Pepsi Goes Red In China
By Tom Ryan
Pepsi recently came out with the red can in China in honor of the upcoming 2008 Beijing Olympics, but some say it too eerily resembles Coca-Cola’s own Olympics-themed cans.
The move, reported in the Wall Street Journal, tears apart traditional distinctions that delineated the rival colas by color: red for Coca-Cola and blue for Pepsi.
Pepsi officials said they made the move to support China’s national sports team, coordinating the design of Pepsi’s can with the color of China’s national flag. Pepsi is a sponsor of Team China, the national team that represents China in various international sporting events, including the Asian Games.
Besides the color, the new Pepsi can – like Coca-Cola’s – features Olympic athletes, though they are different from the ones on the Coke can because Coca-Cola has exclusive contracts with some athletes, in addition to being an official sponsor of the Beijing 2008 Olympics.
Pepsi’s can is a darker red than Coke’s, and its red, white and blue globe logo is displayed prominently. According to a Pepsi spokesperson, this “makes the brand-identification crystal clear.” Coke has its brand name in all sizes printed from almost every angle on its can. It also has only one large photo per can of a sponsored Olympic athlete while Pepsi has numerous smaller ones.
The red can is just a temporary promotion that will last through the end of the year. In China, Coke has a 51 percent market share in overall carbonated soft drink sales, led by Coca-Cola and Sprite against Pepsi’s 30 percent; according to Beverage Digest.
Leo Tsoi, marketing director for Pepsi in China, told the Journal that the company’s decision to “go red” had nothing to do with Coke. Instead, he said, it was in response to positive feedback the company got from a survey of Pepsi drinkers, who he says supported the campaign as a “bold move” and appreciated Pepsi’s support of their national team.
“We are going red for Team China,” Mr. Tsoi said. “We wouldn’t be doing a program that is simulating the competitor.”
Tom Pirko, president of BevMark LLC, a beverage-industry consultant, said that by adopting red, Pepsi is muddying the waters for Coke. “You don’t ever want to allow Coke in China to be like Coke in the U.S., where it’s so iconic,” he said.
Mr. Pirko also said it’s a good time to support Team China. He told the Journal, “If you’re going to a party you wear the right clothes, and the right clothes in China are red.”
Kelly Brooks, a spokesman for Coca-Cola, didn’t comment on whether Coke would ask Pepsi to desist from marketing its cola in a red can or seek other action against the company. But he did seem bemused with Pepsi’s move, “Red? Great idea. Why didn’t we think of that?”
Discussion Question: What do you think of Pepsi using a similar red color can as Coca-Cola’s in China as part of a one-time Olympics promotion?
It’s amazing how far Pepsi has come from the days when Roger Enrico was the CEO and the “cola wars” were at full strength. In those days Pepsi would never think of developing anything using the color red, in the same way Coke wouldn’t allow the color blue to be used. The move by Pepsi is certainly an indication that the company is no longer the brand equity/marketing focused machine it used to be. (You can see similar changes at Frito-Lay with how they’re changing the look of their packaging, particularly the Lay’s brand.)
This is great marketing on Pepsi’s part. Color is an important part of Chinese society, as are many icons (this is the year of the pig) and numbers (8 is a very lucky number, this is why the Olympics are being started at 8:00 on 8/8/2008). With a much lower share of the market (and less distribution) Pepsi needs to shake things up and they are doing the right things in my opinion. This campaign demonstrates the smart approach to marketing products on a global level, and Pepsi seems to have the right team in place in China.
This would be a hands-down winner guerilla marketing move–if Pepsi were a 3 share brand, or maybe even a 13. I’m not so sure about a 30 share brand making this move though. Pepsi has always been “edgy” in their marketing and the international marketers get even more leeway than their domestic counterparts (or at least used to).
I think the final vote of this one comes from the Chinese people and hinges on the question “Do they see the red as a tribute to China (strength) or a ripoff of Coke (weakness)?” My gut doesn’t like this move much–but my head says it may be a winner.
I guess if Coke had a major problem with Pepsi’s usage of their own “red” color scheme, they would have to point the finger at themselves for Coca Cola Blak. Blak’s sleek color lines resemble several malt liquor and root beer traditional brand imagery…so it just goes to show how brand blurring and color segmentations are in constant experimentation mode in the soft drink industry.
More and more, it seems that soft drink marketers are willing to experiment, particularly with temporary promotions. Temporary flavors, fad entertainment tie-ins, packaging tweaks (Coke in traditional bottles for Christmas, half size cans) are all symptomatic of the giant stakes each market share percentage point means to the executives involved. Soft drink marketing is starting to resemble guerrilla war: unpredictable tactics and surprise timing.
In my opinion, so many brand managers are “losing it” when it comes to preserving identity and image consistency to the point where it’s sad. This goes far beyond Pepsi and Coke and other consumer goods. Today, almost all chain drug stores have similar red signs and logos with almost virtually the same look inside the stores. Hotels in each class have become image imitators of each other to the point where all are very much the same with hardly any visual points of differences, or “feel.” Banks, office stores, and book-stores, almost all look and feel the same. I miss the days when Walgreens was green, and the warm and friendly Holiday Inn sign and logo that made this place a “Holiday Inn.” Coke should always look like Coke, and Pepsi should not look like Coke because it’s “Pepsi.”
It’s not about Coke, it’s about the consumer, which is exactly how marketers should be thinking. Consumers aren’t going to be confused. The colors are less of an issue now that Coca Cola comes in multiple colored cans. It’s all about the logo. The Pepsi logo is still there front and center. So the red is a tribute to a consumer that cares about red. It works. It’s smart.
It does not seem to be as big an issue today as it might have been years ago. Coke used to “own” red, but their current products come in red, silver, black, etc. How many colors can they own? To be fair, and this might be a bit politically incorrect, but if anyone owns the color red it would be the Chinese, so I’m not sure Coke can really protest. Pepsi should be fine, and this is a smart move on their part.
Latest news on this from the Chinese Market front. Red campaign was totally unnoticed by local consumers. Pepsi has been giving the product out “as part of many buy 6 get one free-type promos’ as it appears Chinese consumers did not ‘get it’, were unimpressed and now they need to clean up this bad inventory.
For those analysts that forecasted this to be a bad marketing campaign, you were clearly right.
Pepsi is now trying a new campaign for 2008 – a “Pepsi Love China” program (I am not making this up) coming out to coincide with February celebrations of new year.
I think these guys are trying way too hard to look more Chinese than the Chinese and they are looking quite opportunistic and phony.