Is the iPhone Coke, New Coke, Pepsi or Just Sugar Water?

On January 10, 2016, long time subscriber and frequent commentator, Obarthelemy wrote:

User Experience is in the eye of the beholder. Until I see double-blind tests about it, I flatly deny that Apple’s is superior/premium…. ~ Obarthelemy

This really got me thinking. How would the Apple iPhone, Phones that ran Android, Windows Phone, etc. fare against one another in a double-blind test?

Like Carl Sagan, I’m a huge believer in the scientific method:

…the scientific method was the best method ever invented for arriving at the truth of things. ~ Carl Sagan

However, before we discuss whether the iPhone or Android Smartphones ((Smartphones that run the Android operating system.)) or any other smartphone would win in a double-blind test, we should first take a step back and ask ourselves whether a double-blind test is the best way to judge consumer preferences for smartphones — or consumer preferences for ANY product, for that matter.

Fortunately, we don’t have to guess. That question was asked and answered in the 1980s by the marketing campaign known as the Pepsi Challenge.

The Pepsi Challenge

The Pepsi Challenge (see 30 second commercial) marketing campaign of the 1980s was supposed to be a scientific inquiry; a double-blind experiment.

In a world overwhelmed with soda options, how could you really know which soda you liked best? It made sense to put prejudice and branding aside, wear a metaphorical blindfold and focus purely on the flavor of the various options. ~ Pepsi paradox: Why people prefer Coke even though Pepsi wins in taste tests

Here’s the thing: The Pepsi Challenge wasn’t just a marketing gimmick. It really is true that in blind taste tests people preferred the taste of Pepsi over Coke.

In fact, the Pepsi Challenge marketing campaign was so successful that Coke began a series of its own internal taste tests aimed at developing a superior product. The result was New Coke — a sweeter cola reformulated to be better than Pepsi and better than the classic formulation of Coke in blind taste tests.

The reaction to New Coke was not at all what the Coca-Cola company had expected. Regular Pepsi drinkers were underwhelmed. Regular Coke drinkers hated it.

The board of Coca-Cola then reversed itself, re-introduced the old formula under the brand name “Classic Coke”, and sold both New Coke and Classic Coke side-by-side. Over time, New Coke all but disappeared with Classic Coke, once again, taking its place as the company’s flagship product.

Today, despite the double-blind taste tests that showed that Pepsi was preferred over ‘Classic’ Coke, and New Coke was preferred over both Pepsi and Classic Coke, people buy far more Coke than Pepsi, and almost no one at all is interested in buying New Coke. ((According to industry statistics compiled by Beverage Digest, Coke owns 17 percent of the American market for carbonated soft drinks. The next most popular choice is Diet Coke with 9.4 percent. Pepsi languishes in third place at 8.9 percent.))

What’s the heck is going on here? If New Coke beats Pepsi in taste tests, then why is it less popular than Pepsi? If Pepsi wins taste tests against Coke, then why does Coke still dominate the soda market?

Hypothesis #1: Marketing Is All That Matters

Some industry observers contended that Coke’s ultimate success over Pepsi was proof that superior marketing wins out even over a superior product. Marketing, therefore, was all that really mattered and consumer companies should invest lots of money in advertising. But that explanation doesn’t really hold water.

If marketing is all that matters, then why didn’t Pepsi — which supposedly had the superior product — just improve its marketing? For that matter, if marketing is more important than product, why doesn’t every company just improve their marketing?

Half the money I spend on advertising is wasted, and the trouble is I don’t know which half. ~ A maxim of obscure origins, put in famous mouths

And if marketing were all that, then why wasn’t the Coca-Cola company able to sell New Coke? They devoted far more advertising dollars to New Coke than they had ever used to promote the former version of Coke, but New Coke — which was specifically formulated to beat both Coke and Pepsi in taste tests — went exactly nowhere.

When a man says there’s nothing that marketing can’t do, you know that the man has nothing to do with marketing.

Hypothesis #2: Sweet Sips

A second theory was that people preferred Pepsi in bind taste tests because people prefer sweeter tastes when sipping. And there is a factual foundation for this assertion. Even in blind taste tests of wine, people almost invariably preferred sweeter varieties. And no one is seriously contending that sweeter wines are always superior to other varieties of wine.

