New Coke Marketing Disaster 1985 - Report Example

New Coke Marketing Disaster 1985 Date of Submission : Course Code : Course Name : Student Number : Honesty Statement I certify that this formal report is original and except from evidence gathered from the different media to support the arguments in this report such as cover page of magazines, excerpts of news report, and cartoon illustrations, the report contains no part copied completely or in part from somebody else work. Similarly, I did not allow anyone to copy this report and will not in the future lend this report to anyone regardless of affinity, need, and other circumstances. Table of Contents Contents Contents 3 1. Introduction Challenged by Pepsi’s new marketing strategy, Coca-Cola introduced a new formula for Coke in 1985 but failed due to public outcry and negative media coverage. Others believed that it was a clever marketing strategy in order to reignite public interest on Coca-Cola but facts leading to the disaster suggest the opposite. The following discusses how media’s agenda setting strategy shape public opinion and increase individual interest on certain social issue. These include presentation of primary hypothesis, discussion of selected communication theory and its relevance to the case study, Coca-Cola and the failed marketing of New Coke, presentation of evidence support the agenda setting theory, analysis of evidence, and concluding statement. 2. Main Arguments/Hypothesis Media’s agenda-setting power can significantly affect how people perceived a particular issue. It is a strategy to shape public opinion and intensify public interest on issues or objects media considered as profitable in the increasingly competitive marketplace. 3. Agenda-Setting Theory In 1972, Maxwell McCombs and Donald Shaw formulated this theory to explain the impact of the emphasis placed by media on certain issue in influencing people’s perception of that issue (Littlejohn & Foss, 2009, p.31). According to Baran & Davis (2011), media does not cause immediate ideological conversion of its audiences nor tell people how to behave or think but do “tell people what to think” (p.311). In other words, media can actually influence the level of importance people give to certain public issue. It cultivate and frame people’s thinking by giving emphasis on a particular attribute of an issue that is more popular in the public mind (Stacks & Salwen, 2009, p.96). One example of this agenda-setting theory is how media sports programme enticed significant number of people to join sports club as in the case of American football that became popular mainly because it was given more emphasis by editors and producers who underestimated if not totally ignored other sports (Pedersen et al, 2007, p.83). Another is the combined influence of mass media coverage that put the ozone layer issue in the centre of public interest and global environmental policy. According to Andersen et al, (2012), the New York Times published 43, 550 ozone layer stories from 1970 to 2000 (p.292). Similarly, accounting scandals like Enron and Volkwagen’s governance failure have been the subject of media’s agenda setting strategy intensifying public monitoring and scrutiny. In a detailed analysis of intensive negative media coverage, Volkswagen suffered considerable image loss because media give much emphasis on corporate depressing characteristics such as corruption, favouritism, special treatment of executives, and others (Agenda Setting.com, 2012, p.1-6). The Foxconn Technology Group suicide scandal, where 14 Chinese workers in July 2009 took their lives because of dismal pay, unfair treatment, and unsafe working environments ( commonly known as global sweatshop), is another good example how media was able to hide the truth from public view. Instead of calling it a product of global social injustice, media from US and China, set the agenda to mainly psychological problem, human rights related, and China-specific (Guo et al, 2012, p.485). However, agenda setting can also happen the other way as in the case of Coca-Cola where media agenda setting spoiled the launching of a new product. 4. Coca-Cola and their New Coke Formula Coca-Cola is major player in the beverage market and Coke, its primary product, is a “virtual synonym for soft drink” (Koessler, 2008, p.335). However, things suddenly changed when Coca-Cola was severely affected by Pepsi’s blind taste test marketing strategy showing Pepsi as the most preferred soft drink. According to Epstein (2005), Coca-cola panicked and changed their Coke’s original formula to one close to Pepsi in 1985. Coca-cola then conducted their own blind taste test and found that large majority of consumers preferred their new formula (p.251). The production of New Coke as announced just before Coca Cola’s 99th anniversary in April 23, 1985 and it has been more spectacular compared to the Radio City Music Hall launching of Diet Coke (Didsbury, 1986, p.259). Few days before the introduction, Coca-Cola alerted the media for a major announcement, declared a company-wide holiday on the 23rd, paid a full-page ad on New York Times declaring their victory over the cola wars, and held a news conference at New York City’s Lincoln Centre (Axelrod, 2008, p.261). However, the subsequent New Coke fiasco was even more magnificent because the media made an extensive coverage and put their emphasis on the negative side of the issue. New York Times called it the greatest marketing fiasco of modern times while extensive news media coverage triggered several months of consumer outrage (Batchelor & Stoddardt, 2007, p.48). While tens and thousands of protest letters were sent to Coca-Cola, the media continued to sensationalised the fiasco and Coke’s mistake became popular and appears in monologues of late-night talk in television, editorial cartoons in newspapers and magazines, and in Pepsi’s own advertising (Davila, 2007, et al, p.101). Coca-Cola was confident about the result of their market research thus it released the New Coke to the consumers. However, consumer reaction was different from what Coca-Cola management expect as instead of positive reaction, the introduction of New Coke received widespread public protest accusing Coca-Cola of killing an “American icon” (Epstein, 2005, p.251). Coca-Cola is a brand affiliated with America for many years thus changes to the brand disconnect the emotional connection between American consumers and Coke (Crothers, 2012, p.6). Consequently, responding with outrage, consumers completely rejected the New Coke and compare it to sewer water, furniture polish, and “two-day old Pepsi” (Woodger & Burg, 2006, p.186). An organization was even formed to lobby Coca-Cola to bring back the old Coke, filed a class action suit, and attempted to source out original Coke from abroad (Davila et al, 2007, p.101). In reality and as far as Coca-Cola sales is concern, the New Coke was a success despite protest and negative media coverage. This is because according to Axelrod (2008), their sales rose 8% just a week after New Coke was introduced to consumers (p.261). In other words, a good number of consumers liked the new formula as the blind taste test result suggest. The New Coke actually showed strong sales figure but due to negative news and media response from loyal classic Coke drinkers, who according to Evans & Hastings (2008) are largely ignored in the New Coke focus group research , Coca-Cola finally withdrawn the new formula from the market and admitted their gigantic branding mistake (p.11). 