The 7E Principles by Richard Lee (Pepsi)

There is no bigger market than China. When Richard Lee, former vice president of Pepsi China, was given the task of increasing the famous cola drink’s presence in the world’s most populous nation, he knew he needed to go big. For Richard, who is now Pepsi International’s vice president of colas, this involved mapping out a 10-year branding strategy which has seen the company’s market share more than double in China.

The Pepsi 7E principles by Richard Lee

We are meeting Richard at the Pepsi head offices in New York, where he starts talking straight away. Richard: “Our strategy included five key phases. From 1997 to 1998, our primary task was to raise awareness about Pepsi. From 1999 to 2000, it was our goal to enhance our global stature. Phase three, from 2001 to 2004, involved creating one on one interaction between Pepsi and our core consumers, while from 2004 onwards we have dedicated our branding activities to “Beyond the 3D experience”. While the strategy involved numerous campaigns and initiatives, our company’s core values remained the same.”
Pepsi runs numerous branding campaigns around the word. Each aims to penetrate the everyday life of consumers.
Richard continues: “Despite a huge diversity in marketing tools and forms, all campaigns follow the 7E Principles. Let me explain them to you so you better understand the Pepsi brand.”

Emotional Power - Pepsi taps the emotions of its target audience by using celebrities to generatean emotional response to the drink. “It’s about using celebrities as brandbuilding ingredients,” Richard explains. “It’s about creating a multi-dimensional line-up to deepen brand depth. We don’t just pick any celebrity. For the China campaign, we came up with 4 key emotions we wanted to convey to potential consumers: innovation, cool, national pride, dynamism.” They then went and found celebrities which best generate these kinds of emotional responses. “The Chinese basketball star Yao, for example, represents national pride”, Richard says.

The Pepsi 7E principles by Richard Lee

Entertainment Value – “Every new campaign, platform and initiative must be as entertaining and newsworthy as possible. In this way, we create and maintain a long term hype for the brand.” The company also works to create a unique multi-touchpoint brand experience by employing non-conventional media tools to promote Pepsi. This sees Pepsi partake in a variety of non-core business activities, such as album producer, concert sponsor and even as a movie producer. “It’s about keeping the brand fresh and exciting by changing mediaformats and tonalities,” Richard says. “A good example of this was in the lead up to the Chinese New Year and cans were messaged with “wishing you 100 moments of happiness”. The combined result of these activities is that Pepsi touches the lives of consumers from 360 degrees, 365 days of the year.”

Brand Evangelism – Little expense is spared to get the hottest celebrities drink Pepsi. The company explicitly exploits star advocacy to boost the consumer bond with the Pepsi brand. For one TV advertisement alone, the company flew its high profile brand ambassadors into the fabled former desert kingdom of Petra in Jordan to film one of the most talked about commercials ever made in China.“In this way we deliver the Pepsi message with the maximum memorability and engagement,” Richard says proudly.

Omnipresent Exposure – China’s equivalent of the Oscar’s is one of the country’s highest profile events. “Instead of having the stars walk the traditional red carpet, however, we sponsored the event and had the country’s A-List celebs walk the Pepsi blue carpet. It created a huge buzz,” Richard says. It’s a good example of how Pepsi works to permeate the brand into the daily lives of consumers. “Rather than simply running print and TV ads, we work to create a “theatrical” brand experience”, Richard explains.

Collaborative Engagement – “In all our branding, we work to create an interactive experience between consumers and our brand.” Pepsi has been particularly quick to seize upon new mediaforums in building this relationship, such as mobile phone messages, websites offering interactive portals and Pepsi computer games.

Executive Excellence – Together Everyone Achieves More. Pepsi’s results stem from this commitment to working as a TEAM. The Pepsi employee, says Richard, has an analytical mind, visionary eyes, a sharp nose to smell the trends, patient ears to understand, an articulate mouth, is action orientated and has a passionate heart and daring attitude. “It’s not just a brand, it’s a culture,” Richard said of Pepsi.

Investment Effectiveness – In all its activities, Pepsi aims to get the biggest branding bang from the fewest branding bucks. In all the company’s campaigns, Pepsi looks to leverage programs with a large amplifying affect. Since 1998 the company’s RSOM to RSOS ratio – Relative Share of Market to Relative Share of Spend – has increased from 0.43 in 1998 to 1.75 in 2008.

Pepsi Success – In 1997, Pepsi represented little more than 25 percent of the cola beverage market. By 2007, the company’s market share had grown to more than 60 percent. Pepsi has more than doubled its market share in China since 2007. Richard is obviously proud of these results as he finishes off: “I am very proud to say that all brand equity indicators have grown dramatically and Pepsi is the preferred cola drink in the key 17 to 23 year old age group. We have created an iconic youth-spirited brand with sustainable advantage through gradual brand platform evolution.”

Richard Lee - Marketing Chief Pepsi International

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