thinkby: Jonathan Salem Baskin No, not its inane brand image campaign and logo nonsense.

I'm talking about its announced intention to spend $6 billion to take control of its bottling and distribution operations. I think it is the smartest branding move the company has made in recent memory. I think it's nuts that the company is wasting millions on the above-referenced brand communications campaign. It's a tax (or sacrifice) in service of an imagined abstraction of branding, and it's proof that its marketers have only doubled-down on their spite of the changes in the world that render those efforts laughable. Going beyond this easy slam on branding, though, there's a deeper, more substantive issue worth talking about: the traditions of distribution have changed, too. The outdated perspective on operations is that it's purely functional. In the soft drinks business, companies wanted to keep these businesses (assets and liabilities) "off the books," so they could focus on the real business of developing and marketing stuff. It was also the source of lots of financial ledgermain that contributed to the bottom-line. Chairman and CEO Indra Nooyi knew the gig was up on Pepsi's old-fashioned distribution model last year when she announced that it needed to be "reconceptualized." The company had selling lots of products that don¶t quite fit the "fill and ship" model that worked for a long time (and made lots of bottlers very rich). I suspect Ms. Nooyi saw also that the definitions of branding and distribution are interrelated. Marketing tells people about products, and awareness is far preferable to non-awareness. Sales promotions work, and digital marketing campaigns can be lots of fun. Creative ads get headlines and even win awards at Cannes. But very little of what Pepsi's inventive brand marketers can propagate into the Universe will do anything to support long-term, repeat cola sales (or sports drinks, or water, or whatever). It'll do even less for profits, as branding is anexpense no matter how many people will swear their lives to the pretense that it's aninvestment. Tomorrow's real branding magic is going to come from conceptualizing all business activities as branding: ingredients, mixtures, containers, manufacturing, distribution, display, replenishment, and support all commingled to provide uniqueness, competitive advantage, and behavioral prompts for purchase. So bottling isn't after or outside Pepsi¶s brand, but rather is the brand. Or at least a core part of it. Bringing it into the company¶s fold isn¶t some exercise in cost-reduction, as noted by the financial press this week, but rather a brilliant, strategic branding move. Think about it. New packages and formulations, available at new and different locations, priced and supported in novel ways...all thanks to a holistic approach to the brand, vs. some archaic top-down application that sees it only as image and words. It's these actions, and real investments, that will build sustainable, long-term brand growth.

If she's successful. But I suspect Nooyi's bottler strategy is a brilliant move toward redefining that what. PepsiCo worked closely with Peter Arnell and Arnell Group. and this design strategy may continue indefinitely. The newest campaign slogan. "The Choice of a New Generation. Though not "generational" in word. introduced this year. Arnell reinvented the Pepsi package as a meaningful and appealing communications ." Pepsi's Global Strategy 23. based in New York City. to devise a comprehensive new strategy that would connect with Pepsi's core consumers. In 1984 Pepsi launched another long-running campaign. advertising.So Pepsi can run all the nonsense ads it wants. A decidedly youthoriented strategy." which definitely coincides with one concrete example of "more" in the packaging of Pepsi products today²more designs. and do nothing for its business other than help its agency folks put their kids through college (I'm all for it). the campaign hoped to hook young Baby Boomers while they were still young." and in 1997 they debuted the "GeneratioNext" concept.05. of Pepsi's brand. Many more. it may have been the first time a brand was marketed primarily with an association to its consumers' aspirational attitudes. is "More Happy. At least 35 distinct design ideas will grace the packaging of Pepsi's cans and bottles this year alone. and not just the how. I bet we'll see billboards that say something more meaningful and compelling than "Howdy. the campaign certainly has a youth-oriented feel with package designs.2007 When the "You're in the Pepsi Generation" advertising campaign launched in 1963. and websites that are fun and playful.

