“Only one has it all”: A case study of Pepsi One

It’s the first day of the year 2014 and I am sitting in front of a Compaq 5500 screen at the MBA lab as I complete the review of a case study given by my “Strategic Brand Management” lecturer which has to be submitted before the end of the class.

Find below a “summary” of what I’ll be submitting. Yeah, you’re seeing it before he does. Cool innit? 🙂

The case is about a product PepsiCo released in 1998 and how it faired in the market for which it was intended for. A diet cola called Pepsi One.

Pepsi One was designed to be different from other cola diet drinks in that it contains an artificial sweetener which Pepsi thought will be good for 20-30 year old men. For Pepsi One, PepsiCo decided to do without the word “diet” due to the negative image of bad taste, “diet” colas had at that time. Huge amount of money (over $100 million initially) was budgeted which afforded PepsiCo several  marketing and branding efforts including an advertisement that featured the Oscar winning actor Cuba Gooding Jr., comedian  Tom Green and “Sex and the city actress”, Kim Cattrall.

With only 0.8% (less than half of the predicted 1.7 per cent market market share) market share of the then in the carbonated soft drinks category (an industry worth $57.9 billion then), 18 months after the launch, Pepsi One didn’t succeed as expected. This can be attributed to three key reasons (from a marketing point of view):

  1. Pepsi One was poorly positioned in the market. A PepsiCO executed was quoted saying “we didn’t explain it (Pepsi One) as well as we needed to…”
  2. Pepsi already had a diet cola drink, so people became confused about the introduction of Pepsi One
  3. Ad campaigns that fail to explain the “value” of Pepsi One. The initial slogan of Pepsi One, “Only one has it all” neither portrays Pepsi One as a diet drink nor says anything about its taste. The slogan was later changed to “True cola taste. One calorie,”. This created more confusion as customers couldn’t differentiate between Pepsi One and the regular Pepsi diet.

 

Technopreneur. Chief Hustler at 1Plify. PhD scholar [Technology entrepreneurship]

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