In 2005 Pepsi had a campaign where you would get a Sony laptop priced at 2000 EUR by buying some 850 EUR net worth of soda.
When people started sending in their bottle labels en masse, it turned out that the company never expected anyone to actually aim for the prize. Pepsi representation tried to weasel out by changing the rules thrice. In the end, they had to bow down to the consumer protection officials and sent out a newer generation Vaio as they could not source enough of the model they advertised.
That puts me in mind of Hoover's infamous 1990s UK flight promotion. It started off OK, buy £100 of Hoover products, get a free flight to Europe. Not many redeemed the offer. Then they added global destinations. Loads redeemed the offer. People were buying a Hoover and giving or throwing it away, or leaving it in the shop to get (much more expensive) flights to the US.
Hoover made £30m in extra sales, and had to spend £50m on flights, and unknown compensation. TV programmes were made, court cases filed, board execs were fired and Hoover UK sold to the Italians.
> Hoover made £30m in extra sales, and had to spend £50m on flights, and unknown compensation.
This is impressive, but it seems to understate Hoover's problems pretty dramatically. The Wikipedia article says this:
> at this point the consumer response increased enormously, as Hoover was offering around £600 of airline tickets for an outlay of just £100. Customers opted to purchase the cheapest product that was enough to satisfy the £100 requirement, with some not even bothering to pick up the product they had purchased. The Hoover factory had to switch to seven-day working and hire additional employees to meet the demand for the cheapest qualifying vacuum cleaner.
This sounds like a lot of additional expense in labor and materials, all of which was basically wasted.
It ruined them financially and as a brand in the UK, hence the eventual sale. In part because they couldn't buy all the flights claimed, but they also couldn't afford to. The vast majority got no tickets, and had to go to court to seek compensation as they initially tried delaying and avoiding tactics. The £50m was for the small minority who did get tickets.
As a brand they were constantly appearing on the news, and consumer affairs programmes for weeks, months eventually years. Hoover people were flying in from the US, etc.
All because they expected a similarly low takeup rate as their earlier European offer.
I thought the point of the story was the front-and-center statistics, 30 million pounds in additional sales outweighed by 50 million pounds in expenditures on airline tickets.
But that sounds like a 20 million pound loss most of which was wealth transfer (from Hoover to you!) rather than wealth destruction. In fact, because of the sideshow in ordering unwanted vacuum cleaners, the loss was apparently much larger and mostly wealth destruction rather than wealth transfer.
When people started sending in their bottle labels en masse, it turned out that the company never expected anyone to actually aim for the prize. Pepsi representation tried to weasel out by changing the rules thrice. In the end, they had to bow down to the consumer protection officials and sent out a newer generation Vaio as they could not source enough of the model they advertised.