However, if people prefer sweet tastes when sipping, then why do the taste tests reverse themselves when the sodas being tested are labeled as Coke and Pepsi? If sweetness was what mattered most in taste tests, then Pepsi should win out over Coke. And New Coke — which is even sweeter than Pepsi — should win out over both Pepsi and Coke. But this is not what happens. When taste tests with labeled sodas are conducted, the verdicts are reversed. Coke beats Pepsi and both Coke and Pepsi beat New Coke.

Again, what the heck is going on here?

The Brain Overrules The Taste Buds

When Read Montague of Baylor College Medicine performed a version of the Pepsi Challenge with subjects hooked up to an fMRI machine, he found something interesting. In blind taste tests, most people preferred Pepsi, and Pepsi was associated with a higher level of activity in an area of the brain known as the ventral putamen, which helps us evaluate different flavors. By contrast, in a non-blind test, Coke was more popular and was also associated with increased activity in the medial prefrontal cortex — the part of our brain associated with higher-thinking functions. In other words, the higher-thinking functions of the brain were overruling the decision of the taste buds.

You might be saying, “See! This is exactly why we need double-blind studies. People are letting their irrational feelings for a brand interfere with their taste buds and when it comes to choosing flavors that we like, the taste buds — not our irrational brand preferences — should win out. Double-blind tests are the answer.”


Double-blind tests are the answer all right, but they’re the answer to the wrong question.

There are no right answers to wrong questions. ~ Ursula K. Le Guin

Let’s re-review Carl Sagan’s quote on the scientific method:

…the scientific method (is) the best method ever invented for arriving at the truth of things. ~ Carl Sagan

The truth of “things”, yes. But people are not “things”. Consumer preferences are not “things”.

Double-blind tests are designed to eliminate pre-existing biases and the power of suggestion. That’s ideal for scientific inquiries, but it’s totally inappropriate for studying consumer preferences. In fact, it’s worse than useless because double-blind tests eliminate the very thing we’re looking for. When determining consumer preferences, biases and the power of suggestion are not noise to be eliminated — they’re the signal we wish to identify. When studying consumer preferences, we don’t eliminate biases to get to reality. Our biases ARE reality.

The Human Rowboat

The philosopher J. S. Mill once observed:

(T)here are two kinds of wisdom in the world:

1) Scientific; and
2) The Wisdom of Ages.

The first kind of wisdom changes every day. The second kind of wisdom changes not at all. The first kind of wisdom consists in what we know about the world and how it works. The second is what we’ve collectively learned about human nature through the experience of individuals across thousands of years of history. The second kind of knowledge is unsystematic, consists in psychological rather than empirical facts, and is present in more or less equal amounts in every historical period. ((As an aside, my style of writing has been deeply influenced by this idea that there are two kinds of wisdom. I write about technology, but I pepper my articles with quotes filled with the wisdom of ages. It’s always surprising to me how relevant the thoughts of Socrates, Nietzsche, Benjamin Franklin, Groucho Marx, and others who lived yesteryear are to the technology problems of today.))

The scientific method is good for discovering facts, but personal preferences are not facts to be discovered, they are feelings to be uncovered. We are creatures of both logic and emotion. To assume that human beings are only logical is — well — it’s illogical. And very, very counterproductive.

The brain and the heart are like the oars of a rowboat. When you use only one to the exclusion of the other, you end up going around in circles. ~ Dr. Mardy

The above is just a simile, but I think it’s a great one. When it comes to understanding consumer preferences in technology, many otherwise very intelligent people go around and around in circles because they put all their weight behind technology, and neglect — or refuse to acknowledge — the human half of the equation.

The history of technology is the history of understanding things and misunderstanding people.

The Intersection

The best technology products — and this is important, because it’s so widely misunderstood — do not consist only of the best technology. The technology must also cater to the way human beings think and work.

You’ve got to start with the customer experience and work back toward the technology, not the other way around. ~ Steve Jobs

The broader one’s understanding of the human experience, the better design we will have. ~ Steve Jobs

This is why Apple goes on, and on, and on about standing at the intersection of technology and psychology.

I think really great products come from melding two points of view: the technology point of view and the customer point of view. You need both. ~ Steve Jobs

Dr. Land at Polaroid said, “I want Polaroid to stand at the intersection of art and science,” and I’ve never forgotten that. ~ Steve Jobs

Apple has the opportunity to set a new example of how great an American corporation can be, sort of an intersection between science and aesthetics.

