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New Coke: A Classic Brand Failure

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New Coke: The Most Memorable Marketing Blunder Ever?

The history of new coke.

To hear some tell it, April 23, 1985, was a day that will live in marketing infamy.

On that day, The Coca‑Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.

The Coca‑Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.

Swinging for the fences.

The Coca‑Cola Company introduced reformulated Coca‑Cola, often referred to as "new Coke," marking the first formula change in 99 years. The company didn't set out to create the firestorm of consumer protest that ensued; instead, The Coca‑Cola Company intended to re-energize its Coca‑Cola brand and the cola category in its largest market, the United States.

That firestorm ended with the return of the original formula, now called Coca‑Cola classic, a few months later. The return of original formula Coca‑Cola on July 11, 1985, put the cap on 79 days that revolutionized the soft-drink industry, transformed The Coca‑Cola Company and stands today as testimony to the power of taking intelligent risks, even when they don't quite work as intended.

"We set out to change the dynamics of sugar colas in the United States, and we did exactly that -- albeit not in the way we had planned," then chairman and chief executive officer Roberto Goizueta said in 1995 at a special employee event honoring the 10-year anniversary of "new Coke."

"But the most significant result of 'new Coke' by far," Mr. Goizueta said, "was that it sent an incredibly powerful signal ... a signal that we really were ready to do whatever was necessary to build value for the owners of our business."

Factors That Shaped the Launch Decision

The story of "new Coke" is widely recalled, but the context is often forgotten. In 1985, The Coca‑Cola Company's share lead over its chief competitor, in its flagship market, with its flagship product, had been slowly slipping for 15 consecutive years. The cola category in general was lethargic. Consumer preference for Coca‑Cola was dipping, as was consumer awareness. That changed, of course, in the summer of 1985 as the consumer outcry over "new Coke" was replaced by consumer affection for Coca‑Cola classic.

The fabled secret formula for Coca‑Cola was changed, adopting a formula preferred in taste tests of nearly 200,000 consumers. What these tests didn't show, of course, was the bond consumers felt with their Coca‑Cola — something they didn't want anyone, including The Coca‑Cola Company, tampering with.

The events of the spring and summer of '85 — pundits blasting the "marketing blunder of the century," consumers hoarding the "old" Coke, calls of protests by the thousands — changed forever The Coca‑Cola Company's thinking.

At the 10-year anniversary celebration, Mr. Goizueta characterized the "new Coke" decision as a prime example of "taking intelligent risks." He urged all employees to take intelligent risks in their jobs, saying it was critical to the company's success. Many of the employees there that day had worked for the company in 1985 and remembered the thousands of calls and consumer complaints.

Calls flooded in not just to the 800-GET-COKE phone line, but to Coca‑Cola offices across the United States. By June 1985, The Coca‑Cola Company was getting 1,500 calls a day on its consumer hotline, compared with 400 a day before the taste change. People seemed to hold any Coca‑Cola employee — from security officers at our headquarters building to their neighbors who worked for Coke — personally responsible for the change.

Mr. Goizueta received a letter addressed to "Chief Dodo, The Coca‑Cola Company." (He often said he was more upset that it was actually delivered to him!) Another person wrote to him 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. Some people got depressed over the loss of their favorite soft drink. Suddenly everyone was talking about Coca‑Cola, realizing what an important role it played in his or her life.

Protest groups — such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 in a drive to bring back "old" Coke) — popped up around the country. Songs were written to honor the old taste. 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."

The Return of a Classic

When the announcement of the return of "old" Coca‑Cola was made in July 1985, those hoarding as many as 900 bottles in their basements could stop their self-imposed rationing and begin to drink the product as they always had — as often as they'd like.

That July day, the story that the "old" Coca‑Cola was returning to store shelves as Coca‑Cola classic led two network newscasts and made the front page of virtually every major newspaper. Consumers applauded the decision. In just two days after the announcement of Coca‑Cola classic, The Coca‑Cola Company received 31,600 telephone calls on the hotline. Coca‑Cola was obviously more than just a soft drink.

