Marketing Opportunity or Disaster?
Sunday, May 02, 2010
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.
Marketing Blog founder and top-selling author Michael Fleischner has been featured on The TODAY Show, ABC World News, and Bloomerg Radio. 
16 comments :
Michael
I am old enough to remember the New Coke fiasco. I'd find it really hard to believe that it was all a set-up to drive more original Coke sales. I am one of those who definitely preferred Coke to Pepsi and I was really upset with the new coke.
That said, they did a great job of turning it around. And if I recall correctly, their ads afterwards were quite good.
I, too, remember this - a bit! ;)
It was an amazing thing, from start to finish seeing such a HUGE PR "failure" turn into what it did! Nothing short of a miracle some may say, but you have to give the Coca Cola PR team credit for doing what they did. Oh to be a fly on the wall in that meeting!
Things this article brought back to mind:
*Clear Pepsi
*The Pepsi Taste Test Challenge
*2007 brought Coke's release of Ice Cucumber cola in Japan
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Great Blog! It's amazing how they were able to shift their clientele's opinion so quickly!
An interesting piece of the story is the "Pepsi Challenge." What researchers found was that the challenge was bust because people didn't drink a whole can of Pepsi. Turns out, after a whole can, people preferred the flavor of Coke. The challenge hurt Coke sales but Coke, in my opinion, overreacted. They could have easily waited it out or pushed a different campaign instead of spending millions on reformulating the product - just to go back to the original formula.
Impressive post! Well, it is always important to understand market needs, rather than to attempt to "force" people to buy your products and services because you think they are better than anything else available.
Everyone's life is filled with negatives and positives. We try to deal with them everyday. But if you have negatives, the best way to deal with them is to convert them into positives. In other words, take the glass half empty and see it as half full instead. Some people have this tendency by birth, but for some it has to be cultivated.
I'm not old enough to remember new Coke, but I;ve heard from family that it was terrible. I doubt that they launched it knowing it would be a failure, but like you, I think that history proves that they did an A+ job turning a disaster into hype about the original product.
Thanks a lot for a bunch of good tips. I look forward to reading more on the topic in the future. Keep up the good work! This blog is going to be great resource. Love reading it
Best article, good points discussed in this article.
I am not old enough to remember the New Coke launch but am interested to learn more. However, I'm disappointed that your link to the ABC World News "marketing interview" link in the post above was broken. Maybe it's just my computer?
Great Story! It’s awesome to see how a negative was turned into a positive through good marketing strategy.
Haha, that's awesome. It's posts like these that put ideas into a context that we can relate to, such as our favorite sodas, that really improve our skills.
I agree how to turn negative feedback into a positive one. Use these negative comments as your inspiration to change for the better. Instead of sitting down and feeling bad because of the comment, do something to change the area on which you receive your complain.
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This is first considered in the marketing mix as it all depends on it. This can be a physical product or a service that the corporation is offering to the public.
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