A successful product does not guarantee a successful launch
Remember New Coke? (If not, ask your parents.)
The year was 1985, and Coke was starting to lose ground to the sweeter-tasting Pepsi. In response, the folks at Coke developed a sweeter version of their original product and held blind taste tests across the country. Much to the delight of Coke executives, time and time again, the average regular Coke drinker blindly selected the not-yet-released New Coke over both the original Coke and rival Pepsi! Woohoo! What a story this would be!
Unfortunately, this is where things went sideways for Coke. Rather than add a new soda to their product line using the new formula, the marketing and executive teams at Coke made the very risky decision to abruptly replace their original product with the new one. And when I say “abruptly replace,” I mean they stopped production of the old formula the same week the new product was launched!
On the marketing front, Coke spent untold millions launching the product. Not only did they bombard the airwaves with advertising, but they orchestrated a nationwide media blitz, brought in numerous high-profile celebrities to endorse the product, and held in-person events at iconic locations like the Statue of Liberty and Lincoln Center. It was a product announcement unlike any other, and few Americans were left unaware of the release of New Coke. To this day, I would argue that the only consumer product launch with a size and scope comparable to New Coke’s was the release of Apple’s first iPhone.
To Coke’s credit, much of the country was pleased with the new formula and championed its sweeter taste. However, a significant segment of society viewed this forced change as a personal affront, and they were about to make product marketing history.
Soda, Pop, or Coke
One can’t tell the story of New Coke without talking about the South. Back when I was a freshman in college, I made a dear friend named Katie from Austin, Texas. Katie and I were part of a group of four girlfriends with fairly diverse backgrounds: one from Texas, one from Canada, one from Michigan, and I was from Missouri. I vividly remember the first time the four of us went to dinner together, and Katie offered to pick up our drinks, asking us, “What kind of coke do y’all want?” Nicki, Annie, and I looked at Katie like a dog who just heard a high-pitched sound. Huh? Why was she assuming our only choices were Coke and Diet Coke? Weird.
“I don’t want a Coke; I’d like a Sprite, please,” I told her. That’s when we learned that southerners commonly used the word “coke” to refer to all carbonated beverages, which people from St. Louis, Missouri, call “soda” and those from Michigan and Canada call “pop.” Apparently, southerners have been calling all fizzy drinks “coke” since the turn of the century when Coca-Cola was first invented in Georgia. Coke is part of the South’s regional identity, and no one could just replace Coke with New Coke without hearing from the South.
Backlash
The backlash from the southern U.S. market was intense and even made the nightly news in some regions. People were furious and wanted their voices to be heard, so they did what everyone did before social media existed: they made phone calls and wrote letters. A lot of them. In the weeks following the formula change, Coke received 40,000 letters and phone calls from angry consumers demanding that Coke bring back the original formula.
To really understand where things went wrong, we must backup to the results of those blind taste tests. What those Coke executives didn’t know was that their market research team may have measured the taste preference of the consumer, but they failed to measure—or perhaps measured and failed to report—the product loyalty of the consumer and the potential impact of that loyalty. In other words, by ignoring whether their consumers were willing to give up original Coke for a “better” version, they made a blunder that is widely considered to be the most public product marketing mistake in modern history. It seemed that product loyalty could not be bought.
Fast forward to three months post-launch, and Coke executives retook the stage to apologize to customers and announce the return of original Coke. This news was so significant that some television networks interrupted regular programming to make the announcement. In a mea culpa, Coca-Cola president Donald Keough proclaimed, “Our boss is the consumer (and) we want them to know we’re really sorry.”
Entire books have been written on this subject, and my summary only scratches the surface of the story of New Coke. But as a marketing strategist, my takeaways are these:
- Product loyalty and product preference exist separately and must be measured separately.
- Do not spend a dollar on advertising if you haven’t spent significant dollars on consumer research.
- Finally, no amount of marketing or advertising spend can guarantee a successful product launch.
Cheers.
