New Coke Failure

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The Failure of New Coke Wright State University MKT 3500 - 01 Marketing Research By Nicole Fore Taylor Gilliam Ashley Hatton John Petry Abstract During the 1980’s Coca-Cola was faced with a potentially company killing problem. They were losing market share quickly to their competitors. Pepsi was stealing a portion of the younger generation with their advertising campaign, and they proved that consumers liked Pepsi better with the “Pepsi Challenge.” To combat their falling market share Coke decided to introduce a new formula. This formula was based on the fact that people preferred the sweeter taste of Pepsi. Once the new formula was finished, Coke conducted close to 200,000 taste tests to find out what consumers thought. New…show more content…
Another reason Coke was worried was that when given the choice in supermarkets consumers were choosing Pepsi. These factors were all considered in the decision to dramatically change Coke’s formula, which had been around for 99 years. The Research After Pepsi began conducting taste tests, which were showing more and more people were beginning to like Pepsi, Coke decided that it was time for them to also conduct some market research and see if there was anything they could change in their formula. The marketing vice president along with the president of Coke decided to send a team of marketers out on “Project Kansas” and conduct a nation-wide taste test. With the help of two Atlanta based market research firms, MARC and Kenneth Hollander Associates, Coke tested their new product in over 30 cities (Fierman, 1985). The results were overwhelmingly in favor of new Coke, 55% chose the new Coke over the old and 52% chose it over Pepsi. Overall, Coke spent two years and around $4 million dollars researching the new Coke formula. They used a variety of methods for research, such as: interviewing of around two hundred thousand people; blind taste tests; focus groups; and surveys. With the numerous methods used to test the new Coke formula, Coke was sure they had a winner with the new formula. During the blind taste tests consumers preferred the new, sweeter Coke. In the taste tests, 88% of people said they
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