Free

Improving Decision Making in the Coca-Cola Company - Case Study Example

Comments (0) Cite this document
Summary
In the paper “Improving Decision Making in the Coca-Cola Company” the author focuses on changing and improving the taste of Coke. Thus, the company reformulated and created the New Coke. In a double-blind test conducted by the company, it appears that 60% of consumers prefer the new taste…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.5% of users find it useful
Improving Decision Making in the Coca-Cola Company
Read TextPreview

Extract of sample "Improving Decision Making in the Coca-Cola Company"

Improving Decision Making The Situation In 1985, Coca-Cola Company made a major marketing blunder with its introduction of the New Coke. It can be recalled that the business organization dropped its original Coke formula and reverted to the New Coke in response to the tight competition with its major rival, Pepsi. According to the blind tests administered by the company, the sweeter taste of Pepsi is more preferred by customers. Even though Coca-Cola leads the industry in terms of market share, its competitor is substantially gaining control. During that period, supermarket sale of Pepsi is 2% higher than Coca-Cola. Thus, in an aggressive effort to battle head on with Pepsi, the company thought that the most viable solution is to change and improve the taste of Coke. Thus, the company reformulated and created the New Coke. In a double-blind test conducted by the company, it appears that 60% of consumers prefer the new taste of New Coke to Pepsi (Kotler and Armstrong 2001). Thus, Coca-Cola dropped its classic formula and introduced New Coke as its flagship brand.
The introduction of New Coke, together with the flurry of advertising and publicity bolstered the sales of the product. However, the succeeding month saw the failure of the company as sales went flat and Coca-Cola began receiving complaints from angry customers. These customers staged protests and threatened to file a suit against the company (Kotler and Armstrong 2001). Thus, three months after its introduction to the public, the New Coke was repackaged as an extension brand while the old formula was named Coke Classic and was retained as the flagship brand.
What Went Wrong
The experience of Coca-Cola which is discussed above has become a classic marketing tale documenting the mistakes that managers can make in their decision making process. The failure of Coca-Cola can be largely attributed to two factors namely, narrow definition of its marketing research problem and poor judgment in interpreting the research planning strategies around it (Kotler and Armstrong 2001).
Managers became narrow-minded and myopic in diagnosing the problem that Coca-Cola was facing. Instead of looking at all the factors which may be influencing the buyers in their purchases, these managers only look at the taste of the product. Their research has focused only at the taste ignoring the customers' feelings about dropping the product. It turned out that Coke's symbolic meaning in the United States is more important than taste.
Coca-Cola's managers also failed to use wise judgment in the introduction of the New Coke. Even though their decision of dropping the old Coke is warranted by the 60% acceptance rate of the new formula, they did not anticipate that the 40% might still like the old Coke better.
Conclusion
Decision making process must not be too narrow to overlook some of the important factors and details. As the situation of Coca-Cola shows us, managers should always avoid hasty generalizations and marketing myopia. In the business environment, decisions should always be grounded on all the factors affecting performance. Focusing on one aspect only will yield a one-sided and inadequate decision.
References
Kotler, P. & Armstrong, G. (2001). Principles of Marketing. New Jersey: Prentice-Hall Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Improving Decision Making in the Coca-Cola Company Case Study”, n.d.)
Improving Decision Making in the Coca-Cola Company Case Study. Retrieved from https://studentshare.org/business/1527471-improving-decision-making-essay
(Improving Decision Making in the Coca-Cola Company Case Study)
Improving Decision Making in the Coca-Cola Company Case Study. https://studentshare.org/business/1527471-improving-decision-making-essay.
“Improving Decision Making in the Coca-Cola Company Case Study”, n.d. https://studentshare.org/business/1527471-improving-decision-making-essay.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Improving Decision Making in the Coca-Cola Company

Coca-Cola Company

... decision making tool. The analysis includes the careful selection of data from relevant financial statements. The purpose of the analysis is to ascertain if the entity, including Coca Cola America, performed well or dismally within one accounting period. The analysis is used to determine the company’s trend in terms of future revenues, profits, assets, and other financial statement data. Table 1: Documentary Financial Statement Analysis Table Period ending 2010 Financial Statement Ratio Coke America Profit Margin Ratio 34% Return on Equity Ratio 33% Receivables Turnover 8.58 Inventory Turnover 14.04 Total Asset Turnover 0.48 Liquidity: Current Ratio 1.17 Debt to Total Assets 0.57 1. Profit Margin ratio. Based on the above table... ...
11 Pages(2750 words)Research Paper

