Who mugged the Bean?

I believe the answer lies in the "New Coke" story...

Pepsi vs Coke

It was the early '80s and Pepsi was at the time running its taste test that revealed time and time again that customers chose Pepsi over Coke. Even when Coke conducted its own test, it got the same devastating results... there was no question, it was time for change. So it gathered all the marketing research data it could, called in the scientists and the experts and tasked them with finding a drink that would beat not only Classic Coke (as it came to be known) but Pepsi as well in a taste test.

A few years later, April 1985 to be exact, New Coke was launched with great fanfare and hype and a few zillion dollars in marketing spend (oh, to have been the media shop that placed those ads!).

However, public reaction was less than favourable, to say the least, with some people likening it to tampering with the American flag. Stories abounded about retailers hording Classic Coke and selling it at many times the retail price. On 11 July, Coca-Cola removed New Coke from store shelves. "We did not understand the deep emotions of so many of our customers for Coca-Cola," said company President Donald R Keough.

So how did Coke with all its millions manage to blow this one? Well, the secret lay in how the tests were conducted and the results you get from a taste test over a prolonged usage test.

Would have been completely different

Pepsi is sweeter and smoother and, on first tasting, appears more satisfying. Coke, though, is stronger, with deeper flavours. Had the researchers given the respondents a case of each drink to take home for the weekend and drink at their leisure, the results would have been completely different. Coke is easier to enjoy in larger quantities and over a longer period of time.

So how does all this relate to M&B and its new look and the reactions it's receiving?

Mugg & Bean hit the malls in the mid-to-late '90s with what was, without it realising at the time, a perfect "Blue Ocean Strategy". That is to say, it created its own space where no-one else was sailing.

While the competition were either competing in the stainless-steel-and-fluorescent-light coffee shop space or the old stuffy restaurant space, Mugg & Bean was able to take everything we loved about coffee shops (fast, simple, relatively inexpensive, accessible etc), combine this with everything we loved about restaurants (portions, range of food, comfortable surroundings etc), toss out everything we didn't like about either and throw in a whole heap of innovations such as Giant Muffins and Bottomless Coffee... Blue ocean sailing it was!

Slowly others began to take note, some attempting to copy The Mugg while others began creating a new space for themselves, such as Woolworths Foods and Tasha's. Mugg & Bean woke up one morning and realized the ocean was not so blue anymore and a new battle had begun.

Was it the...?

Was it the food? Was it the branding? Was it the look and feel of the stores? Or was it, heaven forbid, all three?

Focus groups were put together and many of them included a younger clientele that were not predisposed to M&B and could not relate to the signage or the look and feel of the stores. New agencies were called in and new briefs were written... and "New Coke" (or is that "New Mugg"?) was presented to franchisees and test groups alike to a resounding "YES, that will make the difference!"

The look was fresh, the look was innovative, the portions were scaled down, the branding got a makeover BUT instead of creating a new Blue Ocean, all M&B had done was made some modifications to its ship that was sailing in those same murky waters.

To make matters worse, it didn't realise that people would no longer find its fresh new look as inviting and as familiar as they had found the original look; it was, in fact, great to taste but not too appealing over the whole weekend. The warmth and familiarity was gone and with it many people's perception of the brand.

We all know that marketing is not a battle of product; it is a battle of perceptions. Not ours but those of our customers!

A whole new market?

Who is to say that the new brand and new look won't open up a whole new market for The Mugg by appealing to Gen X and Y and the New Millennials, but alas, for the Baby Boomers who found such comfort in the food, the décor and the brand, it may be lost forever.

I have been delivering a talk called "Bottomless Customers - how Mugg & Bean turned bottomless coffee into a seemingly endless stream of customers and how you can do the same for your company" for some time now and maybe a few years from now, for better or for worse, "New Mugg" will be a case study too!