Coca‑Cola classic was sold alongside Coca‑Cola ("new Coke"), and the two brands had distinct advertising campaigns, with the youthful, leading-edge "Catch the Wave" campaign for the new taste of Coke and the emotional "Red, White and You" for Coca‑Cola classic. Later, the name of the new taste of Coca‑Cola was changed to Coke II; the product is no longer available in the United States.

The events of 1985 changed forever the dynamics of the soft-drink industry and the success of The Coca‑Cola Company, as the Coca‑Cola brand soared to new heights and consumers continued to remember the love they have for Coca‑Cola.

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Why Coca-Cola’s ‘New Coke’ Flopped

By: Christopher Klein

Updated: September 14, 2023 | Original: April 23, 2015

If it ain’t broke, don’t fix it.

The time-tested adage appears to be the lesson from Coca-Cola’s disastrous introduction of “New Coke." Except in 1985, Coca-Cola indeed thought its signature brand was broken.

Although Coca-Cola remained the world’s best-selling soft drink, rival Pepsi-Cola continued to gain market share in the 1970s and early 1980s, thanks in part to its aggressive “Pepsi Challenge” campaign in which consumers taking blind taste tests were surprised to learn they preferred the flavor of Pepsi. To the shock of Coca-Cola, internal taste tests yielded the same results. Company executives grew convinced that its soda’s taste—not its rival’s advertisements targeting the “Pepsi Generation”—was the reason for its declining market share.

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Since its introduction in 1886, Coca-Cola’s secret recipe had been tweaked several times—such as when changing sweeteners from cane sugar to beet sugar to corn syrup—but its taste had remained constant. While the company was developing the unique formula for Diet Coke, which was introduced in 1982, it found in top-secret taste tests that a sweeter version of the concoction beat not only Pepsi but the classic version of Coke. Executives decided to make a risky change.

Coca-Cola bets everything on New Coke

On April 23, 1985, Coca-Cola Company chairman and CEO Roberto Goizueta stepped before the press gathered at New York City’s Lincoln Center to introduce the new formula, which he declared to be “smoother, rounder, yet bolder—a more harmonious flavor.” The press, however, said what Goizueta couldn’t admit: New Coke tasted sweeter and more like Pepsi.

Had it been an opera, the Lincoln Center performance would have been a tragedy to devoted fans of Coke’s original formula. Rather than divide its market share between two sugar sodas, Coca-Cola discontinued its 99-year classic recipe and locked Formula 7x away in an Atlanta bank vault with the intention that it never again see the light of day.

“Some may choose to call this the boldest single marketing move in the history of the packaged-goods business,” Goizueta said. “We simply call it the surest move ever made.” Coca-Cola president Donald Keough echoed the certainty: “I’ve never been as confident about a decision as I am about the one we’re announcing today.”

New Coke falls flat

While Goizueta and Keough toasted each other with cans of New Coke, the news was already beginning to fall flat. On the New York Stock Exchange, shares of Coca-Cola dropped, while those of its rival rose. Pepsi gave its employees the day off and declared victory in full-page newspaper advertisements that boasted, ‘‘After 87 years of going at it eyeball to eyeball, the other guy just blinked.’’

New Coke left a bitter taste in the mouths of the company’s loyal customers. Within weeks of the announcement, the company was fielding 5,000 angry phone calls a day. By June, that number grew to 8,000 calls a day, a volume that forced the company to hire extra operators. “I don’t think I’d be more upset if you were to burn the flag in our front yard,” one disgruntled drinker wrote to company headquarters. At protests staged by grassroots groups such as “Old Cola Drinkers of America,” consumers poured the contents of New Coke bottles into sewer drains. One Seattle consumer even filed suit against the company to force it to provide the old drink.

The outrage caught Coca-Cola executives by surprise. They had hardly made a rash decision unsupported by data. After all, they had performed 190,000 blind taste tests on U.S. and Canadian consumers. The problem, though, is that the company had underestimated loyal drinkers’ emotional attachments to the brand. Never did its market research testers ask subjects how they would feel if the new formula replaced the old one.

Coca-Cola Classic returns 

Seventy-nine days after their initial announcement, Coca-Cola executives once again held a press conference on July 11, 1985—this time to announce a mea culpa and the return of the original formula, which hardly had time to gather dust in its Atlanta bank vault, under the label “Coca-Cola Classic.” “Our boss is the consumer,” Keough said. “We want them to know we’re really sorry.” The news was so momentous that television networks broke into normal programming with special reports.

Coca-Cola Classic quickly outsold New Coke and within a few months had returned to its position as the top-selling sugar cola, ahead of Pepsi. The company rebranded the new formula “Coke II” in 1990 before it was eventually abandoned in 2002. In spite of the blowback, Coca-Cola emerged from the fiasco with its market position actually strengthened as consumers rediscovered their attachment to the iconic brand. (Moreover, in 2019, Coca-Cola actually re-released a very limited run of New Coke.) 

“The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people,” Keough admitted. The blunder was so colossal that some thought it must have been an intentional marketing gimmick. “Some cynics say that we planned the whole thing,” Keough said. “The truth is we’re not that dumb and we’re not that smart.”

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New Coke Case Study (Part 1)

Consumer behavior, strategy, competition, new products, role-play exercise, teaching notes.

It is a role-play case study

Much has been written about the New Coke new product development and launch in 1985 and there have been numerous case studies published in various textbooks, along with numerous books. But what is different about this case study for New Coke is that students will role play a particular character or professional in their discussions, taking into account their goals and motivations.

The information provided below will take the students back to 1985 to address the challenges that Coca-Cola was facing at that time. The character and role descriptions provided are based upon the real players and their generalized motivations.

This is Part 1 of the Case Study

This New Coke case study is in two parts, part one (deciding the best competitive marketing strategy against Pepsi is outlined below) and part two (deciding if and how to launch a new product – that is, New Coke) is on another page on this website.

Student Roles and Structure

This case study role play exercise is designed for groups of six students. If there are more or less than six in each group, then the role of the ‘consultant’ can be dropped (for a discussion group of 5) or you can have two consultants (making a group of 7).

For discussion groups of four, drop both the ‘consultant’ and the ‘sales rep’ roles. Allow student groups around 30 minutes to review the case, decide roles and discuss and debate their final marketing strategy. Then the ‘CEO’ of each group can present their strategy to the rest of the class.

Case Study Debrief

A summary discussion of the similarities and differences in strategy can then be conducted, making the whole exercise around 1 to 1.5 hours – but probably quite worthwhile for a better understanding of the New Coke decision. If there is general agreement on the need to modify Coca-Cola’s product mix in some way, then you can proceed to the second part of the New Coke Case Study.

Video Support

Please note that there is a page on this website that has links to individual YouTube videos that will help students get a better understanding of the Coke-Pepsi ‘cola wars’ era – or there is a summary video overview at the bottom of this page.

Review the activity below or download the PDF student worksheet

• Student Worksheet:  New Coke Marketing Case Study
• Instructor Solutions (Members Only):  New Coke Case Study (Part 1) = Solutions

New Coke Marketing Case Study

The new coke story in a nutshell.

In 1985, Coca-Cola completely withdrew their flagship product from the market and replaced it with a “new” Coke in the US and some international markets. This product is often referred to as “New Coke”, but the intention of the packaging was to indicate that Coke was new.

The product was developed and launched after years of R&D and taste testing and focus groups with consumers. The new flavor outperformed both traditional Coke and Pepsi in market research taste tests. However, within a few days of traditional Coke being withdrawn and replaced by “new” Coke, there was a backlash from consumers and the media and their brand image was damaged.

Many consumers saw Coke as a cultural icon and were angry that it was no longer available. Primarily due to media and consumer lobby group pressure, within 80 days Coke re- introduced “Coke Classic” and offered two Coke variations along with “new” Coke. Today they no longer offer “new” Coke in the US market.

The “Traditional” Cola Marketing Environment

The Coca-Cola product was the traditional market leader in the cola category. They had achieved success through a strategy of outsourcing manufacturing and logistics to licensed bottlers, strong retailer relationships, and building a very strong brand.

In its early years, Pepsi positioned itself as a discounter and sold its product for half the price of Coke in a larger bottle. This positioning had some impact with budget-conscious households and helped Pepsi become the “at-home” drink, while Coke remained the social drink.

To reinforce their perceived higher product quality, one of Coke’s slogans was “it’s the real thing”. Because of this initial relative competitive position, Coke believed their product was superior and that they had an entitlement of being the market leader. Whereas Pepsi always saw themselves as the challenger and tended to be more aggressive in their marketing tactics as a result.

The Pepsi Challenge and the Pepsi Generation

Pepsi reintroduced “the Pepsi Generation” advertising campaign in the early 1970’s. Pepsi had run briefly this advertising campaign in the early 1960’s. Its reintroduction was driven by John Sculley, who would later go on to run Apple and sack Steve Jobs.

The Pepsi Generation advertising, along with the tag-line “The Choice of a New Generation”, helped position the Pepsi as modern, young, innovation and energetic. At the same time, it was designed to reposition Coke in the minds of the consumers as old, tired and boring.

The Pepsi Challenge also started in the 1970’s has run off and on ever since through many parts of the world. The Pepsi Challenge consisted of a blind taste tests with consumers. These were filmed and the reactions of loyal Coke drinkers that chose Pepsi were shown as “reality advertising”. Over 300 of the Pepsi Challenge TV commercials (TVCs) were made, usually for local/regional markets throughout America.

Occasionally deals were struck, at a university or college campus for example, for the university to switch to Pepsi if they won. Needless to say, Pepsi consistently won all the Pepsi Challenges – usually by a narrow margin.

This period – 1970s and 1980s of aggressive promotions and comparative advertising between Coke and Pepsi is now referred to as the “Cola Wars”. The cumulative impact of all these marketing activities by Pepsi against Coke were designed to reposition the brands in the minds of the consumers, as shown in the following perceptual map.

Pepsi Sponsors Michael Jackson

Pepsi signed Michael Jackson to make two TV commercials and to sponsor his concert out just before “Thriller” took off – which became the biggest selling album of all time. The deal was struck for $5 million, which doesn’t sound like a lot of money today, but around that time the Rolling Stones tour only received $500,000 for their sponsorship deal. So this was an extraordinary amount of money to be paid to a celebrity for a sponsorship deal in the early 1980’s. Although not part of the original deal, Michael offered his biggest song, Billie Jean, to be reworded and used in the Pepsi TV commercial as he didn’t like the song Pepsi was planning to use. He was involved in editing the TVC.

Impact on Soft Drink Market Shares

Pepsi started outselling Coke in the “free-choice” channels, such as supermarkets, grocery stores and drug stores as early as 1977. Pepsi was consistently closing the market share gap on the market leader, with Coke’s market share fell from 24.3% to 21.8% (down 2.5%) from 1980 to 1984.

Coke was able to maintain its market share lead because of its distribution and retailer relationships (e.g. with McDonald’s and other fast food chains, extensive numbers of vending machines, relationships with restaurants, hotels, cinemas, airlines and so on).

But Pepsi’s taste preference was impacting these contracts. For example, the Burger King chains switched from Coke to Pepsi in 1983. And to add to the concern of a falling market share for Coke, the overall soft drink market was in slight decline.

A Quick Summary of Coke’s Position in 1985

• Coke was being outsold by Pepsi in segments where consumers had a choice of the brands, such as supermarkets,
• Overall their market share was surely and steadily declining in a declining market (down from 24.3% in 1980 to 21.7% in 1984) ,
• Coke had increased their advertising and promotional spending from $50m to $200m in recent years. Their $200m promotional budget was 1/3 more than Pepsi’s spend of $150m),
• There was increasing “pressure” on maintaining retailer relationships (e.g. the loss of the Burger King account) as Pepsi was becoming more acknowledged as the preferred cola among consumers,
• Coke were running more aggressive sales promotions and discounting in stores (to reduce the impact of the Pepsi Challenge advertising). To offset this discount, Coke started to increase prices to their captive customers (such as the fast food chains),
• Coke’s own market research was indicating that “taste” was the main reason for their erosion of market share,
• Pepsi’s “new generation” advertising campaign was designed to position Coke as old and tired and boring,
• Pepsi now had Michael Jackson at the height of his career. To counteract this, Coke used Bill Cosby as their main spokesperson. Bill had the number one TV show in America at the time (The Cosby Show), but probably had more family appeal rather than youth appeal,
• Coke’s R&D area has developed a new cola formula that not only beats Pepsi and existing Coke in blind taste tests, but is cheaper to manufacture which would add up to a $50m pa increase to the bottom line.

Role Play Participants – Information for Students

This New Coke case study is undertaken as a role play exercise , where each student in the group will take the role of one of the following participants.

You are the final decision maker for group. Since heading Coca-Cola five years ago you have pushed push executives NOT to make safe decisions. Your culture change program has challenged management to be more entrepreneurial, but you always insist on analysis and professional decision making, with decisions tied to financial outcomes for Coke.

The Marketing Manager

You are the marketing manager responsible for the Coke brand. In 1982 you brought Diet Coke to market; the first ever extension of the Coke brand. It was hugely successful, becoming the 3rd best selling drink in the market, behind Coke and Pepsi, making it one of the most successful new products in FMCG marketing history.

The cornerstone of Diet Coke’s success was its superior taste leveraged by Coke’s marketing expertise in brand building and distribution and logistics. You are considered a very ambitious and a highly confident marketing manager.

The Market Researcher

As the marketing research manager for Coca-Cola, your prior taste test research for Diet Coke was spot on as Diet Coke became the best-selling diet soft drink on the market within two years, primarily because of its taste. You have also been reporting for several years that market research with consumers indicates that taste is the main factor for falling market share of the main Coke brand.

You have just conducted an enormous market research study on the new formula for Coke. Almost 200,000 taste tests were conducted with a budget of $4 million. You have concluded that the new formula is clearly preferred by respondents in blind taste tests against both existing Coke as well as Pepsi. However, in research situations where the brand was disclosed to respondents, Pepsi was less preferred than in the blind taste tests.

The only area of concern raised in your research was that in focus groups some consumers got angry at the idea of withdrawing old Coke, but this finding was not replicated in individual surveys where respondents were generally positive about the idea of a new better tasting Coke.

The Sales Rep

You work as a sales representative for Coca-Cola. Your main role is to keep existing retailers and fast food chains committed to Coke, as well as trying to win new retailers and outlets. One of the challenges you face is that the competitive Pepsi sales reps highlight that consumers prefer the taste of Pepsi and that it fits better with a younger market.

It was this kind of persuasive argument that helped convince the Burger King chain switch from Coke to Pepsi two years ago. You are generally excited about new products, such as the highly successful Diet Coke, but you did notice that many retailers stopped ordering Tab (Coke’s existing diet cola drink) due to the retailers’ unwillingness to dedicate too much shelf space to Coke products.

The Bottler

You bottle and distribute Coke products in a defined geographic area . Your business is quite large in its own right and you employ many 100’s of staff. There are a few large Coke bottlers in the USA whose business is now worth more than $1 billion.

Unfortunately, relationships between Coke and its bottlers were not always smooth. For example, a number of the bottlers took legal action against Coca-Cola to get a better deal with Diet Coke and some bottlers stopped manufacturing Tab (Coke’s existing diet cola drink) because it is a logistic challenge to manufacture multiple drinks.

Bottlers pay 45% of advertising costs in your area, primarily for TV air time, and you weren’t happy with the huge Diet Coke launch AND the increase in advertising costs overall in recent years. As a manufacturer and distributor you don’t want lots of products to make and sell as a large-scale mass-produced streamlined operation is more cost-effective and profitable for your business.

The Outside Consultant

You are the one person in the case study discussion exercise that has no set agenda or existing motivations. Therefore, your role is to help the team reach the right decision for the firm overall and you may even act as the facilitator for the group. You are rational in your approach, but will force the other players consider both the up and downsides of their preferred solution.

Discussion Questions for New Coke

• It’s 1985 again at Coca-Cola, what is the best marketing strategy for Coke to pursue to improve their position and increase the overall profitability of the Coke brand? (Note: Your suggested solution may or may not include a “new” Coke product solution.)
• Outline why your proposed competitive strategy will be successful in this aggressive period of the Cola Wars.
• In what ways, do you think, that Pepsi may respond to your proposed strategy?

When you have finished the above questions, the CEO can report their team’s strategy to the rest of the class.

New Coke Video Case Study Summary

Related Activities

• New Coke Case Study (Part 2)
• Videos for the New Coke Case Study
• New Coke Case Study Video
• Pepsi Next Case Study

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New Coke: A Classic Brand Failure

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Marketing Case Studies: What You Can Learn From Coke’s Massive Branding Mistake

March 27, 2019 by Karon Thackston

To take a word from President Roosevelt: April 23, 1985, is a date that will live in marketing infamy. For on that date, the minds at Coca-Cola chose to go with what they saw with their eyes rather than what they knew in their hearts.

As marketing case studies go, this is a classic. It was a branding / marketing mistake (read: disaster) equivalent to Captain John Smith ignoring all his years of experience and basing the decision to speed up the Titanic on what an outsider told him.

In 1985, the recipe for Coke was changed to taste more like its number-one competitor. The world was outraged, Coca Cola was stunned by the reaction, and marketing would never be the same.

What Led Up To This World-Class Marketing Mistake?

Whether you read marketing case studies or remember the actual event (as I do), this branding story is one that will be discussed in classrooms and boardrooms until the end of time.

In the years leading up to 1985, Coke had suffered a significant loss in market share. What was a long-held 60% dominance had plummeted to around 24% as of the early ’80s. As the public’s desire for diet soft drinks and non-cola beverages increased, Coca-Cola’s core product was slipping.

Figuring Out And Solving The Problem

Smartly, the company’s marketing team did a series of blind taste tests that revealed consumers preferred the sweeter taste of arch-rival, Pepsi. A new recipe was devised and more blind tests were conducted. The result? The new formula of Coke substantially beat the current Coke flavor as well as Pepsi … hands down.

Focus groups were held and, according to Wikipedia, “Asked if they would buy and drink the product if it were Coca-Cola, most testers said they would, although it would take some getting used to. About 10–12% of testers felt angry and alienated at the thought, and said they might stop drinking Coke altogether.”

The data was there. The tests had been done. And, after following all the marketing rules (well … almost all), Coke began an initial rollout in New York and Washington, DC. As soon as the nationwide launch took place, what would be deemed “New Coke” was also available in select McDonald’s restaurants.

It worked! Sales over the next few weeks showed a rise of 8% over the same period as the previous year. Regular Coke drinkers said they liked the new taste and would buy the product again.

I’m sure Coca-Cola corporate breathed a sigh of relief. Their scientific approach to this massive change was delivering everything they had hoped for.

And then the other shoe dropped.

The Power Of Branding: The Good, The Bad, & The Outraged

Statistics, reports, surveys, and other data clearly showed New Coke was the savior that would return leading share to Coca-Cola. However, two elements had been overlooked: emotion and branding.

