New Coke: One of Marketing's Biggest Blunders Turns 25

Today marks a quarter century of one of marketing's biggest blunders -- and the sixth biggest moment in 75 years of advertising, according to Ad Age: New Coke

Still smarting from the 1975 "Pepsi Challenge" taste-test battle, Coca-Cola Co. launches "Project Kansas," a top-secret mission to reformulate Coke. President-Chief Operating Officer Robert Goizueta appoints Coca-Cola USA head Brian Dyson, who taps marketing chief Sergio Zyman

to head the endeavor. Mr. Zyman and company test a new, sweeter version of the flagship cola with 190,000 nationwide taste tests at a cost of $4 million. At a bottlers' meeting in Atlanta back on April 22, 1985, Mr. Zyman announced from the stage that Coke was changing its taste. The next day Coca-Cola revealed the new, sweeter taste to financial analysts and the media. But word of the new product finally leaks out and Pepsi dispatches its own press assault on the same day claiming victory. "The other guy blinked," Pepsi says in ads saying Coke reformulated its brand to taste "more like" Pepsi. The press hammers at Mr. Goizueta, now chairman-CEO, to explain the difference and what will happen to the old Coke, which 39% of consumers still favor. When Mr. Goizueta admits it will do away with the old formula, consumers revolt. Dazed by the backlash, management on July 11, 1985, just 79 days later, agrees to bring back the original formula, renaming it Coca-Cola Classic. Some in the industry counterintuitively suggested the blunder was actually good for the beverage giant -- that its fans' reactions to the idea of their beloved Coke going away, along with the reintroduction of the cola as Coca-Cola Classic, have created a fantastic new marketing strategy. But we think the lesson is pretty clear: Don't tinker with success. Or at least think very, very carefully before you do.
Here, in memory of the short-lived New Coke, are the Bill Cosby spots introducing the product -- and one of Pepsi's cheeky reactions to it. In the words of one of Coke's many taglines (this one circa 2000): Enjoy!

15 Disastrous Product Launches That Were Quickly Killed

Wednesday, October 12, 2011 Pepsi A.M. and Crystal: Both 1 year
In 1989, Pepsi tried to target the "breakfast cola drinker" with Pepsi a.m. It only lasted a year. In 1992, Pepsi tried again, this time with a clear cola, "Crystal Pepsi." No dice -- it died in 1993

New Coke: 77 Days

In the early 1980s, Coke was losing ground to Pepsi. So it tried to create a product that would taste more like Pepsi. While New Coke fared OK in nationwide taste tests before launching in 1985, it turned out those were misleading. Coke abandoned the product after a few weeks, and went back to its old formula. It also gave its product a new name: Coca-Cola Classic.

--------------------------------------------------------Pepsi and Coca Cola sales Drop Drastically

Pepsi and Coca Cola are in for the fight of their lives! Soda may be Good, but cola sales are dropping at an alarming rate! In fact, Beverage Digest looked at the top 10 carbonated soft drink brands and saw that only Diet Mountain Dew and Diet Dr Pepper showed any volume growth in 2008. (Diet Dew volume rose 4 percent, while Diet Dr Pepper volume rose 2.3 percent.)

Soda sales decline for first time since 1985

Public appetite for noncarbonated drinks rising, firms are poised for change
ATLANTA Beverage makers who once relied heavily on carbonated soft-drink sales are putting more focus on water and sports drinks as consumers show increasing interest in drinks that are lighter and are perceived to be healthier.

Sales volume of carbonated soft drinks across retail, vending and fountain channels in the United States fell last year for the first time since 1985, according to Beverage Digest, which said volume slid 0.2 percent. Excluding energy drinks, it fell 0.7 percent. Even so, sales of noncarbonated drinks were on the rise, helping beverage makers like The CocaCola Co., PepsiCo Inc. and Cadbury Schweppes PLC. "I think people have a growing interest in beverages which are lighter and have actual or perceived functional benefit," Beverage Digest editor John Sicher said Thursday. "I think we've seen a decline in regular soft drinks for some time." Sicher said the trend toward noncarbonated drinks is likely to continue, but he noted beverage makers are prepared for the shift. "I think we're seeing a consumer shift, but I think Coke and Cadbury and Pepsi are wellpositioned to handle this," Sicher said. A spokesman for Atlanta-based Coca-Cola said the company reported last month in its fourthquarter and year-end earnings release that it saw a 1 percent increase in carbonated soft-drink sales volume in the U.S. for the last three months of 2005, reversing three consecutive quarters of negative performance in the category. "People want variety," Ben Deutsch said. "You saw this tremendous growth in non-carbs this last year. That's impacting carbonated soft drinks." Still, Deutsch said Coca-Cola is "very bullish" on carbonated soft drinks going forward. "We are a total beverage company and we see tremendous opportunity both in carbonated soft drinks and in non-carbs," he said. In a research note Wednesday, Morgan Stanley analyst William Pecoriello said the rules for success in the soft drink industry are changing rapidly. "Consumer choices are exploding, consumers have greater knowledge about products, are taking personal responsibility for their health/wellness and growing more sophisticated," he wrote. "The concentrate companies and bottlers need to make changes to their businesses to adapt to this reality." On an individual basis, Beverage Digest said Cadbury Schweppes increased its sales volume of carbonated soft drinks by 0.6 percent in 2005, compared to Coca-Cola, which was down by 0.1 percent for the year and Pepsi, which was down 1.2 percent

