What to learn from the Coke fiasco

I was just thinking about why Coke made the decisions they made when they took the old Coke off the market and instead created New Coke, and it turned out to be a disaster.

I googled Coke and found out some interesting information that I feel pertains to all of us that are in business.

In the early 1980s, Coke was the dominant soft drink in the world.  Then along came Pepsi with their Pepsi Challenge, in which they had groups of individuals sipping a sample of Coke and a sample of Pepsi. When asked to choose between Coke and Pepsi, the majority chose Pepsi.

Coke now did their own blind study and found the same thing. When it came to a sipping challenge, the majority chose Pepsi.  

So what did Coke do? They took their bestseller off the market and created New Coke. What a disaster. You probably remember it.   

They made New Coke sweeter because Pepsi was sweeter.

In the ensuing error of judgment, they listened to their customers and reintroduced the old Coke back as Classic Coke.  

I found out that the Pepsi challenge findings – where the majority of people choose Pepsi over Coke – was only a sip test. Tasters don’t drink the entire can. They just take a sip from each of the brands or in the Pepsi and Coke example a sip from each, then make their choice.

When Coke did the test differently, where they allowed the taster to finish the can, they found that the majority chose Coke over Pepsi.

Pepsi happened to be a drink that shines in a sip test. Does this mean that Pepsi misled people?

I don’t think so. It just means that people have two different reactions to colas, depending on the test.

Think about this in your business.

Also, the color of a product makes a big difference too.

I remember reading a while ago, that margarine was originally white in color. When they changed it to yellow, people accepted it more because it looked like butter.

Just a few examples for you to consider.


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