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pepsi-cola co. has transformed Mountain Dew from a soft drink with a hillbilly theme to a cutting-edge brand that grew faster than any other carbonated soft drink last year.

Mountain Dew's volume shot up 13% in 1997, far outpacing the overall sales growth of 3.3% in the U.S. carbonated soft-drink business, says Beverage Marketing Corp.

In the continuing battle between industry leader Coca-Cola Co. and Pepsi-Cola, Mountain Dew's stellar performance is a particularly sweet victory for No. 2, since its brand jumped ahead of Coca-Cola's Sprite to become the No. 4 carbonated soft drink, with a 6.3% share. Sprite, ranked fifth by Beverage Marketing Corp., had a 6% share.

Industry observers and those close to the brand marvel at its current growth in a tough market, and attribute its strength to a far-sighted marketing strategy and a consistent message that has changed with the times without radical shifts in positioning.


"The brand has been a model of consistency," said Jeff Mordos, exec VP-managing director at longtime agency BBDO Worldwide, New York. "If you trace every aspect of that brand over the last 25 years, what you'll find is its positioning, its packaging, its formula have all been true to form. They haven't deviated a lot. The image . . . has been a real tight link with . . . thirst-quenching . . . and with teens having an outrageous time with the brand outdoors."

Mr. Mordos noted that Pepsi has made subtle changes to contemporize the brand, both with packaging tweaks and new sports alliances, most notably its current link to so-called extreme sports. Mountain Dew is a sponsor of ESPN's X Games.

"What you're seeing today is the culmination of 20 years of investment, as opposed to seeing a given advertiser and a given brand trying to reinvent themselves every 5 minutes," he said.

Pepsi backed Mountain Dew with $34 million in measured media spending last year, Competitive Media Reporting said.

"It comes up with the right programs to target its major demographic group, and it hasn't departed significantly from the fundamental marketing approach," said Emanuel Goldman, beverage analyst with PaineWebber. "It's upscale, it's energetic and it's youthful."


The lemon-lime drink, with caffeine, has delivered on the message that it's an energetic product, said Kevin Keller, a visiting professor of marketing at Duke University's Fuqua School of Management.

"There is nothing like the energy you can get from that particular age group," he said of the brand's teen target. "That's something they've done a great job tapping into. In this category, where the intangibles are so critical, they've done a great job. It's classic user and usage imagery."

Mountain Dew now faces the enviable challenge of keeping momentum in the face of new competition from Coca-Cola's Surge, which was rolled out to most of the country in the last few months.

Phil Marineau, president-CEO of Pepsi-Cola North America, has some experience in the soft-drink wars. He was formerly with Quaker Oats Co., where he helped build the sports-targeted Gatorade brand.

"Phil was in charge of Gatorade when Coke and Pepsi took their best shots," said Mr. Goldman. "Gatorade fought them off very effectively."

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