M&M’s were originally asked to be included in the movie E.T: The Extra Terrestrial. After M&M’s declined the offer, Reese’s Pieces accepted the offer to be in the movie instead. 

Once the film was released, it surpassed Star Wars as the highest grossing film of all time. And this resulted in a massive increase in sales for Reese’s Pieces.

So why did M&M’s decline the offer and Reese’s Pieces accept the offer?

Well, think of the context.

M&M’s (Mars) were the market leaders. And most market leaders are scared. Scared of losing their position as market leaders.

And imagine being M&M’s (Mars) and hearing an opportunity to get their product featured on a film about an alien holding your product.

They probably thought that it would be more harmful. Because again, think about the content. 3 years before ET came out, a science-fiction horror film called Alien was released. 

Plus ET was being directed by Steven Spielberg and he did the thriller/horror movie Jaws in 1975. Also back in the 80’s product placement was a new thing.

Now imagine being an executive at M&M’s (Mars).

You would be probably right to think that this could have a negative effect on the brand. Which could cause outrage, which could cause a loss in sales and market share.

M&M’s (Mars) thought they had more to lose rather than to gain.

Whereas Reese’s Pieces didn’t have that much to lose so they accepted. Reese’s Piece was a challenger brand. For them to gain sales and share of the market leader they have to be daring and different.

This is what most brands/businesses don’t do, challenge. They don’t challenge the market leader or others in the market by trying to take their part of the share.