The Launch of New Coke

Submitted To Submitted By
Preeti Hiro Sonia Kawatra
Mehak Goyal
Vishal Vaid
Parampal Singh
 Introduction
On April 23,1985 Coca Cola launched a sweeter
version of the soft drink named ‘ New Coke’
withdrawing its traditional 99-year old formula.
Though the initial market response to New Coke
was satisfactory ,things soon went against Coca-
Cola because of consumer protests to New Coke
and a significant decline in its sales, Coca-Cola was
forced to revert back to its original formula.
 Background Notes
The original coke was developed by John Pemberton in 1886.
It was based on a combination of oils extracts from Coca leaves
and various others addictives including caffeine.
On May 8, 1886 Coke was released in the market.
The first advertisement of the coke appeared in Atlanta Journal on
May 29, 1886.
Pemberton spend huge amount on advertising and sell 50 gallons
of syrup at $1 per gallon.
To make the drink popular it was served free for several days-after
this, drink got acceptance.
 Continue…
After the Pemberton’s death, his friend “ As a Candler” and a
wholesaler dreggiest acquired stake in the company.
Positioning of Coke:- In 1895 Coke was advertised as a drink which
relieved one of mental and physical exhaustion and cured
headache.
Repositioning of Coke:- Later Coke was repositioned as a
refreshment drink.
It was found that Coke contain caffeine in it, in a huge amount
which is injurious to health. Due to which it was criticized and a
case was registered against coke, which was settled outside the
court and coke agreed to reduce amount of Caffeine by 50% in coke.
In 1991, company was sold to earnest Woodruff, who took a
major decision of establishing foreign department to make coke
popular overseas.
 The Launch And Its Aftermath
Coca Cola launched a new coke in April 1985 with the punch line
“Catch the wave”. This change in coke’s formula was publicized
through the T.V. and newspapers . The announcement reached
more than 80% of the American population within 24 hrs.
The initial response to the product was encouraging with
distribution reporting a fairly wide acceptance of it.
Slowly consumer found that its taste is similar to that of pepsi
and the sales starts declining and distributors began to accept less
stoke of new coke, later they did not stoke any because of poor
consumer response.
Some old Coke lover said that the original coke had a unique
taste that was stronger than new coke.
 Continue…
After the launch of new coke, Coca-Cola received
thousand calls per week from the coke drinkers most of
whom informed that they are going to replace Coke with
Pepsi as there is no difference between them.
Due to protest and significant decline in the market share
from 15% at the time of launch to 1.4%, Coca-Cola was
forced to revert back to its original formula, in weeks
later by launching “ Coke Classic” on 11th July 1985.
 Issues for New Coke went wrong
Analysts attributes the failure of New Coke to several factors.
Some feel that Coca-Cola has failed to understand. The consumer
emotional attachment with coke.
Analysts also felt that people had a high regard for Coca-Cola
because of its innovative ideas, excellent products launch and the
importance it accord to people and environment.
Some analysts felt that the findings of the market research group
were erroneous and late. The research is either inappropriate
manner or was interpreted incorrectly.
According to analysts, the research could not have measure the
type of consumer feelings that were evoked from reformulation.
Coco-Cola carried out individual interviews first than undertook
the focus group testing.
 A Marketing Blunder or A Ploy
According to me, Coco-Cola had made a ploy for
marketing and not a marketing blunder. Coco-Cola use this
ploy to make people to develop a strong liking of original
coke after they tasted a inferior taste of the drink .
Coco cola used corn sugars rather than cane sugars
through this coco cola saved millions of dollars.
This is strategy of coco-cola company of introducing
inferior taste new coke and this will help the again
introduction of original coke and regain its lost market
share.
 Competitor
By soft drink sales in the US had risen to 200 drinks per
capita and coca-cola’s market share has risen to 41%
against Pepsi 24% .
In 1970, Pepsi advertisement budget exceeded Coca-
Cola’s.
Due to the rise in Pepsi sales Coca-Cola market share
declined.
1978, Pepsi was found to be beaten Coca-Cola in super
market sales because of its dominance in vending
machine.
 The Rationale
Goizueta’s focus strategy could not stop the decline in Coca-Cola’s
market share, which fall from 24.5% in 1984.
Coca-Cola’s distribution wider than Pepsi which had enable it to be
the leader in the soft drinks industry yet in 1984 coca-cola’s overall
market share had dropped from 9.8% in the early 1970 to 4.9%.
This become a major cause of worry for the top management of
Coca-Cola.
During the middle of 1983, the idea of formulating a 99 year old
coke formula struck Goizueta.
The purpose was to increase coca-cola’s market share as well as to
defend its position as the market leader.
Although market research was conducted which included
interviews with about 2,00,000 consumers.
 Continue…
In some cases response was contradictory.
After blind taste test, it was discovered that many people
preferred Pepsi to Coke because Pepsi was sweeter.
Coca-cola felt that the sweeter taste would appeal more
to teenagers and youth, it decided to launch a sweeter
version of Coke, the taste would be similar to Pepsi.
Coca-Cola also conducted a focus group research that
revealed that many people were willing to try New Coke.
Both the surveys i.e. focus group and survey research
indicated consumer dissatisfaction and there results were
contradictory to each other.
 Suggestions
Coca-Cola should do product differentiation that launch new coke with the
presence of original coke in the market.
Coca-Cola should do group testing first and than do individual interviews.
It can use many other research techniques like quantitative and qualitative
researches.
It can create brand loyalitity by providing customer satisfaction.
It should do market expansion.
It should make strategies to face new challenges come to the market.
It should understand first the emotions of consumers and than introduce the
new product.
It should do proper product management so that the value of shares will
increase and make the stake holders happy.
 Limitations
Coco-Cola was to rely on local bottles
who did not promote the product
sufficiently.
Government regulations
Trademark registration
Language and culture
THANK YOU