New Coke, Coke Classic & The Pepsi Challenge
Sat, Apr 13 2019
I've been thinking about over-reactions lately, mostly due to the current trends in media & politics. It reminded me of a famous over-reaction in branding that happened in the '80s. Coca-Cola's reaction to the "Pepsi Challenge" advertising campaign.
In 1983 Pepsi launched an ingenious advertising campaign called the "Pepsi Challenge" where average people would take a sip of two different colas in a blind taste test then give their honest reaction about which cola taste better.
Pepsi won in a landslide and in the court of public opinion Coke was in trouble of losing its status as the Americas favorite soft drink. The advertisers at coke thought they had to do something. The Executives reaction was unprecedented, they decided to change the secret formula of Coca-Cola to compete with Pepsi in the taste test. The Numbers don't lie & the blind taste tests from both companies proved Pepsi taste better.
Coke updated its branding and formula to prevent Pepsi from taking over the market share as the taste of a new generation.Coke succeeded. Or so they thought.
In the new blind taste test, the "New Coke" was beating Pepsi at its own game. However sales were telling a different story, Cokes traditional customers were not buying New Coke. What happened?What happened was a huge over-reaction by Coca-Cola. While in taste tests a sip of Pepsi beat a sip of coke. Pepsi only won because a sip of Pepsi was sweeter than coke. In the long term most people still preferred an entire Can of Coke more than an entire Can of Pepsi.
Pepsi's marketing strategy shook up the executives at Coke and disrupted their confidence in a product that had been enjoyed for decades. Coke brought back the original formula a few years later as Coke classic and eventually phased out New Coke altogether.
Today Coke Classic the original formula still has the Lion's share of the soft drink market.