Every year, millions of dollars are spent marketing products (or services) that fail. Companies would love to get all that money back.
We learned that there are five main steps for the marketing process. In Step 2 before marketers decide on the value proposition and the USP and positioning, they need to conduct in-depth market research to gain an understanding of their target market and the consumer behavior (i.e., their needs and wants). The market research process has five main steps that, if not followed correctly, will result in the failure of the marketing plan and, at the higher level, the product or service. You are tasked to analyze one of these failures.
Product or Service Name: New Coke Company: The Coca-Cola Company Year Introduced: 1985 Introduction Location: Worldwide, including the United States
In 1985, The Coca-Cola Company, one of the most iconic beverage companies globally, faced a significant product failure with the introduction of “New Coke.” This new formulation was an attempt to update the taste of the classic Coca-Cola formula in response to increasing competition from rival Pepsi.
Market Research Process Steps: The market research process involves several crucial steps to ensure successful product development and marketing:
Clearly identify the purpose of the market research and what information is needed to make informed decisions.
Developing the Research Plan: Define the research objectives, sources of information, and methods to gather data.
Collecting Data: Gather relevant data through various methods, including surveys, interviews, focus groups, and observations.
Analyzing Data: Interpret and analyze the collected data to identify trends, patterns, and insights.
Presenting Findings: Communicate the research findings to stakeholders and decision-makers to inform strategy and action.
The failure in the case of New Coke can be attributed to a misstep in the market research process. The main failure was in Step 2, “Developing the Research Plan.” Coca-Cola conducted taste tests that indicated consumers preferred the sweeter taste of the new formulation, which led the company to conclude that a change in the formula was needed to stay competitive. However, the research plan focused heavily on taste preference and neglected to consider the emotional and psychological attachment consumers had to the original Coca-Cola taste.
If we could go back in time to address this failure, a more comprehensive market research approach could be implemented:
Define the Problem Holistically: Ensure that the research objective includes a holistic understanding of consumer perception, loyalty, and emotional connection to the existing product.
Diverse Data Collection: Alongside taste preference, collect data on consumers’ emotional ties to the product, nostalgia, and brand loyalty. Utilize a combination of quantitative and qualitative methods, such as surveys and focus groups.
Segmentation Analysis: Divide the target market into segments based on factors like age, geographical location, and loyalty. Understand how different segments perceive the product.
Emotion Analysis: Incorporate psychological techniques to understand the emotional associations consumers have with the brand. Analyze the impact of change on emotional connections.
Scenario Testing: Conduct scenario-based research to simulate consumer reactions to different product changes. Gauge emotional responses in addition to taste preferences.
Incorporate Historic Data: Utilize historical sales data and consumer feedback to identify patterns and trends in consumer behavior.
Informed Decision-Making: Present a comprehensive report that not only includes taste preferences but also emotional ties, loyalty factors, and potential risks associated with changing a beloved product.
In conclusion, the New Coke failure serves as a reminder of the critical importance of a thorough and well-rounded market research process. By addressing the gap in Step 2 of the process and considering the emotional and psychological aspects of consumer behavior, companies can make more informed decisions, avoid costly failures, and maintain strong brand connections with their customers.
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