BlinkPepsiChallenge - Excerpt on taste testing market...

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Excerpt on taste testing market research from Blink by Malcolm Gladwell. For educational use only . 2. Pepsi's Challenge In the early 1980s, the Coca-Cola Company was profoundly nervous about its future. Once, Coke had been far and away the dominant soft drink in the world. But Pepsi had been steadily chipping away at Coke's lead. In 1972, 18 percent of soft drink users said they drank Coke exclusively, compared with 4 percent who called themselves exclusive Pepsi drinkers. By the early 1980s, Coke had dropped to 12 percent and Pepsi had risen to II percent and this despite the fact that Coke was much more widely available than Pepsi and spending at least $100 million more on advertising per year. In the midst of this upheaval, Pepsi began running television commercials around the country, pitting Coke head-to-head with Pepsi in what they called the Pepsi Challenge. Dedicated Coke drinkers were asked to take a sip from two glasses, one marked Q and one marked M. Which did they prefer? Invariably, they would say M, and, low and behold, M would be revealed as Pepsi. Coke's initial reaction to the Pepsi Challenge was to dispute its findings. But when they privately conducted blind head-to-head taste tests of their own, they found the same thing: when asked to choose between Coke and Pepsi, the majority of tasters - 57 percent - preferred Pepsi. A 57 to 43 percent edge is a lot, particularly in a world where millions of dollars hang on a tenth of a percentage point, and it is not hard to imagine how devastating this news was to Coca-Cola management. The Coca-Cola mystique had always been based on its famous secret formula, unchanged since the earliest days of the company. But here was seemingly incontrovertible evidence that time had passed Coke by. Coca-Cola executives next did a flurry of additional market research projects. The news seemed to get worse. "Maybe the principal characteristics that made Coke distinctive, like its bite, consumers now describe as harsh," the company's head of American operations, Brian Dyson, said at the time. "And when you mention words like 'rounded'
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This note was uploaded on 01/12/2012 for the course MAR 255 taught by Professor Cushman during the Spring '08 term at Syracuse.

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BlinkPepsiChallenge - Excerpt on taste testing market...

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