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Questions about Coke's Classic Misstep
On April 23, 1985, Coca-Cola Company announced that it was changing Coke's formula for the first time in nearly a century. Although designed to better position the company to compete in the changing soft drink market, the move turned out to be a miscalculation when consumers, loyal to the original Coke formula, stopped buying Coke altogether. Here are a few questions to see what you know about the rise and fall of New Coke.
What Motivated Coca-Cola to Change the Coke Formula?
Coca-Cola's introduction of a new, sweeter formula in 1985 turned out to be a disastrous marketing misstep.
In the 15 years leading up to the introduction of New Coke in 1985, the Coca-Cola Company had seen its lead in the all-important cola-drinks market slipping steadily. In contrast, its primary rival, Pepsi-Cola, had been gaining ground on Coke as more and more cola-lovers opted for the sweeter-tasting beverage. Although Coke was holding onto a thin market lead, thanks to its edge in the fast-food and vending-machine segments, Pepsi was outselling Coke in supermarkets. To Coca-Cola executives, it seemed that it was only a matter of time before Pepsi toppled Coke as the king of colas.
Roberto Goizueta, who had become Coca-Cola Company's chairman and chief executive officer in August 1980, decided a new, sweeter formula for Coke might better position the company's flagship soft drink to compete with Pepsi. That formula change, according to Coca-Cola's company website, spawned ¨consumer angst the likes of which no business has ever seen.¨
How Did New Coke Fare in Blind Taste Tests?
Although New Coke was a bust, the controversy somehow reinvigorated Coke sales, which soared after the return of Coke Classic.
As part of the market research done in advance of the change in Coke's formula, nearly 200,000 blind taste tests were conducted. These taste tests pitted Pepsi, Coke's new formula, and classic Coke against one another. In more than half of the tests conducted, participants favored the new Coke over both Pepsi and the original Coke formula.
Looking back on the taste tests and the marketing decision that they drove, Coca-Cola's website acknowledges that the tests had one fatal flaw. ¨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.¨
What Was the Initial Market Reaction to New Coke?
In the early days after New Coke's introduction, which was rolled out regionally beginning in big cities like New York and Washington, D.C., Coke sales increased and were up as much as 8 percent over the previous year in some key markets. However, the new beverage was greeted less than enthusiastically in the Southeast, the birthplace of Coke and one of its biggest regional markets.
However, it was not long before the tide turned, perhaps driven by the realization that the Coke many consumers had loved for decades was gone for good. Lovers of the original Coke flooded Coca-Cola's consumer hotlines with calls complaining about the change. By two months after New Coke's roll-out, the company was getting 1,500 angry phone calls daily on its consumer hotline, compared with 400 a day before the formula change.
What Was the Eventual Fate of New Coke?
Less than three months after the introduction of New Coke, the Coca-Cola Company bowed to consumer pressure and announced on July 11, 1985, that the original Coke would return to the market, rebranded as Classic Coke. However, the original formula did not replace New Coke, which continued to be sold under the name Coca-Cola until 1992 when it was officially renamed Coke II. In 2002, the company discontinued production of Coke II altogether.
On April 23, 1985, Coca-Cola Company announced that it was changing Coke's formula for the first time in nearly a century. Although designed to better position the company to compete in the changing soft drink market, the move turned out to be a miscalculation when consumers, loyal to the original Coke formula, stopped buying Coke altogether. Here are a few questions to see what you know about the rise and fall of New Coke.
What Motivated Coca-Cola to Change the Coke Formula?
Coca-Cola's introduction of a new, sweeter formula in 1985 turned out to be a disastrous marketing misstep.
In the 15 years leading up to the introduction of New Coke in 1985, the Coca-Cola Company had seen its lead in the all-important cola-drinks market slipping steadily. In contrast, its primary rival, Pepsi-Cola, had been gaining ground on Coke as more and more cola-lovers opted for the sweeter-tasting beverage. Although Coke was holding onto a thin market lead, thanks to its edge in the fast-food and vending-machine segments, Pepsi was outselling Coke in supermarkets. To Coca-Cola executives, it seemed that it was only a matter of time before Pepsi toppled Coke as the king of colas.
Roberto Goizueta, who had become Coca-Cola Company's chairman and chief executive officer in August 1980, decided a new, sweeter formula for Coke might better position the company's flagship soft drink to compete with Pepsi. That formula change, according to Coca-Cola's company website, spawned ¨consumer angst the likes of which no business has ever seen.¨
How Did New Coke Fare in Blind Taste Tests?
Although New Coke was a bust, the controversy somehow reinvigorated Coke sales, which soared after the return of Coke Classic.
As part of the market research done in advance of the change in Coke's formula, nearly 200,000 blind taste tests were conducted. These taste tests pitted Pepsi, Coke's new formula, and classic Coke against one another. In more than half of the tests conducted, participants favored the new Coke over both Pepsi and the original Coke formula.
Looking back on the taste tests and the marketing decision that they drove, Coca-Cola's website acknowledges that the tests had one fatal flaw. ¨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.¨
What Was the Initial Market Reaction to New Coke?
In the early days after New Coke's introduction, which was rolled out regionally beginning in big cities like New York and Washington, D.C., Coke sales increased and were up as much as 8 percent over the previous year in some key markets. However, the new beverage was greeted less than enthusiastically in the Southeast, the birthplace of Coke and one of its biggest regional markets.
However, it was not long before the tide turned, perhaps driven by the realization that the Coke many consumers had loved for decades was gone for good. Lovers of the original Coke flooded Coca-Cola's consumer hotlines with calls complaining about the change. By two months after New Coke's roll-out, the company was getting 1,500 angry phone calls daily on its consumer hotline, compared with 400 a day before the formula change.
What Was the Eventual Fate of New Coke?
Less than three months after the introduction of New Coke, the Coca-Cola Company bowed to consumer pressure and announced on July 11, 1985, that the original Coke would return to the market, rebranded as Classic Coke. However, the original formula did not replace New Coke, which continued to be sold under the name Coca-Cola until 1992 when it was officially renamed Coke II. In 2002, the company discontinued production of Coke II altogether.
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