Barack Obama and the Pepsi Challenge

Barack Obama reminds me of the New Coke and the Pepsi Challenge as described in Malcolm Gladwell's national bestseller Blink (2005).

This story starts in the 1980s, when Pepsi was making serious inroads in the market for cola soft drinks in spite of the fact that Coke had a far greater distribution presence, spent a $100 million more than Pepsi in advertising, and was a true iconic American brand. 

Pepsi capitalized on its up-trend by aggressively running TV commercials pitting Coke and Pepsi in a head-to-head taste test in what was then called the Pepsi Challenge.  In it, dedicated Coke drinkers were shown taking a couple of sips of two unmarked cola drinks and asked which one they preferred.  By a significant majority, they picked Pepsi over Coke. 

Coca-Cola's management couldn't believe these results, which seemed to confirm the current market trend.  And so they privately conducted their own taste tests.  To their chagrin, they found that over and over, something like 57% of Coke drinkers did indeed prefer Pepsi. 

Panic ensued, which prompted a re-design of Coke into New Coke. 

Behind the scenes, Coke was reformulated to be more like Pepsi -- that is, sweeter and lighter.  As Gladwell writes:

Immediately Coke's market researchers noticed an improvement. In blind taste tests of some of the earlier prototypes, Coke pulled even with Pepsi They tinkered some more. In September of 1984, they went back out and tested what would end up as the final version of the New Coke. They rounded up not just thousands but hundreds of thousands of consumers all across North America, and in head-to-head blind taste tests, New Coke beat Pepsi by 6 to 8 percentage points. Coca-Cola executives were elated. The new drink was given the green light.

Of the New Coke, company CEO Roberto C. Goizueta crowed that the new product was "the surest move the company's ever made."

As is now well-known, just like Ford's Edsel, the meticulously market-designed New Coke flopped in the marketplace, and in short order, the original Coke was back on the shelves, there to stay. 

Market research failed in another area, too. Its warning that Pepsi was on the road to capturing leadership from Coke never happened.  Today, Coke -- the original Coke -- is still the number-one soft drink in the world.

This presents a paradox.  How can it be explained that in taste tests, people prefer Pepsi over Coke, yet when they make purchases, they buy Coke?

The long and short of it is that in a taste test, the drinkers do not drink the entire can of soda.  They take just a sip or two.  Gladwell again: "A sip is very different from sitting and drinking a whole beverage on your own. Sometimes a sip tastes good and a whole bottle doesn't."  A taste test is thus biased towards sweetness -- Pepsi.  However, when consumers were given a case of both Pepsi and Coke to bring home and report the results a few weeks later, the original Coke won. 

This brings us to politics.  In an analogous way, Pepsi is like Obama.  In 2008, voters were really only getting a sip of him.  Back then, Barack seemed enjoyable, nice, youthful, and even refreshing.  And so in that November's taste test, America voted Obama in as president. 

But now, four years hence, the whole can of Obama-cola has been washed down.  Many consumers (citizens) are concluding that the initial sipped sweetness is no longer appealing after having drunk the whole can.  Obama-cola is coming across as superficial at best and overpowering and sickeningly sweet at worst. 

Twenty-twelve is shaping up as a year when reality is beckoning America to return to traditional values including hard work, honesty, self-sufficiency, saving, and yes, even biting the bullet when and where necessary.  This is in stark contrast to the sweetness of a childish and nebulous mantra like Hope and Change.

Time will tell soon enough which road America takes.

Barack Obama reminds me of the New Coke and the Pepsi Challenge as described in Malcolm Gladwell's national bestseller Blink (2005).

This story starts in the 1980s, when Pepsi was making serious inroads in the market for cola soft drinks in spite of the fact that Coke had a far greater distribution presence, spent a $100 million more than Pepsi in advertising, and was a true iconic American brand. 

Pepsi capitalized on its up-trend by aggressively running TV commercials pitting Coke and Pepsi in a head-to-head taste test in what was then called the Pepsi Challenge.  In it, dedicated Coke drinkers were shown taking a couple of sips of two unmarked cola drinks and asked which one they preferred.  By a significant majority, they picked Pepsi over Coke. 

Coca-Cola's management couldn't believe these results, which seemed to confirm the current market trend.  And so they privately conducted their own taste tests.  To their chagrin, they found that over and over, something like 57% of Coke drinkers did indeed prefer Pepsi. 

Panic ensued, which prompted a re-design of Coke into New Coke. 

Behind the scenes, Coke was reformulated to be more like Pepsi -- that is, sweeter and lighter.  As Gladwell writes:

Immediately Coke's market researchers noticed an improvement. In blind taste tests of some of the earlier prototypes, Coke pulled even with Pepsi They tinkered some more. In September of 1984, they went back out and tested what would end up as the final version of the New Coke. They rounded up not just thousands but hundreds of thousands of consumers all across North America, and in head-to-head blind taste tests, New Coke beat Pepsi by 6 to 8 percentage points. Coca-Cola executives were elated. The new drink was given the green light.

Of the New Coke, company CEO Roberto C. Goizueta crowed that the new product was "the surest move the company's ever made."

As is now well-known, just like Ford's Edsel, the meticulously market-designed New Coke flopped in the marketplace, and in short order, the original Coke was back on the shelves, there to stay. 

Market research failed in another area, too. Its warning that Pepsi was on the road to capturing leadership from Coke never happened.  Today, Coke -- the original Coke -- is still the number-one soft drink in the world.

This presents a paradox.  How can it be explained that in taste tests, people prefer Pepsi over Coke, yet when they make purchases, they buy Coke?

The long and short of it is that in a taste test, the drinkers do not drink the entire can of soda.  They take just a sip or two.  Gladwell again: "A sip is very different from sitting and drinking a whole beverage on your own. Sometimes a sip tastes good and a whole bottle doesn't."  A taste test is thus biased towards sweetness -- Pepsi.  However, when consumers were given a case of both Pepsi and Coke to bring home and report the results a few weeks later, the original Coke won. 

This brings us to politics.  In an analogous way, Pepsi is like Obama.  In 2008, voters were really only getting a sip of him.  Back then, Barack seemed enjoyable, nice, youthful, and even refreshing.  And so in that November's taste test, America voted Obama in as president. 

But now, four years hence, the whole can of Obama-cola has been washed down.  Many consumers (citizens) are concluding that the initial sipped sweetness is no longer appealing after having drunk the whole can.  Obama-cola is coming across as superficial at best and overpowering and sickeningly sweet at worst. 

Twenty-twelve is shaping up as a year when reality is beckoning America to return to traditional values including hard work, honesty, self-sufficiency, saving, and yes, even biting the bullet when and where necessary.  This is in stark contrast to the sweetness of a childish and nebulous mantra like Hope and Change.

Time will tell soon enough which road America takes.

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