How PepsiCo Is Improving Its Brand Loyalty

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In Brand Keys’ 21st Annual Customer Loyalty Engagement Index, PepsiCo (NYSE:PEP) usurped Coca Cola and gained the top spot as the most loyal regular soda brand. For the past four years, Coca Cola had retained this spot with Pepsi playing a close second fiddle. However, its aggressive marketing and innovation, intended to create excitement around its brand, seemed to have paid off, with the company gaining the top spot in 2016. The company spent a significant portion of its marketing budget on a Super Bowl sponsorship in 2015, including sponsorship of the half time show. PepsiCo also piloted its “Pepsi Emoji” campaign last year in Canada and other markets and will execute this idea globally in the summer of 2016. The company appointed its first ever Chief Design Officer in 2012 and has been using innovation through design to identify new opportunities to promote its product platforms and  brands in what it terms the “society of future”, one that is influenced by social media.  PepsiCo’s has  categorized  its diversified portfolio as: 1) “Fun for you”, which includes the carbonated soft drinks and snacks; 2) “Better for you”, which has low calorie versions of its products; and, 3)“Good for you”, which constitutes its healthy products.  And it has leveraged its innovative marketing techniques to maintain its newly acquired leading position in brand loyalty.

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Digital Innovation Key To Attract Younger Consumers

PepsiCo’s diversified portfolio gives it an advantage in developing a better brand recall, since it has products in a range of consumer categories. And its focus on innovation through its newly implemented design thinking is giving the company a competitive edge. One innovative product launched by the company is Pepsi Spire, a digital drinks fountain that puts consumers in control and allows them to personalize their drink with up to 500 combinations. Spire was developed as an initiative to find the perfect balance between customer engagement and efficiency.  The company is now unveiling prototypes for its smart tech bottles for Gatorade at the South by South West (SXSW) Festival.  The microchip fitted “smart cap” bottle along with a sweat patch will be able give users’ updates on how much and when they should drink, as the sweat patch tracks sodium loss. The company is innovating in emerging markets as well. With the onset of summer, PepsiCo has launched a new mini can in India along with its Pepsi Moji campaign to target the aspirational class in the country. The company also launched a new hydration drink Revive in India which it claims is a hydro-tonic containing vitamins and electrolytes, thus diversifying its portfolio in the region.

We believe its digital initiatives are aimed at attracting the younger generation. These initiatives include a smart bottle for Gatorade, the emoji’s campaign,  and the dedication of  40% of its Super Bowl advertising budget on digital media.  The company is looking to innovate and adapt itself to the changing needs of the consumers.  Hence it is leveraging a focus on design to identify opportunities in future to diversify its portfolio, so as to increase the consumption of more healthy beverages in all regions. These initiatives seem to be paying off by the increased ranking in its brand loyalty and should drive revenues for the company in future.

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