In the early 1980s, Coca-Cola was facing a major competition

In the early 1980s, Coca-Cola was facing a major competition

In the early 1980s, Coca-Cola was facing a major competition from Pepsi. Pepsi was growing really fast, with its “Pepsi Challenge” campaign. Coca-Cola had to react, and came up with a new product, or rather, changed its 100-year old formulation, and introduced “New Coke”. “New Coke” presumably beat Pepsi in the blind tests, and was sweeter than the older version. On April 23, 1985, New Coke was released to a great deal of fanfare. By the middle of June, people were “Saying No to New Coke ” Reaction to New Coke was swift and humiliating. Eighty – seven days after the new Coke was introduced, the old Coke was brought back in addition to the new one. This was greatly due to dropping market share and consumer protest. The market share fell from a high of 15 percent to a low of 1.4 percent. This was said to be a classic marketing retreat. The Coca-Cola company’s eight hundred number received eighteen thousand calls of gratitude. One caller said they felt like a lost friend has returned home. The comeback of old Coke drove stock prices to the highest level in twelve years. This was said to be the only way to regain the lead on the cola wars. Looking back at Coca – Cola’s marketing blunder, we can see that Coke defined its marketing research problem too narrowly. The research failed to take account of the __________. A) taste of rival soft drinks such as Pepsi B) intangibles: Coke’s name, history, packaging, cultural heritage, and image C) the entire market size D) market share of Pepsi

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