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PepsiCo, And Maintaining Honest Competition

PepsiCo, and Maintaining Honest Competition

In 2006, three people tried to sell Coca-Cola’s trade secrets to Pepsi. The two companies, being seven years apart from each other (Pepsi was created and developed in 1893 while Coca-Cola was developed in 1886), have been at “trade war” with each other for decades. Both companies have, at certain points in time, even sponsored media campaigns against each other, so it would be natural for Pepsi to rush at the chance to have Coca-Cola’s secret recipe.

But PepsiCo (the mother company) simply alerted Coca-Cola of the development and the guys were caught.

Crazy, right? I mean, even with my integrity and personal values, passing up an offer like that, against an age-long rival, is not a decision I will take easily.

Pepsi took its name from the Greek word for “digestion” (the word has the same pronunciation as pepsi) and marketed the Pepsi-Cola drink as such (a drink that aided in digestion) back then, as against Coca-Cola that marketed theirs as a temperance drink (non-alcoholic drink).

 

In the early years, Pepsi faced a lot of challenges and changed ownership a couple of times. Coca-Cola also had the chance to buy the company (more than thrice) but they declined on each occasion. The company’s popularity grew in the 1930’s when Pepsi decided to double the volume of the drink Coca-Cola sold but still maintaining the same price.

They got their big break in the 1950’s when Walter Mack, the new president of the company as at then, noticed that they (including Coca-Cola) had been ignoring the “negro market”, the African Americans…which was an untapped market that could yield great business benefits. Prior to this, Coca-Cola’s reluctance to hire blacks kinda put them in a really bad light in the negro market.

So, when Pepsi came up with new ads that showed blacks enjoying the drink, and made sure its anti-racism stance was well-known, their market share shot up dramatically. In the 1970’s their market share climbed further when they conducted blind tests in the then “Pepsi Challenge” in which participants were given unlabeled coke and pepsi drinks to test and say which was better. A majority of the participants preferred the pepsi taste to coke’s.

Today, Coca-Cola still outsells Pepsi, but the difference in market share is not much, and Pepsi even outsells the world’s third most valuable brand in some regions of the world.

 

But what is most remarkable is the company’s brand values…

While they share the same mission (to create happiness and more smiles), Pepsi has a “Winning with Purpose” mantra, which shows their strong stance on good business conduct and also reflects their ambition to win sustainably in the marketplace and embed purpose into all aspects of the business.

So yeah, I bet they would pass up another chance to have Coca-Cola’s secret recipe again. I also think they are setting a great example for growing brands out there, to always stand for what’s right, and not always for what gives them competitive advantage or money.

 

Over to you… would you pass up a chance to obtain your rival’s trade secrets? Which do you think tastes better, coke or pepsi-cola?

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