Advertising
as Weaponry
Pepsi has marked more than the Hundred Years War
with no decisive victory in sight. But then, perhaps
victory would spoil all the fun -- not to mention
the price wars that frequently let thirsty consumers
load up at grocery chains for less than 17 cents
a can. If it were just a matter of stuffing cola
into an endless procession of cans, the days at
Purchase and Somers, N.Y. (home of the Pepsi division)
would hold no intrigue. (Ellis, 1979).
Slogan Wizardry
For decades Pepsi has defined itself through the
wizardry of the slogan, the jingle and the storyboard
and all that a succession of four ad agencies
has spun from them. One hundred years after New
Bern, N.C., druggist Caleb Bradham called it Pepsi-Cola
(actually, Caleb Cola would have had a nice ring
and spared Mr. Bradham the necessity of buying
out an existing trademark, Pep-Kola, for the princely
sum of $100), this worldly and sophisticated company
still succumbs to the temptation to see itself
as the ``feisty newcomer'' struggling in the shadow
of tradition and Americana cast by ``the competitor.''
(Martin, 1962)
Selling In Bottles
The demand, it turned out, was already there.
The race was how to make enough Pepsi without
going broke in the process. Spritzing it out of
fountain dispensers didn't begin to do the job.
So Mr. Bradham turned to selling it in bottles.
Unfortunately, this required bottles, which were
only beginning their evolution from hand-blown
delicacies to mass-produced containers. It also
required bottlers willing to invest capital in
Mr. Bradham's beverage. With the fundamentals
of manufacturing still untamed, building additional
demand through advertising probably was the least
of anyone's concerns. (Martin, 1962)
Manufacturing Crisis
Indeed, it was a crisis of manufacturing, not
marketing, that would swallow Pepsi up in the
first of a series of bankruptcies. Sugar shortages
during World War I and a cartel-induced price
surge after that war convinced Caleb Bradham to
buy up as much sugar as he could before prices
got worse.
Unfortunately, prices soon got better, making
everything else worse for Mr. Bradham, who found
himself buried under a stockpile of overpriced
sugar and debt. Facing bankruptcy, he prevailed
upon Wall Street investor Roy Megargel to reorganize.
But it came to nothing. In 1923, Mr. Bradham sold
out for $35,000 to the Craven Holding Co., went
back to the drugstore business and died 11 years
later.
Craven transplanted Pepsi to Richmond, Va.; while
Mr. Megargel, now the largest stockholder, sat
on the board and watched his company ekes out
a modest growth record through the 1920s. It was
reorganized again in 1928 as the National Pepsi-Cola
Co., just in time for the the Depression and bankruptcy.
Exit Roy Megargel, enter Charles Guth, president
of the Loft Candy Store chain and a man with a
score to settle against Coca-Cola Co., which had
refused to supply Loft stores with syrup at a
price Mr. Guth considered reasonable. With Pepsi
on the block in 1931, he saw a source of supply
that would be his to control. So he picked it
up for $150,000, as much to avoid dickering with
Coke as for any future he might have seen in Pepsi.
(Mulchand, 2003)
An Approach to Coke
When a humiliated Charles Guth sent quiet feelers
to Coca-Cola about buying out the company, Coke
wasn't interested. It preferred to let Pepsi die
a natural death, and the quicker the better. The
year was 1934.
Then, with nothing left to lose, Mr. Guth had
a final idea, one shimmering with the glow of
common sense. That March, something astonishing
began appearing in Baltimore grocery stores --
12-oz. bottles of Pepsi selling for 5 cents each.
Without raising the price, Mr. Guth had taken
Pepsi off the gold standard of the soft drink
business, the 6-oz. sales unit. In the midst of
the Great Depression, he offered customers a bargain.
The result was a reversal of fortune worthy of
a Frank Capra movie. Sales soared, bottlers materialized
and the race was on to meet a suddenly huge demand.
Pepsi began operations in Canada, Cuba and England
and moved its main offices and bottling plant
to Long Island City, N.Y. (Prendergast, 1993)
No Money for Radio
By 1936, Pepsi had a $500,000 ad budget and retained
the Brown Agency, a small shop in Manhattan. Pepsi
had no money for network radio, which was the
glamour end of the ad business. Spending doubled
by 1938, and the Pepsi account moved to Metropolitan
Advertising in Manhattan.
