Their outrage compelled Coca-Cola to reintroduce its old formula under the brand name 'Coca-Cola Classic' in just six months. To make matters worse, they changed their original formula in 1985, which infuriated their loyal customers. Under the aggressive marketing strategy of Donald Kendall throughout the '70s and '80s, Pepsi introduced 'The Pepsi Challenge' in the Coca-Cola-dominated city Dallas in the Texas state in 1974.Īfter demonstrating that Pepsi was better than Coca-Cola in this blind taste, they decided to hold this campaign in other places of the US as well.įor the first time in history, Pepsi passed Coca-Cola by a 1.4 share point level in 1979.Ĭoca-Cola responded by introducing Diet Coke in 1980-84, doubling their advertising costs, and instituting some management and policy reforms.ĭespite its efforts, Coke was unable to reclaim its position. Meanwhile, Coca-Cola's excessive focus on overseas markets weakened the distribution network in the US market, which ultimately reduced its domestic lead to 2-1 to Pepsi. Targeting the young people through its aggressive marketing strategies, Pepsi soon, successfully, captured a large portion of the US domestic cola market. Under his visionary leadership, Pepsi merged with the snack food giant Frito-Lay to become PepsiCo. During his tenure, Pepsi worked with its bottlers to improve and modernise its plants while also improving store delivery service. This strategy seemed to work for Pepsi, as other Cola companies, including Coca-Cola, typically used 6.5 or 12-ounce bottles in those days.Īfter Alfred Steele, Donald Kendall became the CEO of Pepsi. But the game began to shift in favour of Pepsi, when the former marketing executive of Coca-Cola Alfred Steele became the CEO of Pepsi in 1950.Īiming at family use, Alfred Steele decided to introduce Pepsi in 26-Ounce bottles. However, Pepsi was struggling to keep itself in the competition due to bankruptcies in 19.
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