In a competitive business environment, there is a constant battle for market share
and brand dominance. And occasionally even large competitors make very public errors. The rivalry between Pepsi Cola and Coca-Cola is almost as old as time itself. Pepsi have always been No. 2 but they certainly rocked the boat when they introduced the “ Pepsi Challenge” – blind tasting to see if consumers could tell the two brands apart. Much to the horror of Coca-Cola’s senior executives, most participants preferred Pepsi’s sweeter products. The bait was set.
In the 1980s Pepsi continued their assault by not taking only the Pepsi Challenge global but also further strengthening their position with the help of celebrity endorsements aimed at the younger end of the market. Coca-Cola were losing ground not only to Pepsi but also to other drinks in the market.
The problem as far as Coca-Cola was concerned came down to taste – the Pepsi Challenge highlighted that time and time again – so Coke took what could be seen as a logical next step… they tinkered with the recipe.
What Pepsi had succeeded in doing was to bait Coca-Cola into competing on the one issue they wouldn’t win. Coca-Cola started to work on a new formula and on 23 April 1985 (doing my maths, that’s exactly 25 years ago) “New Coke” was launched. A few days later, production of the original Coca-Cola was stopped. This two-pronged decision has since been referred to as the biggest marketing blunder of all time. Consumers demonstrated their outrage by boycotting New Coke. Even Pepsi realised the magnitude of the error before Coke did and exploited the situation. They ran a TV advert featuring an old man sitting on a park bench looking devastated, staring at his can of coke : ‘ They changed my Coke; I can’t believe it”
Coca-Cola seriously underestimated the power of their brand. Coke, it seemed, had a passionate, loyal and committed market that didn’t care whether Pepsi tasted better or not – they would never switch. On 11 July 1985, Coca-Cola chairman Roberto Goizueta announced at a press conference: “We have heard you!” New Coke was scrapped. The reinstatement of the original recipe was considered so significant that it appeared in a news flash on ABC News and other US networks and has not been touched since.
and brand dominance. And occasionally even large competitors make very public errors. The rivalry between Pepsi Cola and Coca-Cola is almost as old as time itself. Pepsi have always been No. 2 but they certainly rocked the boat when they introduced the “ Pepsi Challenge” – blind tasting to see if consumers could tell the two brands apart. Much to the horror of Coca-Cola’s senior executives, most participants preferred Pepsi’s sweeter products. The bait was set.In the 1980s Pepsi continued their assault by not taking only the Pepsi Challenge global but also further strengthening their position with the help of celebrity endorsements aimed at the younger end of the market. Coca-Cola were losing ground not only to Pepsi but also to other drinks in the market.
The problem as far as Coca-Cola was concerned came down to taste – the Pepsi Challenge highlighted that time and time again – so Coke took what could be seen as a logical next step… they tinkered with the recipe.
What Pepsi had succeeded in doing was to bait Coca-Cola into competing on the one issue they wouldn’t win. Coca-Cola started to work on a new formula and on 23 April 1985 (doing my maths, that’s exactly 25 years ago) “New Coke” was launched. A few days later, production of the original Coca-Cola was stopped. This two-pronged decision has since been referred to as the biggest marketing blunder of all time. Consumers demonstrated their outrage by boycotting New Coke. Even Pepsi realised the magnitude of the error before Coke did and exploited the situation. They ran a TV advert featuring an old man sitting on a park bench looking devastated, staring at his can of coke : ‘ They changed my Coke; I can’t believe it”
Coca-Cola seriously underestimated the power of their brand. Coke, it seemed, had a passionate, loyal and committed market that didn’t care whether Pepsi tasted better or not – they would never switch. On 11 July 1985, Coca-Cola chairman Roberto Goizueta announced at a press conference: “We have heard you!” New Coke was scrapped. The reinstatement of the original recipe was considered so significant that it appeared in a news flash on ABC News and other US networks and has not been touched since.
Coca-Cola was baited in fighting a battle it never needed to enter. It was after all, ‘the real thing”.
1985 Coca-Cola commercial after reverting to old recipe.
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