Please answer the following questions based on the book Chapter 17: Case Study - MountainDEW and Flavor Crowdsourcing

1.What was the value proposition to PepsiCo (owner of Mountain Dew) of the series of DEWmocracy2 campaigns? How do you think PepsiCo benefitted?

2. For each stage of DEWmocracy, how effective do you think it was in engaging consumers with the Mountain Dew brand?

3. Were there too many stages? Why?

4. Could PepsiCo use this approach for other brands in their portfolio? Have they? For which types of brands and target segments does crowdsourcing in this way seem most appropriate?

Following is the article:

On December 29, 2008, the soft drink marketing team at PepsiCo Inc. nervously launched a new flavor of their nearly 70-year-old caffeinated soft drink brand, Mountain Dew. The new flavor was called Voltage and it contained ginseng and had an apparently pleasant raspberry-citrus taste. This product line extension was not like any they had done before because this new flavor was not the result of months of detailed internal research and development, market research, focus groups, market testing. Instead, this flavor was chosen by the brand's fans as part of a crowdsourcing program that PepsiCo had been running since 2007. After over a year the winning flavor had been chosen and was being officially launched into the marketplace.

This excited the marketing team, but also made them nervous. On the one hand, why wouldn't this product be successful? After all, the very people who PepsiCo hoped would buy itthe brand's passionate fanshad developed it. On the other hand, this entire crowdsourcing program was a gamble. Never before had PepsiCo entrusted consumers to make key product decisions for one of its major brands (which accounts for approximately 20% of PepsiCo's US beverage sales and has in recent years outperformed Pepsi Cola[1]).

After a long, multi-stage crowdsourcing program in which consumers elected new flavors, came up with colors, names, and packaging designs chose advertisements, and eventually voted on three finalist flavors (Supernova and Revolution were the other two alongside Voltage), the marketing team hoped that their new flavor would sell. They also hoped that this new social approach to product development that openly allowed consumers to participate in decision making that would usually be done internally would pay off with stronger brand loyalty, advocacy, and engagement over time. If these brand-level benefits were achieved then maybe a crowdsourcing approach to product development, particularly for line extensions, could be used again.

Mountain Dew's History and Positioning

Mountain Dew is a carbonated soft drink brand owned and produced by PepsiCo. It was invented in 1940 by two brothers in Tennessee, Barney and Allen Hartman, the formula was updated in 1958, and the brand was purchased by the then Pepsi-Cola Company (now PepsiCo Inc.) in 1964. The original drink invented by the Hartman brothers was intended for use as a mixer for hard liquor (Tennessee mountain-made "moonshine" specifically).

In 1973 the Pepsi-Cola Company rebranded Mountain Dew and completely overhauled the brand's image. Instead of having a "hillbilly" look and feel they updated it so that it would appeal to a younger and more physically active consumer.

Up until 1988, Mountain Dew was available in a single citrusy flavor. Mountain Dew Red was the first line extension with a new flavor, launched in 1988. Although it did not survive in the marketplace, it sparked a series of new flavor trials and launches, particularly in the 2000s. New flavors introduced over time were, for example, Code Red (cherry, 2001), Live Wire (Orange, 2003), and Baja Blast (tropical lime and only available at Taco Bell fast food restaurants, 2004).

Since the mid-1990s Mountain Dew has become increasingly associated with extreme action sports and fringe subculture sports such as skateboarding and BMX biking. This has attracted a predominantly young, white male consumer to the brand. More recently the brand has also become strongly associated with the video gamer subculture, which also tends to be a predominantly young male consumer. Mountain Dew today is largely seen as a highly caffeinated beverage consumed by young males who are interested in action sports and video gaming. Further, it is a brand that enjoys strong brand advocacy and has a community of passionate fans who closely follow the brand and get excited about new flavors, special edition/limited release flavors, and promotional tie-ins with movies from franchises as Batman, Star Wars, and Superman.

PepsiCo categorizes brands in its portfoliowhich includes Pepsi, Gatorade, Lipton tea, as well as Lay's Potato Chips and Doritos Tortilla Chipswith over US$1 billion in annual worldwide sales as "mega brands." Over 20 of PepsiCo's brands are mega brands and Mountain Dew is usually one of the top three (and Diet Mountain Dew is in its own right a separate mega brand).[2]

From DEWmocracy 1 to DEWmocracy 2

The first DEWmocracy in 2007-2008, which resulted in the Voltage flavor, was considered by PepsiCo and consumers to be a success. The marketing and product development teams managed to make crowdsourcing and "democratic product design" a market success. Perhaps it was the novelty factor that made it work. Or maybe it truly did engage and energize the brand's passionate core fan-base and that drove the success of this campaign. Regardless, PepsiCo's management was now convinced that crowdsourcing product development was a viable method and worth trying again in the future. This led to the team planning the next installment of crowdsourcing, which they called "DEWmocracy 2."

