Coke Versus Pepsi

Can Pepsi make Pepsi One the One?

Case Summary:

Pepsi One is an innovative product launched in the market by PepsiCo to keep the image of innovation, fast movement, and competitiveness. The case includes the steps of a new-product development process. Emphasizing the launch of the product and the ways that Pepsi One is getting more familiar to the target market. Pepsi One is becoming a successful product by getting more market share from the main competitor Coca-Cola.

Key Marketing Issues

• Line extension – Development of a product that is closely related to existing products in the line but meets different customer needs. Pepsi One is a product that tries to differentiate itself from the normal diet products, to reach different target markets.

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• Product modification – Change in one or more characteristics of a product. Pepsi changed the sweetener to acesulfane potassium (ace K) to create the Pepsi One.

• Aesthetic modification – Changes to the sensory appeal of a product. Pepsi tried to appeal as a not a new diet drink but a new way of tasting a soda.

• New-product development process – A seven-phase process for introducing products: Idea generation, Screening, Concept testing, Business analysis, Product development, Test marketing, Commercialization. The PepsiCo performed all phases of new-product development in order to ensure the product would succeed in the market.

• Product differentiation – Creating and designing products so that customers perceive them as different from competing products. Pepsi One tries to differentiate itself being the only low calorie drinks that taste exactly as a regular drink (Pepsi).

• Product design – How a product is conceived, planned, and produced.

• Styling – The physical appearance of a product. Pepsi One omits the word “diet” and even the word Pepsi, is secondary to the thick, black lettering of the word “One”.

• Product positioning – Creating and maintaining a certain...