New Coke Fiasco
Brief History
April 23, 1985
Coca Cola announced reformulation of Coke
July 11, 1985
Reinstating old coke as Coca Cola Classic
Pepsi’s blind taste tests suggested
that America preferred Pepsi
over Coke
Coke was loosing market share
Coke was considered an old brand, whereas Pepsi was young
and energetic
Business Environment
So how did coke handled this difficult situation?
Gain the lost Market Share
Beat Pepsi
Revamp Brand
Strategy
Sweeter Taste
Cool Packaging
Advertisement Campaign
Plan
Coke’s Reaction
And what about Customer Reaction??
Customer’s ReactionA man wrote to Mr. Goizueta asking for his autograph — because, in years to come, the signature of "one of the dumbest executives in American business history" would be worth a fortune.
When the taste change was announced, some consumers panicked, filling their basements with cases of Coke®.
A man in San Antonio, Texas, drove to a local bottler and bought $1,000 worth of Coca-Cola.
Protesters at a Coca-Cola event in downtown Atlanta in May carried signs with "We want the real thing" and "Our children will never know refreshment."
Back to Classic
Introduced within 77
days
Classic Coke
outsold New Coke
Coke gained market
share from Pepsi
Coca Cola Classic to Coca-Cola
in 2009
New Coke line
terminated in 1992
Old Formula
for loyalists
And what about Customer Reaction??
So what went wrong?
Backlash
CustomersResistance to
ChangeStrong American
ValueBrand associated to
culture
Coca-ColaBiased Market
ResearchLow confidence in
Brand Attribute based war
Misalignment of competencies
Coke’s Strength - Association with History
Coke’s Strength - Association with Culture
ResonanceInvolvement, Community, Attachment
JudgementInnovation,
Loyalty, Leader, Superiority
FeelingHappiness, Sharing, Celebration, Family,
Self respect
ImageryHappiness, Moments, Christmas, Social, Fun
PerformanceRefreshment, Unique
Flavour, Reference of Colas, Energy, Tasty
SalienceEverywhere, American Values, Fresh Drink, Happiness, Thirst Quencher, Lovermark
Misalignment of Strength
Attack
Strength
War Zone
ResonanceInvolvement, Community, Attachment
JudgementInnovation,
Loyalty, Leader, Superiority
FeelingHappiness, Sharing, Celebration, Family,
Self respect
ImageryHappiness, Moments, Christmas, Social, Fun
PerformanceRefreshment, Unique
Flavour, Reference of Colas, Energy, Tasty
SalienceEverywhere, American Values, Fresh Drink, Happiness, Thirst Quencher, Lovermark
Coca-Cola to New Coke
100 years of relationship with American Values
Deterioration of Brand Equity
New packaging and taste means lost attachment, So basically a new brand
Learnings
Product Perception is more important than Product
Emotional attachment to brand can be irrational
Imitation doesn’t provide competitive advantage
Listen to your customers
Prevent biases in Market Research
Align competition and competencies well
Disclaimer
Created byHiteshwar Gaur, IIM Lucknow
under
Prof. Sameer Mathur, IIM Lucknow
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