Coca-Cola Company

...of the promotion mix and performance in a global framework. Theoretical Background The growth of the Coca-Cola Company into overseas markets commands a judgment-making course, since there are many aspects that sway such an internationalization course. Among the most imperative judgments concern the Coca-Cola promotional mix. By budding an ample marketing mix the Coca-Cola Company can gratify the requirements of their aimed market and get to their organizational goals augmenting the performance. Consequently, the company’s products that emerge a marketplace for the...
8 Pages(2000 words)Essay

Coca Cola Company

...Business Strategy March 24, The Strategic Analysis of the Coca Cola Company This paper will provide the analysis of mission, vision, objectives of the coca cola company. The analysis will be on these points (1) Sustainability and road map to success, (2) Strategy remain same with the changes in technology, (3) Continuity in strategic direction and continuous improvement (4) The myth of inflection points (5) Great strategies are not complex (6) Chief strategist has to be the leader. The paper will also provide conclusion in which the brief analysis of the strategies of The Coca Cola...
3 Pages(750 words)Coursework

Improvement of Coca Cola Market Decision Making

...Improvement of Coca Cola Market Decision Making EXECUTIVE SUMMARY This company is reputed as a chief producer, dealer and distributor of non-alcoholic drinks and its concentrates and syrups worldwide. Over 125 years have passed the company was established by a pharmacist who intended to a medical concoction. John Pemberton discovered the concoction while the name was suggested by the pharmacist’s bookkeeper Frank Robinson. From then on, the company has grown from being sold in a pharmacy in Atlanta to become an acceptable worldwide beverage that is universal. The company has a variety of products, and it licenses or possesses more than 500 brands. With is vast empire worldwide the company has grown to become a market leader... that...
8 Pages(2000 words)Research Paper

Coca-Cola Company

...of optimisms through the brands and actions of the employees and also to create value through making a difference whenever the persons are involved in their business activities. 1.The internal and external environment of the coca cola company The internal factors that have been affecting the operations of the company include; research and development, operations and logistics, human resources and information systems. The management of the company has constantly been involved in carrying out research work that is aimed at developing unique and innovative products into the market .The company has over 2600 products but it...
10 Pages(2500 words)Essay

The Coca Cola Company

...Days in Q1 2008). Although the company is able to meet its short-term liabilities; it should still make an effort to improve the collection of its debts. The credit term given to its customers is not stated; however, as a guideline, 30 days is recommended. In this case, the company's customers are enjoying slightly more than the normal credit terms and this should be monitored. The profitability of The Coca-Cola Company is sound. Its Gross Profit Margin of 69% (64% in Q1 2008) is quite high. This is a 4% drop compared to the first quarter of 2008, due to the lower sales in the first quarter of 2009. Although, its sales...
6 Pages(1500 words)Research Paper

Coca-Cola Company Assignment

...Minute Maid is a division of the Coca-Cola Company which was established in 1945 and was purchased by Coca-Cola in 1960. The company produces ready to drink juices and teas in over 100 flavors. There has been a visible decline in the consumption of carbonated drinks as a result of the rising health concerns. Carbonated drinks make up a significant portion of Coca-Cola's sales. This is a good opportunity to increase sales of the non-carbonated drinks by entering into newer untapped markets. This document serves as a marketing plan for Minute Maid healthy beverages for the subsequent...
27 Pages(6750 words)Assignment

The Coca-Cola Company

...to meet its short-term liabilities; it should still make an effort to improve the collection of its debts. The credit term given to its customers is not stated; however, as a guideline, 30 days is recommended. In this case, the company’s customers are enjoying slightly more than the normal credit terms and this should be monitored. The profitability of The Coca-Cola Company is sound. Its Gross Profit Margin of 69% (64% in Q1 2008) is quite high. This is a 4% drop compared to the first quarter of 2008, due to the lower sales in the first quarter of 2009. Although, its sales performance shows a slight improvement from the...
5 Pages(1250 words)Research Paper

Coca cola company report

...decentralization. The two operating groups of the company are the corporate and the bottling investments. The operating groups are also divided in different business regions, geographic regions. This system allows the company to operate business efficiently in local levels. The employee of the higher level management focuses on the long term planning of Coca Cola. Recommended organization structure The Organizational structure of a particular company should follow the overall strategy of the company. There is a close linkage between strategy and structure of a company/. When strategy and structure is aligned it leads...
13 Pages(3250 words)Essay

The Coca-Cola Company

...The Coca-Cola Company Executive Summary The Coca-Cola Company is considered a leader globally in the manufacture of non-alcoholic beverages. The company was incorporate in 1889, and since then, it has managed to develop over 400 brands in more than 200 countries around the globe. However, due to its vast presence in different regions around the globe, the firm has shifted to a decentralized structure to improve efficiency in the management of its business. As such, the firm has established operating groups that include, for instance, Latin America, European Union, Pacific and Africa. As a result, the...
12 Pages(3000 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Improving Decision Making in the Coca-Cola Company for FREE!

Contact Us