BRANDING STRATEGY OF MOUNTAIN DEW

Company Description

PepsiCo, Inc. is among the most successful consumer products companies in the world,
with revenues of over $20 billion and 116,000 employees. The company consists of:
Frito-Lay Company, the largest manufacturer and distributor of snack chips; Pepsi-Cola
Company, the second largest soft drink business and Tropicana Products, the largest
marketer and producer of branded juice. PepsiCo brands are among the best known and
most respected in the world and are available in about 190 countries and territories. Some
of PepsiCo's brand names are 100 years old, but the corporation is relatively young.
PepsiCo, Inc. was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay.
Tropicana was acquired in 1998.

PepsiCo's success is the result of superior products, high standards of performance,

distinctive competitive strategies and the high integrity of their people. Their overriding
objective is to increase the value of their shareholders' investment through integrated
operating, investing and financing activities. Their strategy is to concentrate their
resources on growing their businesses, both through internal growth and carefully
selected acquisitions. Their strategy is continually fine-tuned to address the opportunities
and risks of the global marketplace.

Mission/Vision

PepsiCo's overall mission is to increase the value of their shareholders' investment. They
do this through sales growth, cost controls and wise investment of resources. They
believe their commercial success depends upon offering quality and value to their
consumers and customers; providing products that are safe, wholesome, economically
efficient and environmentally sound; and providing a fair return to their investors while
adhering to the highest standards of integrity.

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Core Competency and Sustainable Competitive Advantage

In terms of core competency, PepsiCo seeks to achieve a unique ability to:

1. Provide a distinctive, high-quality one-calorie soft drink and to provide a high-

quality citrus soft drink using Pepsi Company’s distinct ingredients to appeal and
to excite contemporary tastes for these products and
2. Deliver these soft drinks to the customer using effective manufacturing and
distribution systems that maintain PepsiCo’s quality standards.

To translate these core competencies into a sustainable competitive advantage, Pepsi Co.
works closely with key suppliers and distributors to build the relationships and alliances
necessary to satisfy the high taste standards of our customers.

MOUNTAIN DEW

Mountain Dew is a drink distributed and manufactured by PepsiCo. The main formula
was invented in Knoxville, Tennessee, named and first marketed in Knoxville and
Johnson City, TN in the 40s, then by the Minge family in Fayetteville, North Carolina
and across the United States in 1964.When removed from its characteristic green bottle,
Mountain Dew is bright yellow-green and semi-opaque.

As of 2007, Mountain Dew was the fourth-best-selling carbonated soft drink in the
United States, behind only Coca-Cola Classic, Pepsi-Cola, and Diet Coke. Diet Mountain
Dew ranked ninth in sales in the same year. In October 2008, it was announced that Pepsi
would be redesigning their logo and re-branding many of their products.

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SWOT Analysis

Strengths

The primary and key strength of Mountain Dew is that it is the brand of one of the
strongest and globally recognized company that is PepsiCo. Since, the mother brand is so
strong, it helped Mountain Dew a lot in creating its name in the beverage industry. It also
increases the credibility of the Mountain Dew.

Opportunities

One of the best opportunity for mountain dew is that the people are now fed up of
ordinary cola’s and other existing options, hence strongly moving their interest towards
the citrus segment like mountain dew, sprite etc.

Another opportunity is that the income of consumers is high enabling them to be less
price sensitive, and convenience is becoming important to many countries around the
world.

Weaknesses

Fragmentation in the beverage industry is another weakness. Secondly and most

importantly, Mountain Dew’s fame can hurt the credibility of the mother brand, Pepsi.

Threats

The biggest threat for mountain dew is the competition threat from Sprite and other
energy drinks like red bull, energy etc. Before Sprite, Mountain Dew enjoyed the
monopoly in the citrus segment of the industry. Now, the competition is very high
between the two brands. Secondly, from the Pepsi’s perspective, Mountain Dew can be a
threat for the mother brand.

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Competitor Analysis

The industry falls into four main segments: Colas, Citrus segment, Lemon-lime
segment & Orange segment. Please refer to the following table:

Segment PepsiCo Products Competing Products

Cola Pepsi Coca Cola

Citrus Mountain Dew Sprite

Lemon Line 7up Sprite

Orange Mirinda Fanta

The major disadvantage regarding the competitive structure of the market lies in the fact
that there are so many other competitors and substitutes such as water, coffee and juice to
compete for the same consumer.

Customer Analysis

Pepsi, the mother brand of Mountain Dew has an extremely large customer base due to
the wide spread popularity of other soft drink that really helped Mountain Dew in
creating its name in the beverage industry. It is therefore necessary to segment the market
and look at particular trends in the soft drink market. The key trend in the soft drink
market, which are the growing demand for healthier soft drinks.