We want to stand at the intersection of computers and humanism. ~ Steve Jobs

The reason Apple resonates with people is that there’s a deep current of humanity in our innovation. ~ Steve Jobs

People Don’t Buy A Product, They Buy An Experience

When we make purchases, we use all of our senses, along with our accumulated memories, feelings, knowledge, etc. We apply the lessons we learned yesterday to the purchases of today. We don’t buy products in a vacuum, we buy them within the context of our lives.

When people drink soda in a blind taste test, they prefer Pepsi. When people drink soda in a cup with the soda’s logo on it, they prefer Coke. Why? Because people don’t buy a product, they buy an experience. And for most, drinking Coke is a better experience than drinking Pepsi.

It was actually Pepsi, not Coke, that tricked us with their marketing by convincing us that a blind taste test represented an accurate way to measure the desirability of a soda. The Pepsi challenge wasn’t scientific at all — it was a gimmick because it measured the wrong thing. Products and services aren’t judged by how good they are, they’re judged by how good they make us feel.

We never desire strongly, what we (only) desire rationally. ~ Francois De La Rochefoucauld

New Coke succeeded in labs and Pepsi succeeded in blind taste tests because they appealed to a single sense. Classic Coke succeeded in the marketplace because it appealed to our overall sense of well being.

People don`t ask for facts in making up their minds. They would rather have one good, soul-satisfying emotion than a dozen facts. ~ Leavitt

The Apple Experience

Coke is not successful because of their ingredients any more than a great Chef is successful because of his or her ingredients. It’s how the ingredients are put together and how they are presented that make a great meal.

— Great Chefs sell an experience.
— Coke sells an experience.
— Apple sells an experience.

You can’t use double-blind tests to determine which is the best soda and you can’t use double-blind tests to determine which is the best smartphone either.

The primary reason why so many industry analysts misunderstand Apple is confusion surrounding what Apple actually sells. Apple doesn’t sell phones, tablets, laptops, and desktops, and… smart watches. Apple sells experiences.

Apple is a counterintuitive company because they are an experienced technology company that tries to arrange technology so we don’t have to experience it.

Apple has always been, and I hope it will always be, one of the premiere bridges between mere mortals and this very difficult technology. We may have the fastest PCs, which we do, we may have the most sophisticated machines, which we do. But the most important thing is that Apple is the bridge. ~ Steve Jobs

Apple is a company of solutions wrapped in experiences. ~ Lou Miranda

The reason why Apple can consistently collect between 90-95% of all the smartphone profits is because, while they’re competitors are selling technology, Apple is selling an experience.

Apple has no competition who sell what their customers are buying. ~ Horace Dediu (@asymco)


User Experience is in the eye of the beholder. Until I see double-blind tests about it, I flatly deny that Apple’s is superior/premium…. ~ Obarthelemy

Dude, that ship has sailed.

Double blind tests are not the standard by which you judge the taste of soda and they’re not the standard by which you judge the user experience of a smartphone either. In the marketplace, profit garnered from sales — not double-blind tests — is the only measure that matters. And Coca-Cola and Apple Co., have most all the profits.

What I love about the consumer market that I always hated about the enterprise market is that we come up with a product, we try to tell everybody about it, and every person votes for themselves. They go “yes” or “no.” And if enough of them say yes, we get to come to work tomorrow. ~ Steve Jobs

In the free market, you get to vote “yes” with your dollars, but you don’t get to veto the votes of others.

Indeed, a major source of objection to a free economy is precisely that it… gives people what they want instead of what a particular group thinks they ought to want. ~ Milton Friedman

The verdict of the market is final and inviolate. ((Absent the use of force, the verdict of the market is final and inviolate))

Facts do not cease to exist because they are ignored. ~ Aldous Huxley

Published by

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?

34 thoughts on “Is the iPhone Coke, New Coke, Pepsi or Just Sugar Water?”

    1. Competency is the floor, but the experience is the ceiling.

      If the chef has lousy ingredients, he’s going to make a lousy meal no matter how good a chef he is. But if a chef has great ingredients, that’s no guarantee of a good meal. In fact, an incompetent chef can easily make a disaster out of the very best ingredients.

      1. Experiences are subjective, that’s why I brought up results oriented professions. Experiences can be good food, experiences can also be snake oil. “Step right up folks…”.

        1. Actually, the most sought after and highest paid professionals provide top flight experience (sympathy, steely resolve, urbane humor, human connection, whatever it may be) on top of incredible results.