Coca-Colas Emerging Markets Strategy Counters Declining Demand in Established Markets

Posted on February 17, 2009 by sterling1

Coca-Colas fourth quarter profit fell by 18%. Thats a result attributed to falling demand amid a sharp global economic slowdown, according to this news report on the IndustryWeek site. While the news item isnt granular enough to know where Coke did well and not so well in terms of comparative absolute dollars, theres no question they are having the troubles at home and scoring big in emerging markets. Two sentences in the news report, separating by other copy points, summarizes what they are doing: The company had slashed costs and raised prices to counter falling consumer demand for soft drinks in North America, its largest market reeling from recessionDuring the last quarter, Coca Cola increased turnover by 29% in China and 28% in India, its key emerging markets.
No one is too worried about Coke, by the way. They had a $995 million fourth quarter profit and netted over $5 billion for the year. But you dont achieve that by ignoring market trends, and I think their emerging market strategy is a significant example of how they pay attention and are capitalizing on the opportunity.

Why Coca Cola Blak Failed

Danielle Cleghorn, Yahoo! Contributor Network Dec 10, 2008 Coke Blak was one of many, many efforts Coca-Cola Company made to improve the declining cola sales of 2005. The product development department had the not so ingenious idea to grab on the coattails of the Pepsi-Starbucks frappacino idea and develop a coffee flavored cola. This concoction took approximately two years to develop, which tasted exactly like you would expect it to taste: pouring your cup of cheap coffee into your can of coke. Why would it take Coca Cola two years to nail down a product that took my three year old son approximately two seconds to master? It could be because "Coke introduced more than 1,000 products in 2005" and could have "over-dilute the new product development and launch resources." Regardless of the reasons why it took so long to develop, one fact remains glaringly clear. Coke Blak tasted dreadful. Many tastes tests have been conducted for this product and the consensus is that Coke Blak was a beverage that would not be consumed more than once. Coca-Cola seemed to ignore this evident fact even when Marc Mathieu, Senior VP, Global Brands for the Coca-Cola Company, presented Coke Blak at the PDMA conference in Atlanta, GA.

"Mathieu had a friendly audience at the 2006 presentation. The Atlanta area is the location of Coca-Cola's corporate headquarters. No samples were provided during the presentation. The break after the presentation featured legacy Coca-Cola products but did not include Coke Blak. The event staff was not familiar with Coke Blak." Was this an oversight or a deliberate move by Coca-Cola executives to postpone the inevitable consumer's negative reaction? My money is on the later. Nick Gerlich's post on wordpress.com truly sums up my opinion regarding why Coke Blak only survived a mere 16 months: "While Blak was targeted at sophisticated over-30 customers, Coke thinks the price may have been a turn-off. But I think not. It was the taste, quite simply. It was horrible. I am definitely over 30 and can afford the indulgence (you can debate whether I am sophisticated or not), but if something does not taste good, a repeat customer I will not be." A simple fact that is a constant with any produced product: marketers can not over promise and under deliver which was the case with Coke Blak. Coca-Cola failed miserably to produce a drink with even a slightly appealing taste. I am astonished it lasted as long as it did. Sources: http://www.usatoday.com/money/industries/food/2005-12-07-coke-products_x.htm Coke poured out 1,000 new products in 2005, by Mary Jane Credeur, Bloomberg News, Posted 12/7/2005 http://blog.pdma.org/2007/09/obituary-for-coke-blak.html Obituary for Coke , by Mary Jane Credeur, Bloomberg News, Posted 12/7/2005 http://nickgerlich.wordpress.com/2007/09/07/blak-eye/ Goodbye Coca Cola Blak. We hardly knew ye, by Nick Gerlich, Posted 09/07/07