The lessons of marketing research failure of Coca cola

Coca cola Company made a decision of changing the formula daringly and introduced the new coke in the mid-1980s for dealing with the continual growth of Pepsi in the soft drink market. This movement caused the huge loss in both company profit and brand value at last. Before introducing the new coke, Coca cola finished a marketing research of new beverage taste test involving almost 200,000 respondents in United States. And most of respondents preferred the new formula rather than original formula and Pepsi (Coca Cola, 2012). This marketing research with nearly $4 million costs was regarded as a successful test in the view of Coca cola managers at that time. And they gained the ‘correct’ conclusion that taste was the most important factor of sales decline. While the new coke was introduced in the U.S. market, the original formula was also removed from that market. However, it proved to be a big wrong decision. The original formula as Coke Classic was reintroduced in the market eventually.

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Why the powerful Coca cola Company would be failing in such a simple marketing research seemingly?

There was a relatively obvious mistake in coca cola marketing research of taste test. Taste was not the most important factor resulted in the decline of market share. In other words, Coca cola did not define the research problem incorrectly in fact. So, the survey result was also wrong. Meanwhile, Coca cola managers also ignored the social influence of original coke that brought consumers the emotional involvement and brand association.

There was the conflict between the results of focus group and individuals’ surveys in the marketing research process.

But Coca cola trust the survey.

As a result, when many consumers were stimulated by media reports and other social interactions with angry coke loyalists, most changed their opinions in the previous individual interview (CBSNEWS, 2015). This was not predicted by individual interviews. Even if marketing researches asked the correct question in a right way by individual interview, it was very unlikely that the results would have predicted the shift in opinion which eventually occurred.

marketing-failure-1-new-coke-coca-cola-1-638

 

So what’s the lesson?

The real lesson is that social influence effect must be taken into account carefully in the new-product development process. This can best be done by focus group that can reveal important insights about social interaction effects that other qualitative methods are likely to miss. Focus group technique is more than just a way of gaining a quick and vivid consumer opinion. It is also a unique source of information about how the consumer will respond in a situation where there will be an awareness of the views of other consumer.

Focus group and individual interviews are the widely used traditional qualitative research survey methods that have the distinctive strengths and weaknesses. And each is appropriate for different research tasks. Focus group is a better choice for measuring the effects of interpersonal influence when respondents have the opportunity to interact with others.

If the two forms of qualitative research agree, then the confirmatory research can proceed using the traditional survey methods. However, if the results of the preliminary individual interviews and focus group diverge, then the researcher needs to consider how much awareness of the views of influential others will exist in the marketing situation. Although focus group is the best research method for revealing critical social interaction effects, there is a need for methods which make possible the confirmation of insights of focus group research.

Marketing research is much important for launch a new product or taste, one approach would be the development of procedures for conducting group research on a large representative sample of consumers.

 

By : Yuchen Pang 216039596

 

References

CBSNEWS. (2015), 30 years ago today, Coca-Cola made its worst mistake, Retrieved on April 17, 2016 from

http://www.cbsnews.com/news/30-years-ago-today-coca-cola-new-coke-failure/

Coca Cola. (2012), The Real Story of New Coke, Retrieved on April 17, 2016 from

http://www.coca-colacompany.com/stories/coke-lore-new-coke/

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