5. Evidence of Agenda Setting Gathered from Various Media Agenda setting is also evident in a number of media such as the attributes presented by Newsweek Magazine of the eleven candidates for the 1976 presidential nomination, which is very different from the New York Democrats magazine’s description (Stacks & Salwen, 2009, p.95). However, the Entertainment Weekly’s October 2008 issue featuring Stewart & Colvert is a much better example how agenda setting occur in media (see Appendix A). It is obvious in the cover page that the magazine is suggesting that terrorism and Muslims are synonymous, which according to Stewart and Colvert is "silliness media coverage" (Brundidge, 2018, p.1). The cover of Times and Newsweek Magazine (see Appendix B) featuring O.J. Simpson with titles “Trail of Blood” and “An American Tragedy” respectively are undoubtedly agenda setting because it will one way or another affect what people think of O.J. Simpson as a person- a killer. Note that O.J Simpson was acquitted after nine months of trial. News video of CNN in YouTube (see Appendix C and click link) is clear evidence that CNN is engaging in agenda setting. CNN newscasters appear setting public mind by associating words, thoughts, suggestions, and unverified footage in their reports. Similarly, the illustration in Appendix D showing “Uncle Sam” (an American icon) legs caught by bear traps in Iraq and Afghanistan but testing the mousetrap in Pakistan with his left hand is suggestive that the United States after invading Iraq and Afghanistan is now aiming at Pakistan. These evidence suggest that media is indeed involved in agenda setting in order to condition the minds of their target audiences. The New Coke disaster was not caused by erroneous marketing research or miscalculation of consumer preference but negative media coverage taking advantage of the popular culture and their agenda setting power. 6. Analysis Careful analysis of the New Coke disaster and evidence gathered from different media suggest that McComb and Shaw were right when they formulated the agenda-setting theory. For instance, although it is partly to be blame for its panicking behaviour and market insecurity over its competitor, Coca-Cola spent millions of dollars in research thus their decision to change their formula and introduce New Coke to its consumers is probably well-informed. It should be noted that as mentioned earlier Coca-Cola successfully launched Diet Coke in 1982 and therefore well experienced. Moreover, literatures reviewed regarding the marketing disaster suggest that New Coke was indeed received warmly by consumers as evidenced by increased sales during that time. There are rumours however that the introduction of New Coke was a clever advertising strategy because Coca-Cola bounced back after the fiasco and was back as market leader a year after in 1986 (Crothers, 2012, p.2; Woodger & Burg, 2006, p.186). Coca-Cola did not acknowledge this and there is no evidence to suggest that such a decent company would risk their reputation and competitiveness by intentionally introducing a product that will flop. Apparently, Coca-Cola was sincere about New Coke but failed to anticipate negative impact of media coverage. Logically, a group of classic Coke loyalist will have little impact in terms of protest unless media support them. By analysis, the agenda setting power of media not only increased the number of protesters but their reach and influence. For instance, aside from disseminating classic Coke loyalist grievances and demands, the media during the course of agenda setting call to mind the role of the original Coke as an American icon and ignite public interest on rejecting the New Coke. The impact was indeed significant, as Coca-Cola had to rush classic Coke back onto the market. It is also somewhat clear that the issue framed by the media is the new formula as Coca-Cola bounced back to regain its market share almost in the same year. Similar to media’s treatment of Coca Cola’s New Coke fiasco, evidence from different news media compiled by this study suggest that agenda setting is somewhat inherent in the journalism business. As discussed earlier Entertainment Weekly’s cover page in Appendix is a good example of how media even in a comical manner direct people’s attention and thinking to a certain issue. A terrorist engaging in fist bump (a gesture similar to handshake) with a man dressed in traditional Middle Eastern clothes is suggestive of either respect to one another or friendly relationship that may be interpreted in the West as conspiracy between Muslims and terrorist groups. Such agenda setting effort can change people’s perception of equally peaceful Muslims or hold the belief that they are synonymous. Similarly, the picture of a black American with large title saying “Trail of Blood” and “An American Tragedy” in Newsweek and TIME respectively can shape public opinion that the man is indeed a criminal even if he is still on trial. CNN reporting is evidence that media actually distort the facts in order to direct people to their chosen agenda. A lot of people may never notice this news manoeuvring but their impact on individual’ sense of reality is significant. For instance, the statement suggesting that President Obama is simultaneously criticizing the bloody crackdown in Iraq and authorizing drone strike in Pakistan is contradictory but some unsuspecting CNN audience may generalized that Obama is insincere about human rights issues. This is similar to Uncle Sam in Appendix D where media through cartoon illustration attempts to influence thinking and gather public support for Pakistan. 7. Conclusion and Summary Agenda setting in media is evident and it can either destroy or build the reputation of individual and organization. The New Coke marketing disaster in 1985 is a good example how media can tell people what to think and achieve its goal. The popularity of the ozone layer issue put together by New York Times, the image loss suffered by Volkswagen, the concealment of sweatshop issue in Foxconn suicides, and those that were discussed earlier are all traces and evidence of media’s continuing use of agenda setting to shape public opinion. 8. 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Appendix A. B. C. http://www.youtube.com/watch?feature=player_detailpage&v=s-eRkpJEhJ4 D. Read More