Brands sometimes goof up. Big brands goof up in a big way. In today’s post, let’s look at the 3 biggest scandals that Pepsi had to go through.
1. The “Pepsi Number Fever” Promo that nearly bankrupted Pepsico
In Philippines, if you get scammed, people say you got “349’ed”. The number 349 has a peculiar 30 year old story and it was unwittingly started by Pepsi.
The story goes back to the early 1990’s. Pepsico used to be the number 1 soft drink in Philippines, beating Coca Cola by a humongous margin. But under the leadership of Neville Isdel, the then Philippines CEO (and later Global chairman), Coca Cola was beginning to gain market share really fast.
Therefore, Pepsi was desperate to hit back and thus came the Pepsi Number Fever promo.
Pepsi offered 2 million US dollars worth of prizes based on a lucky number system. It was basically an under-the-crown scheme wherein they put numbers from 001-999 under the caps. Some lucky numbers would qualify for prizes ranging from 100 pesos to a grand prize of 1 million pesos (4US$ – 40,000US$). (Source: Wikipedia).
The promo was so successful that Pepsi’s monthly sales went up from 10 million USD to 14 million USD. The market share jumped from 17% to almost 25%. The Pepsico team was ecstatic at the phenomenal growth. So they extended the promo for another 5 weeks. It was supposed to end on May 8th, but they decided to go on and squeeze some more benefit from it.
And that is when things took a different turn.
On May 25th, they announced the another grand prize for the number “349” missing the fact that there were over 800,000 bottle caps with the number 349 that had already been printed during the campaign before. Those bottles were still in circulation or the caps were still with the consumers.
So, when they announced the magic number 349, there was a barrage of jubilant claimants for the grand prize. Pepsico realised their blunder and it was estimated that if every cap was found and claimed it would cost them 32 billion US dollars to pay off everyone.
So they quickly backtracked and announced the next day that the winning number was 134 instead. It created so much confusion and subsequently furore over suspicions of being cheated. Pepsi did pay off many of the claimants with small amounts, but couldn’t pacify a few.
Over the next few months, Pepsi sales went down drastically and market share fell below the previous levels to 17% or so. Not only that, many officials from the company faced death threats and attacks. In fact a few employees and civilians lost their lives to the violence that ensued.
This probably is one of the biggest blunders by any brand ever.
2. Pepsico Points Case: Leonard Vs Pepsico, Inc
PepsiCo seems to have a penchant for making promises it can’t keep. In the mid 1990’s again, Pepsi was trying hard to beat Coca Cola and doled out plenty of promotions. In this particular one, they were trying to win the loyalty of young consumers by offering prizes against points earned by purchasing Pepsi.
The ad campaign had a humorous tone and mentioned the prizes: T shirt, sunglasses, jacket and a Harrier Jet all for various point slabs. A B-school student named John Leonard noticed that the Harrier Jet was valued at around 37 million USD dollars whereas Pepsico was offering it for only 7 million Pepsi points, which was estimated at 700,000 USD.
Confident that he had found a great loophole, he convinced some investors and sent Pepsico a cheque of that amount and demanded the jet.
Pepsi, of course, denied his claim and responded that advert was make jokingly and they didn’t mean to give anyone a jet.
Obviously, Leonard took them to court accusing them of breach of contract. However, the court ruled in favour of Pepsi and the bungling drinks company was saved again.
I mean, whether it was a fair ruling or not, the case speaks volumes of how careless and thoughtless the advert makers were, making a fool of the consumers and tarnishing the brand image, and spending millions of dollars to achieve that.
3. Pepsi and Kendall Jenner Controversy
The latest controversy Pepsi got embroiled in was the Kendal Jenner Advert (2017). The advert was an in-house creative team attempt. The advert shows youth agitating and tensions building between the protestors and the police. At that point Kendal Jenner steps in and calms the situation by offering the cops a Pepsi can.
When this advert was launched it was widely perceived to be tone deaf and insensitive, particularly to the Black Lives Matter movement. Critics also noted that this is a poor attempt to use a political situation to the brand’s advantage to increase sales. Social media posts by consumers took note of how the Pepsi team trivialised a major issue in their advert.
Due to the backlash, Pepsi had to take down their advert and issue an apology.
Pepsi eating its own words: has that happened before? Oh wait, yes, twice. LOL.
Any smart brand would do well to avoid 2 topics in their adverts: Politics and Religion. People are sensitive towards these things and it is wrong to take sides.
Anyway, that’s about it. I hope Pepsi has learned its lesson and will be able to avoid these scandals in the future.
I sure do hope this post has shared some insights to you as well.
Thank you for reading!