New Coke
New Coke refers to a reformulated version of Coca-Cola that was introduced in April 1985, aiming to create a sweeter taste to compete with Pepsi, particularly among younger consumers. The Coca-Cola Company conducted market research that suggested a preference for the new formula, yet the majority of taste tests did not utilize the final recipe. This miscalculation overlooked the deep emotional and nostalgic attachment many Americans had to the original Coca-Cola formula, leading to a backlash when the new product was released.
The introduction was met with significant consumer disapproval, prompting thousands of complaints within weeks. In response to the overwhelming negative sentiment, Coca-Cola reintroduced the original formula as Coca-Cola Classic by July 1985. The situation has since been analyzed as a misstep in marketing strategy, emphasizing the importance of understanding consumer loyalty and emotional connections to brand icons. The New Coke episode serves as a cautionary tale in marketing literature, highlighting the potential pitfalls of disregarding customer sentiment.
New Coke
Coca-Cola’s new soft-drink formula
Date Introduced on April 23, 1985
Coca-Cola underestimated Americans’ sentimental attachment to its soft drink and caused a public outcry by replacing its ninety-nine-year-old cola formula. The new product and its failure acquired iconic value, coming to symbolize all the decade’s major mistakes by corporate executives.
In the early 1980’s, the Coca-Cola Company began experimenting with different sweeteners to produce a new, diet version of Coke. This research continued in 1983, as Coca-Cola sought to develop a sweeter cola to rival Pepsi and increase its market share among teenagers. In January, 1985, operating under extreme security, marketing executives began to develop an advertising campaign for the new, sweeter cola. Hastily, two research companies conducted market research regarding the new formula. Preliminary blind taste tests indicated that Americans preferred the new, sweeter cola. However, only 20 percent of the taste tests conducted used the final formula. Nonetheless, these results guided Coca-Cola management’s decision to market the new formula.
The company also underestimated research that indicated Americans held a sentimental and patriotic attachment to the Coca-Cola formula, instead believing that consumers would remain loyal to the brand name despite a change in the formula. Coca-Cola’s management thus determined that only one soft drink would be named Coca-Cola in the United States, to ensure that any increase in consumers of potential Coke products would be attributable to converted Pepsi drinkers, rather than loyal Coca-Cola drinkers. The new formula became the only Coca-Cola, and the company no longer bottled the original formula, used in the United States for the previous ninety-nine years.
On April 23, 1985, Coca-Cola president Roberto Goizueta and other top executives held a press conference at the Lincoln Center in New York to introduce the new Coke. Surprised by the overwhelmingly negative response and hostility from reporters, Goizueta was ill-prepared to field questions from journalists in a professional manner. Reports of Coca-Cola’s new Coke and Goizueta’s loss of composure led news broadcasts around the country. Released to the public the next day, the new Coke was rejected by nostalgic Americans, who felt betrayed by the corporation’s decision to change the formula during a decade whose culture was centrally characterized by nostalgia. By June, the Coca-Cola customer service telephone number was receiving over eight thousand calls a day from angry consumers. Forced by customers to admit its mistake, on July 10, 1985, Coca-Cola reintroduced the original formula under the name Coca-Cola Classic. The new, sweeter formula remained on shelves as Coke II. The decision to sell both formulas led many analysts to speculate that Coca-Cola had planned the introduction of new Coke and the subsequent media and consumer outcry in order to garner free publicity. The company, however, disputed these charges, claiming they were neither “dumb enough” nor “smart enough” to plan such an advertising ploy.
Impact
The Coca-Cola Company miscalculated the emotional connection Americans had with its signature soft drink. Without conclusive market research, the hastily made decision to introduce a new formula created a hostile consumer backlash, forcing Coca-Cola to relent and to rebottle Coca-Cola Classic. The new Coke fiasco is now used in many advertising textbooks as an example of a failed marketing strategy.
Bibliography
Hayes, Constance L. The Real Thing: Truth and Power at the Coca-Cola Company. New York: Random House, 2004.
Oliver, Thomas. The Real Coke, The Real Show. New York: Random House, 1986.
Pendergrast, Mark. For God, Country, and Coca-Cola: The Unauthorized History of the Great American Soft Drink and the Company That Makes It. New York: Macmillan, 1993.