After Pepsi-Cola’s aggressive marketing campaign in the early 1980s, Coca-Cola made a bold move. In April 1985, it changed its highly successful 99-year-old recipe and launched “New Coke.” What happened next became legendary, as New Coke was a flop. Consumer backlash was off the charts. Coca-Cola received over 40,000 letters and phone calls from loyal consumers expressing their disappointment. Just 79 days later, Coke brought back the original formula, renaming it “Coca-Cola Classic.”
This story began in 1975 when Pepsi began blind taste tests that aired on TV commercials. Random people were asked to taste unlabeled Coke and Pepsi and choose which drink they preferred. Over 50% chose Pepsi. By the early 1980s, Pepsi was gaining market share in the soft-drink market segment. This caused a tailspin of events at Coke and convinced high-level executives to believe that consumers liked Pepsi’s taste better, which was the reason for Pepsi’s market share increase. Coke could not have been more wrong. While Pepsi was increasing its market share, Coke remained No. 1 in that market and still does to this day worldwide.
Coca-Cola’s mistake was believing that the blind taste test was proof that people preferred the taste of Pepsi over Coke when the reality was that in taste tests where people knew what they were drinking, they overwhelmingly chose Coke over Pepsi.
You Versus You
In the world of business, there is only one situation where you can win time and time again. That’s when you compete against yourself. Obsessing over your competitors can be mentally and financially exhausting. It will also lead you to apply strategies that can damage your brand, which may become obstacles to your company’s success. Does that mean you should ignore your competition altogether? No, it doesn’t. While there is value in studying your competition, focusing too much on what your competitors do may lead to copying them and making decisions that can damage your brand. It may also lead to implementing marketing strategies or making product changes that customers may not desire or even care about.
Learn and Adjust, Don’t Copy
When speaking with coaching clients, I often tell them, “Study your competition. Find out everything about them. And then don’t do anything they do.” This may seem a bit extreme, but the purpose of my statement is to reinforce that every business must define its culture, core customer base and brand position. It must also promote its own story, not someone else’s.
To be truthful, we can learn from our competition. And good competition can make your company stronger. For example, I remember years back when a major competitor across town purchased a new touchless tire machine for low-profile and run-flat tires. This led me to do my research and purchase a similar machine. But these things are “behind the scenes” attributes of our businesses. This is learning from the competition and making decisions that benefit our company, employees and customers without diluting our brand.
Stay True to Your Brand
Every business has a unique identity. That uniqueness, when properly marketed, makes us stand out. When we stand out, we get noticed. This brand identity also helps create loyal customers and builds a strong company. Use this uniqueness and build a marketing plan around it. Find out what your customer like most about you, and deliver that consistently, over and over.
Coca-Cola lost sight of what made it successful, which was the emotional attachment its loyal customers had to the brand. Think about this: Your customers will not jump ship merely because of a clever marketing campaign by your competition. If you must obsess over something, obsess over your customers and your employees.
