The Pepsi Refresh Project Case Study
Order Description
Please carefully read the case study (attached), then summarize it with discussing this question: “Pepsi’s Refresh Campaign is considered a form of cause marketing, attempting to reposition the brand. Was this type of branding campaign appropriate for Pepsi? Explain why or why not”

Important Note: please review the two exemplars that I attached. They are perfect examples of the case summary I look for.

You do not have to use sources or references in summarzing the case
The Pepsi Refresh Project: A Thirst for Change
Ana Maria “Ami” Irazabal grabbed a Pepsi from the soda fountain in the hallway while dashing
to her meeting. She needed a caffeine boost to keep with the pace of her job as the senior marketing
director for Trademark Pepsi and the leader of the company’s Social Good program, the Pepsi
Refresh Project. It was December 2010, and the project was finishing its first year.
In 2009, Pepsi had announced that it would not run advertising for its trademark brands during
the 2010 Super Bowl. Instead, the company diverted $20 million—its typical Super Bowl budget—to
support grants for a cause marketing program. The Pepsi Refresh Project allowed people to submit
ideas for grants to “refresh” their communities. Grants were awarded to ideas that generated the
most votes.
Consumer response to the program was tremendous. More consumers submitted ideas to the
Pepsi Refresh Project than auditioned for American Idol; more votes were cast for Pepsi Refresh
projects than in the previous U.S. presidential election. At the same time, Pepsi sales were slumping
in the U.S.—down 5% in 2010—and PepsiCo was losing market share to its rival, Coca-Cola.1 For the
first time in 20 years, Pepsi-Cola surrendered its title as the second best-selling carbonated beverage
to Coke by slipping to third, behind Diet Coke.2 PepsiCo’s share price was also down 5% in 2010.3
Irazabal sat down with her brand team to plan their strategy for 2011. Two questions loomed:
Should Pepsi continue to invest in the Pepsi Refresh Project? And, if so, how should the team tweak
the marketing strategy and execution to use the project’s success to drive Pepsi sales?

The History of the Pepsi Brand
Brand Pepsi was owned and managed by PepsiCo, a global consumer products company that
managed a diverse portfolio of snack food, beverage, and food brands—including Fritos, Doritos,
Lay’s, Gatorade, Tropicana, Sobe Waters, Aquafina, 7-Up, Mountain Dew, Quaker Oats, Cap’n
Crunch, Rice-a-Roni, and Aunt Jemima. In 2010, Pepsi was one of the world’s most valuable brands.
Its brand equity was valued at over $14 billion, and it ranked 23rd on the Interbrand ranking of the
best global brands.4 The Pepsi brand had a long history, originating in 1898 as a hand-mixed
carbonated creation developed to delight the crowds at Caleb Bradham’s North Carolina pharmacy.
The original Pepsi-Cola drink was joined by Diet Pepsi, a low-calorie drink launched in 1964, and
Pepsi MAX, a zero-calorie, sugar-free cola with double the amount of caffeine launched in 2007, to
form the Trademark Pepsi brand family.
________________________________________________________________________________________________________________
Professors Michael I. Norton and Jill Avery (Simmons School of Management) prepared this case. HBS cases are developed solely as the basis for
class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
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The Pepsi Refresh Project: A Thirst for Change

