A challenge to capture market: how Pepsi won the battle but lost the challenge.

Pepsi is known for its exceptional taste and its legendary marketing moves, which is the reason why Pepsi is able to stay in the top-notch from a long time. The company spends a huge amount on advertisement to stay in the eyes of people and this is one of the main reasons that a person going to buy a soft drink is likely to buy Pepsi as they have seen the ad visuals so many times.

Coke was the leading soft-drink company as they had amazing distribution system and effective marketing that directly catches customer’s eyes and attract them towards the brand and obviously, the brand loyalty made the company to stay best in the business.

 

The company was started in 1965 and since then to capture the market company has tried a lot of advertising techniques to stay in limelight. One such bold move made by Pepsi was the blind taste challenge that they conducted against Coke and this was done in the year 1975. Pepsi went to all the malls and shopping complexes of the city and they conducted a blind taste challenge where they randomly asked people to volunteer and taste two drinks without disclosing the brand. The result of the blind taste challenge was not less than a surprise as the volunteers choose Pepsi over Coke because of its sweet taste. This was a bold move made by Pepsi to surpass other brands and hold a good position in the market. Pepsi further displayed results of the challenge in Tv ad campaigns.

 

Coke got anxious and jumpy and was compelled to speak some words in the context of this challenge. The company further issued several press releases and statements. Pepsi was successfully able to create momentum while Coke was back pleading and started several PR campaigns.

Getting panicked with the momentum of Pepsi, Coke decided to change their old secret recipe and copied the formula of Pepsi. Coke further quoted “If you can’t beat them, join them”. The new strategy was not a success; they received more than 400,000 letters from people demanding them to bring their traditional taste back.

 

How Pepsi became overconfident.

 Initially, it was a brilliant move made by Pepsi as they had very few customers to lose if they fail but it was tough for Coke as they had a large customer base and if the campaign goes in favor of Pepsi they might end up losing their market share. Inspired by the results of the first blind taste challenge Pepsi decided to conduct this challenge across different cities and slowly worldwide. But at the end of the campaign Pepsi was just able to create momentum but was not able to capture the expected market share.

Coke having a loyal customer base was able to hold its position and remained in the top-notch in game. Pepsi became over-confident and rather adopting different marketing strategies they completely invested in this challenge. They set up the tone in the market because of this challenge and this created a negative impact on the mind of customers. Hence, Pepsi won the challenge but lost the ultimate battle.

 

Points to ponder:

·         Coke got jumpy and they over-reacted the situation and in response, they changed their traditional recipe which was totally a bad move.

·         Coke had a loyal customer base as they were able to maintain good relationships with their existing customers.

·         The campaign started by Pepsi was initially a good move but it was not able to change customers' buying habits. Hence it was a failure.

 

 

What could have Pepsi done instead

 

Pepsi could have adopted different marketing techniques like:

·         Buy one get one free technique

·         Discount coupons

·         Distribution of Merchandise

·         Creative ad campaigns etc.

It is not always a brilliant move to directly challenge the market leader, You need to be prepared.