In this case of Coca-Cola changing their well established Coke formula and introducing an new one in 1985 for the purpose of gaining more market share; the reason why such decision was made by Coke’s executives was mainly because of a series of marketing campaign conducted by their major arrival – Pepsi. During mid 1970s, Pepsi has ran a the famous “Pepsi Challenge” of blind taste tests on all the commercials to show that the majority preferred Pepsi than Coke based on its teste. By 1977, Pepsi had exceeded Coke’s market share in major restaurant chains and food stores.
Under the threat of being taken over by Pepsi and losing the industrial leader position, Coke released their new formulated coke on April 23th, 1985. While the Coke’s new formula was preferred in the blind taste tests, consumers especially loyal consumers across the country had a strong and negative reaction to the fact that Coke was going to replace the original formula with this new. In the end, Coke had to reintroduce the original Coke under the name Coke Classic, and the new coke quickly faded away. And the once leading Pepsi during Coke’s transactional period, fell back to the second market place again.
In my opinion what Coca-Cola got it wrong was that they focused too much on the taste of the Coke and neglected the emotional attachment that consumers had to the original flavour. Coca-Cola could have simply changed the direction of its campaigns by giving Coke a brand new image to attract the “new generation” if they felt they were losing market share to Pepsi in that specific consumer group because image is probably more important than taste in selling soft drink based on Pepsi’s success of their “New Generation” campaign . But if Coke was determined to change the recipe, it could probably have done it without letting anyone know.
Alternatively, the new Coke could have been introduced without knocking out the original Coke off the shelves. Simply adding an new flavour to the Coke family and giving consumers one more option to choose from could have resulted a better outcome, for example, Coca-Cola’s launch of Vanilla Coke. But the company considered, and rejected, planed to keep the old-formula drink in circulation under the name “original” Coke. The taste question was crucial to Coke. But what Coca-Cola executives failed to realize was that there is more to marketing soft drinks than winning taste tests.
More than any other product consumers had an emotional attachment to their soft drink brand. I believe from Americans’ point of view, Coke discovered fiddling with the formula of the 99-year-old beverage was probably an assault to their patriotic pride. Here I can quote a saying from Coca-Cola’s President Donald R. Keough to summarize what Coca-Cola has learned: “We did not understand the deep emotions of so many of our customers for Coca-Cola. ” I think any marketer who plans a noticeable revision of a product must consider the loyalty of its consumers and the possibility that the change will be rejected.
To prevent this possibility, marketers should realize that balking at change is a customer characteristic of specific product preferences. Also, in this case, a more sophisticated qualitative and quantitative research could have been conducted and prevented Coke from this mistake. Consumers resist changes for many reasons – brand choice results from a complex set of beliefs, buyers associate products with themselves, buyers do not fit into clear segments. I think the key to all the marketers is to realize the involvement of what a product actually does for the user, and what emotional attachment that links the user to the brand.