The Pepsi Generation
In its early days, Pepsi-Cola was sold as a healthful drink. During the Great Depression, it
captured consumers’ attention with a message of value, offering 12 ounces of soda (twice as much as
the competition) for a nickel. During World War II, Pepsi changed its packaging to red, white, and
blue, featuring patriotic themes in its advertising.
In the 1950s, Pepsi was positioned as a drink for the young and the young at heart, embodying
being sociable and spirited, feeling free, and embracing change. In the 1960s, Pepsi ran awardwinning advertising campaigns that designated the generation then coming of age as “The Pepsi
Generation.” In 1985, Pepsi became “The Choice of a New Generation,” with an ad featuring pop star
Michael Jackson, putting Pepsi on the leading edge of popular culture. In 1997, Pepsi launched its
“GeneratioNext” campaign, reinvigorating the message for a new generation of Pepsi consumers.
Pepsi continued to include the most influential music artists (e.g., David Bowie, Madonna, Aretha
Franklin, Faith Hill, Britney Spears, Shakira, and Beyoncé), sports heroes (e.g., Joe Montana and
Shaquille O’Neal), and fashion models (e.g., Cindy Crawford) in its advertising. Howard Pulchin,
EVP and managing director of Brand Stewardship for Edelman, Pepsi’s public relations agency,
summarized Pepsi’s pop culture strategy: “Pepsi has always been at the nexus of cultural shifts,
trying different, new things. Pepsi is about bringing together people and ideas at the nexus of culture.
When people are together, Pepsi is there.”
Frank Cooper, chief engagement officer of PepsiCo Beverages, explained the enduring appeal of
this lifestyle positioning:
In the 1960s, we built a successful ad campaign on the slogan “For those who think young.”
That idea morphed into “The Pepsi Generation.” The Baby Boomers who were coming of age
were excited, engaged, and enthusiastic—and started a movement that transformed our
culture. In the 80s and 90s, Generation X experienced the transformation from typewriter to
computer, letters to email, isolated cultures to global infrastructure. Today’s Millennials, the
most globally connected group in history, embody and embrace change. They live life in beta.5
As the brand team shaped the Pepsi Refresh Project, they were careful to consider Pepsi’s rich
brand meaning from its long history, with Irazabal noting that “part of Pepsi’s DNA has always been
the spirit of the challenger, celebration of the next generation, and of optimism and all things young
at heart.”6

The Cola Wars
In the 1970s, Pepsi’s rising sales began to challenge those of the market leader, Coca-Cola—and
the “cola wars” began. Pepsi was fighting against a formidable competitor. In 2010, Coke’s brand
equity was valued at over $70 billion and it topped Interbrand’s list of the best global brands.
Interbrand’s assessment of the Coke brand was that “its brand promise of fun, freedom, spirit, and
refreshment resonates the world over and it excels at keeping the brand fresh and always evolving—
all this, while also maintaining the nostalgia that reinforces customers’ deep connection to the
brand.”7 Memorable campaigns included “It’s the Real Thing” from 1969, “I’d Like to Teach the
World to Sing” in 1971, “Have a Coke and a Smile” from 1979, “Coke is It!” from 1982, and “Always
Coca-Cola” from 1993.
In 1975, Pepsi’s brand team found a compelling way to differentiate Pepsi from Coke, converting
results from blind taste tests showing that people preferred the taste of Pepsi to Coca-Cola into an
award-winning advertising campaign. The “Pepsi Challenge” energized Pepsi sales, catapulting the
2
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brand into the #1 slot for the best-selling soft drink in American supermarkets. In response, CocaCola reformulated Coke, creating a sweeter version that appeared on shelves in 1985. “New Coke”
beat both Pepsi and Coke in blind taste tests. However, Coke’s consumers revolted against New
Coke, demonstrating the nostalgic and iconic appeal of the Coke brand. In response, Coke quickly
introduced Coca-Cola Classic.
Pepsi and Coke’s rivalry was enduring, with the two companies constantly trying to win the battle
for “brand switchers”—the large group of die-hard cola drinkers who were fickle enough in their
preferences to switch from one brand to the other on the basis of price discounts, innovative
promotional strategies, and other marketing efforts. In 2010, Coca-Cola led the soft drink market
(Exhibit 1).

