Coke Under Fire Again: A Case Study

Background Of The Study

In the year 1985 of April 23rd, the Coca-Cola Company had taken a great risk that left an ineffaceable mark in the history of marketing. On that day, the company preceded with changing the 99-year old formula into a sweeter one, the “new Coke”. This single act leads to thousands of irate consumers, backlashing and protesting for the revival of the original formula since it carries the consumers’ sentiments. With that, it was considered to be the “marketing blunder of the century” (The Coca-Cola Company, 2012).

Prior to its release, the Coca-Cola Company was in a cold war with a formidable competitor, Pepsi-Cola. In 1975, a Pepsi Challenge ad campaign invoked to conduct a blind taste test between Pepsi and Coke and a huge percentage in its outcomes unveils that Pepsi is chosen over Coke (Fogarty et. al., 2018). In addition to this catastrophe, the market share of Coca-Cola from right after World War II was 60% and it declined to 24% in 1983 (Davila et. al., 2007).

The company was losing its market share against Pepsi. Thus, its response was to create a new formula to keep up with the rivalry. Another taste test was made for about 200,000 consumers before finally launching the New Coke. Results show that the sweeter formula was preferred than the original formula and that urged CEO Roberto Goizueta to definitively change their branding (Edwards, 2015). However, the problem did not cover the number of soda intakes consumers drink in actuality. The working theory established by Gladwell (2007) claims that the sweet taste of Pepsi and New Coke was only enjoyed in small doses. Polarity is established when it is drunk in large quantities.

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Moreover, the test also did not exhibit any regard for the customer’s attachment to the Classic Coke. Coca-Cola offices were flooded with thousands of customer complaints. It was a national disaster. Consumers who are loyal to the original taste even stocked their basements with cases of Coke since people had sudden realizations of how significant this product takes part in their life (The Coca-Cola Company, 2012). In that period of time, Pepsi is a representation of the younger generation and the Baby Boomers, while Coke, on the other hand, signifies tradition. Coca-Cola has exerted enormous marketing effort for that past 50 years and it was noted that they have been a symbol of the real America (Edwards, 2015).

Statement Of The Problem

In what ways could the Coca-Cola company avoid the backlash from loyal consumers as they introduce a new and sweeter formula of Coke?

Objectives

The objectives of the study are the following:

• To determine the strategies that will effectively use to market the new coke
• To achieve higher sales and recover the loss of sales from the previous years
• To identify the risk of introducing new coke in market competition
• To provide the consumer with an honest background and information about the product

Alternative Courses Of Action

Alternative Course of Action no. 1

The Coca-Cola Company should introduce a new, smoother, and sweeter drink and at the same time, bring back the production of the original coke.

Advantage: The company will be able to secure the patronage of the product from its loyal consumers and at the same time be able to experiment about the consumers’ reactions towards a new product or innovation.

Disadvantage: The company might experience production and space-related problems.

Alternative Course of Action no. 2

The Coca-Cola Company should create possible solutions rather than changing its product in cases of worst-case scenarios that could involve the declination of their sales.

Advantage: The company shall have thorough research that will take into account the symbolic value and emotional involvement of its consumers through the years.

Disadvantage: The company would not be able to diversify its products.

Alternative Course of Action no. 3

The company should convince the public to like the flavor through marketing such as releasing new commercials and hiring popular icons as endorsers.

Advantages: According to Deshwal (2015), using celebrities and popular icons to promote products has been proven to increase sales. With the influence of pop culture, consumers easily trust the products that the endorsers promote.

Disadvantage: There is no sure guarantee that the public will be swayed by the marketing tactics.

Alternative Course of Action no. 4

The Coca-Cola Company must conduct a survey on the consumer’s preferred version in every state.

The statistics received from the survey will show the number of consumers who want the original formula back. The results would be the basis of the company’s decision on whether to reintroduce the original coke on some states or not. If half of the total number of samples, in every state, agrees to bring back the original Coke, the company shall produce the original Coke and new Coke, at the same time.

Advantages: The company will be able to reach out to its loyal consumers and hear all the consumers’ responses about their preferred flavor.

Disadvantages: Conducting a survey requires planning and time. Also, it requires a huge number of respondents and surveyors. Some survey questionnaires would not be returned, thus, claiming a result that does not represent the whole population. The said intervention, if approved, would create a space problem.

Recommendation

The proponents of this study recommend developing effective strategies that will make the new coke stand out in the market. Preparation is the key to a successful product launch. According to Sujan Patel (2018), co-founder of Growth marketing agency, Web Profits, there are five best practices for new product introduction, and the researchers found this practice as a way to create an effective strategy in marketing a new coke.

First, is by knowing the USP or Unique Selling Proposition, Wendy Connick (2012) defined it as a statement that described how your product different from the competition, our goal is to convince the consumer to choose our product. The company needs to catch the interest of our consumers. By this time, there should be a clear vision of who is the target audience or target consumer of the product. The third one is Get Your Whole Team’s Buy-In, everyone involved must believe in the product, they should show the confidence of using the product because it increases the trust of the consumer. The fourth one is the most important, the right timing (Patel, 2018).

According to Chuck Cohn (2015), CEO and Founder of Varsity Tutor, a successful launch begins with great timing. The company might feel the urgency to introduce the new product but we should accompany this urgency with the right timing. In the business world, timing is very crucial because its impact affects all the preparation and plans of the whole team. Lastly, upon launching, the market must be diversified by using social media as a platform to inform the consumer of what is new in the market.

References

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