Pepsi Company Change the Game Campaign - Term Paper Example

Analysis: Pepsi Company Change the Game Campaign Name Institution Table of Contents Table of Contents 2 2.0 Introduction 5 2.1 Background to Online Advertising 5 2.2 The Case of Pepsi Company 6 3.0 Summary of the advert 8 4.0 Impact of Advertising on Pepsi’s Market Performance 8 4.1 Advantages 8 4.2 Disadvantages 10 5.0 Recommendation and Conclusion 11 1.0 Executive Summary This report is aimed at furnishing the top management of Pepsi Company with wealth of information regarding the validity of the contents of the adverts that are on use to promote their change the game strategy. It is an in depth analysis of the content and intuitions drawn from one of the seven video clips used for the purpose; and currently circulating in electronic media and online communities. The report starts with an introductory review of online advertising, why and how it has gained popularity in the recent past. Then, the report gives a summary of the case of Pepsi Company. An evaluation is made of the position the entity holds, its significance and the various external market forces that may work to its detriment. The selected video is summarized in theoretical format. This helps the user of the report to come to terms with the issues raised with regard to its content. The summary is referred to in the subsequent discussion of this report. Then the impact of the campaign on Pepsi’s market performance is evaluated. The advantages discussed include massive creation of customer awareness, geographical expansion, highly appealing and enticing features and high levels of consumer engagement. The demerits highlighted include legal charges for breach of advertising policies; complains from various agencies for lack of honesty, sub-optimization, creating a bad public image as well as adverts not instigating the buying decisions of consumers. Finally, a conclusion is formulated based on matters discussed in the three cases. This is an opinion of best advertising practices that should be adopted by companies. A recommendation is then made for Pepsi Company on the most prudent course of action. The position held is that the campaign has more demerits than merits. The immediate move that would be most viable is to revise the content of the adverts to militate against non-compliance challenges. In the end, the company ought to consider establishing an internal advertising function rather than outsourcing the same. 2.0 Introduction 2.1 Background to Online Advertising Modern advertising is becoming a vital competitive strategy each day yet sensitive at the same. Unlike in the past, today’s a business war has found a new battlefield and this is undoubtedly in the online communities. Virtually all big and multinational companies have taken to this direction not only to gain competitive edge but also as a survival tactic (Brinkmann 2002). The major driving force to this new way of thinking has been brought about by the advent of much improved technology and the subsequent creation of the social networking services. These sites are already commanding massive membership, and marketers realize then that this could be the way to go. Advertising firms and agents have timely identified the new opportunity to redefine their strategies and service provision framework (Kotabe, Masaaki & Kristiaan 1998). The marketing environment of modern times is complex due to the level of consumer awareness companies have to deal with. That aside, competitors design new strategies each day and being actively in the market demands that such strategies have to be countered. This calls for the application of methods that have influential effects to the consumers. One of these methodologies involves situational influence. This entails taking advantage of the many people who log onto websites by floating so many adverts on these sites (Pride & ferrel 2003). The next viable appeal strategy is the psychological influences. This entails designing adverts that identify with specific social classes. For instance, adverts that target the teenagers will most likely be put on sites that focus on pop stars or star sportsmen. Such a move works to entice the customer groups by making them feel part of the generational change patterns. These complex strategies have been possible through the use of internet (Mohammad & Mohammad 2011). The online advertising is not any easy. Two major concerns have to come to play. One is unquestionably coming up with an effective advert and devising the entire advertising campaign. The next issue is ensuring total compliance to the acceptable policies and international advertising standards. The commercial advertising firms address the first issue quite professionally and enthusiastically. However, the same cannot be said of the later. 2.2 The Case of Pepsi Company The global battle in the soft drink and food beverages industry intensifies virtually each day. Each major player must not afford to brink or else lose business. The cola war aside, the firm war between the major manufacturers of soft drinks, is one worth a pose. This is attributable to the structure of the industry that is served by few entities. The small number herein, makes it difficult for players to adopt a unique marketing strategy because each player can master the moves of all the immediate rivals without much strain, and act on information so obtained (Biswas & Sen 1999). Pepsi-Cola has been ranked second for many decades close behind Coca-Cola both with US origin. However, this does not seem to be the case all along. In the cold war for example, the Pepsi-cola has surrendered the second position to diet-cola. Whenever this happens, the first area of concern definitely becomes the marketing strategy (Abdul et al. 2012). In today’s business world, it is almost impossible to mention advertising without mentioning online. As