Last updated: August 18, 2019
Topic: BusinessMarketing
Sample donated:

Pepsi Cola and Coca-Cola have been competing with each other for many years through numerous taste tests and television ads. One of the ideas they came up with is water. In the early 1990s Evian and Perrier were the brands that dominated the niche and helped establish bottled spring water’s clean, healthy image. Pepsi first tried to attack this market with bottled and sparkling water but failed. In 1994, Pepsi had the idea of using its bottlers to filter local tap water and offering the resulting product under the name of Aquafina.

They experimented with a reverse osmosis process pushing already filtered tap water at high pressure through fiberglass membranes to remove even the tiniest particles. This process created water with no taste or odor. In addition, because the process used tap water it was inexpensive and would compete well on price with the other spring waters in the market. Pepsi wanted to target everyone with unisex, mainstream water at an everyday price. By 1999, the bottled water market had boomed and competitors such as Coca-Cola decided it was time to join the market. Similar to Pepsi they launched Dasani.

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Dasani was bottled water filtered locally by its bottlers but with certain salts and minerals added to give it a fresh, clean taste. Having the same motives as Pepsi, Dasani was content just to build distribution and not promote water. By 2001, the category was on the way to becoming the 2nd largest beverage category. By 2004 both companies decided they needed to promote their waters. This resulted in a new front called the “Water Wars”. The early water products such as Evian, target women and “high-end” consumers and positioned themselves as expensive, upscale products.

Pepsi on the other hand wanted to target everyone with a unisex product at an everyday price. They position the product as having “nothing”! Pepsi is referring to how the product has no added minerals or anything and that it is pure. However, Evian and other natural spring waters are also positioned as pure. Possible Target Options Pepsi could mimic the other water producers and target women. But to narrow the targeting even more, it could target the 20-35 aged, active, on-the-go, health-conscious woman. In response to the concerns over teenagers drinking oo many soft drinks, it could position the drink as a substitute for soft drinks. This would be problematic for Pepsi but could be a complementary alternative. Another option would be to target the 20-35 year old, active, health-conscious man who is on the go. This might position it against sports drinks and Pepsi’s own Gatorade. It could position it not as a sports drink but simply as a convenient source of pure water for people on the go or in situations where good water was not readily available. Pepsi has a difficult time finding a good position for Aquafina that makes sense in terms of its other product offerings.

An Aquafina bottle doesn’t mention Pepsi on the label so they could pursue a multi-brand strategy. QUESTION 2 & 3: What recommendations would you make for advertising objectives, message strategy, and message execution for Aquafina? Consumers already know about the product and the category’s success has demonstrated the primary demand for the product. The focus for advertising objectives should be on persuading or on building selective demand. Pepsi wants to build brand preference and encourage both new users and brand switching.

Persuasive advertising includes persuading customers to purchase now, to receive a sales call, and convincing customers to tell others about the brand. The first step in creating effective advertising messages is to decide what general message the company wants to communicate to consumers. This flows from the positioning statement stressing the idea that the positioning statement guides development of the marketing mix. The message should convey the product’s benefits and flow from a “creative concept”. Pepsi problem arising because they are positioning the product as “nothing”.

If Pepsi wanted to target active people who drink water, a core benefit could be summarized as “Pure water. Wherever you are. ” Although there are many pure positions, the author is stressing the convenience of bottled water especially in out-of-the-way places. The stated advertising appeals should be meaningful, believable, and distinctive. For message execution there are a number of different styles. Pepsi initially used a “slice of life” style in depicting “real” people drinking Aquafina. If this were the case then selecting lifestyle ads that depict active people using the product in unusual places is a good method.

QUESTION 4: What advertising media recommendations would you make for Aquafina, and how would you evaluate the effectiveness of those media and your advertising? If Pepsi is targeting “everyone” then any media would work. This is why the company should really narrow its focus which will help it select which media opportunity to pursue. If the company targets active people with the pure/convenient positioning stance they can use media that serves various sports and outdoor enthusiasts. Pepsi could advertise in hiking magazines or on television shows that featured outdoor activities and themes.

It could develop an Aquafina Web site that offered information on outdoor activities and education/advice on outdoor activities. Pepsi wants to generate a trial of Aquafina and a potential switching from other products. The print ads might contain coupons for free or reduced price Aquafina that consumers could redeem at stores. Each coupon could have an identifying code so Pepsi could determine which print media contained the coupon. The Web site could also have similar offers through downloading coupons. Television ads could also include promotional offers.

All of these steps could help Pepsi measure both communication effects and the sales effects of the individual media. Focus groups and other marketing research techniques could help measure overall brand awareness and communication effects. Pepsi could also experiment with different promotional programs in different market areas and compare the results with those in other areas. QUESTION 5: What sales promotion and public relations recommendations would you make for Aquafina? Pepsi could promote Aquafina in grocery stores with end-of-aisle displays and special pricing. It could give away sample drinks in the stores.

It could have contests whereby entrants could win various promotional items like Aquafina coolers and bottle holders. It could offer trade promotions to encourage stores to stock and feature the water. They could also develop a loyalty program, in a category where switching is so easy, such a program could be important. Evian has a program whereby a consumer goes to its Web site and enters a code on the Evian bottle. This earns the consumer points that are redeemable for merchandise. For public relations, Pepsi could sponsor various athletic and outdoor competitive events, such as 10K runs where it would supply water for the participants.

Community charity events, like walkathons for a charity would also be good candidates. QUESTION 5: If Pepsi launches an “Aquaceutical,” should it use the Aquafina brand name? Given that Pepsi has established the name and selective demand for Aquafina, it is much cheaper for it to build off that rather than to start over to build marketing support for another new brand name. Both brands stayed true to the healthy traits that were propelling water sales (no calories, carbs, or sugar). But Pepsi designed each to satisfy different needs within the market.

Aquafina Sparkling was carbonated, unsweetened, and came in unflavored and lightly flavored varieties. FlavorSplash was noncarbonated, unsweetened with Splenda, and had heavier doses of flavor, with Raspberry, Citrus Blend, and Wild Berry varieties. These should be positioned as an alternative to bland water. “Add some zing to your water” might be a tagline suitable for these products. The target in this situation is the water consumer who is looking for some variety. Pepsi can still pursue a health-orientated positioning. Promotions aimed at health-conscious people, especially those who like to exercise or go to health spas.

For both products, generating trial is an important promotional task. By 2006, the beverage market trends had intensified. In our opinion Aquafina’s sales growth at the moment is attributed to the dynamics of the market since it has boomed. However Pepsi was one of the first to recognize that the consumer was moving to noncarbonated products, and they innovated aggressively. In that respect its advertising and promotion has helped its sales growth because Pepsi is doing better than competitors such as Coca-Cola. In addition the consumer is becoming more geared towards noncarbonated products.