THE LAUNCH OF NEW COKE

Submitted by:-
Naveen Kumar pgfb0925
Pearl Juneja pgfb0928
Pragya Jaiswal pgfb0929
Shashank pgfb0938
Shishir pgfb0939
Tushar Mittal pgfb0951
 QUIZ
Q.1. In which Journal the first
advertisement of Coke was appeared?

Ans: “The Atlanta Journal”

Q.2. Who suggested the name Coca-
Cola first?

Ans: Frank Robinson

Q.3. Who knows the original
formula of Coke?

Ans: Candler & Robinson

Q.4. Who was the 10th President of
Coca-Cola?

Ans: Paul Austin

Q.5. In which year Coca –Cola face
tough competition?

Ans: In 1970
Q.6. In which year Coca-Cola
launched New Coke?

Ans: April 1985

Q.7. Coca-Cola re-launched New
Coke by which name?

Ans: Coke II
 INTRODUCTION
• On April 23, 1985, Coca-cola launched a sweeter
version of the soft drink named ‘New Coke’,
withdrawing its traditional 99 year old formula.
• Though the initial market response to New Coke
was satisfactory, things soon went against Coca-
Cola.
• Because of consumer protests to
New Coke and a significant decline
in its sales, Coca-Cola was forced
to revert back to its original formula.
 BACKGROUND NOTES
• The original Coke was developed by John
Pemberton in 1886.
• It was based on a combination of oils, extracts
from coca leaves & various others additives
including caffeine.
• On may 8,1886 coke was released in the marked.
• The first advertisement of the coke appered in
“Atlanta Journal” on may 29, 1886.
• Pemberton spend huge amount on advertising
& sell 50 gallons of syrup at $1 per gallon.
• To make the drink popular it was served free
for several days – after this, drink got
acceptance.
• After the Pemberton’s death, his friend “Asa
Candler” & a wholesaler druggist acquired
stake in the company.
• Positioning of coke:- In 1895 coke was
advertised as a drink which relieved one of
mental & physical exhaustion & cured
headache.
• Repositioning of coke:- later coke was
repositioned as a refreshment drink.
• it was found that coke contain caffeine in it,
in a huge amount which is injurious to
health. Due to which it was criticized & a
case was registered against coke, which was
settled outside the court & coke agreed to
reduce amount of caffeine by 50% in coke.
• In 1991 company was sold to Ernest
Woodruff,who took a major decision of
establishing foreign department to make
coke popular overseas.
Continued…

• Problems faced in establishing foreign

department:-
 It has to rely on local bottles who did not
promote the product sufficiently.
 Govt. regulation
 Trademark registration
 language & culture
COMETITOR
• By soft drink sales in the US had risen to
200 drinks per capita,& coca cola’s market
share had risen to 41% against Pepsi 24%.
• In 1970 Pepsi advertisement budget
exceeded coca cola’s.
• Due to the rise in Pepsi sales coca cola
market share declined.
• 1978 Pepsi was found to be beaten coca cola
in supermarket sales because of its
dominance in vending machine.
 THE RATIONALE
• Goizueta’s ‘focus strategy’ could not stop the decline
in Coca-Cola’s market share, which fell from 24.5%
in 1984.

• Coca-cola’s distribution wider than Pepsi, which had

enabled it to be the leader in the soft drinks industry
yet in 1984 Coca-cola’s overall market share had
dropped from 9.8% in the early 1970 to 4.9%.

• This became a major cause of worry for the top

management of coca-cola.
• During the middle of 1983, the
idea of reformulating 99-year
old Coke formula struck
Goizueta.
• The purpose was to increase
Coca-Cola’s market share as
well as to defend its position
as the market leader.
• A thorough market research
was conducted which included
interviews with about 2,00,000
consumers.
• In some cases, response was
contradictory.
• After Blind taste test it was discovered
that many people preferred Pepsi to
Coke because Pepsi was sweeter.
• Coca-Cola felt that the sweeter taste
would appeal more to teenagers and
youth, it decided to launch a sweeter
version of Coke, the taste would be
similar to Pepsi.
• Coca-Cola also conducted a Focus
group research that revealed that
many people were willing to try New
Coke.
• Both the surveys (Focus
group and Survey
research) indicated
consumer dissatisfaction
and their results were
contradictory to each
other.

