Brandstand: Why Pepsi must consider the Virgin way

It is common knowledge that carbonated soft drinks are shrinking globally, driven largely by considerations of health. Both Pepsi and Coke have suffered in the wake, as younger customers migrate to newer sources of refreshment, fuelled by increasing choice. While the brand owners attempt to resurrect the declining category, it is now vital to assess the stretch of these iconic brands to more sustainable businesses.

Both Pepsi and Coke work in a time-tested ‘protectionist’ way of brand management, the mark zealously guarded against any unwarranted usage, to protect the ‘core’ cola franchise. So much so that in the ‘carbonated’ arena itself, flavours were assigned different brands, snacking extensions quite naturally even farther removed. This school of thinking belongs to an era when identity was exceptionally connected to imagery, both owner and customer desiring unique connectivity. In the current age of experience, performance is the primary source of affiliation, driven by sensorial and rational considerations. The emotions and interventions drawing from this core, leading to the endearing brand relationship. Also, with the virtual dissolution of entry barriers, from development to distribution, every category is open to almost everybody, as proven by the grief given to the cola majors by nimble local players. The brand thus being strategically cocooned and not allowed to grow laterally is both useless and unnecessary, especially when the category being protected is shrinking terminally.

It is fair to say that Pepsi and Coke are sitting on bankable associations that can stretch to every possible youth category, provided there is a glowing foundation of performance. They enjoy relationships of genuine trust and respect as essential springboards for a sustainable identity, proven over time and continents. Which can also stretch to online and digital platforms, as the premise of being an abettor of passionate ‘time-pass’ is very well established. Till the business plan is promising and sustainable and the values established by the brand make sense for the consumption TG, in such an event surely the expansion cannot be harmful for the carbonated beverage business. In fact, the breath of fresh products and services can add back substantially to the core venture, the multi-faceted presence rekindling the dwindling affections and providing a healthy foundation for new-age beverages. A few possibilities that can easily emerge are illustrated below.

The Pepsi Amusement Parks, in miniature formats, that provide high-intensity gaming for youth, enjoying an online version quite easily. A messenger service only for the TG, finally combatting WhatsApp’s universality with credible credentials eliminating the oldies. Pepsi range of apparel and accessories, in a stylised logo version, that will infuse physicality to the chosen dimension of attitude, developing its very own design language from watches to t-shirts. Cafes, in a DIY easy-conversation format, can succeed convincingly on Pepsi credentials, occupying the attractive space between coffee shops and pubs. Pepsi Channel on Netflix or Amazon as the host for cutting-edge youth content, the hub of next-gen creativity and imagination. Pepsipost.com, an e-paper that is truly global, with the DNA of a World Edition and not local versions intended to divide. On a more ambitious plane, Pepsi Airways, the low-cost second airline for any of the global majors, living the proprietary attitude in the act of genuine flight. The possibilities are truly endless, when the integrity of the brand’s DNA is extended seamlessly.

For the above to succeed, a few conditions exist, inspired certainly by the Virgin case study among many others. Every brand extension must be viewed as genuine business with its staggering stand-alone potential and never be considered as a source of nutrition for the cola product. Richard Branson had famously stated that every category the Virgin brand extends to, the experience must be palpably better than the competition. A great benchmark for Pepsi as well, the brand will certainly pull its weight in consumer affinity once the fundamental performance is truly established. Also, the teams managing each venture must be stand-alone specialists, operating with an independent yet cohesive licence to grow the cola heritage. What matters most is ensuring a consistent and ownable experience that transcends categories through some compelling identifiers, just like Virgin.

Brands like Pepsi and Coke deserve to be managed as liberating experiences and not as narrow products, paving the way for highly successful businesses. A combination of high-quality performance and built-in customer loyalty leading to distinctive and ownable experiences, equally permitting the beverage franchise to breathe easy. Colas may wither and eventually die but these iconic brands can certainly flourish and thrive.

(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: shivajidasgupta@inexgro.com)

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