In the midst of the Pepsi renaissance, though,
an internecine battle broke out between Mr. Loft
and Mr. Guth that would open a new management
era for Pepsi. After Mr. Guth stepped down as
Loft president in 1935, the company demanded his
91% share of Pepsi on the grounds he had built
it with Loft capital. In 1938, after three years
of litigation, Mr. Guth was out and Pepsi was
a division of Loft. (Earl, 1998)
Ownership Change
In July 1939, Walter Mack, a VP of Phoenix Securities,
Philadelphia, which owned 29% of Loft, took over
Pepsi. A year later Phoenix sold off the last
of its Loft stock, cutting forever the link to
Pepsi.
In 1939, the cola wars got serious. When producer
Billy Rose decided to sell Pepsi in his Aquacade
show at the New York World's Fair that summer,
Coke got the fair's lawyers to block him, an order
Mr. Rose immediately ignored with his usual flair.
This brought out police to seize the contraband
Pepsi, which in turn drew an injunction from Mr.
Rose, one that was upheld a month later in court.
A few weeks later, as if to emphasize its victory,
Pepsi launched a sky-writing campaign by putting
its signature directly over the fair grounds.
(A Selection of …..1998)
An Agency Switch
With manufacturing and distribution finally on
sound footing, Mr. Mack knew marketing would drive
Pepsi's future. He fired Metropolitan Advertising
and in August hired the Newell Emmett Co., which
10 years later would become Cunningham & Walsh.
In May 1942, Newell Emmett took Pepsi advertising
into network radio for the first time, but in
a weekly five-minute slot on the second-string
NBC Blue Network (soon to become ABC). A second
try in February 1946, with a 15-minute Sunday
evening commentary program by journalist Quentin
Reynolds, also was brief, as was a third network
flirtation involving ``Counter-Spy'' in 1949 and
1950. (Hein, 2004)
A Move to Manhattan
In 1948, with sales dropping, Mr. Mack took two
steps to separate the old Pepsi from the new.
He moved company headquarters across the East
River from industrial Long Island City to fashionable
Fifth Ave. and 57th St. in Manhattan. And, as
CEOs routinely do at such times, he fired his
agency. Newell Emmett was out; the Biow Agency
was in. Milton Biow had given America ``Call for
Philip Morris-s-s'' and ``B-U-L-O-V-A -- Bulova
watch time.'' In 1949, with a $3 million budget
in hand, he intended to give Pepsi ``Twice as
Much for a Nickel, Too.''
In October 1950, with Pepsi sales down $16 million
from 1947, Walter Mack resigned at age 54, clearing
the way for his heir apparent, Alfred Steele,
whom Mr. Mack had recruited from Coca-Cola in
1949. It wasn't the last talent Coke would surrender
to Pepsi. In 1951 Biow beckoned three key executives
from Coke's long-time agency, D'Arcy Advertising,
presumably at the instruction of Mr. Steele, who
had been friends with each of them since his Coke
days with D'Arcy in 1939. (Ellis, 1979)
A Stylish Image
``More Bounce to the Ounce'' became the Pepsi
mantra as Mr. Steele took over, a line that complemented
his taste for glamour, not to mention his TV sponsorship
of Faye Emerson, whose plunging necklines and
décolletage were the talk of the industry.
The old ``John Peel'' jingle was phased out, and
a stylish Polly Bergen personified Pepsi's modern
image as she talked about a ``the light refreshment
that refreshed without filling.'' Pepsi's stylish
image was further burnished when Alfred Steele
married actress Joan Crawford in 1956. ``Reduced
calories'' became a Pepsi theme years, bringing
with it the whole diet category, as slender women
in Dior suits set the new upscale look. Even the
Pepsi-Cola logo was lightened from two hyphens
to one. (Riley, 1958)
An Angry Breakup
Eight million dollars was an account worth fighting
for in 1955, and rumors of a change were in the
air after D'Arcy lost Coke to McCann-Erickson
in October. John Tiago, speaking for the Biow
Agency (by now Biow-Beirn-Tiago), said he knew
nothing about a Pepsi agency switch and that in
any case he was loyal to BBT. Two weeks later,
Pepsi fired BBT and hired Kenyon & Eckhardt.
