The Pepsi Challenge

Strange things happen in America. Stranger things happen in marketing there. For instance, while Coke is the leader in the American market, most people prefer the taste of Pepsi in blind tests!

The Pepsi Challenge has been an ongoing marketing promotion run by PepsiCo since 1975. The challenge is designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical drinks, with no meaningful differences.

The challenge took the form of a taste test. At public contact points, a Pepsi guy set up a table with two blank cups: one containing Pepsi and one containing Coke. People were encouraged to taste both colas, and tell which one they prefer. Then the Pepsi guy revealed the two bottles so the taster can see whether they preferred Coke or Pepsi. Not surprisingly, or maybe surprisingly, the preferred brand was Pepsi.

Ever since the famous findings of the Pepsi Challenge, marketers have argued that the difference between this perception and reality was the handiwork of ‘Marketing’. In other words, their work was making a difference! How else could Coke come on top?

The Pepsi Challenge, subsequently, moved into TV during the 70s and 80s where a series of ads showed how Americans preferred Pepsi to Coke.

But 30 years after the commercials debuted, neuroscientist Read Montague was still thinking about them. Something didn't make sense. If people preferred the taste of Pepsi, the drink should have dominated the market. It didn't.

So in the summer of 2003, Montague gave himself a 'Pepsi Challenge' of a different sort: to figure out why people would buy a product they didn't particularly like.

What he found was the first data from an entirely new field: Neuromarketing.

(To be continued in my next post)