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Group9 Newcoke 120902000256 Phpapp02 PDF

Coke introduced New Coke to compete with Pepsi on taste, playing into Pepsi's strategy of using taste tests to gain market share. However, Coke failed to recognize that it had built strong brand equity as an iconic American symbol rather than just another soft drink. Consumer reaction showed that changing Coke's formula disrupted its emotional and cultural meaning. Though initial tests showed New Coke outperforming Pepsi, sales declines forced Coke to retract New Coke and re-release Coke Classic after just 79 days. Coke may have rushed its decision without fully understanding consumer sentiment or giving New Coke more time and marketing support to succeed. Ultimately, Coke realized it had strayed from its core symbolic brand identity in an attempt to compete on Pepsi's terms

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76 views

Group9 Newcoke 120902000256 Phpapp02 PDF

Coke introduced New Coke to compete with Pepsi on taste, playing into Pepsi's strategy of using taste tests to gain market share. However, Coke failed to recognize that it had built strong brand equity as an iconic American symbol rather than just another soft drink. Consumer reaction showed that changing Coke's formula disrupted its emotional and cultural meaning. Though initial tests showed New Coke outperforming Pepsi, sales declines forced Coke to retract New Coke and re-release Coke Classic after just 79 days. Coke may have rushed its decision without fully understanding consumer sentiment or giving New Coke more time and marketing support to succeed. Ultimately, Coke realized it had strayed from its core symbolic brand identity in an attempt to compete on Pepsi's terms

Uploaded by

bhartia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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INTRODUCING NEW COKE

A GROUP 9 PRESENTATION
Brand Equity Model shows the superior
position enjoyed by Coke…
SWOT Analysis shows Coke’s situation…

STRENGTHS OPPORTUNITIES
• Positive customer-based brand equity • Younger generation, the untapped
• Deeply imbibed in the American culture market
• Huge loyal customer base • Build on their considerable loyal base
• Horizontal Growth – Diversification

WEAKNESSES THREATS
• Too much emphasis on legal issues • Complacency towards competition,
• Loss of focus; failed diversification never been tested against a rival
attempts
• Fragmented leadership; no strong
leader
Leadership
High earnings / high potential
Niche
Low earnings / high potential
(Differentiation / Relevance / Energy)

DEREK
Energized Brand Strength

DEREK

Declining DEREK
High earnings/ low potential

Eroded
Seriously challenged

New

DEREK DEREK

Unfocused

DEREK

Brand Stature
( Esteem / Knowledge )
NEW COKE INTRODUCED…
 PEPSI’s reaction – Epitome of good marketing
strategy, and making the most of an opportunity
(crafting strategy)

 Consumer Reaction – Difference between taste tests


and actual reactions – extent of COKE’s symbolic
value

 Retraction by COKE – Sales went back up…


What went wrong?
Should they have leveraged their symbolic value,
rather than playing Pepsi’s game (taste)?
 Strong & Loyal Customer base, emotional connect.
 Taste was never the focus, or for that matter, the issue

 Pepsi focused on taste – “Pepsi Challenge”


campaign
Published results of Blind Taste Tests

 Coke played into Pepsi’s hand, by competing on


taste
 Coke tried to compete with Pepsi on their turf
 Pepsi ensured customers saw this as Coke admitting
defeat
Was this a case of Marketing Myopia?
 Coke was a “national institution” of America

 Coke was a symbol of American culture rather than


just a refreshing drink

 Coke should have realized they were more than just


a beverage for the American people.

 Changing the taste (even to improve it) was a short-


sighted strategy.
Did Coke rush their decision to withdraw?
 Initial decision was to wait out till the end of the year

 Early June - New Coke beating Pepsi in Blind Taste


Tests

 Mid June – Sudden downturn, Pepsi overtakes New


Coke

 July 11 – Coke is back!!

 “…only 1% of those who did not like the reformulation were


switching brands…” – was the situation as drastic as it was
perceived to be?

 2 months – Is it enough for people to get used to a new


drink after 80 years of the same taste?
Should Coke have gone for more
advertising?
 Pepsi was aggressively advertising “Coke admits
defeat”

 Coke cut their advertisement budget in half

 Should they have gone for more Aggressive


Marketing, to divert attention from Pepsi’s strategy?

 Or did they have to reduce the exposure of their


brand?
Or did they really fail, after all?

“… we’re not that smart, and we’re


not that dumb”!!!
THANK YOU

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