They are drinking Inca Kola in Peru these days. That or Coke. This the result of the disastrous mid-1980s El Reto ad campaign, Pepsi’s South American version of El Norte’s hugely successful Pepsi Challenge.
Pepsi implemented virtually the same “taste test” challenge in Peru that had proved so astoundingly successful in the U.S., but cultural difference between the two countries proved disastrous for the cola giant’s South American market. The company’s market share plummeted to an almost nonexistent 3% share.
In his book, Bad Habits, humorist Dave Barry sniped at the Pepsi Challenge as, “Pepsi’s ongoing misguided attempt to convince the general public that Coke and Pepsi are not the same thing, which of course they are.”
Coca Cola had a similar taste test failure when the company went with the New Coke in 1985, although one may be hard pressed to call it a taste test. Coke out of the blue thrust a “new, improved” brand on the market when for all intents and purposes the old one was doing fine. Mutiny followed. People wanted their old Coke back.
Actually, Pepsi Cola experienced a resurgence in South America a few years back, but only after the company established its Pizza Hut, Kentucky Fried Chicken and other Pepsi franchises in Peru, which only sell Pepsi products in their outlets.
Yet we all buy products that have been exhaustively scientifically market tested before they hit the shelves across the country and around the world. And more often than not we think we prefer one product to another. But do we? Do we really, really like them better? Or is it merely the power of suggestion that makes us select one brand over another?
Well, yes, and no.
First let’s assume that the introduction of any new or “improved” product is about making money for the manufacturer. Increased sales, or market share, is the underpinning of every marketing campaign. Therefore it is a pretty good bet that the maker thinks he has a product that at least equals others on the shelves, and that it will sell better. In the case of the Coca Cola fiasco it has even been argued that Coke planned the whole thing to boost its original formula sales against its chief rival, Pepsi.
Bizarre but maybe true.
Indeed, when the company relaunched the original Coke, repackaged as Coca Cola Classic about six months later, it took the market, outselling both New Coke and Pepsi.
Taste tests are not the only market testing flops in recent history.
The industry has had a veritable “Murderer’s Row” of misjudgments and outright flops over the years. Domino Pizza is a case in point: Their 1970’s 30-minute delivery guarantee was a train (or rather car) wreck. And the company’s new-what the Stanford Review is calling-“Sorry for 50 years of terrible service,” campaign is in question.
Burger King’s biggest Whopper in years, it appears, are the new Sir-Mix-A-Lot and Subservient Chicken commercials. Recent sales seem to suggest that the spooky “The King” mascot ads, although a pop culture hit, may not be yielding the results the MacDonald wannabe had hoped.
Coke and Pepsi made virtually the same mistake in the 1980s; they-to use a tired old adage-put all their eggs in one basket. Coke tried to fix a market that wasn’t “broke” by releasing an untested product; Pepsi failed to do market research in Peru that would have told them, well, that Peruvians do not respond well to being told what to like.
So why do we like one product brand over another? Do all of the marketing campaigns and endless promotions influence what we buy? Certainly MacDonald’s nearly $1 billion annual advertising budget helps. On the other hand, BK’s recent “The King” spots, although virally successful, may suggest that hip ads don’t necessarily translate to increased sales and market share. But as simplistic or trite as it may sound, advertising works or we would not be saturated with it 24 hours a day. Still, sometimes, it may be as true that we just like what we like.
All this talk of fast food is making me hungry. Think I’ll go out for a Krispy Kreme. Has anybody seen a Krispy Kreme?