Selecting New Creatives for Mountain Dew

TO: PepsiCo Management

FROM: Lindsay Jester, Nicholas Wehunt, Zhenhuan Lu, and Carling Frederick

DATE: October 7, 2015

RE: Selecting New Creatives for Mountain Dew

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Problem

Mountain Dew has been presenting their “Do the Dew” campaign featuring creatives filled with alternative sports, stunts, and edgy music to consumers for eight straight years, surpassing any consumer goods baseline. To improve their image, other brands have begun to sponsor the same alternative sports, music and activities that Mountain Dew has relied upon over the last several years. In addition, key competitors in both the Carbonated Soft Drink (CSD) and the non-carbonated soft drink market have been raising their advertising budgets to compete with Mountain Dew, leading to a recent decrease in Mountain Dew sales. In order to maximize the impact of Mountain Dew’s relatively small media budget, it is critical that Mountain Dew’s creative team selects the right new ads to air during the Super Bowl to keep the “Do the Dew” campaign working hard to maintain brand relevance with its target consumers as well as compete with the growing threat of non-carbonated soft drinks.  Mountain Dew needs to establish extraordinary creatives to explore other options beyond alternative sports to express exhilarating intensity and enhance consumer’s perception about their products.  

Company

Mountain Dew was purchased by PepsiCo in 1964 and became a favorite on the Eastern seaboard, the Great Lake states, and in Northern Plains of Minnesota and the Dakotas. PepsiCo is considered to be one of the most sophisticated and aggressive marketing companies in the world. The company has category-leading brands Pepsi and Mountain Dew as the number two and number three soft drinks in North America. PepsiCo has been able to create loyal customers with Mountain Dew consumers as the most loyal in their category.  Among PepsiCo’s strengths are its advertising agency, BBDO. BBDO, one of the ten largest ad agencies in the world and known for the quality of their creative work, has developed breakthrough campaigns for Pepsi including Mountain Dew’s successful “Do the Dew” campaign. A key to PepsiCo’s financial success is their ability to spend substantially less on advertising as a percentage of sales than its competitors by developing exceptional creatives to make advertising work harder for less cost. However, PepsiCo is a very large company with several product lines which could hinder the focus on Mountain Dew’s weaknesses. Mountain Dew’s creatives as well as current competitors branding activities have overexposed extreme sports in their campaigns. In addition, Mountain Dew struggles to gain market share in the urban cities and has developed the highest “gatekeeping” (mothers trying to limit the amount of Mountain Dew their children consume)  rating of all CSDs causing it to be perceived as an unhealthy soft drink option. (See Exhibit A)