Team PepsiCo

Communication Plan
Justin Chavez
Molly Stolz
Taylor Slagle
Samantha Vodanovich
Morgan Walkovich

Table of Contents
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1. Table of Contents...1
2. Executive summary .....2
3. Introduction ... 3
4. Situation ....... 3
5. Background and Analysis
5.1 Research and Findings for Key Issue .........3
5.2 Key Stakeholders .........3
6. Recommendations
6.1 Pep-Reps..........4
6.2 Social Media...5
7. Response
7.1 Pep-Reps...... 5
7.1.1 Next steps ...... 5
7.1.2 Timeline ..... 6
7.1.3 Budget ......... 6
7.1.4 ROI ....................... 7
7.2 Social Media ......... 7
7.2.1 Next steps ...... 7
7.2.2 Timeline ......... 8
7.2.3 Budget ..................... 8
7.2.4 ROI ........... 8
8. Conclusion ............ 9
9. Reference Page ............ 11
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Executive Summary
This document will describe PepsiCos situation, background, analysis, recommendations, and
responses to the companys key issue. The key issue that our team identified is the
miscommunication of PepsiCo values to consumers through advertisements. These values
include unity, positivity, healthy-living, and social progress. In some advertisements, these
values were ineffectively portrayed and PepsiCo was perceived as out of touch and insensitive.
PepsiCo must be more sensitive and deliberate in its approach to communicating with its
customers.

The three main stakeholders for PepsiCo are its consumers, employees, and investors. The
primary focus of the company is on the consumers, because the relationships with the employees
and investors are directly related to consumer perceptions of the company. When PepsiCos
consumers view an advertisement negatively, it can lower revenue for the company, leading to
employee hiring freezes and poor earnings per share reports for company investors. Our
recommendations focus mainly on consumers aged 18-35, because these consumers are highly
involved with social media and are consistently demanding healthier food and beverage choices.
Our ideas will focus on promoting our healthier brands and communicating our values more
accurately to consumers at the same time.

The first recommendation is to create an intern program at universities across the United States.
These student interns would be trained to become PepsiCo Representatives (Pep-Reps) and will
communicate face-to-face with the students on their own campuses. Pep-Reps will more
effectively communicate the values of PepsiCo to consumers, while actively advertising the
companys healthy products. PepsiCos healthy product options will be advertised by providing
students with free samples to raise awareness of these healthy options. The second
recommendation is to create a more interactive social media experience for current and potential
consumers. There will be a specific focus on changing how PepsiCos major brands connect with
consumers on their Twitter and Instagram pages. Another change will be creating advertisements
in the form of games. The gamification of PepsiCo ads would increase consumer interaction and
allow them to win prizes by participating.

The first recommendation will cost approximately $1.9 million annually. Compared to other
advertising campaigns, this strategy has fairly low costs. Our Pep-Reps will allow college
students to have hands on experiences with our healthy products and will have conversations
with students where they will accurately communicate the companys values. The second
recommendation will only be the cost of developing the gamified ads. PepsiCo already budgets
for advertising spending on social media sites, so there would be no increased cost of purchasing
ad spots. For the past four years, the advertising budget for PepsiCo has been between $2.3 and
$2.5 billion per year. Our recommended actions will create more personal and interactive
relationships with consumers and will lead to long term monetary and relational returns on a
small investment now.
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Introduction
In this report, the communication interns of PepsiCo will be reviewing the issue of
miscommunication with consumers, the companys main stakeholder. We have conducted
research on how to appeal to consumers more effectively, as well as how to keep up with the
evolving trends of our society. Our variety of brands appeal to large audiences all over the world
and continue to strive to satisfy the wants and needs of our stakeholders. Our team has also
formulated two recommended courses of action to address the issue of miscommunication.
Below you will find details regarding an issue PepsiCo is having communicating with their
stakeholders and how we plan to fix these problems.

Situation
The common goal at PepsiCo is to portray an image of unity, progression, and positivity. We
have not properly expressed this to our stakeholders which has resulted in them viewing our
company as something we are not. Attempting to be on the cutting edge of societal controversy
led to a miscommunication of PepsiCos ideas to its consumers. We are currently trying to
improve our marketing strategies and keep up with current health trends in the world. PepsiCo
wants to appeal to as many consumers as possible, because they are the primary stakeholder. Our
goal of this report is to present recommendations for PepsiCo to recover from past advertising
failures and continue to appeal to what our stakeholders desire. With past advertisements, the
company has rubbed some of its consumers the wrong way, which is why we must increase
sensitivity to current issues when releasing any type of media. Along with taking a more
sensitive and deliberate approach to communication, we are also appealing to consumers who are
interested in living a healthier lifestyle.