What had apparently piqued Pepsi for several months
was the appearance in July of BBT's high-fashion
Philip Morris campaign, whose art and type style
were too close to Pepsi's for comfort. In Pepsi's
view, it was sheer plagiarism, because the company
credited Mr. Steele and not BBT with coming up
with the high-fashion glamour look. (Martin, 1962)
Closing the Gap
Kenyon & Eckhardt raised the stakes of elegance
and good taste still higher. ``Say Pepsi Please''
became the slogan de jour going into 1957, as
the Coke-Pepsi sales gap closed from 5 to 1 in
1950 to 2 to 1. A quiet revolution was taking
place in Pepsi advertising. In trying to tell
a quality story, the advertising emphasis had
drifted from product qualities to an association
with a quality-conscious lifestyle. The principle
was good, and more basic than anyone may have
sensed. There was only one problem: For a soft
drink, the lifestyle lacked any sense of reality.
(Mulchand, 2003)
New Office, New Logo
Then in April 1959, Alfred Steele, the master
of it all who made Pepsi the nation's 57th largest
advertiser, died at age 57. Mr. Steele's demise
signaled big changes just ahead. There would be
Pepsi in new pop-top cans, whose pull rings, buyers
soon discovered, not only made the old ``church
key'' obsolete but made excellent slugs in parking
meters (an unintended design benefit later corrected
by American Can Co.). Also just ahead: a new non-script
logo, new Manhattan offices at 500 Park Ave.,
new brands like Teem and Patio, the first Diet
Pepsi cola. (Riley, 1958)
Donald Kendall’s Rise
Over the next three years, real power shifted
to Donald Kendall. After joining Pepsi in 1947
as a syrup salesman, this gregarious salesman-politician
and friend-of-U.S. Presidents secured control
of the company in 1963 and began the acquisition
spree that would turn Pepsi into a multinational
conglomerate. First came Tip Corp., maker of Mountain
Dew, in September 1964. Then in 1965 came the
merger with Frito-Lay. With Frito-Lay came the
creation of PepsiCo, parent company of all once
and future acquisitions. (A Selection of ….1998)
Zeroing In On the Young
Seeing a young stampede barreling toward the marketplace,
Pepsi zeroed in on a population that saw itself
as distinct and separate from its parents in a
way earlier generations hadn't. Three weeks after
John Kennedy was inaugurated as President in 1961,
Pepsi set out to take that generation for its
own. To the tune of ``Makin' Whoopie,'' singer
Joannie Sommers rolled out the message that would
steer the Pepsi personality for the rest of the
century -- ``for those who think young.'' The
phrase became a colloquialism that United Artists
even used as the name of a beach-romp film. The
intensity of the campaign symbolized a fierce
new overall aggressiveness against Coke.
The phrase ``Pepsi Generation'' soon became interchangeable
with baby boomer, although it didn't materialize
until four years later when BBDO launched the
``Come Alive . . .''You're in the Pepsi Generation''
campaign, also with Ms. Sommers. (A Selection
of ….1998)
Using Folk Music
In the hot-blooded '70s the folk sound seemed
safer. Pepsi used a different folk style in ``You've
Got a Lot to Live, and Pepsi's Got a Lot to Give.''
And as for the pop hits, Pepsi had charted one
five years before with its own music for Diet
Pepsi, ``Music to Watch Girls By.'' There also
was a growing tolerance for diversity as commercials
became proudly multi-racial. For the first time
viewers saw black and white consumers, not only
in the same spot, but actually socializing with
one another. (Riley, 1958)
Varying the Message
But BBDO knew this was not a happy land. Wisely
Pepsi scratched a mid-'70s campaign on the ``Smilin'
Majority'' in the wake of Watergate in favor ``Join
the Pepsi People, Feelin' Free.'' A sanitized
counter-culture sensibility pervaded even the
most traditional Main Street visuals of swimming
holes and farm life, as lines such as ``you be
you, I'll be me'' blended a non-judgmental open-mindedness
with red, white and blue patriotism. (A Selection
of ….1998)
Music as A Road Map
Music has become the road map to the next generation,
wherever it might be hiding. By the mid-'80s,
the Michael Jackson tour sponsorships made Pepsi
and BBDO show-business players in ways not seen
since the '30s and '40s, when great advertisers
and agencies produced packaged music stars like
Bing Crosby (Kraft) and Benny Goodman (Camels)
for network radio.
Company-Agency Synergy
Under a succession of smart company men a client-agency
relationship of considerable dimension has developed.
Each has complemented the other's weaknesses with
a countervailing strength. They have much to celebrate.
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