The New Coke Fiasco - Market Research Lessons to be Learnt

By Colin Bates
Posted Saturday, October 23, 2004

Before Coca-Cola launched 'New Coke' they had invested US$4,000,000 in market research and undertook 200,000 blind taste tests. In all these blind (unbranded) taste tests the New Coke outperformed both Pepsi and existing Coke.

These blind taste tests were the basis of the launch of 'New Coke' in 1985.

The launch created a public outcry, with Coke receiving over 40,000 letters of complaint and over 6,000 calls a day to the company's '0800' phone number. After only 87 days the company responded to the public's demands and re-introduced the original Coke formula.

How had the Coca-Cola management got it so wrong?

" They had focused on the product, not the brand. " They had neglected the emotional value of 'Coke' to the American public. " They asked the wrong questions, so their research provided irrelevant information.

As one Coca-Cola official said at the time "we betrayed a national trust". Why? Because they never thought to ask American consumers how they would feel about a change to Coke, whether or not they would want a 'New Coke'.

This is a classic example of one of the biggest challenges in market research: knowing what you need to know to make a good decision.

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