DEWmocracy 2 in 2009-2010

The Mountain Dew team thought hard about how to follow up on the success of DEWmocracy 1. Should they do something completely different, or should they follow pretty much the same approach previously taken? After all, what they did before worked well for them. Taking the same approach is fine if this method does indeed truly engage passionate fans of the brand. However, if DEWmocracy 1's success was due in large part to its novelty (and it being a marketing gimmick) then a very similar DEWmocracy 2 might not be that successful. Despite this risk, the team pushed ahead with DEWmocracy 2 and designed it to be quite similar to their previous crowdsourcing program. The objective was to create deeper brand engagement and to build a more active community of fans in social media.

DEWmocracy 2 was designed to have seven stages, each taking fans through a different stage of product development. The program lasted 12 months and started in July 2009.

Truck Stop. The program began with a national sampling tour where Mountain Dew representatives drove around the United States and held tasting events. Trucks traveled to 17 markets in 12 states. Members of the general public could taste seven potential new flavors (labeled with code numbers and presented in test tubes) and vote for the flavor they liked the best. Mountain Dew also encouraged people to "like" the DEWmocracy Facebook page, which was how they started to build an online community around this program. A total of 222,712 sampling "experiences" took place, 1,100 new Facebook fans for "DEW Labs" were acquired, and the seven flavors were narrowed down to three. Further, 1.5 million people attended the events and about 3,000 votes were submitted. Also as part of this phase brand fans were allowed to submit 12-second videos explaining why they deserved to receive a home tasting kit. Mountain Dew selected 50 of these fans, each of whom was sent a home tasting kit with the seven flavors and a video camera for them to use to document their tasting.

Stage 2

Express Your Flavor. Mountain Dew then made "DEW Labs," which was what PepsiCo called their online product creation community for DEWmocracy. They decided to make a special invite-only online community for "brand fanatics" where these fans would participate in the design of the new product. They identified these fans through social media platforms (Facebook and Twitter, mainly) and also gave them a screening survey to measure their love for the brand (Mountain Dew had to be their most favourite beverage, they had to drink it at least a few times a week, and they had to be social media savvy). Approximately 4,000 of the brand's most dedicated and passionate fans joined DEW Labs.

All DEW Labs members were sent samples of the three flavors that came out of stage 1 and indicated online which one was their favorite. This was done in order to divide the DEW Labs members into three "Flavor Nations," which were separate communities organized around a mutual preference for one of the three flavors.

The first task for each Flavor Nation was to describe their flavor by coming up with temporary names. To help them, videos featuring the Mountain Dew food scientists who made each flavor were shown to fans. In these videos, the food scientists explained how the flavors were developed. Three names, entirely made by fans, came out of this:

• Lime Blasted DEW (No. 231)
• Smooth Citrus DEW (No. 493)
• Punch of Tropical DEW (No. 509)

Stage 3

Shoot Your Shade. Now that each Flavor Nation had a temporary name for its flavor, the next step was to come up with a color for their beverage. The DEW Labs members had to choose, from a set of 18 colors, the three colors that they thought best fit their flavor. The general Mountain Dew fanbase on Facebook was then asked to vote for the colors; i.e., for each flavor, the Facebook fans were presented with the three color options and had to vote for one. To build excitement, there was also a live paintball event where each vote on Facebook during the event (which was streamed live on Facebook) triggered a robotic paintball gun to fire that color at a target. Through Facebook, they received a total of 11,745 votes (62% during the live paintball streaming event). The three colors that resulted were:

• Lime Blasted DEW (No. 231): deep green
• Smooth Citrus DEW (No. 493): white flash
• Punch of Tropical DEW (No. 509): cloudy red

Stage 4

Name Game. The three Flavor Nations now had the makings of real products. They had flavors (taste), names (albeit temporary/working titles), and colors. Next, they had to come up with actual names for their products. DEW Labs members submitted suggestions to their Flavor Nation. PepsiCo's legal department then vetted these suggestions and removed anything inappropriate or unable to be used (e.g., due to similarity to other brand names or product names in similar categories on the market, in order to avoid trademark infringement and consumer confusion). The vetted list for each Flavor Nation was then voted on by its members, and three favorite names came out of this for each flavor. The names were:

• Lime Blasted DEW (No. 231): Outburst, Luminous, and Distortion
• Smooth Citrus DEW (No. 493): Rainstorm, Flash, and White Out
• Punch of Tropical DEW (No. 509): Cyclone, Hurricane, and Typhoon

