The customer is always right!

20 OCTOBER 2010 ONE COMMENT

It’s April 23, 1985. The Coca Cola Company has just
announced to the press that there’s going to be a major announcement concerning a change in the
products formulation. They’ve built up the hype and the expectations to a nadir, and they’ve even got
their upstart rivals, Pepsi, on their toes. The company has been working on “Project Kansas” with the
utmost secrecy, to test and perfect the flavour for New Coke. And so, with much fanfare and gusto, the
new flavour is finally introduced to the world. Curious consumers all come to see what the new product
is. But few of them really buy it.

In fact, far from not buying it, consumers went on a rampage, lambasting Coca Cola for taking away their
brand. Angry phone calls and letters became the order of the day, and prescient drinkers started
hoarding the old cans and selling them at a premium, with prices going as high as $30 a can. Desperate
fans even went to the length of importing it from foreign markets, where the new formulation had not
been introduced. Gay Mullins took the initiative of forming the Old Cola Drinkers of America,  in order to
lobby and get Coca Cola to either re-introduce the old formula, or sell it to someone else.

Just where did Coca Cola go wrong? New Coke is now the stuff of legend, in marketing folklore, of how a
company can go wrong when introducing a new product. It was developed after two years of extensive
taste tests, in which it trumped both Pepsi as well as what would go on to be rechristened Classic Coke.
However, according to some, Coca Cola forgot to ask consumers the most important question of all – Do
they want a new product? As the saying goes, if it aint broke, don’t fix it.

Its not the only Cola giant to trip up on this issue either. Pepsi got their own New Coke when they tried
to introduce ‘Crystal Pepsi’ in 1992. Just like New Coke, this product had also done well in the market
research which was conducted. It was, as the name suggests, a clear liquid, which would serve to create
a more “pure” cola, which the Pepsi executives felt was what the market wanted. And so they went
ahead with it full blast, with the zippy tunes of Van Halen’s “Right Now” backing them on the airwaves.
But in spite of the initial spike in sales, Crystal Pepsi too turned into a failure.
In fact, this oversight is not restricted to the Cola industry alone. One of Ford’s most infamous cars, the
Edsel, is a shining example of marketers giving consumers a product or a change they don’t need. They
designed a very covert campaign for the car, with dealers being given specific instructions not to lift the
covers before the release date, just to build that air of mystery. As curious as the public was, though,
they never bought it. The Edsel wasn’t a bad car; it had a number of innovations, such as a “rolling
dome” speedometer and a “Teletouch” transmission shifting system. However, the marketers missed
out on one important fact – they were offering their most expensive model in the middle of a recession,
at a time when their competitors were offering cheaper versions. Not the best of choices to make.

However, as constrained as these marketers may have been with respect to getting the public’s opinion,
their successors enjoy easier and more open means of communication with the customer. And they’re
putting it to good use. Just recently, Gap had been contemplating a change in their logo (a significant
step for any brand). However, before actually taking the plunge towards their “more contemporary,
modern expression”, they decided to get the opinions of their consumers. And the torrent of negative
reviews they received from Facebook and Twitter users helped make this one an easy choice for them.
So that’s one marketing disaster averted!