Coca-Cola faced significant competition from Pepsi-Cola, prompting a rebranding effort with the introduction of 'New Coke,' formulated to meet changing consumer preferences. Despite favorable taste test results, the move was met with public backlash, resulting in the eventual discontinuation of New Coke and the return of the original formula as 'Classic Coke.' This incident showcased the importance of brand loyalty, consumer emotions, and the risks of imitating competitors.

1. The New Coke – Coca Cola
TAPISH PANWAR

2. Coca-Cola, the undisputed market leader was constantly
challenged by Pepsi-Cola, the new kid on the block
Pepsi-Cola changed its strategy by positioning itself as the
genuine youth cola and met with some success
Pepsi raise the challenge by introducing Pepsi Challenge -
A taste preference test with participants blindfolded
Pepsi emerged clear winner on the taste challenge not just
in US but globally

3. Coke’s numero uno status was being seriously
threatened
• Not just by the rival Pepsi-Cola but also by its own brands like
Fanta and Sprite
Started getting to be associated as an old brand
• Stout, lack of innovation

4. Coca-Cola concluded that the problem was
primarily due to the product and not perception
Started to believe that the consumer preferences
have changed with sweeter as the new better
Coca-Cola worked on a new formula and
conducted 200,000 taste tests
• Largely favoured the new formula over the old coke as well as
the rival drink Pepsi-cola

5. Launched the New coke(preferred taste by the
participants from blind test)as the only coke offering
Stopped the production and distribution of the old coke
completely
Promoted on the basis of firm belief of have understood
the consumers of America by a strong market research
Known as the “Biggest Marketing Blunder of AllTime”

6. Large population of beverage drinkers got furious over
the step
Boycott of the new coke and Hate messages/letters to
the company
Consumers were hurt because of a historical association
of coke with American culture and history was being
taken away by the company
All time low sales volume for the brand and company

7. Public apology
The famous "We have heard you" comment
by the the Chairman, Roberto Goizueta
The old coke was brought back as "Classic
coke“
Mega promotional events

8. The loyalty to the old coke went
higher than the previous records
• Made some conspiracy theorist to
believe that the whole ‘new coke’ thing
was staged
Coke was back to number one
with reasonable lead

9. Product perception is as important as product itself
Never underestimate the emotions attached to a brand
Imitating competitors can never be a long-term strategy
Save your market research from strong biases
Have courage to accept your mistake and correct it