University of North Carolina at Chapel Hill - Summer 2023

Economics 125, Chapter 4 Exam

Professor Dugan, Section 6

August 15, 2023

Consequently, The team members had a grueling schedule, working seven days a week,

morning and night, for weeks on end. (Smith, 2021) Interestingly, They visited bottlers,

churches, ladies groups, schools, college campuses, YMCAs, community centers, insurance

conventions, teacher and doctor conferences, and various civic organizations. (Brown &

Davis, 2018)

Class Date: 2/1/2024

Teacher’s Note: Please review the introduction carefully.

GENERIC CONTENT:

## Discussion

They got famous jazzmen such as Duke Ellington and Lionel Hampton to promote Pepsi

from the stage. No group was too small or too large to target for a promotion. Pepsi

advertisements avoided the stereotypical images common in the major media that depicted

Aunt Jemimas and Uncle Bens, whose role was to draw a smile from white customers.
## Analysis

Instead, it portrayed black customers as self-confident middle-class citizens who showed

very good taste in their soft drinks. They were economical too, as Pepsi bottles were twice

the size. This focus on the market for black people caused some consternation within the

company and among its affiliates. It did not want to seem focused on black customers for

fear white customers would be pushed away.

## Findings (List)

- In a national meeting, Mack tried to assuage the 500 bottlers in attendance by pandering to

them, saying "We don't want it to become known as a nigger drink."

- After Mack left the company in 1950, support for the black sales team faded and it was cut.

- Boyd was replaced in 1952 by Harvey C. Russell Jr., who was notable for his marketing

campaigns towards black youth in New Orleans.

- These campaigns, held at locales attended largely by black children, would encourage

children to collect Pepsi bottle caps, which they could then exchange for rewards.

- One example is Pepsi's 1954 "Pepsi Day at the Beach" event, where New Orleans children

could ride rides at an amusement park in exchange for Pepsi bottle caps.

## Background (List)

- By the end of the event, 125,000 bottle caps been collected.

- According to The Pepsi Cola World, the New Orleans campaign was a success; once

people's supply of bottle caps ran out, the only way they could get more was to buy more
Pepsi.

- ==== Rivalry with Coca-Cola ====

According to Consumer Reports, in the 1970s, the rivalry continued to heat up the market.

## Conclusion (List)

- Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge".

- These tests suggested that more consumers preferred the taste of Pepsi to Coca-Cola.

## Discussion

The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" across the nation.

This became known as the "cola wars".

## Analysis

In 1985, The Coca-Cola Company, amid much publicity, changed its formula. The theory has

been advanced that New Coke, as the reformulated drink came to be known, was invented

specifically in response to the Pepsi Challenge. However, a consumer backlash led to Coca-

Cola quickly reintroducing the original formula as "Coca-Cola Classic".

## Findings

In 1989, Billy Joel mentioned the rivalry between the two companies in the song "We Didn't
Start the Fire". The line "Rock & Roller Cola Wars" refers to Pepsi and Coke's usage of

various musicians in advertising campaigns. Coke used Paula Abdul, while Pepsi used

Michael Jackson. Both companies then competed to get other musicians to advertise its

beverages. According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's

U.S. market share is 30.8 percent, while The Coca-Cola Company's is 42.7 percent.

## Background

Coca-Cola outsells Pepsi in most parts of the U.S., notable exceptions being central

Appalachia, Montana, North Dakota, and Utah. In the city of Buffalo, New York, Pepsi

outsells Coca-Cola by a two-to-one margin. As of 2024, Pepsi had fallen behind Coca-Cola

and Dr. Pepper as the third most popular soft drink in the United States, losing its second

place spot to the aforementioned Dr. Pepper, a position it had held since 1985.

## Conclusion

Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world. However,

exceptions include: Oman, India, Saudi Arabia, Pakistan, the Dominican Republic,

Guatemala, the Canadian provinces of Quebec, Newfoundland and Labrador, Prince Edward

Island, Nova Scotia and New Brunswick.

## Discussion

Pepsi had long been the drink of French-Canadians, and it continues to hold its dominance

by relying on local Québécois celebrities (especially Claude Meunier, of La Petite Vie fame)
to sell its product. PepsiCo introduced the Quebec slogan "here, it's Pepsi" (Ici, c'est Pepsi)

in response to Coca-Cola ads proclaiming "Around the world, it's Coke" (Partout dans le

monde, c'est Coke). In India, by most accounts, Coca-Cola was India's leading soft drink until

1977, when it left India because of the new foreign exchange laws which mandated majority

shareholding in companies to be held by Indian shareholders; Coca-Cola was unwilling to

dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act, which

would have forced them to share their formula with an entity in which it did not have

majority shareholding. In 1988, PepsiCo entered the Indian market by creating a joint

venture with the government of Punjab-owned Punjab Agro Industrial Corporation and

Voltas India Limited.

## Analysis (List)

- This joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign

brands was allowed; PepsiCo promptly bought out its partners and ended the joint venture

in 1994.

References / Works Cited:

1. Wikipedia (n.d.). Retrieved from https://wikipedia.org/

2. Random Book Title (2022). Academic Publishing House.