The Pepsi Refresh Project: A Thirst for Change

Abstract

In 2010, for the first time in 23 years, PepsiCo did not invest in Super Bowl advertising for its iconic brand. Instead, the company diverted $20 million to the social media-fueled Pepsi Refresh Project: PepsiCo's innovative cause-marketing program in which consumers submitted ideas for grants for health, environmental, social, educational, and cultural causes. Consumers voted for their favorite ideas, and PepsiCo funded the winners in grants ranging from $5,000 to $250,000. The case highlights the benefits and risks of traditional branding and social media branding, including a discussion of how the Pepsi Refresh Project fits with Pepsi's previous brand positioning. The case discussion focuses on how the brand team should evaluate the initiative's return on investment (from sales to social media engagement), whether they should continue the initiative in 2011, and whether Pepsi is the right brand for this kind of initiative.

Learning Objective: The case has three primary teaching purposes: 1) exploring the risks and rewards when major brands engage in cause-marketing programs, including backlash from media and consumers; 2) Evaluating the success of cause-marketing programs, which involves balancing short-term sales against longer-term customer loyalty and brand health; 3) Exploring the risks and rewards of "opening up" a brand to consumer involvement via social media; the Pepsi Refresh campaign empowered consumers to propose projects for any charitable cause they wished, meaning that the brand relinquished some control over the causes it supported.