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Case Study Assignment

Pepsi is increasing its marketing of diet sodas in response to concerns about obesity and schools limiting sugary drinks. One-third of teens drank diet soda last year, and Pepsi is now treating Diet Pepsi as its flagship brand. However, some young people, particularly men, do not consider diet sodas cool. As a result, Pepsi will market Diet Pepsi as a hip, cool brand for all ages. Meanwhile, Pepsi will focus its marketing of regular Pepsi more narrowly to those under 25, Latinos, African Americans, and sports fans.

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Fahad Malik
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630 views

Case Study Assignment

Pepsi is increasing its marketing of diet sodas in response to concerns about obesity and schools limiting sugary drinks. One-third of teens drank diet soda last year, and Pepsi is now treating Diet Pepsi as its flagship brand. However, some young people, particularly men, do not consider diet sodas cool. As a result, Pepsi will market Diet Pepsi as a hip, cool brand for all ages. Meanwhile, Pepsi will focus its marketing of regular Pepsi more narrowly to those under 25, Latinos, African Americans, and sports fans.

Uploaded by

Fahad Malik
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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A recent article in the Wall Street Journal described how the next “Pepsi Generation” likely will

be drinking diet cola. Pepsi learned that one-third of teens were diet soda drinkers last year and
that teens start drinking diet soft drinks at a very early age. However, they also acknowledged
that a substantial portion of young people don’t consider diet sodas cool, particularly men. The
chief marketing officer for Pepsi-Cola North America was quoted as saying, “We are treating
Diet Pepsi as the flagship brand. . . . It’s a big step for us.” Indeed, this is a major break with the
traditional soft-drink marketing in which the sugar-sweetened brand still dominates in market
share. However, with concerns of rising obesity and schools cutting back on sugar-sweetened
drinks in vending machines, soft-drink manufacturers, like Pepsi, are responding with an
increase in marketing of their diet soft drinks. As part of this new change in focus, Diet Pepsi
will be marketed as a hip, cool brand for everyone, including teenagers and Baby Boomers.
Meanwhile, the article stated that Pepsi is narrowing its sales pitch for regular Pepsi-Cola to
“soda drinkers younger than 25, Latinos, African-Americans, and sports fans.”

146. Mini-Case Question. By treating the diet soda market as relatively homogenous, what
marketing strategy is this known as?

Answer:

Undifferentiated strategy or market aggregation strategy.


(moderate; p. 147)

148. Mini-Case Question. What segmentation variables are Pepsi using when it decided to
narrow its marketing efforts for regular Pepsi cola to “soda drinkers younger than 25,
Latinos, African- Americans, and sports fans”?

Answer:

Age and ethnicity fall under demographic segmentation, and sports fans represent an
interest, which would be psychographic segmentation.
(moderate; p. 148)

149. Mini-Case Question. It was also noted in the article that a substantial portion of young
people don’t consider diet sodas cool, particularly men. What is Pepsi trying to
accomplish with their increased effort to reach these consumers?

Answer:

Pepsi is trying to change their attitude toward diet sodas. Currently, a substantial portion
of young people’s attitudes toward this product are negative, and Pepsi would like to
change that attitude. Attitudes are important to advertisers because they influence how
consumers evaluate products.
(moderate; p. 139)

150. Mini-Case Question. Previous Diet Pepsi ads have shown a balding office worker in a

135
Chapter Five: The Consumer Audience

shirt and tie who dreamed of riding a motorcycle next to actor Peter Fonda in the movie
Easy Rider. The commercial’s sound track used the song “Born to be Wild.” New spots
for Pepsi will feature hip-hop star Sean “P. Diddy” Combs in an attempt to appeal to a
younger audience. Why do you think that younger consumers were not influenced by
Diet Pepsi’s previous ads and why do you think they will be now?

Answer:

One psychological factor influencing consumer behavior is selective perception.


Ultimately in the perceptual process we select stimuli and ignore others because we
cannot be conscious of all incoming information at one time. Younger consumers may
not have even allowed themselves to be exposed to Diet Pepsi’s previous message due to
selective exposure, meaning their minds filtered out messages that were not relevant to
them. Because the new ads seem to be more targeted to the younger consumer, they
might be more likely to tune in to the ad because the music star featured in the ads will be
more relevant to them.
(moderate; p. 138)

136

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