University of Cebu - Banilad Campus

College of Business and Accountancy

S.Y. 2019 – 2020 | 2nd Semester

Coca-Cola Company: New Product Limbo Mitigation and Prevention

(A Case Study)

In partial fulfillment of the Midterm Requirement in BA 328

(Operations Management and Total Quality Management)

Submitted by:

Gramatica, Jennifer

Gabiana, Fritzie Mae

Gerona, Joy

Filipino, Clifford

Flores, Roseneth

Gabayan, Dave

Submitted to:

Liezyl A. Kuhail, MBA

 Coca-Cola Company: New Product Limbo

Mitigation and Prevention

Authors:

Jennifer Gramatica Joy Gerona

Fritzie Mae Gabiana Clifford Filipino

Dave Gabayan Roseneth Flores

Institution:

University of Cebu - Banilad Campus

(College of Business Administration and Accountancy)

Keywords:

Coca-Cola, Launching New Product, Product Limbo, Case Study of Coca-Cola

Company, Sugar, Calories and Carbs, Rejection of Coca-Cola C2, Diet Coke
Abstract

A soft drink giant, Coca-Cola, is one such example which market aggressors

since has been 1886. Coke as a brand in itself tries to substitute the entire soft drink

markets. However, just like any business there is an unpredictable dilemma that

needs to be provided with solutions. This study focused on a dilemma of having a

product limbo specifically in the Coca-Cola Company. Launching a new product

out from an existing product can be very crucial. It can either be a hit or a failure.

The company launched Coca-Cola C2. Coca-Cola identified a new market but the

result in selling to the people was not satisfactory. In business, consumers are one

of the most important factor. Satisfying their taste and being able to supply their

preferences is one ultimate goal. The question is how? That is when the unique

feature of having a marketing strategy takes place in ensuring that the target

audience will be interested in the product and to feel that the company is doing

some innovation. This study also tries to forecast some of the causes of the failure.

It is also recommended that Coca-Cola Company should remember the core of the

business, must be reviewed well before the launch, gather feedback after the

launch, address head-on the number one reason for failure, focus on the most

critical rule of thumb for growth today-customer acquisition, think faster, and

lastly, self-preparation. Careful strategic planning must be adopted to help the

company make a good impact in their growth.

Introduction

The drink Coca-Cola was originated in 1886 by an Atlanta pharmacist, John

S. Pemberton (1831–88), at his Pemberton Chemical Company. His

bookkeeper, Frank Robinson, chose the name for the drink and penned it in the

flowing script that became the Coca-Cola trademark. Pemberton originally touted

his drink as a tonic for most common ailments, basing it on cocaine from the coca

leaf and caffeine-rich extracts of the kola nut; the cocaine was removed from Coca-

Cola’s formula in about 1903. Pemberton sold his syrup to local soda fountains,

and, with advertising, the drink became phenomenally successful. By 1891 another

Atlanta pharmacist, Asa Griggs Candler (1851–1929), had secured complete

ownership of the business (for a total cash outlay of $2,300 and the exchange of

some proprietary rights), and he incorporated the Coca-Cola Company the

following year. The trademark “Coca-Cola” was registered in the U.S. Patent

Office in 1893.

Though the Coca-Cola Company apparently would rather not talk about the

origin of its name in detail, it's clear that Robinson derived "Coca-Cola" from two

of the drink's ingredients: cola from the cola nut, and extract of coca leaf, also the

source of cocaine. Cocaine was a common ingredient of nineteenth-century patent

medicines, and by the standards of the day Coca-Cola contained a minuscule

amount that probably had no effect on its consumers.

 Still, by the early 1890s there was a rising tide of anti-cocaine sentiment, and

Atlanta businessman Asa Candler, who acquired the Coca Cola Company in 1891,

steadily decreased even the tiny amount of the drug in the recipe. There is some

evidence that the only reason Candler kept putting even minute amounts of coca

extract in the drink was the belief that to omit it entirely might cause Coca Cola, by

then besieged by imitators, to lose its trademark. In any event, Coca-Cola was

completely cocaine free by 1929.

