Armageddon in the Cola Wars

In the early 1980s the Coca-Cola Company had a slight problem. It had twice as many vending machines as its nearest competitor, Pepsi, it dominated the fountain market (McDonalds and other food chain outlets), it had more supermarket shelf space and it spent twice as much on advertising. And it was losing market share. Worse, the reason was that people preferred drinking Pepsi, as taste tests proved, which led the corporate suits at Coca-Colas headquarters to one inescapable conclusion. After 100 years of using basically the same cola formula, Coke had to change. Which it did, experimenting with countless different formulas until finally creating a sweeter Coke that convincingly beat Pepsi in taste tests. The next step was extensive market research, including surveys and focus groups with more than 200,000 consumers, and all of the research was checked, re-checked and corroborated. Four million dollars was spent ensuring that American consumers really did love the new formula and would accept a change. This led to Cokes introduction of New Coke, in 1985, supported by one of the most comprehensive advertising and public relations campaigns in Cokes history. And one month later sales were in the toilet. Americans complained that New Coke tasted like furniture polish. Some called it Coke for wimps. Dedicated Coke drinkers stockpiled old Coke and a black market for it developed. It was the most disastrous marketing decision Coke ever made, and it had the companys executives scratching their heads. The research said New Coke was a winner. What went wrong? In hindsight, Coke learned that market research doesnt always tell the story, especially when the product in question is one of the most successful in history. It was one thing for members of a survey to say that, in theory, they would switch to the new product. It was something else entirely when it actually happened and those surveyed realized that one of Americas cultural institutions in a league with hot dogs, apple pie, baseball and Old Glory was being replaced. Changing a product is one thing, Cokes executives learned, but you change a piece of Americana at your own risk. And so in July of 1985 the Coca-Cola Company announced that it was restoring old Coke now called Classic Coke to its rightful place at the head of the companys product line. And lo and behold, Cokes market share then reverted to pre-1980 levels, even though it was the same product Pepsi had beaten in taste tests. The moral of the story? Perhaps pop singer Joni Mitchell summed it up nicely when she sang, Dont it always seem to go that you dont know what youve got til its gone.

A Marketing Nightmare
Release of "New Coke" unwelcomed by fans

In the 1980's, the sugary soda market began to decline. Executives at Coca-Cola wondered, "Are people getting tired of Coke?" This notion, along with increased competition from Pepsi, prompted Coca-Cola to take a drastic measure. The research and development team kept a new soda under wraps from nearly everyone, even the bottlers. The team found that among test group after test group, "New" Coke was winning against Classic Coke in blind taste tests. However, researchers failed to mention one thing to their test subjects: The New Coke that they thought tasted better would completely replace the Classic Coke On April 23, 1985, New Coke was launched, but not without backlash from Classic Coke lovers. A group called the Old Cola Drinkers of America formed, and in July Coke had about 8,000 calls a day expressing their anger over the new formula. In addition, angry letters poured into Coca-Cola headquarters every day. The problem with New Coke was that it broke tradition. By 1980, Coke was an identifiable icon, and changing the taste was almost like changing people's lives. The taste of New Coke probably didn't offend them the most; it was the idea of New Coke that hurt fans of Coca-Cola. On July 10, 1985, it was announced that Coca-Cola classic would be returning to store shelves.

Coca-Cola and Pepsi have always been at war with one another. Around 1933, Coca-Cola declined an opportunity to buy out its little rival Pepsi and they were instead taken over by Roger Enrico. The Enrico family were much later to bring in the music icon Michael

Jackson to shake things up and sing Pepsi to success. The war between Coca-Cola and Pepsi took place mainly over the media air waves, with the newspaper, radio and TV being put to good use in order to promote the sales of the two products. Pepsi was born in 1898, Coke was born in 1886 and both had their fair share of ups and downs: Pepsi went bankrupt but didn't lose its cool and battled on; Coca-Cola changed its recipe and brought out New Coke in 1985, which was so unpopular it nearly brought Coca-Cola to an end. Diet Coke was also (temporarily) shelved quietly without media intervention in the year 1970. So, in the 1980s, when both products needed a re-vamp, it was also thought that the products would sell better if famous faces endorsed them. In 1983 Michael Jackson was signed up to an advertising deal with Pepsi and by 1984, the thrilling Michael Jackson television adverts emerged. Whereas Coca-Cola have sold a wholesome, 'real people' image, Pepsi have considered to pay rock stars huge amounts of money to endorse their products. This, contrarily, has led to some unwanted media attention. Michael Jackson, it is reported, accidentally set his hair on fire while making the advert, and subsequent mishaps on the 'Pepsi Stage' have haunted the Spice Girls and Britney Spears; the press jumped on this and labelled it 'The Pepsi Curse'. Coca-Cola and Pepsi are still on the market today and they continue to compete in sales of drinks, their primary concern being to please their paying customers. They also continue to litter the media with adverts and there has also been concern in what degree of effect the products have on their customers, particular young people who are regularly labelled as being 'overweight'. Pepsi and Coke battle for supremacy in the marketplace. Each hired musicians to promote their drink. Coke hired Paula Abdul, while Pepsi had Michael Jackson. They then started to try to outdo each other by getting other musicians and celebrities to help promote their drinks.