“Today, You Could Be A Millionaire!” – Pepsi Meant More Than A Soda Drink
In 1992, an error in marketing led to deadly riots in the Philippines, causing losses of at least 5 Filipinos’ lives. This is said to be one of the worst marketing mistakes in the world. “Pepsi Number Fever” was like a lucky draw, redeeming certain numbers printed inside the caps of Pepsi soda drink bottles. The prize ranged from 100 pesos to 1 million pesos. 1 million pesos were equivalent to almost 15 years of average annual income in the Philippines at the time. This was huge!
Imagine: One day you won a lucky draw that would give you the money 15 times as your annual salary. Feel like leaving your job? Or feel like booking a luxurious trip with your family? It would be a dream come true! Then suddenly, you were told you were not entitled to receive the money even though you had drawn the winning number. You would be disappointed. You would be angry. You would feel unfair. In fact, this was exactly what happened in the Philippines. The worse was, there were up to 800,000 bottle caps marked the winning number, 349, instead of one single winner. Pepsi refused to pay because “a mistake had been made.” Had they paid, it could have cost them $32 billion.
A Mistake Could Lead to A Deadly Result
Reactions to Pepsi’s refusal were full of resentment, not to mention. Pepsi’s delivery trucks were stoned, torched and overturned. Bombs were thrown at Pepsi plants and offices. Amid the riots, at least 5 people lost their lives, including a 5-year-old girl. More than 22,000 people took legal actions against Pepsi: 689 civil suits seeking damages from Pepsi, and more than 5,200 criminal complaints for fraud and deception.
Pepsi ended up with offering 500 pesos, around $18, to the bottle cap holders as compensation. According to news at the time, 486,170 people accepted the offer. Though Number Fever was kicked off with the initial budget of $2 million, they had to pay $10 million more for the compensation. The scandal not only caused monetary damage, but also damaged the brand image. Pepsi’s market share in the industry fell from 26% to 17%.
Expectation and Disappointment: Is It Ethical to Use Human’s Strong Emotions?
There are a number of marketing methods. Lucky draw marketing campaigns are probably one of the most common. A prize, whatever it is, could motivate a consumer to buy the product. The consumer could buy the product repeatedly for the sake of the prize. However, would it be ethical if the prize were so big that could make people almost hysterical? It is usually the case, the higher the expectation, the greater the disappointment. Using psychology must be an important part in successful marketing, but adopting an ethical approach would be vitally important. “Ethical consumption” is on the rise around the world. “Ethical marketing”—not only fair and transparent, but also ‘not playing with consumers’ emotions’—should be valued more.