New Coke Blunder: The Pepsi Clone People Liked But Didn't Want

By | May 23, 2023

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Sources: Ad Age;

In April 1985, Coca-Cola took a huge risk with the introduction of New Coke. It had a refreshing taste that was closer to that of cola juggernaut Pepsi -- and the public revolted. Angry consumers felt they were being played by a company that was claiming to solve a problem that didn't exist. The launch of New Coke is one of the most famous debacles in the history of marketing, and exposed the limitations of market research, which said all along that people would love New Coke.

When then Coca-Cola Company chairman and CEO Roberto Goizueta sauntered in front of a crowd of press at New York City’s Lincoln Center he described New Coke as a "smoother, rounder, yet bolder—a more harmonious flavor" than the original Coca-Cola formula, making it sweeter than the company's number one competitor, Pepsi.

It turned out that consumers had a bond with Coca-Cola that went much deeper than taste. The introduction of New Coke sent them into a panic, as they were far more upset at the loss of the old formula than excited about trying a new and improved version.

As sales of New Coke went into a freefall the Coca-Cola Company did the only thing that they could do, they brought back the original formula as Coca Cola Classic a few months later and found success. Success might be too underwhelming of a term. The Coca-Cola Company scored a resounding win with the return of the most beloved soft drink of the 20th century, but not before the company was nearly brought to its knees.

New Coke was a product of the cola wars

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source: coca-cola company

By 1985, Coca-Cola's dominance of the cola market was quickly dissipating. Thanks to both the "Pepsi Challenge" (a blind taste test held at shopping malls) and a waning interest in Coca-Cola, the company behind the formerly beloved soft drink felt that they needed to do something to shake up public interest and to jack their sales up to numbers not seen since the 1960s.

In the midst of the "cola wars" Coca-Cola lobbed a grenade into soft drink battlefield with the release of New Coke, a sweeter version of the original drink. The Coca-Cola Company allegedly performed more than 200,000 taste tests before launching New Coke. The company's numbers showed that the public would like the taste of New Coke, but Coca-Cola didn't take into consideration how people actually feel about the classic soda.

Coca-Cola learned an important marketing lesson in a very public way. Coke drinkers were so attached to the customary formula that they wouldn't -- couldn't -- have an open mind about a new and, according to market research, improved version. The taste of New Coke wasn't the issue. The problem was that the introduction of New Coke left loyal customers feeling that the company was taking something away from them for no apparent reason. Coke drinkers felt betrayed.