CMO Nicholson Exits Pepsi as Share Declines

Some Say Ads Have Lost Spark, Company Is Mired in 'Marketing Malaise'

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NEW YORK ( -- Amid sliding market shares for several of its brands, softening spending and lackluster marketing, Pepsi-Cola's senior VP-chief marketing officer, Cie Nicholson, is leaving the beverage giant.
Pepsi's departing senior VP-chief marketing officer, Cie Nicholson
Pepsi's departing senior VP-chief marketing officer, Cie Nicholson

"Certainly the ball was advanced with her," said Tom Pirko, president of Bevmark. "But she put herself in a position where she took on a lot of responsibility. Whatever she did, she didn't get enough done. ... All of us are wondering when [Pepsi is] going to escape their malaise and turn this whole thing around for the consumer."

Ms. Nicholson, a decisive executive who made her reputation by shepherding Sierra Mist into a top-10 brand and overseeing the successful launch of Mountain Dew Code Red, is said by several people to have a similarly strong personality to Massimo d'Amore, CEO of PepsiCo Beverages Americas, who took on that role in November. According to those people, Ms. Nicholson and Mr. d'Amore may have had potentially conflicting ideas about the direction of the division. "There have been a lot of changes at Pepsi," said one executive, "and Massimo has very clear ideas about marketing."

A PepsiCo spokeswoman said only that Ms. Nicholson is departing in order to "pursue other interests, like travel and spending time with family." The spokeswoman said that no departure date had been set and no successor has been named. Ms. Nicholson was unavailable for comment.

Named a Woman to Watch by Ad Age in 2001 and to the Marketing 50 in 2003, Ms. Nicholson had rapidly ascended the company's ranks. She came on board in 1997 as director-innovation in the fountain-beverage unit and went on to hold roles including VP-flavors and then VP-noncarbonated beverages.

But with those accolades came a big personality, which various industry watchers described as aggressive, assertive and overly confident. "Certainly there was always an impression that Cie took up a lot of oxygen, and Massimo takes up as much oxygen, and, as everybody knows, [PepsiCo Chairman-CEO] Indra [Nooyi does too]," Mr. Pirko said.

"In this particular case, the fact that certain people, whose authority is very high, have the opportunity to put their paws on other people's provinces might have been one of the reasons why [Ms. Nicholson left]."

But it's also undeniable that Pepsi-Cola's marketing -- once a dazzling star cavalcade with Super Bowl-style flash -- has lost some of its spark. Several industry consultants, in fact, are hard-pressed to call to mind a recent campaign.

Attention has been diverted from the company's core brands, as resources are shifted to the Pepsi Stuff promotion and the ailing Gatorade brand. Sobe Life Water and Amp also have received increased attention this year, although those initiatives are widely seen as me-too efforts, following in the footsteps of more-established giants such as Vitaminwater, Monster and Red Bull.

Flat cola
"It's a perform-or-get-out kind of place," said Bob Goldin, exec VP at Technomic. "Pepsi expects a lot out of their people. But it's just an intensely competitive business, and it's flat."

Marketing budgets also appear to be shrinking across the board at PepsiCo. Spending was down 1.2% in 2007 to $1.3 billion for the entire company. Measured media spending was also down for the year across several of the company's key beverage brands. BBDO, New York, is the agency of record for Pepsi-Cola North America. OMD Worldwide, New York, handles media.

According to Ad Age's Leading National Advertisers report, market share declined in 2007 for Pepsi, Mountain Dew and Tropicana, while Gatorade was flat. Of the top 10 beverage brands, only one of Pepsi's, Aquafina, saw market share rise.

With the numbers painting a difficult picture, Ms. Nicholson's* successor will inherit a difficult situation. Industry watchers note that PepsiCo tends to hire from within.

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CORRECTION: An earlier version of this story read "Ms. Johnson" rather than "Ms. Nicholson."

EDITOR'S NOTE: Since the publication of this article two executives with whom we've spoken have said that they do not agree, based on their experience, with the description of Ms. Nicholson as "aggressive."
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