Read the case study “Risks: The Pepsi Refresh Project: A Thirst for Change” in your course pack and summarize the article in a couple of paragraphs. Do you feel that the choice to pass on Super Bowl ads and invest the money into social media programs was a good idea? Why or why not? You must also respond to a minimum of two other students’ blog posts.
Reply 1: Rachel Bellet
In 2009, Pepsi decided that they would take their $20 million Super Bowl marketing budget and use it to create The Pepsi Refresh Project. This project allowed people to submit ideas for grants to help refresh their communities. The ideas that generated the most votes each month were then awarded the grants. Pepsi created six categories in which the grants could be placed: Health and fitness, Arts and culture, Neighborhoods, The Planet, Education, Food and Shelter.
They created this campaign with three executions in mind. They had wordplay that targeted Millennials, bottle pass which target the Baby Boomers and refresh anthem that targeted the Super Bowl. The theme for the campaign was to create feelings of optimism, hope, joy and love. When the campaign officially launched, their site had reached the 1,000-idea submission limit in its first 72 hours. More than 141,000 votes were cast in the first three days, and by the second month of the campaign, it only took 16 hours to read the 1,000-submission limit. Consumers were interacting with this campaign through all forms of social media. By March 2010, Pepsi had earned an additional 300,000 Facebook friends and was generating 1,000 tweets daily due to the campaign’s success.
In my opinion, I feel like Pepsi’s choice to pass on the Super Bowl ad was a mistake. Even though the brand was having tremendous success with the project and creating hype around the brand, their “sales were slumping in the U.S.—down 5% in 2010—and PepsiCo was losing market share to its rival, Coca-Cola.1 For the first time in 20 years, Pepsi-Cola surrendered its title as the second best-selling carbonated beverage to Coke by slipping to third, behind Diet Coke.2 PepsiCo’s share price was also down 5% in 2010” (Norton, Avery. 2013). Above, I also stated that due to the campaign Pepsi gained 300,000 more Facebook friends. However, Coca Cola gained 390,000 on Facebook due to the multiple Super Bowl ads they ran. Pepsi alienated themselves by not creating an ad because their campaign wasn’t shown on the most-watched television even in the media at that time. If they had created the campaign and showed it on the Super Bowl, their sales would probably have increased and would have gotten more engagement from consumers.
Reply 2: Joseph Damora
In 2010 Pepsi decide to forego their Superbowl budget and direct those funds towards their social media ventures. Was this a smart idea? It depends how you want to look at things, the immediate effects of this decision were not great. “Pepsi-Cola surrendered its title as the second best-selling carbonated beverage to Coke by slipping to third, behind Diet Coke. Pepsi Co’s share price was also down 5% in 2010.” (Norton, 2013) Obviously this is alarming for a company of Pepsi’s size, you are losing market share and in the game of cola your brand dominance is very important.
On the other hand, Pepsi’s marketing campaign focused around giving grants to people who submitted ideas to refresh their communities. “Consumer response to the program was tremendous. More consumers submitted ideas to the Pepsi Refresh Project than auditioned for American Idol; more votes were cast for Pepsi Refresh projects than in the previous U.S. presidential election.” (Norton, 2013) This is an enormous response via social media, creating a huge response and building their social media following at the same time. This may not give immediate dollars back in revenue, but this builds a different kind of ROI in your customer base through social media. Another thing to observe is that even though Pepsi lost their spot as the number two soft drink, they would jump from 43.23 billion dollars in 2009 to 57.84 billion dollars in 2010. (Statista, 2020) Pepsi Co has a few other products under their umbrella such as Mountain Dew and Diet Pepsi. This makes it clear that the company overall had huge success, people may just have been buying their other products rather than their headliner Pepsi soda.
It seems that when you consider the huge jump in revenue that Pepsi experienced that year, their actual market share seems a little insignificant. Their social media campaign in the refresh project may not have worked as effectively to keep their spot as the number two soft drink; but there were obviously some other big bonuses in their social media growth, consumer engagement and overall revenue.
Michael J Norton. “The Pepsi Refresh Project: A Thirst for Change” (2013, August 26). Retrieved March 27, 2020, from https://services.hbsp.harvard.edu/lti/links/content-launch
Bedford, Emma. “PepsiCo’s Net Revenue Worldwide, 2018.” Statista, January 23, 2020. https://www.statista.com/statistics/233378/net-revenue-of-pepsico-worldwide/.