" Thinking globally The Pepsi can designs roll out one at a time. Experiental packaging Arnell Group (a wholly-owned subsidiary of Omnicom Group) is a design and brand creation firm specializing in experiential design and product innovation. formed the Arnell Group Innovation Lab in 1999 to place invention and innovation at the forefront in a collaborative laboratory for corporations interested in designing for next generation products and experiences. "Product innovation today must be driven by deep consumer meaning and connectivity. Using design to turn packaging into personal consumer-powered media helps create the ultimate supportive and inspiring relationship between Pepsi and its youth audience. Peter Arnell." says Arnell. and the campaign is unfolding in a similar manner overseas. Mike Doyle. music. Arnell applied many of his philosophies in the Pepsi project.tool for the latest generation of youth that are not overwhelmed by media. innovative. The can designs roll out one at a time approximately three weeks apart to enhance the anticipation of discovery and to pique the interest of collectors. currently chairman and chief creative officer of Arnell Group. explains that there was a great depth of exploration and research that was conducted before even beginning to formulate a new Pepsi packaging strategy. but the two-liter Pepsi bottles will have three or four designs out at any given time. "Peter has taken a classic and turned it into a modern. PepsiCo International. . preferring to take complete branding and packaging projects from first concept to complete market solutions. creative director at Arnell Group. The new global look launched in February with eight new package designs across cans and bottles. "It is less about unmet needs and more about giving people what they haven't asked for but are dying to have. PepsiCo and Arnell Group traveled extensively to emerging markets to find key consumer product drivers for youth cultures and to learn how the Pepsi brand was perceived in different countries. and relevant marketing and communications tool." said Ron Coughlin. chief marketing officer. or digital distractions. beverages.

" the iconic Pepsi blue. making the newly centered globe more of the hero." says Doyle. and the smaller Pepsi wordmark less prominent. "The brand equity is really consistent. In the ads and on the front of most of the new packages is the reassuring tag line: "Same Pepsi inside. Their answer was direct and consistent." Doyle believes that the designs succeed because they are able to capture the audience's mind space. "We redefined packaging as media in the marketplace for Pepsi. somewhat surprisingly. Designers at Arnell Group created the dozens of new and vibrant designs with only a handful of blue and gray shades. The most recent logo design had the Pepsi wordmark on top of and slightly overlapping the iconic Pepsi red-white-and-blue "globe. Each design tells a story of sorts and each can design has a unique website address on the side of the can. Pepsi-Cola North America." Miller explains that it is customary and important to reassure consumers for at least six months in situations like this. new look outside. the wordmark wrapped halfway around the can." where the consumer audience is constantly intrigued and engaged. They also found many consistencies in youth cultures around the world in how today's youth is preoccupied with newness. The new cans and bottles have un-bundled the word and globe. and the familiar tilted Pepsi capital letters.They found. and the globe was off-center." On the previous can design. effervescent brand image. "The designs are reflecting back to the culture instead of talking to the culture or imposing on it. . "It speaks to youth in their language. Miller describes the design campaign's goal as "sustainable discovery." Reassuringly Pepsi Pepsi actually asked their loyal consumers what brand elements would have to remain so that they would be intuitively reassured that their favorite drinks were not changing and the brand they trusted was still essentially the same. Pepsi-lovers needed to see three elements for sure²the Pepsi "globe. and personalization of their possessions. The first one on the "Your Pepsi" can allows web users to design a digital billboard that will appear in Times Square. and one coming shortly will allow users to mix their own music online. marketing director." says James Miller. Arnell Group updated the primary logo substantially and cleverly without really redesigning its key elements. that there were very few differences around the world in how consumers felt about Pepsi's fun. discovery. Television ad campaigns are reinforcing the globe-centric approach by featuring a boulder-sized Pepsi globe in various settings careening to and fro like a pinball.

and it could also make introducing special seasonal or regional designs more intriguing and less disruptive." explains Miller. "This is a new way of using packaging as media. The new Pepsi design strategy is versatile because it can be authentic and stay current." By Ron Romanik . "The consumer is looking for more variety and expecting more from their brands.Miller also sees today's youth as demanding authenticity from the products they come into contact with in their day-to-day experiences. They want to have a dialogue with their favorite brands.