The "New Coke" Debacle - A Lesson on customer feedback

In 1985, The Coca-Cola Company made a significant change to its century-old Coke formula, introducing "New Coke." The decision, which was based on market research and blind taste tests, turned out to be one of the biggest marketing blunders in history. The company underestimated the deep emotional connection its customers had with the original Coke.

Background

In the early 1980s, Coca-Cola was facing fierce competition from Pepsi. Pepsi's "Pepsi Challenge" marketing campaign, where people blind-tasted both sodas and often preferred Pepsi, was gaining traction. As a response, Coca-Cola conducted its research and found similar results. Believing that a change in formula could help regain market share, the company decided to introduce "New Coke."

Launch of New Coke

On April 23, 1985, Coca-Cola announced that it was replacing the old Coke with a sweeter "New Coke." Initial reactions were mixed, but it soon became clear that a significant portion of the customer base was unhappy with the change.

Peter Jennings, ABC News anchor at the time, broke into regular programming to announce the change. This underscores the magnitude and significance of Coca-Cola's decision.

Backlash

Consumers were not merely indifferent to the New Coke; many were outraged. They flooded the company with letters and phone calls expressing their dissatisfaction. Some even started hoarding bottles of the old Coke, anticipating a shortage.

A famous quote from this period is from Gay Mullins, founder of the "Old Cola Drinkers of America," who said, "They can't do this to us!" The sentiment echoed the feelings of many consumers who felt a deep-rooted brand loyalty and connection to the original Coca-Cola.

Reintroduction of Coca-Cola Classic

Realizing its mistake and listening to the overwhelming customer feedback, Coca-Cola made a swift decision. Just 79 days after the introduction of New Coke, the company announced the return of the old formula, now branded as "Coca-Cola Classic."

Roberto Goizueta, then Chairman and CEO of The Coca-Cola Company, admitted, "We did not understand the deep emotions of so many of our customers for Coca-Cola."

Conclusion

The New Coke saga serves as a powerful lesson on the importance of understanding and valuating customer feedback. While market research and blind taste tests provided one dimension of consumer preference, they failed to capture the emotional and cultural connection people had with the original Coke.

The financial implications of this oversight were significant. However, by swiftly responding to customer feedback and reintroducing the original formula, Coca-Cola managed to regain trust and even bolster its market position in the long run.