Real Story of New Coke

To hear some tell it, April 23, 1985, was a day that will live in marketing infamy.

That's the day The Coca-Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.

The Coca-Cola Company introduced reformulated Coca-Cola®, often referred to as "new Coke®," marking the first formula change in 99 years. The company didn't set out to create the firestorm of consumer protest that ensued; instead, The Coca-Cola Company intended to re-energize its Coca-Cola brand and the cola category in its largest market, the United States.

That firestorm ended with the return of the original formula, now called Coca-Cola classic®, a few months later. The return of original formula Coca-Cola on July 11, 1985, put the cap on 79 days that revolutionized the soft-drink industry, transformed The Coca-Cola Company and stands today as testimony to the power of taking intelligent risks, even when they don't quite work as intended.

"We set out to change the dynamics of sugar colas in the United States, and we did exactly that -- albeit not in the way we had planned," then chairman and chief executive officer Roberto Goizueta said in 1995 at a special employee event honoring the 10-year anniversary of "new Coke."

"But the most significant result of 'new Coke' -- by far," Mr. Goizueta said, "was that it sent an incredibly powerful signal ... a signal that we really were ready to do whatever was necessary to build value for the owners of our business."

The story of "new Coke" is widely recalled, but the context is often forgotten. In 1985, The Coca-Cola Company's share lead over its chief competitor, in its flagship market, with its flagship product, had been slowly slipping for 15 consecutive years. The cola category in general was lethargic. Consumer preference for Coca-Cola was dipping, as was consumer awareness. That changed, of course, in the summer of 1985 as the consumer outcry over "new Coke" was replaced by consumer affection for Coca-Cola classic.

The fabled secret formula for Coca-Cola was changed, adopting a formula preferred in taste tests of nearly 200,000 consumers. What these tests didn't show, of course, was the bond consumers felt with their Coca-Cola -- something they didn't want anyone, including The Coca-Cola Company, tampering with.

The events of the spring and summer of '85 -- pundits blasting the "marketing blunder of the century," consumers hoarding the "old" Coke, calls of protests by the thousands -- changed forever The Coca-Cola Company's thinking.

At the 10-year anniversary celebration, Mr. Goizueta characterized the "new Coke" decision as a prime example of "taking intelligent risks." He urged all employees to take intelligent risks in their jobs, saying it was critical to the company's success. Many of the employees there that day had worked for the company in 1985 and remembered the thousands of calls and consumer complaints.

Calls flooded in not just to the 800-GET-COKE phone line, but to Coca-Cola offices across the United States. By June 1985, The Coca-Cola Company was getting 1,500 calls a day on its consumer hotline, compared with 400 a day before the taste change. People seemed to hold any Coca-Cola employee -- from security officers at our headquarters building to their neighbors who worked for Coke -- personally responsible for the change.

Mr. Goizueta received a letter addressed to "Chief Dodo, The Coca-Cola Company." He often said he was more upset that it was actually delivered to him! Another person wrote to him asking for his autograph -- because, in years to come, the signature of "one of the dumbest executives in American business history" would be worth a fortune.

When the taste change was announced, some consumers panicked, filling their basements with cases of Coke®. A man in San Antonio, Texas, drove to a local bottler and bought $1,000 worth of Coca-Cola. Some people got depressed over the loss of their favorite soft drink. Suddenly everyone was talking about Coca-Cola, realizing what an important role it played in his or her life.

Protest groups -- such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 in a drive to bring back "old" Coke) -- popped up around the country. Songs were written to honor the old taste. Protesters at a Coca-Cola event in downtown Atlanta in May carried signs with "We want the real thing" and "Our children will never know refreshment."

When the announcement of the return of "old" Coca-Cola was made in July 1985, those hoarding as many as 900 bottles in their basements could stop their self-imposed rationing and begin to drink the product as they always had -- as often as they'd like.

That July day, the story that the "old" Coca-Cola was returning to store shelves led two network newscasts and made the front page of virtually every major newspaper. Consumers applauded the decision. In just two days after the announcement of Coca-Cola classic, The Coca-Cola Company received 31,600 telephone calls on the hotline. Coca-Cola was obviously more than just a soft drink.

