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Sunday, May 02, 2010

Last week I had a great opportunity to talk to ABC World News about the 25th anniversary of New Coke.  During the marketing interview I couldn't help but think about what it must have been like for the marketing team immediately after New Coke was launched.

For those of you who weren't old enough to remember one the of the most significant marketing events of all time, let me explain what was happening twenty five years ago.  There were two major brands, Coca-cola and Pepsi.  Pepsi was the new kid on the block and they were eating Coca-cola's lunch.  They still had a long way to go but were making significant headway.  The Coca-cola guys (and ladies) said, "We need to do something significant if we are going to maintain our market share."

Well, something significant they did indeed.  Coca-cola reformulated their beverage.  This would soon become one of the most significant marketing case studies of all time.  The reason being that much of the market research said that consumers would prefer the new formulation and would therefore consume more Coca-cola.  However, it appears as though Coca-cola didn't take notice of some of the opinions of die-hard Coca-cola drinkers who were resisting a change. The result - disaster (or in reality opportunity).

By ignoring the voice of their best customers, New Coke was destined for failure.  As marketing professionals, we love data - especially when it serves us.  And although the majority of research showed users preferring the New Coke formula, loyal customers weren't supportive.  When the new formula was introduced there was a backlash and the biggest marketing launch of all time was over before it even started.

It wasn't long until Coca-cola started planning for a relaunch in the form of Coca-cola Classic.  They didn't want to give up on New Coke all together, but clearly they had to do something.  There are stories of Pepsi closing their offices the day that New Coke launched professing - "We Won!"  They knew they had Coca-cola on the run, but they underestimated the power of marketing.

The marketing team and executive teams at Coca-cola responded quickly and in just 3 months, relaunched the original formula saying, "We heard you and have brought back the original."  People flocked to stores and bought Coca-cola in droves.  Even Pepsi fans were getting in on the action to taste the formula that everyone wanted back so much.  

I'd like to give the marketing guys at Coca-cola all the credit.  Did they know that the New Coke would be a failure?  Were they planning a relaunch of the original formula since day one?  Was this a PR stunt?  We'll probably never know!  Regardless of whether or not this was planned, the response by Coca-cola was an opportunity created from near disaster.

The next time you launch a product that doesn't do well, remember Coca-cola and how they managed to turn a negative into a positive.  Today Coca-cola is on top of the Cola Wars and continues to be the beverage of choice for many throughout the world.  Your marketing can be effective when you do your research, look at it objectively, and utilize your best customers for product improvement ideas.  Doing so is nothing short of refreshing!


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