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The Pepsi Challenge was a very successful advertising campaign back in the 1980s where Pepsi showed people trying, in a blind taste test, whether they liked Coke or Pepsi. More people admitted that they liked Pepsi over Coke, that it scared the Coca-Cola company so badly that they introduced a new, sweeter formula, that bombed worse than the Edsel. As an ironic twist, Coke's actions were completely unnecessary since even after claiming that Pepsi tasted "more refreshing" the majority of the subjects still said they would buy Coke over Pepsi.
The term Pepsi Challenge entered the lexicon as an open comparison between two products where you showed your competitor's actual name and showed how bad they were. (Before this, almost all companies pretended competitors didn't exist or used Brand X as the example).
Examples of use of direct comparison between competitors:
- In Pulp Fiction, the drug dealer that's selling heroin to Jules says that his stuff is so good he'd take a Pepsi Challenge against drugs from any other dealer.