In Blender Render engine you may achieve it using the material nodes.
Being in Edit Mode unwrap your mesh (press U-->Project From View).
Create some materials- basic Orange and Pink materials (the ones you want to blend), Transition (this material'll be used for blending the ones above using material nodes) and Gradient (this'll be used to create a gradient texture for blending materials).
With Gradient material selected go to the Texture header, set the texture type to Blend, check the Ramp checkbox in Colors panel, then press the Linear and Vertical buttons in Blend panel. Also set the Mapping coordinates to UV. Your gradient texture is now ready.
Now select the Transition material and press Use Shader Nodes button.
Go to Node Editor and set up nodes as pictured below. First add two Material nodes- the Orange one and Pink one (Shift+A-->Input-->Material) and mix it using MixRGB node (Shift+A-->Color-->MixRGB). Use the Texture node (previously created Gradient texture) as a factor for blending. Plug in the UV output of the Geometry node (Shift+A-->Input-->Geometry) to the Vector input of the Texture node as shown below.
Now you may manipulate the transition between materials (go to the Texture header of the Gradient material and play with the sliders in Colors panel for different results).