In 1985, the Coca-Cola company decided to shake things up — and it exploded in the soft drink maker's face. Coca-Cola had just made a splashy launch of a new formula for the 99-year-old drink, which quickly became known as New Coke.

During the 1980s, Coca-Cola introduced 'new Coke' in an effort to compete with Pepsi, which was gaining market share through aggressive marketing and celebrity endorsements. The new formula, however, was met with widespread consumer dissatisfaction, with many preferring the original taste and some switching to Pepsi.

Marketing experts now view the 'new Coke' launch as a classic example of a failed marketing strategy, emphasizing that Coca-Cola's mistake was not in the product's taste but in underestimating the power of brand loyalty and cultural attachment. The lesson drawn is that companies should be cautious about replacing established products and instead consider expanding their offerings under the same brand to adapt to changing market preferences.

The introduction of 'New Coke' during the 80's cola wars

Follow us back now into the mists of time in the 1980s. It was a transformative decade for pop culture, to say the least. MTV and hip-hop had emerged, and Coke was still king, at least until relative newcomer Pepsi started stealing the show in the spotlight. In 1985, the cola wars were in full swig, and in its battle to stay on top, the already 99-year-old Coca-Cola company launched the new Coke. To say it went badly would be an understatement. The new taste of Coke has been on the shelves for two months now, but after 99 years of the old Coke, some say the new stuff just doesn't pass the test. Well, it's good. There's one exception. It doesn't mix good with rum. They've lost the magic touch, haven't they? I don't like it as well as the old Coke. I guess I would prefer the old one. Well, a lot of people say they won't drink it no matter what, unless they change it back, but a lot of people that swore they would never drink Pepsi have switched, and they won't drink Coke anymore. In fact, any old Coke that's around is in great demand these days. Usually they buy more than what they usually want, because they don't know how long it's going to be here. Still, there are some die-hard Coke drinkers who will never give it up, even if they don't like the new Coke as well. I have to drink it because I feel obligated to Coke. I've been drinking it for so long, and if they change their taste, it doesn't matter to me. It makes others, like the new Coke, better. Well, actually, with the old Coke, I used to suffer from indigestion, and this is a lot easier on the stomach. It goes down nice. Coke is trying extra hard to sell people on the new taste, with sample booths like this one in grocery stores. Sometimes it works. It's fine. It's very different than the other Coke, but it's good. It tastes a lot like Pepsi. But it's hard to convert those who prefer the competition. It's not enough fizz to it, so Pepsi beats it all the way, I think. One store here in Fredericton says Coke usually outsells Pepsi two to one. But since the new taste came along, Coke sales have been dropping. New Brunswickers have a reputation for traditional tastes. It seems their taste buds are pretty traditional too. Wylene Lafoy, CBC News, Fredericton. So the new Coke campaign is now widely recognized as a famous example of a marketing disaster. But how did it all go wrong? Well, there is one person who knows a lot about this and shares it with students. Jan Cornille is an associate professor of marketing and behavioural science at UBC, and he uses the new Coke as an example to teach his students. We appreciate you coming in. What really went wrong with new Coke in this rollout, do you think? Well, it's a perfect example of bad marketing. So we are back in 1985. Coca-Cola is still super dominant on the market for carbonated soft drink. But Pepsi is starting to gain some market shares, which is absolutely unacceptable in Atlanta. And they have very aggressive marketing at the time, and they are very good at recruiting younger consumers. And one of the things that they do is to advertise blind taste tests in which supposedly consumers would prefer the taste of Pepsi. And Coca-Cola thinks that the problem of their loss in market share is because of the taste, and that's why they introduced new Coke. And it was, of course, the disaster that we know, because the key mistake here is that the problem was not the taste. The problem was that the marketing of Pepsi was better. They had imagined that Michael Jackson as a celebrity endorser back in the days. So now that we see it as a marketing lesson, what do people, when you teach students, say, here's what not to do and here's what to do when it comes to how new Coke was handled? Well, the first lesson is to be very, very careful with blind taste tests. The thing is that we don't only taste with our taste buds and the physical properties of the product. We also taste with all our cultural luggage, everything that we know and love about brands through decades, and in the case of Coca-Cola, a century of marketing that shapes our liking and our sensory perception. And the second lesson is that if you notice a change in the market, a change in taste, like today a preference for a zero-calorie version or a more natural version, don't retire your old product, which at the time Coca-Cola was and still is today part of the fabric of America. Introduce new products under the same brand. That's what we call the brand extension. And when it comes to it, we see other products doing that. Is that how Coke and other companies are staying relevant today? By just adding more variety, particularly in an industry that has seen such huge change over the years? Exactly. That's what Coca-Cola does. So they can introduce new products under the Coke umbrella. We've seen lately Coke Zero. There was also a failure, Coke Life, trying to surf on the more natural trend. And if it doesn't work, they can also add new brands to their portfolio. So Coca-Cola is a huge company. They don't only have Coke among their brands. They also have alternatives that are a better fit to today's market, more natural alternatives like Fresca, and also functional drinks like Body Armor of high vitamin and electrolyte-infused drinks, for instance. Interesting. Jean Cornille, we really appreciate your time and your perspective. Thanks for going with us down memory lane, if you will. Thank you for having me.

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