This month in history.
On April 23 1985, the Coca Cola Company committed what is widely considered to be one of the greatest marketing blunders of all time. On that day, they announced a change to the formula for the world’s most popular soft drink for the first time in 99 years. The move was intended to re-energize its Coca-Cola brand, following years of stagnating sales.
Despite being preferred in taste tests of nearly 200,000 consumers prior to launch, “New Coke” was a marketing disaster. What these tests didn’t show was the bond consumers felt with their Coca-Cola – something they didn’t want anyone tampering with! It provided a case study that is still commonly used in marketing courses to this day.
Coke chairman and chief executive officer Roberto Goizueta bore the brunt of the blame for the ill-advised move. There were protests, thousands of calls a day to the Coke consumer hotline, and widespread hoarding of “old coke”. One disgruntled customer sent a letter addressed only to “Chief Dodo, The Coca-Cola Company.” Bob Goizueta was most upset that it actually found it’s way to him! Another person wrote to him asking for his autograph — because, in years to come, the signature of “one of the dumbest executives in American business history” would be worth a fortune.
The firestorm ended four months later, with the return of the original formula, rebranded Coca-Cola Classic. The two brands were sold alongside each other for some time, and had distinctly different advertising campaigns. In 1990, the name of the new Coca-Cola was changed to Coke II. It was finally discontinued in 2002.
Incidentally, the whole fiasco didn’t hurt Coke’s share price at all. It rose by 37% during 1985. Suddenly everyone was talking about Coca-Cola, realising what an important role it played in their life, and it revitalised sales. So in the end, it wasn’t the marketing disaster it is widely assumed to be.