Joan turns to Peggy, hoping to reel him in for SCDP-CDC (more on that mouthful of a name later). She is soon "kicked off the diving board" in her words by the perpetually awful Pete, who wants to meet with the potential client without Joan.
In an act of subterfuge, Joan sets up another breakfast with her, the Avon exec and Peggy, and doesn't tell Pete. When Pete finds out, he is disgusted and goes straight to the partners. Peggy, too, chastises Joan for disregarding company policy, but she ultimately saves Joan from the Pete and Ted interrogation by faking a call from Avon. The partners eventually brush off Joan's rule-breaking – all business is good business – and Pete deals with being beat by a girl by smoking a joint.
The episode title, "A Tale of Two Cities," refers to New York and Los Angeles (the residents of each look scornfully down on one another). But it might as well be called "A Tale of Two Pitch Meetings," with the contrast between the Roger/Don Carnation pitch and the Joan/Peggy Avon meeting. Roger and Joan were lovers once; Don and Peggy, former work spouses of sorts.
In both, the accounts man (Roger, Joan) turns to creative (Don, Peggy) with a plea ("Don?" "Peggy?") once things start to slag. The women, bubbling with enthusiasm, charm their potential client. Don and Roger, unprepared, fall flat with Carnation. (To be fair, Don's efforts to study up were thwarted by Roger.) Peggy and Joan discuss with the Avon exec bringing makeup trials to the offices of working women – they can see the future. Roger and Don discuss the death of the Democratic Party with the Carnation rep – the men cannot.
That the women are hungrier for success is hinted elsewhere in the episode. "I thought it was a date but it turned out to be better," Joan tells Peggy of her initial meeting with the Avon exec; her desire to move up professionally is irrepressible.
Pete, meanwhile, scoffs at a new title Ted gives him: head of new business. He should consider being more enthusiastic about his place at the firm.
"If you don't like it, maybe it's time to get out of the business," Don warns Pete when he objects to both Joan's usurp of a client and the decision by the firm to change its name to Sterling, Cooper and Partners (a blessing to the agency's secretaries and "Mad Men" recappers alike).
If Pete wants to stay in the pool, he had better learn to swim.