Brand Failures_ The Truth About the 100 Biggest Branding Mistakes of All Time - Matt Haig [7]
Indeed, in the case of New Coke, the first failure we’ll cover, the product was actually an enhancement of the formula it replaced. The reason it bombed was down to branding alone. Coca-Cola had forgotten what its core brand was meant to stand for. It naively thought that taste was the only factor consumers cared about. It was wrong.
Of course Coca-Cola’s marketing whizzes don’t get everything wrong. You don’t get to be the fifth most valuable brand in the world (according to BrandZ’s 2010 study) easily. But even great brands can have an off day!
In fact, all the examples in this chapter highlight fundamental marketing errors which many other brands have replicated since. These errors include such basic mistakes as setting the wrong price, choosing the wrong name, and getting too paranoid about the competition.
However, these failures also illustrate the general unpredictability of all marketing practices. No matter how strong a brand becomes, the market always remains elusive. The best any brand manager can hope for is to look out for any likely pitfalls which could catch them out. It is in the interest of identifying these pitfalls, rather than for the sake of schadenfreude, that the following classic failures are explored in some depth.
1 New Coke
Think of a brand success story, and you may well think of Coca-Cola. Indeed, with nearly 1 billion Coca-Cola drinks sold every single day, it is the world’s most recognized brand.
Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace it with a formula it would market as New Coke. To understand why this potentially disastrous decision was made, it is necessary to appreciate what was happening in the soft drinks marketplace. In particular, we must take a closer look at the growing competition between Coca-Cola and Pepsi-Cola in the years and even decades prior to the launch of New Coke.
The relationship between the arch-rivals had not been a healthy one. Although marketing experts have believed for a long time that the competition between the two companies had made consumers more cola-conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola company had even fought Pepsi-Cola in a legal battle over the use of the word ‘cola’ in its name, and lost.
Outside the courts though, Coca-Cola had always been ahead. Shortly after World War II, Time magazine was already celebrating Coke’s ‘peaceful near-conquest of the world.’ In the late 1950s, Coke outsold Pepsi by a ratio of more than five to one. However, during the next decade Pepsi repositioned itself as a youth brand.
This strategy was a risky one as it meant sacrificing its older customers to Coca-Cola, but ultimately it proved successful. By narrowing its focus, Pepsi was able to position its brand against the old and classic image of its competitor. As it became increasingly seen as ‘the drink of youth’ Pepsi managed to narrow the gap.
In the 1970s, Coke’s chief rival raised the stakes even further by introducing the Pepsi Challenge – testing consumers blind on the difference between its own brand and ‘the real thing’. To the horror of Coca-Cola’s long-standing company president, Robert Wood-ruff, most of those who participated preferred Pepsi’s sweeter formula.
In the 1980s Pepsi continued its offensive, taking the Pepsi Challenge around the globe and heralding the arrival of the ‘Pepsi Generation’. It also signed up celebrities likely to appeal to its target market such as Don Johnson and Michael Jackson (this tactic has survived into the new millennium, with figures like Britney Spears and Robbie Williams providing more recent endorsements).
By the time Roberto Goizueta became chairman in 1981, Coke’s number one status was starting to look vulnerable. It was losing market share not only to Pepsi but also