7 Keys to Marketing Genius: Learn From Coca Cola
The following is an excerpt from The 7 Keys to Marketing Genius by Michael Daehn
In the 80s Coca Cola was winning the cola wars. They were dominating Pepsi in sales and things looked good. The new CEO of Coke wanted to go further. What bothered him was that Pepsi consistently beat Coke in blind taste tests. The CEO reasoned that this was because Pepsi had a better quality product. I think he was right. If tests based on what people prefer based on how the cola tastes is a measure of quality, Pepsi was better. The CEO decided to do something to improve the quality of his product. His answer was New Coke, which was a copy of the sweeter, less carbonated taste of Pepsi.
The result was a tremendous backlash from the Coke faithful. Consumers were disgusted with Coke for changing the recipe they had loved for years. Cases of old Coke were being auctioned like fine vintage wine. The CEO wisely gave in and brought back the old formula as Classic Coke. New Coke seems to have disappeared since then, and all that is available is Classic Coke, now called just Coke again. This illustrates the point that New Coke was better in physical quality due to taste tests than Classic Coke, but Classic Coke was perceived as being the original and therefore of higher quality. Quality is in the mind of the consumer.