noted earlier internet has formed the playing ground for modern promotional campaign. The advertising firms’ take-up the strategy implementation role after the company management creates the marketing strategy. They do it on mutual trust that the duties will be executed objectively and in accordance with the acceptable standards and regulations. This area has given Pepsi Company the cause for alarm. In the recent change the game campaign, the program can easily be graded as controversial (Abdul et al. 2012). This position does not augur well for business. It is an awkward position to be in, given the competitive nature of the soft drink industry. It is also frustrating given the amount of funds that go into financing this campaign. It is no question that Pepsi desperately needs this campaign. This is if at all it will regain its position in the cola race. That one aside, there is the concern for other products that may also suffer suppression by other brands and most importantly the overall company performance with respect to competitors. One advert, can have massive effect on either side of the equation and hence the rationale to write and present this report. Even in a case where an advert is defined to promote a single product of a company with a range of product lines, the fact remains that consumer will still want to associate the same with the company in general. This forms the call for care and precision. The market concern aside, there is also the other immediate concern. This is the probable consequences for non-compliance. The associated penalties associated with successful ethical suits are punitive and damaging (ASB. 2001a. 2001). While the customer reaction may be in the long-run as information takes time to diffuse, these adverse consequences are mostly felt in the short-run. This could be as short as it would take the board to listen and consider the complaints. This report evaluates the latest change the game campaign by Pepsi-cola Company. 3.0 Summary of the advert A brief review of the actual advert puts sets the ground for analyzing all matters of concern. The video advert involves two young men walking along a street that incidentally has no other pedestrians. One of the men has a football that he dribbles around as they walk chatting. The man wears a sport t-shirt with a name ‘Drogba’ and jersey ‘number 11’ on its back. They then come to a refrigerator and the man without the ball unsuccessfully attempts to open it. The other guy hits it with his ball and a bottle of Pepsi-cola, falls off to the drop box unexpectedly. The young man gets a sip from the bottle as the other watches desperately. He then takes the ball and shoots it hard in the direction of the wall only to break the windowpane of the house. Dogs back from background and the man takes to his heals. No details of whether the man is followed or not 4.0 Impact of Advertising on Pepsi’s Market Performance 4.1 Advantages Pepsi Company has attained commendable milestones with through its promotion strategies. One of those is the massive awareness that the campaign has created for the company and its products. Over the time, Pepsi Company has come to be known as one of the biggest market players in the food and beverages industry. Creating awareness to the potential customers is arguably the first and most important step in sourcing business (Abdul et al. 2012) The geographical expansion that the company has a made over time can strongly be linked to its advertisement campaigns. The market base that the company commands today cannot be slighted. It has gained grip of market in areas that Western products were previously unaccepted. The extensive penetration could not have been possible without promotional campaigns such as this one (Mohammad & Mohammad 2011). Through its campaign the company has managed to achieve unprecedented level of user interaction. Today the company has one of the greatest following in the social sites like Facebook, Tweeter and other social media. The constant and direct communication so established has enabled the management to learn the customer demands and perceptions. It has become easy for the company to make through analysis of the market without spending on consumer research or such. The strong engagement with consumer groups helps the company to strengthen its grip in the market (Valerie 2012). The adverts are highly influential particularly to the youth. The appealing power has particularly resulted from use of sports personalities and other celebrities. This is exemplified by the use of the jersey of the football super-star in this advert. And there is a strong and wide-spread belief that celebrities of that caliber make adverts much more attractive and that once they are used the memories of the advert will remain longer among the public, will be discussed more and may appeal to more people than if such a personality was not used (Anita 2006). 4.2 Disadvantages From the onset, it is easy to note some of the adverse effects that the campaign has had on the prowess of the company. For example, it has found itself on spotlight of facing charges by the regulatory board following complaints from third parties. Though majority of such have been ruled on its favour they have left a bad taste among the customer groups (ASB 2000b. 2000). Similarly, there have been complaints from certain agencies that the contents of their adverts have been misleading. For instance, the assertions by the company that Pepsi-cola contains no sugars have been noted as being not the true representation of facts. Such issues among others leave consumers suspecting the credibility of the company to give valid information regarding their brands (Abdul et al. 2012). The campaigns have in many occasions led to sub-optimization. This means that a campaign meant to market one product harms the performance of other products