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Pepsi Throwback: The Renewed Choice of a Generation

Posted in Advertising, Branding, Food, Goodwill, Guest Bloggers, Marketing, Product Packaging

       

In December, PepsiCo introduced the United States market to a new, special limited time offer. From December 28-February 22, the Pepsi brand would offer Pepsi Throwback. This version of Pepsi contains real sugar, just as Pepsi products did until the early 1980s. This is the second market trial of Pepsi Throwback, as it had originally been on store shelves in the spring of 2009. As we near the end of this limited time offer, I urge Pepsi to make Pepsi Throwback the standard Pepsi product permanently. Offering a cola product with real sugar and 1970s era nostalgia packaging will benefit the brand. It is a healthier product that will foster goodwill in the marketplace, it evokes positive memories and it gives the brand an advantage over Coca-Cola.

The best decision that Pepsi can make from a product standpoint is to remove high fructose corn syrup. Until the last 2-3 decades, the vast majority of colas were sweetened with sugar instead of high fructose corn syrup. Since high fructose corn syrup was introduced, the nutrition value (or lack thereof) has been intensely debated, particularly in recent years. Many attribute high fructose corn syrup to causing higher rates of obesity. It is not smart strategy to use an ingredient that can be perceived as harmful to health. By removing high fructose corn syrup, Pepsi gains a competitive advantage over chief category rival Coca-Cola, assuming that Coca-Cola doesn’t revert back to sugar as well. Even if Coca-Cola does make the move, Pepsi would retain first mover advantage, and would still be more positively perceived. This move of returning a product to the original formula evokes nostalgia feelings. When a brand can be associated with positive, nostalgic feelings, it is usually a beneficial occurrence.

Maintaining a sleek retro look in packaging is a wise component of a successful nostalgic brand strategy. In the current Pepsi Throwback campaign, Pepsi has used a modified version of their 1970s and 1980s era logo. When Pepsi first rolled out Throwback in spring 2009, they used an older version of their logo. If Pepsi were to make the decision to make Pepsi Throwback the flagship Pepsi product, the 1970s/1980s era design should be used in packaging. This is a design that will resonate more forcefully with the target market, as it is more memorable than the more dated look. 

A permanent Pepsi Throwback could have some exciting marketing communications elements. In the early 1990s, when the Pepsi logo underwent a re-design, Pepsi made a great commercial featuring Cindy Crawford. In the commercial, Cindy Crawford pulls up to a gas station and buys a Pepsi. Two pre-adolescent boys are watching her every move and they comment about the great new Pepsi can. In the mid 2000s, the Diet Pepsi brand took this same concept and modified it when they made a packaging change. Since Cindy Crawford is still perceived as attractive in her mid 40s, the reformulated Pepsi could make a commercial with her in it, emulating the early 1990s ad. It would be a smash hit, particularly on YouTube.

Pricing strategy is also an important element to consider in making Pepsi Throwback permanent. If Pepsi moves alone in replacing high fructose corn syrup with real sugar, they could potentially raise their prices. This could be done if thoroughly conducted, well reasoned market research supports the conclusion that there is a higher willingness to pay for a product that can be perceived as healthier. This could also be a risky proposition given as though the economy is in a fragile state. Goodwill could potentially be lost in a price increase, as the consumer could feel that Pepsi doesn’t understand them. My recommendation would be to keep prices at approximately the same level to prevent a potential loss in market share.

It is evident that making Pepsi Throwback the standard Pepsi product is an intelligent strategic marketing decision. Many elements of the marketing mix will work well together in this scenario. This successful marketing mix should ensure that Pepsi delivers beneficial financial results in the future.

David Mitchel, Norton Mitchel Marketing

  • http://slyousten.com Steve Yousten

    Of course the bottom line is the almighty dollar sign. Sugar costs more than HFC, so you either need a proportional increase in sales to offset the ding your margin takes by raising costs, or you need to be able to charge a premium for sugar.
    That said, Seattle’s Jones Soda kicked HFC in 2006-2007 had has a nice little niche for itself.
    It would be interesting to see if Pepsi could market the throwback and regular versions side by side, but I suspect the HFC sales would be hurt more than the sugar sales would offset.

  • Ryan

    I second this! Though in my opinion if PepsiCo wants to keep their HFCS recipe as well that is fine, but definitely keep Throwback!!

  • http://www.nortonmitchel.com David Mitchel

    Great news…..Food and beverage products are moving away towards HFCS towards sugar.
    http://online.wsj.com/article/SB10001424052748704706304575107560929031460.html?mod=dist_smartbrief

  • http://www.stuff4you.biz Dan

    This sure is a smart marketing decision, the throwback editions are the only reason why I’ve been buying a lot of pop lately.

  • pj stanley

    the best thing that pepsi has done in years is the throwback! my husband and myself had turned to coca colas. when i saw the throwbacks and we tried them,we were instantly hooked. keep them coming pepsi!