Hbs Case Analysis: Introducing a New Coke

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Case1: Introducing New Coke In spite the great risk of losing its loyal consumers, Coca-Cola Inc. launched a new coke with a refined formula in 1985 to replace the old Coke. Coca-Cola’s risky move aimed at grasping back the market share that had been taken by Pepsi during the years. The launch provoked intense reaction in both consumers and Pepsi. The consumers showed strong disapproval and even anger for Coke’s decision, while Pepsi took the chance to reinforce the impression that Pepsi had a better taste. Though the buzz created by the launch did bring up Coke’s sales for a short period of time, Coke still end up apologizing to its consumers and brought back the old Coke and named it “Coke Classic”. When Coca-Cola Inc. made the move to bring the original Coke back, the brand earned consumers’ appreciation and the sales went up again. Coke did not take the risk without careful investigation into its consumers’ attitude in the first place. In fact, vast amount of time and money had been invested to conduct taste tests, interviews and focus groups so as to validate that the new product tasted better than the old one, and the consumers would not resist vigorously against it. What is it that cased the consumers to react so differently to the new product in the interviews and after the launch? I believe there are two main reasons why: First of all, focus groups and interviews were conducted too late in the decision making process and thus is affected by confirmation bias. Secondly, the launch of new Coke wasn’t executed persuasively enough to convince the consumers that new product still carried the essence of Americans’ culture as the original one. As research methods that generate more valuable qualitative data than quantitative data, focus groups and interviews should be conducted even before the hypothesis was established. Coca-Cola could have conducted

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