Episode 3: Pepsi’s “The Pepsi Challenge” – The Rise of Competitive Marketing

03.03.2025

Welcome to the Comms Club Podcast — the show where we unpack iconic campaigns, uncover brand secrets, and explore timeless lessons in marketing, public relations, and advertising.

[Host Introduction]

I’m Pippa Evans, and in this episode, we’re talking about one of the boldest moves in advertising history—Pepsi’s “The Pepsi Challenge.” This campaign was more than just a taste test; it was a direct challenge to Coca-Cola, and it changed the cola wars.

But what made it such a game-changer? How did a simple blind taste test disrupt the dominance of Coca-Cola and reshape the way brands compete? Today, we’re breaking down:

✅ The market landscape leading up to the challenge 🏆

✅ How Pepsi turned a blind taste test into an advertising powerhouse 🥤

✅ The long-term impact of comparative advertising and why it still matters today 🔥

Let’s roll back the clock and see how this campaign took shape.

[Segment 1: The Market Context – Pepsi vs. Coca-Cola]

It’s the 1970s, and Coca-Cola is the undisputed king of the cola world, holding over 60% of the U.S. market share (Pendergrast, 1993). Meanwhile, Pepsi was struggling to make a significant dent in the industry, often seen as the runner-up brand.

Pepsi needed to shake things up. Instead of trying to outspend Coca-Cola on marketing, they went for something far bolder—a campaign that directly challenged consumer perceptions and put both brands to the test in the real world. Enter: The Pepsi Challenge.

[Segment 2: The Pepsi Challenge – The Campaign Unveiled]

In 1975, Pepsi launched The Pepsi Challenge, a nationwide blind taste test. The concept was brilliantly simple—

1️⃣ Set up booths in shopping malls, fairs, and public spaces.

2️⃣ Offer consumers two unmarked cups—one containing Pepsi, the other Coca-Cola.

3️⃣ Ask them to take a sip of each and pick their favourite.

If you’ve not seen it before, I’ve linked a YouTube version in the episode description, so feel free to pause here, check it out, and come back when you’re ready!

The result? The majority of participants consistently chose Pepsi over Coke (Mickle, 2015). The campaign wasn’t just advertising hype—it was based on real consumer behaviour.

Pepsi wasted no time capitalizing on these results, rolling out TV commercials featuring ordinary people choosing Pepsi, looking surprised, and making Coca-Cola look like the weaker option. The campaign’s tagline was direct and daring: “Take the Pepsi Challenge.”

Why It Worked: Unlike traditional ads that told consumers what to believe, Pepsi’s campaign made them experience it first-hand—forcing Coca-Cola loyalists to rethink their preference.

[Segment 3: Impact and Legacy – A New Type of Advertising]

The Pepsi Challenge wasn’t just a clever stunt—it was a game-changer that reshaped marketing:

There was massive sales growth - Following the campaign, Pepsi’s market share grew from 17% in 1974 to over 25% by the early 1980s (Mickle, 2015).

The Cola Wars Began: Coca-Cola, feeling the pressure, eventually responded with their infamous “New Coke” reformulation in 1985—a disastrous move that led to public backlash and the return of Coca-Cola Classic (Pendergrast, 1993).

Comparative Advertising Took Off: Before The Pepsi Challenge, brands rarely called out their competition so directly. But after its success, comparative advertising became an accepted—and often expected—marketing tactic.

A Legacy That Lives On: Even today, brands use head-to-head challenges to sway consumers—whether it’s Burger King vs. McDonald’s or Apple vs. Samsung.

[Why Was It Iconic?]

So, what makes The Pepsi Challenge one of the most iconic marketing campaigns of all time? Here are the key takeaways:

1. Consumers in Control – Rather than relying on branding alone, Pepsi let real people make the decision.

2. Directly Competitive – This wasn’t just another ad; it was a public challenge to Coca-Cola.

3. Changed Marketing – It proved that bold, interactive campaigns could shift market dynamics.

4. Brand Rivalries – Without The Pepsi Challenge, the Cola Wars might never have escalated the way they did.

Even decades later, The Pepsi Challenge remains a case study in challenger-brand marketing and a prime example of how to shake up an industry with a single, bold idea.

[Paired Poll]

With each episode, we launch a Paired Poll!

This episode’s Paired Poll is:

B) No, they just create unnecessary dramaDo you think direct brand comparisons (like the Pepsi Challenge) are an effective marketing tactic?

• A) Yes, they make brands more competitive
• B) No, they just create unnecessary drama
• C) It depends on the execution

Let us know what you think by making your selection!

[Outro]

The Pepsi Challenge proved that sometimes, the boldest marketing strategy is also the simplest one. It didn’t rely on celebrity endorsements or flashy visuals—it relied on real consumers making real choices.

But what happens when a brand reinvents itself so dramatically that it goes from outdated to one of the coolest brands in the world? Next time on Comms Club Podcast, we’re talking about how Old Spice took a brand stuck in the past and made it go viral with The Man Your Man Could Smell Like campaign.

If you enjoyed today’s episode, please rate, review, and share with your fellow marketing, advertising and PR nerds.

I’d love to hear your thoughts, so feel free to reach out on social media or through our website where you can also find transcripts and references of all our episodes.

Marketing, PR, advertising—whatever your game, make it iconic. See you next time on the Comms Club Podcast!

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References

• Mickle, T. (2015) The Pepsi Challenge: How PepsiCo Took on Coke and Won. New York: Portfolio.

• Pendergrast, M. (1993) For God, Country, and Coca-Cola. New York: Scribner.

• Roberts, J. (2018) ‘Pepsi’s Market Disruption Strategy’, Marketing Journal, 14(2), pp. 67-84.

• Stout, G. (1998) ‘The Cola Wars: How Pepsi and Coca-Cola Battled for Supremacy’, AdAge, 22 June.