1.

Health concern
Health issues are always the top concern of consumers, especially Asians.
Some studies suggest that coffee is not good for the heart. Therefore, Pepsi
Café is release facing a challenge from consumers because their concern
about quality and health. It is thought that carbonated drinks contain sugar,
stimulants that cause obesity and cardiovascular diseases. Therefore, Pepsi
need to concentrate on nutrition fact such as lowering sugar level and adding
more vitamin and fiber. Also, Pepsi have to convey the message of a healthy
soft drink to consumers when launching Pepsi Café.
2. Weaken brand loyalty
Marketer’s desire is to build a set of loyal customers for their offerings.
Loyalty is a state when a consumer is committed to an offering. Loyal
customers do not switch over to competitive products, which allow
marketers to reap the advantages of customer retention. However, Pepsi
extensions involve variations being attached to Pepsi. This encourages
customers to seek variety in the future. Therefore, Pepsi Cafe extension
should be release in a logical way to avoid consumer from brand switching
behaviors and weaken brand loyalty.
3. Hurt Pepsi image
Pepsi have been a big player in soft drink market, consumers may perceive
Pepsi quality through their experience. When a new product of Pepsi is
launched, Pepsi Café may meet or excess consumer expectations, which is a
good sign for Pepsi. However, if it does not meet customers’ expectations, a
negative perception about the parent brand is created. This might result in
adding weak brand associations.
4. Encounter retailer resistance
There is no guarantee that even established retailers will respond well to a
product line extension. Retailers have their own business goals and their own
mix of merchandise that they aggregate the benefit of their own target
markets. Retailers are reluctant to carry the complete line. When some items
are not available, consumers get disappointed. On the whole, line confusion
results in confused customers and confused retailers which hurt the brand in
the long run. Therefore, Pepsi Café should also have a marketing budget that
aim to retailers to catch their attention about Pepsi Café.