          Look at Tom Cruz. He has a brilliant legal/argumentative mind /and/ the experience he delivers is downright nauseating to so many. It’s a credit to his innate brilliance that he’s a US Senator, but he fails miserably on the experience scale.

          1. I think you mean Ted Cruz…
            If he’s so brilliant legally, how come he doesn’t understand that he’s not eligible to be President?

        2. “experiences can also be snake oil.”

          Yeah, that’ completely wrong. Snake oil salesmen don’t provide a good experience which is why they’re always on the move, always seeking new customers who haven’t yet heard that they are frauds.

    2. “Beware the doctor, lawyer, or stock broker selling experiences”

      Sigh. Again, completely wrong.

      If you don’t think you want to hire a doctor or a lawyer who provides you with a superior experience (for example, a doctor with a good bedside manner), because you think one can provide a good experience without being competent too, then you haven’t read or understood my article.

      If Coke didn’t have good ingredients, they wouldn’t be chosen over Pepsi. If a Lawyer didn’t provide competent services, he wouldn’t be selected a second time regardless of how smooth or personable he was.

      1. Priority #1 for a Doctor, head and shoulders above all else. Make. Me. Well. I don’t like going regardless of the bedside manner.

        1. You are — over and over again — missing the point. You assume that if the doctor is giving you a good experience, they are NOT giving competent care. The exact opposite is true. You can’t have a good experience with an incompetent doctor.

          Why am I talking to you. You clearly go out of your way not to understand what I plainly said in my article.

          1. No sir. Experience is overrated in some contexts. Function is never overrated.

          2. The getting well is indeed the true good experience. Not the bedside manner, not the office, not the reception. Those are all very secondary.

            Furthermore, since I’m not a doctor, I’m not even qualified to judge other than being made better.

          3. I still don’t understand how being made whole is not an experience?

            And why do universities make bedside manners such an important part of the education if it isn’t important?


          4. It’s an experience, it’s not a pleasant experience. You don’t choose freely, you choose out of need.
            I didn’t say un-important, I said far less important, secondary.

          5. At least in the US, there are plenty of doctors who are functional. You have a need, but you can choose freely which doctor you want to use.

            My elderly dad has switched doctors several times for the various ailments that he has. There have been many who were terrible at explaining, and at demonstrating caring. I’d think they were otherwise functional, but I can’t say as my dad didn’t stay with them long enough to find out. He says the ones he has now are patient and listen well.

          6. Getting well most often involves the patient taking actions or agreeing to actions requested by the doctor. If the doctor’s “bedside manner” results in the patient thinking the doctor doesn’t care about him, or gives the patient reason to believe he cannot trust the doctor, he will not do or agree with what the doctor asks. The doctor was fully competent (and functional) in diagnosing the illness and prescribing the correct remedy, but the patient doesn’t get well because the experience is so poor.

          7. Okay, here’s how this works. The doctor is educated and expert at these things. The doctor has scientific reality guiding them. They tell the patient what needs to be done, or offer choices. It’s the patient’s job to adhere to the advice if they want the desired outcome. If the patient doesn’t comply, that’s the patient’s failing first.

          8. The experience is functional, it’s just not good. It’s not something desirable, it’s necessary.

          9. That’s the point. Your dealing with humans, not robots. Whether the failing is first or last doesn’t really matter. When the patient fails to comply, a part of the responsibility still lies with the doctor. When a customer fails to buy, a part of the responsibility still lies with the salesperson or store/channel.

          10. Take my argumentativeness (is that a word?) as a sign of respect, I value what you have to say so I’m ‘egging you on’.

            I do think we shop too much in this country, that includes medical care, as well as devices. Too much consumer mentality. Leaves us open to too much manipulation (polite word for bs).

          11. Function is often overrated. Remember the first on-screen keyboards offered by Android phones? Laggy, frustrating experience, but yeah, they functioned.

            The cameras in early feature phones? Yeah, those functions were not overrated. Not at all.

          12. In those cases function was overstated, which is a lack of function, or more simply, a lie.

          13. Nice try.

            You chose to use the absolute term “never.”

            Then without conceding you are wrong about the role ‘experience’ plays, you proceed to use ‘experience’ as a criteria of what constitutes “overstated.”

            Just admit you’re wrong.

          14. “Experience is overrated in some contexts. Function is never overrated ”

            You are not using the word “experience” in the way I used it in the article. I not talking about an “experienced” professional. I’m talking about enjoying a good experience from the professionals services.

