Tami Reller, head of marketing and finance for the Windows business, said in an interview today with the Financial Times that it was changing “key aspects” of Windows 8. The FT called it “one of the most prominent admissions of failure for a new mass-market consumer product since Coca-Cola’s New Coke fiasco nearly 30 years ago.”
But, will Microsoft take advantage of this New Coke Moment? Do they understand that marketing is not just about new features and a great interface? Marketing is often about the relationship human beings have with their brands.
It is worth taking the time to remember New Coke. For 80 days in 1985 (April 23rd to July 11th — days that will live in marketing history), the Coca-Cola company replaced the 100-year-old formula for Coca-Cola with a new formula. It wasn’t an arbitrary decision. Coca-Cola had been losing market share for 20 years, from 1964 to 1984. In addition, the overall sugar cola market was in decline. It did not take much to figure out that a declining market share in a declining market was a recipe for disaster. The company tried new ads, new packaging, new everything except the 100-year-old formula.
Were people just getting tired of the taste of sugary cola? That thought really worried Coca-Cola executives in 1984.
At the same time, the company was investing heavily in the diet soft drink market. Brands like Tab, Diet Coke and others were expanding. The R&D department was trying many different formulations for a better tasting diet drink. In the process, they found a formula that beat the taste of every cola on the market — including Coca-Cola. In blind taste test after blind taste test, the new recipe won. And, it won by a lot.
The company conducted extensive tests in secret and decided to launch New Coke on April 23, 1985. They were convinced that they had a winner. They thought they had tested everything. Perhaps they tested everything physical. But, they never tested the consumer’s emotional attachment to the brand. (And, I do not know how to test that without exposing the secret.)
The word that Coca-Cola changed its formula so upset customers that hate mail reached 8,000 letters per day. Pepsi declared a company holiday and gave everyone the day off to celebrate the admission that “Coke Is Not It.”
But, the real story is how Coke responded by quickly recognizing the emotional value of its brand, admitting its mistake and bringing back the original formula of Coca-Cola as Coca-Cola Classic. Suddenly, the company cemented its ties with the consumer and doubled its shelf space in the supermarket. The advertising quickly changed back from taste tests to emphasizing one’s emotional attachment and has been there ever since. To really appreciate one of the great turnarounds in marketing history, watch this compilation of great emotional Coke commercials. (My daughter is a particular fan of the polar bears.)
Coca-Cola is now stronger than ever and Pepsi market share has not caught up. So, while New Coke has become a shorthand expression of a marketing failure, it is also the story of an amazing recovery. The second part of the New Coke story is the story of doing everything right.
Now, back to Windows 8. Microsoft wishes that it had the emotional attachment from consumers that Coca-Cola had — or even that Apple has. Can it have a New Coke moment?
For Microsoft in 2012, it must have looked like the sugar cola market of 1984. Not only was the Apple Macintosh taking share from Windows, but the overall sales of PCs were in decline. It would not be hard to imagine the company seeing its main source of revenue dropping dramatically.
Phones and tablets are the consumer device of choice these days. So, it would make logical sense to Microsoft to build an interface that was similar from phone to desktop. In theory, a common interface would make it easier to switch between devices. Launched last October, Windows 8 has a new “metro” interface that is similar to the one on the Windows 8 phone. The new operating system was well received on the phone. One reviewer called it “the most elegant mobile operating system out there.”
But, just like with Coke, the Microsoft R&D department did not think about the relationship that people have with their products. Phones are in a constant state of change and people are expecting new things. (The iPhone was first unveiled on June 29, 2007 — less than six years ago!) However, the desktop is different. The Windows START button has been around
since Windows 3 in 1990. That is 23 years ago. (CORRECTION: As Phil pointed out in the comments, the START button was created for Windows 95 in 1995, nearly 18 years ago. I stand corrected. In honor, I include a link to the Windows 95 commercial featuring the Rolling Stones playing Start Me Up. http://www.youtube.com/watch?v=P0AJM6HMYjM)
Some blog readers may not remember a time before there was a Windows START button. Windows 8 does not have a START button.
Several weeks ago, a family relation asked me to go with her to her local Best Buy store to help her to select a new laptop computer. She did not have much to spend and she did not need much computing power for email and Skype. Macs were simply too expensive. Touchscreens were not relevant. Tablets, like the iPad were too small for sharing a large screen with her family. Her needs were simple and she was familiar with Windows.
We arrived at Best Buy and saw several rows of displays with Windows 8. And, as silly as it sounds, I could not figure out how to get Windows 8 to start using a mouse and keyboard. I clicked at random and things happened — sometimes. I was frustrated. My family relation was frustrated. We left without buying anything.
Microsoft just made me look stupid in front of my family. I got angry and was frustrated. Thank you, Microsoft.
Walking out of the store is what more and more people are doing. International Data Corp. says Windows 8 contributed to a 14 percent decline in worldwide PC sales during the first three months of the year — the biggest year-over-year drop ever.
“People think they have to have touch, and they go look at the price points for these touch machines, and they are above where they want to be and they say, ‘I guess I’ll wait,’” said Bob O’Donnell, an analyst at IDC.
Windows users did not protest the change in the operating system in the same way that Coke users protested the change in their beverage. Windows shoppers simply just did not buy.
Ms. Reller of Microsoft did not say what changes would be in those “key aspects” of the operating system. Bringing back the START button would be an obvious one. But, that is just the most obvious one.
So, can Microsoft have a New Coke moment? They certainly made the New Coke marketing mistake. But, can they rally the market and have the marketing success? Let’s recap:
- Coke responded in 80 days. For Microsoft, it has been 8 months.
- Coke said exactly what they would do. They brought back the old formula very quickly. Microsoft still has not said what they will do or when they will do it.
- Coke recognized the emotional connection people have with their brand. Microsoft, well …. I do have a relationship with the START button, but it is not an emotional one. It is a practical one. I have been trained.
For Microsoft to have a New Coke moment, they need to realize that for Coke it wasn’t about the taste, it was about the idea of New Coke. They learned that and Coke is now stronger than ever.
For Windows, it is not about the features, it is about leveraging 20 years of consumer experience with Windows. It is not about the function of the START button, it is 20 years of START being a constant on-line companion.
If Microsoft can master its relationship with millions of users, maybe it can be lucky enough to have its New Coke moment.