"new Coke" Marketing Wac

The new coke was a response to the increase in market share of Pepsi after they released the taste test results of the Pepsi challenge. The product was not made simply because it was better; the formulation was treated as sacred and had never been tested. It was just a reaction to Pepsi’s growth in sales, and not necessarily consumer complaints. The brand itself was not a problem: although people showed a preference for Pepsi in blind taste tests, in identified taste tests the people chose Coke.

A possible source of conflict may have been preexisting internal issues from the 70s and diversification attempts that slowed down growth so significantly that their market position was slipping. Add to this the more recent change in management from Austin to Goizueta, who supported the change in formulation and diversification of the brand. Although the creation of the separate Diet Coke line was successful, the tampering of the original formula was a separate case; it was the flagship brand for which the company was known.

They realized that the problem lay with the product itself. On the one hand, changing the product does seem inevitable. Knowing the results of the taste tests, a change in formulation was the logical way to go. Executives recognized that consumers’ tastes may change, and research supported the new coke in taste tests. However, for a brand that existed as long and as successfully as Coke, changing the formulation and creating a “new” product to replace the old one translated to the die-hard consumers as taking away something that had become so familiar it was part of their lives. This was encouraged by Pepsi-Co’s attack on the new Coke that emphasized that they were pulling their flagship brand, not introducing a new one.

Strongly negative reactions came soon after the release, and since people were so devastated by the loss, they started hoarding the old one. All the positive brand perception was associated with the old product, but now with the new product, they have no perceptions of it. More rational consumers would prefer buying something they know very well than something they know nothing about. This not only refers to the flavor; by changing the formulation, consumers wondered if the new product could do the things the old Coke could, like “settle a nervous tummy,” remove grease and encrusted bugs from windshields, and remove rust? Aside from using it in daily life, Coke is heavily entrenched in the country’s culture, associated with Santa Claus and soldiers. Trying to change something so assimilated into their culture is bound to agitate people.