PepsiCo in the Twenty-First Century
As the new century dawned, PepsiCo faced significant challenges. The first was a decrease in soda
consumption in the United States. In 2009, the average American consumed 46 gallons of carbonated
soft drinks, the equivalent of 736 8-ounce servings—more than 2 servings per day—but down
significantly from 1998, when Americans consumed 864 servings.8 Since peaking in 2004, volume
sold had declined for six straight years, as cola drinkers switched from soda to iced teas, juices, and
waters—though in 2009 consumers still purchased more than twice as many gallons of cola than
bottled water, and more cola than milk and beer combined (Exhibit 2). Analysts expected volume to
decline by 1.5% to 3% annually for the next ten years.9,10
The second challenge came from external pressure. By 2010, two-thirds of American adults and
one-third of American children and adolescents were overweight or obese.11 First Lady Michelle
Obama initiated an anti-obesity initiative that included requiring soda manufacturers to put calorie
content on the front of containers.12 Groups lobbied lawmakers to sponsor soda taxes to reduce
consumption and pay for the health costs of obesity.13 Companies like PepsiCo, Coca-Cola, and
McDonald’s were often presented as corporate exemplars of the obesity problem. Jon Leibowitz,
chairman of the Federal Trade Commission, stated that his agency would begin “shaming companies
that aren’t doing enough.”14
In response, the American Beverage Association pledged to reduce beverage calories in the
marketplace, with their member companies offering lower-calorie beverages and smaller portion
sizes.15 PepsiCo and the Coca-Cola Company stopped selling full-calorie sweetened drinks in U.S.
schools in 2006.16 In 2009, PepsiCo’s CEO, Indra Nooyi, announced a new vision for the company—
Performance with Purpose—that placed global corporate citizenship at the forefront of PepsiCo’s
mission:
PepsiCo’s people are united by our unique commitment to sustainable growth, called
Performance with Purpose. By dedicating ourselves to offering a broad array of choices for
healthy, convenient, and fun nourishment, reducing our environmental impact, and fostering a
diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving
back to our communities worldwide.
The company began to enhance its product portfolio with wholesome foods and beverages, with a
new approach to segmenting its product line: fun-for-you products such as Pepsi, Doritos, and
Mountain Dew; better-for-you products such as Baked Lays and Propel water, with levels of fat,
sodium, and sugar in line with dietary-intake recommendations; and good-for-you products such as
Gatorade, Quaker oatmeal, and Naked juices that included whole grains, fruits, vegetables, and
3
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The Pepsi Refresh Project: A Thirst for Change

nutrients. Research and development operations were directed to explore new means of making all of
PepsiCo’s products healthier. PepsiCo’s goal was to triple the number of good-for-you products by
2020. Nooyi stated: “By expanding our portfolio, we are making sure our consumers can treat
themselves when they want enjoyable products, but are able to buy a range of appetizing and
healthier snacks when they are being health conscious.”
As the company focused on making their product offerings healthier, critics claimed that
PepsiCo’s senior management was losing its focus on the core soda and snack businesses—and that
the stock price was suffering as a result. Sanford Bernstein analyst Ali Dibadj stated that “they have
to realize that at their core they are a sugary, fatty cola company and people like that. Health and
wellness is a good focus, but you can’t be singularly focused on it.”17

The Refresh Everything Campaign
As Irazabal, Cooper, and their advertising agency, TBWAChiatDay, searched for the next big
idea to anchor Pepsi’s 2009 advertising campaign, they observed several important cultural shifts in
the U.S. The financial crisis of 2008 had provided a sobering end to the excesses of the 2000s. A Pepsi
consumer survey in December 2008, however, showed that Americans were hopeful about the future;
this was particularly true for Millennial consumers (ages 17-27), 80% of whom expressed hope about
their future.
In response, Pepsi launched a new campaign—“Refresh”—with the tagline “Every Generation
Refreshes the World,” which had three executions: Wordplay, targeted mainly to Millennials; Bottle
Pass, targeted mainly to Baby Boomers; and Refresh Anthem for the Super Bowl. All executions
communicated themes of optimism, hope, joy, and love; the campaign was launched to coincide with
New Year’s Eve 2009, and Pepsi kicked off the excitement by plastering Times Square in New York
City, the site of the biggest New Year’s Eve party in the U.S., with advertising. The campaign
challenged consumers to refresh and renew their world.
A “Refresh Anthem” commercial was created for the 2009 Super Bowl, featuring Bob Dylan and
will.i.am, the lead singer of the Black Eyed Peas, to the tune of the Dylan classic “Forever Young.”
The ad featured the tagline “Every Generation Refreshes the World” and juxtaposed scenes from the
1960s and the 2000s. The visuals focused on the similarities between the Baby Boomer and Millennial
generations and communicated themes of happiness, change, and youthfulness. TBWAChiatDay’s
Pepsi account planner, Jeremy Simon, explained the campaign:
It came from insight into two business problems facing Pepsi. Our core Baby Boomer
consumers were leaving the soda category and weren’t being replaced by Millennials. Our
challenge was to find a single solution to both problems, to keep Baby Boomers and attract
Millennials. Our insight was that those two generations have a lot of shared values and
attitudes—they are optimistic generations who believe that they can change the world.
Many noted similarities between the messaging of “Refresh Everything” and the rhetoric of
Barack Obama, and between Pepsi’s newly redesigned logo and the logo used by Obama in his
presidential campaign. To capitalize on the excitement surrounding Obama’s inauguration, Pepsi
peppered the crowd with Pepsi tote bags and T-shirts and blanketed Washington, DC, with Pepsi
Word Play billboards. Nicole Flavin, Pepsi Brand marketing director for Diets and Innovation,
explained that “our point was not to have a political point of view, but to make sure that we were
riding the sentiment in the country—and the sentiment was change.”

