Coca-Cola Classic
In May 1985, Coca-Cola chairman Robert Goizueta announced one of the boldest gambles in marketing history: Coca-Cola would make a significant flavor change in Coke, the world’s best-selling soft drink.
(1) The idea, according to one of Coke’s leading strategists, "was to take all the positive qualities associated with the current product, its heritage and so on, and transfer that to an improved tasting product."
(2) Supermarket sales of Coke had slipped behind Pepsi by almost two percentage points, and Pepsi was consistently winning blind taste tests. The advertising campaign for New Coke emphasized improved flavor.
Coca-Cola spent nearly ＄4 million to taste-test its new product on 200,000 consumers.
(3) When the brands were not identified, the taste tests of 40,000 people done in 30 communities showed that 55 percent chose the new Coke over the old, and 52 percent chose it over Pepsi. Subjects were not told during any of the tests that the product being tested would take the place of the traditional Coke.
During the first month of New Coke’s introduction, shipments to Coke bottlers set a record, and more people tried the new product than has ever sampled any new product.
(4) Consumers began to demand the old Coke. Sales were dropping rapidly. There was even talk of a class-action suit by a Seattle-based organization, Old Coke Drinkers of America. Coca-Cola headquarters received thousands of protest letters such as, "Dear Chief Dodo: what ignoramus decided to change the formula of Coke " Coca-Cola bottlers meeting in Dallas signed a petition demanding that the company restore the traditional formula.
(5) On July 10, Coca-Cola announced that it would reintroduce the original formula under the name Coca-Cola Classic. Within hours of the announcement, a national phone survey indicated that 68 percent of the people were aware of that move and 66 percent approved of it. The Coca-Cola Classic package was designed only two days before the announcement.
(6) ABC News covered the story on its "World News Tonight" report, again on "Nightline", and on "20/20". ABC-TV also interrupted its "General Hospital" soap opera to tell the public that the old Coke was coming back.
(7) Pepsi’s first advertising campaign in response to its competitor’s move stated that Pepsi’s own better taste had forced Coca-Cola’s move. The second campaign talked about the confusion of Coke products, emphasizing the split between new Coke and old Coke.
(8) By September, Coca-Cola decided to change its approach once more by bringing back the kind of traditional soft-drink advertising that it had been trying hard to get away from. The new ads did not address the differences between the new Coke and Coca-Cola Classic but rather, focused on a return to traditional values.
A. Coca-Cola introduced "New Coke" to the market in an attempt to win back market share from Pepsi.
B. Coke’s 99-year-old formula would be modified to make it slightly sweeter and less filling.
C. The media had given a lot of coverage to what had been labeled the "new Coke failure".
D. PepsiCo, bottlers of Pepsi-Cola, couldn’t resist the temptation to poke fun at Coca-Cola’s misfortune in its advertising.
E. The confusion and controversy between the two cola market leaders grew.
F. On July 5, Coca-Cola announced that it would bring back the old formula.
G. Some of the taste tests were blind, and others had brand names associated with them.
H. However, the entire picture changed suddenly.