Text: In 1985, the highly successful iconic Coke soda was taken off the market and replaced with a new formula, called “New Coke”. At the time, Coke was losing market share in critical market segments and was coming under competitive pressure from its arch-rival, Pepsi.   That time in history was noted as the Cola Wars, as Pepsi executed a new promotion called the Pepsi Challenge. Consumers were asked to vote for their favorite tasting Cola on a blind-labeled basis. Pepsi won handily. These taste tests were turned into television commercials. With Michael Jackson as their spokesperson, this was the nail in Coke’s coffin (so they thought). This prompted Coke to conduct market research studies. With similar results, they abruptly changed the formula.  The new formula created an immediate backlash and consumers led a revolt and boycott. Within 6 months, Coke brought back the original formula. New Coke is heralded as one of the biggest marketing blunders in U.S. history.  Question:  Was Coke more interested in attracting new customers or keeping existing ones?  Explain by discussing tactics that marketers use by either attracting new customers or keeping existing ones.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Text:

In 1985, the highly successful iconic Coke soda was taken off the market and replaced with a new formula, called “New Coke”. At the time, Coke was losing market share in critical market segments and was coming under competitive pressure from its arch-rival, Pepsi.  

That time in history was noted as the Cola Wars, as Pepsi executed a new promotion called the Pepsi Challenge. Consumers were asked to vote for their favorite tasting Cola on a blind-labeled basis. Pepsi won handily. These taste tests were turned into television commercials. With Michael Jackson as their spokesperson, this was the nail in Coke’s coffin (so they thought). This prompted Coke to conduct market research studies. With similar results, they abruptly changed the formula.  The new formula created an immediate backlash and consumers led a revolt and boycott. Within 6 months, Coke brought back the original formula. New Coke is heralded as one of the biggest marketing blunders in U.S. history. 

Question: 

Was Coke more interested in attracting new customers or keeping existing ones?  Explain by discussing tactics that marketers use by either attracting new customers or keeping existing ones. 

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