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Tuesday, November 07, 2006

Brand idea failures: Pepsi

In pursuit of purity

Coca-Cola may have one of the most famous brand failures of all time, but its long-standing rival has also had its fair share of marketing mishaps. For instance, in 1992 Pepsi spotted what it considered to be a gap in the market. What the world was waiting for, the company decided, was a clear cola. After all, there had already been a variety of diet colas, cherry colas, sugar-free colas, caffeine-free colas, caffeine-enhanced colas, and all had achieved at least some form of success. So why not a clear cola?

After months of tests and experiments the company arrived at its new, clear formula and decided to call it Crystal Pepsi. They also produced a diet version – Diet Crystal Pepsi. Both products, Pepsi believed, answered the ‘new consumer demand for purity.’ After all, this was a time when consumers were starting to opt for a bottle of Evian or Perrier just as often as they were picking up a bottle of Coke or Pepsi.

The only problem was that a product with the word ‘Pepsi’ in its name was expected to taste like, well, Pepsi. But it didn’t. In fact, nobody seemed to know what it tasted of.

Anyway, after a little more than a year, Pepsi halted the production of Crystal Pepsi and started work on a new clear formula. In 1994, the reworked product appeared on the shelves, branded simply as Crystal, and available only in regular. However, the negative associations persisted and Crystal mark two did even worse than its unpopular predecessor. Pepsi eventually admitted

defeat and scrapped the whole concept of clear cola. But never one to give in easily, Pepsi remained aware of the ‘new consumer demand for purity.’ In 1994, the same year it launched Crystal, Pepsi decided it wanted a piece of the growing bottled water market. It therefore launched its own bottled water product, entitled Aquafina, which had considerably more success than Crystal in the US market.

In addition to Crystal, there have been other, more general marketing problems for Pepsi over the years. In particular, it has had trouble differentiating its brand identity from Coca-Cola. As it wasn’t the first to market the cola category, Pepsi was never going to be the generic name. People rarely say, ‘I’m going to have a Pepsi’. Even when they have a Pepsi bottle in their fridge they would be more likely to say, ‘I’m going to have a Coke.’

However, although this situation couldn’t be avoided, Pepsi’s branding for many years failed to give the product a stand-alone identity. Crucially, Pepsi breached what Al and Laura Ries refer to as ‘The Law of the Color,’ one of their 22 Immutable Laws of Branding in the book of the same name. As they state:

There is a powerful logic for selecting a color that is the opposite of your major competitors [. . .] Cola is a reddish-brown liquid so the logical color for a cola brand is red. Which is one reason why Coca-Cola has been using red for more than a hundred years.

Pepsi-Cola made a poor choice. It picked red and blue as the brand’s colours. Red to symbolise cola and blue to differentiate the brand from Coca-Cola. For years Pepsi has struggled with a less-than-ideal response to Coke’s colour strategy.

Recently, though, Pepsi has sacrificed red for mainly blue to create a stronger distinction between the two leading brands. Now Coca-Cola equals red and Pepsi equals blue.

Lessons from Pepsi

  • Don’t assume that gaps should always be filled. If you spot a hole in the market, it doesn’t mean that you should fill it. Just because clear cola didn’t exist, it didn’t mean it had to be invented. However, the previous success the company had with its Diet Pepsi product (the first cola of its kind) had convinced Pepsi that there were more gaps to fill.
  • Don’t relaunch a failed product. Crystal failed once, but Pepsi still believed the world was crying out for a clear cola. The second version fared even worse than the first.
  • Differentiate yourself from your main competitor. For years Pepsi’s visual identity was diluted through its red and blue branding.

2 comments:

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sarah lee said...

I really enjoyed reading your article. I found this as an informative and interesting post, so i think it is very useful and knowledgeable. I would like to thank you for the effort you have made in writing this article.


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