Great Business Ideas: Being honest with customers

Great Small Business Ideas to Start: Being honest with customers

Focusing exclusively on the threat from competing businesses can leave clients feeling alienated and neglected.

The idea

In the early 1980s, soft drinks giant Coca-Cola was concerned by its decreasing market share and rivalry with the soda multinational PepsiCo. The 1980s was a decade that saw a “taste explosion” in the soft drinks market, with the introduction of a wide range of new citrus, diet, and caffeine-free colas. Coke was being outperformed by Pepsi in a series of “blind taste tests.” Rather than focusing on the overall issue of declining popularity, Coca-Cola zeroed in on the issue of losing in the taste tests, ignoring the significance of its image, and consumer attachment to its brand.

It launched “New Coke” with a new and improved taste. Although the launch technically went well, Coca-Cola soon found itself facing an angry and emotional reaction to its new formula and image.

Thousands of calls were received from people wanting a return to Coke’s classic product. Some of the calls were not even from Coke drinkers, but simply Americans wanting a return to a classic cultural symbol. The original Coke was brought back, Coke apologized, and the lessons were learned. Focusing on the threat from an increased number of rivals and on Pepsi’s superiority in taste tests meant Coca- Cola had lost sight of the arbiter of competition: the customer.

Making decisions based solely on the actions of competitors, without first researching what matters most to customers, can lead to serious corporate blunders.

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In practice