4
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The Pepsi Refresh Project
As the “Refresh Everything” campaign moved into its second year, the mood of the nation had
changed again. Simon explained: “2010 became a year of action, not words. ‘Refresh Everything’
would be judged on the brand’s actions, not just on the words in our advertising. We knew we had to
do something really big and tangible, a physical manifestation of our brand platform.”
Irazabal’s research showed that Millennials perceived the Pepsi brand as superficial: “Consumers
are tired of words without actions. ‘So, great, you’re refreshing the world. Show me how.’” Cooper
noted that “one of the ideas that came up was to show consumers that the brand is giving back to the
world—that the brand is not just taking.”
The Pepsi Refresh Project was a marketing program geared to solicit and reward consumers’ ideas
for refreshing their communities: Pepsi would enable consumers to enact change by funding their
ideas. For 2010, $20 million—originally earmarked for other marketing activities including Super
Bowl advertising—would fund the best ideas submitted by consumers. Grants ranging from $5,000 to
$250,000 would support ideas in six categories, such as “Education” and “The Planet” (Exhibit 3).
The hub of the program was its website—www.refresheverything.com—where consumers submitted
ideas, reviewed idea proposals, and cast their votes. Each month, the site accepted up to 1,000 idea
submissions. Consumers were encouraged to return frequently to vote; each person could vote for 10
ideas per day during a 30-day voting period.
The project capitalized on several converging trends. First, studies showed that brands’ social
capital was important to Millennials: 69% claimed that they considered a company’s social and
environmental commitment when shopping, and 89% said that they would switch to a brand
associated with a good cause.18 Second, Millennials believed that they were both obligated and
empowered to make the world a better place: 92% believed the world needed to be changed, and 83%
believed that their generation had a duty to change the world.19 Third, Millennials believed that
technology, and specifically social media linking people together, was a force for change.20
The brand team encapsulated these trends with the tagline “Every generation refreshes the world.
Now, it’s your turn.” Launch materials invited consumers to participate:
Imagine if people from all walks of life across the U.S. had just one idea to make the world
better. Now imagine if they had the means to bring their ideas to life. The Pepsi Refresh Project
offers a platform for change, empowering Americans to bring a positive impact to their
communities . . . . The Pepsi Refresh Project is about the power of people and their ideas.

Pepsi’s Partner Network
The scope and the scale of the project were unlike anything Pepsi had done before. The brand
team enlisted a cadre of agency partners to help plan and execute the project. In addition, all internal
Pepsi brand resources—both financial resources and personnel—were diverted from other marketing
programs. Irazabal laughed as she recalled the support she had received:
We have about 125 people working on the project, including everyone here at Pepsi and at
our agency partners. If you ask any one of them, they all feel like they own the project. There is
a huge sense of pride. People who work on the other brands here at PepsiCo ask, ‘Is there any
way I can help?’ We have a group of employees who are Millennials who help us moderate the
ideas each month, just because they want to be a part of it, not because it is part of their job.

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The Pepsi Refresh Project: A Thirst for Change

