PepsiCo’s marketing ‘reset’ fails to lift sales
PepsiCo has posted a 2.2 percent drop in revenue for the second quarter despite increasing its investment in marketing and the launch of its first global campaign for flagship brand Pepsi.
The food and drinks maker posted a revenues pf $16.6bn (£10.7bn) in the three months to 16 June.
PepsiCo unveiled plans to “reset” its business and wrestle market share from rivals Coca-Cola and Kraft Foods in February. It is planning to increase ad spend by as much as $600m (£378m) to boost sales of its 12 core brands including Pepsi-Cola, Tropicana, Doritos and 7-Up. The increase will be paid for by cost-cuts including the axing of 8,700 job this year.
It subsequently launched the ‘Live for Now’ global campaign for Pepsi featuring singer Nicki Minaj as it looks to use music to appeal to a younger generation of consumers.
PepsiCo chairman and chief executive Indra Nooyi, says in a statement on the quaterly results: “Our focus for the second half of the year is squarely on executing against our strategic priorities. We will continue to step up our brand support through increased advertising and marketing, accelerate our innovation to drive growth, and drive our aggressive productivity agenda.”
Profits fell by 21 percent to $1.49bn (£962.6m) during its second quarter because of costs related to the restructure.
Last week, Coke reported a rare drop in quarterly earnings, which were hampered by the economic crisis in the Eurozone.
