Cadbury could learn a thing or two from 1980's Coca Cola experiment

When you mess around with an iconic product that your customers just love to obsession just because you think you can save money by changing its appearance, packaging and well and truly tried and tested formula you risk losing that iconic status and your reputation that took generations to build and your customers.

Cadbury PLC [CBRY.LSE] have done just that by changing packaging sizes of their family block chocolates while keeping them the same size of the old by using different packaging and the most brain dead thing of all changing the taste of their very successful essential ingredient that has made them the brand to go to when you think of chocolate, the ingredient in all their products, chocolate itself!

Forget for a moment that I am a pure obsessional when it comes to chocolate, my body is part blood, water, Crunchie Bar, Dairy Milk, Moro Bar and a list as long as your arm in Cadbury products but just consider what Cadbury have done.

The product that has made them the leader in chocolate for generations has had its successful formula changed,they have substituted the very essence of chocolate, palm oil for animal fat, supposedly to save money.

That is like taking the sugar out of Coca Cola and still calling it Coke!

Business 101, you don't change a successful product that your customers would die for just to save money. Trust me, they will pay more for it.

Executives at Cadbury head office are perhaps too young to remember another iconic product that was tampered with in the mid 1980s, the aforementioned Coca Cola from the Coca Cola Company [KO.NYSE].

The formula for that iconic drink was sweetened to taste more like Pepsi and launched on customers as "New Coke" and was an instant failure. Customers protested, Coke didn't listen,



they said the new product was better and consumers just needed to get used to it but Coke management didn't figure on how obsessive their customers were (duh!) and they simply stopped buying the new Coke. Two months latter Coca Cola relented and re-launched old Coke as "Coca Cola Classic" and the two products existed side by side on the supermarket shelf for a number of years. It is no longer sold in the United States.

This should be a lesson for Cadbury who must have execs in the marketing department of their Schweppes division that know about this famous marketing blunder, they sell their own iconic lemonade and other drinks products - the Coke story from the 1980s is taught in business schools around the globe about what not to do when in business.

"Those that don't learn from the lessons of the past are doomed to make the same mistakes".

Cadbury should learn from their mistake, it is already costing them in lost sales and is going to cost them dearly in the long-term if they don't rectify their decision to make a change.

I am a life long consumer of their former delicious products and I will no longer be buying them.

They just don't taste the same.

Its Whittakers for me!

See the new Whittaker's TV Advertising comparing Cadbury to Whittakers.





Disc I love chocolate

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Getting fluffy and cute with Teresa Gattung

Come back Teresa, all is forgiven, we love you!

That is what I would be saying if I wasn't being realistic about the disastrous job that Teresa Gattung did at the helm of Telecom New Zealand [TEL] .

Teresa, whose expertise is apparently in marketing, milked Telecom of dividends, failed to invest for the future and cost long term Telecom shareholders billions , as the company share price recently plumbed the depths of sub NZ$3.20 .

After all that she has been resurrected like one of those genetically enhanced sheep from the 2007 film "Black Sheep", the girl just wont die.

Appropriate that I make an early sheep joke because now someone has shepherded her back to New Zealand to become chairwoman of The Wool Company, which is undergoing a complete re-branding under the guidance of PGG Wrightson [PGW] chairman Craig Norgate.

Now you might think this post is about sticking it to Gattung again. Well that is where you would be wrong.

While Ms Gattung was the worst possible person to head a communications company, principally because she doesn't communicate well, as a marketer, she is perfect for resurrecting the tired image and fortunes of the New Zealand wool industry.

Wool isn't sexy, it is still being used mainly in lower margin products like carpet and bulk wool, whereas it could be marketed for use in higher margin goods like quality clothing, specialist outdoor gear and other high end product.

Now I could be wrong, she maybe an awful marketer, however, at Telecom, under her wing, she developed some of the best marketing in business at the time.

