Hbr Case “Introducing the New Coke”

1 January 2017

Its main success was coming from a new marketing strategy, directing its focus on new generation consumers as well as hosting a series of commercials called “the Pepsi Challenge”, which is a taste test competition between Pepsi and Coke. The result of this test was in Pepsi’s advantage, it indicated that consumers prefer the taste of Pepsi more. This result made the Coca-cola company’ executives highly concerned and decided to revolutionize its flagship product by changing the taste of the Coke and introduced it as the “New Coke”. After the product was launched, consumers’ response was outrageous and the new product was a complete failure.

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Only a few months later, the company had to decide to bring its original product back, Coke classic. 2. What is Coca-Cola? In terms of Ted Levitt’s famous question, “what business is it in”? You may need to do some additional research on Levitt. Please do not write the obvious answer (e. g. beverage, soda, etc). Ans: When Ted Levitt asked the question “What business is it in”, he was challenging companies to look beyond their immediate material product or service and examine the spectrum of ways they can and should target the greater public appeal.

Coca-Cola is in the beverage industry but its business is to offer a sweet, fun, memory-inspiring portable beverage that inspires nostalgia for a carefree time. Coca-Cola is a sense-memory product that relies on a perception of indulgence and comfort 3. How did Pepsi develop its brand and how was the Pepsi brand positioned in the marketplace? Was it really a threat to Coke? How should Coke have responded to Pepsi’s meaning making advances? Ans: Pepsi realize throwing itself into a war with Coke on brand recognition would likely to be a lost cause.

The Coke brand has been imprinted in consumers’ mind over decades, through war, recession and many important historical events and memories. Therefore, it decided to focus on one particular consumer segment and started to build its brand in the new segmentation. By focusing on young consumers, whose mind is not yet attached to the coke brand, it positions itself as a young, lively drink, with the slogan “Pepsi Generation” implies the young, lively people, the new generation. It would be a threat to Coke, because Coke would lose its young people segment to Pepsi.

However, Coke should response to its competition by reminding of how original the product is, or introducing a new product with different market segmentation strategy. 4. Hindsight is indeed 20/20, but putting this bias aside, what major factor do you think caused the failure of the New Coke launch? Please do not write the obvious answer (e. g. people did not like the new taste). Do you think it was the product, the launch process or both? If you think it was the process, then how could it have been more successful?

Ans: The major factor of the failure to New Coke launch, in my opinion, was not the product itself, the new coke was suppose to be a better product with better taste. The launch process has been interrupted a little bit but it has also not the main failure. The main failure was the removing of the original product, the product that is emotionally intact with consumers’ mind. While busy with upsetting about losing the old Coke, no one would pay attention or willing to give a New Coke a try. The New Coke might have been more successful, if it was to be introduced as an addition to the product line. With a new marketing strategy.

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