The New Coke
In 1985 it seemed as if
Coca-Cola was on its way to
losing the
cola wars. The
cola wars consisted of Pepsi and
Coca Cola fighting for the number one spot in the soda industry. Yet, an event that seemed to be
cokes [?? Coca Cola's ?] downfall in the
cola wars
proved to elevate Coca Cola [proved to the factor that led ] to a whole new level of sales. It seemed almost that the consumers
' near loss of their favorite beverage made them appreciate it that much more, and made the
Coca Cola Company that much more successful.
What led to this catastrophic decision to take the original
Coca Cola product off of the market and how did
Coca Cola pull out of it is the question this paper will examine.
Coca Cola has been a staple in American society ever since it was invented in 1886 by Dr. Pemberton. This was a product that
, whether Americans liked it or not
, they knew the taste they were getting
. The
Coca Cola formula had not been changed for nearly
99 years up till 1985. Besides the taste, another factor that remained stable throughout a large portion of
Coca Cola history
up until 1981 a few years before 1985 [omit] was the fact that the company was led by Robert Woodruff. Woodruff accomplished much during his reign
. As stated by Elliott, “
He was head of the
Coca Cola Company from 1923 until 1984, during which time sales increased from 31 million a year to $7.36 billion.” Woodruff clearly knew how to run a profitable company and
one thing he was insistent on is, [omit]] as stated by Allen, “during his lifetime he had insisted on keeping the same formula.” Because of Woodruff’s consistency in bringing the same quality product to the market time and time again,
Coca Cola customers never considered that they were at risk of losing their favorite product.
Coca Cola had become a staple throughout America as can be seen when Bell states [repetition - change the sentence], “People in nearly 200 countries drink more than one billion eight
-ounce (237ml) servings of
Coke products a day”. It would seem unimaginable to
bring [take] this popular of a product [so popular a product/ a product as popular this off the market. Not only
was Coca Cola profitable but it was full of tradition, and people do not let tradition go that easily. It would seem like market suicide to
bring[take] your most profitable producer off of the market.
Yet, with Roberto Gizueta taking
over the company in 1981
, things were not looking too stable
for the company [repetition - omit one]. There had been a time where
Coca Cola did not have any real competition
. This is portrayed by Haig when he states, “In the late 1950’s, Coke outsold Pepsi by a ratio of more than five to one”. These times were over by the time Gizueta took the lead position at
Coca Cola. Pepsi and
Coca Cola’s ongoing competition about who had the best soft drink was coming to a head. Based on taste tests it was beginning to look as if the customers might really prefer Pepsi. These taste tests were not a joke as Lee states, “In 1975, Pepsi began airing a series of television commercials, called the Pepsi Challenge
, that depicted people looking astonished when, in blind taste tests, they picked Pepsi over Coke. And the truly terrible thing was that your own tests confirmed that the Pepsi Challenge wasn't funning. People seemed only to prefer Coke when it was labeled Coke.” This advertising move by Pepsi really worried
Coca Cola. In fact
Coca Cola had a right to be concerned
. As Pendergrast states, “In 1984,
Coca Cola lost one per cent of its market share, while Pepsi-Cola gained one and a half points.” The significance of this loss is better demonstrated as stated by Allen, “Each percentage point lost or gained meant 200 million dollars”. So to
Coca Cola this was a huge loss. Even more concerning was the fact that
, as stated by Pendergrast, “The competition already sold more in the supermarkets and it was advancing on Coke’s superior fountain and vending sales.” It appeared as if customers were getting bored with
Coca Cola and Roberto Gizueta was not one to sit by idly as his company took care of itself.
Coca Cola may have been the drink that had brought the company this far but perhaps it was time to readjust to the times. Gizueta seemed to think coke might be holding the company back. If the taste tests said Pepsi was better, why not make a product that tasted better
than both?
When running a successful business it is important to keep the customer happy. If customers were no longer finding the taste of
Coca Cola appealing
, why not change it? This is how Roberto Gizueta felt in the year before his major 1985 decision. Gizueta thought that the only thing that went into the huge success of
Coca Cola was its taste. Before making any sort of decision about changing the
original formula, Gizueta wanted to be sure this was the right decision
, as Hays portrays, “
Coca-Cola's most senior executives commissioned a secret effort named
'Project Kansas
', headed by marketing vice president Sergio Zyman and Brian Dyson, president of
Coca-Cola USA, to test and perfect the new flavor for Coke itself”. Gizueta believed
that if he could find that winning flavor
, then he could turn the
Coca Cola Company’s losses around without a problem.
In order
to come to any sort of conclusion Smith describes a lengthy process
: “This historic decision was preceded by a top-secret $4 million survey of 190,000 people, in which the new formula beat the old by 55 per cent to 45 per cent.” This new formula was to have a sweeter taste that could rival its arch
-enemy, Pepsi. In fact, Pendergrast states, “The results of that were strong — the high fructose corn syrup mixture overwhelmingly beat both regular Coke and Pepsi.” With results such as this Gizueta believed the new
Coke was the answer to
Coca Cola’s slump. This was not going to be just an additional product
; Gizueta planned for the new Coke to replace the old
Coke as he stated, "New Coke or no Coke".
Coca Cola was going into this venture with one hundred per cent confidence. Yet, most taste testers did not realize that when they picked the new formula over
traditional Coke, they were voting to take
Coke completely off of the market. Consumers thought they would have the new
Coke alongside the old one, yet Gizueta saw no need for that. Here was a formula that would make people forget all about
old Coke, so good was this new product in comparison.