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‘Typing error tens of billions of dollars’ in the most disastrous marketing campaign in Pepsi history: Attract half of the Filipino population to join, ending with riot and compensation!

After a few months from the 349 incident, up to 10,000 people filed suit and demanded money from Pepsi.

In the 90s, Pepsi in the Philippines once launched a program with a chance to win a special prize of 1 million pesos. However, an error occurred at the bottling plant that caused 600,000 people to win this prize, not a few, resulting in litigation, riot and even loss of life.

Marily So (50) is the owner of a grocery store in Manila, Philippines. She sells many different brands, except for Pepsi. For over 28 years, she has never forgotten the bitterness and indignation she felt for this company.

Mrs. Marily So in her grocery store.

At the age of 23, So lived in a wooden shack next to the tracks with four children under 5. At 6 pm on May 25, 1992, she was one of 70% of Filipinos watching the evening news on Channel 2.

Pepsi is about to announce the winning number in a promotion that has attracted tens of millions of Filipinos to participate. Her husband, an artist, spent the last of their last change to buy Pepsi bottles of the “Digital Fever” program in the hope of changing his life thanks to the award.

Pepsi’s ads promise to help buyers become millionaires. 1 million pesos ($ 68,000 today) is a special prize, valued 611 times the average monthly income in the Philippines at the time. Pepsi has given awards to 18 people and these emerging “millionaires” also appear in its advertising to increase persuasion.

“Digital fever” is the brainchild of director Pedro Vergara, a Chilean who works for the advertising department in New York. After successful deployment in the US, Pepsi-Cola CEO Christopher Sinclair decided to make it part of a strategy to compete with Coca-Cola in foreign markets.

Pepsi hired the Mexican company, DG Consultores, to bring “Digital Fever” to Argentina, Chile, Guatemala, Mexico and the Philippines, where it really exploded. Monthly sales quickly increased by several million USD and helped Pepsi increase its market share from 4% to 24.9% in just 2 months.

Bottling plants operate 20 hours a day, doubling the usual output. Pepsi’s headlining campaign dominates the media with 29 radio stations and 4 newspapers announcing the winning numbers.

Initially, the program was scheduled to end on May 18 but was later extended because the demand was too great. The police even jailed a maid for allegedly stealing a homeowner’s winning bottle. Two Pepsi salespeople were also murdered after an argument over another bottle cap.

Going back to So’s story, when Pepsi announced the winning numbers, her husband, Isagani, shouted happily when he held the bottle with the number 349 in his hand – the winning number of 1 million pesos.

A few kilometers away, Ernesto de Guzmán de Lina, a tricycle driver also shared the joy. Meanwhile, another person also owns the number 349 and won the jackpot. A series of similar cases have taken place throughout the Philippines.

As the winning crowd grew, a secretary phoned Pepsi’s marketing director, Rosemarie Vera, to announce that there were a lot of 349 bottles in circulation. By 10 pm, a company employee had to call the Philippine Ministry of Commerce and Industry and say something went wrong.

It didn’t take long for Pepsi to trace the source of the mistake. In fact, 349 was designated as a “no win” number in a promotion but due to a computer mistake, up to 800,000 bottle caps were printed with this number below. If all of the bottle owners had a prize of 349, Pepsi would have to pay a huge sum of tens of billions of dollars.

Throughout the year, Filipino consumers have expressed outrage by organizing riot attacks, even using grenades that injured dozens and killed five. This is perhaps the largest marketing disaster in history and an expensive lesson in business circles.

The 349 incident has caused a series of riots in the Philippines.

In response to a request to comment on the incident described in the story, Pepsi said it could not verify because the event took place 30 years ago and the directors know that the happenings are no longer working at PepsiCo .

The company said: “We are unable to access the archived records on this issue. We are extremely sorry for the pain that the company ‘s mistakes caused to a part of the Philippines at the time. that point “.

When Pepsi launched the “Digital Fever” campaign, Coca-Cola was in the upper hand in the Philippines. By 1992, the market share of Coca-Cola was so high that they no longer bothered about advertising.

Pepsi’s “digital fever” has made Coca-Cola stand still. Rodolfo Salazar, president of Pepsi, is proud that half of the Philippines’ population has participated and made it the most successful marketing program in the world. But the reality is the opposite!

When the incident occurred May 25, Pepsi initially tried to change the winning number. The next morning, the press simultaneously reported that the winning number was 134, number 349 was a mistake.

That has made consumers angry. The company has to lock down factory gates in Quezon City and ask police to crack down on bottle holders of 349 to attack buildings.

The protests continued the next day. At 3 am, Pepsi decided to pay the people with a bottle of bottle 349 to come to receive the prize within 2 weeks, 500 pesos each. It is estimated that only half of the 600,000 people who own a bottle of bottle 349 receive money, the damage of the company amounted to 6 million USD.

According to AsiaWeek, Pepsi eventually paid nearly $ 10 million, the price was too expensive for a marketing campaign seemed to bring great success.

The disaster did not stop there, after a few months, up to 10,000 people filed a lawsuit and demanded money from Pepsi. The company’s factory and delivery trucks were attacked, executives often had to accompany bodyguards to ensure safety and the company even had to send many employees abroad.

In January 1993, Pepsi fined 150,000 pesos to the Philippines Ministry of Trade and Industry for the “Digital Fever” campaign. However, the lawsuits have not stopped there. A 5-year-old woman and girl were killed when shopping at a grocery store in Manila. The reason is that the truck carrying Pepsi nearby was attacked by grenades and exploded. The incident also injured 5 others.

By 2006, a court had ruled that Pepsi was not liable for damages. At that time, the persistent nightmare of the company was over. After Pepsi’s scandal 349, the Philippines began to monitor its advertising programs more closely and doubled fines for companies that violated consumer rights.

Source: Cafebiz

Translated by Thanh Tran

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