Advertising Strategy of Pepsi and Doritos - Report Example

Executive summary Following a successful campaign dabbed “cool the burn”, Pepsi and Doritos wish to partner again in a similar arrangement to market their two brands in a functional manner where the two will complement each other with the aim of building a strategy that will be so powerful to boost the sales numbers of the two. The new campaign that will be dabbed “the complete combo” will rely on a similar idea where the two products just create wonderful unique experience worth repeating for the consumers. This will be popularized through several mediums to reach the target market which is young people between the ages of 18-39. This group is young and adventurous and will surely try out the new limited edition product. Advertising strategy for Pepsi Max and Doritos in Australia Situational analysis Pepsi max and Doritos have partnered before to launch the “cool the burn” combination of the hot and spicy corn chip and the lime flavored Pepsi max soft drink. This combination was designed to boost the consumption of the two reputable brands. The current combination has so far worked very well with the sales going beyond the expectation of the two companies. It should be noted however that Doritos is a wholly owned subsidiary of PepsiCo which is the same company that owns the Pepsi max brand which is an alternative to Pepsi cola and diet Pepsi in Australia (Schultz, 2012). The upcoming advertising strategy will involve pairing a sweet vanilla flavored corn chip from Doritos and Pepsi max flavored with ginger and cinnamon. The experience will be a very sweet corn chips diluted with a cold ginger flavored soft drink. The experience will be such that it’s only the combination of the two that will deliver a unique bitter sweet taste worth trying again. The previous campaign by Pepsi and Doritos has been designed to boost the sales of the two popular brands in the Australian market through various ways which include; TV commercials that depict young males probably in their late teens or late twenties taking a bite of the spicy Doritos. It’s so hot in their mouth such that it’s only a cool Pepsi max lime or “cease fire” that can cool the burn. The campaign gets its tagline from this idea of cooling the spicy corn chip burn with the lime flavored Pepsi max (Simpson, 2012, Greenbla, 2013). Market in Australia The market in Australia for the two brands is very competitive and saturated. The snack market is particularly very congested with very many players both small and big. The market is at its mature stage where innovation and product differentiation is key to achieving minimal growth or survival in the market (Pickton & Broderick, 2005; Barker, Michael, & Shimp, 2012). Snack brands Australia and Snack foods are some of the big players in the industry. The revenue generated by the snack food industry within the five year period through 2012-13 totaled $2.93 billion (Harper, 2013). It is expected to reduce by at least 0.8% in the year 2013. This is particularly due to consumer changing taste and preference for healthy foods. Salty snacks and carbonated drinks are taking a back sit as consumers look for real fruit drinks and foods low in calories and high in nutritious content. The industry is expected to grow for snack food although only minimal growth will be achieved and thus only big players will benefit or small innovative players with niche markets (Euromonitor International, 2012). As for Pepsi, competition from Coca-Cola and other soft drink players is also very rife. The market has been growing at a compounded rate of 0.9% for five year through 2012-13 (Kolier, 2012). The soft drinks are also affected by colder weather through out Australia in the past two years. Annual revenues average $4 billion. The Coca-Cola’s Amatil’s network is very strong (The Sydney Morning Herald, 2013). Competitors’ analysis Then main competitor to Doritos snacks is snack brands Australia. Some of the brands by snack brands Australia include Cheezels, Kettle and CC’s popped (The Smith's Snackfood Company Limited, 2013). These brands are similar to what Doritos offers in terms of raw materials and production techniques. They can therefore offer a very hostile competition environment for Doritos. Snack Brands is a fairly big company which has enough resources a wide range of product lines and an existing market penetration. All these make it a formidable source of competition for Doritos. Coco-cola through Amatil holdings has a well established distribution network and market share in Australia. It is the leading market player in the Australian industry. Schweppes and other private labels also have a good share of the market. Pepsi therefore has to deal with very rife competition from the soft drink competitors even as it hopes to jointly boost the sales of its soft drink with Doritos (Bhasin, 2013). Strengths Coca-Cola has a market share of 52 % in Australia but it is receiving pressure from Schweppes and Pepsi and as such it is expected to fall (Bhasin, 2013). Coca-Cola has considerable experience and distribution network in Australia and as such has a good understanding of the market The Coca-Cola brand is very strong in Australia having been in Australia longer than Pepsi. Weaknesses The main weakness with Coca-Cola is the fact that it does not own any other business in the snack industry and as such may not leverage on combining a snack and its soft drinks to attract customers. Even if it does, it might be so complicated since it will be in partnership with another major player probably with different objectives from those of Coca-Cola. SWOT Analysis Strengths Pepsi and Doritos are popular and highly regarded brands in the Australian market. People have over time associated them with quality and innovativeness (PepsiCo, 2013; The Smith's Snackfood Company Limited, 2013). Pepsi and Doritos have extensive knowledge of the Australian market having launched a similar campaign dubbed “cool the burn”. They are therefore well positioned to implement a similar campaign successfully The two brands haves strong financial backing from the mother company PepsiCo and thus can carry out a good market research and lay out a well financed campaign to promote the new limited edition products. The two brands are owned by the same company and as such it is easy to develop an advertising campaign since the overall objectives of the two are not so different from each other meaning decision making will be easy. Weaknesses Pepsi’s market share is not as huge as Coca-Cola’s and as such it may not be sufficient to propel Doritos corn chips as far as the chips can go in terms of distribution and sales volume. This may therefore work to reduce the