Mumbai: Internal discussions at PepsiCo are revolving about a pull out from the title sponsorship after its five year contract ends in 2017, reports indicate. This comes in the wake of the many controversies surrounding the IPL and the Justice Lodha penal order on two IPL teams Chennai Super Kings and Rajasthan Royals.
PepsiCo won the right to sponor the title with a 396 crore bid for a five-year period that started 2013, which was double the previous sponsor, DLF had paid for the period 2008-12.
“There has been too much controversy in the IPL and the internal thought process is that the company doesn’t want to re-bid for the title sponsorship,” said an executive with knowledge of internal discussions at Pepsi.
“Title sponsorship is a direct association with the brand image, which directly risks getting impacted by controversy,” the executive said.
Company declines comment
The company has declined to comment on the matter. “We do not comment on speculation,” said Vipul Prakash, vice president, beverages, PepsiCo. “We have not seen the copy of the complete order and hence will not be able to comment any further at this stage. We remain committed to ethical conduct in sport and expect that issues surrounding IPL are adequately and swiftly addressed. The faith of cricket fans is important and needs to be restored in the interest of the game.”
The Supreme Court-appointed RM Lodha committee on Tuesday suspended the Chennai Super Kings (CSK) and Rajasthan Royals (RR) franchises for two years, besides banning Gurunath Meiyappan of the first team and Raj Kundra of the second for life. The move could force the IPL to go into the next season with just six teams, although the CSK owner plans to appeal the decision. The other team is also expected to appeal.
PepsiCo chairperson and chief executive Indra Nooyi had alluded to some discomfort over the IPL spot-fixing scandal in an interview in 2013. “We would like to see no controversy of the sport… We hope they fix it,” she had told the Economic Times. “We are a highly ethical and principled organisation. So we want to associate with organisations that are principled and ethical. We hope the current problems of IPL are short term and they are addressed. But if they are not, we will have to go back and rethink.”
Brand relationships
Brand consultant Harish Bijoor drew comparisons with the Maggi noodles episode. After the product was banned in June for excessive lead content, brand endorsers such as actresses Madhuri Dixit and Preity Zinta also got sucked into the row.
“This (latest development) has stirred a hornest’s nest and all lead sponsors would question their association with the team. In the consumer’s mind, lead sponsors could be also painted with a negative brush, which is what the brands have to be careful about,” Bijoor told the Economic Times.
For Pepsi its a big blow to its marketing strategy as the Dhoni is the most visible ambassador of its flaghsips Pepsi and Lays Chips.
“As a brand, anyone wants to be associated with something positive,” said Varun Gupta, managing director at global consultancy American Appraisal. “There will be some negative connotations with the tournament at least in the short term. But this also gives the IPL an opportunity to clean up and move forward competitively.”
