Coca cola failure


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Coca cola failure

  1. 1. New Coca-Cola The biggest market blunder 1Brief HistoryIt was early 1985, and the news was slowly leaking out: The Coca-Cola Co. was working ona new kind of Coke, a variation of a product that reached back through American history, arejoinder to the emerging challenge from an upstart called Pepsi.The company, already two years into taste tests and research, was working with the secrecyof a military operation which named as “Project Kansas,". Thorough surveys, taste tests andfocus groups were carried out and targeted to ensure the success of reformulated cokeplanned to be launched in the market after analysing the public‟s reaction and feedbackregarding “New Coke”. Coca Cola performed market research for a period of two years andspent an enormous amount of $4 million to compare the taste of New Coke versus Pepsiand old Coke. After performing 200,000 blind taste tests, it was concluded that peoplepreferred the taste of New Coke over any other available beverage.Public reactionPublic reaction was overwhelmingly negative; some people likened the change in Coke totrampling the American flag. Coca Cola Consumers were hoarding cases of the old stuff. InJune 1985, Newsweek reported that savvy black marketers sold old Coke for $30 a case. AHollywood producer, giving an old vintage its proper respect, reportedly rented a wine cellarto hold 100 cases of the old Coke.Coca cola reactionCoca-Colawasnt prepared for how the public responded,” said John Craven, editor, a Web site that monitors trends in the U.S. beverage industry. “If you look at it,the success of New Coke was that it got people pissed off enough to care about regularCoke again.On July 11, Coca-Cola yanked New Coke from store shelves. “We did not understand thedeep emotions of so many of our customers for Coca-Cola.
  2. 2. New Coca-Cola The biggest market blunder 2After the New Coke debacle, Coca-Cola returned to its original formula (hastily rechristenedCoke Classic), then jumped headlong into a diversification of the original brand thatcontinues today.The Failure reasonsIt has been spotted several reason on failure of new coke than old one;1-Taste the new coke was slightly distinct from the original one .Diet version of the originalcoca-cola, sweeteners were added which made it comparatively more sweeter than theoriginal one and it was a bit less tangy (that is less tang was included) and was smootherthan the original.The difference in taste was a major reason for the failure of „New Coke‟ among the masses,tests done by their research and development department proved that the taste of the Cokewas the reason it was losing its market share. During the blind taste test, people just took asip of the cola and preferred a sweeter taste. But in reality they buy a can of 330 ml and theypreferred the less sweet taste of old Coke.2-Fast market decisions,Diet Coke was launched during that time, people considered it to beanother variant of the parent beverage. Therefore, due to the wrong framing of questions formarket research, they yielded wrong results which proved to be fatal.4-The new packaging isolated itself from its consumers. The association of the word newwas related to Pepsi as it was comparatively new into the market and a brand of youth.5-Thelast reason it arguesonCoca Cola ignored the sentimental value.the loyalty of Coca-Cola to his loyal and old customers by bringing new design and taste without throughunderstanding of brand loyalty.Coca-Cola apparently neglected to take into account was thatmany of the 45% who preferred old Coke did so passionately. The 55% who voted for newCoke might have been able to live with the old formula, but many on the other side sworethat they could not stomach new CokeMust be remembered the word of new design and
  3. 3. New Coca-Cola The biggest market blunder 3ingredients it sees as the Pepsi since the company was new in the market. Basically oldCoke was considered a legacy and integral part of the American Culture. At the end CocaCola loyal customers are felt ignored and keep aside by Coca-Cola for the sake of companyprofit.How Coca Cola could Avoid BlundersFirstly base my understanding on this case, The coca Cola just take new step in cokerevolution to use of syrup corn as part of cane sugar, which was the company it was using inhis ingredients but not much of it proximately 45% .The reason was behind, It was the costsaving and the price of syrup corn much cheaper than cane sugar (sugar/HFCS).base myresearch Coke started the switch to corn syrup FIVE YEARS before the launch of NewCoke. In fact, there was no cane sugar Coke available in the US at all for many monthsbefore the whole New Coke debacle took place. The fact remains that all of America hadalready made the switch to the new sweetener without knowing or detecting itand it wasntan issue. In terms of taste, there are those few who are can detect it (mostly professionaltasters), but that is a very small and elite group, and much smaller than the group that thinksthey can. There are many possible reasons that the whole New Coke intro took place, but itsuse as a ploy to cover up the change in sweeteners just isnt one of them. Try looking at thePepsi taste tests if you need a legitimate reason.Secondly, the best wayit could Coca-Cola to sidestep marketing blunders is to avoidshooting from the hip when it comes to launching new marketing ideas. Cocacola should doa proper marketing research in many states around U.S with different type of segmentation.Basically Marketing research is vital to the success of any effective marketing program.Verify marketing ideas with consumers who represent your target audience to aver thepossibility of back pedalling from a marketing mistake.The availability of many different types of marketing research can help you figure out whichmarketing ideas might be home runs for your business and which concepts should be
  4. 4. New Coca-Cola The biggest market blunder 4avoided. The only way to know how potential customers are going to view your marketingstrategies is to ask them what they think. Marketing research options include:Focus GroupsInformal InterviewsMall Intercept SurveysProduct TestingTelephone SurveysMedia and Magazine feedbackInternet feedback from customers whereas Commercial internet service providers (ISPs)began to emerge in the late 1980s and 1990s.Even with fewer funds you could undertake a formal research study on every marketingstrategy you consider implementing, you can certainly ask loyal customers and people whomyou hope will become customers to give you feedback on your ideas before you implementthem. The Coca-Cola customers and prospects are likely to appreciate the fact that askedfor their opinion, so this research technique is a form of customer service with an addedbonus of being an effective customer retention techniqueCoca-Cola new hit on the market after debacle.Coca-Colas latest variations of the original beverage include Coke with Lime, being rolledout this quarter, and Coca-Cola Zero, a no-calorie variation of the low-calorie variation. Thenew drinks follow on the heels of Diet Cokewith Lime, which followed vanilla, cherry andlemon variations.The other type of Coca Cola failure.Coca-Cola Fresca
  5. 5. New Coca-Cola The biggest market blunder 5In Mexico, Fresca is a term for Lesbian. Jokes abound, but sales werent hurt. (Despite whatyou read elsewhere on the web.) There are many fruit drinks named Agua Fresca (freshwater).Coca-Cola, Ke-ke-ken-la, Ko-kou-ko-leThe name Coca-Cola in China was first rendered as Ke-ke-ken-la.Unfortunately, the Coke company did not discover until after thousands of signs had beenprinted that the phrase means "bite the wax tadpole" or "female horse stuffed with wax"depending on the dialect. Coke then researched 40,000 Chinese characters and found aclose phonetic equivalent, "ko-kou-ko-le,” which can be loosely translatedas "happiness in the mouth."