The citrus-flavored brand is the third biggest carbonated soft drink brand by sales in the U.S. Besides Mountain Dew, the company plans to launch Pepsi Max in China this year as well as "a new beverage line that delivers functional benefits, leveraging traditional Chinese medicine," said CEO Indra Nooyi during a call with investors on April 20, 2009.
Pepsi is introducing more of its global beverages in China and developing tailor-made products to offset problems elsewhere, particularly in the U.S., where carbonated soft drink sales are declining. Pepsi's global net revenue fell 1% to $8.26 billion during the first quarter of 2009, for example, but in China, Pepsi is still posting high single-digit growth.
"Mountain Dew has always been known as a bold and innovative trend leader and China is a young, vibrant country that the world is looking to," said Harry Hui, Shanghai-based chief marketing officer of Pepsico's beverage business in greater China.
Pepsi wanted to launch Mountain Dew in China earlier, but it was not possible until this year because of a recent change in Chinese regulations. Previously, the government didn't allow sale of any clear-colored, caffeinated and carbonated beverages, only brown ones such Pepsi and Coke.
Contest blends Chinese and western culture
To promote Mountain Dew in China, Pepsi is following a strategy that works well for its flagship Pepsi brand: contests that turn the winning Chinese consumers into stars. This month, the company launched a nationwide talent search for a new street-dance that blends China's heritage with western culture in a mix of urban and modern dance moves, sports and martial arts.
The contest is aimed at the same hip, active, urban and mostly male Chinese consumers aged 13 to 24, who will, Pepsi hopes, like the highly-caffeinated soft drink's edgy image. In western markets, the brand is also closely tied to male-oriented activities like online games and action sports. The brand's slogan in China is "Live life on your own terms."
The "China's Best Dew Crew Challenge" talent contest is open to teams of three to five people aged 18 and above. Between May 15 and June 15, competitions will be held in Beijing, Shanghai, Guangzhou, Chongqing, Xian, Hangzhou, Jinan, Shenyang, Shenzhen, and Changsha.
Each city's winners will attend a training camp to compete with China's best dancers, learn from professional dancers and celebrities, and get tips from famous stylists and fashion designers. They will compete in 10 rounds to win the national championships. The grand champions will be cast in the new movie Kung Fu Hip Hop II, to be directed by Zhong Shu Kai.
The contest will push the boundaries beyond just being a television show by extending its reach into other forms of expression like street murals, extreme sports, and online games, said Mimi Vong, Pepsi's Shanghai-based head of interactive marketing in China. Mountain Dew will also sponsor the KIA X Games Asia, an action sports competition held in Shanghai in May.
The Dew Challenge was launched at Beijing's trendy D-Park on April 7 with the unveiling of the Dew Mural, created by 1626, a local magazine that has partnered with Pepsi. The mural blends popular Chinese graphics and characters with U.S. street styles.
The "China's Best Dew Crew Challenge" contest was created in partnership with China's Travel Channel, a Beijing-based broadcaster that claims to have 300 million viewers in the mainland. Each level of the competition will be broadcast on prime time on the Travel Channel and will be available on www.2009j5m.com starting July 11.
Creative for the television show was handled by Hong Kong-based boutique ad agency, Bravo Asia, which was founded by ex- DDB executive Aaron Lau. Pepsi is marketing the contest and the Mountain Dew brand with advertising in TV, print, outdoor and point of sale media, created by Omnicom Group's BBDO Worldwide, Shanghai.
Omnicom's Tribal DDB handles digital marketing for all Pepsi brands in China while Group M's Mindshare division is the media agency. SoftPR handled public relations and the internet media agency Allyes Information Technology provided digital media support.
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