Assignment # 1

Course title :
Marketing management
Submitted to:
Ahmed Sohail
Submitted by:
M.Amir sultan
Roll#:
10399
Program:
BBA
Section:
Evening D

Lyallpur business school

The Cola:
The Coca-Cola Company had always maintained the lion’s share of the cola
market, easily outselling Pepsi five to one in the 1950s. But a genius
marketing campaign from Pepsi in the 1980s positioned the relative
newcomer as the young person’s drink. Pepsi pulled out all the stops:
Celebrity spokespeople, hip advertising music, and poking fun at Coke for
being the cola of an older generation. By the early 1980s, Coke had lost its
grip on the soda market and only controlled 24 percent of the market
share.The Coca-Cola Company had to make a move; especially since time
and time again, sweeter-tasting Pepsi slayed Coke in the clever, blind, and
very public Pepsi Challenge. Coca-Cola’s idea was to come up with a new
Coke formula that consumers preferred over both old Coke.

Poor Taste in Market Research:

No one could fault Coca-Cola for not doing their research: They tested the
New Coke formula on 200,000 subjects and came up with a drink that beat
Pepsi and old Coke time and time again. Therefore, when it finally went to
market in 1985, the company felt confident enough in their research numbers
to simultaneously end old Coke production. They even took
out commercials to prove it.The result: Consumers hated it. Coca-Cola fielded
as many as 400,000 angry phone calls and letters as Coke drinkers professed
their dissatisfaction with the new product. In less than three months, New
Coke was pulled off the shelves and old Coke–rebranded as Coca-Cola
Classic–was back.

Customers are motivated by more than just taste:

The most grievous error Coca-Cola’s researchers made was testing subjects
on taste alone. Most people loved New Coke–53 percent preferred it over old
Coke–but taste isn’t enough. Consumers make purchasing decisions based
on habit, nostalgia, and loyalty as well.

Cola is an identity classification:

 The research was completed during the height of the Pepsi and Coke wars,
and consumers considered the brand of cola which they drank a part of their
identification. Changing Coke fundamentally confused consumers’
identification and relation to the brand.

New Coke wasn’t a choice:

The research was a blind taste test: What did subjects like best? But
researchers neglected to qualify what the response would be if subjects
understood that in choosing New Coke, they would effectively be pulling old
Coke from the shelves, which Researchers only focused on the
physical. What researchers failed to grasp was that while subjects could
appreciate changed physical characteristics like taste and branding, Coca-
Cola also had symbolic significance to buyers, particularly in the American
market. For a group that prefers tradition over novelty, New Coke couldn’t
hold a candle to the continuity and familiarity of old Coke, or eventually, Coca-
Cola Classic.
Market research isn’t just a numbers game. In failing to capture feeling and
attitude toward the brand and relying on taste tests alone, Coca-Cola was left
with a ton of product, cranky consumers, and a big, corporate black eye.
It all worked out, of course. Once Coca-Cola Classic was reintroduced, sales
actually improved over the same time the previous year (potentially because
consumers began to hoard the product in preparation of another.Consumers
were able to breathe a sigh of relief, and companies the world over learned
two valuable lessons: The customer holds the cards and solid market
research can prevent a failure of New Coke proportions could have drastically
altered responses.