Number Fever: Pepsi Contest That Became a Deadly Fiasco

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 The Pepsi Number Fever, also known as the 349 incident, was a promotion held by PepsiCo in the Philippines in 1992, which led to riots and the deaths of at least five people. 

The Promotion 

  • Grand Prize: Certain numbers could be redeemed for prizes, which ranged from 100 pesos (about US$4) to 1 million pesos for a grand prize, roughly US$40,000 in 1992, equivalent to 611 times the average monthly salary in the Philippines at the time. 

Pepsi Number Fever was initially wildly successful, and increased Pepsi's monthly sales from $10 million to $14 million and it's market share from 19.4% to 24.9%. 

The Scandal 

  • Winning Number Error: On May 25, 1992, Pepsi announced 349 as the grand prize-winning number. However, due to a printing error, 800,000 bottle caps with the number 349 were mistakenly distributed, far exceeding the intended number of winning caps. 

  • Public Reaction: Thousands of Filipinos, many of whom came from low-income backgrounds, believed they had won the grand prize. When PepsiCo announced that the bottle caps with the number 349 were a result of a mistake and refused to honor the prize claims, public outrage ensued. 

Consequences 

  • Protest: Many irate 349 bottle cap holders refused to accept PCPPI's settlement offer. They formed a consumer group, the 349 Alliance, which organized a boycott of Pepsi products, and held rallies outside the offices of PCPPI and the Philippine government. Most protests were peaceful, but on February 13, 1993, a schoolteacher and a 5-year-old child were killed in Manila by a homemade bomb thrown at a Pepsi truck. In May, three PCPPI employees in Davao were killed by a grenade thrown into a warehouse. 

  • PCPPI executives received death threats, and as many as 37 company trucks were overturned, stoned or burned. 

 

  • Lawsuits: Thousands of lawsuits were filed against PepsiCo by disappointed claimants. The company faced significant legal battles in the Philippines, many of which dragged on for years. 

  • Public Relations Crisis: PepsiCo's handling of the situation was widely criticized as insensitive and inadequate, severely damaging its reputation in the Philippines. 

Response and Resolution 

  • Settlement Offers: PepsiCo attempted to mitigate the damage by offering a settlement of ₱500 (about $18) to each holder of the erroneously printed caps. Many claimants rejected this offer, demanding full payment of the grand prize. 

  • Legal Outcomes: Over time, most of the lawsuits were resolved with mixed outcomes. Some courts ruled in favor of PepsiCo, while others awarded damages to the plaintiffs. 

  • Long-Term Impact: The scandal had a lasting impact on PepsiCo’s operations and public image in the Philippines. The company had to work hard to rebuild trust and credibility in the market. 

Conclusion 

The Pepsi Number Fever incident of 1992 is a classic example of how a well-intentioned marketing campaign can turn into a major crisis due to execution errors and inadequate crisis management. It underscores the importance of thorough planning, precise execution, and effective communication in promotional campaigns. The scandal remains a significant case study in the fields of marketing, public relations, and crisis management. 

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