Background and Analysis

Research and Findings for Key Issue
Consumers are the main stakeholder we are trying to focus on in this report. In some cases, the
public has seen PepsiCos efforts to communicate their ideas as rather insensitive. Our company
is working to recover from these advertisements and better promote the companys core values.
More recently, PepsiCo has been focused on creating products within their brands that support
living a healthy lifestyle. PepsiCo carefully considers current trends when producing products,
which is why we have the Good For You, Better For You, Fun For You campaigns. Some
examples of PepsiCos efforts to provide more variety in its products are new carbonated waters,
Naked juice smoothies, and low-calorie snacks from Quaker Oats. The research in this document
focuses on communication strategies to consumers and how to cater to their wants and needs.
The goal of our recommendations is to make potential consumers aware of the changes that
PepsiCo is making and how the company aims to satisfy the desires of consumers. Moving
forward, PepsiCo plans to better communicate our core values to our consumers.

Key Stakeholders
As stated previously in the stakeholder analysis presentation, PepsiCos main stakeholders are
consumers, employees, and investors. Consumers determine the demand of PepsiCos products,
which influences the way the company operates. This, in turn, affects the companys employees
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and even further affects the companys investors. When PepsiCo creates a new product, or
releases a new advertising campaign, the consumers are most directly affected, because they
determine whether they will purchase the new product or if the ad connected with them. In other
words, the consumers determine the companys annual revenue because they are they ones who
contribute to the revenue. It is important for a company to ensure that the consumer demands are
satisfied. PepsiCos product demand, for example, is currently shifting from the classic Pepsi
products to new healthier options. Consumers are now valuing healthier goods instead of the
Fun For You products that PepsiCo creates. PepsiCo must create ways to satisfy the demand
for healthier products in order to increase its profits.

Millennials
For the communication plan, we chose to target college students in the United States. As they
continue to get older and earn more money, millennials are beginning to compose a larger
percentage in PepsiCos overall consumption which is an opportunity for growth in the near
future. Attracting this consumer group, however, will be difficult due to the short attention span
that they have. According to The New York Times, humans have an average attention span of
about 5-8 seconds (Egan, 2016). The attention span is also expected to decrease as more people
are choosing video streaming and social media over television. This becomes an advertising
problem because viewers lose interest in traditional advertisements that last 30 seconds.
Companies in the United States are forced to change their advertisements to capture the
consumers short attention span. In response to this issue, PepsiCo must use advertising
techniques that attract the attention of a consumer in a quick and meaningful way.

Recommendations
Now that we reviewed PepsiCos key stakeholders, this document will focus on who we will
specifically be targeting in our communication plan. With our recommendations, our team plans
to target current and potential consumers on college campuses as well as our millennial
consumers that are active on social media. Our proposed recommendations will enhance our
communication abilities with these two particular groups of consumers. If these strategies are
implemented, PepsiCo will be on the right track to more effectively communicating to these
target groups.

Pep-Reps
Our first proposal is to implement a brand ambassador program across approximately 100
college campuses around the country. There are several reasons why we want to focus
specifically on college campuses and this particular age of our consumers. Those reasons include
the need to re-brand PepsiCo as a healthier company, as well as the research on college student
spending. According to an article found on Business Source Complete, It is important that
young adults, specifically college students whose nutrition knowledge is limited, practice
appropriate label reading behaviors and adopt the proper attitude to be able to make healthier
choices. Our ambassadors, which we will call Pep-Reps, can most definitely help with the
healthy eating communication needed on campuses. Also, according to the College Boards
2015-16 estimates, the typical college students budget for other expenses ranges from $1,628
to $2,257. That gives [college students] just between $46.96 and $65.11 a week in spending
money over eight months. This allows us to acknowledge that college students arent as money
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hungry as we once thought. Hiring students from the university will aid our company in
effectively implementing the Pep-Rep program, because the students will help determine high-
traffic areas of that university. These students will also add a relatable factor to the interactions
between the Pep-Reps and their classmates. Adding brand ambassadors to college campuses will
help build a buzz for our healthier food and beverage options and will help better communicate
PepsiCos true values.

Social Media
Our second proposal is to create more interactive social media campaigns and advertisements to
reach consumers online. Social media has become an increasingly useful tool in communicating
company messages and promotions. Companies are obtaining new customers, while
strengthening existing relationships with current customers. According Pew Research Center,
69% of U.S. adults uses at least one social media site which is an immense increase from the last
10 years. This means that a very large portion of the world is using social media and that social
media has become an established marketing tool and will continue to evolve. As stated in the
article, the main demographic level affecting the usage is not income or gender, but rather age.
Millennials are the largest demographic of social media users, so this second recommendation
will attempt to reach the largest generational cohort as they transition out of college and into the
real world. Once again according to Pew Research Center, and as seen below on the graph, as of
November 2016 86% of U.S. adults aged 18-29 years old use at least one social media site. As
for the college students we are trying to reach, they will be impacted by both the ambassador
program and the social media campaigns, which will lead to even higher levels of interaction.

