The Introduction of New Coke by Coca-Cola - Assignment Example

Research Problem of Coca-Cola 1. What research problem did Coca-Cola Company appear to be investigating prior to the introduction of New Coke? Coca-Cola had noticed that despite leading in the soft drink market, they were losing their market share to Pepsi, during the early 1980. Therefore, this prompted the need for an investigation in order to determine whether introduction of a new product in the market would assist in retaining their market share. There were Pepsi challenges that has posed a threat, whereby they held televised test that depicted a higher preference of the sweeter taste offered by Pepsi than Coca-Cola. Moreover, by early 1985, Pepsi had managed to acquire 2% sales of the huge market that amounted to $960 million in retail sales. Therefore, this called for change of strategies by Coca-Cola and their option was to introduce a new product that offered the same feature like their competitors. In this case, they had to conduct a research in order to introduce new product to market. After the investigation, they identified that Pepsi was offering a product that had a sweeter taste and this contributed to a growth in the preference resulting to increased market share. Coca-Cola commenced a research project, whereby they spent two years and $4million prior to settling on a new formula. They conducted 200, 000 taste test on the final formula and a blind test, whose results were sixty percent of the consumers choosing the new formula over the old one. In fact, fifty-two percent of the customers choose it over Pepsi, and this was an indication that new coke would assist in dealing with the problem of losing the market share to Pepsi. 2. Depending on your answer to Question 1, what problems should Coca-Cola has investigated instead? There was a narrow definition of the research problem by Coca-Cola, given that the research emphasized on the taste only and ignored the feelings of the customers in relation to replacing the old Coke with a New Coke. Therefore, Coca-Cola Company should have investigated on other intangibles such as the band name, history, packaging, cultural heritage and reputation. In fact, they forgot that the symbolic meaning of coke was more important to the consumers than the taste. Moreover, Coca-Cola should have focused on the conducting a marketing research considering these emotions. Furthermore, there was a poor judgment during interpretation of research planning strategies by the managers. The poor judgment occurred when they found sixty percent of consumers who preferred the new Coke taste and this led to an assumption that the new coke would be the solution to their problem. However, this did not view this assertion in the basis on the other 40% who were still royal the old Coke; thus, they ended up trampling with the tastes of the royal customers who were not willing to accommodate the change of the taste. Therefore, the company should have focus on introducing the new Coke as a brand expansion and leave the old Coke like what happened with Cherry Coke. Coca-Cola Company had an advanced marketing research operation and their strategies have made them to be at the top of the market. However, in this their market was not based on scientific theories that could have assisted in understanding the consumer behaviors. 3. Companies such as Coca-Cola often test new products in plain white paper cups with no brand names or other marketing information. What does this ‘blind’ testing really measure? Does applying these results to the ‘real’ world raise any issues? Bind testing is aimed at measuring the actual response of the customers to a certain feature of the product without the influence of the brand name or other marketing information. Therefore, the consumer is expected to review the product without the ideas of the manufactures in their minds and these reviews are applied in rating the new product that is yet to be introduced into the market. For instance, Coca-Cola was seeking to settle the new formula by 200 000 taste-tests and 30,000 o the final formula, which was blind test, whereby 60% of the consumers were choosing the new Coke over the new coke and 52% over Pepsi. Therefore, from this example, it is evident that ‘blind’ testing is aimed at measuring the level of preference of the new product over the other old product. However, these results can be used by the Companies in making decision of entering the market, though the taste is not a good reason of replacing the old product like Coca-Cola did. In this case, the results obtained through the ‘blind’ taste test can lead to neglecting relevant aspects in the real world such as resistance of the consumers to change. There are consumers who are loyal to a certain brand and not too due to features such as tastes, but what it represents in society; thus, changing it can result to issues. For instance, when Coca-Cola ignored the fact that the old Coke represented a symbolic meaning to the consumers and they decided to replace it with the new coke, which was a way of dealing with the competition created by Pepsi. This resulted to protests by a group that was called ‘Old Cola Drinkers’ and threats were made of a class action suit by these consumers. 4. Discuss the impact of CCA moving into alcoholic and non-alcoholic beverages, sparking and still waters, juice and flavored milk. What marketing research would you conduct with regard to branding these products? There is a need for a marketing research with regard to branding products aimed at moving towards alcoholic and non-alcoholic beverages, sparking and still waters, juices and flavored milk. However, this marketing research would be based on seeking ways to introduce the new products separately from the old products without the intentions of replacing them. For instance, when Terry Davis came to Australian CCA, his strategies were aimed at entering the market for canned fruits and alcoholic beverages (Frith, 2007). The ranges of each product are marketed under separate brands such as Coca-Cola, Fanta and Lift, Mount Franklin and Deep Spring. Moreover, marketing alcoholic and non-alcoholic beverages, sparking and still waters, juice and flavored milk in brands based on their categories can help in distribution of the cost. Furthermore, this regards to extent of synergy in marketing for diverse range of consumer’s perspectives towards retail trade. References Frith, D. (2007). “Just add alcohol”. Business Review Weekly. Retrieve on Jan 15 2013 from < https://www.brw.com.ua/viewer.aspx?ATL://20070517000018897934> Read More