Kamis, 27 November 2008

Coca Cola to New Coke

In 1985 Coca Cola decided to terminate their flagship brand Coca Cola and launch a formula sweeter than it.To understand why, let's go back a few years.

In the 60s Pepsi repositioned itself as a youth brand, even though it was loosing out its elderly customers to Coke. This move brought them enormous success, it perfectly complimented the rivals 'old and classic' look. With a narrowed focus, it came to be seen as a 'drink of the youth'.

In the 70s Cokes rival started the Pepsi challenge which was a blind test between its own product and the Coke. To the companies terror most of the participants preferred Pepsi to Coke.

In the 80s Pepsi launched the challenge globally, it promoted the arrival of the 'Pepsi generation'. It also signed up celebrities like MJ and Britney Spears. Now Coke's numero uno position seemed to be vulnerable. It lost the market share not only to Pepsi, but to its own brand Diet Coke.In 1983 Cokes market share came down to a new low of 24%.

1n 1984 coke launched a marketing campaign praising itself for being less sweet than Pepsi. They roped in Billy as the brand ambassador. These efforts were fruit less. They could survive only because of their effective distribution chain.

Coke perceived that the problem was with the product. So, they started working on a new sweeter formula. They finally came up with a formula which they taste tested, the results were satisfying. It fared better than Pepsi. But having both the formulae in the market was not logical as it would make the numero uno position vulnerable.

Coke had badly underestimated the power of its brand. After hearing the news, a large part of US decided to boycott the product. On 23, April 1985 New Coke was launched and few days later Coke was stopped. New Cokes sales were low, public was agitated by the fact that Coke was no longer available.

Things were very clear, Coca Cola had to bring back the 'real thing'.

The first very big mistake they did was under estimating its own brand. They took people for granted. We all know that Coca Cola is the 'real thing'. They simply thought that they can convince us by telling that, the real thing was a mistake. So, they have come up with a 'new real thing'. In fact their mistake was first identified by Pepsi, so they came up with a ad criticizing their move. And while analyzing, why their sales were going down, they took only taste into consideration. Its a mistake not just done by Coke. the same little blunder is done by many major companies while analyzing their decline in sales. The main purpose of the launching New Coke was to retain their numero uno position. But history has repeatedly told us that no new product in an old product line can become number one overnight. But this is what they wanted to do. These mistakes sound petty I know, bu these are the kinds of mistake such huge companies do.

Take away:

-Brand value can never be underestimated.
-Research should have a 360 degree approach.
-Never follow the competitor.

The author Avinash Mohan Bandarapu Chetty is the owner of the blog http://www.marketingcampaigner.blogspot.com

Article Source: http://EzineArticles.com/?expert=Avinash_Mohan_Bandarapu_Chetty

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