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THE PILLARS OF SUCCESSFUL BRANDING: Pillar 8 – Why New Coke Failed: A Classic Research Mistake

As I was thinking about the importance of asking the right questions in brand research, a post on the historical New Coke marketing fiasco appeared in my email. You’ve probably heard the story.

It’s a classic case of how to disregard the importance of brand in testing.

April 23, 1985, Coca-Cola announced that after serious testing of its current product it was changing its formula. They did some critical testing among consumers. 190,000 unbranded taste tests were conducted vs. both arch enemy Pepsi and the gold standard Coke recipe that had been around since the 1800’s. New Coke was sweeter, responding to changing American tastes. Because of the overwhelming positive response to the new taste of New Coke, the secret brew for the classic cola was to be locked away in a vault, forever.

The rest is History.

When New Coke was announced, fans were skeptical and concerned. They loved their Coke and feared being disappointed. Consumers told Time Magazine they worried the company would “ruin a good thing.”

Trial of the new product led to Consumer outrage. The Coca Cola company was fielding thousands of calls a day from disgruntled fans of Original Coke. “I don’t think I’d be more upset if you were to burn the flag in our front yard,” one Coke fan wrote. A group called Old Cola Drinkers of America staged a protest where they poured bottles of New Coke into the sewer.

New Coke failed miserably. Stocks plummeted while Pepsi rejoiced as its sales rose.

Coca Cola was forced to announce the return of the original formula just 79 days after the intro of New Coke. It was such big news that TV networks interrupted their normal programming to issue the special report. Fans returned to their beloved Coca Cola with relief and sales soared once again.

What critical mistake did Coca Cola make?

Classic Coke made a classic research mistake. It failed to factor in the value of Brand. The taste tests were conducted unidentified. This is an instance where Shakespeare was wrong. “What’s in a name?” Everything.

A number of years ago, I did research for a new alcohol free mouthwash. One set of consumers were Scope loyalists. They were given two samples of mouthwash to try blind – all they knew was that these were two green mouthwashes and nothing else. In fact, one was Scope and the other was the new product. The order of tasting was varied from person to person to counter-balance position bias – some people tend to prefer which ever thing they experience first, while others vote for the second. The Scope users in the study overwhelmingly preferred the new offering and several actually spit out the unidentified Scope sample, in distaste.

What’s so interesting about this, is that later in the focus groups, these same people were asked to try the same two products, but this time with brand names on them. To a person, all preferred the branded Scope sample. One person asserted, “Now that’s my Scope!” as the other group members enthusiastically nodded in agreement. Again, these were the same consumers who found the unbranded Scope offensive and repugnant.

Brand has a serious impact on expectations, including something so basic as how things taste.

That’s why when doing research on your product or offering it’s so important to learn the value of your name. How might reactions to what you’re selling be the same or different depending on what you call it? What expectations are created? How is the name supporting your product or service? How will it compare to competition?

Just for fun, when you’re finished reading this article, look up Personal Branding Programs.

They are all generic!!! How are they differentiating themselves? They’re not.

Back to you. How are you going to research your Brand to become the Coca Cola or Scope of your industry?

Ask people in your target audience – not your family and friends.

Hide the fact that you are the brand. Ask people to tell you what they expect from several brands including yours. Based on the name what might they expect? What would the features and benefits be? How might it feel to use that brand? Ask for 3 – 5 brands. Then ask, what the ideal would be like? And finally, ask which of the brands you mentioned would be closest to the ideal? How so? What would it take, if anything for your brand to be closer to the ideal?

Have questions about your brand? Contact me here:

[201] 614-4439

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