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Target Market

For mountain dew every individual with a middle class status can be considered a
potential consumer. Though, in order to target specific markets, mountain dew divides
the target market into the following market segments:

Mountain Dew’s Target Market

Mountain Dew targets male consumers within the age range of 16-18 years of age. This
is when mountain dew is marketing to teenagers, which they call as Bull’s Eye Target
Audience. These potential customers still live at home with parents. They rely heavily on
parents to purchase the product for them. These are the key consumers for mountain dew
because they are ready to embrace excitement, adventure, fun, energy and enthusiasm. In
this segment, mountain dew is trying to capture brand awareness.

Communication target

The communication target is broad in nature as compared to the target market. Here,
mountain dew targets the people within the age range of 16-24 or even 16-35.
Communication target defines the target audience for which the company is going to
advertise, people who will watch the ads.

Consumption target

Consumption target will be as broad as possible, because it involves all the people who
will actually consume the product. Here, no age limit is defined because whoever is
consuming the product is their target in this section. It could be teenagers, families, etc.

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Positioning Strategy:

The positioning strategy is the heart of the brand strategy. Positioning statement typically
identify the set of associations (benefits, quality, user imagery) that the brand should
own, the support for claiming these associations, and perhaps the tone or personality by
which the brand should speak to its prospects about these concepts. Positioning
statements are the arguments for the brand relative to the other brands in the category and
are based on abstracted associations. For example, the positioning statement of Mountain
Dew used by PepsiCo is as follows:

“To 16-18 year old males, who embrace excitement, adventure and fun, Mountain
Dew is the great tasting carbonated soft drink that exhilarates like no other because it
is energizing, thirst quenching, and has a one of a kind citrus flavor.”

This statement defines the target in terms of age and psychographics and then directs the
creative to communicate a laundry list of benefits: its exhilarating and energizing effects,
its thirst quenching ability and its distinctive citrus flavor.

Mountain Dew has positioned itself against its key competitors on the basis of product
attributes. They introduced the unique beer bottle design, then the usage of colored bottle
and drink, and finally they have strongly positioned them based on the amount of
caffeine used. Since, caffeine gives energy, hence their positioning strategy strongly
focuses the words like, males, who embrace excitement, adventure and fun, great
tasting carbonated soft drink that exhilarates like no other because it is energizing.

“A 12 ounce can of Mountain Dew contain 55 milligrams of caffeine. What surprises

many people is the level of caffeine in Mountain Dew - at 55mg it is significantly
higher than any other existing CSD.”

The strength of Mountain Dew’s positioning strategy is that they very smartly and
aggressively deliver the positioning strategy in their ads as well. The ads are very much

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attractive for the target audience as they are able to see what they are actually willing to
see. The ads are full of excitement, adventure, fun, energy and enthusiasm.

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Distribution Strategy:

Mountain Dew is using two distribution channels:

1. Direct Distribution.

2. Third Party Distribution.

1. Direct Distribution

In direct distribution channel, there are no middle-men or intermediaries. The sequence

of direct distribution channel is as follows:

Producer – Retailer – Consumer (P-R-C)

2. Third Party Distribution

Third party distribution channel involves the sale of offering using intermediaries or
"middle-men" to distribute our product or service to the retailers. The sequence of direct
distribution channel is as follows:

Producer-Distributor-Retailer-Consumer (P-D-R-C)

Intensity of Distribution

Mountain Dew has adopted the intensive distribution strategy to provide saturation
coverage of the market by using all available outlets. For example, Mountain Dew is
available at all the small and large retails stores, supermarkets, departmental stores and
medical stores as well.

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Product Strategy:

Product Offerings: Mountain Dew’s product offerings are as follows:

• 250 ml : 12/-Rs

• 330ml(Tin): 25/-RS

• 1.5 Litre: 50/-Rs

• 2.25 Litre: 65/-Rs

Mountain Dew falls under the category of FMCG (Fast Moving Consumer Good).
However, if we further sub-categorize it, then it is a convenience good as well because
the consumers are not supposed to prepare it after the purchase. It is an RTD (Ready To
Drink) CSD. Just purchase it and consume it.

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Advertising & Promotion Strategy

Logo

The logo further reinforces this imagery. The ‘M’ and ‘W’ are overly large – possibly to
give the look of mountain peaks and troughs. The colour green is a universally associated
with plant life, while red is a colour of aggression and passion which connects with
Dew’s secondary association with extreme sports.

