Why Smart Companies Do Dumb Things - Essay Example

The desire to stay ahead of Pepsi and to be able to meet the taste of what Pepsi produces made the strategy of New Coke compelling to the executives of Coca Cola. In the early 80’s coke lost its market share to its rival Pepsi by two share points which represented to about $960million sales of Coke production. Coke real marketing problem was its advertisement and not its product. With a change in the soft drink consumer market, coke was not able to match up with the thought process with its commercials ads.

Coca Cola had lost generation of young people with its bland advertising style. Coke advertising had a stodgy look and feel in comparison to Pepsi. Coke did not have any relevant statement for the youth in the 80’s. It was being positioned as a beverage preferred by senior citizens in comparison to Pepsi ads which targeted the youths. As a result the company did not pay any attention in improving the advertising rather focused on the product as marketing problem. Coke advertising strategy was no longer matching with the youth culture.

Coke had researched every number and projection before the launch of its New Coke and the figures were accurate but it mis-leaded the company as it allowed the company to chase the wrong problem. The problem was in advertisement strategy the executives thought it to be the product. The executive of Coke got carried away with fragile and funky numbers. It ignored the issue that impacted the quality of the numbers such as research design, problem definition, how to ask questions and the analytical skills which helped to interpret the meaning of the numbers.

Numbers have always been accepted blithely and so did New Coke before its launch. New Coke marketing research lacked validity as it did not communicate to its consumer that its flagship brand would be replaced with new sweeter product and its research was one dimensional. It was based only in sip testing which took place at central locations and was