The real thing
By Linda Forrest
Last night, I happened upon a special on CNBC about Coca-Cola called The Real Story Behind the Real Thing. It was a fascinating look at the soft-drink company whose grasp and usage of marketing is legendary. Legendary also is the grave misstep it made in the 1980s when it launched New Coke.
Pepsi came on the scene and was holding blind taste tests called the Pepsi Challenge. When asked, the majority of participants noted that they liked the taste of Pepsi better than Coke. This caused Coca-Cola to conduct its own tests, the results of which mirrored the Pepsi Challenge. Despite the fact that the recipe for Coke hadn’t changed considerably in the previous hundred years (the initial recipe contained cocaine, but just for the first few years on the market), the powers that be at the company panicked and ordered the recipe to change so that the flavour more closely mirrored that of Pepsi. Big mistake.
New Coke failed spectacularly and within months, the original Coke was brought back to market, branded as Coca-Cola Classic. Funnily enough, Coke gained significant market share when all was said and done, though the company’s mistake had the potential to sink the entire operation.
When one executive was asked whether it was all a stunt, whether Coke had planned it, he said that they weren’t that smart, and they weren’t that dumb.
While it all worked out in the company’s favour in the end, it could have easily gone the other way. Many lessons can be learned from this and I’m sure many an MBA student has written their thesis on the New Coke experiment.
Here, I’ll try to distill a few lessons that we as marketers can take from it:
1. Don’t panic. What Coke did was react hastily to competition that was offering a similar product at a lower price and that was using an innovative marketing message. Rather than assess its own branding and marketing issues, it immediately destroyed whatever brand loyalty existed for its products. Consumer products such as soft drinks have a more personal meaning than what the companies often give them credit for. Know your product, know your market, know your customers and act based on what’s best for those three, rather than solely based on what your competitors are doing.
2. Be willing to admit mistakes and correct course. The fact that Coke recognized the error of its ways and quickly corrected itself saved the company and the brand. If you make a misstep, it just proves that a) you’re human and b) you’ve got work to do.
3. Competition can drive innovation. Cola is cola, when it comes down to it. Pepsi and Coke don’t actually compete so much on taste or price as they do on marketing. The curvy Coca-Cola bottle is so iconic and distinct that in 1993, when the company changed its plastic bottles to mirror the shape of its glass bottles, sales were boosted by more than 40%.
4. Be authentic. When Coke tried to be something it wasn’t, as is so often the case, it didn’t work. Know who your company is, what your brand is and stick to your knitting. Especially in challenging economic times, companies tend to deviate from their branding. So often it seems as though diversification is the solution and so often the offering becomes too watered down or too off message and fails. If you don’t know who you are and what you have to offer the market, neither will your customers or prospects.
