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Keep innovation aligned with customers' brand expectations

By ,
Coca-Cola's
original formula
for Coke never
should have
been replaced,
the company
learned when it
alienated loyal
customers with
a sweeter New
Coke in 1985.
Coca-Cola's original formula for Coke never should have been replaced, the company learned when it alienated loyal customers with a sweeter New Coke in 1985.

You may have come across the expression that goes something like this, “Culture and brand are opposite sides of the same coin.”

The term relates to the close relationship that exists between the how and what you believe and do (culture) and how your product or company projects itself (brand) in the marketplace.

Companies such as Apple and Google are perceived as innovative powerhouses that actively work on culture to support and maintain their creative outputs.

Four decades ago, an American corporate behemoth once let its culture of innovation and large brand presence take it down a road that left the nation scratching its collective head – wondering just how such a successful enterprise could make a seemingly stupid decision.

The company is Coca-Cola.

In the 1980s, Coke was the No. 1 soft drink, but Pepsi was making significant inroads as it marketed to a younger, hipper audience. Megastars such as Michael Jackson were signed to promote “Pepsi, the choice of a new generation.”

Coke had been actively innovating and had already affected its own brand when it released Diet Coke.

But to counter Pepsi, Coke in 1985 opted for a sweeter formula that it called New Coke, while retiring its original century-old recipe.

The results were immediate and disastrous as loyal Coke drinkers rejected New Coke and protests grew into organized efforts to force Coke to return to its original formula. Coke, of course, did just that – but not after 77 days of lagging sales and damage to its brand.

Lessons learned from that experience have gone deep into the culture of Coke and how it approaches business today.

While Coke believes in continuing to innovate, the New Coke mistake led to the understanding that it is loyal customers – not the company – who ultimately own Coca-Cola and all of its brands.

So when one thinks about culture and brand being opposite sides of the same coin, a major lesson is to keep cultural innovation aligned with brand expectations of customers.

Marianne Chester is founder and CEO of mEnterprise Solutions LLC, a strategic services consultancy based in Stroudsburg. She can be reached at 570-460-9599 or mchester@menterprisesolutions.com.

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