Once again, the general public then had an opportunity to get involved. This time, however, instead of using Facebook for voting, they used Twitter. In fact, they had a "Twitter race" to see which names were liked the most. For each flavor, there were three possible names. For each name, a separate Twitter account was made (see Figure 2 for an example of the Twitter page for No. 509 with the potential name "Cyclone"). Each Flavor Nation selected three leaders, each who would run that Flavor Nation's three Twitter accounts. They were tasked with getting as many followers as possible because the names with the most followers would be the winners. The results were:

• Lime Blasted DEW (No. 231): Distortion (54% of followers with 582 followers)
• Smooth Citrus DEW (No. 493): White Out (46% of followers with 1,014 followers)
• Punch of Tropical DEW (No. 509): Typhoon (36% of followers with 398 followers)

Stage 5

Submit Your Vision. Now Mountain Dew had three named and colored flavors. In this next stage, they then needed to design the packaging, specifically the product label. To make this they needed people with design expertise, which DEW Labs members in the Flavor Nations most likely did not have. Instead, they issued a design challenge to designers, art schools, artists, and of course, DEW fans. Entrants in this challenge had to design a label for a can. This resulted in hundreds of viable submissions, which were posted on Facebook. The DEW fans on Facebook then voted, which narrowed it down to ten finalists. All ten finalists received a prize of an Apple MacBook Pro. The winner for each productselected by the respective Flavor Nationsalso received $10,000. The winners were then engaged with the Mountain Dew marketing team and representatives of the Flavor Nations through conference calls and online chats to refine their designs to the satisfaction of PepsiCo (designs that would stand out on store shelves) and Flavor Nation members (designs that fit their product).

Stage 6

Creative Juices. This stage was similar to stage 5, but instead of having designers participate in a label designing challenge, Mountain Dew invited people to submit TV commercials. Small advertising agencies, film students, and DEW fans were invited to submit a 12-second TV commercial for the base (green) Mountain Dew can that showed off their skills. DEW fans in general then voted for their favorites, which resulted in six finalists out of 162 submitted videos. These videos were viewed 202,000 times and 15,000 votes were cast. Each of the finalists then made a short pitch video for the DEW Labs community so that each flavor nation could select their ad creator to collaborate with.

Stage 7

Three Flavors Enter, One DEW Stays. Finally, each Flavor Nation had a producta flavor, a color, a label design, and a TV ad concept. The three Flavor Nations had been involved for almost a year at this point and were very enthusiastic about what they had made. Now it was time to get the public to vote. PepsiCo released the three flavors in stores on April 19, 2010, for an eight-week test market campaign. PepsiCo used traditional marketing promotions to encourage DEW fans to try these flavors in stores and then vote for their favorite through a website, wit the flavor with the most votes wins a permanent spot in the Mountain Dew product lineup. However, true to the crowdsourcing ethos of this entire marketing program, the DEW Labs members were involved in deciding how PepsiCo would advertise the launch. Members were asked to list their favorite websites that they thought would be good for PepsiCo to place advertisements for these three flavors. Representatives from the most popular websites then pitched to the community members to convince them why their website was the best place for the advertising. This resulted in DEW Labs members selecting CollegeHumor, The Onion, CraveOnline, and FunnyOrDie for advertising.

The Flavor Nations were also encouraged to be very active throughout the popular voting process, particularly using social media. They each ran campaigns to drum up as many votes as possible for their product. Each Flavor Nation had its own Facebook page, Twitter account, and YouTube channel.

After the voting, it was revealed that the winning product was White Out (Smooth Citrus DEW; No. 493; see Figure 3). It received 44% of votes. Typhoon (Punch of Tropical DEW; No. 509) received 40%, and Distortion (Lime Blasted DEW; No. 231) received the remaining 16% of votes.

Was This a Success and What's Next?

After the lengthy seven-stage program for DEWmocracy 2, the marketing team at Mountain Dew had to determine how successful this was. They engaged a lot of consumersboth avid fans who were members of DEW Labs and a more general public fan through social media channels such as Facebook and Twitter. They indeed grew their fanbase, at least on social media.

For example, at the beginning of DEWmocracy 2 in July 2009 Mountain Dew's Facebook page had just over 100,000 fans. By the end of the program that number had grown by approximately 800,000. They also had an active group of consumers as members of DEW Labs who were highly engaged with the brand. It seemed like a successful marketing program that engaged a variety of consumer segments, acquired new fans, used social media, and built a strong online brand community. This was all good news, as it seems like taking a risk on DEWmocracy 2 paid off. This then led the team to think about what to do next. How could they use the social/community resource that they had so carefully cultivated for future marketing and product development initiatives? Should they use the members of DEW Labs who were part of the Flavor Nations in the future or would they be fatigued or, for those whose flavor did not win, disenfranchised? And finally, could this crowdsourcing model be used for other mega brands in PepsiCo's portfolio?