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Get ready for a tsunami of spending from PepsiCo as it resets its business to retain talent and focus on long-term brand loyalty rather than short-term solutions.
In less than two weeks, the snack and beverage giant will unveil its much-anticipated business outlook for 2012 and beyond, with analysts calling for an additional marketing investment of $400 million to $500 million.
Expectations are high that PepsiCo will outline plans for increased marketing investment, particularly in beverages, answering critics who charge it's an area neglected for too long. And while there's no doubt the company is at an inflection point, several industry executives told Ad Age that despite rampant speculation about the departure of CEO Indra Nooyi, and Kraft-like breakup of the company, both scenarios are unlikely.
Pepsi needs to play catch-up in marketing. Its ad spending on beverages has trailed Coca-Cola in both absolute terms and as a percentage of sales for years. In each of the past three years, Coca-Cola spent close to $3 billion on advertising, while PepsiCo spent less than $2 billion promoting its beverage brands.
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