One of my great pleasures is mentoring young people who are armed with fresh ideas, boundless energy, and a hunger to learn about entrepreneurship, marketing, and disruptive innovation. Thanks to social media sites such as Facebook, our newly-connected world allows fledgling entrepreneurs to find seasoned businessmen like me and plumb our experience.
Recently I received a note from a new Facebook Friend who is an MBA student in Salzburg and works for a company licensed to sell and bottle Pepsi products in Austria. He is in the process of writing his Master’s thesis and had some questions about strategies for marketing soft drinks internationally.
Most of what I told him stems from what I have learned from my own experience during the “Cola Wars,” which began in 1970 when I was appointed Pepsi-Cola Co. marketing VP. It occurs to me that the examples I used from those days illustrate the kind of disruptive marketing that is required in today’s competitive global economy.
- The Pepsi Generation campaign indeed disrupted the normal ways in which products such as soft drinks were marketed. Focused on fun and active sports, these commercials emphasized the experience of Baby Boomers, not the product. Under the eye of our talented advertising head Alan Potash, Pepsi Generation was the first lifestyle marketing campaign, shaping much of consumer advertising in the decades that followed.
- Timing was – and still is – a critical factor in marketing success. I remember attending a lecture in 1969 by the late anthropologist Margaret Mead at New York City’s MOMA, where she said the most important “fact” for marketers would be the emergence of an affluent new consumer group she called “Baby Boomers.”
- By 1970, bigger screen color television was replacing small B&W TV. Coke was focusing its much larger advertising budget on selling the product (“Coke is the Real Thing”). But Pepsi’s advertising agency, BBDO, went to Hollywood’s best-known feature film directors with instructions to create 60-second movies capturing the experience of Baby Boomers enjoying active sports like hiking, dirt bike racing, and surfing. At the end of each commercial would be a simple Pepsi signature moment showing these active people enjoying a Pepsi – no hard-sell product message. We called this strategy “experience marketing” (that is, selling the experience, not the product features).
- Another breakthrough experience marketing campaign was the Pepsi Challenge, which infuriated Coca-Cola Co. because we focused on the surprise reaction of long-time Coke drinkers who, in a blind Pepsi vs. Coke taste test, had chosen Pepsi instead of Coca-Cola. By 1978, Pepsi was established as the largest-selling consumer packaged goods product in the US.
- In 1982, I met Steve Jobs and he became fascinated by the Cola Wars and experience marketing. Jobs was in the process of creating Macintosh, with its graphical user interface experience. He believed that computers eventually would become big brand consumer products with powerful experience marketing advertising.
And the rest, as they say, is history.