Peppi - Niche Marketing

Niche Marketing

Walter Mack was named the new President of Pepsi-Cola and guided the company through the 1940s. Mack, who supported progressive causes, noticed that the company's strategy of using advertising for a general audience either ignored African Americans or used ethnic stereotypes in portraying blacks. He realized African Americans were an untapped niche market and that Pepsi stood to gain market share by targeting its advertising directly towards them. To this end, he hired Hennan Smith, an advertising executive "from the Negro newspaper field" to lead an all-black sales team, which had to be cut due to the onset of World War II. In 1947, Mack resumed his efforts, hiring Edward F. Boyd to lead a twelve-man team. They came up with advertising portraying black Americans in a positive light, such as one with a smiling mother holding a six pack of Pepsi while her son (a young Ron Brown, who grew up to be Secretary of Commerce) reaches up for one. Another ad campaign, titled "Leaders in Their Fields", profiled twenty prominent African Americans such as Nobel Peace Prize winner Ralph Bunche and photographer Gordon Parks.

Boyd also led a sales team composed entirely of blacks around the country to promote Pepsi. Racial segregation and Jim Crow laws were still in place throughout much of the U.S.; Boyd's team faced a great deal of discrimination as a result, from insults by Pepsi co-workers to threats by the Ku Klux Klan. On the other hand, it was able to use racism as a selling point, attacking Coke's reluctance to hire blacks and support by the chairman of Coke for segregationist Governor of Georgia Herman Talmadge. As a result, Pepsi's market share as compared to Coke's shot up dramatically. After the sales team visited Chicago, Pepsi's share in the city overtook that of Coke for the first time.

This focus on the market for black people caused some consternation within the company and among its affiliates. It did not want to seem focused on black customers for fear white customers would be pushed away. In a meeting at the Waldorf-Astoria Hotel, Mack tried to assuage the 500 bottlers in attendance by pandering to them, saying: "We don't want it to become known as a nigger drink." After Mack left the company in 1950, support for the black sales team faded and it was cut.