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Pepsi Speeds Up Marketing in Slow Season
Posted by: Muhammad Bazil (IP Logged)
Date: December 13, 2012 09:01AM

All the beverage companies witness a season of slow sales globally in the winter season and PepsiCo (PEP) is no exception. The demand for beverages continues to fall as the season moves toward its peak, and this fall in demand is causing a steep decline in Pepsi’s sales. This temporary setback is witnessed each year and the company struggles to manage demand in this time period by speeding up its marketing activities. The campaigns also keep the company’s marketing performance alive. PepsiCo’s stock is currently trading within the range of $70.10 and $70.89, and the trend suggests that the stock price is gradually rising.

Pepsi’s Marketing Deal

Pepsi took everyone by surprise when it disclosed a $50 million deal with the world-renowned singer and actress Beyonce Knowles. This deal is gaining significant attention due to its nature. Usually, celebrity endorsements are confined to appearances at events and appearances in advertisements. In this case, the celebrity holds a greater degree of creative control over the marketing campaign.

The multi-year deal is said to include the conventional advertisement methods, such as commercials and print ads. The only difference is, Beyonce will be given a wider scope of authority in decision making and the overall direction of the advertising. There will be photo shoots and appearances like any other marketing deal, but the singer and actress will also assume a creative partnership with the company.

This deal can set Pepsi on the right path as it includes all the essential factors that should be present in an effective marketing campaign. Beyonce is very well known around the world; therefore the advertisements can be used by Pepsi in multiple territories. The singer and actress has a huge fan following; therefore Pepsi may be able to reach out to the fans of the singer. Apart from her current image, the multi-talented celebrity has numerous projects lined up for the near future. These projects will renew Beyonce’s popularity once again, and this will give Pepsi an edge in advertising.

The deal was announced recently, but the effects of this deal are being observed already. The press coverage received by this announcement is extensive and it can be said that Pepsi has reached one of its goals by making headlines through this partnership. Pepsi aims at reflecting the right image of the company.

The president of PepsiCo’s global beverage group, Brad Jakeman, said, “Consumers are seeking a much greater authenticity in marketing from the brands they love.” He further added, “It’s caused a shift in the way we think about deals with artists, from a transactional deal to a mutually beneficial collaboration.”

Coca-Cola and HSN

Pepsi is not the only beverage maker to strike a headline-worthy marketing deal. The direct competitor of Pepsi, Coca-Cola (KO), has also entered into a comprehensive marketing campaign with HSN, the home shopping guru.

The partnership will result in appearance of Coca-Cola-branded merchandise at the online store by HSN. The HSN store will be the biggest online store for Coca-Cola merchandise, and it will include some of the most popular items, along with some exclusive products. Stuart Kronauge, vice president of Coca-Cola Trademark Brands said, “Partnering with HSN gives us the opportunity to leverage their innovative digital platforms and engaged customer base to introduce the world of Coca-Cola to a whole new audience.” He further added, "Fans of our brand will be able to experience it like never before, and we look forward to working with HSN to elevate our brand in new and exciting ways.”

It can be said that both the beverage giants are pursuing major marketing activities, and these marketing activities may bring a temporary incline in the stock prices, but for the long term, both the firms seem to have an uncertain future. Investors should hold the stocks of the company as there is high risk in buying the stock, and selling the stock may turn out to be a loss of opportunity for making short-term gains. The share price of PepsiCo has improved during the month of December, and it can be expected to follow the same trend for the short term.

Stocks Discussed: PEP, KO, HSN,
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