Coca Cola’s Biggest Marketing Blunder

Name : Surbhi AggarwalRoll No. : PGP31239

IIM Lucknow

• History• Some Interesting Facts About Brand• Launch of the New Coke• Public reaction to New Coke• Reason for New Coke Introduction• Relaunch of Classic Coke• Coca Cola’s Reaction• Conclusion

Road Map

1886

Coca Cola

BORN

1891

Coca Cola’s first

BOTTLINGIn a drug store occurred

1899

The first bottling

was doneAGREEMENT

1909

400 Coca-Cola plants

were operatingBOTTLING

1930

The company started moving

GLOBALY

1960

New

FLAVOURSwere Introduced

Some Interesting Facts About

Coca Cola

Coca-Cola was made for the cure of

headacheand other illnesses

Sales for the first year were only

$50

is the most recognized word in the world after

Coca-Cola

Okay 162 B 115 BIn 2012

Enterprise Value

In 2012

Total GDP

Launch of the

New Coke

Reason for New Coke introduction

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

Roberto Goizueta and Donald Keough toasting New Coke

Market research for 2 yearsOver 2,00,000 blind tests Young drinkers favoring Pepsi & sweetness

Led to release of New Coke

Slogan: “Catch the wave”Max Headroom print ad from

"Catch the Wave."

Reason for New Coke introduction

Launched the New coke(preferred taste by the participants from blind test)as the only coke offering

Completely stopped production/distribution of old coke

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 All Time”

Re-Launch of the

Classic Coke

Public Reaction to New Coke

“We did not understand the deep emotions of so many of our customers for coca cola.”

- Donald R. Keough Coca Cola President

Consumers were hurt because of a historical association of coke with American culture and history was being taken away by the company

Public Reaction to New Coke

In 1985, one consumer shows her love of old Coke and distaste for the new

New Coke faced severe public backlash

Relaunch of Classic Coke1. Coca Cola Sales Dropped

1980 1984

24.30%

21.80%

Coca-Cola Market Share

15%

6%

19%61%

1985 Soft Drink Market Share

New Coke Coke Classic Pepsi Others

May, 1985 Pepsi became No.1

24.30%

21.80%

Relaunch of Classic Coke

2. Loyal Consumer Backlash

• Replacement of original coke was too upsetting for consumers• Backlash:

Angry letters and phone calls (60,000 calls/day)Intense media coverage – negative consumer responseProduct boycottProtest groups — such as the Society for the Preservation of the

Real Thing and Old Cola Drinkers of America established

Coca Cola’s Damage Control

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

Reaction of

Coca Cola Co.

Coca Cola’s Reaction

• Coke’s Management Reactions• July 1985, “Old” Coke was sold alongside New Coke

(after 79 days) and re-named as “Classic” Coke• 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

Coca Cola’s Reaction

1985

“Old” Coke was sold alongside New Coke (after 79 days) and re-named as “Classic” Coke

New Coke collapsed to 2.3%, Coke Classic surged to 18.9% Pepsi held firm at 18.5%.

1986 1987

Classic Coke became No. 1 soft drink. Consumers became even more loyal to the brand after it was temporarily taken away from them

1990New Coke re-labelled to “Coke II” and taken off the shelves

2009“Classic” Coke became Coca Cola

LearningsProduct 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

Thank YouProf. Sameer Mathur,

IIM Lucknow

Project done in the course of Brand Management under the guidance of Prof. Sameer Mathur