Launch Activities

Internationally, Mountain Dew has an integral association with alternative sports,

which encompasses a whole gamut of culture, music and fashion trends. In keeping
with that trend, two of the most popular international ambassadors of Mountain
Dew, 23-year-old Fabiola Da Silva of Brazil, the top female in the field of aggressive
inline professionals and 24-year-old Chad Kagy of the US, the world's top BMX
competitor, accompanied Mountain Dew on its voyage to India, and performed
spectacular feats at its unveiling.

Announcing the launch of the new product, Mr. Rajeev Bakshi, Chairman, PepsiCo
India Holdings Pvt. Ltd., said "Mountain Dew is all about connecting with young
people by breaking through to them in ways that capture their attention. "Doing the
"Dew" is like no other soft drink experience because of its daring, high-energy, high-

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intensity, active, extreme citrus taste. Mountain Dew is a soft drink that exhilarates
like no other because it gives a refreshing rush of energy. Mountain Dew is going to
open up a new need state - energy, and bring in a whole new dimension to the very
lifestyle of youngsters in India. And this is just the beginning, we have a constant
supply of innovative, exciting new products and promotions over the next few weeks
leading upto the world cup."

Advertising

To begin with, three ad spots, of 30 seconds duration each, will be launched on all
mainline TV channels. The spots, conceptualised by PepsiCo's ad agency JWT, are
made by young filmmaker Kunal Shivdasani. Shot at various locations in Mumbai
such as Film City, Lonavala and the Borivili Natural Park, the stills of the spots are
shot by celebrated photographer Atul Kasbekar.

Story board

The first ad featured four ‘Dew Dudes’ being asked (by a voice over) whether they'd
visited some famous tourist attractions around the world. On being asked ‘Big
Ben dekha?', the ads show shots of the boys bungee jumping off the Big Ben.
‘Jump maara,' one of them answers, ‘Baja diya baarah,' says another, ‘Par boring thaa
saara,' a third shrugs. The ad continues in this vain till the voice over asks ‘Sab kuchh
toh kiya, but have you done the dew?' The boys vouch for the drink as soon as they taste
it.

The second ad became a cult hit. It featured a Dew Dude on a bike chasing a cheetah in a
Savannah, catching up with it, leaping and wrestling it into submission before pulling a
can of Mountain Dew from its throat! ‘Cheetah bhi peeta hai' remarked another Dew
Dude.

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Advertising Objective

Mountain Dew has constantly sought to associate itself with adventure sports to promote
and popularize the brand. Remember the ads featuring the ‘Dew dudes’? And the ones
where a guy takes on a cheetah and the one with a wild ram? All of them were meant to
connect with the youth and to establish a high-energy, high-intensity image for the brand.

Results

The initial commercials were instant hits and were successful in grabbing customer
attention. And Mountain Dew went on to capture up to 5% of the market share within the
first 3 months of its launch in 2003.

This phase also saw events featuring BMX bike riders and skateboarders being held
across a number of major cities in the country. This trend continued and in 2005, a stunt
biking event was held in Bangalore. Mountain Dew continued to be associated with
‘youth’ brands and the thrust was on using adventure sports to capture and cultivate
youth following for the brand. This was in keeping with Mountain Dew’s image and
promotion across the world

Ground Activities

PepsiCo rolled out an innovative ground communication package through exciting

outdoor presence and merchandising to generate awareness about Mountain Dew in
all major cities and towns in the country. Specially designed Mountain Dew Cars will
hit the roads in all these places to add to the excitement.

The most popular youth hangouts in cities and towns had "Dew Velcro", "Dew Twin
Peaks" and "Bungee Running" which are some of the world class fun game PepsiCo
brought for the purpose.

Various cities across the country experienced PepsiCo's relentless focus on driving
the brand properties of energy and exhilaration in ground execution to connect with
youth to "Do the Dew".

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Adventure Reality Show

Mountain Dew, the drink that celebrates the adventurous pulse of the youth, launched
India's biggest adventure reality show with "Mountain Dew Himalayan Challenge 2006".
Mountain Dew had partnered with Uttaranchal Tourism and associated with co-sponsors
- Mentos, Hercules TI, Ten Sports and Weekender. The event, managed by Total Sports
& Entertainment India Pvt. Ltd, brought together an action packed event that promised
loads of adrenalin rush, exhilaration and excitement. The "Mountain Dew Himalayan
Challenge 2006" had 10 teams of 3 contestants each, pitted against each other amidst the
mighty range of Himalayas to win prize money worth Rs 2 lakhs. The Challenge
comprised of teams participating in daring adventure sports such as rock-climbing,
rappelling, GPS navigated cross-country, white-water rafting and mountain biking.

