Master Life Faster: Newsletter

Why Coke Tastes Better Than Pepsi

Posted in Newsletter by Paul Lem, M.D. on December 22, 2009

Volume 2, Issue 12
SOCIAL: The simple way to make people remember what you say
WEALTHY: Why Coke tastes better than Pepsi
SMART: The no-sweat way to improve your skills


“The universe is made of stories, not of atoms.
-Muriel Rukeyser

The Simple Way to Make People Remember What You Say

Chip Heath is a professor at the Stanford Graduate School of Business. His students are among the best and brightest in the country. But there is a simple way for community college students to out-communicate anyone in his class—even if they speak English as a second language.

Made to Stick
In Made to Stick, Heath explains how he discovered the secret. During one of his classes, Heath asked his students give a 1-minute speech on a topic such as crime patterns in the US. After each speech, students rated each speaker. Not surprisingly, the most polished speakers usually got the highest ratings. The surprise happened 10 minutes after the last speaker. Heath asked the students to pull out a sheet of paper and write down every idea they could remember for each speaker.

The class was shocked to discover how little they recalled. For some speeches, students couldn’t remember any ideas. In the average 1-minute speech, speakers used 2.5 statistics. Only 1 in 10 told a story. But when it came time for recall, 63 percent remembered the stories, compared to 5 percent for statistics.

Sticky Stories
Results showed that speaking talent had almost no effect on making ideas stick. According to Heath, “The stars of stickiness are the students who made their case by telling stories, or by tapping into emotion, or by stressing a single point rather than ten.” He confides, “There is no question that a ringer—a student who came into the exercise having read this book—would squash the other students.”

Why are stories so powerful? Heath believes it’s because stories are like flight simulators for the brain. When you tell a story, your audience imagines they are there with you. It’s the next best thing to first-hand experience.

So the next time you’re giving a speech or presentation, remember that stories are your secret weapon to making ideas stick.

References
Heath C, Heath D. (2007). Made to stick: Why some ideas survive and others die. Random House.


“People will forget what you say, but they will never forget how you made them feel.”
-Warren Beatty

Why Coke Tastes Better Than Pepsi

Warren Buffett is the world’s greatest investor. He has made his fortune by investing in companies such as Kraft Foods, Mars Candy, Wrigley, and Coca-Cola. What do these companies share in common? They make brand-name products that customers buy over and over again.

Predictable Profits
This means there is little need for research and development. Mars sells you the same chocolate bar year after year . It doesn’t have to invest money in improving the recipe.
In contrast, a company such as Intel spends over $5 billion a year to sustain its technology lead. If it stopped, its competitors would catch up and surpass it.

Another advantage of selling brand-name products to loyal customers is that retailers have to stock them to stay in business. For example, imagine if McDonald’s stopped serving Coke and replaced it with a no-name cola. Customers wouldn’t be happy. As Buffett’s partner Charlie Munger says, “If I go to some remote place, I may see Wrigley chewing gum alongside Glotz’s chewing gum. Well, I know that Wrigley is a satisfactory product, whereas I don’t know anything about Glotz’s. So if one is 40 cents and the other is 30 cents, am I going to take something I don’t know and put it in my mouth, which is a pretty personal place after all, for a lousy dime?”

Battle of the Colas
But what if McDonald’s substituted Pepsi for Coke? What would happen then? After all, Pepsi is a brand-name product. And blind taste tests show that many Coke-drinkers prefer the taste of Pepsi over Coke. But if that’s true, why isn’t there a mass defection of Coke drinkers over to the Pepsi side? Why do people keep drinking Coke?

At Baylor College of Medicine, Samuel McClure and his colleagues set out to find the answer. They gave Coke and Pepsi to volunteers under two scenarios:

  1. Blind taste test: Volunteers drank from unmarked cups.
  2. Non-blind taste test: Volunteers drank from cups marked with Coke and Pepsi brands.

While the volunteers were drinking, the researchers scanned their brains using functional Magnetic Resonance Imaging (fMRI). This is a technique that reveals how brain activity changes in response to different conditions.

The results showed that branding had a dramatic effect on brain activity. In taste tests with Pepsi, there was little difference in brain activity when volunteers knew they were drinking Pepsi. In contrast, Coke-drinkers strongly preferred drinking Coke out of Coke-branded cups versus unbranded cups. Brain scans showed a sharp increase in activity in the hippocampus, dorsolateral prefrontal cortex (DLPFC), and midbrain. These regions of the brain are known to modify people’s behavior based on emotional memories.

Warm and Fuzzy
The Coca-Cola company spends over $2 billion on advertising every year. Their creative teams have won awards such as the Gold Lion from Cannes and Time magazine’s Top 10 best ads of 2007. Does their advertising pay off? Well, how do you feel when you think of Coca-Cola? For me, I feel happy as I remember drinking Coke on a hot summer day while fishing with my dad.

These warm and fuzzy feelings are why Coke tastes better than Pepsi. And indirectly, it’s the reason why Warren Buffett is Coke’s largest investor.

References
Buffett M, Clark D.  (1997). Buffetology: The previously unexplained techniques that have made Warren Buffett the world’s most famous investor. Rawson Associates.

McClure SM et al. (2004). Neural correlates of behavioral preference for culturally familiar drinks. Neuron. 44(2): 379–387. Full Article.


“For 37 years I’ve practiced 14 hours a day, and now they call me a genius.”
-Pablo De Sarasate

The No-sweat Way to Improve Your Skills

Thomas Edison is famous for saying, “Success is 10 percent inspiration and 90 percent perspiration.” Psychologist Anders Ericsson confirmed this when he studied violin students at Berlin’s prestigious Academy of Music. By the age of 20, elite performers had put in about 10,000 hours of practice, compared to 8,000 hours for good students and 4,000 hours for mediocre students.

It’s All in Your Head
Deliberate practice is the foundation for success. But what if there were a way to practice without getting sweaty? There is—it’s a training technique called mental practice. How does it work? It’s simple. You sit quietly and visualize yourself performing the task successfully from start to finish. For example, a violinist would practice Beethoven’s Fifth Symphony by thinking through the notes, or a golfer would picture the motions for a perfect putt.

How effective is mental practice? In research funded by the US Army, James Driskell and his team reviewed 35 studies on mental practice involving over 3,000 subjects. Overall, they found that mental practice is about two-thirds as good as actual physical practice.

In addition, they discovered two easy ways to maximize the benefits of mental practice:

  • Practice at least once a week. Mental practice just before the actual activity provides the biggest boost in performance. The benefit drops by 50 percent at 14 days, and is negligible at 21 days.
  • Practice for about 20 minutes. Practicing longer doesn’t help much.

Mind Games
Mental practice has been proven to work in a wide range of activities, including dart throwing, welding, trombone playing, figure skating, and estimating the volumes of chemical substances.

The next time you’re sitting in an airport or waiting for the bus, pass the time with some mental practice. It’s the no-sweat way to improve your skills.

References
Ericsson KA, Krampe RT, Tesch-Romer C. (1993). The role of deliberate practice in the acquisition of expert performance. Psychological Review. 100(3): 363–406. Full Article.

Driskell JE, Copper C, Moran A. (1994). Does mental practice enhance performance? Journal of Applied Psychology. 79(4): 481–492. Full Article.


Copyright 2009 by Paul Lem, M.D. All Rights Reserved.
Posted to: https://masterlifefaster.wordpress.com

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