The worst marketing disaster in history

Shutterstock.com/ zef art
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Someone once said that “there is no such thing as a bad idea, just a poorly executed one”. That it is totally false, there are some very bad ideas out there in the world. However, there are many good ones that are ruined by poor execution as well. Today we want to share the story of Pepsi and the worst executed idea in the history of marketing. It resulted in lost money, lost market share, riots in the streets, and the death of innocent people. This is the story of Pepsi trying to grow market share in the Philippines.

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Our story takes place in the 1990s. The Philippines is a developing nation with a high number of people living below the poverty line. It is a huge country with a population of over 60 million and growing quickly (today the population is over 100 million). It is a country that likes soda and at the time that Pepsi concocted its idea, the Philipines was the twelfth-largest market in the world. That means it is a market this is incredibly important. Yet the market share of Pepsi was just 4.9%

Pepsi came up with an aggressive marketing strategy that would increase its market share in a matter of months. It is one that has seen similar success in many markets across many products around the world. The plan was to commit $2 million to prize giveaways over a two month period. Bottle caps would have numbers written on the inside giving away small amounts of money or free bottles of Pepsi. At the end of the campaign, a lottery would be held revealing two winners of $US 40,000 an incredible sum of money in the Philipines at the time.

Pepsi realized how important these two bottles would be. The winning number was already chosen, 349, and Pepsi took it upon themselves to write the 349 on the bottles. They informed their manufacturing companies to write all the numbers on the caps but leave this number out. One company made a mistake. Instead of omitting this number, they wrote it on 800,000 bottle caps. Quick math will tell you that this move alone would create additional prize winnings of almost 32 billion dollars.

Imagine the scene. Imagine working hard all day in the fields of Cebu or the streets of Manila. You treat yourself to a bottle of soda and opt for Pepsi because, who knows, it could make your dreams come true. You don’t think it really will though. The odds of being one of the two bottles are not in your favor but it doesn’t hurt to dream. The night of the lottery comes and you tune in, not expecting to win, but because it has become the most talked-about occurrence all month. Then they read the number 349, you look at your bottle, 349, you read the number on the television again, 349, you look at your bottle, 349, you look at your family and you scream. You have won. You can buy a new house, a new car, you can pay for whatever your family needs. However, you are one of 800 people experiencing this feeling that night and you are one of the 800,000 people who are about to be very disappointed.

When Pepsi realized the error they apologized to the people of the Philipines and said they could not afford to pay. They realized they needed to do something so offered each winner $18 in prize money (which would still have cost Pepsi nearly $9 million). 

The idea of winning $40,000 and now being offered $18 made the people of the Philipines furious. They took to the streets in riots and blew up any Pepsi truck they found. Sadly on one occasion a live grenade was thrown and ricochet off a truck and blew up a woman and child. 

Pepsi’s market share increased from 5% at the beginning of the campaign to 25% at its peak. However, it plummeted after the disaster happened. Slowly Pepsi has grown its market share in the country but it will never be number one. We hope that it has thought twice about how it executes its marketing strategies in the future.