Failiure Of New Coke Essay

1347 words - 5 pages

Critique 1: Failure of New CokeAccording to the American Marketing Association, brand is a form of representation of the consumer experience with a certain product or service and often refers to logo, name, and slogan. The factors influencing branding are the expectations of the consumer, design and product packaging, advertising, public relation, etc. (AMA, 1995). In today's world it is very important to develop and enhance the brand to be considered in the market. To have your product successful in market branding is very important which will deliver the message of the company about the new product, increase credibility, motivates the buyer and builds brand loyalty. Coca Cola as a brand is one of the most recognized brands in the world. Before launching any new product in the market they undergo various processes of understanding if the consumers will like their product or not. These market research are conducted surveys, focus groups, IDI (in-depth interviews), online forums etc. Knowing the market and their consumers has made Coca Cola a successful brand and has increased their brand loyalty. But in 1985, they were responsible for one of the most catastrophic mistake in the market by introducing a new product called New Coke. [1: AMA Dictionary, "Dictionary", Date Published: 01st January, 2005, Date Accessed: 23rd June, 2009, Link:]Coke and Pepsi are markets major competitors. Since 1960's Coca Cola's market share has been same but on the other hand Pepsi were expanding rapidly in the market. They repositioned their brand as youth which turned out to be really successful. Pepsi was capturing all the free market such as convenience store, super market etc whereas Coke had markets of restaurants, club etc because they already existed. Pepsi introduced the Pepsi challenge where the consumers were blind tasted between Coca Cola and Pepsi and they preferred the taste of Pepsi. Because of their competitor Pepsi they lost their major market share from 60% down to 24% by 1983. Taste was major factor behind the success of Pepsi. So it was important of Coca Cola to react as the market shares of Pepsi were constantly increasing. Therefore in 1985 Coca Cola introduced a new product called New Coke by stopping the original one as they did not want to reduce their sales volume, sales revenue and market share. But the results were shocking; the company had underestimated the number of consumers shifting from the old coke to new one. Coca Cola received more than 40,000 letters of complaint and more than 6.000 calls daily about how they want their old coke back. After 3 months, the company reintroduced the old formula by calling it the Classic Coke. In 1985, Pepsi were the leader in the competition but because of the fiasco, Classic Coke gained a lot of popularity and out sold New Coke and even Pepsi and they regained their number one rank. People who liked the New Coke bought the Diet Coke as...

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