Pepsi has just made the biggest marketing blunder since rival Coca-Cola changed its successful 99-year-old formula into the disastrous New Coke in 1985.
This is no small accomplishment. The saga of New Coke has become a legendary example taught in business schools to marketing students of what a company should never, ever do. Until now, no one has been able to top that blunder. Yet Pepsi has managed to live up to its slogan and become the Choice of a New Generation… Of marketing dodos.
Today -- October 21, 2015 -- is a famous date in history: future history, that is. That was the day we saw, on our movie screens in 1989 in Back to the Future II, Marty McFly (Michael J Fox) walk into a futuristic soda shop and order a bottle of Pepsi. What he received, was the uniquely shaped bottle of Pepsi Perfect… Presumably, the Choice of a Future Generation. Millions of fans longed for their own bottle of Pepsi Perfect (after their own hoverboard, of course). It was a stroke of product placement genius, no doubt the work of Pepsi’s brilliant marketing gurus of the 1980s. But Pepsi’s current marketers are not their father’s marketing department (to paraphrase another popular ad slogan). It would appear instead, this is where the New Coke blunderers ended up, along with the overly Internet savvy Gen Y crowd who pride themselves on not knowing anything before their birth date, guaranteeing they will repeat the previous failures of others.
We will never know what possessed the Coca-Cola executives to ignore the immortal adage “if it ain’t broke don’t fix it.” Yet on April 23, 1985 – known as “Black Tuesday” – Coca-Cola discontinued the most popular soft drink in the world and replaced it with a sweeter tasting version to compete with Pepsi’s sweet taste. Eventually, the company was forced to give in to consumer demand and bring back its original formula repackaged as “Coca-Cola Classic”. In the meantime, Pepsi executives were laughing all the way to the bank, and angry Coke fans boycotted New Coke.
Pepsi executives are not laughing now. Enraged Pepsi fans are flooding social media promising to stop drinking the product. Marketing Rule No. 1: Never enrage your customer base. Pepsi had 30 years to plan what could have been one of the biggest marketing coups in history. It blew it. Big time. Through inconceivable stupidity that would’ve resulted in any marketing student being flunked out of business school. Here’s what it did:
Pepsi decided to issue a commemorative edition of “Pepsi Perfect” in the same unique bottle shown in Back to the Future II. A great idea. Pepsi chose to release the product on October 21, 2015: the same day the fictional Marty McFly first encountered it. A brilliant idea. They hyped the launch date aggressively through social media. Then, Pepsi screwed it up.
Mistake No. 1: After creating worldwide demand, Pepsi announced it would only release 6,500 bottles.
Mistake No. 2: Pepsi announced it would release 1,500 of those bottles at a special event (the New York ComicCon) ahead of the launch date and then only to costumed attendees, leaving only 5,000 bottles available for Pepsi customers.
Mistake No. 3: Pepsi announced each bottle of Pepsi Perfect would retail for $20.15, roughly 30 times the price of a similar bottle of Pepsi. The price was meant to coincide with the date, 2015, but it was a massive rip-off, taking advantage of its own fans and customers.
Mistake No. 4: Pepsi limited the sale of the remaining 5,000 bottles of Pepsi Perfect to online orders, assuring that scalpers would line up at their computers to order en mass so they could resell for a quick profit. Indeed, the 1,500 pre-released ComiCon bottles immediately showed up on eBay offered at prices ranging from $500 to more than $7,000 each.
Mistake No. 5: Pepsi continued to hype the launch date of October 21, 2015 for fans to visit its Website to purchase Pepsi Perfect online. But on the date, the Pepsi Website while mentioning the launch contained no information on how to purchase the product. That was because the product was not available through Pepsi’s Website, but had been released through Amazon.com and Walmart.com instead.
Mistake No. 6: And this is perhaps the biggest mistake of all: pulling the rug out from under your customers. Pepsi released Pepsi Perfect two hours earlier than it had advertised it would. Unsurprisingly, it sold out immediately. By the time Pepsi customers woke up and visited Pepsi.com for the opportunity to purchase the much hyped and ballyhooed Pepsi Perfect they had been promised, eager Pepsi fans found their ship had sailed before the launch date. Even the Titanic let passengers board before it launched.
On eBay, early-bird sellers are charging upwards of 25 times what they had paid minutes earlier for, offering bottles of Pepsi Perfect they have not even received yet. By 10 a.m., Amazon.com listed 701 reviews for Pepsi Perfect: 87 percent gave it the lowest rating of one star, and these reviews were actually scathing comments from disaffected customers annoyed at their inability to purchase what Pepsi had promised them. You see, marketing departments are supposed to create demand for their products and then actually fulfill the demand. Whoops! Instead, Pepsi pissed off its customer base, with self-described longtime alienated fans swearing they would never purchase another Pepsi product.
If Pepsi wants to attempt to recover from this disaster, it should immediately announce it will release an unlimited supply of Pepsi Perfect in time for the Christmas holiday season, offered in stores, at the same price as similarly sized Pepsi products. That would placate its customers and punish the scalpers. Perhaps they will take my advice. In the meantime, Pepsi is busy changing its formula for Diet Pepsi, replacing the key ingredient aspartame with sucralose. Headlines range from “People Hate the New Diet Pepsi” (Business Insider) to “Diet Pepsi Drinkers Furious Over New Aspartame-Free Formula” (The New York Post). By the way, Pepsi is no longer the Choice of a New Generation. In 2012, it let its decades-old trademark lapse and an oatmeal company scooped up the iconic tagline. You can’t make this stuff up.