Week 5 Case Assignment MRKT 5000 PepsiCo: “Pepsi Sales Bubble with Limited-Edition Soft Drinks” Case Summary: Pepsi and their partner, Suntory, are using limited-edition soft drinks to boost market share in the $30 billion Japanese beverage market and keep sales bubbling despite a cola war with Coca-Cola and fierce competition for space on store shelves. No new product is a sure thing, but the Japanese market is particularly challenging.
Of the 1,500 beverages launched there every year, only the tiniest percentage survives the introductory period because the Japanese convenient stores are small and they make room for only the products that will sell off the shelves quickly. Another reason is because the Japanese consumers crave novelty limited-editions products that are for specific seasons, regions, or reasons. Given, the competitive environment, the pressure from retailers to make new products perform, the speed with which consumer tastes change, and the cost of launching a new soft drink, Pepsi and Suntory are being careful not to overuse their limited-edition strategy.
Key Marketing Issues: Line extension - Development of a product that is novelty, but closely related to their existing product line to meet different customer needs, to reach different target markets. Aesthetic modification - Changes to the sensory appeal of a product. Pepsi changed with berry-flavored Pepsi Blue and Ice Cucumber. Product differentiation – Creating and designing products so that customers perceive them as different from competing products.
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Pepsi differentiated itself by being offering the Ice Cucumber only during the summer and by limiting the Pepsi Blue. Personal Case Analysis: Case Questions: 1. Pepsi and Suntory cap their limited-edition soft drink introductions at four per year. What effect is this cap likely to have on the new product development process? By Pepsi and Suntory offering their limited-edition drink introductions at a cap of four per year it will have their consumer’s excited anticipating the next introduction, versus offering them more a year and their consumers getting bored quickly.
What we have to remember is that the Japanese market does not respond the same way as the U. S does. The Japanese market, wants novelty and limited-edition and that’s what Pepsi and Suntory is going to give them. When Pepsi and Suntory set out to tap this widespread interest in variety by marketing limited-edition soft drinks, they started with berry-flavored Pepsi Blue. In the United States the Pepsi Blue remained on the market for two years. In Japan, the entire production sold out the same product within a few weeks.
It’s a great marketing plan to allow their limited-edition soft drinks stand out and not overuse their limited-edition strategy. 2. How important is product quality when a limited edition soft drink like Ice Cucumber sells out in a matter of weeks? Product quality is important, but not as important as ensuring that the product meet the needs of the consumers. Consumer needs are most important. Consumers spread the news by use of technology and word of mouth, which is significant for any successful marketing strategy.
Another thing that’s important is the scarcity and seasonality, as mentioned in the textbook these two added to the appeal of high demand. 3. What criteria would you suggest that Pepsi and Suntory use when screening ideas for new limited-edition soft drinks? The most important criteria I suggest that Pepsi and Suntory use when screening new ideas for new limited-edition soft drinks is making sure they match product offerings to customer’s needs, make sure they have effective and consistent branding, good timing is necessary, effective promotions, and sufficient distribution.
I would use the previous technique they used before by taste testing many possibilities, then choosing a flavor, creating samples and waiting for responses by focus groups. This will give consumers something to look forward to every season. Recommendations Works Cited Pride, W. and Ferrell, O. , Marketing, 16th ed. Copyright 2012, Cengage Learning
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