APR 332: Section 101
Dr. Kenon A. Brown
Alex Mashburn
Michael Davis
Morgan Hart
Erin Waits
Jimmy Yann
Client and Industry Background
PepsiCo Inc. is an American corporation that distributes and manufactures products all
over the world. The PepsiCo family includes Americas Beverages, Americas Foods, PepsiCo Europe
and PepsiCo Asia, Middle East and Africa. PepsiCo is one of the major commercial leaders in the food
and beverage industry and, most recently, the fruit juice evolution. The majority of PepsiCo’s product
lines are extremely successful, earning the company nearly $1 billion annually.
Because shareholder value and operating a successful business are PepsiCo’s ultimate
organizational goals, the company believes in active participation in public policy. PepsiCo follows
strict policies dealing with political contributions, human rights, responsible research, animal testing,
and genetically modified food and ingredients. The company practices transparency by posting its
policies on its website for the public to see how the company operates. PepsiCo also adheres to
“Performance with a Purpose,” the company’s world-wide code of conduct. Employees are expected
to conduct business with integrity and high ethical standards in all levels of the company.
Last year, PepsiCo’s most successful brands were Pepsi-Cola, Mountain Dew, Lay’s,
Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Oats and Cheetos. PepsiCo is most known for
its products in the Carbonated Soft Drink (CSD) industry, which is dominated by PepsiCo Inc. and
Coca-Cola Co. Coca-Cola Co. is the industry leader, owning 26 percent of the global share in retail
value. PepsiCo owns the second largest global share with 12 percent.
Although more competitors enter the CSD industry every year, the industry is on the
decline. Carbonated soft drinks are under scrutiny for being a major contributor to obesity and heart
disease, leading many consumers to explore healthier alternatives. Subsequently, diet drinks are
rising in consumption, and traditional colas are becoming less popular because of healthier drinks’
entry into the market.
Client History
PepsiCo Inc. was founded in 1965 as a result of a merger between Pepsi-Cola and FritoLay. Pepsi-Cola, Diet Pepsi, Mountain Dew, Fritos and Lay’s were the company’s first major products.
PepsiCo soon expanded in its acquisition of Taco Bell and Pizza Hut in 1977 and 1978, respectively.
After buying the Kentucky Fried Chicken (KFC) chain, PepsiCo Inc. combined KFC, Taco Bell and
Pizza Hut to form a new company called Tricon Global Restaurants.
PepsiCo Inc. expanded its product base from soft drinks and snack foods when it bought
Tropicana Products in 1998 for $3.3 billion. The company also merged with Quaker Oats Co. in 2001,
making PepsiCo Inc. a $25 billion company. Notably, PepsiCo Inc. acquired IZZE Beverage Company
in 2006. Today, PepsiCo is the second largest food and beverage company in the world.
Past Communication Efforts
PepsiCo Communication Efforts
Throughout the last 50 years, PepsiCo has remained aware and responsive to the
demands and concerns of its key publics. With each new social movement, the company has
consistently created effective campaigns or reconstructed existing campaigns to work most
efficiently with its audiences and enhance the PepsiCo brand across each demographic. Notable
examples of past slogans include “The Light Refreshment” campaign, created in 1953 in response to
growing concerns regarding weight among Americans, and the “Come Alive! You’re in the Pepsi
Generation” campaign, created to appeal to younger consumers. PepsiCo has also utilized celebrity
endorsements from artists such as Michael Jackson, Britney Spears and Nicki Minaj.
Media coverage of the PepsiCo brand has varied and continues to vary depending heavily
on the public’s perception of each new campaign. In 2004, child rights activists targeted PepsiCo for
its campaign that depicted a child serving drinks to the Indian cricket team. Protesters said that the
campaign glorified and depicted India as a country that endorsed child labor. PepsiCo defended its
campaign and claimed it only aimed to show a child delighted to be in the presence of his idols. Most
positive media portrayals of the PepsiCo brand have been generated by its official beverage
sponsorship with the NFL and its advertisements before and during the Super Bowl. In 2011, Doritos,
a product owned by the Frito-Lay unit of PepsiCo, dominated social media conversations regarding
pre-Super Bowl advertisements. A two month analysis of more than 73,000 online conversations
portrayed PepsiCo as the brand with the most positive media coverage.
PepsiCo’s internal communication efforts include several employee initiatives such as
Smart U, a program that focuses on familiarizing employees with PepsiCo’s social media policy and
educating them on tools such as Twitter. PepsiCo has strengthened internal trust by empowering its
employees, while enhancing the company’s reputation in an authentic and transparent manner.
