In 2003, Read Montague had a "why" question that was nagging at him. If Pepsi was chosen by the majority of people in a blind taste test, why did Coke have the lion's share of the cola market?
It didn't make sense. If Pepsi tasted better, why wasn't it the market leader?
Fortunately, Read wasn't just any cola consumer idly pondering the mysteries of brown sugared water. He had at
his disposal a rather innovative methodology to explore his "why" question. Dr. Read Montague was the director of Baylor University's Neuroimaging Lab and he just happened to have a spare
multi-million dollar MRI machine kicking around. MRI machines allow us to see which parts of the brain "light up" when we undertake certain activities. Although fMRI scanning's roots are in medicine,
lately the technology has been applied with much fanfare to the world of market research. Montague is one of the pioneer's of this area, due in part to the 2003 Coke /Pepsi study, which went but
the deceptively uninteresting title, "Neural Correlates of Behavioral Preference for Culturally Familiar Drinks"
Montague has since picked up a knack for catchier titles. His recent book is "Why Choose this Book? How We Make Decisions"
).Believing in Brands
In my last two columns
, I talked about how our emotions and
beliefs are inseparably wrapped up in many brand relationships. The strongest brands evoke a visceral response, beyond the reach of reason, coloring our entire engagement and relationship with them.
It doesn't matter if these brands are better than their competitors. The important thing is that we believe they are better, and these beliefs are reinforced by emotional cues.
certainly seemed to be the case with Coke and Pepsi. The market split was beyond reason. In fact, the irrationality of the market split caused Coca Cola to make the biggest marketing blunder in
history in 1985. A brief recap of marketing history is in order here, because it highlights one of the challenges with market research: namely, that there's a huge gulf of difference between what we
say and what we do, thanks to the mysterious depths of our sub-cortical mind. It also sheds light on the strength of our brand beliefs.Coke's Crisis
'70s and '80s, Coke's market share lead over Pepsi was eroding to the point when, in the mid '80s, Coke's lead was only a few points over their rivals. This was due in no small part to the success of
the Pepsi Challenge advertising campaign, where the majority of cola drinkers indicated they preferred the taste of Pepsi in blind taste tests. This wasn't just a marketing ploy. Coke did their own
blind taste tests and the results were the same. If people didn't know what they were drinking, they preferred Pepsi. It was panic time in Atlanta.
Enter new Coke. It was a lighter, sweeter
drink that was possibly the most thoroughly tested consumer product in history. Coke was preparing to kill the golden goose, and it wasn't a decision they were taking lightly. If they were changing
the secret recipe, they were making damned sure they were right before they rolled it out to market. So they tested, and tested, and tested again Coke meticulously did their home work, according to
all the standard market research metrics. The results were consistent and overwhelming. In the tests, people loved New Coke. Not only did it blow the original Coke formulation away, it also trounced
Pepsi. They asked people if they liked New Coke. Yes! Would you buy New Coke. Yes! Would this become your new favorite soft drink? Yes, Yes and Yes! Feeling exceptionally confident, Coke bit the
bullet and rolled out New Coke. And the results, as they say, are now history.Classic Coke's Comeback
On April 23, 1985, Coke shocked the world by announcing
the new formulation and ceasing production on the original formula. And, at first, it appeared the move was a success. In many markets, people bought new Coke at the same levels they had bought
original Coke. They kept saying they preferred the taste. But there was one critical market that new Coke had to win over, and that wasn't going to be easy. In the Southeast, the home of Coke, people
weren't so easy to convince. There, ardent Coke fans were mounting a counteroffensive. By May, the "Old Coke" backlash had spread to other parts of the U.S. and was picking up steam. Soon, a "black
Coke" market emerged when deprived Coke drinkers started bring in the original Coke from overseas markets where the old formulation was still being bottled. By July, the Old Coke counteroffensive was
so strong, the company capitulated and reintroduced the original formulation as Coke Classic. Within months, Coke Classic was outselling both New Coke and Pepsi and began racking up the highest sales
increases for Coke in decades, rebuilding Coke's lead in the market.
Although it eventually worked out in their favor, Coke executives were puzzled by the whole episode. President Don
Keough admitted in a press conference, "There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years, The simple fact is that all the
time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people."
Keough was amazingly prescient in this statement, although he had the university wrong. Almost two decades later, it would be a professor at Baylor, not Harvard, that would dig further into
the puzzle. Next column, we'll see what one of the very first neuromarketing studies uncovered when Montague replicated the Pepsi Challenge in an fMRI machine