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  • Introducing New Coke: A Group 9 Presentation

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    Coke introduced New Coke to compete with Pepsi on taste, despite Coke's strong brand equity and cultural symbolism. This played into Pepsi's strategy of using taste tests to show it was better than Coke. Consumer reaction showed symbolic value was more important than taste. Within months, Coke withdrew New Coke and reintroduced Coca-Cola, showing it rushed its decision and should have leveraged its brand rather than changing its formula. The introduction and withdrawal of New Coke was an example of marketing myopia, as Coke failed to recognize it was more than just a beverage.

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    Coke introduced New Coke to compete with Pepsi on taste, despite Coke's strong brand equity and cultural symbolism. This played into Pepsi's strategy of using taste tests to show it was better than Coke. Consumer reaction showed symbolic value was more important than taste. Within months, Coke withdrew New Coke and reintroduced Coca-Cola, showing it rushed its decision and should have leveraged its brand rather than changing its formula. The introduction and withdrawal of New Coke was an example of marketing myopia, as Coke failed to recognize it was more than just a beverage.

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    21 views12 pages

    Introducing New Coke: A Group 9 Presentation

    Uploaded by

    bhartia
    Coke introduced New Coke to compete with Pepsi on taste, despite Coke's strong brand equity and cultural symbolism. This played into Pepsi's strategy of using taste tests to show it was better than Coke. Consumer reaction showed symbolic value was more important than taste. Within months, Coke withdrew New Coke and reintroduced Coca-Cola, showing it rushed its decision and should have leveraged its brand rather than changing its formula. The introduction and withdrawal of New Coke was an example of marketing myopia, as Coke failed to recognize it was more than just a beverage.

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    INTRODUCING NEW COKE

    A GROUP 9 PRESENTATION
    Brand Equity Model shows the superior
    position enjoyed by Coke…
    SWOT Analysis shows Coke’s situation…

    STRENGTHS OPPORTUNITIES
    • Positive customer-based brand equity • Younger generation, the untapped
    • Deeply imbibed in the American culture market
    • Huge loyal customer base • Build on their considerable loyal base
    • Horizontal Growth – Diversification

    WEAKNESSES THREATS
    • Too much emphasis on legal issues • Complacency towards competition,
    • Loss of focus; failed diversification never been tested against a rival
    attempts
    • Fragmented leadership; no strong
    leader
    Leadership
    High earnings / high potential
    Niche
    Low earnings / high potential
    (Differentiation / Relevance / Energy)

    DEREK
    Energized Brand Strength

    DEREK

    Declining DEREK
    High earnings/ low potential

    Eroded
    Seriously challenged

    New

    DEREK DEREK

    Unfocused

    DEREK

    Brand Stature
    ( Esteem / Knowledge )
    NEW COKE INTRODUCED…
     PEPSI’s reaction – Epitome of good marketing
    strategy, and making the most of an opportunity
    (crafting strategy)

     Consumer Reaction – Difference between taste tests


    and actual reactions – extent of COKE’s symbolic
    value

     Retraction by COKE – Sales went back up…


    What went wrong?
    Should they have leveraged their symbolic value,
    rather than playing Pepsi’s game (taste)?
     Strong & Loyal Customer base, emotional connect.
     Taste was never the focus, or for that matter, the issue

     Pepsi focused on taste – “Pepsi Challenge”


    campaign
    Published results of Blind Taste Tests

     Coke played into Pepsi’s hand, by competing on


    taste
     Coke tried to compete with Pepsi on their turf
     Pepsi ensured customers saw this as Coke admitting
    defeat
    Was this a case of Marketing Myopia?
     Coke was a “national institution” of America

     Coke was a symbol of American culture rather than


    just a refreshing drink

     Coke should have realized they were more than just


    a beverage for the American people.

     Changing the taste (even to improve it) was a short-


    sighted strategy.
    Did Coke rush their decision to withdraw?
     Initial decision was to wait out till the end of the year

     Early June - New Coke beating Pepsi in Blind Taste


    Tests

     Mid June – Sudden downturn, Pepsi overtakes New


    Coke

     July 11 – Coke is back!!

     “…only 1% of those who did not like the reformulation were


    switching brands…” – was the situation as drastic as it was
    perceived to be?

     2 months – Is it enough for people to get used to a new


    drink after 80 years of the same taste?
    Should Coke have gone for more
    advertising?
     Pepsi was aggressively advertising “Coke admits
    defeat”

     Coke cut their advertisement budget in half

     Should they have gone for more Aggressive


    Marketing, to divert attention from Pepsi’s strategy?

     Or did they have to reduce the exposure of their


    brand?
    Or did they really fail, after all?

    “… we’re not that smart, and we’re


    not that dumb”!!!
    THANK YOU

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