IZZE Communication Efforts
Marking its 10-year anniversary this year, the IZZE Beverage Co., a subsidiary of PepsiCo, is a
relatively young company in the beverage industry. The alternative beverage company launched two
national ad campaigns with the slogans, “Good Taste Comes Naturally” and “You’ll Love What’s
Inside,” in 2008 and 2009. Both print campaigns placed ads in magazines such as Vanity Fair, InStyle,
People and GQ. The main focus of the campaigns was communicating the all-natural and pure fruit
juice content of IZZE beverages to consumers. IZZE currently communicates with its key publics by
maintaining a strong social media presence on Facebook and posting daily status updates that
include fun promotional advertisements, pictures, and questions that encourage user comments.
Media coverage of the company has positively represented IZZE beverages as healthy
alternatives to other carbonated beverages. In 2010, magazines such as Vegetarian Times and Fitness
announced the award-winning status of the IZZE Esque brand. IZZE beverages have also been
positively covered in publications such as Better Homes & Gardens, Wall Street Journal, Chicago SunTimes and Glamour since 2006. IZZE’s internal communication is limited as the company only has 31
employees in its small office in Boulder, Colo.
Although the media have positively portrayed IZZE beverages and awarded them for
being some of the healthiest beverages on the market, the problem lies in IZZE’s inability to maximize
its consumer reach. With only two print ad campaigns, no official celebrity endorsements, and low to
moderate name recognition, IZZE must increase its consumer awareness by making itself present in
the minds of its key publics.
Key Publics
In the past, IZZE’s key publics were adults with an appreciation for quality products and a
younger millennial audience that looked at IZZE as an alternative for carbonated soft drinks. IZZE
used print campaigns and social media to promote the brand and communicate with its consumers.
Past media coverage indicates that the target demographic was young to middle-aged women who
were health-conscious and read magazines such as Women’s Health, Cooking Light, People and OK.
Currently, the IZZE brand’s most loyal consumers are 13-24 year-olds or the millennials.
With over 105,000 likes on Facebook, the communication between the organization and its key
publics is positive and upbeat. User comments reflect an eagerness to buy IZZE in more locations and
an “addiction” to IZZE products. Within IZZE’s current key public, the demographic again seems to be
young women who appreciate the all-natural alternative to beverages with a higher calorie, sugar
and caffeine content. However, young men also communicate frequently with the company and
express positive brand experiences with IZZE beverages.
Competitors
PepsiCo’s top two competitors in the Carbonated Soft Drinks industry are Coca-Cola and Dr.
Pepper Snapple Group. According to the 2012 U.S. Food and Drink Report for the second quarter,
carbonated soft drinks have been steadily declining in the last five years, triggering a push toward
healthier alternatives such as juices, bottled water and functional drinks. IZZE beverages fall into the
emerging Premium Bottled Beverages industry, which includes bottled water, enhanced and flavored
water, juice drinks, sports drinks, and ready-to-drink teas.
In the Premium Bottled Beverages industry, IZZE’s top competitor is Glacéau Vitamin Water.
According to BevNet, Glacéau Vitamin Water is the No. 1 brand of alternative beverages. In 2007, the
Coca-Cola Co. bought Glacéau Vitamin Water for an estimated $4.1 billion. The brand’s competitive
advantage lies in the cleverness of its website, social media pages and promotional marketing. The
brand has a strong social media presence with over 3.4 million likes on Facebook and almost 37,000
followers on Twitter. Vitamin Water is also effective in its consumer reach with celebrity
endorsements and summer music festival sponsorships.
Snapple is the next viable competitor of IZZE beverages. Snapple merged with Dr. Pepper in
2000 to form the Dr. Pepper Snapple Group. Under this umbrella, Snapple has thrived and now offers
over 50 varieties of teas, juice drinks and flavored waters. Like Vitamin Water, Snapple heavily
advertises its products with campaigns such as the “Half-n-Half Hash Out” and notable slogans such
as “The Best Stuff on Earth.” Snapple also has a strong social media presence with over 1 million likes
on Facebook and 33,000 Twitter followers. The brand’s main competitive advantage lies in its strong
market penetration with a brand that has lasted 32 years. Consumers are aware of the brand and its
key messages, and they have responded by making Snapple the leading product in the push away
from carbonated soft drinks.
