What is Pepsi doing ? Marketing blunder after blunder.

Most marketing errors aren’t obvious. Marketing mistakes bleed companies usually with invisible cuts that take years to add up. Such as McDonalds recent decision to change the colours of their ‘restaurants’ – such a move won’t substantially harm such a distinctive brand as McDonalds not when they are doing so many other things right, but it will hurt a bit.

Occasionally though marketers make big blundering really obvious errors. These can actually be quite valuable (if corrected quickly). Valuable because the effects are are visible so much learning can be gained from them.

It’s very rare to see obvious blunder after blunder. But lately Pepsico has done it, again and again. Are they learning nothing ?

This is the company that launched the Tropicana disaster by removing the brand’s distinctive assets from the pack. Sales dropped sharply overnight. Hopefully that taught some marketers about branding. It’s a mistake that most packaged good companies have made.

In the same year Pepsi decided to call Gatorade just G, and ditch their logo. Again they have been backtracking ever since.

And, of course, in 2009 Pepsico also changed the Pepsi logo. A more modest change - so more of a small wound than wholesale bleeding, but still no good for the brand. On April 20th AdAge reported that the beverage division reported a 9% decline in revenue and 6% decrease in volume (the difference meaning they price promoted heavily to try to save themselves) during a quarter that included their New Year’s Eve, Presidential Inauguration and Super Bowl marketing blitzes!

Then they told the world that they were going to revolutionise their marketing by taking a huge chunk of their marketing budget out of TV advertising and moving it into social media related initiatives. The “Pepsi Refresh project” saw share declines (in a shrinking category) so that Diet Coke became the number 2 soft-drink in America.

Bob Hoffman summed it up:

The Refresh Project accomplished everything a social media program is expected to: Over 80 million votes were registered; almost 3.5 million "likes" on the Pepsi Facebook page; almost 60,000 Twitter followers. The only thing it failed to do was sell Pepsi.

Now in mid 2011 Pepsi have announced a return to TV advertising with the first new campaign in 3 years. And look at it, it features Coke bottles and Coke’s distinctive assets more than Pepsi. Amazing. Have they learnt nothing about distinctive assets?

Ad Age reports that their Chief Marketing Officer for beverages is leaving, and they are reshuffling other senior marketing positions. I suspect that might mean they haven’t learnt from their mistakes, that they simply are desperate.

Professor Byron Sharp. July 2011.