The 'Mountain Dew Himalayan Challenge 2006' was designed for all adventure
enthusiasts who dare to challenge and showcase their competitive streak. The event
exemplified Mountain Dew's daring imagery and this helped strengthen Mountain Dew's
association with adventure sports as well as enhance consumer connect in India.

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‘Darr Kea Age Jeeth Hai’ Campaign. 2010 (Brand Repositioning)

Cut to 2010 and you have the ‘Darr kea age jeeth hai’ campaign. Now, the basic theme
all these years has been high-adrenaline ‘adventure’. The latest campaign certainly seems
to be a step in this direction; the commercial attempts to associate the drink with one’s
ability to conquer fear, rather than indulge in thrill-seeking. It appears to be a cautious
move to reposition the brand in an attempt to make it more attractive to a wider
consumer base.

The question that arises now is, has Mountain Dew’s association with high-energy
adventure sports or the ‘adventure’ tag in general, been the reason behind its phenomenal
success in the country? Or is it the unique taste of the neon-colored drink? And if we
were to doubt the efficacy of the campaign, what could have prompted PepsiCo to stick
with the ‘adventure’ tag?

Reasons For Repositioning

Adventure sports have never enjoyed as much popularity in India as they have in the US.
To most, adventure sports were and still are, confined to the television, with neither the
inclination nor the means to pursue them. Given this setting, one might argue that ads
featuring adventure sports would have appealed to unfulfilled adventure sport aspirants.
However, given the limited knowledge and appeal at that time, this would certainly
account for a minority only. How then, did Mountain Dew manage to succeed in such a
grand manner?

Mountain Dew’s ads featuring adventure sports were new and different and this novelty
certainly played a role in capturing attention. However, it was the ‘taste’ which appealed
to consumers and helped retain a loyal customer base; the ‘adventure’ tag was just one of
the reasons behind its success. Mountain Dew’s persistence with the adventure theme
may have been an attempt to avoid repeating the mistakes made with 7UP (Initially
launched with the Fido Dido campaign, its failure forced PepsiCo to reposition the brand.
They tried to constantly change and adapt the promotional theme, to preserve the novelty.
However, this sent out mixed signals to the consumers, leaving them confused).

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Survey Results

A survey by Synovate in late 2005 among 16-20 year old SEC A1 & SEC A2 showed
that people preferred Sprite and Limca, with Mountain Dew performing only a shade
better than Frooti. This ‘baffling’ result revealed an insight. Firstly, the concept of
extreme sports is limited to Indian metros, that too among the more upwardly mobile
sections. And even there, awareness does not necessarily mean appeal. There aren't many
‘outdoorsy types' in this country - at least not the kind Mountain Dew has in mind. The
ad campaigns itself were found to be over the top and unrealistic. This survey and the
market performance of Mountain Dew set the stage for a course correction.

Yet such a course-correction has to remain faithful to the current clientèle of Mountain
Dew and conform to the global branding of Mountain Dew. Just a market repositioning
rather than a radical re-branding was what was the need of the hour.

The New AD Campaign

This repositioning saw the introduction of the ‘Dar Ke Aage Jeet Hai’ campaign.
Designed by JWT India, these ad was set in a river rapid where some guys were going to
attempt river rafting. The ad starts with a nervous guy telling himself ‘Itna mat dar,
beta Joy. Sunny ko dekh, kaisa chilled out sa baitha hai’. Sunny is saying a silent prayer
‘Bhagwaan, aaj apne Sunny ko bacha lena. MainAnshul ki tarah stud nahin hoon’.
Anshul, a well-built guy is thinking ‘Kya faayda teri body ka Anshul? Sabse dara toh tu
hi hai’. Suddenly, accompanying shots of the raft overturning a voice over remarks
‘Boss, dar sabko lagta hai, gala sabka sookhta hai. Toh aaney do dar ko, kyunki dar ke
aagey jeet hai’. The next shot show cheerleaders worrying for the overboard rafters when
suddenly the raft comes out of the water and wins the race.

As we can see, the ad portrays the Dew Dudes human beings with normal emotions like
fear. Instead of asking for people who have ‘been there done that’ to adopt Mountain
Dew it asks for people who wish to conquer fear to adopt Mountain Dew. Thus the
campaign effected a subtle repositioning of the brand from that focusing on identification

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with the Dew Dudes to one focusing on the aspirational quality of conquering ones inner
monsters. All the while it remains faithful to its association with adventure.