potential of Doritos to sell or in effect leave Pepsi behind as people consume chips and avoid Pepsi. Opportunities There is a growing market for nutritious snacks in Australia which Doritos can take advantage of to offer customers an alternative with low calorie and high in nutrients. Pepsi max can also build on the success of its former campaign to retain the consumers who loved the earlier combination. Threats Many consumers are changing taste fro carbonated drinks to fresh juices due to health concerns (Goyal & Sicgh, 2007, O’Brien, 2013), this may reduce the consumption of Pepsi over time. Consumers are also attracted to nutritious natural snacks which maybe difficult to produce due to the nature of ingredients used (Erasmus, 2002). If Coca-Cola launches a similar campaign it might affect the success of Pepsi-Doritos campaign. Aims goals and objectives Aim The aim of the ‘complete combo’ campaign is do drive the sales of Doritos and Pepsi brands through a perfect combination of sweet vanilla flavored corn chips and ginger flavored Pepsi max drink. Outcome goal: To ensure sustained sales of Pepsi max and Doritos in Australia Process goals: To deliver of advertisement materials in major stores all over Australia to popularize the “complete combo” campaign. To roll out a series of promotional events in Australia in partnership with events organizers and major retailers. To launch a series of television adverts to popularize the limited edition “complete combo” Objectives To achieve a 4% growth in market share for both brands in the Australian market To increase the revenue of the two brands by at least 10% within one financial year. Outcome goal: Drive rapid awareness and mass trial of the bundle Process goals To roll out outdoor advertising campaign through bill boards To start radio advertisements meant to introduce the new offering by Pepsi and Doritos Objectives 80% awareness of “complete combo” in the Australian target market 70% success rate of the new limited edition as anticipated by the two brand managers Target segment Based on age, the “complete combo” by Pepsi and Doritos targets young consumers between the ages of 18-39, this segment is young and wants to try anything new and anything that is daring and exciting as the flavored corn chip s and bitter sweet ginger/cinnamon Pepsi max. Over time the two brands have been associated with the young care free spirit that is the youthful age of the target market. The campaign will be able to reach the target market through the print media, television radio and outdoor advertisement options. The target market will only be moved by something new and challenging to give a try. This will be the key message that the campaign will seek to pass to the target market; that the “complete combo” is the new exiting thing in town to try out. Message design Broad message to the target group Tagline: Pepsi punch and Doritos vanilla the “compete combo” Pepsi and Doritos rhyme very well with the youthful spirit of the target market that is daring and exited to try out something knew. The two brands are known to produce quality and unique products that are very popular with the young consumers. The combination of the two is well designed to ensure a memorable experience for consumers worth repeating Sub-message We realize that obesity and lifestyle diseases caused by sugary food and carbonated drinks is a problem in many developed states. We take all the precaution to develop products low in calorie and nutritious to our consumers Implementation Advertising Objectives To ensure the target market is aware of the new product offering To spark in our target market the desire to try out the new product offering Implementation Print advertising Print adverts will be placed on major Australian newspapers such as the Sidney Morning Herald, the Australian and the Age. The ads will inform the target market of the new product and why they need to try it out. Outdoor advertising Outdoor billboards will be placed in popular areas in major Australian cities – eg. Sydney, Melbourne, Brisbane, Perth, Adelaide. Promotion Objectives To ensure the target market is aware of the new product offering To spark in our target market the desire to try out the new product offering Implementation Free samples will be offered on selected days at major retailers in Australia and also at sporting events. The Pepsi and Doritos websites will also be used to run promotions and advertise the product further at a lower cost. These will ensure the awareness of the product is enhanced through word of mouth as well as through publicity. Budget $ 50, 000 Research $150, 000 Production $1 Million media Evaluation There are three phases involved in the summative evaluation process of the campaign Before campaign implementation This phase will evaluate the effectiveness of the current advertisement strategy by pepsi max and Doritos. This will be done using available sales figures, market research and focus group discussions. During the campaign implementation During implementation, the campaign will be evaluated biannually to make adjustment as required. The evaluations will include; Media analysis to evaluate the extent of coverage in the campaign Awareness study to know what percentage of the target market is aware of the new product. After the campaign implementation The evaluation at this stage should focus at the end result of the campaign (Ferell & Hartline, 2010). Productive efforts will be celebrated while hard questions and debates shall be instituted for failed targets. The companies’ measurable objectives shall also be used to determine the success of the campaign. References Barker, N., Michael, V., & Shimp, T. (2012). Integrated Marketing Communications. Cengage Learning. Bhasin, K. (2013, January 5). COKE VS. PEPSI: The Story Behind The Neverending 'Cola Wars'. The Business Insider Australia. 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Available online from: HYPERLINK "http://www.smh.com.au/business/marketing-and-advertising-shift-to-where-the-eyeballs-are--online-20120406-1wgz3.html" http://www.smh.com.au/business/marketing-and-advertising-shift-to-where-the-eyeballs-are--online-20120406-1wgz3.html . [Accessed: 23 October 2013] The Smith's Snackfood Company Limited. (2013). Doritos - Party Central. Retrieved October 23, 2013, from Doritos Website: http://doritos.com.au/#products-container The Sydney Morning Herald (2013, October 17) PepsiCo's profit edges up on snacks. Available online from: HYPERLINK "http://news.smh.com.au/breaking-news-business/pepsicos-profit-edges-up-on-snacks-20131017-2vnkl.html" http://news.smh.com.au/breaking-news-business/pepsicos-profit-edges-up-on-snacks-20131017-2vnkl.html . [accessed: 23 October 2013] Read More