The latest (March 9th to 16th) issue of the Economist has two very interesting articles, both on the same page, that fundamentally deal with the issue every global corporation faces, brand management and growth strategy.
The bigger article deals with Pepsi and Starbucks. Pepsi is dealing with the issue that more people are opting for healthier drinks alternatives rather than the sugary stuff they (and Coke) have been selling. This is an issue that is prevalent mainly in the developed countries as more and more consumers are worried about obesity and health related issues brought about by high sugar, high calorie food and beverage intake. What is interesting is that according to the article, Pepsi has decided to fight back by re branding their drinks by way of new imaging, logos etc. There are about 35 themes of which one will be released periodically and each theme will have its own website, music etc to add the wow factor and appeal to the consumer.
The second much shorter article concerns a new drink that Coca Cola developed in China thats like an orange juice soda complete with orange juice pulp and calcium. According to the article, this drink when put out in the market in China, quickly took the number one or number two position in every region it was available. The drink was introduced into Thailand in 2005 and was a huge success and the plan was to introduce the drink to the Indian market in Feb 2007.
Here is my take… The Coke approach is totally spot on. When you have markets that are stagnant with barely any growth (in some cases declining sales) one needs to sit down and really think about the current environment. Consumer preferences are change all the time, at the same time, competitive forces tend to put pressure on products especially those products that are commodities and that have not changed in a long time.
On the other hand, Pepsi’s approach is totally wrong. Why? Pepsi is selling the same product just packaged in something a little more prettier, that’s all. This is not what Pepsi needs to be doing. Pepsi needs to develop one or two new products, at the right price point that caters to the consumers’ needs (or wants), in this case a healthier alternative but still refreshing soda.
I stopped (well I only drink regular sodas once in a very blue moon) drinking sodas for two main reasons. First, I was getting bored with the cola flavor. Secondly and more importantly, I couldn’t stand the over sweetened stuff any more. I really don’t enjoy most sodas simply because of all the sugar. That was until I discovered Izze Soda.
I love Izze Soda because of the two main reasons I don’t like regular colas. First, Izze has a number of different flavors, most of which I really like. Secondly, Izze is a soda made from real fruit juice. Third and most important, all the sugar in Izze is from the fruit… no added sugar. For these reasons, when I drink Izze Soda, I do not feel bad or guilty about drinking the stuff. I am able to relax and enjoy the stuff… and that I think is picture Pepsi is missing!