New Coke, Classic Coke, or Pepsi? In the early 1980s, the Pepsi company started asking people to take the "taste test.' The taste test consisted of two small paper cups with a few teaspoons of Coke in one cup and a few teaspoons of Pepsi in the other. Members of the public didn't know which cup contained Pepsi and which cup contained Coke. It is important to note here that Pepsi is a slightly sweeter cola than Coke. Members of the public were asked to drink the contents of both cups and then state which cola they preferred. Pepsi won the "taste test" more often than Coke. This news scared Coca‐Cola, which, at the time, was holding on to a small lead in sales over Pepsi. Coca‐Cola decided to undertake its own taste test. During its taste test, it experimented with the taste of Coke. One option consisted of sweetening the taste of Coke to lure more teenagers to its brand. In its own taste tests, Coca‐Cola learned that its new, sweeter Coke was beating Pepsi. In other words, Coca‐Cola thought it had found the way to gain market share in the soft drink market. So, it undertook to replace its old, original Coke with what was called “New Coke.” On April 23, 1985, Coca‐Cola launched New Coke. It was a disaster. Coke consumers across the country turned their backs on New Coke. One person said replacing the old Coke with New Coke was like “spitting on the flag.” Another said, “At first I was numb. Then I was shocked. Then I started to yell and scream and run up and down.” Coca‐Cola experienced a backlash from consumers. What had gone wrong? The company hadn’t realized a fundamental problem with these taste tests. As it turns out, asking people to decide between a few teaspoons of different sodas is quite different from asking them to decide between entire bottles of soda. Often, when only a small amount of a cola is consumed, people choose the sweeter of the two colas. But when people have to drink larger amounts, they will often find that the sweetness they liked in a teaspoon becomes “too sweet” before they finish the hundreds of teaspoons contained in an entire bottle. Coca‐Cola obviously thought that its taste tests indicated a strong demand for New Coke. That interpretation was wrong. What the taste tests actually showed was a strong demand for a few teaspoons of New Coke, not a demand for a six‐pack of New Coke, especially when it meant taking old Coke off the market. Coca‐Cola made a mistake in thinking that buyers had a demand for New Coke when they didn't. On July 11, 1985, Coca‐Cola brought old Coke back as Classic Coke. And over time it did away with New Coke. Questions for Discussion (type your answers in Word, 25 word minimum each) 1. What mistakes (list as many as you can think of ) did Coke make when it decided to get rid of regular

Coke and replace it with New Coke.

2. What might Coke have done during the taste tests to reduce the chances of making such a costly mistake?

3. Today, there are dozens of different varieties of both Coke and Pepsi. Can you think of some of these varieties that have been very popular? What about ones that were not (and no longer exist)?

4. How does this article relate to economics and business?

Other Disastrous Product Launches That Were Quickly Killed Plenty of other big companies have abandoned products after disastrous launches. We picked out some of the most quickly cancelled products in history…

Ford Edsel: 3 years The name "Edsel" is synonymous with "marketing failure." Ford invested $400 million into the car, which it introduced in 1957. But Americans literally weren't buying it, because they wanted "smaller, more economic vehicles," according to Associated Content. Other pundits have blamed its failure on Ford Motors execs never really defining the model's niche in the car market. The pricing and market aim of most Edsel models was somewhere between the highest-end Ford and the lowest-end Mercury. It was taken off the market in 1960.

HD DVD: 2 years Sponsored mostly by Toshiba, HD DVD was supposed to become the hi-def successor to the DVD when it launched in March 2006. But the Sony-led Blu-ray faction ended up winning the format war when Warner Bros. announced it was dumping HD DVD for Blu-ray on Jan. 4, 2008. About a month later, Toshiba said it would shut down its HD DVD efforts.

Pepsi A.M. and Crystal: Both 1 year In 1989, Pepsi tried to target the "breakfast cola drinker" with Pepsi a.m. It only lasted a year. In 1992, Pepsi tried again, this time with a clear cola, "Crystal Pepsi." No dice -- it died in 1993.

McDonald's Arch Deluxe: 1 year In 1996, McDonald's introduced the Arch Deluxe. It was intended to appeal to "urban sophisticates" -- outside of its target demographic. To reach this group McDonald's spent $100 million, which makes it one of the most expensive product flops in history.

Microsoft Bob: 1 year Microsoft Bob was supposed to be a user-friendly interface for Windows, a project that was at one point managed by Bill Gates' now wife. Microsoft killed it one year after launching it in 1995. Why? "Unfortunately, the software demanded more performance than typical computer hardware could deliver at the time and there wasn't an adequately large market," Bill Gates later wrote. "Bob died."

Orbitz soda: 1 year Although the soda, which looks like a lava lamp, appealed to young kids, it was not tasty (people compared it to cough syrup). It disappeared off shelves within a year of debuting in 1997. However, Orbitz is still sold on eBay for a premium.

JooJoo: 11 months In the era of a $499 Apple iPad, an inferior tablet computer that also costs $499 doesn't work. (You may remember this device from its previous title, the CrunchPad.) It came out in 2009 and was gone by 2010. But JooJoo backer Fusion Garage continues to tinker and it's coming out with another tablet, which will also flop.

Mobile ESPN: 8 months Mobile ESPN, introduced in January 2006, was one of the biggest flame-outs of "mobile virtual network operators," or MVNOs, last decade, which also included Amp'd Mobile, Helio, Disney Mobile, and others. The idea was that ESPN would exclusively sell a phone that offered exclusive ESPN content and video, leasing network access from Verizon Wireless. But ESPN only had one phone at launch, a Sanyo device selling for $400. No one bought it, and ESPN quickly shut down the service, instead providing content to Verizon's mobile Internet service.

Google Lively: 4 months For some reason, Google thought it had to compete with Second Life in mid-2008, with a virtual world called "Lively," which came out in July 2008. (Except unlike Second Life, Lively was supposed to be sex-free.) When the economy went down the toilet, those dreams faded fast, and Google quickly pulled the plug by November 2008.

HP Touchpad: 49 Days After just a month and a half on the market, HP gave up the TouchPad and its mobile OS, WebOS in August. The tablet was no iPad killer, selling just 25,000 units for Best Buy over the 49 days it was on their shelves. Where does this put the TouchPad in the pantheon of tech flops? Well, it lasted one day longer than the Microsoft Kin phones, another recent flop. So it's not the worst flop ever. And, in fairness to HP, the TouchPad wasn't that bad. It was rough around the edges, but those could have been smoothed in the coming months. It just didn't really do anything better than the iPad, which means it's just like every other tablet out there.

Qwikster: 23 days In September, Reed Hastings announced that Netflix would spin off Qwikster as a DVD rental business. This move met tons of criticism, and Hastings backtracked on his statement 23 days later.