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New Coke

1

New Coke
New Coke
Type Manufacturer Distributor Cola The Coca-Cola Company Coca-Cola Enterprises

Country of origin USA Introduced Color Variants April 23, 1985 Caramel Coke II

New Coke was the reformulation of Coca-Cola introduced in 1985 by The Coca-Cola Company to replace the original formula of its flagship soft drink, Coca-Cola (also called Coke). New Coke originallyhad no separate name of its own, but was simply known as "the new taste of Coca-Cola" until 1992 when it was renamed Coca-Cola II. The American public's reaction to the change was negative and the new cola was a major marketing failure. The subsequent reintroduction of Coke's original formula, re-branded as "Coca-Cola Classic", resulted in a significant gain in sales, leading to speculation thatthe introduction of the New Coke formula was just a marketing ploy.[1]

History
Background
Just after World War II, the market share for the Coca-Cola Company's flagship beverage was 60%. By 1983, it had declined to under 24%, largely because of competition from Pepsi-Cola. Pepsi had begun to outsell Coke in supermarkets; Coke maintained its edge only through soda vending machines and fast foodrestaurants.[1] Market analysts believed baby boomers were more likely to purchase diet drinks as they aged and remained health- and weight-conscious. Therefore, any future growth in the full-calorie segment had to come from younger drinkers, who at that time favored Pepsi and its sweetness by even more overwhelming margins than the market as a whole.[2] When Roberto Goizueta took over as CEO in1980, he pointedly told employees there would be no sacred cows in how the company did its business, including how it formulated its drinks.[3]

Market research
Coca-Cola's most senior executives commissioned a secret effort named "Project Kansas" — headed by marketing vice president Sergio Zyman and Brian Dyson, president of Coca-Cola USA – to test and perfect the new flavor for Coke itself.It took its name from a famous photo of that state's renowned journalist William Allen White drinking a Coke that had been used extensively in its advertising and hung on several executives' walls.[4] The company's marketing department again went out into the field, this time armed with samples of the possible new drink for taste tests, surveys, and focus groups. The results of the taste tests werestrong – the sweeter mixture overwhelmingly beat both regular Coke and Pepsi. Then tasters were asked if they would buy and drink it if it were Coca-Cola. Most said yes, they would, although it would take some getting used to. A small minority, about 10–12%, felt angry and alienated at the very thought, saying that they might stop drinking Coke altogether. Their presence in focus groups tended toskew results in a more negative direction as they exerted indirect peer pressure on other participants.[5]

New Coke The surveys, which were given more significance by standard marketing procedures of the era, were less negative and were key in convincing management to move forward with a change in the formula for 1985, to coincide with the drink's centenary. But the focus groups had provideda clue as to how the change would play out in a public context, a data point that the company downplayed but which was to prove important later.[6] Management also considered, but quickly rejected, an idea to simply make and sell the new flavor as yet another Coke variety. The company's bottlers were already complaining about absorbing other recent additions into the product line in the wake ofDiet Coke. Many of them had sued over the company's syrup pricing policies. A new variety of Coke in competition with the main variety could, if successful, also dilute Coke’s existing sales and increase the proportion of Pepsi drinkers relative to Coke drinkers. Early in his career with Coca-Cola, Goizueta had been in charge of the company's Bahamian subsidiary. In that capacity, he had improved...
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