Coke vs. Pepsi War
American University in Beirut – Class 16. April 2nd, 2014
Mohamed Saada.
Coke vs. Pepsi War
Overview:
In 1985 Coke has introduced a new Coke product replacing its old Coke Formula that has been around for almost 100 years. The reaction has been outrageous by the consumers who resisted the new Coke forcing the company to go back in its decision and sell the two products together.
My opinion is that the mistake was partially being a wrong strategic call and partially a mistake in interpreting the market research date. On the strategic call, Coke was losing share to Pepsi and it wanted to stop that share decline. However Coke should have differentiated between why some people have switched versus the loyal consumers who stayed with Coke. Their profile is different and the way to satisfy them might be different. Secondly, a brand with the mega size of Coke might find it difficult to satisfy the more diversified and sophisticated consumer needs with one product. Third strategic question is whether a “new/improved” taste fit into the equity of Coke being an “iconic” brand for the Americans for years.
There is also a mistake on the market research by underestimating the effect of the 10%-12% rejecters of the new product and ignoring the qualitative data that did not support the launch. What happened in reality was that the 10%-12% rejecters magnified the resistance and influenced the rest of the population. A safer approach was to launch in a test market and mimic the real life situation.
What is the profile of the Coke loyal consumers versus the “prime prospect?”
The first step is to profile the Coke consumers and try to understand where the majority of the consumption is coming from? And where the additional opportunity “prime prospects” is? Usually the consumers can be profiled in one of the following segments:
Loyal Consumers: Those are the consumers who do not alternate/switch between brands. They usually represent the bulk of the consumption.
Mohamed Saada.
Coke vs. Pepsi War
Overview:
In 1985 Coke has introduced a new Coke product replacing its old Coke Formula that has been around for almost 100 years. The reaction has been outrageous by the consumers who resisted the new Coke forcing the company to go back in its decision and sell the two products together.
My opinion is that the mistake was partially being a wrong strategic call and partially a mistake in interpreting the market research date. On the strategic call, Coke was losing share to Pepsi and it wanted to stop that share decline. However Coke should have differentiated between why some people have switched versus the loyal consumers who stayed with Coke. Their profile is different and the way to satisfy them might be different. Secondly, a brand with the mega size of Coke might find it difficult to satisfy the more diversified and sophisticated consumer needs with one product. Third strategic question is whether a “new/improved” taste fit into the equity of Coke being an “iconic” brand for the Americans for years.
There is also a mistake on the market research by underestimating the effect of the 10%-12% rejecters of the new product and ignoring the qualitative data that did not support the launch. What happened in reality was that the 10%-12% rejecters magnified the resistance and influenced the rest of the population. A safer approach was to launch in a test market and mimic the real life situation.
What is the profile of the Coke loyal consumers versus the “prime prospect?”
The first step is to profile the Coke consumers and try to understand where the majority of the consumption is coming from? And where the additional opportunity “prime prospects” is? Usually the consumers can be profiled in one of the following segments:
Loyal Consumers: Those are the consumers who do not alternate/switch between brands. They usually represent the bulk of the consumption.