CASE: DIET PEPSI

Submitted by- Chidananda Mohanty

FT154066
Objectives:
1) What is Diet Pepsi trying to do in branding terms?
Solution:
1) The case in discussion discusses the brnading strategy of diet Pepsi. As per the strategy, it
concerns the Diet section of the aerated drinks segment. As per the case, Pepsi is trying to
catch up to the market leader Coke and does a great job at giving Coke a run for their money for
their Diet product.
2) In the mid-90s Diet Pepsi revitalized its product formula and launched 'Diet Pepsi' in
competition with the incumbent 'Diet Coke'. As a result the market share of Pepsi rose from
4.2% to 4.8% in response to the new product, but after that it did not increase much. Coke on
the other hand enjoyed market supremacy at 6.4%. Pepsis marketing strategists deduced that
they were lagging in market share not of lack of a revolutionary product but because of an
improper marketing strategy. So the objective that lay before Pepsi was to reinvent their
marketing approach for people in their late 20s and early 30s. This segment comprised of two
sub segments, first ones comprised of the Diet Pepsi drinkers and the second ones being Diet
Coke drinkers.
3) Since carbonated drinks were high on carbohydrates and contributed to the fat therefore
increasing the girth of the person, they were being rejected by the individuals leaving their
twenties and entering the so called mature adulthood.
4) By introducing the diet element, the intention was to appeal to the younger side of these
people by luring them to be young again or alive again by starting a series of exciting
campaigns which depicted the livelihood of the youth and subtle maturity of the adult.
Advertisements like Dirty dancing & Dancing can were the perfect creative interpretation. In
addition to this, in the print media segment the Shoe laces, Paper clip & Bottle cap all tied up
into the office theme. Furthermore, the Forever Young tagline was the homerun for Pepsi.
5) Pepsi had to carefully place the advertisements of the Diet product not to cannibalize its own
original product and at the same time the objective was to appeal to the very selective market
segment of diet cola consumers. By promoting the Forever Young campaign, Pepsi was able to
achieve it. As a result Pepsis market share increased. By the end of the campaign in 1999, the
share of the market pie had increased from 4.8% to 5.1%.
6) Now coming to the branding strategy, we see that Pepsi was trying to renew the brand image of
Diet Pepsi in such a way that it would appeal to the young and young at heart. Pepsi proved
that branding an image was not a matter of spending millions but appealing the market
strategically. Though Coke spent over USD 15m in all, Pepsi achieved their targets just by
spending USD 1.5m during the campaign.