The Learning Center

The great American poet Charles Bukowski once said  “There is nothing that teaches you more than regrouping after failure and moving on.” 

No one knows this better than Coke-a-Cola. In today’s post, we are going to take a brief look at the history of the “New Coke” marketing blunder and how you can avoid some of the same mistakes. Because if a worldwide company can trip and fall on its face, so can yours. 

In the early 1980s, Coca-Cola’s market share for cola drinks began to decline as Pepsi became more popular. This was partially due to the changing preferences of the aging core consumer, who were increasingly health and weight conscious and began to purchase diet drinks. In order to revive its sales, Coca-Cola decided to reformulate its drinks to appeal to younger consumers. This led to a change in the recipe for Coca-Cola that made it more similar to Pepsi. As a result, Pepsi began to outsell Coke in supermarkets and other venues. 

Coca-Cola learned the hard way that it’s not wise to mess with a classic. 

When they introduced New Coke in 1985, they didn’t realize that their customers were fiercely loyal to the original formula. The company received over 40,000 calls and letters expressing anger or disappointment, and its hotline received over 1,500 calls a day compared to around 400 before the change. A psychiatrist whom Coke had hired to listen in on calls told executives that some people sounded as if they were discussing the death of a family member.  

After releasing the New Coke, the company quickly realized its mistake and reintroduced the old formula 79 days later, rebranded as “Coca-Cola Classic.” There was a lot of speculation that the new formula was actually a marketing ploy to get people to buy the original Coca-Cola. However, the company denies this.  

According to research, by the end of 1985, Coca-Cola Classic was outselling both New Coke and Pepsi. In the six months following the rollout, Coke’s sales had increased more than twice as much as Pepsi’s. 

 

So basically Coke had a knee-jerk reaction to competition, did the unthinkable and changed a staple brand, caught tons of backlash, listened to their customers, owned the mistake, and came back stronger than ever! 

There are a lot of lessons to be learned from what happened with Coke. 

Lesson 1: Your brand is who your company is, take care of that. 

Coca-Cola is a great example of how a brand can be damaged when it loses touch with its customers. With minimal research, they changed the core of their main product. They could have updated and revamped marketing campaigns without changing the product. But instead, they went with a plan that presented like they were out of touch with their customer. This leads to the second lesson. 

Lesson 2: The relationship with your customer is your biggest asset. 

The lesson that Coca-Cola learned from this debacle is that the relationship between a company and its customers is its biggest asset. In order to maintain customer loyalty, a company must always put its customers first. In the end, Coke showed this by reintroducing Coke Classic just 79 days after the fallout over changing the formula. By owning the mistake, they helped repair the relationship with their customer base.  

Lesson 3: Failure is not the end.

Some people in marketing still think the whole “New Coke” thing was planned from the beginning to the end. I don’t believe it was. That’s some bond villain-type planning, not to mention it’s estimated to have cost Coca-Cola around $4 million in development costs. After deciding to pull New Coke from the shelves, Coca-Cola was left with over $30 million in unwanted New Coke concentrate. In today’s money that is almost 94 million dollars. Not to mention that Coke almost lost the entire company over the switch. What they did right was own their mistake. If you ever find yourself in a marketing mistake, just acknowledge it and take it as an opportunity to reconnect to your customer base.  

Lessons: 4-7

Here are some mini-lessons as well

Don’t get so caught up in competition that you forget who your business is.

Check, double-check, and triple-check risky ideas outside your inner circle.

If you do mess up, mess up so badly that people write about you almost 40 years later for free advertising.

For good or bad, your marketing strategy is the voice of your company.

In Conclusion…

Coca-Cola’s story is a great reminder that failure is not the end. If you make a mistake, own up to it and take it as an opportunity to reconnect with your customers. In the case of Coca-Cola, they did just that and came back stronger than ever.

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