of the same company. This is a case where consumers shift from consumption of one Pepsi brand to another of its brand. The company in total does not make any progress in such situations. For example, the sales of Diet cola have been growing in US market while those of Pepsi-cola have been experiencing a downward trend. Analysts have explained this as being a case of company customers simply changing their taste preferences as a result of appealing adverts of one brand over the other (Valerie, 2012). Pepsi campaigns have in certain cases worked on the detriment of the company’s image. In some cases the content of the adverts have been noted as being not the true representation of facts. In such cases the company has had to deal with board proceedings over default of the regulations and policies. That one side the company’s reputation has suffered a permanent dent in the eyes of public and competitors have capitalized on such issues to blow things out of proportion to gain business. It is a policy requirement that all adverts should be truthful. It is also required and subsequently expected that organizations will refrain from such things as superstition or things and scenario pointing to such in their adverts (Li Juan 2009). The case is not so in the advert herein. A bottle of Pepsi falls off at the hit of a ball. In the ordinary way of living, nobody would expect a bottle of a soft drink to sense the presence of a leather ball as the advert purports. Indeed these are two inanimate objects. When this is represented to be the case questions of honesty are likely to start flowing. Unfortunately even, is the societal perception that once a liar always a liar (Li Juan 2009). If they rate this particular advert to be pointing to some form of untruthfulness, then they are like to rank all the others the same way. Many adverts have been ranked as highly appealing but not influencing the consumers into the actual buying. Basically this means that the advert acts just like a form of entertainment but do not propagate the choice behavior. The brandy trend that has been the icon for Pepsi has not translated into sales in most parts of the world. The youth flock in India, for example, has been noted as not identifying itself with Pepsi brands. This is despite the campaign that has aimed at defining the company as a young alternative soft drink supplier of the modern direction (Valerie, 2012). 5.0 Recommendation and Conclusion In light of the circumstances surrounding Pepsi advertising campaign it is prudent to assert that the project has more disadvantages than benefits. This considering the costs that go into this campaign without objective predictions on the outcome. The minimal gains that may accrue from the campaign are far suppressed by demerits associated with it. The financial implications that may result from successful suits on grounds of transgressions are unnecessarily too high. Indeed by all means and considerations of the demerits so discussed this is not a gamble worth taking. The advertising industry places a high regard for ethics in advertising. This position has consequently been adopted by people as the acceptable code of behavior and now demand that organizations to go by that. It will be difficult therefore for companies to avoid this reality. Pepsi cannot be an exception either. Any advert that makes it to the waves must be thoroughly examined. Companies must not do this just to comply with the regulations but to demonstrate high levels of social responsibility. Indeed entities should avoid adverts that may mislead the public on their own motion. However, it remains difficult to determine whether a negative advert really influences bad behavior and if so to what extent. Organizations must however, float a mindset of sensitivity to what they broadcast to the public (Harker 2003). It is imperative to err on the safe side. The extent of damage that results from controversial adverts must be viewed in both the short-run and the long run. The immediate effects usually would entail the punitive penalties the offender may be required to pay while the long-term effects are more extensive. They may not be objectively quantified like the later but their implications are much more adverse. They may imply lost customer loyalty, surrender of the competitive edge to rival firms or even closure of business or business line. Doing business in the twenty first century implies adopting those practices that have gained acceptable moral validity to the extent that they can be taught to future generations as the societal code of conduct (Paul, Costanzo, Janelle & Goodnight 2005). Corporate entities must respect and appreciate that unlike in the past; they now have to deal with a very informed customer base. For our case herein; Pepsi Company’s change the game advert, it is better to be on the safe side of the law. It would be prudent to revise the adverts rather than wait for external pressures to start mounting (Gutwirth 2002). A campaign of this magnitude is worth at least well-rehearsed and refined adverts to ensure its success without implied extra costs. In future, the management needs to consider the competence of the firms contacted to design the adverts. It would be safe also to consider creating an internal function within the company to design the adverts in future, rather than outsourcing. This will enhance greater control of the marketing campaigns. 6.0 References Abdul, M, Muhammad, W, Ali, R & Sohaib, A 2012, ‘Consumer Preference Coca Cola versus Pepsi-Cola’, Global Journal of Management & Business Research, Vol. 12, no. 12. Abbarno, GM 2001, ‘Huckstering in the classroom: Limits to corporate social responsibility,’ Journal of Business Ethics Vol.32, no.2 pp.179-189. Anita, MM 2006, ‘False Advertising and Celebrity Endorsements’, Where’s My Script? 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