This presentation tries to capture the basic mistakes committed by coke and repercussions of the launch of new coke in terms of Brand equity

1. New Coke Fiasco

4. April 23, 1985
Coca Cola announced
reformulation of Coke
July 11, 1985
Reinstating old coke as Coca
Cola Classic

7. Pepsi’s blind
taste tests
suggested that
America
preferred Pepsi
over Coke
Coke was
loosing market
share
Coke was
considered an
old brand,
whereas Pepsi
was young and
energetic
Business Environment

8. So how did coke handled this difficult situation?

9. Gain the lost
Market Share
Beat Pepsi
Revamp Brand
Strategy
Sweeter Taste
Cool Packaging
Advertisement
Campaign
Plan
Coke’s Reaction

10. And what about Customer Reaction??

11. Customer’s Reaction
A man wrote to Mr. Goizueta asking for his autograph
— because, in years to come, the signature of "one
of the dumbest executives in American
business history" would be worth a fortune.
When the taste change was announced, some
consumers panicked, filling their
basements with cases of Coke®.
A man in San Antonio, Texas, drove to a local bottler
and bought $1,000 worth of Coca-Cola.
Protesters at a Coca-Cola event in downtown Atlanta
in May carried signs with "We want the real
thing" and "Our children will never know
refreshment."

13. Back to Classic
Introduced
within 77
days
Classic
Coke
outsold
New Coke
Coke
gained
market
share from
Pepsi
Coca Cola
Classic to
Coca-Cola
in 2009
New Coke
line
terminated
in 1992
Old
Formula
for loyalists

14. And what about Customer
Reaction??
So what went wrong?

15. Backlash
Customers
Resistance to
Change
Strong American
Value
Brand associated to
culture
Coca-Cola
Biased Market
Research
Low confidence in
Brand
Attribute based war

17. Coke’s Strength - Association with History

18. Coke’s Strength - Association with Culture

19. Involvement,
Community,
Attachment
Innovation,
Loyalty, Leader,
Superiority
Happiness, Sharing,
Celebration, Family,
Self respect
Happiness, Moments,
Christmas, Social, Fun
Refreshment, Unique
Flavour, Reference of Colas,
Energy, Tasty
Everywhere, American Values, Fresh Drink, Happiness, Thirst Quencher, Lovermark
Misalignment of Strength
War Zone

21. Involvement,
Community,
Attachment
Innovation,
Loyalty, Leader,
Superiority
Happiness, Sharing,
Celebration, Family,
Self respect
Happiness, Moments,
Christmas, Social, Fun
Refreshment, Unique
Flavour, Reference of Colas,
Energy, Tasty
Everywhere, American Values, Fresh Drink, Happiness, Thirst Quencher, Lovermark
Coca-Cola to New Coke
100 years of relationship with
American Values
Deteriorationof
BrandEquity
New packaging and taste means lost
attachment, So basically a new brand

22. Learnings
Product Perception is more important
than Product
Emotional attachment to brand can be
irrational
Imitation doesn’t provide competitive
advantage
Listen to your customers
Prevent biases in Market Research
Align competition and competencies
well

23. Created by
Hiteshwar Gaur, IIM Lucknow
under
Prof. Sameer Mathur,
IIM Lucknow