The name Coke appeared in popular usage as a short form of Coca-Cola just

before World War I but was often applied as a generic term to any cola drink (and

used by Coca-Cola's competitors, including the now long-defunct Koke Company)

until 1940, when the U.S. Supreme Court ruled that the name Coke rightfully

belongs to the Coca-Cola Company.

In financial circles, Coca-Cola has been one of the strongest and most

reliable trading stocks, showing a steady return in all of its years of existence but

one. Warren Buffet, one of the world's richest men, has always touted Coca Cola as

an essential in one's stock portfolio.

Presentation

Despite a series of company reorganizations, Coke had failed to spur growth

and their sales were flat in 2004. The Coca-Cola Company has announced further

details about its new mid-carb beverage. The company introduce Coca-Cola C2 in

Japan first and then the US this summer. The announcement follows more than a year

of research and development on Coca-Cola C2. The packaging graphics feature the

Coke trademark in black on a "Coca-Cola red" background, to provide a distinctive

visual difference between Coca-Cola C2 and the flagship brand.

Figure 1. Coca-Cola C2
 Table 1. Nutrition Facts

Sugar Carbohydrates Calories

½ of regular coke ½ of regular coke ½ of regular coke

This study presented a clear and honest account of the problems with Coca-

Cola C2. These include:

a. Nutritional Facts of Coca-Cola C2

b. Ingredients of Coca-Cola C2

c. Customer disinterest in a mid-calorie soda

For its biggest launch since Diet Coke, Coca-Cola identified a new market:

20- to 40-year-old men who liked the taste of Coke (but not its calories and carbs)

and liked the no-calorie aspect of Diet Coke (but not its taste or feminine image).

C2, which had half the calories and carbs and all the taste of original Coke, was

introduced in 2004 with a $50 million advertising campaign.

However, the budget couldn’t overcome the fact that C2’s benefits weren’t

distinctive enough. Men rejected the hybrid drink; they wanted full flavor with no

calories or carbs, not half the calories and carbs. And the low-carb trend turned out

to be short-lived. (Positioning a product to leverage a fad is a common mistake.)

 Unhappy with their lack of success, Coke’s board of directors asked 40-year

Coke veteran, Neville Isdell, to return from retirement to help right the ship. He

identifies the problem immediately. Neville Isdell returns in 2004 as the CEO of

the company. He said, "We have lost our vision. There is no clarity about where

we are going and what we need to do. We need to go back to our roots and start

seeing ourselves as more than a carbonated soda business. We are in a creative-

service business."

There are lots of reviews as Coca-Cola launches this new product. According

to Mr. Akhil a consumer of Coca-Cola C2, “I have used Coca-Cola C2 for testing

its taste. It is good in taste and it can make impulse on our taste buds, when we

drink a chilled coca cola we can feel that. But dears one thing we have to keep in

mind the temporary feeling of taste make long term health hazards to us. The taste

offered by this drink is produced through artificial chemicals which can ruin our

health as well as reduce our brain performance. Some studies conducted in India

suggest that this drink contains some amount of lead, which can put us in great

danger. So dears stay away from it”.

Why didn’t these issues come up before the launch? Sometimes market

research is skewed by asking the wrong questions or rendered useless by failing to

look objectively at the results. New products can take on a life of their own within

an organization, becoming so hyped that there’s no turning back. Coca-Cola’s

management ultimately deemed C2 a failure. Worldwide case volume for all three

drinks grew by only 2% in 2004 (and growth in North America was flat), suggesting

that C2’s few sales came mostly at the expense of Coke and Diet Coke.

Figure 2. Sales of Coca-Cola (2004)

Outcomes

Whether or not companies have the budget to hire a go-to-market owner or

simply choose to ignore their go-to-market process, one thing is certain: as

companies grow and scale and develop more sophisticated products, the go-to-

market process will inevitably stall somewhere in the organization or the new

product launch may fail altogether. The solution to this problem is to perform

upstream market research and identify the hierarchy of attributes in terms of both

performance expectations and the best associated messaging and positioning using

discrete choice analysis with qualitative feedback. The ultimate goal of market

research is to understand customer priorities and to produce products which solve

the most urgent customer problems. This helps us avoid the dreaded product limbo.

