How Pepsi Took a Big Loss in The Philippines

Pretty much many people around the world would have heard of this brand as it is the most popular soda drink ever aside from coca-cola. Regardless of all the happiness and joy, the company Pepsi was also once involved in such a fiasco in a country situated in South East Asia, the Philippines.

Some of you who are reading this might have not been born yet as it happens in 1992. It was at that time that Pepsi decided to try to get into the Philippines market where coca-cola was already dominant at the time.

With a 62 million population during that time in the Philippines, it is definitely a big market penetration and it is considered the 12th biggest market in the world.

Philippines Economy

The economy was rather weak and a lot of the people have to struggle just to fulfill their daily needs. Millions of people at the time were working as farmers or other low-income jobs.

The executive at Pepsi decided that it was time for them to launch a campaign promising huge returns to their investors.

Every single Pepsi cap will have a series of numbers on them which will indicate whether you have won or not their lucky draw. There will definitely be lots of small winners followed by their two main prizes consisting of $40,000 USD each.

Things Turned South

By running this campaign, Pepsi hoped of changing the mind of all the Coke fans that consist of low-income. They plan it out thoroughly and promised to give $2 million USD in prize money.

However, things did not go as planned as the computer of one of the Pepsi vendors made a grave mistake by producing 800,000 caps with the number '349' on them and the number '349' will be the lucky number walking away with $40,000 USD.

Pepsi has told their factory vendors to specifically not print out the number since both the cap with the number will be issued by Pepsi themselves and sent to the Philippines.

Therefore Pepsi went on to operate as usual every month without knowing that they have mistakenly sent the bottle caps with the lucky number worth a staggering $32 billion USD.

Everyone was pretty much hype about the whole promotion and how they have the chance to win big prizes. At the start, Pepsi gained a lot of popularity since many of their soda were always sold out ever since the campaign started. It has raised the market of Pepsi from 4% to 24.9% in merely two months.

The Big Day

When the big day the announcement has come all of the Phillippines was pretty excited and cannot wait for the announcement of the big prize. When Pepsi announced the lucky number which was '349', everyone in the Phillippines burst out with joy since they thought that they have won big time.

Pepsi eventually realized its grave mistake and it also knew that it cannot simply go without paying a dime. They decided to offer $18 USD to every single winner which they will only have to pay $8.7 million USD compared to the $2 million USD as planned. The people of the Philippines were definitely not happy with the news since it was definitely not worth it.

Chaos Break Through

A group of resistance known as '349 Alliance' was formed and a demonstration took place in Manila in front of the government building as well as the headquarter of Pepsi. The situation changed to more aggressive as riots break out and more than 30 Pepsi trucks were burned down during the protest.

Things go from bad to worse as a fight between the police and the rioters took place. Many were injured and things got out of hand when a hand grenade was randomly thrown out of a Pepsi truck and it exploded killing a woman and a very young girl.

The riots went on for days and by the end of the fight as many as five people were killed and dozens were injured all due to one bad mistake made by Pepsi.

When everything was finished, Pepsi was faced with thousands of lawsuits against them which was to be settled in the following years. It was a long trial and the Court finally concluded that it was not Pepsi's fault and there was no bad intention involved.

It can be said in the end that Pepsi definitely took a big loss from its own mistakes and definitely their reputation is heavily impacted. It can be estimated that they lost $20 million USD and it will take years for them to repair the damages that have been done.

It was definitely a lesson to be learned from Pepsi and to the rest of us as one big mistake can be life-changing.

What do you think is your biggest mistake in life?

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