• Coca-Cola ignored it
and decided to launch
New Coke based on
results of the blind taste
tests.
 The launch and its aftermath
• Coca Cola launched new coke in April 1985 with
the punch line “Catch the Wave”. This change in
coke’s formula was publicized through the TV and
news papers. The announcement reached more
than 80% of the American population within 24hr.
• The initial response to the product was
encouraging with distributors reporting a fairly
wide acceptance of it. Analyst come up with a
reason that people had not tasted the new coke so,
there is curiosity to taste the new coke that is why
the sales went up initially.
• Slowly consumer found that its taste is similar
to that of Pepsi and the sales starts declining,
and distributors began to accept less stoke of
new coke, later they did not stoke any because
of poor consumer response. A majority of
Coke lovers criticized the company’s act of
changing the 99 year old formula.
• Some old coke lover said that original coke
had a unique taste that was stronger than new
coke. One of the coke lover also said that
company has spoiled the 99 year old soft
drink and betrayed the nations trust. By the
end of May 1985, the scenario had worsened
with consumer response at its lowest.
• After the launch of new coke, Coca Cola
received thousand calls per week from the
coke drinkers most of whom informed
that they are going to replace Coke with
Pepsi as there is no difference between
them.
• Due to the protest and significant decline
in the market share from 15% at the time
of launch to 1.4%, Coca Cola was forced
to revert back to its original formula, ten
weeks later, by launching “Coke Classic”
on 11th July, 1985.
 Model
Model of
of Consumer
Consumer
Marketing
Marketing and
Product
Price
Behavior
Behavior
Other
and
Other Stimuli
Stimuli
Economic
Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s
Buyer’s Black
Black Box
Box Affecting
Process Consumer
Behavior

Product Choice Purchase

Buyer’s
Buyer’s Response
Response Timing
Brand Choice
Purchase
Dealer Choice Amount
Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Psychological
Psychological
Motivation
Motivation

Beliefs
Beliefs and
and Psychological
Factors PPerception
erception
Attitudes
Attitudes

Learning
Learning
 New Coke what went wrong?
1. Analyst attributes the failure of new coke to
several factors. Some felt that Coca Cola has
failed to understand the consumer’s emotional
attachment with coke. The attachment with
the brand was so strong that one of the coke
lover went to the extent of wishing his bones
and ashes to be preserved in coke cans after
his death. But after the launch of new coke, he
said he did not want to be associated with coke
anymore. Another consumer said God and
Coke is the two important things in his life.
• Analysts also felt that people had a high
regard for Coca Cola because of its
innovative ideas, excellent products launch
and the importance it accord to people and
the environment. Also, Coca-cola was the
pioneer in recycling plastic bottles.
• Some analyst felt that the findings of the
market research group were erroneous and
late. The research is either in an
inappropriate manner or was interpreated
incorrectly.
Continued…
• According to analyst
the research could not
have measured the type
of consumer feelings
that were evoked from
reformulation. Coca
cola carried out
individual interview
first then undertook the
focus group testing.
A MARKETING BLUNDER
OR A PLOY?
 SLOGANS
• 1904:- Delicious & refreshing
• 1908:- Good till last sip
• 1922:- Thirst knows no seasons
• 1924:- Refresh yourself
• 1938:- Pure drink of natural flavors
• 1942:- Thirst ask nothing more
• 1942:- The only thing like coca-cola is coca-cola
itself
• 1956:- coca-cola makes good things taste better
• 1987:- You cant beat the feeling
• 2000:- Enjoy
MARKET SHARE OF COCA-COLA &
PEPSI
MARKET SHARE
COKE CLASSIC
Pepsi Cola
Diet coke
Mountain Dew
Sprite
Dr. Pepper
Diet pepsi
7 up
Caffeeine Free Diet Coke
Barq's Root Beer
•Thank you…..