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The Iconic Pepsi Ad That Made Coke Go Ballistic

Guest Writer
6 min read
Opinions expressed by Entrepreneur contributors are their own.

When John Sculley started out at Pepsi in 1967, the soda company had a strong hold in the Southeast and Midwest, but still hadn't established itself as a national brand. Sculley was instrumental in changing this narrative. 

As vice-president of marketing at Pepsi in the 1970s, he managed to capture significant market share from Coca-Cola by creating the Pepsi Challenge, an ad campaign in which the company recruited people off the street to participate in a blind taste test between Coke and Pepsi and filmed their reactions. 

"I think the most important thing to break through the clutter of advertising is that you have to have a very clear customer in mind," Sculley says. In the case of the Pepsi Challenge, he knew he was primarily speaking to parents, typically mothers and grandmothers, who were making the shopping decisions for their families. For any company, he says, it's crucial to build a profile of your target customer and from there, figure what kind of medium he or she pays the most attention to. 

Back in 1970s, it was television. In one now-famous commercial, the company filmed a grandmother shopping in a grocery store, whose granddaughter convinced her to take part in the challenge. After the big reveal, the granddaughter said, "'Grandma! You picked Pepsi!'" Sculley remembers. "And the grandmother said, 'I can’t believe it! I’ve never had a Pepsi in my whole life, but it must be better because I picked it!'" 

That commercial shook the soda industry, and placed Pepsi firmly on the map. "Bang. Nine seconds...that was the shot that went around the world," Sculley says. "Coke went absolutely non-linear over it."


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