Marketing Case Studies
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Chapter 3: Cola Wars
Question #1: In the new Coke fiasco, how could Coca-Cola’s marketing research have been improved?
To determine how the marketing research could have been improved, let us first define the end result. Ultimately, consumers felt almost betrayed that Coca-Cola scratched their flagship product, Coke, for a newer, updated flavor. Coca-Cola’s marketing research showed that over half of the people who taste-tested the new flavor preferred it over Pepsi and the nearly 100 year old Coke flavor. Looking back, there were several areas in which Coca-Cola’s marketing research strategy was fatally flawed.
First, taste-testers were not made aware of the possibility that the existing Coke flavor would be replaced with the newer flavor. This could have been the million-dollar question for Coca-Cola executives: “How would you feel if we replaced the existing Coke flavor with this new flavoring?”
Second, the sample size who tested the new flavoring was simply too small. Taste-testing was geared more toward determining whether consumers preferred a sweeter taste instead of toward the actual flavoring used. When deciding whether or not to abandon a century old product whose number of customers reaches into the hundreds of millions, even 40,000 taste-testers cannot provide a representative sample.
Finally, in what seems to be the most glaring oversight of all, the research showed that only 55% of the taste-testers preferred the new flavor. This data is hardly convincing enough to scrap an existing product in favor of a new product. Assuming that there were 100,000,000 Coke drinkers in 1984, Coca-Cola essentially cut their market in half to 55,000,000 who would presumably prefer the new flavor. It hardly seems like rocket science that if only half of the taste-testers prefer a new flavoring, you should not replace the existing flavoring.
Question #3: “If it’s not broken, don’t fix it.”
Just because a product or service is not broken does not mean that the company should not try to improve upon that product or service. In a fast-paced economy, a competitor could introduce a competing brand with some feature or other advantage over your company’s product or service. If you had been from the school of “If it’s not broken, don’t fix it”, you could potentially lose a lot of revenue. Instead, if you had been proactive in updating your own product to keep it viable in today’s marketplace, you could more easily fend off competitive advances by your competitors.
In the Cola Wars case study, Coca Cola attempted to keep their product up-to-date by changing the flavoring. Obviously, this was a poor choice. What can be learned from their failure is that no one rule of new product development can be applied to every company in every industry.
Chapter 4: Airliner Wars
Question #5: What do you see for Boeing three to five years down the road? For Airbus?
Since this case was last updated in 2005, we already know what has happened during 2006/2007 so I will speculate as to what the future holds for each company from today forward.
Boeing recently launched their newest plane model, branding it the 787 Dreamliner. This was the most successful commercial airplane launch to date with orders having been placed for 677 planes at a value of over $110 billion. Over the next three to five years, I suspect that Boeing will regain a considerable amount of its market share with their consumer-focused advancements integrated into the 787 Dreamliner. It seems like Boeing has finally come around and listened to what the consumers have been saying for years. With their new airliner, Boeing is offering larger seats, aisles, windows and lavatories. In addition, there will be wireless internet access with seatback displays.
I believe that Airbus will continue to receive orders for their A380 super-huge crazyjet. The problem I foresee is the logistics required for boarding 550+ passengers into this aircraft. Obviously, with time, this problem will be ironed-out, but at what cost? Will too many early adopters be put off by the long waits? And what physical modifications will need to be done at the terminal gates to support the efficient boarding of these aircraft? Loading passengers into the upper and lower levels simultaneously will require significant modifications to each airport’s facilities.
Question #9: How wise do you think it was for Airbus to “bet the company” on the super-jumbo A380?
In order to be successful in an industry such as aircraft manufacturing, one must find a