"New Coke" by Coca-Cola - Biggest Marketing blunder Ever!
Back in 1985, Coca-Cola company launched a revised version of its original content and entitled it as New Coke. The launch was very enthusiastic and supposedly a BANG in the market and the product was expected to gather great sale but something really disturbing hampered the very goal of the company of making the product a success!
What actually happened back in 80's, read to find out!
New coke introduced in 1985 as a revised version of the already Coca-Cola introduced in 1886, that had gained world fame with its existence stretching back to more than a century and managed to attain huge customer ship with the passage of time, but with slight differences in the ingredients used in the original Coca-cola. With an effort to produce diet coke the Coca-Cola Company made the biggest ever marketing blunders.
A costly failure; Indeed
It would be wrong if New Coke, although a huge failure, is labeled as a hasty decision and therefore overruled or criticized. No it was a well planned and researched project. Coca-Cola's most senior executives commissioned a secret effort named "Project Kansas," headed by marketing vice president Sergio Zyman and Brian Dyson, president of Coca-Cola USA, to test and perfect the new flavor for Coke itself. Thorough surveys, taste tests and focus groups were carried out and targeted to ensure the success of reformulated coke planned to be launched in the market after analyzing the public’s reaction and feedback regarding “New Coke”. Coca Cola performed market research for a period of two years and spent an enormous amount of $4 million to compare the taste of New Coke versus Pepsi and old Coke. After performing 200,000 blind taste tests, it was concluded that people preferred the taste of New Coke over any other available beverage. So in spite of having such strong research background, investing millions of dollars and carrying out successful surveys what lead to its disastrous failure in the market?
What went wrong
So finally New coke was launched in the market with a new packaging and obviously with a bang and the original old one was discontinued. An appalling increase of 8% in the sales was observed soon after it was initially launched in the biggest consumer regions of New York, Washington D.C and in cities where it was for the first time introduced.
In the beginning everything went according to the plans of the executives of the company and many right steps were also taken like tapping the market at the time when it was facing a decrease in its market share, best team for research and development work was chosen to prepare the best flavor and packaging which is appealing to the masses, as already mentioned no monetary compromises were made in carrying out marketing campaigns, extensive market research was done. Surveys indicated, in fact, that a majority liked the new flavoring. Three-quarters of the respondents said they would buy New Coke again. The big test, however, remained in the Southeast, where Coke was first bottled and tasted.
The following reasons made it difficult and ultimately impossible for New Coke to maintain its market not more than 87 days:
~ In taste the new coke was slightly distinct from the original one:
With an effort to come out with a ‘diet’ version of the original coca-cola, sweeteners were added which made it comparatively more sweeter than the original one, was a bit less tangy (that is less tang was included) and was smoother than the original.
The difference in taste was a major reason for the failure of ‘New Coke’ among the masses, tests done by their research and development department proved that the taste of the Coke was the reason it was losing its market share. During the blind taste test, people just took a sip of the cola and preferred a sweeter taste. But in reality they buy a can of 330 ml and they preferred the less sweet taste of old Coke.
~ Since Diet Coke was launched during that time, people considered it to be another variant of the parent beverage. Therefore, due to the wrong framing of questions for market research, they yielded wrong results which proved to be fatal.
~ Moreover, the new packaging isolated itself from its consumers. The association of the word new was related to Pepsi as it was comparatively new into the market and a brand of youth. The old Coke was considered a legacy and an integral part of the American culture. Therefore, the brand loyal consumers of Coke were finding it hard to associate the ‘new’ change with Coca Cola.
~ Coca Cola had ignored the sentimental value which its loyal American consumers had towards the brand. During the overall launch of the product, Coca Cola had its complete focus on the product and neglected the emphasis on the brand.
~ What Coca-cola apparently neglected to take into account was that many of the 45% who preferred old Coke did so passionately. The 55% who voted for new Coke might have been able to live with the old formula, but many on the other side swore that they could not stomach new Coke.
~ Pepsi attacked with counter-ads, including a full page ad in the New York Times. To make matters worse, Pepsi launched advertisements in New York Times and other publications stating that Pepsi had won the ‘cola war’ and has taken a lead due to the mistake made by Coca Cola. Coke did not react to this, as they were already pressurized by the consequences of the fiasco. Pepsi took advantage of the situation, running ads in which a first-time Pepsi drinker exclaimed "Now I know why Coke did it!"
In all, the race of beating the fire, by bringing out the New coke in capturing more of the market shares lead the coca cola company to face great resentments. One of The reasons that accompany the loss of sales was the estimated decision that was made in regard for the whole USA populations, in consideration to their preferences, tastes, and choices. The company didn’t rely on making the scrutinic market researches which added in the loss to a great deal.
The brand would have gained success if the company had approached the marketing research department to get information about already liked percentages of customer loyalties to already existed brands and then initiating targeting markets..
Moreover, efforts should have been made in making the attractive and catchy brand name that matches with the life styles of the people and not just relying on adding ‘ new’ to the brand it should be like leaving the customers filled with exuberance when the hear it.
Other than this the product should have been developed with some new energizing ingredients that makes it to distinguish from the substitutes already existed in the market carrying the same attributes, in order to make the innovation holding markets leading to rising sales and profits for the company.
Following the above steps with efficacy and efficiency will help the company bring out the revised version of Coke in the market with a prolonged BANG accompanied by great success in establishing more of customer ship, attaining more of loyalty and adding more of goodwill to the brand name and tremendous sales.