Marketing | Product thinking vs. brand thinking

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In 1985, the Coca-Cola Company made a now-famous mistake that not only ended up saving the business, but also taught us a lot about the power of a brand.

At that time, Coke was rapidly losing market share to Pepsi, and as things just kept getting worse, the company decided to take drastic measures. It seemed apparent that the public preferred the taste of Pepsi, and so a new formula was developed that was closer in taste to Pepsi than the original Coke. Test groups loved it, even more so than Pepsi. So the company decided to go ahead and replace their old product with what they called “New Coke”.

But when the announcement was made in the US, the public was furious. They weren’t buying the “classic” Coke and they hadn’t tasted the new version yet, but they knew they didn’t want anybody messing with something they considered an embodiment of American culture. People started stockpiling crates of the original Coke, protest groups were formed, and phone calls flooded the company’s hotline. After a few months, the company had to admit that they had made a mistake. In choosing to let go of a dying product, they had underestimated the power of their own brand. Classic Coke was brought back into production and, by the end of 1986, the drink that people had stopped buying was outselling both New Coke and Pepsi.

The American people had lost enthusiasm for the product, but they still loved the brand. And, as it turned out, the problem was not with the product after all. Pepsi had for decades marketed itself to the younger generation, and this paid off in sales. And when, after the New Coke fiasco, Coke changed its brand strategy to be more youth focused, sales rose. Additionally, the incident revealed that the company was attentive to its customers, thereby gaining new affection from the public.

The obvious moral of this story is that when you have a strong, reliable brand, customers will easily overlook a bad product decision. But the corollary to this is that too much focus on a product at the expense of your brand is not a good long-term strategy.

As you build your product range, advertising the qualities of individual products matters less. Customers who had a good experience with one of your products will buy new products based on that experience and the guarantee that they associate with your logo on the packaging. At that point, it will pay to become more brand focused rather than product focused. A brand is a promise and, provided that your products deliver on that promise, you can direct your efforts and resources on building your brand without losing sales.

Not too long ago, a well-known battery manufacturer sold branded torches and failed to include batteries. Customers buying the torch would have had to buy separate batteries, and may have picked those of another manufacturer. It seems obvious that a battery manufacturer should include its principal product with what was essentially a battery-operated marketing device. However, somewhere between the boardroom and the factory floor, this basic piece of marketing logic got lost. This is a classic example of product thinking.

Product thinking is focusing so hard on your product that you lose sight of your brand; it’s not being able to see the wood for the branded trees. The next time you develop a new marketing strategy, consider your ultimate goal – do you want to sell a few products, or do you want to build your brand?

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