Over a much longer period than most marketers-Pepsi did its first African-American ad in 1948-the cola giant has evolved from the ethnic segmentation most companies still use, to looking at young ethnic consumers more as tribes bound by shared interests than ethnicity.
"Race is not the unifier," says Giuseppe D'Alessandro, Pepsi's director of multicultural marketing. "The multicultural mind-set is more about your interests, like music, than whether you're African-American or Latino."
The Pepsi globe, he says, is 20% Latino, 15% African-American and 6% Asian-American. Forty percent of the Pepsi world is diverse, concentrated in major urban centers like New York, Los Angeles and Miami where youthful minorities are often the majorities.
"They see their reflection in the popular culture, almost to the point of exaggeration," Mr. D'Alessandro says. "We call it the multicultural heart."
Pepsi's multicultural ads run all over. Pepsi-sponsored singers Beyonce Knowles and Shakira, for instance, aren't relegated to Black Entertainment Television and Univision, as they would have been just a few years ago.
SELLING THE JOY
Both performers star in ads that depict a world of imagination and passion as they sell "The joy of Pepsi."
In the dramatic mini-opera "Pepsi's Carmen," Spike DDB, New York, wrote new lyrics to the famous aria (To see the spot, go to AdAge.com QwikFind AA082i). In it, Zeke from Battle Creek loses his can of Pepsi as he stares in wonder around Times Square, and Beyonce as Carmen mobilizes a singing and dancing crowd to restore his drink, trans- forming tragedy into a joyous ending. The spot debuted on the Academy Awards telecast.
"We're very multicultural from day one," says Mr. D'Alessandro. "But that doesn't mean we don't do things that are more focused and relevant."
One Shakira music spot has two versions, one sung in Spanish and one in English. And the Hispanic market was the first to be targeted for a joint promotion involving Pepsi and PepsiCo sibling Frito-Lay's Doritos. The promotion was titled "El Reventon de Sabor," which loosely translates as a huge, flavorful party, and was heavily advertised on Spanish-language TV.
"Combining Pepsi and Doritos makes sense for all markets, but expression and product mix have to be different," Mr. D'Alessandro says. Latins love a fiesta, he says, while African-Americans are more mellow and cool, and the products better be barbecue flavored.
Pepsi has done a few products specifically for Latinos, like the launch of Gatorade's Xtremo last year. The company has tested in Chicago aguas frescas, based on drinks Mexicans make at home by mixing juice with water and sugar, and is likely to roll them out in heavily Hispanic areas, though Mr. D'Alessandro says a final decision has not been made. The bigger market lies in the appeal that certain drink brands have for different groups, like the Mountain Dew brand extensions Live Wire and Code Red that are popular in African-American households.
AD AGENCIES GET IDEAS GOING
Pepsi briefs its agencies, and Hispanic, multicultural and general-market shops all contribute ideas and compete. "Pepsi's Carmen" came from Spike DDB; Dieste Harmel & Partners, Dallas, did the first three Shakira spots; and BBDO Worldwide, New York, created a fourth one, "Tango." All are part of Omnicom Group.
In "Tango," a nerdy convenience store employee begins to dance to radio music with a life-size Shakira cutout that comes to life. He tangos enthusiastically down the aisles of the store with her, a rose between his teeth as he gyrates to the beat.
Their enjoyment of the dance, and a Pepsi, ends abruptly when passers-by peer through the store window and see only a guy and a cardboard girl. Mr. D'Alessandro says that in targeting youth it's hard to tell what percentage of Pepsi's ad budget is focused on any one group. Hispanic Business ranks Pepsi as the ninth biggest Hispanic advertiser, spending an estimated $35 million last year. In total, Pepsi spent $1.11 billion in measured and unmeasured media in 2002, according to Advertising Age's 2003 Leading National Advertisers Report.
Much of Pepsi's youth market are bicultural Hispanics."They consume a lot more English media than Spanish media, so we have to use English media more," says Mr. D'Alessandro. "[English-speaking Hispanics] is obviously an area that is underrepresented. That can be hard for marketers to understand. They always thought Spanish was the main thing, when in reality it's not [about] the language."
What does Mr. D'Alessandro, who is from the Dominican Republic, like to watch? "I love [WB Networks'] `Sister, Sister,' " he says. "I watch it with my daughter. And the Garcia Brothers ."