in this post, we will try to do the RCA-postmortem to understand why did the 'New-Coke' fail.
You can read the failure-story here:
New Coke - the epic 1985 Product failure of Coca-Cola - part 1 of 2
Following are some of the failure reasons, that I've gathered from multiple sources:
1.
The Coca-Cola Company's apparently sudden reversal on New Coke also led to conspiracy theories, including this one: The company intentionally changed the formula, hoping consumers would be upset with the company, and demand the original formula to return, which in turn would cause sales to spike. Keough answered this speculation by saying "We're not that dumb, and we're not that smart."
2.
Later research, however, suggested that it was not the return of Coca-Cola Classic, but instead the nearly unnoticed introduction of Cherry Coke, which appeared almost simultaneously with New Coke, that can be credited with the company's success in 1985.
3.
The Coca-Cola Company concluded that it had underestimated the public reaction of the portion of the customer base that would be alienated by the switch. The company failed to consider the public's attachment to the idea of what Coke's old formula represented.
4.
Brands are more than a list of individual physical characteristics and so it is highly dangerous to focus on a single product attribute (e.g. taste). Our brains respond to implicit/psychological goals such as reassurance and conformism that we associate with a brand. These implicit goals help differentiate brands that may be very similar to each other in terms of physical characteristics. Coca-Cola had been telling consumers that Coke was “it” and “the real thing” for many years and now New Coke completely undermined this strategy by changing the formula and discontinuing old Coke. Little thought appeared to have been given to the attitudes of customers and that they might prefer tradition and stability over novelty. In the USA in-particular, Coca-Cola has a strong symbolic meaning and is seen as a cultural icon by some consumers. This contributed to the sense of loss when old Coke was discontinued.
5.
People are motivated to buy brands by implicit/psychological goals that conventional market research struggles to identify. Conventional market research relies on responses from the conscious mind & hence, usually fails to trace the implicit/psychological goals, because it relies on direct questioning which generates a response from our slow, rational mind - However, our attention is largely activated by our quick, intuitive brain. People don’t have full access to their psychological motivations and instead post-rationalize decisions when asked to explain a choice.
6.
The blind taste test completely ignored the influence of brand perception as participants weren’t informed of the brand until after they had stated their preference. Indeed, a 2003 study using the implicit research technique fMRI found that the results of the Pepsi Challenge were reversed when respondents were shown the packaging of the product they were drinking.
7.
Psychological research has repeatedly shown that people are more concerned about avoiding a loss than making a gain. By withdrawing old Coke customers felt an emotional loss of a brand they had probably consumed since childhood and scarcity magnified this loss. When old Coke was withdrawn there were stories of people going around and buying up old stock and selling it on for up to three times the normal price.
8.
Coca-Cola was such an established and well-known brand that many loyal customers saw it as part of their identity. Conforming to your tribe or in-group is an important motivator of behavior. The market research ignored the importance of identification and herd-instinct with relation to brand loyalty.
9.
The mere-exposure effect means that people associate familiarity with safety. Coca-Cola was such a familiar brand to so many people that New Coke was always going to struggle to replace such a strong brand. People perceived them to be separate brands as old Coke was so entrenched in their psyche.
You can read the failure-story here:
New Coke - the epic 1985 Product failure of Coca-Cola - part 1 of 2
Following are some of the failure reasons, that I've gathered from multiple sources:
1.
The Coca-Cola Company's apparently sudden reversal on New Coke also led to conspiracy theories, including this one: The company intentionally changed the formula, hoping consumers would be upset with the company, and demand the original formula to return, which in turn would cause sales to spike. Keough answered this speculation by saying "We're not that dumb, and we're not that smart."
2.
Later research, however, suggested that it was not the return of Coca-Cola Classic, but instead the nearly unnoticed introduction of Cherry Coke, which appeared almost simultaneously with New Coke, that can be credited with the company's success in 1985.
3.
The Coca-Cola Company concluded that it had underestimated the public reaction of the portion of the customer base that would be alienated by the switch. The company failed to consider the public's attachment to the idea of what Coke's old formula represented.
4.
Brands are more than a list of individual physical characteristics and so it is highly dangerous to focus on a single product attribute (e.g. taste). Our brains respond to implicit/psychological goals such as reassurance and conformism that we associate with a brand. These implicit goals help differentiate brands that may be very similar to each other in terms of physical characteristics. Coca-Cola had been telling consumers that Coke was “it” and “the real thing” for many years and now New Coke completely undermined this strategy by changing the formula and discontinuing old Coke. Little thought appeared to have been given to the attitudes of customers and that they might prefer tradition and stability over novelty. In the USA in-particular, Coca-Cola has a strong symbolic meaning and is seen as a cultural icon by some consumers. This contributed to the sense of loss when old Coke was discontinued.
5.
People are motivated to buy brands by implicit/psychological goals that conventional market research struggles to identify. Conventional market research relies on responses from the conscious mind & hence, usually fails to trace the implicit/psychological goals, because it relies on direct questioning which generates a response from our slow, rational mind - However, our attention is largely activated by our quick, intuitive brain. People don’t have full access to their psychological motivations and instead post-rationalize decisions when asked to explain a choice.
6.
The blind taste test completely ignored the influence of brand perception as participants weren’t informed of the brand until after they had stated their preference. Indeed, a 2003 study using the implicit research technique fMRI found that the results of the Pepsi Challenge were reversed when respondents were shown the packaging of the product they were drinking.
7.
Psychological research has repeatedly shown that people are more concerned about avoiding a loss than making a gain. By withdrawing old Coke customers felt an emotional loss of a brand they had probably consumed since childhood and scarcity magnified this loss. When old Coke was withdrawn there were stories of people going around and buying up old stock and selling it on for up to three times the normal price.
8.
Coca-Cola was such an established and well-known brand that many loyal customers saw it as part of their identity. Conforming to your tribe or in-group is an important motivator of behavior. The market research ignored the importance of identification and herd-instinct with relation to brand loyalty.
9.
The mere-exposure effect means that people associate familiarity with safety. Coca-Cola was such a familiar brand to so many people that New Coke was always going to struggle to replace such a strong brand. People perceived them to be separate brands as old Coke was so entrenched in their psyche.
a 1930s print-advertisement of Coca-Cola
Credit:
Coca-colacompany.com/news/the-story-of-one-of-the-most-memorable-marketing-blunders-ever
Motherjones.com/food/2019/07/what-if-weve-all-been-wrong-about-what-killed-new-coke/
Vox.com/2015/4/23/8472539/new-coke-cola-wars
Alistapart.com/article/what-the-failure-of-new-coke-can-teach-us-about-user-research-and-design/
Conversion-uplift.co.uk/new-coke-market-research-fail/
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