Coke Brand Failure

In: Business and Management

Submitted By bhasmech
Words 2127
Pages 9
Think of a brand success story, and you may well think of Coca-Cola. Indeed, with nearly 1 billion Coca-Cola drinks sold every single day, it is the world’s most recognized brand.
Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace it with a formula it would market as New
Coke. To understand why this potentially disastrous decision was made, it is necessary to appreciate what was happening in the soft drinks marketplace.
In particular, we must take a closer look at the growing competition between
Coca-Cola and Pepsi-Cola in the years and even decades prior to the launch of New Coke.
The relationship between the arch-rivals had not been a healthy one.
Although marketing experts have believed for a long time that the competition between the two companies had made consumers more cola-conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola company had even fought Pepsi-Cola in a legal battle over the use of the word ‘cola’ in its name, and lost.
Outside the courts though, Coca-Cola had always been ahead. Shortly after World War II, Time magazine was already celebrating Coke’s ‘peaceful near-conquest of the world.’ In the late 1950s, Coke outsold Pepsi by a ratio of more than five to one. However, during the next decade Pepsi repositioned itself as a youth brand.
This strategy was a risky one as it meant sacrificing its older customers to
Coca-Cola, but ultimately it proved successful. By narrowing its focus, Pepsi was able to position its brand against the old and classic image of its
14 Brand failures competitor. As it became increasingly seen as ‘the drink of youth’ Pepsi managed to narrow the gap.
In the 1970s, Coke’s chief rival raised the stakes even further by introducing the Pepsi Challenge – testing consumers blind on the difference between its own brand and ‘the real…...

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