New Coke's 1985 Failure: A Classic Marketing Misstep

Introduction

Perhaps one of the most infamous examples of a product failure is "New Coke," introduced by Coca-Cola in 1985 with much fanfare but little acceptance from a market that had grown accustomed to the original formula. To determine the facts, this paper reviews the relevant literature concerning this iconic marketing fiasco to identify what went wrong with New Coke and why it was not embraced by the marketplace. A summary of the research and its most important findings are presented in the conclusion.

The 'New and Improved' Mandate

According to columnist Dave Barry, the thinking that contributed to the introduction of New Coke in 1985 was firmly rooted in a cultural obsession with "new and improved" everything — including well-established brands such as Coke. In their efforts to develop a superior beverage, however, the marketers at Coca-Cola ignored what the marketplace actually wanted in favor of their own version of what constituted an improvement over their tried-and-true formula. In this regard, Barry writes, "For many years, [the folks at Coca-Cola] were content just to sit back and make the same old carbonated beverage. It was a good beverage, no question about it; generations of people had grown up drinking it." Nevertheless, the "new and improved" mandate produced a carbonated reformulation that was clearly not an improvement at all. According to Barry, "The folks at Coca-Cola... improved Coke by letting it sit out in vats in the hot sun and adding six or eight thousand tons of sugar, the exact amount being a trade secret." While this may have been a slight exaggeration for comedic effect, there was nothing humorous about the dismal market response to New Coke.

The possibility exists, of course, that in some alternate universe — one in which Coke was never invented by Atlanta pharmacist Dr. John S. Pemberton in 1886 — consumers might have fully embraced New Coke as superior to Pepsi or the other alternatives available at the time. The fact remains, however, that Coca-Cola's marketing executives failed to recognize the powerful emotional attachment the marketplace had formed with the traditional formula and attempted to foist on consumers something that may have been new but was certainly not improved. As Chaman points out, "After 99 years of successfully selling its popular soda, it changed the recipe — and the taste. It did all the market research before the launch, and spent millions of dollars to promote its 'improved' soft drink. The company was very excited about it. But when 'New Coke' was launched, consumers rejected it" (49).

Conclusion

The research demonstrated that a product or service can be "new" without being "improved," particularly when the product is well established and consumers have formed an emotional bond with the brand. The research also showed that the marketing executives at Coca-Cola learned this lesson the hard way, spending tens of millions of dollars on a new formula and market research for a product that no one wanted. The fact that no comparable reformulation initiatives have been undertaken by Coca-Cola in the decades since this debacle suggests that the lesson was taken to heart — and that Classic Coke will be around as long as humankind.

Barry, Dave. "Notes on Western Civilization." Chicago Tribune, 13 Oct. 1985. Web.

Jain, Chaman L. "How to Use Big Data and Predictive Analytics to Improve the Success of New Products." Review of Business, vol. 37, no. 1, Spring 2016, pp. 48–50. Print.