TIME TESTED
New Coke’s Old Debate
WAS COMPANY’S 1985 BLOCKBUSTER A HISTORIC
MARKE TING BLUNDER, OR GENIUS? BY REID CREAGER
U
SING THE internet’s best-known search engine “The best soft drink, Coca-Cola, is now going to be
and typing the words “New Coke marketing even better,” Goizeuta said at the highly anticipated
disaster” recently yielded 2,470,000 entries— press conference. He said the consumer “made (the
another reason to remember that the Web is not the choice). We didn’t.”
ultimate authority on everything.
The bold launch by the makers of the world’s best- Sour aftertaste
selling soft drink came on April 23, 1985, around the Although blind taste tests showed the revised formula
time a modest publication called Inventors Digest was was preferred to Pepsi, public reaction to New Coke
unveiled. Coke, which outsold chief rival Pepsi 2-to-1 was even more bitter than the original drink’s taste.
in the 1950s, had seen that margin plummet to a 4.9 Criticism was most vehement in Atlanta, where the
percent lead by 1984. It announced a sweeter version changes were seen as a slap in the face to Coke’s
Donald R. Keough of its iconic product that had fi st been sold on May southern tradition.
(left) and Roberto
Goizueta (right) 8, 1886, at Jacob’s Pharmacy in Atlanta. A call center set up by Coke received about 8,000
formed a dynamic The big day was the culmination of a project with complaints a day. Seattle retiree Gary Mullins formed
duo that helped lead CIA-level secrecy, known by Coke insiders as “Project the organization Old Cola Drinkers of America in
Coca-Cola to huge
success in the 1980s Kansas.” Under the authority of CEO Robert Goizueta, May and reportedly received 60,000 phone calls.
and into the 1990s. marketing vice president Sergio Zyman and Coca- Talk show hosts including Johnny Carson and
Cola USA president Brian Dyson David Letterman ridiculed New Coke on their shows,
were to create a new flavor for with Letterman saying: “Coke’s decided to make their
the drink. formula sweeter. They’re going to mix it with Pepsi.”
This wasn’t just an American backlash. In his
2004 book “For God, Country and Coca-Cola: The
Defi itive History of the Great American Soft
Drink and the Company that Makes It,” Mark
Pendergrast wrote that Fidel Castro called New
Coke a sign of American capitalist decadence.
Few remember that New Coke actually
was selling well in most of the country
after the launch. But 79 days later, the
drink was pulled from stores.
Sales turnaround
Marketing experts and industry observ-
ers were quick to offer their postmortem
second-guessing of the company.
“They 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
Although blind taste tests showed the
revised formula was preferred to Pepsi,
public reaction to New Coke was even
more bitter than the original drink’s taste.
10 INVENTORS DIGEST INVENTORSDIGEST.COM
quickly,” said Sam Craig, professor of marketing and Above: Although this
billboard leveraged
international business at the Stern School of Business the proven psycho-
at New York University. logical draw of the
Coke President Donald R. Keough said the word “new,” Coca-Cola
learned quickly that its
company “did not understand the deep emotions of customers preferred
so many of our customers for Coca-Cola.” Turner claims that if the new product failed, Coke the tried and true.
Or did it? could bring back the old product with a cheaper
Above left: New Coke
The old saw that bad publicity is good public- sweetener—saving more than $93 million in produc- was brought back in
ity was confi med in a 2011 study by the Stanford tion costs—and have the good PR that came with it. limited quantities last
Graduate School of Business. It concluded that nega- If it succeeded, it would still bring back the original May in a cross-promo-
tion with the show
tive publicity can increase sales when a product or with the cheaper sweetener and have two successful “Stranger Things.”
company is relatively unknown. brands on the market that would take up more shelf
Th s also is true when the company is very well space in stores.
known. Six months after New Coke’s launch, Coke’s Still, no one can say factually that New Coke was
sales had increased at more than twice the rate of marketing genius, any more than it can be called a
Pepsi’s—a devastating blow to the rival that had fed marketing blunder.
reporters negative questions about the new version As Coke’s Keough said: “Some critics will say Coca-
at the April 23 press conference. (The introduction Cola made a marketing mistake. Some cynics will say
of Cherry Coke, around the same time as New Coke, that we planned the whole thing. The truth is we are not
was also a key factor in Coke’s rebound.) that dumb, and we are not that smart.”
Planned failure? INVENTOR ARCHIVES: JANUARY
Those claiming New Coke (brought back in limited
quantities last May in a cross-promotion with the January 23, 1943: The movie “Casablanca” was copyrighted, the
show “Stranger Thi gs”) was a planned disaster have same day it was released in the United States. Producer Hal Wallis had
plenty of ammunition. purchased film ights to the play the previous January.
When the company announced it was going back “Casablanca” was shot at Warner Bros. Studios in Burbank, California,
to the original formula, Peter Jennings of ABC News with the exception of one sequence
interrupted the highly rated daytime soap opera at Van Nuys Airport. Despite its inclu-
todd gipstein / corbis via get ty images
“General Hospital” to tell viewers. Coke embarked on sion of frontline stars Humphrey
a wave of public forgiveness and took full advantage. Bogart and Ingrid Berman, the
The vintage formula, branded as Coca-Cola for a movie was not expected to be
century, was rebranded as Classic Coke. A reintroduced anything special.
Its world premiere was on Nov.
product with the same old taste gave Coke a high fruc-
26, 1942, in New York City. The fil
tose corn syrup shot in the arm when it needed it most. was an unspectacular success in its
A marketing analysis by longtime Coke afici nado initial run but won the Academy
Joe Turner concluded that New Coke was a win/win Award for best picture.
for the company.
©
JANUARY 2020 INVENTORS DIGEST 11
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