Hemming and hawing over Diet Coke

Here is another example of fast-following being better than leading.

Twenty years ago, it became clear that there was a really major market out there for diet cola. And regular Coke had the reputation for being stuffed with calories.

The Coca-Cola Company had sold for many years a brand called TAB – and the reason that the company gave it a separate name, far from Coke, was that it tasted foul.

So the challenge was to produce a good-tasting product with zero calories. First to market was a local US brand, Royal Crown. It tasted good and consumers liked it. But the truth was that they were faced with a powerful global competitor who could obliterate them quite easily.

So after much hemming and hawing – it seemed to take years – Coca-Cola finally launched Diet-Coke (Coca-Cola Lite in many markets), which built massive sales everywhere, including in Australia, where my ad agency, Lintas, handled the launch.

I think the lesson is not to go up against a much bigger competitor with your new product if they can blow you out of the water so easily.

In that case, you’ll need an important aspect of your product or brand that’s either hard to copy, or, better still, has some IP protection.

To lead or to follow? That is the question

Which is the better strategy - leading or following? Well, of course, it depends…

If there are problems with a competitor’s new product that have not been resolved and you can address them speedily, then it’s better to learn from their experience.

A dramatic example of this was the introduction in 1952 by the British aero manufacturer, De Haviland, of the world’s first commercial jet airliner, the Comet. All seemed well for a while, but then Comets started to fall out of the sky with significant loss of life. The problem, they discovered in due course, was stress fractures resulting from the square shape of the windows.

Boeing’s introduction of their 707s a few years later completely solved that problem and the Boeing 707 went on to dominate world markets for a generation.

So if you plan to be an effective fast-follower, it’s good to set yourselves up to study competitors’ failures, as well as their successes, and to see if you can fix their problems and outflank them.