Troubleshooting Communication – Coca-Cola Company and the ‘New Coke’

‘New Coke’

Summary of failed Communication at Coca-Cola Company

Coca-Cola Company made a decision to introduce a new beverage product dubbed ‘New Coke’ in the mid-1980s, a process that cost the company millions of dollars because of an error in market research. The new product; ‘New Coke’ was developed to be different from the original-formula coke in that the it was a lot sweeter.This decision was based on evidence that the single most important cause of Coke’s decline in the market share in the late 1970s and early 1980 was, taste. More than half of the 200, 000 participants who participated in the product blind taste tests that were conducted in the United States were in favor of the New Coke and disliked Pepsi and the original Coke formula. Based on this feedback, the original-formula Coke was withdrawn from the market and the New Coke was introduced in what would later become Coca-Cola Company’s big mistake of the mid-1980s.

By announcing that Coca-Cola would be changing, the formula for the world’s most popular soft drink was one of the biggest risks in the history of consumer goods and one that spawned consumer angst on a scale that has never been witnessed before. This reformulation at Coca-Cola Company was the first formula change in 99 years and it was done with the intention to re-energize the cola category and the Coca-Cola brand in the United States; its largest market(Coca-Cola Company, 2012). Instead of achieving this goal, the market research and consequent marketing campaigns veered off course due erroneous assumptions and ended up creating a firestorm of consumer protests.

 

Reasons the persuasive campaign by Coca-Cola Company was unsuccessful

According to Smith (2013), the company was wrong on making this move because of two major reasons: their market research of taste tests was flawed and their marketing campaign failed to realize the emotional involvement and the symbolic value of the original Coke among the consumers. Overall, the entire process that bore the idea of the ‘New Coke’, from market research, product development, the marketing campaign around it, its introduction to the market and the withdrawal of the original Coke from the market missed the relevant variables. The first line of defense would have been the market research but that is the primary exercise that failed to determine or include the relevant variables that would affect the problem solution. The biggest flaw at this critical stage was that the taste tests that were carried out during the market research made the erroneous assumption that in consumer purchase behavior, taste was the deciding factor. The Coca-Cola Company failed to ask its consumers whether they would give up the original coke formula for the New Coke and failed to notify their consumers that only one product would be marketed.

To end the crisis, Coca-Cola Company was forced to return the original formula Coke back into the market and had to find other ways to improve a lethargic cola category, a dipping preference for Coca-Cola and the company’s market share that had been on the decline for 15 consecutive years(Coca-Cola Company, 2012).

A persuasive campaign that might have succeeded

By reformulating Coca-Cola, the company wanted to change the dynamics of sugar colas in the United States and even though they did not succeed with the attempt in 1985, they eventually managed to find a way a way to do it without upsetting the consumer, although the process did not go the way they had planned it initially. This acted as an exhibit of the company’s commitment to do whatever it takes to build value for the owners of their business(Coca-Cola Company, 2012). Coca-Cola Company, managed to turn around a disastrous mistake into an opportunity to rebuild.

Despite the negative effects of the 1985 incidence, there were a few positive aspects as people suddenly began talking about Coca-Cola, which made it apparent that the soft drink played an important role in the lives of many people. The return of the original Coke back into the shelves of stores created a huge media buzz for the Coca-Cola Company and the Coca-Cola brand as it made the news in a big way with consumers applauding the company’s decision to bring the original soft drink back. Suicidal as the move might have been, the success of the Coca-Cola Company and the soft drink industry were changed forever by the events of 1985, which reminded consumers why and what they love about Coca-Cola.

Although the idea of taking intelligent risks is appealing  and often encouraged because of its potential to yield desired results that can surpass expectations, the lesson learnt from this incidence at the Coca-Cola Company is that market research is very important. When done correctly, market research provides a decision maker with the power to make the right decision, but when wrongly done, it costs people and companies a lot of money in losses and potentially diminishes the brand image of a company or an organization and consequently leads to loss of business andloss of customers altogether.

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