In 1985, The Coca-Cola Company decided to do something it hadn’t done for 99 years. They changed the formula for Coke. But it wasn’t just Coke, it was the most popular soft drink in the entire world…and a ballistic backlash in response to that strategic move shook The Coca-Cola Company’s consumer world down to its core.
The original Coke formula was brought back by popular demand just 79 days later. Coke Classic and New Coke would both be sold. The battle of Classic vs. New was on. But at least Classic was making a quick comeback and had more than a fighting chance to recover and reclaim whatever glory it lost from this unexpected and sudden setback.
Why is this story from 1985 still relevant today? Because companies continue to make the same mistakes when it comes to change and there’s no better teacher than history.
The taste of change is often bittersweet.
Trying to breathe new life into a brand isn’t a new concept. So, where did things go wrong with New Coke? The Coca-Cola Company’s biggest problem is that they didn’t watch for consumer behavior to change. They initiated change that had more to do with changing who they are.
Coca-Cola still had to aggressively compete for market share with the Pepsi Generation. But that lead had been steadily evaporating for 15 consecutive years. Were consumers losing their taste for Coke? Coca-Cola was determined to find out.
Taste tests were conducted and nearly 200,000 consumers were feeling bubbly about the changed formula. Yet when New Coke hit the market, calls choked the company and 800-GET-COKE phone lines with consumers eager to express outrage and get their “old” Coke back. Critics called it the “marketing blunder of the century.”
Be careful when drinking up your own data.
The Coca-Cola Company had all the data they needed to take a smart risk. The market was becoming increasingly competitive. Consumer awareness for the product was down. The product category was begging for a new and exciting spark. All signals said GO!
However, there’s one thing that all the data and testing in the world just couldn’t even come close to capturing: The emotional connection established between consumers and the product they love so much.
The lesson is simple, even though Coca-Cola learned it the hard way.
Data should be used to inform your thinking, not your decisions. Please reread that again because it’s really critical. In Coke’s case, focus groups and files full of comprehensive research all pointed to changing the formula. But change is challenging. You need to know everything about when, how and why you’re changing. If you don’t, you can’t possibly end up with the right formula for success, or for that matter, soft drinks.
Data dictates, but it doesn’t always show what it’s feeling emotionally.
Where did The Coca-Cola Company’s data analysis drop the ball? It failed to hear the consumer until it was too late. What the consumer was saying loudly and clearly was: “We have built a super powerful bond with your product over the past 99 years, so DON’T MESS WITH IT!“
In a data driven business world, the two things data drove in this case were panic and protest. The data simply neglected to accurately capture consumer sentiment. So much so that when the formula change was announced, consumers actually started stockpiling the original Coke formula product. While that is one strategy for creating a short-term spike in sales, the long-term effects were potentially catastrophic.
I’ll drink to that!
Coca-Cola acknowledged their mistake and apologized. Taking decisive action to correct a big brand blunder and bring back the Coke consumers craved worked. In the first two days after announcing the return of Coke Classic, they received more than 31,600 hotline calls.
As for New Coke, its name was eventually changed to Coke II. It’s no longer sold in the United States, proving once again that it’s hard to knock off a classic.
When you look at your product, is that all you see?
When you analyze your data, does it tell the whole story?
When you listen to your consumers, are you actually hearing what they say?
Clearly, fans of Coke see more than a soda. It’s not just what’s in the can that counts. Coca-Cola doesn’t just manufacture a family of consumer products. They also manufacture products that are part of the consumer’s family. At least that’s what the latest data shows.
Source: The Real Story of New Coke
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