Accelerate Grads '06: New Coke: The perils of poor market research.

On 23rd April 1985 the Coca-Cola company launched a product called ‘New Coke’.

Chances are you haven’t heard of it, and if you have it’s probably because by the time you were big enough to hold your milk bottle by yourself at playgroup ‘New Coke’ had become known as one of the biggest commercial flops of its time.

Why?

Because the big shiny Cola-Cola Company ignored their market research.

In a bid to re-dress their continuously eroding market share following the huge success of the Pepsi Challenge, they changed the taste of Coke, (known to us as Classic/ ‘Fat’ Coke), and re-branded it as New Coke.

Like any diligent brand they trialled this veritable can of sugary goodness with both qualitative (how do you feel about it and why?) and quantitative (how many people feel like that?) market research (check bottom of the post for deeper definitions of these).

The results?

The ‘touchy-feely’ qualitative research said that some people were deeply unhappy with New Coke, and that it somehow ‘felt wrong’. But the people with the numbers returned their quantitative analysis and claimed that their surveys’ said New Coke would be as popular as the trendiest soft drink ever…

What did Coke do?

Ignored the qual results and bowled on with their plan to dominate the soft-drink world armed with New Coke.

We all know how it ended…

NEVER EVER ignore your research.

Market research is not there to back up some idea that looked great on paper when you were brainstorming in the office, it is there to empower brands to;

understand their customers and their needs
measure the potential opportunities to impact the market
monitor that performance and feedback into the brand development.

New Coke brand managers made a mistake because they ignored the market research that went against their expectations, when in fact it turned out to be the one pivotal key insight that determined the success ( or ultimate failure) of their brand!

Had they taken the insight that people felt uncomfortable with New Coke, and incorporated it into their brand strategy they could have either scrapped the product altogether and used market research to help devise a successful campaign to redress the demise of traditional Coke, or used the market insights to position New Coke in such a way that didn’t alienate their potential market!

Now, given that I am on the healthcare stream, can you see just how important good market research is to Pharmaceuticals?

Given that it takes approximately £550 million to take a drug from discovery to prescription pharmaceuticals do not want to get it wrong. They want to know where their drugs can have an impact, how, how often, what would make it better than its competitor in the eyes of a prescribing physicians etc etc; they ignore market research at their peril.

I’m currently experiencing the delight of Adelphi International Research(AIR), where I have been working on a load of different aspects of market research.

Last week having received transcripts from interviews with doctors all around the world about a potential new product, I got to help with the analysis of their answers, decipher headline findings and help predict the potential impact of said drug on the current prescribing landscape: its essentially like doing an essay at Uni- get a load of sporadic unrelated material, synthesise it into some meaningful/coherent concepts and postulate on these findings.

OK, there is much more to say but I feel that even I might not get to the end of this post whilst spell checking, so any q’s on the back of a postcard…

Zo x

Definitions Qual vs Quant:

Qualitative Research: Understanding ‘why’ people feel how they do? What are their attitudes/beliefs/ gut reactions? These are usually done in the form of interview or focus group, or any forum that allows people to discuss and develop their thoughts and ideas.

Quantitative Research: Measuring how many people feel a particular way. i.e. how many people did not like the taste of new coke? How many people said that they would not buy it? Usually involves large amounts of respondents, and get a very simple top line yes/no/maybe or ‘x rather than y, but definitely not z’ answers.

If you want to know more check out a plethora of information on New Coke's creation and launch on our old friend Wikipedia: