New Coke Blunder: The Pepsi Clone People Liked But Didn't Want
Sources: Ad Age; twitter.com
In April 1985, Coca-Cola took a huge risk with the introduction of New Coke. It had a refreshing taste that was closer to that of cola juggernaut Pepsi -- and the public revolted. Angry consumers felt they were being played by a company that was claiming to solve a problem that didn't exist. The launch of New Coke is one of the most famous debacles in the history of marketing, and exposed the limitations of market research, which said all along that people would love New Coke.
When then Coca-Cola Company chairman and CEO Roberto Goizueta sauntered in front of a crowd of press at New York City’s Lincoln Center he described New Coke as a "smoother, rounder, yet bolder—a more harmonious flavor" than the original Coca-Cola formula, making it sweeter than the company's number one competitor, Pepsi.
It turned out that consumers had a bond with Coca-Cola that went much deeper than taste. The introduction of New Coke sent them into a panic, as they were far more upset at the loss of the old formula than excited about trying a new and improved version.
As sales of New Coke went into a freefall the Coca-Cola Company did the only thing that they could do, they brought back the original formula as Coca Cola Classic a few months later and found success. Success might be too underwhelming of a term. The Coca-Cola Company scored a resounding win with the return of the most beloved soft drink of the 20th century, but not before the company was nearly brought to its knees.
New Coke was a product of the cola wars
By 1985, Coca-Cola's dominance of the cola market was quickly dissipating. Thanks to both the "Pepsi Challenge" (a blind taste test held at shopping malls) and a waning interest in Coca-Cola, the company behind the formerly beloved soft drink felt that they needed to do something to shake up public interest and to jack their sales up to numbers not seen since the 1960s.
In the midst of the "cola wars" Coca-Cola lobbed a grenade into soft drink battlefield with the release of New Coke, a sweeter version of the original drink. The Coca-Cola Company allegedly performed more than 200,000 taste tests before launching New Coke. The company's numbers showed that the public would like the taste of New Coke, but Coca-Cola didn't take into consideration how people actually feel about the classic soda.
Coca-Cola learned an important marketing lesson in a very public way. Coke drinkers were so attached to the customary formula that they wouldn't -- couldn't -- have an open mind about a new and, according to market research, improved version. The taste of New Coke wasn't the issue. The problem was that the introduction of New Coke left loyal customers feeling that the company was taking something away from them for no apparent reason. Coke drinkers felt betrayed.
Let the hate flow
After the introduction of New Coke, the 800-GET-COKE hotline was inundated with 1,500 angry phone calls a day compared to the 400 a day that it received prior to the introduction of the experimental drink. Consumers haaaaaated New Coke, so much so that they complained to any member of the Coca-Cola team that they ran into regardless of whether they were truck drivers, bottlers, or people who worked at the company who had no sway over the recipe change.
Consumers who didn't take out their frustration on the company bought what was left of classic Coca-Cola en masse. A man in San Antonio supposedly purchased $1,000 worth of the soft drink, while thousands of people around the country stocked up on as much original Coca-Cola as possible. New Coke may have been a failure, but it succeeded in spiking sales of the original formula.
There's nothing like the real thing
Today, consumers can (and do) hop on social media to let companies know exactly what they think of their decisions. If a new product pops up that they don't like, people tell them about it and they do it with a fervor saved for military coups and football hooligan riots. In 1985, consumers who may have enjoyed the taste of New Coke complained that Coca-Cola was taking away a beloved product that meant more to them than the somewhat better taste of New Coke.
Consumers were so up in arms about New Coke that the Society for the Preservation of the Real Thing and Old Cola Drinkers of America were created to bring back the original formula. Many of these original Coca-Cola lovers made their way to downtown Atlanta to let the company know their distaste for the change in culture.
Coca-Cola Bottlers played a part in getting rid of New Coke
It wasn't simply that American consumers were frustrated with the change in recipe, the independent bottlers who trekked Coca-Cola (and now New Coke) around the country were worried that they would lose out on contracts because of the failure of the new recipe. It's likely that if the bottlers had been on board with New Coke that it would have remained the norm regardless of what consumers felt, but the bottlers were angry that they weren't even consulted on the change.
In June of '85 a collection of bottlers made their way to Atlanta where they registered complaints with the company, insisting that Coca-Cola bring back its original formula. With consumers and bottlers firmly against the company, Coca-Cola announced on July 10, 1985, that they were bringing back the classic Coca-Cola recipe.
Happy summer, the cola wars are over
Coca-Cola's 79 day waking nightmare ended on July 11, 1985, when they brought Coca-Cola classic to the market. The return of Coca-Cola to the shelves sparked a giddiness in Americans consumers, who quickly forgave the company and expressed a weirdly sincere gratitude, as if the return of old Coke was a matter of life and death. One executive remarked that "You would have thought we cured cancer." More than 30,000 calls came into the Coca-Cola Company hotline, but this time they were in praise of the company.
It was clear that Coca-Cola was more than a soft drink, it was a piece of America's cultural identity. Then Chairman and chief executive officer of Coca-Cola Roberto Goizueta noted:
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. But the most significant result of 'new Coke' by far 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.
Tags: Advertising | Coca-Cola | Remember This?... | Marketing | Soft Drinks | Famous Blunders
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