It's the Cola

Pepsi is a very successful company in its own right, however their pursuit of Coca-Cola can be compared to one thing.

Wile E. Coyote keeps ordering new tools, trying new tactics, and continually fails to catch the Roadrunner. The only winner in Wile's incessant attempts is the Acme Company who continues to profit off of him.

Do you really want to catch the roadrunner, or should you set your sights on something different? Why spend all that money to make Mr. Acme rich?

Back in the better days, Pepsi was the choice of a new generation. Their advertising had a fun and youthful feel that still applied to everyone (remember, no matter how old we are, we want to be thought of as young). Though Coca-Cola has always been number 1, Pepsi wasn't too far behind. It was this threatening market position, and the results of the Pepsi Challenge that led Coca-Cola to make the colossal mistake of introducing New Coke.

Coke reversed their mistake, and for the most part kept their message strong. Meanwhile, Pepsi continued to chase them by using every celebrity and package redesign possible. In 2002, sales of Pepsi were 35% behind Coca-Cola in sales. The slogan was "Think young. Drink young." Then they abandoned the new generation. 2003 brought "The joy of Pepsi." 2004, "It's the cola." Now they are attempting to "Refresh Everything."

Notice anything about the new slogans? They're all head-on attacks against Coke. Joy, refreshment, and all about being "The Real Thing" are brand essences of Coca-Cola. The Acme Company was selling Pepsi countless logo revisions while their advertising messages were making people think about Coke. Today, they sit 41% behind the real thing.

When it comes to your business, do you want to be Wile E. Coyote, and constantly chase the Roadrunner? Or would you rather set a goal that won't have you always the one to have the anvil drop on you?

Listen to your customers - but not that way

You need to be listening to your customers. Success is that simple, as long as you remember what to do once you have heard them. A business also needs to acknowledge what their purpose is, to provide for, solve, or otherwise make our consumer's life better. Why else would they part with their money if your business did not provide something of value to them? We need to listen to our customers, but if we are not the experts who solve the problem, rather simply facilitating the literal translation of what they asked for, why would they need us?

Henry Ford once said, "if I had asked people what they wanted, they would have said faster horses." Asking a customer exactly what product they want will not yield the innovation that will make you the market leader. You need to listen to your customer's goals, desires, and aspirations to develop a product that they did not know they needed.

Focus groups and other consumer feedback help us understand what is important to people. However, as Ford learned with Edsel, consumers all loved the features of the car but that did not turn into an overwhelming success. In fact, despite the consumer feedback, Edsel is often referred to as a colossal failure. Where Ford went wrong was determining what was most important to the consumers, which was a more affordable car.

Coca-Cola made a similar mistake with a cola formula that was preferred in most taste tests. Despite the positive reaction they received in blind-tasting results, New Coke became a disaster for the company.

Conversely, Dietrich Mateschitz hired a market research firm to test his new soft-drink and received bad news. "People didn't believe the taste, the logo, the brand name." But he launched his drink anyway and Red Bull has been a tremendous success.

The lesson is, if you present product options to consumers, they will pick what they are familiar with. This is not because they are uncreative or resistant to change, but that they have to base their opinions on what they know. It's your job to introduce them to the next thing they will want.