THE $34 MILLION DOLLAR

MARKETING

MISTAKE

THAT YOU NEVER WANT TO MAKE

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One of my first memories of reading and writing (for fun) was when I was 12. I can recall consuming a book a day and writing short stories, diary entries and doodling my name with “Rock Super Star” next to it.  I was mad crushing on Jon Bon Jovi at the time, so being a rock legend was my dream in 1985.

The Coca-Cola Company had a dream that year too.  They were certain that once and for all, this dream of being and staying number one, was about to be a done deal.
They introduced “New Coke.” Do you know what marketing experts at the time said about it? They said it was the worst marketing blunder in history.
At the time, Coca-Cola was a 99 year old company looking for a way to update itself and they chose to do so by changing the original formula of their iconic soft drink. They created a sweeter version that had been preferred in taste tests, but fans of the brand protested the decision in an overwhelmingly negative response. Within three months Coca-Cola announced it would return to the old formula and tried to re-brand the drink as Coca-Cola “Classic” and New Coke quickly disappeared. http://www.thepeoplehistory.com


And classic it has remained to this day. Thank you sweet baby Jesus for that! I’ve never been a Pepsi fan, so Coke recognizing their mistake and quickly correcting it made and still makes me happy to this day. I love me some ice cold Coke!

So, what was all the ruckus and “things need to change around here” all about back in ’85 anyway?

The year before, Coke discovered that Pepsi’s market share was increasing and if it continued it would overtake Coke by 1990. They surmised that Pepsi had an advantage based on a few things.

  1. In 1975 (talk about old data) they introduced the “Pepsi Challenge” – a blind taste test which showed most Americans preferred Pepsi to Coke by a margin of 53% to 47%. This was a result of Pepsi being sweeter than Coke as it contained more sugar.
  2. Pepsi had Michael Jackson and positioned itself as The choice of the new generation. (if they only knew :/)
  3. They lost their Burger King account. Pepsi was seen as new and exciting, while Coke was old and “traditional”. (Mcdonald’s fries are better anyway)


Do you know what happened within days of releasing “New Coke”? They received over 400,000 phone calls and letters from customers that were not at all happy with the ousting of classic Coca-Cola. Imagine now, in the age of Twitter, Influencers and email. That number would likely be in the millions.

They instantly knew they f*cked up!

Here’s what happened:


In an attempt to grab more market share, they tried to innovate an existing product. A product that had been a favorite, a staple, a treat, a classic for almost a CENTURY.

For years, Coca-Cola had been telling consumers that Coke was “it” and “the real thing”. Now, New Coke was giving “it” the finger by changing the formula and discontinuing old Coke.

As it turns out, that middle finger crushed the identity and symbolic meaning a lot of loyal Coca-Cola drinkers (especially in the US) had. It was a legitimate emotional loss. People had been consuming Coke since childhood and had memories attached to it. Now, with it scarce and eventually GONE, people were like wtf?!

Coke’s supposed market research ignored the importance of identification and brand loyalty.

Fun fact: When old Coke was about to be no more there were stories of people going around and buying up old stock and selling it on for up to three times the normal price.

Not so fun fact for Coke: They lost $30 million in unused “New Coke” concentrate and were out another $4 million spent on advertising. That’s a costly mistake. Wonder how many heads rolled on that one…

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“We simply call it the surest move ever made. I’ve never been as confident about a decision as I am about the one we’re announcing today.” – Coca-Cola president Donald Keough (about New Coke)

Meanwhile….on the New York Stock Exchange, shares of Coca-Cola dropped.

Pepsi gave its employees the day off and took out full-page newspaper ads that read, ‘‘After 87 years of going at it eyeball to eyeball, the other guy just blinked.’’

Ohhhh snap. Someone got served.

Don’t be that guy. Don’t second guess your classic taste.

You have your own style and flavor and people like you.

Who gives a shit if the other guy seems a bit flashier.

Don’t blink.