Brands fail when they stop listening and start telling.
One such Super Brand misjudged, grew complacent and flopped at a change - Coca cola and the new coke.
As per one article I recently read, Coca Cola is the largest Brand.
Reason: They sell nearly one billion Coca Cola drinks every single day.
Wow! One billion drinks a day .Think of it, not at all an easy job. To keep continuing on this pace one needs to continuously re-innovate themselves in the mean time making sure that their change appeals to one billion or more potential buyers.
Amidst such huge expectations, companies tend to stumble and so did Coca cola.
On 23 April 1985, Coca-cola, launched a sweeter version of their soft drink, christened 'New Coke', withdrawing its 99 year old traditional formula. Public reaction to the change varied from poor to pathetic. Subsequently, The Company was forced to bring back their original formula and this has lead to significant gain and ever growing upward surge in sales. By the end of the year, Coke Classic was substantially outselling both New Coke and Pepsi, putting the company back into the number-one position it has enjoyed ever since. Six months after the rollout of the older formula, Coke's sales had increased at more than twice the rate of Pepsi's.
Lessons learnt:
Brand Loyalty and its importance
I quote money.cnn here
Brand Loyalty -- Something which makes consumers buy this brand over and over again. This id defintely an elusive quality and begins with customer's preference for a product based on objective reasons like the drink is sweeter or the paper towel is more absorbent so on and so forth. Read more on this:
http://money.cnn.com/magazines/fortune/fortune_archive/1985/08/05/66245/index.htm
Challenges in Market research
Market researchers had expected the company to conduct focus group tests of the new product and then use individual interviews to verify the results of such focus groups. Also the company could have done its research in a much better wary. Generally one must be sure shot of success before bringing about the change.
Emotional attachment to brands
Marketers realize that emotions are important. But they’re not quite sure why—or what to do about it. Quoting quote William J. McEwen form the Gallup organization, author of “Getting Emotional About Brands”- “It should come as no surprise that humans are emotional creatures. Even a casual glimpse into the nation’s driveways, liquor cabinets, and cosmetics shelves reveals that consumers make buying decisions based in part on their feelings and emotions about particular brands”.
I conclude here leaving few open ended arguments as to what would have been the right thing which could have made a difference and saved the day for coca-cola(apart from re-instating its old brand) . Decide for yourself.
Hoping to catch you soon with another scenario with good learnings.
