2011 sees The Value Engineers celebrate its 25th anniversary. As an homage to the branding world which has been our life for the last quarter of a century, we will be posting a blog on the 25th of every month, discussing everything ’25′.
To start our year of twenty fives is a story from 25 years ago but one for which the moral is as central to branding today as it was then. It’s a story of when 250,000 people were wrong and involves the world’s most valuable brand; Coca-Cola.
In the early 1980s Coca Cola (which according to some surveys is the second most recognised word in the world after ‘ok’), was in trouble. It faced the frightening prospect of losing its number one spot in the American soft drink market.
Pepsi’s aggressive ‘Taste Challenge’ campaign was winning market share and Coke had to rely increasingly on its dominance in restricted markets such as vending machines and fast food outlets to maintain its market leader position. Adding to the problem was the success of the brand’s stable mate, Diet Coke. As sales of Diet Coke increased and people become converted to the new brand, the pool of available sugar cola drinkers was getting smaller.
The team in Atlanta embarked on a mission to beat off the Pepsi challenge. Blind taste tests, whereby people are given samples to drink and rate but are not told what brand they are, were conducted. They showed – horror of horrors! – that people preferred the taste of Pepsi.
So the team decided to develop a new Coke. The new formulation they settled on was based on Diet Coke but instead of artificial sweeteners, high fructose corn syrup was added to create a drink that was sweeter and smoother than original Coke and in fact more like Pepsi.
It is reputed that Coke then undertook the largest ever programme of taste panel research, interviewing over ¼ million people. A clear and significant majority of these preferred the taste of New Coke.
So what should the executives in Atlanta do, launch New Coke alongside ‘Old’ Coke or replace it outright? Worried that if they retained the original alongside the new it might split sales and give the leadership of the sector to Pepsi they chose to replace the old with the new. The need to maintain secrecy, however, meant that this decision had been taken without ever asking the consumers whether they wanted a new, improved Coke.
On April 23 1985 New Coke was launched and production of the original formulation was halted later that week. And everyone in Atlanta lived happily ever after. Well no, not exactly….
America was outraged. Rather than welcoming the better tasting New Coke, millions of Americans decided they hated it, even before they tasted it. Even amongst those who did taste it, the vast majority were convinced they still preferred the original! (So much for the 250,000 people with whom it had been researched!)
For so many Americans, Coke was much more than just a product: it was an institution, a way of life. It was something they had grown up with, something with which they felt they had a relationship. It was their brand. They reacted with horror to this change. They protested long and loud.
In the end senior executives were forced to hold a press conference to announce the return of the original – now called Classic Coke.
Perhaps luckily for Coke, the real surprise was that after the outrage came forgiveness and then celebration and while Coke did lose leadership to Pepsi in 1985, Classic Coke, the re-launched original regained its leadership in 1986 and kept growing. New Coke faded away.
And the moral of the story? Today, as well as back in 1986, a brand is much more than a product; it exists in the mind as much as it does on the ‘shelf’.