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Lo-res_A0W2HT-SThe terms and names that marketers use to describe their offerings are often critically important. Consumers might refer to carbonated beverages as colas, sodas, or pop, but in a new experimental expansion, PepsiCo. is emphasizing the term “kola” in an effort to highlight the kola nut that is the source of the flavor and body of traditional cola drinks. It isn’t emphasizing the Pepsi name or any of the valuable brands that the company owns. And perhaps most remarkably, it isn’t selling a product, in the traditional sense of the word.

Instead, at Kola House, a soon-to-open restaurant, bar, and event space in New York’s trendy Chelsea neighborhood, Pepsi will run a traditional restaurant in conjunction with a product testing ground. The food and beverage menus will all revolve around the kola nut and related ingredients. This single space is the only Kola House planned so far, though Pepsi notes that if it achieves success here, it would consider expanding the idea to other cities.

Inside the still-under-construction Kola House, the menu has not been finalized, but Pepsi already has hired its head “alchemist”—a position that most people would likely call the head bartender. It also has plans for “modular” Kola Houses (a design that most people would call a pop-up) to appear at major sporting events like the Super Bowl, as well as at Lollapalooza and similar music festivals. Furthermore, the entire enterprise is being run by Pepsi’s marketing department, not by a product division or specialized restaurant arm.

With this explicit marketing orientation, Pepsi is not only taking care with the words it uses but also taking a unique perspective on the entire restaurant experience. The physical space is largely designed to be so compelling and interesting that it drives consumers to report about it through social media. The very essence of the planning thus is not what products the restaurant will serve but rather what service experience it can create to excite and thrill consumers. The design firm helping Pepsi create the space is owned by Lenny Kravitz, and the plan is to include subtle hints of the ownership, without emblazoning the Pepsi logo everywhere.

The initiative is thus both innovative and risky. As this article asserts, “Essentially, Pepsi is trying to market its product without marketing its product.”

Discussion Questions:

  1. Can companies market their products or services without marketing their products or services? Explain your reasoning.
  2. Why won’t the Kola House feature prominent Pepsi logos?

Source: Sydney Ember, “Pepsi Turns Restaurateur, to Serve Up Some Buzz,” The New York Times, January 28, 2016