In 1985, Coca-Cola classic was introduced alongside Coca-Cola ("new Coke"), and the two brands had distinct advertising campaigns, with the youthful, leading edge "Catch the Wave" campaign for the new taste of Coke and the emotional "Red, White and You" for Coca-Cola classic.

Later, the name of the new taste of Coca-Cola was changed to Coke II; the product is no longer available in the United States.

The events of 1985 changed forever the dynamics of the soft-drink industry and the success of The Coca-Cola Company, as the Coca-Cola brand soared to new heights and consumers continued to remember the love they have for Coca-Cola

Blossoming of Brand

Jonathan Schwartz, CEO of Sun Microsystems, has written a heart-felt piece on the value of branding for a company and its customers.
……………………….I was married in 1999. It was a small wedding, presided over by family, in a house in San Francisco. It was the best party my wife and I have ever thrown for us. I heartily recommend throwing a good wedding.
After the ceremony, we gathered up our friends, and drove over to the hotel where we'd booked a suite. We had it all planned out, an evening with our friends, a view of the Golden Gate Bridge, a night in the city before leaving town. They even had a package deal for honeymooners.
We arrived at the hotel, mingled with our friends for a while (I in a tux (Semiformal evening dress for men), my wife still holding the bouquet she forgot to toss), and walked up to the reservation desk after a half hour or so. I said "Hi, we're here to check in, last name is Schwartz." Bear in mind, this is long before my name had any value in San Francisco (unless you were a total geek).
The guy at the front desk crinkled his nose, looked at his computer, then looked back at me - "sorry, we're full up." I didn't know what to say, I figured it was a friend playing a prank. So I said, "You're hilarious. But I have a reservation. We have your honeymoon suite, we just got married." He said, "Nope, sorry, no more rooms, looks like we over booked, really apologize." And after taking a few minutes to gather my sanity (and lower my blood pressure), I asked if he could help us find another room or other accommodations. He said, "Nope, but good luck, if you come back in a week or so we'll definitely have space."
Uh, right.
So we went to another hotel. Just down the road, we ended up marching in at 10:30 at night, in full wedding garb, still. The restaurant was closed, as was the bar. Everything was. And I went up to the clerk at the front desk and asked if they had any room. He was kind enough to notice the wedding dress, and asked if we'd been at a wedding - I explained yes, I'd just gotten married, and he said he'd take care of everything.
He opened the lobby, turned on all the lights, and recruited a couple employees to reopen the bar, and make us feel at home. They served us until the wee hours of the morning, put up with our noisy reunion, then put my wife and me in a beautiful room, and found other rooms for our friends. They managed to put a handwritten note in our room, "Congratulations," it said, next to a bottle of champagne. I don't remember what they charged us - I remember feeling like it was nowhere near their going rate. The following morning, fresh faces at the checkout desk somehow knew to offer their best wishes.
Needless to say, I will now go out of my way to stay in their hotels. I recommend them to my friends. I am a huge fan. Even when their brand breaks their promise, I dutifully fill out my room survey to help them improve. I want them to win, I'm an evangelist. It's not a promise, it's a cause. They are the white hats; I'm on a mission to see them succeed.
The other guys? The other hotel? I never think of them. I don't bad mouth them, life's too short for that. I just don't care. I simply reciprocate the attitude of that clerk seven years ago. Careless indifference.
What's a brand?
It's not a logo, an ad campaign or a money back guarantee. At minimum, it's a promise that helps to define those items. Beyond that, it's a cause that gives definition to the ill-defined, that tells you how to deal with the unexpected or the uncomfortable. It's what motivates you to hire that fellow at the front desk, and to foster his instinct to feel, "Eureka, I found an opportunity to build an evangelist (A preacher of the Christian gospel)!"
That's not about money or resources or training or contracts. It's a cause. One your employees - and more critically, your customers - willingly join.
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The saying goes, "a brand is a promise." On a personal level, I've always felt that statement was incomplete. A promise is the lowest common denominator of a brand - it's what people expect. Think of your favorite brand, whether search engine or sneaker or coffee shop or free software, and you'll know what I mean - a brand is an expectation. If you experience anything less, you're disappointed. A promise seems like table stakes.