Put a $1bn fizz in your pocket

One Pepsi drinker could win $1 billion (£625 million) in a prize game devised by the company this summer. Yes one billion dollars. Pepsi Billionaire is just one of a rash of promotions to hit US supermarkets - others include a lucky Big Mac eater winning a court date with Venus and Serena Williams and children who munch Peanut Butter Crunch breakfast cereal landing family holidays in Puerto Rico.

The promotions illustrate the lengths to which companies will go to boost market share - and the desperate state of US retailing. Summer is never easy for American stores but this year, it's tougher than ever. To lure customers, they are offering bigger, better and sometimes bizarre prizes that have nothing to do with the product they sell.

Prize-based promotions have long been a favoured ploy in Britain - Cadbury Schweppes is embroiled in controversy for providing free sports equipment to schools on condition that their pupils eat enough chocolate - but never has the tactic swept the US with such force.

"Times are bad and consumers are managing their family budgets in tenacious ways," says George Rosenbaum, president of a Chicagobased-retail consultancy. "Companies are paying a ransom for the customer through prizes and other promotional giveaways."

Many major US retailers are offering headline-grabbing prizes in an attempt to attract attention and separate them from the pack. Pepsi is fizzing with an array of promotions including the over-the-top-1 billion contest in which Pepsi drinkers initially compete for $1 million. The winner will then have the chance to carry on and win $1 billion. Pepsi is not as mad as it seems. It says the chances of $1 billion being won are one in 1000. Dawn Hudson, Pepsi's North America president, says: "We have an insurance policy in place for that possibility. Let me assure you, I won't be funding it out of my profit-and-loss statement."

But someone just might win $1 billion. Already, adverts showing a hip teen sipping soda with a group of swells at an exclusive club for the extremely rich are being aired. The contest represents a costly attempt to win market share from rival Coke. It is also launching new beverages to bring some punch back to flat soft-drink sales.

Pepsi's market share fell 0.2% in 2002, according to Beverage Digest newsletter. Analysts say Pepsi is taking a calculated risk that the very public promotion will win it enough sales, over a long enough time period, to pay for itself.

"Promos are like diets," says one market-watcher. "They work over the short run but long-term success is tough."

Pepsi's eye-popping dollar amount is generating a large amount of media attention while other companies are counting on unique prizes to lure customers. McDonald's patrons can buy Super Size fries and instantly win house-cleaning services, dates with superstar athletes or cruises in the Caribbean.

Paramount Pictures and Nickelodeon are pushing the summer movie Rugrats Go Wild with a $100 million campaign that features scratch-and-sniff cards that smell like sweaty feet. Burger King is giving away 20 million Odorama cards in its Kids' Meals to coincide with the film's June release. Stinky feet are a theme of the movie, which is also offering a holiday in Puerto Rica through a tie-in with cerealmaker Quaker Oats.

Parents may prefer the sweepstakes offered by Baby Superstar, a company that makes infant products. Its grand prize is a year's worth of nanny services.

In Florida, Procter & Gamble's Pringle potato snacks last week staged a private concert at the high school of a teenager who won a draw through buying a P&G sandwich and carton of Pringles for lunch.

Hip-hop group Nappy Roots performed songs from their platinum-selling CD Watermelon, Chicken & Gritz. Which says it all: draw prize Nappy Roots singing at a school about summer soul food - in a season gone mad.