Guess what happened 25 years ago today?
On April 23, 1985 Coke released “New Coke”– the Sanjaya of colas. That proved to be misguided. So, how did it happen?
Dominant since World War II, Coke slowly conceded market share to archrival Pepsi (cue boos and hisses). The perfect storm of a new CEO–Roberto “No sacred cows” Goizueta–at Coke, a brilliant leader at Pepsi and Michael Jackson culminated in the mid-eighties.
Coke’s market research showed aging Baby Boomers preferred less sweet beverages and the youth market chose the hipper Pepsi Generation. Coke executives believed they needed a formula that was fresh and targeted to younger audiences. Taste tests confirmed Coke’s hunch.
Then Pepsi leader Roger Enrico hired global megastar Michael Jackson. As Enrico says in his book, “The Other Guy Blinked.”
In a rush to counter success driven by the Michael Jackson ads, Coke discounted a small, but very vocal subsection that expressed anger in market testing to changing Coke. By the way the MJ ads gained super dooper attention on news of the gloved one’s hair catching fire during filming. I digress…
Enrico wasted no time taunting the stodgy Coke brand. A companywide holiday was declared and a full page The New York Times ad celebrated Pepsi as the winner of the cola wars. Knowing Coke was preoccupied preparing for the big announcement, Pepsi PR went into high gear to cultivate skepticism among reporters, which caused the press conference to go badly. Marketing New Coke went downhill from there. And as they say, the rest is history.
The public reaction was so bad that the original formula was reintroduced just three months later.
Comments
Ooh. Love this post. Forgot all about the cast of characters -- Roger Enrico, Michael Jackson, Goizueta.
I still remember when they announced they were bringing old Coke back. I was down to my last couple from the stash I bought before the switch. How silly?
I can only imagine what would have happened if we'd have had social media in 1985! I bet it wouldn't have taken three months to pull New Coke.
Agreed.
Remember when one would have to write to the company to get any hope of recognition? And that recognition would probably be a coupon for a 6-pack of new Coke.
Thank goodness for consumer-driven media! I bet "Classic Coke" would have been back on the shelves the following week!
Thanks Karen!
The lessons from New Coke were clearly in play this past winter when Domino's updated its pizza recipe.
Whereas Coke's ploy in 1985 amounted to "We've come up with something you're gonna love, so hold still," Domino's placed the responsibility for the move squarely on the consumer's shoulders: "You've told us our pizza sucks."
Even the less dramatic communications coming out of Domino's late last year all began with the same claim: "We've listened to our customers."
You're right.
My, how we've learned from the past.
I totally remember the announcement that "Old" Coke was coming back. I do think that if it happened today that time frame would have been shortened down from 3 months to 3 days.
But at the same time I do remember people like Karen that went out and bought a 6 month supply of Coke before the New Coke launch. One has to think maybe this was the plan all along to clear inventory and create buzz?
I could never tell the difference between Old Coke, New Coke, Pepsi, etc. Maybe RC Cola tasted a little different but was amazed at how big a story New Coke was at the time.
Good observation, Brian. If that happened now the backlash would be instantly global. I think it would also carry the stink a whole lot longer.
As you know...the Internet never forgets.
Still a great case study in marketing savvy wouldn't you say?
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