Saturday, 13 June 2020

Pepsi’s $32 Billion Typo Caused Deadly Riots

quote [ So here is Pepsi, churning along each month, not knowing they accidentally sent $32 billion worth of winning caps to the Philippines. ]

Whoopsy-daisy! It's Medium, sorry.

[Edit:] Arrgh, and it's one of those per-month-types from a marketing blog. Full in extended.


Pepsi’s $32 Billion Typo Caused Deadly Riots
Sean Kernan

Pepsi hoped the allure of prize money would convert many of the low-income Coke drinkers. They strategically planned to give out a total of $2M in prizes.

However, a computer glitch with one of Pepsi’s vendors caused them to manufacture 800,000 bottles with the number “349” on the bottle cap.

Most bottles are manufactured on a several stage conveyer belt: bottle, pouring, capping, then labeling. (Source: pic via Delmarvanow)

The number “349” was the $40,000 winning number.

Pepsi had explicitly told its vendor factories not to print this number at all. The two bottles with that number would be specially manufactured and sent to the Philippines by Pepsi themselves.

So here is Pepsi, churning along each month, not knowing they accidentally sent $32 billion worth of winning caps to the Philippines. Meanwhile, everyone in the Philippines is going bananas for this promotion, buying up all the soda bottles. This disruptive campaign increased Pepsi’s market share from 4% to 24.9% in just two months.

Fast Forward. The big day arrives. All the Filipinos have their TV’s on. Pepsi goes on to announce the winning bottlecap number, 349, and across the Philippines, crowds of people are cheering. They’ve won enough money to buy a large house.

Pepsi then realizes they’ve made a terrible mistake. They do their whole, “Whoa whoa whoa, hold up.”

The optics of the situation aren’t pretty. You have this first world multibillion-dollar business that has made this huge monetary promise to these poor people, only to backpedal and blame it on a system error. One could see how it wouldn’t sit well with a rice farmer.

Pepsi realizes they can’t just walk away without paying anything. They make an offer of $18 to each patron. It came out to $8.7M in total payouts, versus their original budget of $2M. The people don’t find this offer very appetizing.

A 349 Alliance consumer action group forms. They begin protesting across Manila, in front of government buildings as well as Pepsi’s local headquarters.

Source: pic via Romeo Gacad Getty Images

Things start to get more violent. Then, full-blown riots break out. More than 30 Pepsi trucks are firebombed in the process.

Source: Pic via Imgur

Then the situation escalates even more. Police are called in and rioters begin fighting with them, throwing rocks.

Source: Pic via Imgur

The police begin lobbing tear gas canisters at the protestors. Then a random protester throws a live grenade that ricochets off of a Pepsi truck and accidentally kills a woman and a young girl.

The fighting continues on throughout the day. By the end of all the carnage, five people die and dozens more are wounded. All because of a marketing promotion went wrong.

Following all of this, Pepsi faced thousands of court claims that it had to work through in the following years. There was a lengthy trial and the Philippine commerce courts eventually ruled that Pepsi’s mistake wasn’t malicious and it hadn’t committed a crime.

At the end of everything, Pepsi’s total combined losses, between physical, legal, and brand equity costs, would top $20M. Their market share would plummet and take years to rebound.

But Pepsi, ever the resilient brand, would recover its market share in due time. But not before “revisiting” a few of their internal processes.
[SFW] [history] [+5 Interesting]
[by Paracetamol@12:02pmGMT]


arrowhen said @ 11:28pm GMT on 13th Jun [Score:1 Funny]
Pepsi brings your ancestors back from the grave!
damnit said[1] @ 12:57am GMT on 14th Jun [Score:1 Insightful]
I remember this. The contest was a big hit in the Philippines. I was in the 2nd grade. I went to a special elementary school (integrated laboratory school) inside a teaching college. Fledgling student teachers would rotate every marking period to their respective homerooms and became our teachers for different subjects. While we got graded for our classes, the student teachers were graded for their teaching ability. Kind of experimental, since not every kid could go in (I was lucky I got sponsored).

Anyway, the canteen at our school were basically running out of Pepsi products every day since everyone bought them to get prices. The most I've won was a free soft drink bottle.

The "349" issue was disastrous. I remember a news crew taking video of several locals from a district holding their bottle caps with the numbers "349" printed in all of them. There were at least 40 people in the video and there were more people in the country with the same number.
stacyswirl said @ 6:51pm GMT on 14th Jun
What year was this? It doesn't say.
Paracetamol said @ 7:04pm GMT on 14th Jun

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