New Coke: The debacle turned blessing 39 years ago

Source #2: Coke company website

Thirty-nine years ago today, one of the most famous mistakes in business occurred. New Coke was introduced April 23, 1985.

Roberto Goizueta, Coca-Cola’s CEO, announced New Coke saying this was, "one of the easiest decisions we've ever made.” (Source)

Seventy-nine days later, the original Coke returned. New Coke faded into oblivion until it was discontinued years later.

New Coke is viewed by marketing gurus as one of the biggest marketing blunders in history. But the numbers reveal a different side of the story.

The introduction of New Coke made sense. Coke was a big company in 1985, with access to all the research. You know they did taste tests, surveys, and focus groups about the product and promotion. They did not make a gigantic move like removing a 100yo beverage without considering every nuance.

The data was clear:

⚫ Coke was losing market share to Pepsi and needed to do something to gain share.

⚫ Customers clearly liked New Coke better than Pepsi and original Coke in pre-launch taste tests.

⚫ The introduction of New Coke increased Coke’s revenue…for a few days.

Then the backlash began. There were thousands of calls daily to headquarters, lawsuits, community groups, protests. The changed soda formula was talked about repeatedly on every news channel and at kitchen tables and office water coolers all over the country.

Loyal customers weren’t mad about New Coke though.

They went berserk over the removal of original Coke. With all the hours and dollars spent preparing for the launch of New Coke, the company had not expected that level of backlash.

What Coke missed was not about the product or marketing.

What Coke missed was how their customers felt about their product.

Customers felt betrayed when the original Coke was replaced. The company underestimated their relationship with their customers.

Company president Donald Keough said at the time there had simply been no way to gauge the “deep and abiding emotional attachment to original Coca-Cola felt by so many people.” (Source)

There was so much backlash about removing original Coke, that ABC’s Peter Jennings interrupted soap opera General Hospital to announce when it returned less than three months later.

Customers cheered for the return of the original Coke, now labeled as Coca-Cola Classic. Wall Street was happy too, as shares of Coke reached their highest levels in twelve years on the news of the returning beverage. (Source 3)

The biggest mistake in the history of marketing turned out to be a blessing for Coca-Cola. Their customers were bonded with the company deeper than before New Coke. In fact, the debacle turned out so well for the company, there are conspiracy theorists who believe that was the plan all along. Keough denied that was the plan though, saying they weren’t smart enough to pull that off.

On this anniversary day, think about Coke’s decision to launch New Coke, remove original Coke, and bring back the original.

⚫ What can you take away from their experience?

⚫ What does it teach about resilience and mistake management?

⚫ What is your company considering that could use a fresh look to be sure nothing is missed?

⚫ What errors have happened within your company that could use a review for lessons learned?

⚫ What is the bright side of a major change you have been through?

The bright side for Coke was the deepened bond with their customers. They haven’t taken that for granted in the 39 years since.

So, congratulations to Coke for New Coke!

May all of your mistakes turn out as well.

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(SOURCE 1: What We Can Learn From Coca-Cola’s Biggest Blunder, Time Magazine)

(SOURCE 2: New Coke: The Most Memorable Marketing Blunder Ever?, Coke Website)

(SOURCE 3: Introducing New Coke Case Study by Susan Fournier, Harvard Business Review, 2001)