Classic Marketing Mistake

It is nearly 25 years since Coca Cola decided to give the world New Coke and a text book example of how not to do marketing by ignoring loyal customers.

Background

In 1985 Coca Cola unveiled New Coke on the world. This was a new sweeter recipe that was to replace the “secret formula” that had been around for a mere 99 years.The words “the best just got better” were uttered during the unveiling. It was the start of something special for Coca Cola, unfortunately it was not a positive experience to begin with….

The reaction of consumers was a lesson in how companies meddle with their brands at their peril. Despite all the market research that had been undertaken the company had failed to engage with their customers directly. Research indicated that the sweeter formula was preferred to the existing flavour.

The company failed to grasp that brands should always be viewed through the eyes of customers. Companies may own their brands but they need permission to change or tinker with them.

Customer Reaction

Within 78 days after a barrage of letters and phone calls the original formula returned branded as Coke Classic.

Customers had reacted with such intensity of feeling that it had shocked Coca Cola. The brand was and is such an integral part of American culture that its removal caused almost panic amongst consumers.What took nearly a hundred years to build was almost lost in the blink of an eye.The closet example of such brand destruction in UK terms has to be the famous Ratner speech.Overnight a respected chain of jewelers had its reputation and stock value reduced to next to nothing.

Outcome and Lessons

Coke had panicked at the the thought of Pepsi stealing a march on them. Pepsi was running the taste challenge commercials which showed that consumers preferred their sweeter product. New Coke was the response that went so wrong.

Disaster turned to triumph as sales of the Coke Classic went through the roof. Customer loyalty was reinforced and the brand remains to this day one of the most valuable  in the world.

The lessons of this are clear. Brands generate a strong emotional bond that is a vital strand in success.If any part of the complex interdependency of emotions, value and price is changed then the brand ceases to be the brand.

Consumers expect the relationship to be such that any changes are run past them first…All companies must at all times make sure that they seek regular feedback from the people buying their product or service.Customers react to lack of communication by spending their money with someone who will listen to their views.That someone will always be one of your competitors…