Failure of New Coke - Marketing Management Short Case Studies

Details

Case Code : CLMM020
Publication date : 2005
Subject : Marketing Management
Industry : Food and beverages
Length : 04 Pages
Price : Rs. 100

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Key words:

Coca-Cola, Aerated Beverage, New Coke, Roberto Goizueta, Market Leader, Market Share, Pepsi, Market Research, Focus Group Research, Consumer Dissatisfaction, Marketing Strategies, Customer Relationships, Coke Loyalists, Coke Classic, Emotional Attachment, Customer Goodwill

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

Abstract:

On April 23, 1985, Coca-Cola, the largest aerated beverage manufacturer of the world, launched a sweeter version of the soft drink named 'New Coke,' withdrawing its traditional 99 years old formula. The caselet examines the factors that prompted the company to undertake such an initiative. It provides details about the market research study conducted by Coca-Cola prior to the launch of New Coke. The caselet explains the marketing and financial implications of the launch of New Coke. Finally, it discusses the subsequent withdrawal of New Coke and the re-launch of Classic Coke.

Issues:

   » Challenges in marketing research
   » Importance of brand loyalty
   » Emotional attachment of consumers with brands
   » Product management and new product development

Introduction

On April 23, 1985, Coca-Cola, the largest aerated beverage manufacturer of the world, launched a sweeter version of the soft drink named 'New Coke,’ withdrawing its traditional 99 years old formula.

Coca-Cola's decision to change Coke's formulation was one of the most significant developments in the soft drink industry during that time. By early 1980's Coke sales were on decline. By 1984, Coca-Cola's overall market share had dropped from 9.8% in the early 1970s to 4.9%. This became a major cause of worry for the top management of Coca-Cola...

Questions for Discussion:

1. The launch of New Coke turned out to be a nightmare for Coca-Cola. Discuss the marketing implications of introducing New Coke.

2. Market researchers had expected Coca-Cola to conduct focus group testing of a new product first and then use individual interviews to verify the results of the focus groups. What other types of research methods would have been helpful to the company in providing consumer insights? Discuss.