Marketing Principles and Market Greed

How can any marketing be complete without at least one legend from the Coke - Pepsi saga being thrown in.
More than just that, this story is about board room follies, that can at times be no larger or smaller, than any other folly.
It's also about how a huge brand can come on its knees in literally an instant, when it violates some very established marketing principles.
And it's also about how market dynamics can cause perceptual change such that a highly respected company can find itself completely helpless and at the mercy of a hostile environment that it no longer understands.
So this is the story of a hero and a villain - one of the most sensational marketers in marketing history - Sergio Zyman.
All market research said - go launch the New Coke and it will be liked. The reality was - far from being liked; it was actually hated. Yes, hated.
Over the years, till 1983, Coca Cola market share had fallen from 60% to 24%, mainly because of Pepsi. So when Roberto Goizueto took over as CEO in 1980, he said that there would be no sacred cows and even the formulation of Coke can change, if required. The 'new coke' was formulated and it tested positive in market research and focus groups.
On the eve of the launch, Pepsi started working at creating skepticism in the minds of the press and public. One salient decision that Coke took, proved to be its nemesis. It withdrew the old Coke from the market.
Even in the test marketing phase, the results were supposedly positive. That the resistance to the new product would come from southerners who saw it (in the context of the civil war!) as succoming to the 'Yankees', was lost on Coke, since they failed to get to this deeper insight. Their research did not capture it, for it was blind. It was research without an insight in sight.
The new Coke was launched and all hell broke loose. Angry letters flooded Coke offices everywhere; the media went berserk; and after some 4,00,000 telephone calls that called them names, they actually roped in a psychiatrist to listen to these calls on a special toll free number - that must be among the most (in)famous toll free numbers: "1800-GET-COKE!"
The psychiatrist analysed the problem:
a. More than the birth of the "New Coke", people (consumers) saw it as the death of old one!
b. And till death actually happens (market research phase), one doesn't know what one misses!
c. The death of the Old Coke was seen by people (consumers) like the death of a family member!
The backlash on the new Coke now started gaining rapidly. Now protests broke out. The company thought and hoped they would ease. But they only gained in magnitude.
77 days later, the new Coke was withdrawn and the old one re-introduced.
And now the pendulum swung the other way. Although, it was not a planned strategy, but now the consumers had missed the Old Coke so much, that it rapidly gained market share reaching the No. 1 position once again!
But Zyman left Coca Cola and legend has it, that the company once again became conservative and started losing market share. So 7 years later, they got Zyman back!
The saga continued....but for now, here's the moral of the story:
1. Tampering with the core product can make it lose its meaning in an unimaginable way. Because Coke is more than the name of a certain aerated drink. It was (and is a symbol of a certain kind of America, a certain age, a certain philosophy, and therefore a certain brand)
Many brands symobolise and represent a full age. The reactions to a change in their existence can therefore be far more extreme than one can envision. These brands are like institutions that almost become the centre of gravity of a certain socio-economic philosophy. And socio-economic philosophies may be second to only religion in terms of deep beliefs binding a full eco system.
2. Market Research cannot drive itself - it needs a driver. The insight comes first, the research later. For example, research alone is incapable of telling us who this new class of middlemen averse people are and so that's why they trade online. Deep insight comes from observation of behaviour and research comes from statistical sample sizing. Hence the former precedes the latter.

3. There are age old marketing principles, but they are violated sometimes. That's because market greed and human desperation, is older!
Have a great weekend!