Pepsi Rebranding 101: First, Do No Harm

Big results require big ambitions. For Pepsi , that meant regaining its destination brand status through reinvention, starting with the end of a 23-year investment in the Super Bowl last year. Opting for new direction centered around the Refresh Project--a digital platform for action to reward those with big ideas for improving communities across the areas of arts and culture, charity, health, neighborhood and education--Pepsi had many innovative ways the Refresh Project would be featured in the digital space.

Offering a platform for consumer action was ambitious and seemed appropriate for the times, but it backfired. Why? Pepsi is a soda, not an iPad, and it disregarded the fundamental re-branding principle: "First, do no harm." Consider brand equities and category cues before re-designing anything; get it wrong and you'll either rupture consumers like Tropicana did last year or send them to the competition, as in the case of Pepsi.

The radical brand overhaul was an extraordinarily misguided marketing endeavor; it generated attention, but no lift in sales--in fact, they declined. Big questions remain as to who is ultimately responsible for the rack of failures, what was the strategy, when are they correcting course, why did it happen, where the focus should now be and how the fizz will be replaced, now that they've switched back on the TV, trying to spotlight that "summer time is Pepsi time."

Narrative brand strategies across multiple channels can be hugely successful, but Pepsi is having a hard time finding the new Pepsi generation because it needs to find itself first. Facing many CPG brands is a movement where consumers are taking more control--there are four diet soda brands in the top 10--and pushing back on conceived notions on what "permission" they should give to brands. Add to that the explosion of touch points Pepsi was chasing, the lack of control in their brand management/direction, compounded by the challenge to stand out, and with so many PepsiCo brands vying for space "on the truck," the company has also suffered from too much internal focus.

PepsiCo CEO Indra Nooyi has made great strides with the company's "performance with purpose" and building a diversified global portfolio bursting with opportunities, but she has one hell of a job to do. Pepsi has become a loose-fitting part flailing around in the PepsiCo machine; not only does it not run well, but it has fallen from a destination brand to an impulse item. Several lessons learned: Social media is not the holy grail, but just another lever in the marketing tool box; advertising gets the consumer to the aisle; and a limp logo and retro look can drive you red. Perhaps now that they've extinguished the fires and have made significant management changes, they might find some solace that they'll be butting up next to Coke again very soon--when Diet Coke knocks down Coke, too.

Dean Crutchfield is an independent brand consultant.