[Economics] The incredible mistake that pitted Pepsi against a young university student over a military plane

[HeWhoRemains™]

It was 1995 and the "War of the tails", started in the 1970s, was still going on.

The bitter rivalry between Coca-Cola and Pepsi-Cola had started from the very moment the Pepsi Cola Company was founded, in 1902, 10 years after the Coca-Cola Company.

Although Coca-Cola used to dominate, Pepsi used price cutting and other tricks to gain ground.

But in 1975 he launched what he called the "Pepsi Challenge" that took direct aim at his rival, declaring that marketing war.

Lots of commercials and two decades later, he rammed the "Pepsi Stuff" promo campaign, the tagline of which was "Drink Pepsi, Get Stuff."

 

If customers kept the Pepsi tags, they accumulated points to redeem for merchandise such as T-shirts, hats, denim and leather jackets, handbags and mountain bikes.

It turned out to be the most successful strategy of this conflict between soft drinks.

But there was a stone in the shoe that was about to become a real rock.

the jet
The scheme was promoted in stores with dots adorned with huge photos of supermodel Cindy Crawford.

But the catalogs themselves were unappealing, particularly to the so-called "Pepsi Generation" they wanted to win over.

To make a real impact, the campaign had to be reinforced on the big battlefield: the movie and television screens.

The creatives devised a commercial in which a boy was seen getting ready to go to school.

Some of the items that the company offered were put on and the number of points needed to acquire them appeared. "75 Pepsi Points T-shirt." "Jacket 1,450 Pepsi points".

"Now the more Pepsi you drink, the more cool stuff you get," the narration read.

Dressed and proud, the boy would leave the house and get on a fighter plane in which he would arrive at school.

On the screen was: "Harrier fighter 7,000,000 Pepsi points."

And that's it.

The next caption was the catchphrase.

At no time, in the commercial originally released in the United States, did that legend appear in small print that we are always recommended to read, which in this case should have indicated that this last item was not included in the promotion.

Arithmetric
Obviously, no one at the company took out a pen and paper to do the math before setting that price in Pepsi points for the fighter jet.

When it comes to big numbers, many of us tend to reach a point after which everything that follows means "a lot" or "a lot."

7 million, in this case, fell into that category, especially when you took into account how difficult it was to get the required points for any of the merchandise.

Each bottle of soda represented just one point and with the packages of cans you did worse: those of 24, for example, gave 4 points.

So you had to drink a lot of Pepsi just to get the t-shirt in the commercial... and an absurd amount to claim the Harrier.

The truth is that those responsible for the commercial never stopped to think how much it was, because for them it was nothing more than a trick to attract attention.

But at least one person did.

Not only that, he got what it took to claim it.

john leonard
Leonard was a college student always looking for opportunities to earn money with which he financed adventures, particularly his passion for mountain climbing.

He was 20 years old and had a long list of jobs that he had taken since he was a child for this purpose.

He heard about a commercial that offered the chance to get an airplane and when he saw it, he noticed the absence of the disclaimer, so he did the homework that Pepsi hadn't.

He added and multiplied to establish how many soft drinks he needed to buy to get the Harrier; he subtracted the amount he had to spend to stock the millions of bottles and remove the labels, and found that even though the numbers were high, the offer was still a bargain.

It would cost you about $4,000,000 to purchase a plane worth about $23,000,000.

He pitched the plan to millionaire Todd Hoffman whom he had befriended on a trip he had worked on as an assistant mountaineering guide.

Hoffman, several years older than him and with much more experience, asked him the necessary questions to establish whether the plan was viable.

One of them led to the collapse of the plan: what would happen if, when they were about to finish collecting all the labels, the promotion ended.

What would they do with millions of unlabeled soft drinks?

ping pong
Disappointed, Leonard gave up, but one day, flipping through the Pepsi catalog, he read something that opened another path for him.

Pepsi Points could be purchased for 10 cents each, meaning the seven million points needed for the jet would cost $700,000.

Hoffman wrote the check and it was mailed.

Thus began something similar to a slow-motion table tennis match.

Pepsi's first response was along the lines of "Funny! Here's his check and some gift certificates."

Leonard and Hoffman responded: "If we do not receive transfer instructions within 10 business days from the date of this letter, you will leave us no choice but to bring an appropriate action against Pepsi."

But the company beat them to it, filing a lawsuit in New York, ensuring that any legal action took place in a place known to be more business-friendly.

They were seeking "a declaratory judgment establishing that it was under no obligation to provide plaintiff with a Harrier Jet," according to the final ruling.

This unleashed a media frenzy that began painting Leonard as David fighting Goliath Pepsi, but eventually ended up judging him as an opportunist who wanted to take advantage of the poor multinational soft drink company.

Leonard vs. PepsiCo
The dispute dragged on for years.

Along the way, Leonard turned down a settlement offer that Pepsi offered him after suing him.

They also filed a lawsuit with Hoffman in Florida, which is why the court case still taught in US law schools is called Leonard vs. PepsiCo instead of vice versa.

At one point, the fight was even joined by Michael Avenatti, who would later become famous as the lawyer for porn actress Stormy Daniels during her legal battles with Donald Trump and, in 2022, would be convicted of defrauding four of his clients, including they the same Daniels.

But when Avenatti wanted to threaten PepsiCo with using a previous case in which the company failed to honor the promise of a million-dollar prize to its customers in the Philippines alleging a computer error, Hoffman refused, believing the strategy amounted to blackmail.

Finally, in 1999, the trial took place in Pepsi's favorite territory: New York.

the trial
For Leonard and Hoffman, the possibility of winning a fight against not only Pepsi's army of lawyers but that of its insurers and advertising company was remote.

But they had a better chance if the decision was made by ordinary people.

Unfortunately for them, Judge Kimba Wood ruled out the possibility of a jury trial. She opted for a summary judgment.

Another possibility that could have worked to Leonard's advantage was depositions, the procedural means by which one party asks oral questions of the other party or witnesses under oath.

position.

However, Wood decided that he already had the relevant facts, so he did not allow the depositions either.

After the hearing, another long wait, until the ruling in favor of Pepsi finally arrived.

"No objective person could have reasonably concluded that the commercial actually offered consumers a Harrier aircraft," Wood wrote in a lengthy document in which he alleges things like:

"No school would provide a landing space for a student's fighter plane, or condone the disruption that the use of the plane would cause."

 

What happened?
In addition to putting an end to Leonard's youthful dream, Judge Wood left us wondering why Pepsi made such a mistake.

But Andrew Renzi found the answer in a documentary he made for Netflix, "Pepsi, Where's my Jet?"

In it, Michael Patti, former creative director of the advertising firm in charge of Pepsi ads, revealed that originally the number of points that the commercial carried under the Harrier was 700,000,000 million.

But when they presented the ad to Pepsi in their editing room, one of the executives said he found that number hard to read.

Two Pepsi executives who were present confirmed in the documentary that this was the case, although no one remembered who it was.

Patti says that he explained to them that it didn't have to be readable, that it was not necessary to know that it was exactly 700 million, that it was enough to "see that it was a 7 with a lot of zeros after it to understand that it was impossible and funny."

But he did not convince them.

They took a zero from it, but it didn't seem enough. Then another, and everyone agreed that it was better that way.

"They should have thought better of it. It was their promotion. It went through their legal system who reviewed it to make sure everything was okay," Renzi says.

Had that been the case, that 1995 commercial would have been relegated to oblivion.

https://www.bbc.com/mundo/noticias-65254954

[Deanna Ferrell]

It is fascinating to see how far these companies have gone in their competition for market share, and how a simple mistake can cause such a huge problem.