Coca Cola and the Pepsi challenge

It was Coca Cola’s biggest challenge….

What was?

The Pepsi challenge of course. Do you remember it?

In the 80’s a group of high energy Pepsi marketeers would rock up at a local shopping centre with a TV crew.

And set up a blind tasting with two tiny cups of cola (one Pepsi and the other Coke). You didn’t know which was which and had to choose your favourite.

You must remember it? I even took part in one at Blackburn shopping centre (now called The Mall), although they never filmed it. Must be my face for radio!

Coca Cola (Coke) verses Pepsi, who would win?

In the 70’s 18% of soft drinkers said they were exclusively Coke drinkers, with only 4% admitting to being Pepsi drinkers.

By the 80’s things had drastically changed for Coke. Their share had dropped by a third to 12%, whilst Pepsi had nearly tripled to 11%.

Even though Coke was much more widely available than Pepsi, and Coca Cola we’re spending around $100 million more on advertising.

This happened as Pepsi aired TV commercials featuring the public taking part in the Pepsi challenge.

Dedicated Coke drinkers were asked to take a sip from two unbranded small plastic cups (containing Pepsi & Coke) and asked which one they preferred.

To Coca Cola’s dismay they invariably chose Pepsi, as did my 10-year-old self. As a stoic Coke drinker, I was shocked at the time. If I remember, the Pepsi did taste that little bit sweeter.

Coca Cola disputed the findings, whilst carrying out their own blind taste tests. Unbelievably, they found the same thing. 57% of people preferred Pepsi.

What to do? Coca Cola had always relied on the mystic of Coke’s secret recipe. Had people’s tastes changed? Tasters were saying Coke was harsh and Pepsi was smooth and rounded.

Panicking, Coke’s scientists tinkered with the fabled secret recipe to make it lighter and a little sweeter. The market research was positive & they drew level with Pepsi in blind taste tests.

They tinkered some more, finally in the mid 80’s (after getting together a whole army of consumers in blind taste tests) Coke eventually outperformed Pepsi by 6 – 8%.

‘New Coke’ (do you remember it?) was given the green light. With their CEO (Roberto Goizueta) saying, “it’s the surest move the company has ever made.”

Who could argue? Consumers had been asked for their opinion in the simplest and most direct way imaginable. How could ‘New Coke’ fail?

No, the story doesn’t end…

Coke drinkers were outranged with ‘New Coke’ and protested up and down the country. Coke plunged into crisis and within months brought back the original recipe as ‘Classic Coke’.

The predicted success of ‘New Coke’ never materialised. In fact, sales of ‘New Coke’ virtually disappeared once ‘Classic Coke’ came back.

Strangely, the meteoric rise of Pepsi (which was being suggested by the blind taste test market research) didn’t materialize either.

Coke had gone head to head with Pepsi for years with a product that blind taste tests say tastes inferior to Pepsi, yet Coke is still the No1 soft drink in the world, by a country mile!

It don’t figure. Or does it?

You see, the market research was based on consumers taking just a little sip out of a small plastic cup, at no time where consumers asked to drink a whole can or bottle in their own environment.

It seems, a sip is very different from sitting and drinking a whole can or bottle on your own, with your feet up watching Top Gear or Strictly.

Other research has shown, if you only test a product in a sip test, consumers with invariably like the sweeter product.

But when you drink a whole bottle or can in your natural environment, the sweetness can get overpowering. My 10-year-old self-found the same and reverted to ‘Classic Coke’ too.

What can we take from this?

Finding away to let customers try your products in the right environment, seems a logical start. As it can be difficult to envisage what something looks like or how it works in your own environment.

If it’s a fixed product like a carpet, wooden floor, or a tile it’s easy to provide samples, so customers can see what it looks in their home or work environment, before they take the plunge.

Technology can be a little harder though. Although a solution could be to offer a test drive (like some car dealers do) for a few days, a week or even a month.

We’ve made it simple on our printer technology and laptop bundles, they’re on rolling monthly agreements. You can test drive for a month, and if it’s not right, simple return it, penalty free.

…remember, Pepsi won the sip test battle, but Coke won the soft drink war.