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Fad Marketing's Balancing Act


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Only a lucky few ever got to try Pepsi's Ice Cucumber soda. The pale green drink began appearing on shelves at Japanese convenience stores in early June. Within days, clips of people swigging the stuff were showing up on YouTube (GOOG), and bloggers were debating whether the taste was more melon than cucumber. A couple of weeks later, all 4.8million bottles of Ice Cucumber had sold out. But instead of ratcheting up production, Pepsi brand managers in Japan did the unthinkable: They discontinued the drink. "We didn't want it on the market past the summer," says Keiko Ishihara, who oversees PepsiCo Inc. (PEP) sales for Suntory, the Tokyo beverage maker that markets the soda giant's products in Japan. "The value of Ice Cucumber is that it's gone already."

It might seem strange to kill off a product at the peak of its popularity. But for Pepsi, Ice Cucumber was largely a marketing stunt: a way to generate buzz for the brand in what is arguably the world's most cutthroat beverage market. It's a $30 billion-a-year business in Japan, spanning everything from run-of-the-mill brown colas to drinks derived from green tea, coffee, and even kimchee, the spicy cabbage mix that is a staple of Korean cuisine. Of the estimated 1,500 drinks that come to market each year, only a handful survive long enough to win a loyal following.

RED BEAN KITKAT BARS

The warm reception the Japanese gave Ice Cucumber is just one manifestation of a national obsession with the ephemeral. Millions turn out every spring to view delicate cherry blossoms that open and then fall to the ground in just a week. And a word that sends consumers flocking to stores is gentei, Japanese for "limited edition." For years, candymakers have peddled one-off runs of sweets. Nestlé (NSRGY), for instance, offers its KitKat bars in an array of gentei flavors and colors for every season, including Cantaloupe Melon and Koshian Maccha (green tea with red-bean filling). The limited edition candy bars are so sought after that they even show up for sale on eBay.

With Ice Cucumber, Pepsi and Suntory expressly set out to create a short-lived fad. The two spent more than two years developing the soda. They started with 60 flavors, including various tropical fruits, citrus, and cherry, then settled on a cucumber-melon combo last year before running it by consumer focus groups. Despite the soda's strong debut, Suntory has no plans for an Ice Cucumber comeback.

The two companies had experimented before, repackaging drinks from other markets. In 2004 they unleashed Pepsi Blue, a berry-flavored soda that had a two-year run in the U.S. In Japan, all 1.7 million bottles of Pepsi Blue were gone within weeks of its introduction. They soon followed up with a cinnamon-based concoction dubbed Pepsi Red, tropical fruit-flavored Carnival, and ginger-ale-like Gold, which had been marketed in other countries. The strategy has helped Pepsi boost its share of Japan's cola market to 20%, up from 10% in the late 1990s, largely at the expense of market leader Coca-Cola Co. (KO) Coke says that while it launches as many as 100 new products in Japan each year, it has never yanked a hot-seller from shelves.

Pepsi hopes Ice Cucumber will pay dividends for months to come. High-turnover convenience-store chains such as FamilyMart and 7-Eleven restock their shelves four times a day and will banish products from their aisles if sales drop too low. Pepsi believes Ice Cucumber has helped rekindle interest in Pepsi Nex, a sugarless cola managers hope will have staying power. The company has already registered a modest uptick in sales of Nex, which fell off quickly after its introduction in 2005.

The gentei phenomenon has made it harder for companies to build a brand around a few signature products. That's especially true in Japan, where consumers have grown so accustomed to variety and newness that old theories about brand loyalty are being rewritten. Companies are well aware that they run the risk of cheapening brands with such gimmicks. "If you do it too much, [consumers will] forget why they are purchasing the brand," says David Teasdale, president of Mars Japan, which has pegged limited edition versions of its M&Ms to Hollywood blockbusters. Pepsi, too, is wary of overdoing its gentei offerings, and limits them to three or four a year. Anything more, says Ishihara, and "consumers would get tired of it."

By Kenji Hall


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