Organizational Objectives
It would be derelict – a great word! – to ignore the current social, health, and economics factors gripping the nation while discussing PepsiCo’s new product launch and marketing plan. For those of you visiting from planet Warble, Black Lives Matter, everyone is sick, lots of people are unemployed, Target stores are burning, and police across the country are busy quitting and killing citizens, seemingly at the same time. Who the heck wants ice cream?
Well, I do. Ice cream is a great coping resource. For corporations, though, these events represent a challenge and an opportunity. It’s heartening to see PepsiCo’s commitment splashed across its homepage. Among the headings you’ll see such titles as “Helping Black Communities Rise with our Hearts and our Hands“, and “Committing to Combat COVID-19 Impact” (Pepsico.com, 2020). To be clear, there is a confluence of internal and external factors at play, and I believe they are aligned. As stated in the company’s sustainability goals, it seeks to promote diversity in the workplace, advance human rights, and even gives a nod to women (Pepsico.com, 2020). Marketing research in this lights shines far beyond ice cream or any potential new product; it is a valuable resource through which community understanding and thus alignment can be achieved by listening and asking questions, engaging in social media, and even putting people on the ground to conduct surveys.
Future Trends
It has long been considered the primary objective of any corporation: to increase shareholder value. But is that true anymore? Consider a recent statement issued by the Business Roundtable, a collection of about 200 top U.S.-based CEO’s, which pointed out that while shareholder value remains important, “Investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals” (Fitzgerald, 2019).
Issued in 2019, this now is happening in real time. I suspect any U.S. based corporation that has ideas around long-term success would do well to align its objectives with these. As noted above, PepsiCo seems to be doing just that.
Marketing Research and Future Trends
Turning our focus to Pepsi ice cream and ice cream as an industry, the market is expected to grow at a rate of about 5% between now and 2025, and in direct contrast to popular diet trends it appears some consumers are developing more of a sweet tooth. While it is apparent that higher-end, premium products are doing well, it is important to note lower-priced products also are selling, and there is a distinction in the consumer’s mind between low cost and low quality; the two are not necessarily bound (MordorIntelligence.com, n.d.). I believe Pepsi ice cream can succeed in this environment by designing its product as differential to basic flavors like vanilla or chocolate, thus being perceived, and priced accordingly, as slightly higher-end.
Research also aids in understanding how industry trends affect a relatively specialized product. For example, research has shown a shift towards a demand for reduced-sugar or non-dairy offerings. Recently for example I presented a survey to consumers and specifically asked about the importance of these factors. As you would expect my survey went viral, gathering as many a three hits and 1 submission. From this deep pool of data it’s easy to conclude consumers care about these issues, but not with great passion. I, for one, do not see the need for “healthy options” being worth the cost of development and production during the initial launch. Our target audience drinks Pepsi for heaven’s sake.
Marketing Strategy Aligns to Standards
Marketing for Pepsi ice cream will be done electronically. Social media will play a significant role and serve as the primary platform to introduce the product and create brand awareness. Ethical and legal issues affecting these platforms still are in relative infancy, though there are some rather clear standards by which PepsiCo and any other company should stand. These include what one might consider common-sense guiding principles like the need for transparency, avoiding marketing content that distorts or overstates features, and being honest when citing statistics (Bowen, 2018). All of these factors, alongside perhaps the most important need to protect consumers’ private data, are critical in avoiding both reputation damage and legal liability.
In the ice cream industry, marketing with an eye towards ethical standards is important if for no other reason because the marketplace is crowded, competitive, and growing. Disparaging competitors or their products quickly could lead to highly interactive negative online conversation, something to be avoided. All of this is emphasized by the fact that the Food and Drug Administration has regulations in place for ice cream, so reporting on issues such as amount of milk fat must be wholly accurate (FDA, 2019).
Implications
It is my observation that people examine in great detail all aspects of a promotion, and if a claim is found lacking it risks going “viral”. So, honesty really is the best policy, as pointed out by Monique Goodyer. She goes on to point out that even as a claim may be made if it can be achieved in “perfect”, lab-like conditions, consumers who don’t find it to be true may call into question the ethics and legality of such claims, all of which indicates danger for a product (Goodyer, 2015).
High ethical standards are of increased importance in marketing and promoting Pepsi ice cream due to the previously covered role children (minors) play in shaping household buying habits. As the BBB National Programs’ Dona Fraser noted in response to a company settling allegations it gathered data on children illegally, “when companies choose not to follow self-regulatory principles and procedures, they open the door to significant consequences with a regulatory agency such as the FTC” (CARU, 2020). While the BBB has programs and guides for companies to follow, the best practice is to champion ethics internally, beginning with the C-suite and spreading throughout the organization.
Limitations
Research has uncovered two factors which may play a significant role in the success of Pepsi ice cream, one more complex than the other, but both quite real. First, understanding that the ice cream industry is approaching the $100 billion mark and forecast to grow steadily, the question must be asked: Is there room in the market for a player like Pepsi? Craft ice creams are gaining traction, as are complex and “sophisticated” flavors (Callebaut, n.d.). How will Pepsi stand out?
Look further and there is a subset to this question. Pepsi ice cream will be launched in the U.S., but projected inudtry growth in coming years is markets in Europe and Asia (Technavio, 2020). As a successful and recognizable global brand, PepsiCo may do well to consider immediate follow-up launches in those regions.
The second factor uncovered by research involves the trend toward health-conscious offerings. Am I underestimating the impact this will have on the success and marketability of Pepsi ice cream? Research repeatedly shows people are, as mentioned above, reading labels, looking for low calorie, low sugar, and even dairy-free options (Callebaut, n.d.). Failure to give this research due consideration could lead to a rather impressive product failure.
References
Bowen, R. (2018, 5 October). Ethical Issues in Content and Social Media Marketing. Retrieved from https://enveritasgroup.com/campfire/ethical-issues-in-content-and-social-media-marketing/
Callebaut, B. (n.d.). Top 10 Trends to Watch in Ice Cream. Retrieved from https://www.barry-callebaut.com/en-US/manufacturers/trends-insights/top-10-trends-watch-ice-cream
CARU. (2020, June 5). BBB National Programs’ Dona Fraser Reacts to App Developer HyperBeard, Inc.’s Settlement with FTC Regarding Allegations It Illegally Collected Kids’ Data without Parental Consent. Retrieved from https://www.insidenova.com/news/state/bbb-national-programs-dona-fraser-reacts-to-app-developer-hyperbeard-inc-s-settlement-with-ftc/article_fee15595-4ca8-5506-bcb6-00cff51d4318.html
FDA. (2019, 1 April). Retrieved from https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=135.110
Goodyer, M. (2015, 28 May). What Are the Legal and Ethical Issues in Marketing. Retrieved from https://spinsucks.com/communication/legal-and-ethical-issues-in-marketing/
Fitzgerald, M. (2019, 19 August). The CEOs of nearly 200 companies just said shareholder value is no longer their main objective. Retrieved from https://www.cnbc.com/2019/08/19/the-ceos-of-nearly-two-hundred-companies-say-shareholder-value-is-no-longer-their-main-objective.html
MordorIntelligence.com. (n.d.). Global Ice Cream Market: Growth: Trends: Forecast. Retrieved from https://www.mordorintelligence.com/industry-reports/ice-cream-market
PepsiCo. (2020, 14 June). PepsiCo Home. Retrieved from https://www.pepsico.com/
Tecnavio. (2020, 22 January). Top Artisanal Ice Cream Trends for 2020. Retrieved from https://blog.technavio.com/blog/top-artisanal-ice-cream-trends