Games - John Sculley

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John Sculley (born April 6, 1939) was president of PepsiCo during the 1970s and early 1980s until he became CEO of Apple Computer on April 8, 1983. Sculley is currently a partner in Sculley Brothers, a private investment firm formed in 1995. He is best known for his marketing skills, particularly in his introduction of 'the Pepsi Challenge' at PepsiCo, which allowed the company to gain market share over its rival, Coca Cola. Sculley followed this strategy at Apple throughout the 1980s and 1990s to mass market Apple Macintosh personal computers. In May 1987, Sculley was named Silicon Valley's top-paid executive, with an annual salary of US$2.2M.

Background and personal life

Sculley was born in the United States, but within a week of his birth, he and his family were relocated to Bermuda, and subsequently to Brazil and Europe. At the age of 14, he invented a color cathode ray tube, but was unable to patent it because Dr Lawrence of Lawrence-Livermore Laboratories had filed a similar patent to his, only weeks earlier. Lawrence's patent was later acquired by Sony and eventually became technology that led to the Trinitron color television tube. Sculley received a bachelor's degree in architectural design from Brown University and an MBA from the Wharton School of Business. Sculley married Ruth Kendall in 1960, and they had a daughter, Meg, and son, Jack. They divorced in 1965, and in 1978, Sculley married Carol Lee ("Leezy") Adams.

1967–82: Sculley at Pepsi-Cola

Sculley joined the Pepsi-Cola division of PepsiCo in 1967 as a trainee, where he participated in a six-month training program at a bottling plant in Pittsburgh . In 1970 he became the company's youngest marketing vice-president at the age of 30; in 1977, he was named Pepsi's youngest-ever president. At Pepsi, Sculley used his marketing skills and started the Pepsi Challenge in 1980 to compete against Coca Cola to gain market share, using heavily-advertised taste tests.

As vice-president of marketing at Pepsi, Sculley initiated one of the company's first consumer-research studies, an extended in-home product test in which 350 families participated. As a result of the research, Pepsi decided to launch new, larger and more varied packages of their soft drinks. In 1970, Pepsi set out to dethrone Coca Cola as the market leader of the industry, in what would eventually become known as the Cola Wars.

Pepsi began spending more on marketing and advertising, typically paying between US$200,000 and $300,000 for each television spot, while most companies spent between $15,000 and $75,000. With the Pepsi Generation campaign, Pepsi aimed to overturn Coca Cola's classic marketing. At Pepsi, Sculley also took the position of managing PepsiCo's International Food Operations division, shortly after he visited a failing potato-chip factory in Paris. PepsiCo's Food division was their only money-losing division, with revenues of US$83 million and losses of $16 million. To make the food division profitable, Sculley hired new managers from Frito-Lay and improved product quality, as well as improving accounts and establishing financial controls. Within three years, the food division was making US$300 million in revenues and $40 million in profit.

Sculley is best known at Pepsi for the Pepsi Challenge, an advertising campaign initiated from Sculley's own research that Pepsi-Cola tasted better than Coca-Cola. The Pepsi Challenge included a series of television advertisements that first aired in the early 1970s, featuring lifelong Coca-Cola drinkers participating in blind taste tests. Pepsi's soft drink was always chosen as the preferred product by the participant; however, these tests have been criticized as being biased. The Pepsi Challenge was mostly targeted at the Texas market, because Pepsi had a significantly low market share there at the time. The campaign was successful, significantly increasing Pepsi's market share in that state. At the time the Pepsi Challenge was started, Sculley was senior vice-president of United States sales and marketing operations at Pepsi.

1983–93: the Sculley era at Apple

While chairman of Apple Computer, Steve Jobs recruited Sculley from Pepsi by asking him, "Do you want to sell sugar water for the rest of your life, or do you want to change the world?". Apple chose Sculley because they wanted him to apply his marketing skills to the personal computer market, particularly to the Apple Macintosh. The Board of Directors stripped Jobs of all operational responsibilities in 1985 after a power struggle and personality conflicts with Sculley, three months after Jobs' 30th birthday. Sculley has commented on the situation by saying: "The board had to make a choice and I said look, it's Steve's company, I was brought in here to help. If you want him to run it, that's fine by me. But we gotta at least decide what we're gonna do and everybody's got to get behind it ... and ultimately after the board talked with Steve and talked with me, the decision was that we would go forward with my plans and Steve left."

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