Procter & Gamble, China’s largest advertiser, also respects Pepsi’s remarkable growth under Richard Lee, Shanghai-based VP of marketing for PepsiCo’s beverage business in China. The company invited Mr. Lee, 40, to speak at an internal conference in February 2005, marking the first time a non-P&G exec had addressed the company's greater China marketing community.
While Pepsi courts young consumers all over the world, the U.S. beverage marketer has been particularly adept at captivating Chinese teens. Since 1997, when Mr. Lee was recruited as marketing director for the Pepsi brand in China, Pepsi's market share of the carbonated soft drinks category has doubled to 22%, bringing it roughly level with its more mainstream brand rival, Coke.
Dare for More
“In the beginning, we had low awareness and Pepsi was a no-name brand,” said Mr. Lee. “We didn’t come where we are now overnight, it happened in stages” using the brand platform “Dare for More,” which means both “breakthrough aspiration” and “infinite thirst quencher” in Chinese.
Initially, he adapted Pepsi’s global marketing tactics, deploying Western stars like Ricky Martin and Janet Jackson. Starting in 2001, Pepsi began integrating the brand with local music and sports, signing up Hong Kong singer/actor Aaron Kwok as a brand spokesman, sponsoring China’s National Soccer League and venturing into grass roots programs like training camps and concerts.
“Today, Pepsi is a 3D experience shared through non-traditional media vehicles like our popular Pepsi music charts,” he said. The company produces albums, stages concerts and develops feature films. Pepsi also sponsors local bands like F4, which starred in an high-tech two-part commercial by BBDO Worldwide this summer that features stunning martial arts and special effects and was also turned into a music video.
“Richard has applied a mix of traditional advertising with many other tactics, including sex appeal, buzz and PR,” said Harjot Singh, strategic planning director, BBDO, Shanghai. He also knows how to apply symbolism. When Pepsi sponsored the Hong Kong International Film Festival, known as the “Oscars of China,” Mr. Lee “negotiated for the event’s red carpet to be changed to Pepsi’s shade of blue, which attracted a lot of attention,” said Mr. Singh.
When it comes to traditional advertising, the Hong Kong native also has a penchant for creativity. Last month PepsiCo installed the world’s largest billboard for Gatorade, created by DDB Worldwide, in Chongqing.
"Pepsi's phenomenal growth in China over the past three years can be attributed to three factors, a clear strategic vision to align the brand with the youth of China, relentless execution against that vision and a
tremendous passion and energy that characterizes all their executions," said DDB's Aaron Lau, Hong Kong-based chairman-CEO, Asia.
Pepsi marketers must stay current with China’s youth market. At a bottler conference earlier this year, for instance, Leo Tsoi, marketing director for brand Pepsi in China, rapped his brand-building strategy. (The previous year the presentation was delivered by Mr. Kwok, to the delight of the star-struck bottlers.)
Mr. Lee stays in touch by visiting youth hangouts like California Club on weekends, but admits to watching “tons of movies,” in part because he started his career as a budding filmmaker. The Hong Kong native completed three films by the time he was 17, and reluctantly gave up a treasured acceptance to the University of Southern California’s film school (because his parents “threatened to disown him”) to study business at UC Berkeley.
After earning his MBA at Harvard in 1992, he joined Colgate-Palmolive in New York as global marketing manager, oral care. The following year, the company transferred him to Guangzhou to manage its joint venture. He spent the next five years there, but joined Pepsi in 1997, “to try something different and more creative. At that time, Pepsi was almost unknown and I wanted to prove to myself I could turn the brand around.”
Coke moving fast
Now that Mr. Lee has managed to get Pepsi’s core product on track, “his next challenge will be expanding the Pepsi portfolio to consolidate that growth and build more properties for a competitive edge and meet the consumer in more and new ways,” predicted BBDO’s Mr. Singh.
He also has to sustain the brand’s appeal in the face of improved competition. Coca-Cola recently transferred one of its veterans, Ilan Sobel, to Shanghai as general manager, strategic marketing and innovation, to rejuvenate the Coke brand among youth in China.
“Pepsi has chosen a lot of appealing, edgy, fresh celebrities and styles to partner with and it has been received well. But Coke is moving fast. Its recent campaigns blending online games, sports and celebrity are very effective and its new ads have been received extremely well,” said P.T. Black, Shanghai-based partner of research consultancy Jigsaw International.
Who? Richard Lee, Shanghai-based VP of marketing for PepsiCo’s beverage business in China
Favorite PepsiCo product? Gatorade
Favorite Shanghai teen hangout? California Club
Favorite Shanghai restaurant? Sunday brunch at the Portman Ritz-Carlton hotel
Biggest challenge? Finding ways to stay inspired and creative
Top tip for foreigners in China? Believe in yourself