On to the Next One

As if they did not learn their lesson the first time, Pepsi is in the midst of launching a new mid-calorie cola with 60% less sugar. However, this time instead of emphasizing the low calories, they will market it as having low sugar content. Reason being that they are not intersted in going after the calorie-conscience consumer, diet sodas. Instead their main goal is to attract the non-soda drinkers such as people who drink tea, sports drinks, etc. By catching even a small percentage of this market, they can justify the cola through profitable reports.

This is easier said then done. While I do like their “Drink it to Believe it” campaign, I can't help but remember all the past failed attempts at this category of cola: Pepsi Edge, Coca Cola C2 and Pepsi XL. I guess they believe the third time is the charm and by reducing the sugar count an extra 10% it will really make a difference. I on the other hand do not think it will work. Sure initial sales might seem great as it is a new product and people will have the curiosity to try it. However, it is only a me-too product and does not offer enough differentiation for it to succeed in the long-run. Consumers are not going to see the need to switch over especially the "market" Pepsi plans on going after. Those who drink tea and sports drinks will still continue to do so as those products offer a better advantage than a soda with less sugar. This move is intended to compete with Coca-Cola and the other sodas in the market as Pepsi has not released anything significant in a long time and there market share is not as strong as they would like.

The mid-calorie soda is a tough category to hit and I do not believe anyone will ever be able to successfully tap it because it seems pointless, to a degree. Regular full-blend soda and diet soda will always be around as they are differentiated enough to make consumers purchase one or the other. In my opinion, they would have a better chance going after the market that Dr. Pepper 10 is targeting as I could see more people from that segment drinking the soda. This target is men who do not want to be seen drinking diet soda but still want something "healthier" than regular soda. I think they are going in the wrong direction with their current target market and I just can see them converting enough people to make this product profitable. But after all, History tends to repeat itself.

What do you think about this product? Do you see it lasting past a couple years or will it be a complete failure like the ones tried before? Do you think the others failed due to bad timing? and if so, is now the right time for this?