Marketing Mistake: The “New Coke”

After trying my hands at the infamous blind taste test for our Marketing Research Activity in class, it made me wonder how the Pros do it. With the help of Google, I dug up a study done by Coca Cola which led to the introduction of “New Coke”.

Back in the 1980’s, Coke held the majority of the cola market share, but Pepsi was quickly gaining momentum, outselling Coke in the supermarkets. In an attempt to remain competitive, Coke decided to conduct a market research study to determine which formula of cola the consumers preferred. The design of their research project consisted of a blind taste test in which the subjects compared the taste of Coke and Pepsi along with 3 new formulas. Analyzing the primary data collected revealed that the majority of consumers preferred a new sweeter formula over both the Coke and Pepsi formula. This conclusive finding was enough to persuade Coke to deviate from their traditional formula to “New Coke” in 1985.

The result of the switch was an even greater drop in Coca Cola’s sales. Consumers were furious with this decision, refusing to buy the New Coke, although the taste tests proved otherwise. But where did the marketing team behind this research go wrong? They realized that the problem lied in the objective of the taste test study. Coke focused too narrowly on the physical attributes of its product (the taste) while ignoring the psychological implications such as brand loyalty. The taste of Coke clearly wasn’t the problem, but perhaps it was Coke’s ability to penetrate its market and reinforce its brand image.

However, once production of New Coke had seized and the company reverted back to its traditional formula, sales skyrocketed, leaving some analysts wondering if that was their strategy all along.