A product that failed despite being better —The New Coke Fiasco

How inputs from 2,00,000 taste tests failed to predict consumer reaction

Few product launch failures would give market researchers as many chills down the spine as the launch of Coca-Cola’s new New Coke.

On April 23, 1985, the Coca-Cola Company announced that it was scrapping its decade-old formula for Coke. The newly reformulated Coca-Cola would be called ‘New Coke’. Its formula was based on the blind taste tests which suggested that consumers preferred sweeter cola.

The new formula was “smoother, rounder, yet boulder- a more harmonious flavor”

Public reaction was however not very harmonious. With this one move, Coca-Cola managed to invoke consumer outrage the likes of which had never been seen before.

The not so surprising reason for change — Pepsi

Coke’s rival Pepsi was gaining a lot of traction. Pepsi had succeeded in creating an image of itself as a brand for the youth.

Moreover, the Pepsi Challenge — A blind taste test in which shoppers are offered two bottles of Colas to taste, and then are asked to select the one they prefer. The representative then reveals whether the selected bottle is Coke or Pepsi — showed that most tasters preferred the sweeter taste of Pepsi.

In response to the Pepsi challenge, Coca-Cola launched an advertising campaign starring Bill Cosby, where he is seen lauding Coke for being less sweet. But this had limited effectiveness.

Coke was losing to Pepsi and something needed to be done and soon.

The problem Coca-Cola believed was the product itself. After all the Pepsi challenge had proved that people preferred the sweeter Cola.

So they came up with a new formula and conducted around 2,00,000 taste tests. The results were convincing.

Tasters loved this sweeter version of the Coke and moreover, they preferred it over Pepsi.

So the logical decision was to launch the New Coke. But if they wanted to win the ‘Cola War’ they couldn’t have two competing products, and hence they decide to dump the old Coke.

New Coke goes down the sewer

The moment the decision was announced, people started boycotting the new product. Letters came pouring into the Company headquarters in Atlanta.

Protest groups started popping up all over America. At one such protest staged by grassroots groups “Old Cola Drinkers of America” protestors poured the cola in the New Coke bottles down the sewer drains.

Old Coke is back with a bang

Within three months the Company had to reintroduce the original coke, rebranded as ‘Coca-Cola Classic’

This had a surprising result. Within a month Coke had regained its number one spot and New Coke was forgotten.

But why did New Coke fail?

“Products are made in the factory, but brands are created in the mind.” — Walter Landor

It seems Coca-Cola severely underestimated consumers’ affinity towards its original brand. Basing the decision merely on taste tastes and not accounting for the emotions people attached to the product led to grossly misguided actions.

The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people. — Donald Keough, former COO of Coca-Cola