This ‘mainstreaming’ of Mountain Dew also reflected in its secondary associations. From
sponsoring fringe/niche extreme sporting events in India, Mountain Dew has moved to
sponsoring regular sports and even movies. One case point was ‘Mission Istanbul - Dar
Ke Aage Jeet Hai’ placing their tagline in the movie title itself!

Infilm Advertising

Taking in-film placements to the next level, Mountain Dew, the neon drink from
PepsiCo, has integrated its tag line -- 'Darr ke aagey jeet hai' -- in the name of an
upcoming thriller, Mission Istaanbul.

Mountain Dew is a brand that exemplifies exhilaration, adrenalin and a 'can do attitude'.
We are proud to announce the partnership between Mountain Dew and Mission
Istaanbul- 'Darr ke aagey Jeet hai', as this is the first time a brand philosophy and its tag
line have been adopted for a movie. This is a testimony of the popularity and connect the
baseline has been able to achieve.

The association is also backed by a comprehensive communication plan comprising of

modern trade, television and a nationwide exciting contest that is running in eateries,
restaurants and multiplexes. A special television commercial with shots from the movie
had also broken on screens.

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Packaging

Maintaining a keen focus on the youth market, and in particular the male audience,
PepsiCo India has rolled out an outdoor campaign for its beverage Mountain Dew whose
brand proposition ‘Darr Ke Aagey Jeet Hai’ has seemingly struck a chord with the bold
and beautiful. The outdoor campaign follows highly engaging onground activities that
were held in cities like Lucknow, Kanpur, Allahabad, Bareilly, Gorakhpur, Varanasi and
Moradabad to promote the brand’s Grip Pack.

PepsiCo has engaged multiple outdoor agencies to execute the campaign across UP,
Delhi and Punjab. For Delhi and Uttar Pradesh, Navia Asia, an OOH arm of Starcom
Media Vest Group, has been engaged to execute the outdoor campaign.

Objective

The prime objective was to create brand experience and salience among target audiences
in potential markets. The company has invested in impact marketing, such as, signages to
increase permanent visibility. The idea was not just to touch a city but to get deeper into
the place and create optimum impact.”

Mountain Dew is a brand which has portrayed adventure and conveys messages like
‘Darr Ke Aagey Jeet Hai’ through its promotions. Hence, outdoor advertising becomes
essential for the brand and works well with it. It’s an important medium to reach out to
our TG on the road.”

The OOH firm has also used innovations like larger-than-life cut-outs of Mountain Dew
bottle that give a 3D effect with an arm gripping it. Also, the tagline has been highlighted
with neon lights.

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It combines reach, brand, experience, interaction, engagement and sampling with an
integrated mix of media support ensuring a strong brand presence for the consumer. The
brief was to create the WOW factor for the new Grip Pack by using the prominent
high visibility site while also using innovation which relates to the Grip. The
reaction and results have been extremely encouraging.”

The activation, which concludes end May, largely connected with male audience in the
18-32 age-group belonging to SEC A & B. As the brand forays into the smaller cities and
towns, it will be called upon to employ even more inventive ways to engage a large
potential audience.

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Just Dew It In Rural Areas

Launched in 2003, cold drink Mountain Dew has, through its rather ‘daring’ adverts,
managed to build a reputation for itself as an adventurous, bold brand over time.

For one, it is learnt that Mountain Dew thrives on high loyalty but only from the metros.
This loyalty base needed to be expanded to the vast, untapped rural markets – a tough job
for an urban drink. It was important to generate trials while keeping alive the brand
values of rush, exhilaration and adventure.

But there were roadblocks: rural people were of the opinion that adventure is limited to
what they see their favorite heroes perform on-screen (movies and television). For them,
adventure was a larger than life concept. In all, they were unexposed to the brand and its
values.

Hence, MindShare came up with the concept of executing the ‘Dew Dares’ events, which
had rural India participating in semi-dangerous, fun-filled activities such as rope-
climbing, at the ‘Dew’ camps. This was done in order to give them the brand experience,
and a chance to do what they would normally be content with simply watching. Needless
to say, Mountain Dew was sold at these events.

Further, there was a tie-up with publications such as ‘Lokmat’, ‘The Telegraph’, ‘Dainik
Bhaskar’, and ‘Dainik Jagran’, as print reach is high in the targeted areas. Print posed the
opportunity of mass coverage, apart from equipping readers with discount coupons
redeemable at the event. The three-month activity was conducted in 16 states, across
1067 locations in 347 towns.

As a result, there were 500,000 paid trials in the country, with a bottle of the drink being
sold every minute. This resulted in a 50 per cent sustained volume growth for the brand,
as well as a 50 per cent increase in imagery scores in the targeted markets.

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