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PepsiCo steps up marketing investment on its ‘big brands’

PepsiCo has revealed that it would be increasing its advertising spend behind its “big brands”, such as Pepsi, Gatorade and DEW. This is with expectations of positive impact, said Hugh F. Johnston, vice chairman, CFO and executive VP at PepsiCo.

Johnston added that the brand’s strategy in the beverage business is focused on brand building.

The brand’s strategy in the beverage business is focused on brand building.

He added that it is also focused on innovation and execution in the marketplace. However, “like most advertising campaigns, that will take several quarters to fully realise the impact”, he explained.

“So we expect sequential improvement in each of the quarters, starting with Q1,” Johnston said.

According to Indra K. Nooyi, chairman and CEO of PepsiCo Inc, the company looks to step up investment spending in advertising, marketing, frontline workforce training, digital capability, data analytics and e-commerce. The move comes as its investment in e-commerce across multiple channels, from e-grocery, to direct to consumer, to pure play, helped drive exceptional growth in 2017, Nooyi said. As a result, PepsiCo’s e-commerce business is now approximately US$1 billion in annualised retail sales.

“We are leveraging big data and predictive analytics to sharpen real-time marketing messages, dynamic merchandising and tailored offers. And we’re increasingly collaborating with retail customers to make e-commerce a point of differentiation for PepsiCo,” she added.

The company also has “robust marketing innovation lined up for 2018”. This includes the launch of its Pepsi Generations campaign and the launch of Mountain Dew Ice, featured with Doritos Blaze at the Super Bowl. Other initiatives include the introduction of its new sparking water bubly, and further marketing support and packaging innovation. This comes as LIFEWTR enters its second year from launch.

“Furthermore, as a company, we will double down on new capabilities in areas such as e-commerce, digital and brand marketing to make us even more competitive,” Nooyi said.

Regarding its pricing strategy, PepsiCo expects its pricing to be competitive in the marketplace. However, pricing lower is not part of its strategy to gain market share.

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