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New Coke
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New Coke
New Coke was the unofficial name of a reformulation of the soft drink Coca-Cola, introduced by the Coca-Cola Company in April, 1985. It was renamed Coke II in 1990, and discontinued in July 2002.
By 1985, Coca-Cola had been losing market share to diet soft drinks and non-cola beverages for several years. Blind taste tests suggested that consumers preferred the sweeter taste of Pepsi-Cola, Coca-Cola's main competitor, so the Coca-Cola recipe was reformulated. The American public reacted negatively and New Coke was considered a major failure.
Within three months, the Coca-Cola Company reintroduced the original formula, rebranding it "Coca-Cola Classic", resulting in a significant sales boost. This led to speculation by some that the New Coke formula had been just a ploy to stimulate sales of the original Coca-Cola, which the company has always vehemently denied. The story of New Coke remains influential as a cautionary tale against tampering with an established and successful brand.
After World War II, Coca-Cola held 60 percent of the market share for cola. By 1983, it had declined to under 24 percent, largely because of competition from Pepsi-Cola. Pepsi had begun to outsell Coke in supermarkets; Coke maintained its lead only through venues such as soda vending machines and fast food restaurants, especially McDonald's.
Market analysts believed baby boomers were more likely to purchase diet drinks as they aged and became health- and weight-conscious. Growth in the full-calorie segment would come from younger drinkers, who at that time favored Pepsi by increasing margins. Meanwhile, the overall market for colas steadily declined in the early 1980s, as consumers increasingly purchased diet and non-cola soft drinks, many of which were sold by Coca-Cola. This further eroded Coca-Cola's market share. When Roberto Goizueta became Coca-Cola CEO in 1980, he told employees there would be no "sacred cows" in how the company did business, including how it formulated its drinks.
Coca-Cola's senior executives commissioned a secret project headed by marketing vice president Sergio Zyman and Coca-Cola USA president Brian Dyson to create a new flavor for Coke. This project was named "Project Kansas", from a photo of Kansas journalist William Allen White drinking a Coke; the image had been used extensively in Coca-Cola advertising and hung on several executives' walls.
The sweeter cola overwhelmingly beat both regular Coke and Pepsi in taste tests, surveys, and focus groups. The southeastern United States, one of Coca-Cola's strongest and most reliable markets, narrowly preferred the new flavor; this preference widened once the testers revealed the new taste was also a Coca-Cola product. One bottling company threatened to sue the company if it did not put the drink on the market.
Asked if they would buy and drink the product if it were Coca-Cola, most testers said they would, although it would take a while for them to get used to it. About 10–12 percent of testers felt angry and alienated at the thought, and said they might stop drinking Coke. Their presence in focus groups tended to negatively skew results as they exerted indirect peer pressure on other participants.
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New Coke
New Coke was the unofficial name of a reformulation of the soft drink Coca-Cola, introduced by the Coca-Cola Company in April, 1985. It was renamed Coke II in 1990, and discontinued in July 2002.
By 1985, Coca-Cola had been losing market share to diet soft drinks and non-cola beverages for several years. Blind taste tests suggested that consumers preferred the sweeter taste of Pepsi-Cola, Coca-Cola's main competitor, so the Coca-Cola recipe was reformulated. The American public reacted negatively and New Coke was considered a major failure.
Within three months, the Coca-Cola Company reintroduced the original formula, rebranding it "Coca-Cola Classic", resulting in a significant sales boost. This led to speculation by some that the New Coke formula had been just a ploy to stimulate sales of the original Coca-Cola, which the company has always vehemently denied. The story of New Coke remains influential as a cautionary tale against tampering with an established and successful brand.
After World War II, Coca-Cola held 60 percent of the market share for cola. By 1983, it had declined to under 24 percent, largely because of competition from Pepsi-Cola. Pepsi had begun to outsell Coke in supermarkets; Coke maintained its lead only through venues such as soda vending machines and fast food restaurants, especially McDonald's.
Market analysts believed baby boomers were more likely to purchase diet drinks as they aged and became health- and weight-conscious. Growth in the full-calorie segment would come from younger drinkers, who at that time favored Pepsi by increasing margins. Meanwhile, the overall market for colas steadily declined in the early 1980s, as consumers increasingly purchased diet and non-cola soft drinks, many of which were sold by Coca-Cola. This further eroded Coca-Cola's market share. When Roberto Goizueta became Coca-Cola CEO in 1980, he told employees there would be no "sacred cows" in how the company did business, including how it formulated its drinks.
Coca-Cola's senior executives commissioned a secret project headed by marketing vice president Sergio Zyman and Coca-Cola USA president Brian Dyson to create a new flavor for Coke. This project was named "Project Kansas", from a photo of Kansas journalist William Allen White drinking a Coke; the image had been used extensively in Coca-Cola advertising and hung on several executives' walls.
The sweeter cola overwhelmingly beat both regular Coke and Pepsi in taste tests, surveys, and focus groups. The southeastern United States, one of Coca-Cola's strongest and most reliable markets, narrowly preferred the new flavor; this preference widened once the testers revealed the new taste was also a Coca-Cola product. One bottling company threatened to sue the company if it did not put the drink on the market.
Asked if they would buy and drink the product if it were Coca-Cola, most testers said they would, although it would take a while for them to get used to it. About 10–12 percent of testers felt angry and alienated at the thought, and said they might stop drinking Coke. Their presence in focus groups tended to negatively skew results as they exerted indirect peer pressure on other participants.
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