Market Research’s “Classic” Miss

Posted by on Jan 26, 2017 in Uncategorized | No Comments

Throughout my market research career, I’ve conducted many qualitative and quantitative studies including a fair share of hybrids. To the benefit of both my clients and me, my studies have been successful and have provided my clients with reliable data and analysis. But not all market research studies or research professionals have been as fortunate as I have been. It’s not uncommon to encounter snags or bumps in a project, but we are creative creatures and so we usually overcome the challenges; often without our client ever being aware of the adversity.

Market researchers generate and track a large amount of data, but the hits and misses that our industry has created over time is an area that’s not well covered. In last week’s column, I mentioned Mark Cuban’s comment that market research is never right, and the truth is that there have been some significant misses in our past. One that comes to mind is the story of the Coca-Cola Company launching a reformulated version of well-known Coke branded as New Coke in 1985.

For those who may not recall this seismic tremor in the consumer product sector, the Coca-Cola Company ran a battery of market research studies comparing its 100 year-old iconic product with its chief competitor Pepsi Cola (92 years in the marketplace). Coca-Cola’s interest in studying the comparison between the two products was prompted by the fact that Coke had been losing market share for more than a decade while Pepsi was increasing.

Coke’s management was very concerned that their leading product in the United States for their leading consumer market was atrophying. And so were Coke’s bottling partners spread across the land. They figured that market research would give them the answers and a solution to their dilemma. And so Coke’s market research included a blind one-to-one sampling that presented signifying results that consumers actually preferred the taste of Pepsi over Coke. That must have been a huge surprise. And so believing that the data was accurate, Coca-Cola decided to change their ingredients to be more similar in taste to Pepsi. To launch its new product, Coke turned to Bill Cosby * who at the time was flying high in The Bill Cosby Show for his portrayal of Dr. Cliff Huxtable. Cosby had been a very successful spokesperson for Jell-O products ten years prior and so Coke was hoping some of his magic would rub off on their consumers. However, the consumer public wasn’t interested in the new product. Even Bill couldn’t sell it. The result was immediately devastating and New Coke was destined to be a loser. Within several months Coca-Cola had relaunched the original formula as Classic Coke, which is still on market shelves today. There’s a really well spun account of the New Coke story at this Coca-Cola link positioning the benefits of this error in market research.

So how could a company as large, experienced, well branded and even revered among consumers make such a clear and disruptive mistake? I think the answer may be quite simple. They neglected to take their consumer’s loyalties into account. Yes, when compared side to side, respondents may have a preference for Pepsi over Coke, but if they have been purchasing and consuming Coke for years, their loyalty to Coke would naturally trump Pepsi every time. Think about how the two major cola companies have battled for decades to get their products into schools. They buy athletic equipment and install sophisticated scoreboards in gyms and football fields so that their vending machines are visible inside the schools. The goal is to capture the brand loyalty of their consumers as early as they can. Once a Coke drinker, always a Coke drinker. The same goes for the exclusive rights that these two beverage giants initiated to capture consumers at fast food chains and restaurants. The recurring Olympia Restaurant lunch counter sketches from the early years of Saturday Night Live exemplify this best. John Belushi’s character working the counter yells out, “Cheeseburger, cheeseburger, cheeseburger, No Coke. Pepsi!”

I wish I could have been a fly on the wall for one of those focus groups and sensory studies. I would’ve seen how the researchers missed the mark by running with raw data and how they neglected to think through what the real underlying motivations of consumers were at that time. It’s a classic example of how market research is just as much an art as it is a science. And Classic Coke reaffirms this.

*References to Bill Cosby in this column are included solely as historical references, to support the content expressed and to reference the time he was a popular celebrity spokesperson. INGATHER Research & Sensory in no way wishes to imply or express support in any manner or way his personal life nor his current legal situation.

By Bob Chapin, CEO

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