The “New Coke” disaster that led to 400,000 complaints and a quick reversal
Business innovation is not easy – and can often go catastrophically wrong.
The expectation is to come up with exciting new products that millions of people will love and make your company millions.
At the same time, you’ve got to ensure your existing, tried-and-tested products remain relevant.
Coca-Cola is a hugely successful brand known the world over.
It’s a great example of a much-loved product that has generally been brilliantly marketed for more than 100 years.
Some changes have been made, like removing cocaine as an ingredient – which is understandable.
But ultimately, the top-secret recipe has remained unchanged.
However, in 1985, the company inexplicably decided to change the formula of the popular soft drink.
In fairness, the company had carried out some research and had been losing some of its market share to diet drinks and other types of soft drinks for several years.
The company carried out some blind taste tests, and it was found that many consumers were leaning toward Coke’s great rival, Pepsi.
Coke’s response was to change its recipe – to disastrous effects.
“New Coke” came out in 1985, and not many people liked it.
Bizarrely, the company decided to remove “old” Coke from the market rather than alongside the new product.
This led to the company receiving more than 400,000 complaints from customers.
Bear in mind, this was before emails, so people were phoning in or writing letters to vent their anger at the decision.
The change didn’t last long, with the original drink returning to the market as “Coca-Cola Classic.”
Some people speculated this was a cynical marketing ploy.
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The original drink sold 10 times as the new variety.
The company then tried a rebrand, replacing “New Coke” with the imaginatively named “Coke II” in 1992.
It was suggested that one of the reasons Coke was keen on the new brand was that it was a lot cheaper to make and would’ve saved around $50 million a year in production costs.
Coca-Cola has never admitted this.
Coke II was discontinued in 2002.
Speaking in 1995, then-CEO Roberto Goizueta said: “We set out to change the dynamics of sugar colas in the United States, and we did exactly that — albeit not in the way we had planned.
“But the most significant result of ‘new Coke’ by far was that it sent an incredibly powerful signal … a signal that we really were ready to do whatever was necessary to build value for the owners of our business.”
Coca-Cola remains enormously popular, and the company is hugely successful.
And the company can even laugh at itself, calling the fiasco “one of the most memorable marketing blunders ever” and even tells the story on its website.