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That’s where this marketing case study morphs into a colossal marketing mistake.

Remember that 10%–12% of testers in the focus groups who felt angry? They were about to unleash the power of opinion and the voice of dissent on Coke corporate with both rage and depression that one psychologist said resembled the mourning a lost loved one. Their global reach would force change in an unexpected way.

Corporate headquarters in Atlanta, Georgia, received about 1,500 phone calls a day (normal volume was 400 calls per day) with comments about New Coke. Chicago Tribune reporters, late-night comedians, and even dictator Fidel Castro bashed New Coke, pouring gasoline on an already blazing inferno.

Taste aside, the emotional connection to the Coke brand was the cause of anger and even depression over the change. The bond with the original was so strong and so ingrained into American (and other) society in every class that the thought of changing the closely guarded recipe was — in many people’s options — equivalent to painting the Statue of Liberty pink.

Since 1892, Coca-Cola had steadily positioned itself as not only what America drinks, but what it wears and collects and loyally promotes. With advertising segmented to reach every audience avatar specifically, the company had relished in nearly 100 years of relationship building with its logo on everything from coolers and sweatshirts to sports stadium walls. People loved Coke. And for hardcore fans, changing it was an act of treason.

How Coke Survived Its Unforgettable Marketing Mistake

Just two and a half months after the launch of New Coke, public opinion won out. On July 11, Coca-Cola announced the return of the original Coke formula, to be renamed Coke Classic.

According to then company President Donald Keough, “There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years. The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people.”

While New Coke was sold for a while it was eventually retired. Coke Classic (aka Old Coke) came back with a vengeance and began overtaking Pepsi immediately with an 18.9% market share (1987), 20% market share (1989), 43% (2005), and 48% (2015), according to Statista.com.

Don’t Become A Marketing Case Study Fail

What lessons can you learn from Coke’s marketing mistakes?

• Before you undertake a complete rebranding effort, understand what people know about your brand, but also how they feel about your brand.
• Listen to objections. Don’t blow off the 10% who have a contrary opinion and immediately side with the 90% who agree with you. New Coke showed a slightly different application of the 80/20 rule, where (in this case) 10% drove the thoughts and actions of the 90%.
• As you continue to grow your brand, consider the impact your plan might have on future changes. You don’t want to get so boxed in to one brand that you have no room to move later on.
• Be creative! Where Coke excelled overall in branding was with embedding that iconic red-and-white logo into every corner of our lives. In this case, merchandising helped grow their global recognition 1,000X. How can you surprise your loyal fans and attract new ones with inventive marketing?

Above all … LEARN! No brand has a perfect track record when it comes to marketing. According to Coke President Roberto C. Goizueta in a 1995 New York Times interview, “If we had it to do all over again, knowing what the results would be, we would do precisely the same thing.” Marketing mistakes are only failures if you don’t learn anything from them.

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One simple thing I think they should have done is ADD the new product to their product line, not replace it – 24% market share, that’s still significant. Add it as a new product. Some current customers might switch, but they’d still be customers. And the new product might draw in former Pepsi drinkers.

Plus – shelf space (I think that’s what they call it.) in the grocery store, each brand gets a certain number of inches of shelf space. Add a new variety, and you get more shelf space (at least initially.) That’s why some brands have so many variations – they get to take up entire sections of an aisle.

Applied to us as solo/small business owners – if a product is still selling, consider keeping it and adding a new product. Might not end up being your choice, but you should surely consider it.

Agreed on all counts. Seemed a bit dramatic to me to chuck the whole thing

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New Coke, 35 years on: Inside the recipe tweak that sparked nationwide backlash and almost ruined Coca-Cola

It's been 35 years since coca-cola committed 'one of the most memorable marketing blunders ever' with launch of 'new coke', article bookmarked.

