Relaunching Mountain Dew in the U.K.

Caitlin Joshua, Tom Licitra, Brea MacIsaac, Tony Weaver, Sijie Xia

PepsiCo should launch the Mountain Dew brand in the U.K.

• Hybrid branding strategy makes U.K. market attractive

• Mountain Dew can capture market share

• PepsiCo can leverage existing assets

• PepsiCo can leverage existing relationships

2

Will generate revenue

Will be cost

effective

PepsiCo should launch the Mountain Dew brand in the U.K.

• Hybrid branding strategy makes U.K. market attractive

• Mountain Dew can capture market share

• PepsiCo can leverage existing assets

• PepsiCo can leverage existing relationships

3

Will generate revenue

Will be cost

effective

Hybrid branding strategy makes U.K. market attractive

• Both U.K. energy drink and carbonated soft drink (CSD) markets are growing

• U.K. offers attractive growth in target market of 15-34 year-olds

4

U.K. energy drink and carbonated soft drink (CSD) markets are growing

5

11.4

13.7

0

2

4

6

8

10

12

14

16

2005 2010

2005 2010

366% Since 1996

Energy drink market has grown

U.K. offers attractive growth in target market of 15-34 year-olds

6

15.87

18.74

0

5

10

15

2007 2012

2007 2012

PepsiCo should launch the Mountain Dew brand in the U.K.

• Hybrid branding strategy makes U.K. market attractive

• Mountain Dew can capture market share

• PepsiCo can leverage existing assets

• PepsiCo can leverage existing relationships

7

Will generate revenue

Will be cost

effective

Mountain Dew can capture hybrid market share

• Mountain Dew has strong brand awareness

• Consumers show high probability of purchase of Mountain Dew

• PepsiCo can compete with existing competitors for share

• Cannibalization of existing Pepsi products will not occur

8

Mountain Dew has strong brand awareness

76%

24%

Brand Aware

Brand Unaware

9

Consumers show high probability of purchase of Mountain Dew

10

57% 19%

24% Brand Aware,Would Buy

Brand Aware,Wouldn't Buy

Brand Unaware

Mountain Dew can compete with existing CSD competitors for share

11

0%

10%

20%

30%

40%

50%

Carbonated soft drinks’ brand U.K. market share

PepsiCo can compete with existing energy drink competitors for share

12

0%

10%

20%

30%

40%

50%

Red Bull Lucozade Own Brand/Other

Energy drinks’ brand U.K. market share

With only two large competitors, there is room for competition

Cannibalization of existing Pepsi products will not occur

Lemon Lime Caffeine

Pepsi ✓

7Up ✓

Mountain Dew ✓ ✓

13

PepsiCo should launch the Mountain Dew brand in the U.K.

• Hybrid branding strategy makes U.K. market attractive

• Mountain Dew can capture market share

• PepsiCo can leverage existing assets

• PepsiCo can leverage existing relationships

14

Will generate revenue

Will be cost

effective

PepsiCo can leverage existing assets

• U.K. has largest operations of PepsiCo’s international division

• U.K. has $2.1B of PepsiCo’s long lived assets

15

PepsiCo should launch the Mountain Dew brand in the U.K.

• Hybrid branding strategy makes U.K. market attractive

• Mountain Dew can capture market share

• PepsiCo can leverage existing assets

• PepsiCo can leverage existing relationships

16

Will generate revenue

Will be cost

effective

PepsiCo can leverage existing relationships

• PepsiCo can leverage its existing promotional ties

• PepsiCo can leverage is existing vendor relationships

• PepsiCo can leverage its existing supplier relationships

17

PepsiCo can leverage its existing promotional ties

• Retail consolidation increases importance of relationships with major vendors

• Opportunities exist to renegotiate contracts annually

18

PepsiCo can leverage its existing vendor relationships

• PepsiCo spent $2.9B on promotions in 2007

• Strong relationship with global marketing company OmniCom

• U.S. Mountain Dew strategy targets youth segment and can easily be leveraged in U.K.

19

PepsiCo can leverage its existing supplier relationships

• Collaboration is essential to the success of PepsiCo’s supply chain

• Resources are available from a limited number of suppliers with which Pepsi has strong relationships

• Greater economies of scale can be gained through higher quantity orders

20