Response
Pep-Reps
Next Steps
Our first step will be to create a 20-person marketing team that will be responsible for creating
strategies and training our future Pep-Rep interns. The members of this team will come from
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within PepsiCos marketing department. The next step will be to determine the Universities
where the Pep-Reps program would work well. The factors to determine this information will be
based on student population size and geographic region. By July of 2018, the marketing team
will have determined the universities that they will focus on and will have created the training
templates for the future Pep-Reps. For the Fall semester of 2018, PepsiCo will recruit
enthusiastic and eager marketing students on the selected campuses to become Pep-Reps. As the
students are recruited, they will begin training for how to approach their peers with free products
and how to engage in a meaningful conversation about PepsiCos values and narratives in a
casual way. The training should be completed for all Pep-Reps by the end of 2018. The final step
of implementing this program would be to begin the campus outreach for the Spring semester of
2019.

Timeline
The timeline below demonstrates the steps that need to be implemented to effectively put the
Pep-Reps program into practice.

Budget
A positive aspect of this project is that the marketing team is made up of 20 current employees of
the company. This means that the salaries expense for these employees is already accounted for
in the PepsiCo budget. One of the new expenses in this project would be paying the Pep-Reps for
their time spent on the internship. We estimate that 100 universities would be selected and that
two students would be recruited from each campus to function as Pep-Reps. There are
approximately 30 weeks in an entire college year and we would have these Pep-Reps work for 10
hours per week at $10 per hour. This comes to a $3000 expense for each Pep-Rep every year, or
$600,000 for all 200 Pep-Reps. The other major expense would be the provision of free healthy
products from PepsiCo. It is estimated for one college years worth of PepsiCo products per
university, the cost would be ($5*2*5*30)+($32*5*30) = $6300. Multiplying this number by
200 = $1,260,000. Estimated training costs per Pep-Rep are $200, which is a total of $40,000 for
all student trainings. This brings the grand total of this program to approximately
$1,900,000/year. This appears to be a large number at first glance, but when compared to other
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advertising strategies, it is a drop in the bucket. For example, the estimates for the cost of the
failed Pepsi commercial that starred Kendall Jenner are anywhere from $2,000,000-$5,000,000.
This ad stayed on the air for three days and seemed to only hurt the brand name. This was one
advertisement for one product line of PepsiCo. $1,900,000 for an entire year of face-to-face
advertising is a bargain.

Budget Item Cost/Week (30 Weeks) Cost/Year (Academic Year)

Pep-Reps Wages $20,000 $600,000

Free Product Samples $42,000 $1,260,000

ROI
This project would require a relatively low budget in comparison to PepsiCos more traditional
advertising campaigns. Along with a lower price, we are also able to better communicate our
narratives to consumers and transform the brand in peoples minds. According to The Secret
Handshake, face-to-face interactions are still one of the most effective ways to communicate
with most audiences. Interacting with people face-to-face allows the communicator to pick up on
social cues and signals that they might not otherwise see in other forms of communication. This
will hopefully prevent situations from occurring where a consumer does not understand a
message and has no way to clarify what he or she is being told. Pep-Reps will communicate our
values and ideas more clearly to college students for a relatively low price compared to other
marketing campaigns. We will also further enhance our PepsiCo brand image by highlighting our
sustainability messages and healthier products in the face-to-face meetings with other college
students. If the Pep-Reps can make good impressions on college students all around the country,
we can potentially create customer relationships that last for the customers whole life.

Social Media
Next Steps
The primary age group we will be reaching out to is millennials who are highly invested in social
media. Through social media we will also reach other age groups as there is an extensive age
range on social media these days. The first thing we need to establish is the type of content we
want to put out through social media. Since we will mostly be reaching out to millennials, we
want to focus on advertising our healthier products since health and wellness trends are on the
rise with millennials. Additionally, we want to create more meaningful and personal connection
with our online consumers.

One way we plan to do this is to make our social media accounts more interactive and personal.
When scrolling through our twitter accounts for our major brands such as Pepsi and Frito-Lay, it
is noticeable that they rarely engage in personal interactions with our actual consumers. In the
rare case when there is an interaction with a consumer, it is most often in the form of a generic
response. We plan to reach out to our consumers better through social media by not only being
more active with our posts but also engaging more with our consumers. This will create a more
personal relationship between our brand and the consumers.
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We will also be creating interactive advertisements to project our sustainability goals as well as
rebrand PepsiCo as not only a company that sells the delicious products within our original
product line but also a company who sells healthier alternatives. An example of such an
advertisement would be an interactive game which we could also give out a coupon at the end to
encourage our consumers to play the game. An embodiment of this would be a successful
interactive ad Chipotle launched through Instagram that helped get the word out about their fresh
ingredients. We plan to focus our advertising on Instagram not only because it recently surpassed
the number of twitter users and is now the second most used social media application, but also
because Instagram only displays the ads that target only the consumer who showed an interest in
similar products. This shows that we would not only be targeting millennials, as most Instagram
users are under 35, but we will also be targeting users that would be more likely to interact with
the advertisement.