GOOD, an integrated media company for “the people, businesses, and NGOs moving the world
forward,” played a major partnership role. PepsiCo envisioned GOOD as a guide and an enabler.
“We brought GOOD in to shepherd us through the process. They had insight into how things really
work—not just giving to an organization and hoping that they would accomplish something, but
getting involved directly to help execute an idea,” said Cooper. GOOD’s participation granted
PepsiCo legitimacy, as Irazabal explained: “We talked to non-profit entrepreneurs to understand
whether it would work. Will it be called greenwashing? How do we make it authentic?”
GOOD played several roles. They recruited and managed a team of Ambassadors—emerging
leaders, activists, neighborhood advocates, and non-profit founders—who worked to increase the
involvement of the non-profit community and cultivate and curate innovative ideas in their areas of
expertise. GOOD worked with Pepsi personnel to vet submitted ideas to ensure that they adhered to
the spirit and law of the program before being opened to consumer voting. The democratic nature of
the program—allowing consumers to decide which causes Pepsi would support—made the project
unique among cause marketing programs. Lauren Hobart, chief marketing officer, PepsiCo Sparkling
Beverages, felt that “there was a time when brands wanted to keep total control, but we gave control
to the people—which is crucial in engaging today’s consumers.” The idea-vetting process was
designed to ensure that Pepsi did not fund ideas that could damage the brand’s reputation. Andrea
Foote, senior manager of Pepsi Beverages Company Communications, was one of the employees
involved. She noted, “Pepsi has a code of conduct and ethics, and we all try to live by it. What
happens when there’s an idea that’s not in accordance with that code? Can Pepsi stand behind it?”
GOOD worked with grant winners to maximize their success in executing their ideas in their
communities. They also managed other agencies involved in the grant process, such as Global
Giving, which conducted due diligence on the spending of the grant money, and Mission
Measurement, which assessed the social impact of the grants. Grant Garrison, grants director of
GOOD, explained: “Once the money is out there, how do we ensure that the grantees impact their
community—and actually do what the voters wanted them to do? Our team of grant managers
conducts public relations for winners’ events to help them attract as much community participation
as possible.”
The goal was to help grantees succeed. Irazabal noted that “we have a whole backstage
organization that supports the winners to make their ideas a reality. We aren’t holding their hands
per se, as these are very driven people, but we’re making sure we have the right support for them.”21

Employee Engagement Programs
In addition to its external partners, PepsiCo relied on its employees to generate excitement for the
Pepsi Refresh Project. The brand team seeded a special contest among PepsiCo’s employee resource
groups, such as the Women’s Initiative Network and Adelante, the Pepsi Latino/Hispanic Inclusion
Group. Each group was asked to submit an idea for a $10,000 grant, and employees voted for their
favorites. During the voting period, the Pepsi Refresh Project team took over PepsiCo’s headquarters,
wrapping the space with Pepsi Refresh Project signage. All 41,000 PepsiCo employees received
information about the program via Pepsi’s internal newsletter, and branded T-shirts were dropped
on every desk. The winner of the employee resource group contest was announced at a Town Hall
Meeting featuring CEO Nooyi as the keynote speaker. Flavin recalled the excitement of the launch:
“Indra told us that never in her wildest imagination did she think that a brand would internalize
Performance with Purpose and bring it to life in such a meaningful way. She encouraged all of us to
tell 10 people about the Pepsi Refresh Project.”

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Internal research demonstrated the program’s impact on employees: 97% said that the project
reinforced their pride in PepsiCo as a company, 83% planned to vote for an idea, and 25% planned to
submit an idea. Once the program went live to consumers, employees were encouraged to submit
ideas; in the first 10 months, 94 employees or their immediate families had done so. Kristine Hinck,
senior manager, Pepsi Beverages Company Communications, summarized the employee response:
The brand team’s decision to engage employees first was unique and significant. This
approach really helped employees across the company become active, educated, passionate
ambassadors during the launch of the consumer-facing program. We had employees writing in
to say, ‘In my 30 years as a PepsiCo employee, I’ve never been more proud!’”

