“Is Pepsi okay?” is a question we all have heard at one time or another when asking for a Coke which has now become a norm. But back in 1975, Pepsi wasn’t pleased with the idea of being second best to the king of soft drinks. Discover how Pepsi challenged Coca-Cola’s dominance through a taste test, highlighting the importance of brand loyalty and market disruption.
Coca-Cola, founded in 1892 and originally sold in pharmacies, evolved into the most popular soft drink on the market. Pepsi was the new kid on the block, without the history and the household credibility that Coca-Cola had. The soft drink company devised a plan to disrupt the market and get people to consider their options. When it came to enjoying a refreshing beverage. CEO Donald M. Kendall devised a marketing campaign to get their name in the mouths of the public. Pepsi took malls, shopping centers, and anywhere where the people were. A Pepsi representative set up a table with two white cups: one containing Pepsi and one with Coca-Cola and the person sampling was asked which drink they preferred.
The results were astounding, by the end of the promotion, six million Americans had taken the taste test, with 52% choosing Pepsi, 42% preferring Coke, and 6% preferring neither brand. This sent the Coca-Cola execs into a frenzy, running their own internal blind tests and finding the same results that people preferred Pepsi over their own drinks.
When Coca-Cola ran the taste test again but this time telling their test subjects which drink was which, more people said they enjoyed the taste of Coca-Cola more and they were more inclined to purchase Coca-Cola over Pepsi. People were more likely to make a decision on purchasing something they have brand loyalty to.
But to this day Coca-Cola sells more drinks over Pepsi. In Q1 2022, PepsiCo had a market cap of $229.3 billion while Coca-Cola had a market cap of $268.4 billion. Why is that? Coca-Cola was saved by decades of strong branding, marketing and brand loyalty.
The lesson here is having a strong foundation in what your brand image is to your customers is key to keeping your audience coming back even when the market disruptors come. But we can also learn from Pepsi to never be afraid to shake things up, be a disruptor and never cower at the sight of these goliath brands because you never know what small move you can make to send companies back to the drawing board in terms of brand loyalty and market disruption.
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