“Sip Testing” Potential Employees – New Coke’s Marketing Blunder

Coca Cola

Coca Cola

Hiring an employee is a hit or miss; You are running the risk of getting on board a person who can either help your business soar to new heights or burn your brainchild down the ground.

Screening out applicants through interviews or exams helps in getting to know more about the person’s skills and attitude. From here, you will have a better estimation as to whether he or she is fit for the vacant position.
But any measure of estimation is never and will never be a prelude to success. Case in point: New Coke.

Although the tale of Coca-Cola’s black sheep in their white-laced family will live in infamy in the minds of companies running a drastic marketing surge to one-up their competitors, it bears to be mentioned again and again as long as business failures keep repeating themselves.

The tragedy of New Coke marketing

Coca-Cola enjoyed 60% of the market shares since World War II leading up to 1983, when their shares dropped to 24%. The decline was attributed to the rising popularity of Pepsi, a cola drink similar to Coco-Cola’s but with a sweeter taste.

To combat its sagging sales, Coca-Cola did the unthinkable by tinkering Coke’s tried-and-true formula to incorporate a more sugary taste. The result was New Coke, a drink that was perceived to change the beverage industry forever.

It did, but not in a good way.

The company had little foresight as to what the future brought because sip tests conducted before New Coke’s actual release was generally positive. The public’s satisfaction to the product reflected on the increased sales figure once New Coke was rolled out in the market in early 1985.

A couple of months upon its release, backlash for New Coke from a small group of Coke lovers were growing in number. Clamor for old Coke was increasing as the limited supplies of the classic formula has run out in the country, forcing consumers to order thousand cases of old Coke overseas, where the shift to New Coke has not been implemented yet.

On July 10, 1985, Coco-Cola executives issued a press release stating that the company is bringing back the old Coke in the market. The move was what the company was looking for, as the shift to the rebranded Classic Coke outsold not only New Coke, but also Pepsi by the end of the year.

What went wrong?

The change from old to New Coke pointed favorably towards increased sales, as indicated by the taste testing conducted before the product’s release. Any results that produced anything but long-term success for the company would have been impossible.

In his book “Blink,” Malcolm Gladwell got in depth with the issue of the sip tests held for New Coke. According to the research Gladwell gathered, sip tests – as a way to determine a beverage’s taste – do not indicate a beverage’s performance once released in the market.

New Coke won over its sample size because its sweetness was perfect when consumed in small dosages (as would a sip test lets people do). Once the product was sold in 330 ml cans, the sweetness was deemed too overpowering for the regular consumer, thus prompting the backlash against the product.

If the taste tests for New Coke given to people were in cans, the result the company will receive would be closer to the public reaction that took place. Should this have be done, Coca-Cola would have avoided the PR nightmare New Coke produced.

Another factor that goes unnoticed is the lack of preparation on the part of Coca-Cola. The company was forced to scramble on its feet when New Coke fizzled out of the public’s favor. They failed to prepare a plan B that would serve to quell any problems that arose after the release of New Coke. Although they have recovered well upon rolling out Classic Coke, the damage has been done.

The flaw of sip tests

Given this short case study, the experience of interviewing an employee for a job position in your company is similar to a sip test: it only tells little about the applicants. And even if they did well during the screening, it does and should not speak too highly about them.

This is the reason why you gamble when hiring employees even those under probationary statuses. It is customary for applicants to put their best foot forward to make that first good impression during interviews. But this only speaks on what they bring in the table in the meantime. Everything else, especially with regard to what they can bring in the long run, is shrouded in uncertainty.

Sadly, uncertainty is part of the process when it comes to hiring new employees to your company. There is no clear cut method in getting the right people for the long run all the time. What you can do, however, is to be prepared for the worst possible scenario upon getting a person to sign on the dotted line.

Here are some questions you need to ask yourself first before thinking of hiring a new employee to your company:

Can I support the drawbacks of hiring an employee?

Getting additional manpower to get the job done is essential in any business. But what gets overlooked in the process of hiring new employees is the possibility that they won’t pan out as expected, just like New Coke did. Newly hired employees may show flashes of brilliance during their first few months, only to underperform in the long run or succumb to mediocrity once they get settled in your company.

To save yourself from this kind of embarrassment, come up with a contingency plan if the employees don’t meet your expectations upon entering your company. Firing them may be a logical solution, but you’ll have to shed out severance pay to them, which can cripple your company financially if you’re not prepared.

There are alternative ways on handling underperforming employees such as reassigning them to different tasks and preventing them from receiving a salary bonus or increase. You can even take the good will approach by offering a flexible work schedule, option for in-house or home-based work, and seminar programs related to their field of work with the hope of increasing their performance and productivity.

Can someone from my existing manpower do the job?

By offering your current employees the opportunity for extra work, you give them an option to make extra income to support their livelihood, which is important especially in this difficult economy. It is ideal to offer at most half the price you would offer a new employee for the job you will request your existing manpower to do. Set the details of this engagement on paper to make it official, such as the expected output, work conditions, and deadline, if possible.

<h3?Should I let this sit out for now?

Sometimes, not doing anything at all is your best course of action. Do not hire someone just because there is a slight drop in your sales or that your employees are clamoring for added manpower. Assess the situation first. Check the factors and gather data that contributed to the change in sales. Ask suggestions from your employees on what to do other than hiring something. If all signs points to getting an additional skilled employee to solve your problems, only then should you scour the market for that person.

You will have to realize that, although business missteps are inevitable, it is up to you to make the situation work to your favor. The blunder committed by Coca-Cola allowed them to realize that they had the solution to their problem all along: the classic formula.

By taking the necessary precautions with hiring employees, you not only save the risk of falling for unexpected occurrences, but also learning something valuable to help your company grow.

Is the New Coke marketing failure similar to how you hire potential workers in your company? What do you think are other questions you need to ask yourself before hiring employees? Share your thoughts by commenting below!

2 Comments on "“Sip Testing” Potential Employees – New Coke’s Marketing Blunder"

  1. Wow, this is a stirring article. Very comprehensive report! Thanks for the information!

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