Conjoint analysis is one way to do that. In this study it is recommended that Coca-

Cola Company should:

1. Remember the core of the business.

Shifting to an exciting new product is only natural, but remember not to

neglect the existing business. The company needs the strike of balance between

giving the new product life and sustaining the established enterprise.
2. Test thoroughly before the launch.

Testing can help them verify if the product, company and audience are ready

for the launch. Remember that an early launch of a minimum variable product can

help the company get better data on what their customers actually want.

3. Gather feedback after the launch.

Analyze customer feedback, then determine what changes the company need

to make to enhance the product.

3. Address head-on the number one reason for failure.

Companies often refuse to acknowledge a new product or service idea

serves no strongly identified customer need, and they try to retrofit their

marketing to compensate. Start by identifying a relevant, resonant role you could

play in people’s lives. Then develop offerings and experiences that deliver it in a

peremptory way.

4. Focus on the most critical rule of thumb for growth today–customer

acquisition. 
 Get as many quality customers–even light, occasional users–as quickly as

possible. More customers mean more sales, share, and with that, conversion to

loyal, heavy users. In addition, new customers have a key attribute that every

marketer should leverage–word of mouth.

4. Think faster. 

With the impatience of bosses and investors today, you can’t just obsess

about how to quickly add quality customers. You also have to obsess about how

to add them faster than anyone else in your category. Getting lots of new

customers quickly requires some sort of mass reach. From the Advertising

Research Foundation (ARF) to the World Advertising Research Center (WARC),

the findings are quite consistent: Mass reach from traditional media is–at least

for now– still the most effective way to grow a customer base.

5. Prepare yourself: Your launch never ends. 

Marketers must face that their launch will be forever in beta, a state of

continuous improvement that prevents the brand from losing momentum, or

worse, stalling out. Studies confirm that marketers who assume their launch is

over, who pull back, who stop innovating, or who let share of voice fall below

their market share, do not fare well.

Conclusion

To conclude, in doing businesses, it is very important to consider the

different aspects in the market before launching a product to avoid different issues

regarding to it. The Coca-Cola Company strategies are well developed to their

products, however, the company should have broadened their bases or knowledge

of their product for them not to receive negative comments or feedbacks that are

positive, at first, but as the time goes by it became negative for such reason that is

tasty but harmful to the body and health of the people and that has ingredients that

has effect in the body that can lead to illness. The company, before launching a

new product has to check first all the aspects of their new product to the consumer.

Doing business is normal to make new product but the company should not neglect

their existing product for which making new product to add to their company's

branded product that is remarkable for the consumers not to make consumers rant

or compare their new product to the existing ones.

References

Introduction

Coca-Cola Company. (January 13, 2020). Our Company. Retrieved from

https://www.coca-colacompany.com/company

Aguilar, B. (January 13, 2020). Introduction. Retrieved from

https://www.academia.edu/7892988/Coca-Cola_Case_Study

Data Presentation

Harvard Business Review. (January 13, 2020). Why Most Product Launches Fail.

Retrieved from https://hbr.org/2011/04/why-most-product-launches-fail

Coca-Cola C2 Reviews. (January 14, 2020). Retrieved From

https://www.mouthshut.com/product-reviews/coca-cola-c2-reviews-925046503

Just-Drinks. (April 20, 2004). US: Coke set to launch mid-carb C2. Retrieved from

https://www.just-drinks.com/news/coke-set-to-launch-mid-carb-c2_id75400.aspx
The Guardian. (January 7, 2005). Coke shaken by low-carb failure. Retrieved

from https://www.theguardian.com/business

CNN News. (May 24, 2004). Coca-Cola launches low-carb C2 cola. Retrieved

from https://money.cnn.com/2004/05/24/news/fortune500/coke/

Outcomes

The Ascent. (May 11, 2016). When a Product Launch Fails. Retrieved from

https://medium.com/the-ascent/when-a-product-launch-fails-bc72b04d45de

Fast Company. (April 4, 2012). Fast Company. Retrieved from

https://www.fastcompany.com/1829483/8-ways-ensure-your-new-product-

launch-succeeds?fbclid=IwAR1Z2HD6FRyJ-

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