Issues
Mountain Dew is no longer seen as the extreme drink. Energy drinks such as Red
Bull, Monster, and Rockstar have become very popular among extreme sports and the
people that follow them. Mountain Dew may have to reinvent itself in a new market with a
new strategy.
Alternative Courses of Action
1. “Dew good”
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Mountain Dew
a. This is a green initiative or could be used as a call for unity among Dew
drinkers. It could give a place for Dew drinkers to come together.
Honestly I just like the slogan, it could be taken in a million different
ways.
Pros: This would improve the overall image of Mountain Dew and
PepsiCo
Cons: It does not address the need for a new campaign/market
placement.
2. New fountain drink stations
a. Coca-cola released some new fountain drink stations in fast food
restaurants a few years ago. It would be very cool for Pepsi to release a
similar fountain station with a few improvements and a lot more
excitement in the paint scheme.
Pros: This can change the image in the places Mountain Dew is purchased
frequently. Places like Taco Bell where teens are constantly stopping in to
buy food.
Cons: No big change in the ad/marketing campaign.
3. Dew X-perience
a. Buy out a theme park for a day and put Mountain Dew merchandise
everywhere
b. Start a sweepstakes to bring national attention
c. Have it be in multiple locations with live music performances in a tour
across theme parks in America
Running Head: Mountain Dew
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d. It is similar to the Dew Tour yet the attractions are the musical
performances and the theme park
Pros: When extreme sports are oversaturated, create your own event.
Extreme sport enthusiasts will love rollercoasters and will follow the fun.
Cons: Contracts will have to be made with multiple theme parks and this
could be very expensive. Sell Merchandise and VIP everything to try to
cover expenses.
Recommendation
Make the Dew X-perience happen. Why compete with an oversaturated market
when you can offer something that no other beverage company can, a theme park day
completely consisting of Dew. Have a blast with it.
Time Frame
Contact places like Bush Gardens, Six Flags and Cedar Pointe right away. Try to
make it possible for summer 2017, at the latest summer 2019. Collecting musical artist
talent will probably be the last thing on the schedule.
Performance Measurement
This will be difficult to check, awareness does not always directly correlate to an
increase in sales. Best way to track progress would be to initiate a social media hashtag as
well as other posts and track the social media posts and traffic to sites like Facebook,
Twitter, Instagram, and Pintrist.