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BY

ABARAJITHAN

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Case DescriptionCase Description

y Pepsi Challenge

y

Process of Introducing New Cokey Reintroduction ofCoke Classic

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Coca Cola secret formula is amongst most well guarded

secrets with no more than 3 people knowing about it at

any time

Investment in distribution and marketing led to rapid

advancements in profits

The present perceived caricature of the Santa clause is

the gift of coca cola to the world

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In 1937 coke was offered the chance to buy flailing

Pepsi cola which they rejected

Coke supported the American forces during the secondworld war by setting up bottling plants in North Africa

and Italy.

Coke started diversifying its product range with the

acquisition of Minute maid and Duncan foods in 1964.

Coke distributed in 200 countries and consumed 303

million times a day

ABOUT COCA COLA..CONT

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1970 1975 1979 1984

Coke 28.4 26.2 23.9 21.7

Pepsi 17 17.4 17.9 18.8

NEED OF LAUNCHING NEW COCK

Aggressive marketing by Pepsi resulted in a decline in cokes

market share

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The new cokeThe new cokeIn early 1985 aided by the biggest consumer preference test ever

with responses from nearly 2 lakh people coke zeroed in on its

formula for new coke

Preference

forCoke

Preference

for pepsi

New Coke 55% 45%

Goizueta and president Donald Keoughtoasting New Coke.

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Bottlers and franchises

Taste Factor(ChallengeChampaign of pepsi)

Depleting Customer Base

Big Customer Base

Customers Psychologicalpreference

Symbol of a Nation and itsconsciousness

Distracted from objective

Failed Diversification Attempts

Old Executives( Average Age 70)

Product Oriented Promotions

Brand

Strong Heritage and culturalassociation

Secret Formula

Quality Control Programs

Powerful Ads

Distribution

Strength Weakness

ThreatsOpportunity

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STPSTP

Market TargetMarket Segments Target Segment

Those who want

to quench

theirthirst & get

refreshed

People who want

tohave flavorednon alcoholic

drinks

Demographic-

AgeFamily Size

Gender

Education

SEC

Psychographic-

Lifestyle

Personality

Demographic

Age:Teenagers &

Youngsters

(14 to 30 years)

Psychographic

Fun loving

Sports freak

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4Ps4Ps

Product

Coke carbonated soft drink

Packed in Contour Bottle & cans

150 ml to 2 liter

Harsh (Rough) taste

Place

Available in virtually every part of the

world (Grocery shop, super market,

hyper market, retail shops, Vending

machines at different location)

Promotion

Advertising Campaign onTV & Radio

NewspaperSponsoring Events

Brand Endorsement by celebrity

Price

Competitively priced ( $0.92 per liter)

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Brand Equity ModelBrand Equity Model

Has more than 2800 different productsacross various categoriesDifferentiation:

It preempts many of the trends and charts a

course in themEnergy

Coca Cola is the most valuable brand in theworldRelevance

America identifies with

Coca Cola as itsdrinkEsteem

In a branded test for Coca Cola and Pepsi 65% of the people preferred coke to pepsiKnowledge

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How they created the Brand CocaHow they created the Brand Coca

ColaCola

Initial advertisements (red color, curvedbottle, letter writing)Memorable

Derivation of the name Coca ColaMeaningful

Moved from being a cure for headaches tothe most available non-alcoholic beverageAdaptable

Coca cola extends its brands to over athousand allied products in FMCG sectorTransferable

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Failure of Market researchFailure of Market research

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.

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.

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How had the CocaHow had the Coca--ColaCola

management got it somanagement got it so

wrong?wrong?They had focused on the product, not the brand.

They had neglected the emotional value of Coke' to the

American public.

y They asked the wrong questions, so their research provide

irrelevant information. As one Coca-Cola official said at the

time "We betrayed a national trust". Why?

y 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'.

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How to manage Brand EquityHow to manage Brand Equityy Brand Reinforcement:

Coca Cola came back as the strong drink that America

loved so much

y Brand Revitalization:

Coca Cola goes back to the fun element to revitalize itsbrand from time to time

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IsIs this strategy replicable in todays marketingthis strategy replicable in todays marketing

environmentenvironment??

y Yes. Even after 130 years after the launch of Coke this kind of Brand

Building strategy is still replicable in todays market.

y However such kind of efforts from the company requires lots of

investment in terms of money and time

y This will take a lot of effort and time and a lot of imagination by the

brand managers of today

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