How Decades of Solid Branding Saved Coca-Cola from the Pepsi Challenge

The Pepsi Challenge was a marketing campaign started in 1975. It was simply a blind taste test between Pepsi and Coca-Cola, touting that even Coca-Cola fans choose Pepsi. It was a wildly successful marketing strategy that they revisited for decades. Coca-Cola even ran their own private tastes test, through which they found Pepsi was indeed chosen over half of the time, and panicked. They briefly released New Coke in 1985, a formula more similar to Pepsi’s cola. This initiative turned out to be one of the biggest failures in established branding history. Coca-Cola consumers were wildly disappointed. Miraculously, despite Coca-Cola’s snafu, and Pepsi’s increased market share, Coca-Cola remained number one in the soda game, and still reigns today.

In 2004, Baylor College of Medicine performed a version of the Pepsi Challenge with subjects hooked up to a functional magnetic resonance imaging (fMRI) machine. The results were interesting. In blind taste tests, most people preferred Pepsi, just like the Pepsi Challenge. The Pepsi drinks lit up activity in an area of the brain known as the ventral putamen, which helps us evaluate different flavors. It would seem that Pepsi does taste better! However, when the subjects were told which beverage they were sampling before they tasted it, they decided Coca-Cola tasted better. The fMRI scans showed the sips of Coca-Cola increased activity in the medial prefrontal cortex. This part of the brain is more involved in decision making. When the subjects knew they were drinking Coca-Cola, they weren’t simply evaluating flavor, they were considering memories and experiences. The study’s conclusion was that this prefrontal activity was associating the soda with the brand, in effect, overriding the taste buds. When choosing Coca-Cola, consumers are choosing the brand they know and love. Building a successful brand is more than a good product, it’s building a comprehensive experience.