#364: When 70% of consumers do not want a product
The case for blind taste tests, and no labels.
Some of you may remember a time when advertisers used blind taste tests. They would never call out the competitor by name. I distinctly remember a Coke vs. Pepsi ad. A white sleeve covered each soda can, and when the winner was selected, the sleeve was pulled off, showing you only the winner. You never saw the loser. It could have been Pepsi or Tab; it didn’t matter. The clear winner was the one that tasted great or less filling (Bud Light reference).
Over time, these taste tests became quite elaborate, some with four or five legitimate flavors. The consumer was given the ability to choose the one they liked. It wasn’t a binary choice; multiple options had unique features and benefits. When Coke and Pepsi started to lose market share to these smaller brands, they began going head-to-head with each other. In some ads, you would see a red can with no logo facing off with a can with a red, white, and blue circle. Over time, they stopped being polite and just started saying the names. But we no longer saw the RC Cola, Tab, Schwepps, and other brands. Sure, the smaller brands took a few points of market share, but the battle for the lion’s share was between the two behemoths.
As consumer tastes began to change and concerns about health, sugar, and caffeine came about, these two competitors gobbled up their competitors. Sure, we have a wider choice, but from Desanti water to Fanta, you still give your money to Coke. They have a big umbrella, and whether you like their overall strategy or direction, it doesn’t matter; your money goes to fuel the big engine. If Coke decides to eliminate Fanta from the shelves and you shop at a store offering only Coke products, you are forced to swallow what they give you.
Let’s look at a hypothetical market.
Consider having a product available to the consumer and only one real competitor. You will have around 47% of the market, and your competition will be the same. About four or five tiny companies make up the other 6%. Sounds great. Each season, you see a slight shift in your market share, up to 48 or down to 46, but you are guaranteed this penetration level.
You aren’t breaking any laws; you are a legal oligopoly. Sure, government agencies ensure you follow the rules. However, if you are the season's winner, you get to appoint all the government agency managers.
Of course, antitrust laws are designed to promote fair competition and prevent monopolistic practices. However, you and your main competitor have colluded by giving up on specific regions of the country and only competing head-to-head in a few select areas. In fact, out of the 150+ million consumers of your products, a handful of consumers decide the season's winner. One recent season was decided by less than 50,000 consumers spread over five different territories.
Further collusion exists when you and your competition use the agencies they are heading throughout the various regions, preventing the smaller competition from being heard in those markets. But wait, there are consumer advocates and public interest groups that can be potential hurdles and roadblocks to your success. Unless, of course, these groups are nothing more than your external public relations firms. You’ve given them access to your team, and they also profit from your success.
When will we have a fair choice?
Now consider, in a recent study, that 70% of all consumers don’t want your product or your main competitors. They are tired of the ads where you are attacking the competition. They are upset that their region is like a store selling only Coke. If there were a proper taste test between you and your competition, would they be able to tell the difference? Or better yet, would they even like it? Again, you are not worried because you and your competitor own the supply chain and distribution channels.
I’ve asked you to imagine yourself in the position of one of the main companies. It’s a pretty comfortable feeling to know that, in many ways, you are protected and don’t really have to worry about delivering a good product.
Now, think about being a consumer in that marketplace. It kinda sucks.
I want to return to when we had ten cans lined up, unaware of their brand. Let’s honestly and objectively test them and decide which one we like. Imagine, if you will, a ballot with only numbers, no colors or animals depicting each choice. Further, imagine that each had an equal opportunity to sell their features and benefits, and out of politeness and professionalism, they do not mention the other teams. They don’t tell us why Pepsi is bad for us. They sell us on the features and benefits of their brand.
Imagine a distribution channel that doesn’t limit the number of cans on the shelf and has low barriers to entry. Imagine equal advertising and consumer advocates who only objectively reported each option’s features and benefits. Imagine a free and objective media that doesn’t pick sides.
Me? I drink nothing but water out of the tap.
I’m so tired of the cola war that I drink only what comes out of my kitchen sink now. But that won’t stop me from dreaming of tasting something different if I were ever given the chance. We used to have a free choice, and our opinions mattered on what the market supplied.
Let’s allow everyone who wants to be heard into the public square if they can play by some of the old rules. If you don’t have anything nice to say, don’t say anything at all. It’s time to bring back public discourse, compromise, and decency.
Eliminating all labels and forcing the consumer to do homework would be a great way to determine what we strive for as a market. Ultimately, we may find that Dr. Pepper is the most popular. We might not like everything about it, but we would know everyone had a chance to taste it for themselves.
If you’ve read this far, what is your opinion? Do you believe in an open system of non-partisan ballots? What are the pros and cons of the two-party system? I would love to hear your thoughts.