The Customer Is Always Right? … Coke Learns — Not Always.

What’s the most well known brand name in America? Coke!! Hands down. In fact Coke is arguably the best-known brand name in the world. But what you may not know is Coke made two major marketing mistakes that could have put them out of business. And both had to do with giving the customer what the customers said they wanted.

Mistake One: New Coke

Back in 1985, the Coca Cola Company bowed to public pressure from loyal customers and announced that it would continue selling “Classic Coke.” How did this debacle happen? At the time Coke was loosing market share to Pepsi in supermarkets. So they decided to change the Coke formula and make it a little sweeter to compete with Pepsi. Coke had changed their formula many times over the years but this was the first and probably the last time that they announced it to the public.

What was the result of this announced formula change? Eighty thousand calls a day to Coke headquarters simply saying, “Don’t change MY COKE!!” So the Coke executives were scratching their heads about their decision but they still had the Pepsi market share problem. Their solution; taste tests. Let’s see if people really do like the new formula.

The Coke Test

Two hundred and fifty thousand taste tests later New Coke beats both Pepsi and Old Coke. So New Coke is rolled out to super market shelves and sits there. No one want’s anything to do with it. Did Coke listen to their customers? Yes they did. Did it cost them dearly? Yes it did.

Mistake Two: The Coke Bottle

In addition to being the best known brand name in the world Coke’s glass bottle was the best known package design in the world. Between the 1930’s to the 1960’s coke was sold in a 6 oz. glass bottle for 5¢ from vending machines across the country. Coke had close to 6 million of these pint sized packaging marvels and enjoyed a very strong market share.

The Pepsi Challenge

Pepsi on the other hand was losing market share to Coke so they attacked the very essence of Coke’s strength… their bottle. Pepsi filled their vending machines with 12 oz. Pepsi’s that also sold for 5¢. A competitor selling twice as much product for the same price cost Coke a lot of money in retooling and replacing 6 million smaller bottles with new 12 oz. bottles.  Coke once more gave the people what Coke thought they wanted but Pepsi obviously showed them the light.

Some Final Thoughts

Are we drinking New Coke today? Who knows? What we do know is that customers don’t always know what they want. Even though Coke proved that people liked New Coke better, loyal consumers were unable to accept that evidence, and still bought a product they didn’t like as well.

This is why advertising and marketing is so fascinating and challenging. People can’t be pigeonholed or classified. We are as individual as our fingerprints. And as the executives at Coke discovered, the most wasteful thing you can do in business is to try to change a customers mind. Only they can do that. So the next time you walk past a better product to buy your favorite take a long sip of Coke because now you know why you’re doing that.