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They say you cannot progress without change, but that lesson doesn't necessarily apply to products - especially if you’re in the beverage industry.

On 23 April 1985, Coca-Cola learned this the hard way when it committed what it admits was one of “the most memorable marketing blunders ever” when it launched a product that was met with near-instantaneous backlash.

The infamous error, which is still remembered 35 years later as a spectacular failure, was the release of “New Coke ” - which saw the formula of what was and is still the most popular soda in the world changed for the first time in 99 years.

According to Coca-Cola, the launch of the product, which was pushed aside for the return of the original recipe just 79 days later, “spawned consumer angst the likes of which no business has ever seen”.

However, to fully understand the scope of the mistake, the soda company insists that one must first take into context the factors that “shaped the launch decision” - mainly its ongoing competition with Pepsi.

“In 1985, The Coca-Cola Company's share lead over its chief competitor, in its flagship market, with its flagship product, had been slowly slipping for 15 consecutive years,” the company explains in a section on its website dedicated to the New Coke mishap. “The cola category in general was lethargic. Consumer preference for Coca-Cola was dipping, as was consumer awareness.”

Two years before the release of New Coke, Pepsi had struck a deal with Michael Jackson for a $5m partnership. In 1984, likely due to the success of Jackson’s commercials, Pepsi reported $7.7bn in sales and an increase in market share, while Coca-Cola’s dropped.

In an effort to revive its position in the cola market, Coca-Cola decided to make a sweeter version of its beloved soda, which, according to 200,000 consumers who conducted taste tests at the time, was actually preferable.

But, what Coke failed to realise was “the bond consumers felt with their Coca-Cola,” according to the soft drink company. The overwhelming sweetness of the drink when consumed in large quantities has also been blamed for its failure.

Whether it was the sheer fact that they wanted the old flavour or that the new flavour was too sweet, the release of New Coke was met with widespread outrage across the United States.

“Calls flooded in not just to the 800-GET-COKE phone line, but to Coca-Cola offices across the United States,” the company recalls. “By June 1985, The Coca-Cola Company was getting 1,500 calls a day on its consumer hotline, compared with 400 a day before the taste change.

“People seemed to hold any Coca-Cola employee - from security officers at our headquarters building to their neighbours who worked for Coke - personally responsible for the change.”

When calling the company to complain proved futile, customers took their disapproval even further. One man, Gay Mullins, reportedly went as far as spending $30,000 of his own money and three weeks of his time attempting to force Coca-Cola to bring back its original recipe.

According to Mullins, the issue was not just the new taste, but that the company had done something “un-American” - taken away his “freedom of choice”.

“How can they do this? They were guarding a sacred trust!” he told a reporter for People at the time. “Coca-Cola has tied this drink to the very fabric of America - apple pie, baseball, the Statue of Liberty. And now they replace it with a new formula, and they tell us just to forget it.

“They have taken away my freedom of choice. It’s un-American!”

Others, according to Coca-Cola, hoarded bottles of the original, with one consumer from San Antonio, Texas, purchasing $1,000 worth of Coke from a local bottler.

On 11 July 1985, once the extent of the soda brand’s mistake had become evident, Coca-Cola relaunched the original recipe, rebranded as Coca-Cola Classic.

According to the beverage corporation, the news of the drink’s long-awaited return “made the front page of virtually every major newspaper”.

Despite the undeniable failure that was New Coke, the Coca-Cola Company prefers to view the 79-day blunder as “testimony to the power of taking intelligent risks, even when they don't quite work as intended”.

“We set out to change the dynamics of sugar colas in the United States, and we did exactly that - albeit not in the way we had planned," then-chairman and chief executive officer Roberto Goizueta said in 1995 at an event honouring the 10-year anniversary of New Coke.

New Coke was eventually removed from shelves altogether in the US. However, for those curious to taste the drink that made the brand risk it all, it is possible to purchase a Stranger Things collectors pack that includes two cans of New Coke on Amazon for $39.99.

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