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 INTRODUCTION

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 ` CKGROUND 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 market.
— The first advertisement of the coke appeared in ³ tlanta
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.
— fter the Pemberton¶s death, his friend ³ sa 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.
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 COMETITOR

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 THE R TION
E

— Goizueta¶s µfocus 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.
— thorough market research was conducted which
included interviews with about 2,00,000 consumers.
— In some cases, response was contradictory.
— fter `lind 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.
— `oth 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 pril 1985 with the

punch line ³Catch the Wave´. This change in coke¶s
formula was publicized through the TV and news
papers. The announcement reached more than 80% of
the merican population within 24hr.
— The initial response to the product was encouraging with
distributors reporting a fairly wide acceptance of it.
nalyst 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 stock of new coke, later they did not
stock any because of poor consumer response. 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. `y the end of
May 1985, the scenario had worsened with consumer
response at its lowest
 New Coke what went wrong?

— nalyst 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. `ut after
the launch of new coke, he said he did not want to be
associated with coke anymore.
— nother consumer said God and Coke is the two important
things in his life.
— Pepsi saw opportunity.
 nalysts 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. lso, 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 interpreted
incorrectly.
— ccording 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.
 What went right?
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 New Coke after Coke Classic
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