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MOUNTAIN DEW –
SELECTING NEW CREATIVE
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A CASE IN PROMOTIONAL STRATEGY
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CASE ANALYSIS
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01-Jun-11
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INDIAN INSTITUTE OF MANAGEMENT LUCKNOW
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Mountain Dew: Selecting New Creative
Company : PepsiCo
CASE BACKGROUND Product : Mountain Dew (CSD)
1. Timeline Market : USA
1940 - Invention of Mountain Dew by Hartman Beverage Company
1964 - PepsiCo acquires Mountain Dew owing to its success in Great Lake States and rural markets
1964 – PepsiCo assigns Oglivy & Mather as advertising agency for Mountain Dew account
1973 – PepsiCo assigns BBDO as advertising agency for Mountain Dew account
2. CSD (Carbonated Soft Drink Industry) through the decades
1960s 1970s – 1980s 1990s 1999
Cola Wars Cola sector booms Cola growth slows CSD sales suffer
Pepsi Vs Coke Move from coffee to soft drinks 7 up – cash cow 5% retail price rise
Pepsi targets Death of older brands like RC 7up – struggling Move towards
youth Cola, Orange Crush, A & W Flavored CSD like substitutes- Non
Old Vs Young Root Beer Sprite, Mountain carbonated drinks
campaign By end of this decade: Coca Dew & Dr. Pepper and bottled water
Cola, PepsiCo & Cadbury- become popular
Schweppes become 3 major
national brands
Comparing the ratio of expenditure to market share, it is clear that Pepsi spends heavily on advertising
as compared to Coke. However, Mountain Dew’s advertising seems to work better than any other CSD.
Brand 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Pepsi Market 17.60 16.90 16.50 15.70 15.00 15.00 14.90 14.50 14.20 13.80
share
Expenditure 129.80 141.30 137.80 144.00 120.60 133.10 98.10 133.10 140.50 165.90
Ratio 7.38 8.36 8.35 9.17 8.04 8.87 6.58 9.18 9.89 12.02
Coke Market 20.10 20.10 20.10 20.20 20.40 20.80 20.80 20.60 20.60 20.30
Share
Expenditure 157.40 139.90 168.10 131.10 161.50 124.70 199.80 156.80 140.40 167.70
Ratio 7.83 6.96 8.36 6.49 7.92 6.00 9.61 7.61 6.82 8.26
Mountain Market 3.90 4.10 4.40 4.70 5.20 5.70 5.80 6.30 6.70 7.10
Dew Share
Expenditure 12.90 20.00 25.90 29.10 30.30 38.30 40.40 43.10 50.30 45.00
Ratio 3.31 4.8