Introducing New Coke

Topics: Pepsi, Coca-Cola, Cola Pages: 3 (849 words) Published: May 11, 2013
New Coke Assignment

1. What historically had been the value proposition of Coca Cola?

Coca Cola’s value proposition has historically been to evoke a “comforting nostalgic appeal”[1] by associating itself with positive human moods/emotions - primarily happiness, belonging and celebration. The way to make this proposition possible has been to “place Coke within arms’ reach of desire...wherever there are people who get thirsty”.[2] The company has gone out of its way to develop distribution channels ranging from gas stations to pop culture to even within war zones, to provide convenient access to Coca Cola, and in the process associating itself with a range of emotions.

As a result of being so heavily ingrained within the nostalgic psyche of its customers, Coca Cola came to symbolize “the sublimated essence of all that America stands for. A decent thing, honestly made, universally distributed, and conscientiously improved with the years.” [3]

2. What was the value proposition for Pepsi in the 1960’s? (2 Points half each)

Pepsi’s value proposition was to urge their drinkers to “feel free” by associating with their product.[4] They painted an image of their consumers as active, vital and young-at-heart Baby Boomers, and capitalized on the “needs of a country recovering from Watergate, Vietnam and a severe economic recession” This advertising idea eventually went on to be called the “Pepsi Generation” and provided the bedrock for their youth oriented advertising campaigns.

Pepsi’s second value proposition was taste superiority over Coke through its “Pepsi Challenge” comparative blind taste tests. They were able to consistently demonstrate consumer taste preference over a course of advertising campaigns, and ended up capturing a significant share of exclusive drinkers.[5]

3. Coke invested $4 million in consumer testing, yet things went horribly wrong. Was the problem inadequate design, inadequate interpretation of the results, both, or...
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