Vanilla Pepsi Case Study
Pepsi has been the number two selling soft drink company in the United States for the past two decades. Coca Cola has been the number one company and seems to be entrenched in that position for the foreseeable future. When Coke Zero was introduced last year, Coke went ahead even further. This has the Pepsi Cola Company understandably worried. The company feels great pressure from their shareholders to introduce new products into the marketplace to try and cut into some of Coke’s large market share dominance. Coke’s market share has grown from 37% to 41% with the new Coke Zero while Pepsi has shrunk from 29% to 26%.
The marketing department at Pepsi has decided that they need to introduce a similar product to Coke Zero, called Pepsi Max, to take back some of Coke’s gains. Pepsi Max would be higher in caffeine and would likely appeal to teenagers and men (same demographics that Coke Zero is aiming for). Some managers at Pepsi think that this is not a good idea as the current diet choice, Diet Pepsi, is Pepsi’s second selling product and they feel that tinkering with its success would be foolish.
With the success of the Coke Zero product and a new push by the Coke Company to market another product in the cream soda area (under the Barg’s label) Pepsi really feels that this is the way to go. Pepsi sells the very successful A&W Cream Soda and is worried about losing market share there also. However, with the summer selling season coming in a short seven months, Pepsi is under great pressure to move quickly.
The New England Pepsi Bottlers has asked the Middlebury Union High School Sales and Marketing class to help them in this decision. They would like to find out the following information from the teenage market (the number one buyers of cola products): 1. Do teenagers feel that there is a need for a new diet product with more caffeine? 2. Would they buy the new product? 3. Does the Pepsi Max taste better than the Coke Zero? 4. Should Pepsi introduce the new product or should they concentrate on their staples of Pepsi and Diet Pepsi with off chance that Coke may make a mistake in their advertising and introduction of their new Cola products?