All New Coked Up

So . . . today is the twenty-fifth anniversary of Coca-Cola reversing their decision to switch to New Coke, and the return of Coca-Cola Classic to the shelves. This anecdote has been told to death in business classrooms over the past two and half decades, usually as an example of poor strategy, management preference being prioritized over common sense, or a company not really knowing their customers.

And these uses for the story are wrong.

Because, as it turns out, Coca-Cola did tons of research on New Coke, and tested the hell out of the new formula prior to launch. They didn't just introduce a new taste on the fly, but rather took a measured approach to the product and the launch. And the funny thing is, people loved New Coke. In blind taste tests, it was strongly preferred to the old Coke. So why did it fail, and what is the moral of the story?

The failure of New Coke came about because of a strong backlash from about ten percent of Coke's loyal customers. They were mad because of the change (note: not because of the product itself, but the fact that there was a change in the first place), madder than Mel Gibson at a Passover seder. They felt betrayed and abandoned. And their ire picked up steam, and suddenly New Coke was a joke.

New Coke didn't fail because it tasted bad; it failed because it was different. Coke's mistake was not keeping the old Coke around from the get-go (I think I'm using the word "Coke" too much in the post - I'm afraid Lindsay Lohan might find it while Googling). Customers were emotionally and personally invested in the product, and it was taken away from them.

The other mistake Coke made was relying on bling taste-testing. We've all seen the commercials where the underdog is picked in blind taste tests, but this is a trick. It doesn't matter what is preferred in these tests, because when we eat and drink, we don't do so blindly (other than the visually-impaired amongst us). We do so with knowledge of the brand and flavours we are consuming. This knowledge affects how things taste to us, so Coke in a blind taste test tastes different than Coke when we know it's Coke.

We like to think that taste, like our other basic senses, give us unbiased and clear information about the world around us. Research has shown this not to be the case, such as a test where people given a free bottle of wine "from North Dakota" liked it less, and ate less of their dinner, than people given a bottle of wine "from California" (both wines were actually the same wine with different labels). Or a study in which participants were given five glasses of wine and were asked to rate each one, and gave different ratings largely based on the order in which they they tasted them (again, all the wines were actually the same wine from the same bottle). Information separate from the basic taste of the product affects how we think things taste. So if you thought New Coke was going to suck, it would suck; if you thought you would like it, you probably would.

Try this little experiment at home: take a few flavored jelly beans (like Jelly Belly brand or whatever knock-off is available, as long as they actually have different flavours and not just colours). Pick out three or four without looking at them and eat them one at a time. Can you guess the flavour? I just did this, and got two out of three wrong (the one I got right was coffee-flavoured, which is fairly distinctive). Even if you got them right, take another three and this time look at them before eating them, and know the flavour is supposed to be before you put them in your mouth. The flavour is much more distinctive, and it takes less time to identify, right? Because your brain is telling you what flavour to expect, so the flavour is clear.

And even if you got nothing else from today's post, at least you got to eat jelly beans.

IMPORTANT NOTE: To all of my loyal readers (yes, both of you), it has recently come to my attention that people have tried to post comments on the blogs and then the comment doesn't appear. I don't know why this is going on. I have looked up how to fix it and am trying a new comments format, so hopefully that will help. I have never deleted any comments or moderated the comments at all, so please don't think I rejected yours if it didn't appear.

If you try to post a comment and it doesn't appear, just e-mail me (ericdolansky@hotmail.com) and I'll do my best to post it on your behalf.