Moreover, an article from Business Source Complete discussed how Instagram has a bidding
program in place for their displayed ads. The advertising company sets a maximum cost it would
spend per view and then if a user who would find that ad relevant logs on, Instagram would the
highest bidder that best targets the specific user. This is more unique and personal than the
Facebook bidding, where the highest bidder wins without considering the interests of the
consumer. Lastly, we will be sure to test the interactive advertisement on a sample audience or a
test market to make sure the public will react positively to our ads in the future. This will help
ensure that the ad will come across properly and not cause us any problems with
miscommunication like we had with previous ads.

Timeline
The timeline for these two ideas for social media are as follows: we would begin making our
social media accounts more personable and updated within a couple weeks, whereas the
advertisement will take a while to design and edit and then implement through Instagram -
looking at 3-4 months to make sure the ad is effectively communicating our message.
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Budget
According to statistics on Instagram the average price for an ad on Instagram is $6.70 per
thousand views of the ad. This is more expensive than an ad on Facebook would be, but it is also
more targeted to millennials as well as targeted towards consumers who would be more
interested in our products. We have estimated that we are already spending around $2,090,400
annually on Instagram advertising. We found this by taking a third of monthly active US
Instagram users (26 million) to account for the targeted consumers and multiplying that by the
average cost per view of an ad (.0067) and then multiplying that by 12 to get an annual
representation. Since we already have costs in place for Instagram ads, there would be little, if
any, costs added when we shift part of our advertising budget towards this new interactive game
idea. Since we will not have to invest more money into our advertising on Instagram, we believe
PepsiCo will get a greater return on their investment from this interactive ad idea. PepsiCo
already has a mission control center set up to target social media. The budget for better
communication on our social media platforms would be relatively small, only having to pay the
cost of additional monitoring of our Instagram and Twitter accounts, as well as the cost of
designing the interactive ad we plan to put on Instagram.

ROI
Ads on Instagram would lead to a higher return on investment because if we release an ad on
another social media site, we are not guaranteed that the consumers will be receptive, whereas
with Instagram there is a better chance we would attract the consumer with an ad that is directly
targeted towards them. Additionally, with 78 million Americans actively participating on
Instagram monthly assuming we only reach a third of those Americans (26 million), and with the
current 1.1% interaction rate we are currently attracting around 286,000 consumers monthly to
our ads. We believe the coupon incentive as well as the interactive factor to the advertisement
will almost double our interaction rate to 2%, thus attracting 234,000 more consumers per
month. With this 520,000-consumer attraction monthly, it will allow us to attract up to 6,240,000
consumers annually. This means that with the budget already in place, with only the added cost
of the ad itself, we would be attracting more consumers therefore making more revenue for very
little cost. Additionally, this interactive advertising will associate our sustainability and healthy
living ideas to the PepsiCo name, therefore giving us the positive press we desire.

Similarly, since the cost of owning social media accounts are free, and since we already have
people in place to update and take care of those social media accounts there will be little to no
additional costs to shift our focus to interacting with the consumers more and making our
accounts more personable. Although consumers may not respond by immediately going to
purchase PepsiCo products, there will likely be an improved relationship with the consumers.
Eventually, these improved relationships will lead to higher sales numbers, while costing the
company little to no additional advertising expenses.

Conclusion
With the implementation of our recommended ideas, PepsiCo can enhance and improve
communication with its consumers. With Pep-Rep ambassadors, PepsiCo will create a more
personable relationship with college students by creating face-to-face interactions between them
and their peers. Additionally, the Pep-Reps will showcase the plethora of healthy products that
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PepsiCo sells, which will help link our brand to healthier living. Our social media campaign will
work to improve the interactions consumers have with our existing social media accounts; as
well as creating interactive advertisements that will be targeted towards millennials. Our
communication intern team has set a target of fixing the communication issue in PepsiCo set
forth previously and would like to formally propose the implementation of both the campus
ambassador program as well as interactive social media advertising to serve as the remedy to the
key issue identified. If you are open to our ideas we would be glad to talk about it further with
you upon request. Please let us know when you have decided if either recommendation will be
implemented to enhance PepsiCos communication and advertising strategies.
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