If IZZE is going to compete with Vitamin Water, its competitive advantage will have to be its
all-natural juices that are free of refined sugar, caffeine, preservatives and artificial flavors. In 2011,
Vitamin Water was accused of misleading marketing by the Children’s Food Campaign (CFC) for its
use of preservatives and concentrates instead of real fruit juice. Based on the USDA’s 2005 Dietary
Guidelines, IZZE beverages have two servings of fruit in each bottle and are viable alternatives to
sodas for school children.
On the other hand, Snapple does not include artificial flavors or preservatives in its line of
fruit juices or teas. However, Snapple’s new lightly sweetened teas still have 80 calories and 18
grams of sugar, and its fruit juices are packed with calories and sugar. The IZZE Esque line of juices
has only 50 calories and 11 grams of sugar and must be positioned in the market as an alternative for
health-conscious consumers and consumers who have diseases that are affected by high sugar and
gluten content. Although IZZE beverages are not as widely promoted as Vitamin Water and Snapple,
the current national focus on healthier alternative beverages will strengthen consumer acceptance of
the brand.
External Environment
Although IZZE is environmentally friendly in offering its beverages in glass bottles, the cost
of glass bottling for the company could become an issue in the future. Although glass bottling is the
greener method, plastic bottling is the more cost-effective method used by competitors such as
Vitamin Water and Snapple. If IZZE fails to extend its consumer reach and demand declines, the
company could be forced to make the switch to plastic bottling. Another possible issue stemming
from IZZE’s choice of bottling is safety. If IZZE wants to extend its reach into more schools as a
healthier alternative for sodas, it must address the safety issues with providing its juices in glass
bottles to children.
Problem Statement
IZZE maintains a strong competitive advantage in the market because of the healthier content of its
beverages, but weak communication efforts have caused the brand to fail to reach its potential in
consumer awareness and brand recognition.
SWOT Analysis
Strengths:
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Bottling and packaging demonstrates sustainability awareness
Healthy products have the ability to appeal to several key publics
Strong social media presence
Certain products satisfy the Alliance for a Healthier Generation Nutrition Guidelines,
allowing them to be served in schools
Weaknesses:
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Weak brand awareness and promotion tactics
Re-entering an already well-established industry with strong consumer followings
Mediocre industry standing
Lack of memorable brand experiences achieved by a catchy slogan or celebrity endorsement
Opportunities:
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Opportunity to gain consumers leaving the declining soft drink industry and looking for
healthier alternatives
Integrity of the product has potential for lasting endorsements
Chance to market to vegan, gluten-free and other special diet consumers
New York Legislation ban on sugary drinks puts healthy products in good light
Threats:
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Being in the healthy drinks category opens up brand to potential scrutiny
Strict food and drink regulations of many school boards
Other better established brands coming out with healthier products
More brands are entering the beverage industry regularly and are constantly looking for
competitive edge
College-aged Females
Profile: College-aged females are the most important target public in this campaign because of their
pre-existing brand awareness and consumption of IZZE products as evidenced by IZZE’s social media
sites and past media coverage. This public is a strong force in the health food and beverage industry
and constitutes IZZE’s largest key public. IZZE is cost-effective, allowing college students to make
healthier beverage choices while on a budget. IZZE is also low-calorie while maintaining a good
flavor, which is an important factor to this target public.
Objective: To increase sales of IZZE products among college-aged females to 60 percent by Jan. 1,
2013.
Strategy: The strategies that will be used to achieve the objective are radio and print publications, a
social media campaign and a celebrity endorsement.
Rationale: A sales objective was chosen for this target public because they have the highest brand
awareness and constitute the largest, pre-existing key public of IZZE products. According to IZZE’s
social media sites, the majority of likes, tweets and comments were made by females in this age
category. Therefore, radio and print publications will increase awareness of IZZE’s social media
campaign and raise brand awareness. A social media campaign is the most effective way to reach this
target public and will promote IZZE products while generating feedback and creating positive brand
experiences. Lastly, a celebrity endorsement will increase credibility and raise awareness of the
health benefits of IZZE products.
Key Messages:
 The slogan, “Make them green with envy,” will portray a stylish image of IZZE products while
raising awareness of IZZE’s environmental efforts in its packaging.
 IZZE offers cost-effective, healthy products.
 Promoting healthy lifestyle choices is consistent with IZZE’s values.
Tactics: The three tactics that will be used for this target public are a radio actuality sent to Top 40
stations, an email pitch with a magazine quiz, and multiple Twitter tweets and Facebook statuses.
