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Pepsi - Nacional Sponsorship Case Study

Pepsi - Nacional Sponsorship Case Study

It was the month of July back in 1998 and the beverage industry was facing difficult times in Uruguay. Specifically, the increased sales of the "B-brands" (brands that do not invest in advertising and earn market-based prices), which continued entering illegally in the country, in combination with the hegemony of the red Cola brand and the double taxation was creating a cocktail of problems. The price of the product was the highest in the world!

The problem was clear for Pepsi, they needed a successful campaign to increase their sales. After reviewing and analyzing many different campaigns, the Pepsi executives decided to move the war from colas to football. Uruguayans are passionate about football, there are two clubs in which Uruguayans preferences are divided, Club Atletico Peñarol and Nacional Football Club. Other first division clubs is consisted of an approximately 10% of the fans and even them in many occasions support Nacional or Peñarol.

The first conclusion was that there was little to lose and much to gain. On the one hand they could lose the support of the Peñarol's fans, but on the other hand they could win Nacional's fans, it was more attractive to fight for the possible 50% than the ideal and imaginary 100%. After realizing that the benefits were clearly more than the negatives, they started planning the campaign.

The first concept upon which they started working and would develop the proposal was passion. This would be something more than habits, brand preference and in general any rational message and that was the only way to break the hegemony of the red Cola brand. This dichotomy will also provide more passionate and fanatical customers to Pepsi. That's why Pepsi wanted to achieve greater identification with the Club and not be just a sponsor, it wanted to be the main partner especially back then when Nacional was celebrating its 100 years since its birth (1889-1999). Specifically:

1) The strategy generated mutual benefits: Nacional had been received an extremely important base for a 3-year agreement. Also, the club had handled all the advertising for the brand in various channels.

2) Pepsi capitalized this identity based on a consumer loyalty. Regardless of sporting outcomes, the company would enjoy the adherence of thousands of fans that would recognize the conceptual unit.

3) Pepsi extended its presence to an environment such as football by being the main sponsor on the official kit.

4) Nacional had an advertising medium that was important in order to develop a massive campaign of partners that doubled the current figure of that time.

As a final evaluation, Pepsi's strategy with the Nacional agreement gave positive results at first and this was mostly due to the 100 years celebration and the positive sporting results. Participation and engagement grew and remained at good levels for a while, afterwards sporting successes decreased and the country's situation demanded a larger investment from the part of Pepsi, which led to the resolve of the agreement.

Article Source: http://EzineArticles.com/9847321