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Who mugged the Bean?

It was with great interest that I read Chris Moerdyk's recent column on the changes at Mugg & Bean as I am "his marketing manager Mike" whom the first commenter mentioned. I joined the group when there were less than 20 stores and left when there were over 80. All brands develop over time and in fact my motto when running the marketing department was "constant renewal through innovation" but where did M&B slip up, if it has slipped up at all?
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!

The first Mugg & Bean to open was the Waterfront in Cape Town in 1996 and it was the first store to convert to the new look in October 2007. Famous Brands bought the concept from the three owners in 2009. While TBWA\Hunt\Lascaris\Durban won the Mugg & Bean account in February 2010, morrisjones&co has taken it over since mid-June this year and is working and building upon the existing strategy.
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About Michael Said

Twenty two years in the hospitality industry, working from the ground up, has left Michael Said no wiser to understanding the workings of waiters, customers or franchisees BUT he insists he will keep on trying. In January 2006, he founded www.brandStrategy.co.za, which develops brand strategies and integrated marketing plans, including internal and external marketing policies and the overseeing of all ATL and BTL campaigns. Email Mike at , find him on Facebook and follow him on Twitter at @mike_said_what.
Well thought out and written Michael-
I guess the point is that there are a whole bunch of competitors who are offering the same thing these days.The bottomless cup of coffee is about the only point of difference for the Mugg and Bean currently. I can only take so much caffeine. So the Mugg and Bean needs to look at what position they want to own in my mind and sell me a value proposition.All the others are trying to offer me much the same. So where to next? Or do you just stay where you are and keep up the standard? I suggest that isn't going to be enough. Sooner or later one of the other chains will take the high ground and Mugg will fade from our memories. E Vida offered a loyalty card, so did you, Bread Basket gave biscuits with the coffee, so did you. It's tough out there. Finding a unique point has become impossible, or is cut off immediately. So you have decide on something and deliver consistently. Then you take ownership.
Posted on 20 Oct 2010 10:39
Bottomless Talk-
No amount of talking can explain away a really bad tv ad.
Posted on 20 Oct 2010 11:02