The high end wool business could be a high value export business if managed and marketed well and you have to give Gattung a couple of years before you can right her off completely.

Lets hope she doesn't try to pull the wool over her customers eyes, as she did at Telecom.

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c Share Investor 2008

Marketing vs Content

During the last 7 months or so since contributing in a serious way to this blog, I have learnt a number of things.

1. Its bloody hard work
2. Don't ever underestimate how intense competition can get
3. Loyal readers are why I continue
4. Marketing can be more important than content (even though I hope I have
improved my content over the last 7 months)



Marketing such as this, helps push products that
have little real benefit for the consumer but sell
more because of the appeal of its advertised image.


While the first point maybe obvious to those seasoned writers who have been doing this for years, and business leaders should know instinctively the second point. Point number three is more of a personal nature but it is the importance of marketing that I wish to principally discuss here.

When one thinks of the triumph of marketing over content, ones interest naturally leans to the granddaddy of all when it comes to marketing, Coca Cola.

The advertising of the sugar, water, caffeine and CO2 concoction has been filled with much mystique and hype since the product began and hasn't ceased in this way in the product's 100 plus years of existence.

The origins of Coke's marketing success comes from those traveling charlatans who used to go from town to town in the USA, boasting of the properties of the latest elixir that would "cure all".

In the case of Coke it started as one of these types of elixirs but it at least had a bit of a pick me up quality to it, from the sugar and caffeine, and other substances in its earlier guise.

The early backers seized on this traveling salesman mystique and it has been used and refined over the years to the point where Coke is the most recognised brand in the world, and has been for many years.

A huge amount of marketing dollars were used to push the fizzy water over the last 100 years and the ploys used to keep the drinks mystery and image have been many and varied.

During the company's boom years of the 1940s, American soldiers were supplied with the sweet brown stuff by Coca Cola wherever the war took them and the image that Coke was the epitome of fighting for the "American dream" was then cemented in the minds of not just Americans, but many other countries that fought side by side them.

Clever marketing on Coke's part.

The fact that this product, if consumed in large quantities, can, make you tubby, rot your teeth and has no benefit to the body in a nutritional way is largely forgotten because the consumer is constantly bombarded with images of attractive, athletic, young people enjoying the "Coke lifestyle".

A whole host of dangerous and worthless products from Cigarettes to most home cleaning products, are successful because of great and or constant marketing.

It is a masterstroke of marketing an image for a product that has no real benefit to its consumers.

I know, they say consumers these days can see past the hype and can tell quality but the coke test proves that millions just cant or chose to ignore the realities.



The world's most successful brand, Coca Cola, achieved
its longevity not through its magnificent product but
from expert marketing and branding.


While I'm clearly not comparing my writing to Coke's success, I do wonder sometimes about lesser quality product succeeding over the hyped up marketing of the likes of my mate from the Tarawera empire, Phillip MacCallister, who's marketing budget must surely be bigger than my mortgage payments, which are quite considerable!

The Share Investor Blog isn't being advertised on Google, but I probably should. I don't spend any money on marketing but I do spend time trying to get it out there for free so people can read it.

I think it is relatively interesting, and its content of a sufficiently good quality. It is getting a steady increase in readership as the months go by, but I still think it deserves better numbers when I compare it to other websites of a similar nature with larger audiences.

My ignorance of the importance of marketing before I started the Share Investor Blog is clearly apparent to me now. Here was I thinking, in my best Kevin Costner impression, "if I write it they will come".

How hopelessly wrong I was.

The importance of marketing cannot be underestimated, especially when it comes to a new business venture. While it is fine to have a wonderful product, that is not always enough. People actually have to know you have a great product.

Those people at Sony had a superior product in the Betamax Video player in the 1980s but the competition had more marketing muscle but an inferior product.

We all know what happened to Betamax.

My lesson learned!


**Footnote: Look for an exciting new permanent addition to the blog over the next 2 months. Legal reasons prevent me from telling you more.


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