Kaitlin Mickey, Brandon Nolan

Austin Martens, Michael Marchert

Morgan Parisa, Andrew Nolker

Cola Wars Case Questions (March 18)

1. In the new Coke fiasco, how could Coca-Cola’s marketing research have been
improved? Be specific.

Coca-Cola’s marketing research could have been improved in many ways to help it reach success
over Pepsi in the long run. Pepsi started off in the 70’s and 80’s with marketing campaigns like
the “Pepsi Generation” and the “Pepsi Challenge” which really made Pepsi gain momentum on
Coke. Coke could have done some research on this to determine some similar types of
campaigns to compete with Pepsi. Coke was also spending large amounts of money on
advertising, double the vending machines, and larger shelf spaces, but it was not seeing any
increase in its market share. Coke needed to research how to better spend their money in order to
use it more efficiently. If Pepsi was spending less money and gaining market share, what were
they doing right? Research is an essential step in advertising because money cannot be wasted,
there are many other uses within the company which money could be used for.
In order for Coca-Cola to improve the above stated problems and improve their
marketing research, the company could do a number of things. When the flavor changed of
Coke, many were upset about this, even though a study was done to determine if the change
should happen. This decision made by Coke was probably done too quickly and by doing some
more research, the problem may not have been the taste which was suppressing their sales.
Companies need to look into every potential change to a product, and determine the best fit with
many research groups, surveys, discussions, etc. Current customers need to be in on important
decisions like these also because they are your main business. The 80/20 rule applies here where
80% of your sales come from 20% of your customers. Another way to improve their marketing
research is to be quick on sudden changes by competitors. Pepsi grabbed the market share in
Buenos Aires before Coke had any time to react. Coca-Cola should have been researching this
situation way before this and if they had been doing this, they could have been quicker to react.
Companies like Coke need to be looking into every possible market to join because competitors
like Pepsi will always be a step ahead of them if they are not prepared.

2. “If it’s not broken, don’t fix it.” Evaluate this statement.

“If it isn’t broke, don’t fix it.” – In this case there are several times that this old adage would fit.
The main one is when Coke made their new coke formula. They made a new coke formula to
attract more customers but they didn’t expect how much it would impact the patriotism that is in
the Cokes name and how the people that loved the old coke recipe would react. They tried to fix
their market share by changing something that wasn’t the problem. When they changed the
formula to coke the American people thought of that as the company turning their backs on the
old ways, on old traditions. Coke has become part of the American way and for it to change its
loved ingredient, Americans looked at it as, Coke was selling out.
3. Critique Pepsi’s handling of Baesa. Could it have prevented the South American
disaster? If so, how?

We believe Pepsi’s first problem in handling Baesa was the idea of using Charles Beach to plan
the strategy. He had been charged with price fixing by the federal grand jury in the past while
working for Coca Cola. Someone who has been in trouble with the law before would not get our
vote to plan the new strategy, while he had a competitive advantage by working for Coca Cola a
major competitor, he didn’t seem to do such a great job while working for them. While Beach
increased the Pepsi market share at a drastic amount very quickly, we believe he handled this
increase in the wrong way. He began expanding vigorously and borrowing heavily in order to do
this. We believe he should’ve expanded at a slower pace and should’ve taken time to examine
the results from expanding and then decide if further expansion would be necessary and
beneficial. They also needed to take into account their competitor, Coca Cola. They failed to do
this and Coca Cola ended up shutting them out of retail outlets Pepsi wanted and needed to be a
part of in order to continue success. Pepsi needed to take into account how to market better,
rather than to continue to expand without informing consumers about their product. We
definitely believe that if they would’ve really taken into consideration their competition and
figured out ways to find a competitive advantage they could have prevented what happened in
South America. They had already lost many leads in other countries and if they would have
incorporated their competition and made marketing strategies in order to compete with their
competition this problem may have never happened. They went about it in the wrong way, they
just wanted to try and continue to expand and be the first in different countries but they never
thought about how they planned on keeping their leads with such aggressive competition. I think
they needed to look at their numbers and realize that they were better off in the United States
where the majority of their profits were taking place and shouldn’t have started focusing so much
on the world market. The South American disaster could’ve been stopped or could’ve been less
severe if they would’ve taken these measures into consideration and found a way to hold their
own against Coca Cola.

4. How could Coca-Cola have lessened the chances of antitrust and regulatory scrutiny
in Europe?

The first thing that Coca-Cola could have done was made sure that there was a committee of
people who were making sure that there was no such practices taking place at the bottlers in
Europe. If a trusted committee of high ranking workers went around vigorously to each bottler
and made sure that all practices being done were legal than that could have lessened the blow of
the allegations and also could have made for better evidence to fight their side against the
allegations. The second thing they could have done was to have made sure they were a more
transparent company with their books. From the reading it does not seem that Coca-Cola was all
that transparent and if they were, it would have been much easier to fight the antitrust action
being brought against them.
 Kaitlin Mickey, Brandon Nolan
Austin Martens, Michael Marchert
Morgan Parisa, Andrew Nolker
5. A big stockholder complains, “All this fuss over a few kids getting sick to their
stomach. The media have blown this all out of proportion.” Discuss.

Media outlets will take these types of stories and run with it. But in this case it was not a bad
thing for the public to be informed on what was happening with the company. Coke should take
cases like this extremely seriously and do everything they can to fix or address the problem as
soon as they can. Brand equity is an extremely important asset to the Coke brand and you don’t
want consumers questioning the brand. Coca-Cola investigated the problems but found no fault
in their product. The company did the right thing and recalled the products. Negative publicity
hurt the Coca-Cola Company in the foreign market. Their product may have not have had
anything wrong with it and may have been a victim of circumstance. Belgium just overcame a
food epidemic so they were extremely cautious to these things. Coke did make an effort to
restore their brand name by giving away free products to customers.