If you’re in business or marketing you know all about the Pepsi Challenge which led to New Coke.
If you need a quick refresher, here it is.
In 1975, Pepsi launched a TV ad campaign that showed people drinking two colas without any branding on them. The ad would then reveal that the participants doing the blind taste test preferred the taste of Pepsi to Coca-Cola.
This drove Coke fucking mad.
Coke then created, tested, and launched New Coke.
New Coke was put through a litany of tests and focus groups. The result? Coke had made a beverage that people preferred to Pepsi and to Coca-Cola Classic.
Coke then went ahead and launched New Coke and waited for the money to start rolling in. And they waited… and waited.
New Coke was a failure, people wanted Coca-Cola Classic back, so the management at Coke quickly pulled New Coke and went right back to classic.
Sales soared. And Pepsi was returned to second place in the Cola Wars.
But wait… what the fuck really happened.
I mean Coke spent a boatload of money engineering and testing a product that tasted better than both Coca-Cola Classic and Pepsi. So why did it fail when it hit the market?
In the focus groups, Coke had called New Coke by the code name Kansas.
They asked participants if they would purchase and drink Kansas if it were called Coke, many respondents said that they would, however, a very low percentage of respondents said that they would stop drinking Coke altogether and replace it with Kansas.
Re-read the paragraph above. I read reports multiple times and missed this key finding for a while.
The focus groups were indirectly telling the marketers that they expected Kansas to be available as an alternative to Coca-Cola Classic, they expected it to be a sister product, not a replacement.
The test was also flawed because it involved participants just taking a sip, which, when selling 2-litre bottles, is a shit way to see if you like something. So participants enjoyed a sip more but found the beverage too sweet in larger quantities.
The moral of the story is simple. Research is amazing, but, if you misinterpret the results of research, you will move with boldness and certainty in precisely the wrong direction.
Common sense is underrated in a world of big data and AI.
Thanks for reading.