“New Coke” Brand Failure

Coke had been a dominant soft drink for a very long time. In 1980s Coke’s flagship
product’s share was on the decline and Pepsi’s shares were on the rise. Despite huge spends on
the advertisement, wide availability of vending machines, global presence, and deeper network
of sellers, competitive pricing, and Coke’s market share was slowly slipping away.

Though Coke disputed Pepsi’s findings, it went ahead and did its own blind tests. It was
shocking to know that people preferred Pepsi in blind tests than the famous Coca-Cola’s century
old secret formula. Coke felt that the audience has changed the way of quenching the thirst and
the time had come to change the long-held formula of secret taste.

Scientists fiddled with the formula, made it sweeter like Pepsi. The made new coke Smoother
than earlier Coke, Sweeter than earlier Coke, Less harsh than earlier coke. Coke’s market
researchers noticed massive improvements in blind tests of new Coke conducted with thousands
of consumers. It appeared that the “New Coke” would create a sensation and improve its market
share. Coca-Cola’s CEO announced, “The Surest move the company made”. They launched the
product with much fanfare.

The results were disastrous for the company. As soon as taste change was announced, many
panicked customers went, bought so much coke and stocked their basements and empty rooms.
After so many blind tests and focus group tests, the company did not expect such a backlash.
Coca-Cola faced massive protests and outrage at all its promotional events. Protestors shouted
“We want the real thing”

“Our children will not know the meaning of Refreshment” ”Coca-Cola Company was finally
forced to bring the coke with original formula with the name “Classic Coke”.

Questions:

1. What lessons could we take from this failure?

I had learnt that marketing is about much more than the product itself.

2. Make a product cycle on how did ‘’New Coke’’ performed in the market explain each
process?

3. Identify factors which drove Coca Cola to redesign their products?