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TH He Rise & & Fall O of New Coke

Coca-Cola introduced New Coke in 1985 to replace the original Coke formula after 99 years, in an attempt to combat declining market share to Pepsi. However, consumers strongly rejected the change and demanded the return of Coca-Cola Classic. After just three months, Coca-Cola brought back Coca-Cola Classic due to overwhelming negative consumer response. Coca-Cola Classic quickly outsold New Coke two to one by the end of 1985. New Coke remained available but played only a small supporting role, capturing just 2% market share, while Coca-Cola Classic regained the leading position in the soft drink market.

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Nehal Nabil
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141 views

TH He Rise & & Fall O of New Coke

Coca-Cola introduced New Coke in 1985 to replace the original Coke formula after 99 years, in an attempt to combat declining market share to Pepsi. However, consumers strongly rejected the change and demanded the return of Coca-Cola Classic. After just three months, Coca-Cola brought back Coca-Cola Classic due to overwhelming negative consumer response. Coca-Cola Classic quickly outsold New Coke two to one by the end of 1985. New Coke remained available but played only a small supporting role, capturing just 2% market share, while Coca-Cola Classic regained the leading position in the soft drink market.

Uploaded by

Nehal Nabil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Thhe Rise & Fall Of

O New Coke
In 1985, th he Coca-Coola Companny made a classic maarketing bluunder. After 99
succcessful yearrs, it set asidde its longsstanding rule – “don’t mess
m with Mother
M Cokke” –
and dropped itts original formula
f Cokke! In its pllace came New
N Coke with a sweeeter,
smoother taste.

Att first, alongg with the iintroductoryy flurry of advertising and


publiccity, New Coke
C sold well.
w But sales
s soon went flat, as a
stunneed public reeacted. Cokke began reeceiving saccks of mail and
more than 1,500 phone calls each day from angryy consumerrs. A
group called “Old Cola Drinnkers” staged protests,, handed ouut T-
shirts,, and threateened a classs action suitt unless Cocca-Cola brought
back the
t old form mula. Most marketing experts preedicted the New N
Cola would be the “breaktthrough of the t Eightiess.” After onnly three moonths; the Coca-
C
Cola Companyy brought old Coke baack. Now caalled “Cokee Classic,” it sold sidee-by-
sidee with New Coke on suupermarket shelves.
s The company said that New Coke would
rem
main its “flaggship” brannd, but conssumers had a different idea. By thhe end of 1985,
Classsic was ouutselling New w Coke in supermarket
s ts by two too one.

Quick reacttion saved thet company y from poteential disaster. It steppeed up efforts for
Cokke Classic and slottedd New Cok ke into a supporting
s role. Cokee Classic aagain
becaame the com mpany’s maain brand – and the com mpany’s leaading soft drrink. New Coke
C
becaame the coompany’s “aattack bran nd” and adss boldly com mpared Neew Coke’s ttaste
withh Pepsi’s. Still, New Coke manageed only a 2% % market sh hare. In the spring of 1990,
the company repackaged
r New Coke and re-lauunched it ass a brand exxtension wiith a
w name – Coke
new C II. Todday, Coke Classic
C capttures more than 20% of o the U.S. soft
drinnk market; Coke
C II holdds a miniscuule 0.1%.

Why was New


N Coke inntroduced inn the first place? What went wronng?
Many analy
ysts blame the
t blunder on poor maarketing research.

In the early
y 1980’s altthough Cok ke was still the leading g soft drinkk, it was sloowly
losinng market share to Peepsi. For yeears, Pepsi had successfully moun nted the “PPepsi
Chaallenge” a series of teelevised tasste tests shhowing thatt consumerrs preferredd the
sweeeter taste of
o Pepsi. Byy early 19855, although Coke led inn the overalll market, P Pepsi
led in share off supermarkket sales by y 2%. (Thatt doesn’t soound like much,
m but 2%
% of
hugge soft drink
k market ammounts to moore than $1 billion in reetail sales!) Coca-Colaa had
to ddo somethinng to stop thhe loss of itss market shhare, and thee solution appeared
a to be a
channge in Cokee’s taste.

Coca-Cola began thee largest neew productt research project


p in the compaany’s
history. It spennt more thann two yearss and $4 million
m on reesearch befoore setting on a
w formula. It
new I conducteed some 2000,000 tastee tests – 300,000 on the final form mula
alonne. In blindd tests, 60% of consum
mers chose the New Cooke, over thhe old, and 52% 5
chose it over Pepsi. Reseearch show wed that new w Coke woould be a winner
w andd the
mpany introdduced it witth confidencce. So whatt happened??
com

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