New Coke Failure
The Failure of New Coke
Wright State University
MKT 3500 - 01
Marketing Research
By
Nicole Fore
Taylor Gilliam
Ashley Hatton
John Petry
Abstract
During the 1980’s Coca-Cola was faced with a potentially company killing problem. They were losing market share quickly to their competitors. Pepsi was stealing a portion of the younger generation with their advertising campaign, and they proved that consumers liked Pepsi better with the “Pepsi Challenge.” To combat their falling market share Coke decided to introduce a new formula. This formula was based on the fact that people preferred the sweeter taste of Pepsi. Once the new formula was finished, Coke conducted close to 200,000 taste tests to find out what consumers thought. New Coke outperformed both Pepsi and the original Coke in these taste tests. Coke then proceeded to release the new formula on April 23, 1985 based on the results of the taste test. There was public outrage at the release of the new formula. Even though the taste was better than both Pepsi and the original Coke, there was major public outcry and the new formula stayed on the market for 79 days and was pulled on July 11, 1985. This proved that Coca-Cola made a huge mistake with their research. They assumed that taste was the most important factor in choosing a soft drink. However, it turned out that Americans had a deep emotional connection to the Coca-Cola brand and they rejected the new formula causing them to pull it from the market.
History of New Coke
From 1945 to 1983 Coca-Cola’s market share had declined from 60% to below 24%. This major decline was due to the competition Coke had with Pepsi. Pepsi was easily outselling Coke in every market it was available. In 1975 Pepsi started the “Pepsi Challenge” which was a taste test where consumers were overwhelmingly choosing the taste of Pepsi to that of Coke. In response Coca-Cola began what they termed as “Project Kansas”(Klassen, 2010). This was a mission to reformulate Coke
Wright State University
MKT 3500 - 01
Marketing Research
By
Nicole Fore
Taylor Gilliam
Ashley Hatton
John Petry
Abstract
During the 1980’s Coca-Cola was faced with a potentially company killing problem. They were losing market share quickly to their competitors. Pepsi was stealing a portion of the younger generation with their advertising campaign, and they proved that consumers liked Pepsi better with the “Pepsi Challenge.” To combat their falling market share Coke decided to introduce a new formula. This formula was based on the fact that people preferred the sweeter taste of Pepsi. Once the new formula was finished, Coke conducted close to 200,000 taste tests to find out what consumers thought. New Coke outperformed both Pepsi and the original Coke in these taste tests. Coke then proceeded to release the new formula on April 23, 1985 based on the results of the taste test. There was public outrage at the release of the new formula. Even though the taste was better than both Pepsi and the original Coke, there was major public outcry and the new formula stayed on the market for 79 days and was pulled on July 11, 1985. This proved that Coca-Cola made a huge mistake with their research. They assumed that taste was the most important factor in choosing a soft drink. However, it turned out that Americans had a deep emotional connection to the Coca-Cola brand and they rejected the new formula causing them to pull it from the market.
History of New Coke
From 1945 to 1983 Coca-Cola’s market share had declined from 60% to below 24%. This major decline was due to the competition Coke had with Pepsi. Pepsi was easily outselling Coke in every market it was available. In 1975 Pepsi started the “Pepsi Challenge” which was a taste test where consumers were overwhelmingly choosing the taste of Pepsi to that of Coke. In response Coca-Cola began what they termed as “Project Kansas”(Klassen, 2010). This was a mission to reformulate Coke