How Pepsi won the challenge in the 1980s but lost the ‘Soda Wars’ to Coke
Coke and Pepsi have been fighting to win over tastebuds for over a century but despite the latter winning the taste-test challenge it’s standing is sliding.
Coca-Cola and Pepsi were both founded by pharmacists in the late 1800s and have been fighting to be the dominate brand ever since. However, the competition heated up into the great ‘Cola Wars’ of the 1980s where Pepsi, forever the second fiddle, gave the Atlanta soft drink maker a run for its money.
The turnabout came from a brilliant ad campaign, the ‘Pepsi Challenge’, which proved what internal Coca-Cola studies had already been showing, that consumers preferred the “sweeter, more syrupy flavor” of Pepsi, explained David Greising, author of I’d Like the World to Buy a Coke: The Life and Leadership of Roberto Goizueta to History.com. Nowadays though, Pepsi has not only failed to win over more of the market, but has lost share to other brands, falling to fourth place.
Pepsi fell flat despite winning the challenge with Coke
Coca-Cola tended to have the upper hand with its marketing campaigns over the decades like with its famous Santa Claus ads beginning in 1931 and the 1971 ‘Hilltop’ commercial, better known by the jingle ‘I’d like to buy the world a Coke’.
However, in 1975, Pepsico started the Pepsi Challenge, where it invited people to taste test two unlabeled sodas, one cup contained Coke and the other Pepsi, and choose the one they preferred. They performed the challenge at shopping centers and other public places. It was a hit out of the gates and the company’s market share jumped.
Despite the success of the campaign, that continued into the 1980s and resulted in a lawsuit from Coke, Pepsi never fully caught up with the top cola. Furthermore, thanks in part to a marketing disaster, Coca-Cola made customers feel nostalgia for the company’s soft drink.
Coca-Cola’s blunder turns into success
In 1985, Coca-Cola launched ‘New Coke’ and it was a debacle from the get-go. The company had reformulated the recipe of their soft drink to be sweeter like Pepsi and people hated it. It sparked grassroot campaigns and protests calling for a return of the original formula.
“People all of a sudden wanted to actually taste the beverage again, and not just kind of feel good about it,” said Greising.
Within three months, the company caved to public pressure and made a U-turn putting their flagship soda back on the shelves labeled ‘Coca-Cola Classic’.
Pepsi tries to replicate past success
“The high point of the Cola Wars in some ways was the 1980s,” said Greising “But the Cola Wars have continued and are still being fought today.”
Pepsi is trying to reverse the slide of its declining market share by bringing back the Pepsi Challenge once again.
This time however, it will be a head-to-head of Pepsi Zero Sugar against “the other guy.”
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