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ManagementBrand PositioningBeveragesIntermediate1985
Coca-Cola: New Coke Disaster & Recovery
The challenge
In 1985, Coca-Cola faced its worst brand crisis. Blind taste tests showed people preferred Pepsi's sweeter taste, and Pepsi's 'Pepsi Challenge' campaign was gaining ground. Coca-Cola's leadership made the fateful decision to change the 100-year-old formula.
The strategy
The strategy behind New Coke was purely rational — taste tests proved it was preferred. What the research missed was that Coke was not just a beverage but an emotional icon. The strategy failed to account for the psychological attachment consumers had to the original.
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Try the full case free →Key lessons (preview)
- Rational data cannot capture emotional brand attachment.
- Admitting a mistake quickly is almost always better than defending a bad decision.
- A brand crisis can become a brand moment if handled correctly.