An Excerpt from The Master: A Handbook for Service Designers. (Available soon.)
Anyone with a memory of the summer of 1985 will most likely remember the disastrous launch of New Coke, a reformulated recipe of the old standard. It was 1985 when the company suddenly announced to the world that the regular flavor of Coke will no longer be produced, and in its place would be New Coke.
When New Coke hit the market, it was flat on arrival. Protests surged around the country with angry fans demanding the “old” Coke back. Some organized into the Society for the Preservation of the Real Thing, and another group, Old Cola Drinkers of America—both groups organizing rallies for loyalists who chanted and carried signs: “We want the Real Thing” and “Our children will never know refreshment.”
Today, we may wonder why The Coca-Cola Company even considered changing its flavor. But the mid-1980s was a turbulent time with both Coke and Pepsi engaged in what became known as the “Cola Wars.” Coke had always topped Pepsi in global sales, even though both companies had near indistinguishable recipes with Southern heritage dating back to the 1890s. But the Cola Wars was all about looking ahead at changing markets and trying to beat out the other growing market share. Pepsi-Cola had been gaining share on Coke by outperforming grocery stores. Coke, though, held on to its lead through coin-operated vending machines and fast food chain partnerships.
Against this backdrop, both companies were battling for the emerging market known as the Gen-Xers. Pepsi began addressing the market with advertising: “The Choice of a New Generation,” with rotating celebrities Lionel Richie, Tina Turner, Gloria Estefan, Joe Montana, Terri Gar, Michael J. Fox, and Billy Crystal, and later, Michael Jackson.
But Coke decided on a different strategy — a new coke recipe. Ahead of the launch, the company had spent four years experimenting with new recipes and taste testing them with consumers. However, they failed to test, or specifically to ask how consumers felt about losing the time-tested original Coke. The monumental oversight, at its core, only served to leave its baby boomer loyalists behind in search of a new path. The idea puzzled financial analysts at the time and probably will for the ages.
Granted this is a failure of a product rather than a service. But the issue of consumer tastes, trends, and emotional connections is no less an overarching, ongoing challenge for service designers. In fact, the story of New Coke may be familiar to many who have relied on trial and error to design, launch and repair a service.
The International Service Design Institute’s The Master: A Handbook for Service Designers addresses many of the issues that The Coca-Cola Company should have followed, including how to generate reliable data—and choose the right methods to analyze and communicate findings. The handbook book also addresses how to select the right techniques of prototyping before a launch, and how-to measure user/consumer experiences (including to gauge emotions and attitudes). The Master includes tools for diagnosing service failure along with a discussion about whether, when and how to recover failing services.
New Coke Recipe
As Coca-Cola tooled around with a new recipe, Pepsi put their efforts into understanding Gen-Xers. What they found was, a youthful energy and optimism, leading to an opportunity to convert Coke loyalists. This became a theme for its advertising ‘The Pepsi Challenge,’ for which Coke loyalists were asked to taste test Pepsi and consider switching brands.
The Cola War continued on for years, extending to overseas markets, in which the two fought over the Asian market and the former republics of the Soviet Union. Throughout it all, Coke has kept its lead, and as of late, has double the market share of Pepsi—though today, the soft drink market is far more crowded than it was forty years ago.