Pepsi hits high note with schools

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The schoolyard is the latest frontier for the cola wars. To differentiate itself from nemesis Coca-Cola Co. during the crucial holiday season this year, PepsiCo plans to launch what will likely be an annual promotion to support school music-education programs.

The soft drink and snack marketer follows long established school fund-raising programs sponsored by Campbell Soup Co. and General Mills. Even as advertising in schools takes hits from critics including first lady Hillary Clinton, package goods powerhouses are adding to their programs for this year, signifying the increasing importance of school outreach efforts for marketers.

"The holiday season is critical for us, making up 16% of our annual volume, and we wanted to offer something different and more compelling than what Coke will offer during the same period," said Tom Smallhorn, senior marketing manager at Pepsi-Cola Co. "Through research, we determined that 83% of parents with kids in schools supported fund-raising for those schools by purchasing products, and music programs in particular are traditionally underfunded."

MUSICAL EQUIPMENT

PepsiCo's "Share the Joy With Music," which kicks off Nov. 6 and will run through early January, offers schools free musical equipment and supplies in exchange for collecting Pepsi Notes. The notes are printed on more than 300 million larger-sized packages of Pepsi, Diet Pepsi, Pepsi One and Mountain Dew in supermarkets. Select sizes of Frito-Lay's Frito's, Rold Gold Pretzels and Munchos will also carry notes.

To get schools to participate, Pepsi in August sent mailings to more than 100,000 principals and music educators at public, private and parochial schools for grades kindergarten through 12. The materials include an enrollment form and directions on how schools can send in their Pepsi Notes for a password to log on to PepsiNotes.com. The site, linked to online music retail partner Music123.com, offers more than 100,000 items schools can choose from, including music writing software for 300 notes, a violin for 2,115 notes and a tuba for 22,500 notes.

In addition to the positive response Pepsi expects from its parent and youth targets, the beverage marketer is also hoping the program will appeal to retailers, who like to tie in to schools and the local community, Mr. Smallhorn said. In-store lobby displays as well as packaging will feature kids with instruments, among them Pepsi's third-grade spokesgirl Hallie Eisenberg, and retailers are being encouraged to adopt local schools for whom they can set up Pepsi Notes collection areas.

The tie-in with retailers will also allow PepsiCo to peg sales to "Share the Joy With Music."

PARTICIPATION LEVELS

"We will know broadly what our store movement is nationally by running audits from the stores that ran point of sale [materials]." Mr. Smallhorn said. Pespi will use volume numbers as well as school participation levels to determine continuation of the program on an annual basis, he said.

The program will be supported with national radio advertising from BBDO Worldwide, New York, featuring the Harlem Boys Choir singing the Pepsi jingle, "The Joy of Cola," and explaining the program. In addition, print ads touting the effort are running in music education journals.

This is by no means Pepsi's first effort to break into the school arena. Pepsi and Coke have ongoing battles to gain exclusive vending rights at many institutions, which are "important places to be for our category as teens are important consumers," Mr. Smallhorn said.

Schools have long been fertile ground for other marketers and the trend shows no signs of abating. Campbell began its "Labels for Education" program 27 years ago and has so far provided $90 million worth of products -- everything from dodge balls to vans -- to more than 80,000 participating schools.

"The program creates an early sense of loyalty to our brands, among them our soups, Pepperidge Farm products and SpaghettiOs," said a Campbell spokesman. "If you calculate through the number of redemptions [of Campbell labels] on a per-student basis, it's a leading indicator that people are engaged with our brand, are using our brand, and we certainly believe the program has a net benefit to the company in terms of sales."

INSTANT WINNERS

Last year, more than 250 million labels from Campbell products were redeemed. This year, to up the ante and push sales of its ailing condensed soup business, Campbell has added a promotion on specially marked Campbell's condensed soups offering 10 instant winners $10,000 and 1 million bonus labels for their schools. An additional 25 winners will receive two Hewlett-Packard Co. computers -- one for home, one for school -- and 1 million winners will receive free Campbell products and 100 bonus labels. To kick off the program, Campbell staged events in cities including Minneapolis, Cleveland and Houston where consumers got the chance to step inside a special label-grab booth to collect flying labels worth 1,000 points each.

Although Campbell does little outside of in-store materials and newspaper inserts to promote "Labels for Education," the food company's long-running program garners a lot of notice in the local media. The attention comes mainly from the schools' contacting local newspaper, radio and TV stations to promote label collection drives and to tout the results. To encourage such efforts, Campbell includes sample press releases in their school materials.

General Mills, too, gets stacks of local newspaper clippings every week touting success stories of the schools that participate in its "Box Tops for Education" program, a loyalty and sales driving effort now in its fifth year. The program -- which offers the chance to exchange box tops for 10› each, and up to $10,000 in cash from Sept. 1 to March 31 -- has donated $32 million to schools serving kindergartners through eighth-graders.

ADDING PRODUCTS

To expand the program, General Mills this year has added more than 200 Betty Crocker products to the lineup of participating brands, a move expected to prompt the giveaway of $20 million through yearend.

To ensure that its mom target sees the value of the "Box Tops" program, General Mills ran full-page ads in national women's service magazines featuring school success stories and "alerting parents that the program was starting up again for the school year," said a company spokeswoman. Campbell Mithun, Minneapolis, handles.

In addition, General Mills is working with retailers to develop special local promotions. Among them is a program Kroger started in September offering bonus box tops with the purchase of three similar General Mills products. An upcoming program with Minneapolis Byerly's stores creates special community nights where particular schools can visit the store to get double box tops on any General Mills products they purchase.

Such expanded efforts are increasingly important as more and more programs hit school administrators' desks.

"Superintendents and principals are approached on an almost daily basis by companies interested in getting their message inside the schools," said David Walsh, president of the National Institute on Media & the Family, a Minneapolis-based non-profit organization focused on evaluating the effects of media on children. The reasons, he said, are manifold.

86 MILLION STRONG

First, the largest market segment in the country is made of up those born since 1979, now approaching 85 million; second, this is a group with great purchasing power and even greater purchasing influence; third, this is a group attending school for up to 30 hours a week; and fourth, "most companies are in a race to establish brand loyalty with young consumers before their competitor does," Mr. Walsh said.

The dramatic acceleration of marketing to kids over the last decade has begun to cause "somewhat of a backlash," he said.

"Everyone knows that we live in a commercial culture, but you have to draw the line somewhere," he said. "Kids are in school as students not as consumers, and as they're targeted more as consumers within the school building, we're going to start to see those negative reactions intensify."

Recently, Mrs. Clinton came out against advertisers who were directing a "barrage of materialist marketing at young children," and called on the federal government to ban commercials aimed at preschool children and to prohibit advertising inside public elementary schools (see column on Page 58).

`SLIPPERY SLOPE'

As Mr. Walsh helps schools navigate what he calls the "slippery slope" that business partnerships often present, he disagrees with an across-the-board ban on private sector involvement, instead recommending that the administrators carefully monitor the proposals to make sure the primary goal is to help the kids. "If, along the way, the company gets credit and enhances their recognition, great, they deserve it," he said.

While Campbell's efforts 27 years ago were viewed like "mom and apple pie," Mr. Walsh said, "now that programs have become so sophisticated and intensified and overtly commercial, it raises suspicions that will prevent really good proposals that would benefit schools from ever seeing the light of day."

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