Business & Product Strategy

Coca-Cola's Biggest Blunder


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Why did New Coke Failed Miserably but Diet Coke is an Instant hit?Let's Decode the Business Strategy in [ 2 X 2 ]In 1985, Coca-Cola made one of the boldest (and worst) decisions in business history - they killed ๐—–๐—น๐—ฎ๐˜€๐˜€๐—ถ๐—ฐ ๐—–๐—ผ๐—ธ๐—ฒ and replaced it with ๐—ก๐—ฒ๐˜„ ๐—–๐—ผ๐—ธ๐—ฒ.๐˜ž๐˜ฉ๐˜ข๐˜ต ๐˜ฉ๐˜ข๐˜ฑ๐˜ฑ๐˜ฆ๐˜ฏ๐˜ฆ๐˜ฅ ๐˜ฏ๐˜ฆ๐˜น๐˜ต ๐˜ธ๐˜ข๐˜ด ๐˜ค๐˜ฉ๐˜ข๐˜ฐ๐˜ด.- Coca-Cola's hotline, which typically received about 400 calls a day, was flooded with up to 1,500 complaints daily ๐Ÿ“ž- Protesters poured New Coke into sewers. ๐Ÿ’ข- One guy was so upset, that he sued the company for emotional damages! ๐Ÿ—ฏ๏ธWithin months, they had to bring back Classic Coke, branding it "๐‚๐จ๐œ๐š-๐‚๐จ๐ฅ๐š ๐‚๐ฅ๐š๐ฌ๐ฌ๐ข๐œ."๐‘บ๐’ ๐’˜๐’‰๐’š ๐’…๐’Š๐’… ๐’”๐’–๐’„๐’‰ ๐’‚ ๐’Ž๐’‚๐’”๐’”๐’Š๐’—๐’† ๐’‡๐’‚๐’Š๐’๐’–๐’“๐’† ๐’‰๐’‚๐’‘๐’‘๐’†๐’ ๐’Š๐’ ๐’•๐’‰๐’† ๐’‡๐’Š๐’“๐’”๐’• ๐’‘๐’๐’‚๐’„๐’† ๐’‚๐’๐’… ๐’˜๐’‰๐’‚๐’• ๐’„๐’‚๐’ ๐’˜๐’† ๐’๐’†๐’‚๐’“๐’ ๐’‡๐’“๐’๐’Ž ๐’•๐’‰๐’Š๐’”?๐š†ฬฒ๐šŽฬฒ๐š•ฬฒ๐š•ฬฒ,ฬฒโ€‚ฬฒ๐š’ฬฒ๐šฬฒโ€‚ฬฒ๐š ฬฒ๐šŠฬฒ๐šœฬฒ๐š—ฬฒโ€™ฬฒ๐šฬฒโ€‚ฬฒ๐š‹ฬฒ๐šŽฬฒ๐šŒฬฒ๐šŠฬฒ๐šžฬฒ๐šœฬฒ๐šŽฬฒโ€‚ฬฒ๐š˜ฬฒ๐šฬฒโ€‚ฬฒ๐šฬฒ๐šŠฬฒ๐šœฬฒ๐šฬฒ๐šŽฬฒ.ฬฒ๐—ก๐—ฒ๐˜„ ๐—–๐—ผ๐—ธ๐—ฒ ๐—ผ๐˜‚๐˜๐—ฝ๐—ฒ๐—ฟ๐—ณ๐—ผ๐—ฟ๐—บ๐—ฒ๐—ฑ ๐—–๐—น๐—ฎ๐˜€๐˜€๐—ถ๐—ฐ ๐—–๐—ผ๐—ธ๐—ฒ ๐—ฎ๐—ป๐—ฑ ๐—ฃ๐—ฒ๐—ฝ๐˜€๐—ถ ๐—ถ๐—ป ๐—ฏ๐—น๐—ถ๐—ป๐—ฑ ๐˜๐—ฎ๐˜€๐˜๐—ฒ ๐˜๐—ฒ๐˜€๐˜๐˜€.It failed because Coca-Cola underestimated the power of ๐—ฒ๐—บ๐—ผ๐˜๐—ถ๐—ผ๐—ป and ๐—ป๐—ผ๐˜€๐˜๐—ฎ๐—น๐—ด๐—ถ๐—ฎ and how deeply people connect with brands they love.Coca-Cola wasnโ€™t just selling a drink - it was selling an ๐‘’๐‘ฅ๐‘๐‘’๐‘Ÿ๐‘–๐‘’๐‘›๐‘๐‘’, a ๐‘™๐‘’๐‘”๐‘Ž๐‘๐‘ฆ, and a ๐‘™๐‘–๐‘“๐‘’๐‘ ๐‘ก๐‘ฆ๐‘™๐‘’. New Coke disrupted that brand identity by dismissing the intangible value consumers placed on the original formula.๐—ฆ๐—ผ ๐˜„๐—ต๐—ฎ๐˜ ๐—ฐ๐—ฎ๐—ป ๐˜„๐—ฒ ๐—น๐—ฒ๐—ฎ๐—ฟ๐—ป ๐—ณ๐—ฟ๐—ผ๐—บ ๐˜๐—ต๐—ถ๐˜€? ๐—Ÿ๐—ฒ๐˜โ€™๐˜€ ๐—ฏ๐—ฟ๐—ฒ๐—ฎ๐—ธ ๐—ถ๐˜ ๐—ฑ๐—ผ๐˜„๐—ป ๐˜„๐—ถ๐˜๐—ต ๐—ฎ ๐˜€๐—ถ๐—บ๐—ฝ๐—น๐—ฒ ๐Ÿฎ X ๐Ÿฎ.

๐—ข๐—ป ๐—ผ๐—ป๐—ฒ ๐—ฎ๐˜…๐—ถ๐˜€: Preserve Brand Legacy vs. Compromise Brand Legacy.๐—ข๐—ป ๐˜๐—ต๐—ฒ ๐—ผ๐˜๐—ต๐—ฒ๐—ฟ: Incremental Innovation vs. Radical Innovation.1. Incremental Changes (Safe Zone)2. Radical Changes (High Risk)3. Fail to Evolve (Irrelevant)4. Brand Dilution (Disaster)New Coke? It landed in the Disaster Zoneโ€”a radical change that compromised their legacy. What should Coca-Cola have done? What should Coca-Cola have done? They couldโ€™ve introduced New Coke as an option alongside ๐‚๐ฅ๐š๐ฌ๐ฌ๐ข๐œ ๐‚๐จ๐ค๐ž like they later did with ๐‚๐จ๐œ๐š-๐‚๐จ๐ฅ๐š ๐™๐ž๐ซ๐จ ๐’๐ฎ๐ ๐š๐ซ.What do you think?Can innovation hurt a brand? Have you seen other examples like this?



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Business & Product StrategyBy Shailesh Sharma