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Comment by akashs | Hacker News Reader

Well, yes and no. Completely agreed on your basic point that their strength lies in their brand. However, in 1985 when Coke tried to reformulate the original formula and create "New Coke", one thing that it showed was that the taste of the drink was very linked with the brand.

Coke has always built their brand by associating the drink with happiness and good memories, and when that taste changed, people were upset because the Coke they grew up with no longer existed.

But I doubt anyone would be able to steal share away from Coke simply by copying their formula.

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Read Dan Ariely's chapter 1 in Predictably Irrational. It is about relativity and the decoy effect. If you have a choice between A and B, then adding a third choice that looks like a defective version of A (the decoy) tends to nudge people to pick A over B.

As he explains it, choosing between two options in a vacuum is hard. You have to list pros and cons and weigh them carefully. We prefer to create yardsticks and say "better" and "worse". When you add the defective option you create a no-brainer yardstick in the mind of the chooser.

Doesn't this sound suspiciously like New Coke? I don't believe that the marketers didn't know this stuff, or that they were caught by surprise by what played out next.

I dunno. I was under the impression that New Coke was an unmitigated disaster. Coca-Cola Classic (then just "Coca-Cola") was already the dominant soda when it was introduced, and I don't think they picked up any market share in the months/years after the introduction of New Coke. But they did spend a ton of advertising money on the new soda which failed spectacularly.

New Coke was fantastic for Coca-Cola. Coke was on the decline while Pepsi was on the rise. New Coke was an attempt to reinvigorate the brand and get people drinking more Coke again. It succeeded accidentally, as people decided they liked Coke as it had been, leading to a resurgence of sales.

Snopes thinks New Coke was beneficial to Coke, though purely accidentally:

http://www.snopes.com/cokelore/newcoke.asp

Actually reminds me more of trying to split the vote in politics (or maybe just The Wire)

But I get your point on the decoy. Although that's an awful big game to play with a few months worth of Coke sales if they knew it in advance.

I've read recently that it was cover for the switch from sucrose to high-fructose corn syrup as a sweetener - when they switched "back" to HFCS, most people never noticed they hadn't actually switched back to the same thing. It's plausible, but as I'm not sure of the timing (I never looked at ingredients back then) I don't know if it's true.

Debunked by Snopes. Coca-Cola already had HFCS five years before New Coke. Here's the link, and also follow the "Cokelore" link at the top for the whole category.

http://www.snopes.com/cokelore/newcoke.asp

Man, I shoulda known better than to lend credence to that. This is what comes of failing to examine one's assumptions.

Which was significantly a marketing issue - even the person running the anti-New Coke campaign preferred the new recipe in blind taste tests.

http://en.wikipedia.org/wiki/New_Coke

Gay Mullins, a Seattle retiree looking to start a public relations firm with $120,000 of borrowed money, formed the organization Old Cola Drinkers of America on May 28 to lobby Coca-Cola to either reintroduce the old formula or sell it to someone else. [....] In two informal blind taste tests, Mullins either failed to distinguish New Coke from old or expressed a preference for New Coke.

Err, sort of. The taste tests were flawed (and also the reason Pepsi repeatedly won blind taste tests over Coke around then as well).

New Coke was designed to be more Pepsi-like in that it was sweeter. In smaller quantities, people readily preferred the sweeter of the two drinks, whether it was New Coke vs Coke Classic or it was Pepsi vs Coke Classic. But what the taste tests overlooked was that people preferred Coke Classic to either New Coke or Pepsi in larger quantities (e.g. a 12oz can).

Without knowing the exact design of the test it's very difficult to be certain, but also from the linked Wikipedia article:

Goizueta publicly voiced a complaint many company executives had been making in private as they shared letters the company had received thanking them for the change in formula, that bashing it had become "chic" and that, as had happened in the focus groups, peer pressure was keeping those who liked it from speaking up in its favor as vociferously as its critics were against it. Donald Keough, the company's president and chief operating officer, reported overhearing this exchange at his country club outside Atlanta:

"Have you tried it?"

"Yes."

"Did you like it?"

"Yes, but I'll be damned if I'll let Coca-Cola know that."

...

Gladwell reports that other market researchers have criticized Coke for not realizing that much of its success as a brand came from what they call sensation transference, a phenomenon first described by marketer Louis Cheskin in the late 1940s: tasters unconsciously add their reactions to the drink's packaging into their assessment of the taste. For example, one of the researchers told Gladwell that his firm's research had found 7-Up drinkers offered a sample from a bottle with a distinctly more yellowish label believe the flavor to be more lemony, although it wasn't.

...

Coke considered but rejected gradually changing the drink's flavor incrementally, without announcing that they were doing so. Executives feared that the public would notice and exaggerate slight differences in taste. In 1998, Joel Dubow, a professor of food marketing at St. Joseph's University, tested this "flavor balance hypothesis" and argued that it was not true. He and fellow researcher Nancy Childs tested mixtures of classic Coke and Coca-Cola II and found that the gradual changes of taste were not noticed by a significant number of tasters. Coke, he said, would have succeeded had it chosen this strategy.

I'm not at all convinced the primary issue with New Coke was taste-based, from the available information.

I don't know how New Coke was, but I can tell the difference between Coke and Pepsi any time. I could even tell you when you're giving me a mix between the two.

I prefer Coke Cola as I indeed drink larger quantities, but my wife prefers Pepsi. And I don't mind Pepsi, but when I tried Pepsi Blue, the taste was so awful it was nauseating, although I did like the commercial. And if they gradually migrated old Pepsi to Blue, I don't know if I would notice what's going on, but I would stop drinking it.

IMHO taste matters.

I never said it was taste based, but the taste (better or worse) was part of the issue. The primary issue was they were abandoning the brand they had spent 100 years building up. But that brand was linked to the original taste, and throwing out that taste was a bad idea. The issue was not that the taste was horrible, but that it was different.

I wouldn't be surprised if companies in India, Russia, etc., tried copying the formula

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