Question

In: Economics

why did the new coke introduction fail back in 1985? 

why did the new coke introduction fail back in 1985? 

Solutions

Expert Solution

During 1980s there is a competition going on between Pepsi and Cola where Pepsi is having an upper hand at that time. Cola than CEO and other executive thought of changing the flavour of Coco Cola and release it as New Coke in 1985. The major chnagch they made to the Coco Cola drink is that they want to bring some more sweetness to the drink and they even changed it for New Coke. During that time Pepsi is having the sweetness in its drink which Cola was not having.

Few days before the launch of New Coke a rumour spread like wild fire that Coco Cola tried to copy Pepsi and that is why they are bringing sweetness to their product which they never had. People and media started to believe that rumour and during the launch of New Coke they started asking questions to New Coke team. Even when New Coke team tried to make it clear that it is a no media believed their words and they started publishing the same news that New Coke is a copy of Pepsi. After the release of New Coke people did not like it's taste which lead to decline in sales and market share. Within few months of release New Coke lost its market value and sales thus making the company to stop it's supply.


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