Bottler Engagement Programs
Pepsi also engaged its bottler partners in the Pepsi Refresh Project. PepsiCo distributed its soda
through a complex network of independent companies who owned the franchise rights to distribute
Pepsi products in particular geographic areas. Since the bottlers were Pepsi’s front line in stores and
in local communities, the brand team knew their support was crucial to the success of the program.
The project was announced at a national bottler meeting and webinars were produced to walk
bottlers through the logistical details of the program. A special bottler grant contest spurred idea
submissions from the bottlers. Because bottlers would manage local public relations and events
surrounding the grant winners, the brand team created winner kits (with banners and oversized
checks) and press kits for bottlers to use with their local news organizations.
Some bottlers were skeptical of the program’s ability to sell more product; others recognized its
appeal for burnishing the brand’s image. As Foote recalled: “The bottlers understood that the project
was partly about the brand image, about changing people’s perceptions of carbonated soft drinks—
which had become the poster child for bad eating habits. But, for our bottlers, sales volume is much
more important to them. So for any program that we launch, their bottom line is, ‘How is this going
to help me sell more Pepsi?’”
Dave Pederson, vice president of soft drink sales at Bernick’s Beverages and Vending in
Minnesota, believed that the project had enhanced his ability to increase Pepsi’s visibility in stores:
“We fight for floor space and locations in the stores, and this year I think we’re getting better
locations than our competitors. We’re getting bigger displays, because [stores] are seeing that we’re
giving back to the community.”22 But others expressed concern. Brian Charneski, a representative of
16 independent bottlers said, “People feel good about [the Pepsi Refresh Project] and I think it’s neat,
but it doesn’t translate to ‘I’m going to buy a Pepsi.’”23

The Launch
The Pepsi Refresh campaign website went live on January 13, 2010. Irazabal remembered the
moment: “All of the media support for the Pepsi brands went toward the project in 2010. It was the
theme that united all the activities of the brand—one voice, one project.” One key decision was how
best to incorporate the Pepsi brand and products into the project. Kate Watts, of Pepsi’s digital
agency, HUGE, noted that “there was no direct call to action for purchase on the website. The
branding was obviously very much Pepsi, but there was no direct push to sell the product in any
shape or form. And that was the original intent—it was supposed to elevate the brand, not drive
sales.”

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The Pepsi Refresh Project: A Thirst for Change

A launch blitz was designed to build excitement (see Exhibit 4 for examples). Edelman and Weber
Shandwick, Pepsi’s public relations agencies, managed a multifaceted national and local public
relations program. Actors Kevin Bacon and Demi Moore participated in a Pepsi Refresh Celebrity
Challenge, seeking votes for their favorite causes; the Celebrity Challenge was announced for the first
time on The Today Show. The Pepsi Refresh Facebook page also featured an exclusive opportunity to
watch the “Pepsi Refresh Everything through Great Ideas” brainstorm live from New York City. The
brainstorm brought together Moore, Bacon, CMO and president of joint ventures for PepsiCo
Americas Beverages Jill Beraud, advisory board member Majora Carter, and college students from
the New York City area to discuss ideas that they believed would positively move the world forward.
Viewers submitted questions in real time via Facebook and Twitter (@Pepsi); content from the
brainstorm was available on Ustream, Facebook, and a new iPhone application.
In just 72 hours, the site reached the 1,000-idea submission limit for the first month, with at least
one submission from each state. More than 141,000 votes were cast in the first three days of voting. In
the second month of the program, it took only 16 hours to field 1,000 submissions. Pulchin
remembers the moment when the team realized that the program would be a success: “We were
worried that there would be too few ideas submitted. What if no one participates? What if no one
votes? But there were way more ideas than we could put up on the site.”

Social Media Programs
Given the Millennial target audience and the fact that the projects would be posted and the voting
would take place online, the team relied heavily on social media for its reach and impact. Irazabal
increased her digital advertising spend by 60% for 2010.24 Pepsi sponsored Social Media Week, an
industry conference on trends in social and mobile media, and solicited three influential bloggers to
compete for a $50,000 grant. Irazabal, Cooper, and other executives were interviewed by bloggers at
the event, which generated 50 million impressions on Twitter.
Consumers interacted with the project across social media platforms. They voted for ideas on the
main website, on Facebook, or via SMS text messaging. They were encouraged to “Like” the Pepsi
Refresh Project on Facebook and to use Twitter to generate publicity and solicit votes. A mobile
application allowed consumers to view ideas in their area and vote from their mobile phones. On the
website, winners were encouraged to blog about their efforts to increase awareness of their causes.
Soon, the site was receiving four to five million unique visitors each month. About half of those
registering on the site to submit ideas opted in to receive brand communications and coupons from
Pepsi. By March 2010, the project had earned Pepsi an additional 300,000 Facebook friends and was
generating 1,000 tweets per day. Public relations efforts yielded 6 to 12 media stories each day. The
amount of content generated by the program was staggering.
Shiv Singh, Pepsi’s head of digital, noted that t