Did you know that the Coca-Cola Company has been around since May 8, 1886? Doctor John Stith Pemberton, a pharmacist invented the formula. He began selling the concoction for five cents a glass at a local Atlanta pharmacy (Atlanta Beginnings). It was not long before Stith’s concoction became the number one selling soft drink. A title Coca-Cola has continued to retain.
However, in the early eighties, the company brought on a new chairperson; under his headship, changes began to take place. One of those changes resulted in a decision to alter the original formula (New Coke). Its new name was New Coke. Was the New Coke an attempt to draw new prospects, or to retain the title of number one soft drink?
From the very beginning, Coca-Cola advertisements consisted of slice-of-life images showing Americans enjoying a refreshing “pause” (Coca-Cola at Home). Bovee and Williams both authors of advertisement state, “Sponsors find that advertising is most effective when it actually reflects the society and the market to which it is targeted.”
The Coca-Cola advertisement team was very particular in reaching that society. In a typical advertisement, one could enjoy images such as a youthful couple on a date enjoying the refreshing soft drink; or a middle-aged women stopping during her gardening to sip a cold Coca-Cola; or even a man on the golf course pausing for a drink.
The advertisers knew how to reach the people by utilizing the average American, in which most could associate with in their daily life. “In reality, the first responsibility of advertising is to aid its sponsor by informing, persuading, and reminding the sponsor’s customers and prospects” (Bovee and William). Advertising was Coca Cola’s route to informing the world of their refreshing soft drink. It was their door to reaching the consumer and it was paying off well.
However, in the early eighties, even with all their spectacular advertisement, Coca-Cola began losing ground to the Pepsi Cola Company. Coke at that time was selling double of what Pepsi sold; unfortunately, Coca-Cola sales slowly began to fall (Demott). Coca Cola’s market dropped from 22.5 % to 21.7 %, while Pepsi’s rose over 18 % giving the company approximately an 8 % increase of sales. “Each point represent[ed] about $200 million in sales” (Demott). It was during this time that Robert C. Goizueta became the new chairperson (Diet Coke and New Coke). His plan for the company was what he called “Intelligent risk taking” (Diet Coke and New Coke). He implemented a plan to introduce a new soft drink called diet coke. While working on this new soft drink, he had the idea of creating a new twist to the old Coca-Cola. This change resulted in what he called the “New Coke”, which was “the first change in the formulation in 99 years” (Diet Coke and New Coke).
The company began to implement secret taste tests of the new concoction, of which “the new one beat the old one by 55% to 45%” (Demott). In reference to these results, coke began to go full force with its new formula. The company had the idea that change would be a great way of boosting their sales lead over the “Archrival Pepsi” (Demott). “The company even created some misinformation. Coke told bottlers that it would soon put a 100th anniversary label on its packages and that they should begin clearing out stocks of preanniversary bottles” (Demott).
On April 23, 1983, Coke finally introduced the “New Coke.” Consumers did not take the news very well. Some people began storing the old formula in their homes. “In June 1985, Newsweek reported that savvy black marketers sold old Coke for $30 a case” (Ross).
Many outraged consumers began to voice their opinion of the New Coke. Sam Craig, professor of marketing and international business stated, “[t]hey didn’t ask the critical question of Coke users: Do you want a new Coke? By failing to ask that critical question, they had to backpedal very quickly” (Ross).
Most consumers were so fond of the original formula that they demanded its return. The Coca-Cola Company loosing further ground responded to those demands. On July 10, 1985, “eighty seven days after the new coke was introduced, the old coke was brought back in addition to the new one” (History of Coke). The Coca- Cola Company admitted to its marketing mistake. President Donald R Keough stated, “We did not understand the deep emotions of so many of our customers for Coca-Cola” (qtd. Ross).
This recognition, along with the return of the old Coca-Cola brought the Company nearly eighteen thousand calls of appreciation. After the return of the old coke, their market rose to the highest peak in twelve years. This was an outstanding success for the Coca-Cola Company.
As you can see, the New Coke was not an attempt to draw new prospects but rather a way of saving the company from slipping into second place under Pepsi. Perhaps the publicity of the New Coke itself, though negative, sparked a greater audience resulting in many more Coca-Cola drinkers.