The radio actuality raises awareness of the health benefits of IZZE while directing listeners to IZZE’s
social media sites. The email pitch will be sent to Kate White, Editor-in-Chief of Cosmopolitan
magazine. The quiz contained within the pitch is a fun way to promote healthy lifestyle choices as
well as raise awareness of the healthy content of IZZE beverages. The tweets and statuses will
effectively reach girls in this age group and allow interaction between IZZE and its future and current
consumers. Social media will also raise awareness of IZZE’s celebrity endorsement.
Parents of Elementary and Junior High School Children
Profile: Parents of elementary and junior high school children are the second most important target
public because of the potential for IZZE products to be a part of a healthy school lunch. IZZE products
such as IZZE Fortified meet the Alliance for a Healthier Generation Nutrition Guidelines, allowing the
products to be consumed in many schools. A bottle/can of IZZE also has two full servings of fruit
while maintaining a good flavor, satisfying both parents and children.
Objective: To increase awareness of IZZE Esque and IZZE Fortified as healthy alternatives to
carbonated soft drinks among parents of elementary and junior high school children to 40 percent by
Jan. 1, 2013.
Strategy: The strategies that will be used to achieve the objective are radio and print publications.
Rationale: An awareness objective was chosen for this key public because many parents are unaware
of the multiple benefits of IZZE Esque and IZZE Fortified. A radio and print publication campaign will
be implemented because studies have shown this public is most effectively reached by radio and
print.
Key Messages:
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The slogan, “Fizz & Fruit Juice Without the Fructose,” will appeal to parents with the current
concerns over high fructose corn syrup.
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Informing parents that IZZEs are approved by school boards to serve in lunch will establish
credibility.
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Emphasizing that a bottle/can of IZZE has two servings of fruit in each bottle, according to
USDA Dietary Guidelines, will also establish credibility of the nutritional value of IZZE
beverages.
Tactics: The three tactics that will be used for this target public are a radio actuality, a news release
and a newsletter. Today, adults are reached mainly through radio and print mediums. Therefore, a
news release and radio actuality will be effective in raising awareness of the health benefits of IZZE
products. A quarterly newsletter through direct mail will also be effective, as its articles are centered
on raising healthy children. The newsletters will be sent to parents of children who go to schools that
already sell IZZE products at lunch, hopefully encouraging parents to buy IZZE for their home.
Commercial Gyms and Fitness Centers
Profile: Commercial gyms and fitness centers are targeted last in this campaign because of the
difficulty stemming from the variety of healthy beverages currently offered in gyms and fitness
centers. Although there are a variety of products, the IZZE’s nutritional value makes it a good fit for
gyms and fitness centers. If offered in gyms and fitness centers, many consumers who are already
participants in the health industry will have extremely easy access to IZZE products.
Objective: To increase the number of commercial gyms and fitness centers selling IZZE products to
100 by Jan. 1, 2013.
Strategy: The strategies that will be used to achieve the objective are face-to-face communication and
business presentations.
Rationale: Because of the difficulty stemming from a variety of healthy products currently offered,
face-to-face communication will allow for an effective impression of the health benefits of IZZE
products and establish credibility. A media kit with various materials highlighting IZZE’s products
and the company’s values will be delivered at the business presentation, leaving a lasting impression
on the management of commercial gyms and fitness centers.
Key Messages:
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The slogan, “All-Natural Energy Inside and Out,” reflects the all-natural content of IZZE
beverages as well as the environmentally friendly packaging used by IZZE.
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Emphasizing IZZE Fortified as a vitamin-infused recovery drink will promote a healthier
alternative to sugary energy drinks and flavored waters.
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Stressing that IZZE products have two servings of fruit according to USDA Dietary Guidelines
will further prove the nutritional value of IZZE.
Tactics: The three tactics that will be used for this target public are a telephone pitch, fact sheet and
brochure. The telephone pitch will be used to initiate a meeting with the management of gyms and
fitness centers and briefly discuss what IZZE can do for their gym members. The fact sheet will be
included in a media kit given to management at the business presentation. In this fact sheet, the
nutritional value of IZZE Esque and IZZE Fortified are emphasized as well as IZZE’s partnership with
the Global Education Fund to fund literacy. The brochure will also be included in a media kit given to
management at the business presentation and will use bright colors and health-related pictures to
express the health benefits of IZZE as well as IZZE’s environmental focus.