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The Midweek Motivator – Coca Cola’s Price of Panic

The bromide “what’s past is prologue” never fades. Over lost years, vanished time, the pratfalls by leaders of all shapes and sizes can’t be minimized. This extends to marketing and media. 2020 has been a laboratory for some who made desperate leaps often out of whim and caprice, as opposed to studying established trends and empirical facts that usually lead to sound decisions.

Every day All Access and other industry voices talk of formats tossed around like beach balls at Montauk. Routinely the trades sound the clarion call: “Ricco Baggadonutz Out at K-BYE.” It doesn’t change; only the stakes get higher, the volatility greater, based on margins of time and cash. Rarely do we hear discussions about the unchanging principles of “Marketing Warfare” (a model that may have become an anachronism). What should we be learning from personnel turbulence as we soon turn the corner toward 2021? In fairness some newer generation managers have never been exposed to much strategic thinking; the kind that can still be experienced through Perceptual Studies from sustaining credible media research firms like Edison, Paragon, or Coleman. Are they somewhat expensive? Sure, but what’s the larger price of NOT knowing?

What if we could time-travel to the “Pepsi Challenge,” one of the all-time train wrecks in marketing history? That incredible 80’s campaign was a tactical success but a strategic disaster. Both Coke and Pepsi fired at point-blank range! It nearly cost Coke the fight. Incalculable sums were spent; it was the Cola equivalent of two Tank Commanders dueling at point-blank range!

Trailing Coke by a large margin Pepsi decided to engage what ADG calls the “Drag Race” strategy which meant asking people to take their “Pepsi Taste Test” scoring responses on camera! The tests were “blind” between two unnamed Colas. Tasters preferred Pepsi 3 to 2 over Coke. Pepsi carpet-bombed with TV GRP’s. But wait! Since Pepsi is about 9% sweeter than Coke, when only sipping both samples, testers preferred the sweeter “first-taste”. It also supported the “Pepsi Generation” strategy (since nothing is too sweet for a 16 year old). One could argue Pepsi was already defying good marketing dogma since they were comingling two campaigns. But, Coca Cola to Pepsi’s rescue! Coke panicked and did the one unforgiveable thing a leader should never do; they blinked! So instead of relying on credible research guidance, Coke shocked its entire consumer base by changing the formula for America’s favorite soft drink with hope of matching Pepsi’s sweetness with “New Coke”! The “Real Thing” was no longer the real thing; Coke unwittingly agreed to the need for Pepsi! The loss of the Coke bottle was bad enough; then their formula disappeared!

It only took Coca Cola 90 days to realize they had pushed the panic button based on faulty analysis, NOT a competitor’s superior brand! All the analysts at Coke simply misread their research, falsely believing theirs’ was a “product problem. ”After 90 days the beleaguered marketing team in Atlanta surrendered their ill-fated New Coke campaign and re-pioneered Classic Coke to the delight of millions, proving perception is stronger than reality. Perception affects tastes just as it does most human judgments.
Usually there are few “facts” in a consumer’s mind, only perception and predisposition. If you forget this axiom you’re committing a mortal marketing sin; one that can include format strategy.

35 years ago an international icon put its brand leadership at stake and almost lost its position. In recognizing its bouleversement, Coke suddenly swam in the tidal wave of their brand loyals’ forgiveness. Hearing from countless core fans they admitted making a mistake; they heard their partisans and responded to their protests just in time! But beware: if you count on a miracle rescue following a strategic mistake slinging formats or personalities, you may not be forgiven.