The 70s saw fierce competition for market share by the two major cola brands – Coca Cola and Pepsi Cola. The ‘Cola Wars’ ensued, consisting of massive advertising campaigns and expansion into emerging markets, such as Asia. Most of us recall the ‘blind taste test’ which was won by Pepsi.
So how then did Pepsi lose the cola war when it won the blind taste test? How has the brand fallen to third place in market share, after Coke and Diet Coke? A series of marketing errors, many due to a lack of understanding of cultural conventions and nuances in international markets, may hold part of the answer.
Pepsi enjoyed dominant market share in South East Asia in the 1950s. However it lost significant market share to Coca Cola the late 1950s when it changed the colour of its vending machines from royal blue to light blue. Light blue signifies death and mourning in those countries. Conducting even basic cultural research would have revealed this fact and saved the company from the catastrophic error that cost the company heavily.
Further losses ensued in the 60s as Pepsi introduced its “Come Alive with the Pepsi Generation” slogan. It is widely reported that the slogan was translated in some Asian countries as “Pepsi will bring your ancestors back from the dead”, leading to perplexed and offended customers who shunned the drink.
In the 1990s Pepsi attempted to bring the Pepsi Challenge taste test to Japan. It ran US-style ads which failed to resonate with the Japanese audience. The ads were adversarial, directly comparing Pepsi with Coke, which to the non-confrontational Japanese were seen as ruthless, arrogant and inappropriate.
In 2004 Pepsi aired a TV ad in India during a cricket tournament showing a child serving Pepsi to two well known Indian cricketers. The advertisement was seen as glorifying child labour. Pepsi had to immediately pull the ad and was subsequently sued.
Whilst these examples do not explain the entire reason for continued decline in market share over the past three decades, there can be no denying that each of these events inflicted significant financial and brand damage. It reinforces the need for understanding cultural nuances and language, and the importance of partnering with experts with strong local knowledge.
OriginsInfo provides powerful cultural insight for organisations so that they are able to fully understand their customers and the markets they serve, providing the first step in navigating the complexities of communicating in international markets.
International Marketing, Michael Czinkota and Illka Ronkainen, 1993
International Management: Strategy and Culture in the Emerging World, David Ahlstrom and Garry Bruton, 2010A
Short Course in International Marketing Blunders, Michael White, 2002