Pepsi Challenge: Company Preps New Marketing Strategy
This morning Pepsi (NYSE:PEP) insiders revealed that plans are at work in the company to reshape its brand’s image yet again, as rumors circulate that Pepsi will replace Chief Marketing Officer (-CMO-) Jill Beraud with three new, equally powerful executives. The news comes as the result of continued frustration for the soft-drink maker, which recently discovered that Pepsi was superseded by Diet Coke as the world’s second most popular carbonated beverage. Pepsi’s response has drawn mixed reactions, with some hailing the move as ripe with potential, and others questioning its logistical implications, noting that it could lead to significant confusion among market teams employed by the firm.
The three new chief marketers for Pepsi (NYSE:PEP) will be plucked from a variety of locations. Two current marketing executives at the company, Brad Jakeman and Simon Lowden, are expected to seat two of the positions, while the beverage-maker may look outside the firm to fill the third seat. Jakeman in particular has already established his reputation as a marketing whiz, having formerly served as the CMO at Activision-Blizzard (NASDAQ:ATVI). Reportedly, he will be entrusted with marketing responsibilities for the company’s leading drinks, Pepsi, Diet-Pepsi, and Pepsi Max in vital emerging and global markets. Lowden will oversee domestic marketing efforts for a range of the company’s products.
According to one Credit Suisse (NYSE:CS) analyst, the changes may portend a brighter future for Pepsi:
“This is only part of the noise you’re going to get over the next couple of months. Nineteen of the top marketers at Gatorade and Tropicana weren’t there three years ago. Massimo [d’Amore, CEO-PepsiCo Beverages America] is done with the marketing overhaul of those two organizations, for the most part… [Now, Mr. d’Amore] needs to overhaul the New York marketing organizations. The changes in the New York marketing organizations haven’t been as profound or as robust as they need to be. We expect there to be a lot more change and turnover. And we view that as a positive.”
Pepsi’s (NYSE:PEP) marketing overhaul comes at a crucial juncture for the company, as chief rival Coca-Cola (NYSE:KO) continues to boast larger market shares both domestically and internationally. Coke has a particularly wide advantage over its competitor in prized international markets, where Mr. Jakeman will be entrusted to lead Pepsi’s charge towards relevance. Some statistics from Beverage Digest are revealing: 51% of soft-drinks consumed globally are Coke products, while 22% are made by Pepsi. Coke has significant leads over Pepsi in China, where 55% of the market is controlled by Coke and 32% by Pepsi; Mexico, where Coke has a 71% share compared to Pepsi’s 14%; and in the U.K., where Coke’s holds 51% market-share to Pepsi’s 15%.