          15. Yes, my experience at the doctor’s office is never good. Ever! Just being there at all makes me unhappy, no matter who the doctor.

            What matters is the function the doctor fulfils.

  1. “People don`t ask for facts in making up their minds. They would rather have one good, soul-satisfying emotion than a dozen facts. ~ Leavitt” Sounds like our presidential debates.

    1. I try to stay far away from political discussions, but yes, the above quote most definitely applies to politics and pretty much anything involving decision making.

  2. The “in the eye of the beholder” issue pops up again in a later article about dumbphone users: “It intrigues me that price comes up as much as it does, given it seems
    US carriers are penalizing those who don’t yet have smartphones by
    charging them more in various ways on their bill than consumers who do
    have smartphones.”

    This is wrong on several levels:
    1- fact-check first, unless I missed something, price seems a wash: for the Verizon network, $18 for a voice+texts only 2hrs plan, $20 or $25 to add a dumb handset to a family plan. Differences on other network are slightly bigger, $5/mo instead of $2, always in favor of limited talk-only plans.

    2- the consumer makes up an answer that’s simple and socially acceptable, but so lightly supported by facts that it feels like a cop-out. $2-5 /mo is very little extra to pay for a smartphone contract, the real reason for choosing dumb must be elsewhere (no perceived need, perceived complexity, handset price, daily charge, size/fragility…)

    3- the analyst seems to conjure up wrong facts to support a specific analysis.

    If all those irrational phenomena happen for something as ego-void as dumbphone users, anything remotely touching Apple vs Android needs to meet much higher standards.

  3. At the heart of Obarthelemy’s quote is the belief there is an objective “best”. This notion permeates a lot of tech product debates, not just iOS vs. Android. However, there is no objective test or criteria that makes somethings as complex as a smartphone inherently “better” than its competitor. A taste test can never prove one thing is better than another. Consensus and popularity do not objectively define quality.

    Better and best are subjective. This is much easier to see when you acknowledge that the value
    proposition for just about every piece of technology is far more driven
    by use, which is defined and evaluated by the subject, than it being inherent to the object. When someone says, “Android is better than iOS” or “OSX is better than Windows” all he is saying is that one is better than the other for him.

    1. Robert Kennedy said: “What is objectionable, what is dangerous about extremists, is not that they are extreme, but that they are intolerant. The evil is not what they say about their cause, but what they say about their opponents.”

      It’s perfectly fine to be a fanatical adherent to a product. What is not fine is to reject the possibility that it is OK for someone else to be a fanatical fan of their product. Obarthelemy denies that the iPhone is superior because he can’t understand that the iPhone can be superior FOR ME, just as Android can be superior FOR HIM. It’s not a question of which is best. It’s a question of which is best for each individual.

  4. Here’s a story about humans and experience, as most airlines are fully capable:

    “This is a story about a time I called an airline’s customer service desk because our car broke down on the way to the airport, making it clear that hubby and I weren’t going to be getting my very homesick stepdaughter back to her mom 1,000 miles away—at least not that day.

    I called the airline twice. On call #1, here’s what I said (slightly desperate): “Our car has broken down and we’re waiting for a tow truck, which means my step-daughter won’t be able to make the flight that’s taking off in about 45 minutes. I’m hoping you can help me figure out next steps and options.” (Probably too much “back story,” as my husband calls it. Anyway …)

    Here’s how the customer service rep replied: “Confirmation number?”

    On call #2, here’s what I said (defeated): “Our car broke down and we had to get towed home, which means my step-daughter missed her flight home. I’m calling to re-book her flight.” (Less back story—I do improve with time.)

    The (new) customer service rep’s immediate reply: “Confirmation number?”

    Really? That’s the best you can do? You who profess to be all about “luv”?

    I’ve written before about the importance of empathy, and the specific impact it has on our business relationships (there’s a direct tie to influence, among other things). I think this story is an important one to tell because we’ve all been that call center rep. The great empathy famine isn’t limited to people who are trained to work from scripts. Case in point: I see robotic responses every time we drill listening skills in our workshops (remember that one?)

    The intentions might be good: “Give me information so I can help you as quickly as possible.” The subtext is not good: “You’re a confirmation number, not a human being.”

    Fixing it wouldn’t have taken a lot of time. A simple, “Oh no!” to start would have been enough. That might be enough for your customers, too.

    What that means, though, is you have to first see the opportunity to create connection, then seize it.”

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