Essay New Coke

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Table of Contents

Topics Page No.

1. Introduction 1
2. The Reformulation 2
3. How had the Coca-Cola management got it so wrong? 3

4. Were there less drastic alternatives? 5

5. Understanding your Loyal Customer 6

6. Conclusion 7

Reference 8

1. Introduction

Coke was invented by Dr. John Pemberton, an Atlanta pharmacist and his three-legged brass pot all the way back in 1886; by 1985 Coke was closing in fast on its centennial anniversary. (Cook, 2002) Coke along with the legendary chairman Roberto C. Goizueta had witnessed a remarkable set of accomplishments during the 1980's. There were some creeping problems, however. The 87-year old rivalry between Coca-Cola, the
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3. How had the Coca-Cola management got it so wrong?

The one central mistake in Coca-Cola's decision to change the formula was maximization. When Goizueta became chairman in 1981, he was determined to be the chairman of change. His aggressive attitude helped reinvigorate what had become a sluggish company. Goizueta started shattering tradition early in his tenure. Putting the sacred Coke name on a new product for the first time, he had introduced diet Coke in 1982 followed by another new product Cherry Coke in early 1985. (Bastedo & Davis, 1993) Goizueta had moved the company aggressively and successfully into new fields, buying Columbia Pictures in 1982. (Bastedo & Davis, 1993) Goizueta and the other executives were getting caught up in the success of their previous changes and decided to make one grand decisive move to recapture the soft-drink market they were losing to Pepsi. Coke's only deviation from the standard sequence in market research was that the quantitative survey of individuals appears to have been done before rather than after the focus groups. The results of the focus-group phase and the survey conflicted. Although both the focus groups and the survey had provided indications that there would be consumer dissatisfaction, the survey results indicated that this dissatisfaction would be limited to a small segment of the market; the focus groups suggested the dissatisfaction would be widespread. The researchers trusted
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