REMEMBERING NEW COKE FROM THE BUNKER TO THE BOTTLERS: HOW FIASCO SET COMPANY'S FUTURE COURSE

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It didn't take a psychic to predict the fate of new Coke, just a room full of faithful Coca-Cola Co. bottlers.

At the bottlers' meeting in Atlanta back on April 22, 1985, Sergio Zyman, then senior VP-marketing, announced from the stage that Coke was changing its taste.

The whole room of 5,000 shook their heads almost in unison, saying that this would never work, recalled Tim Shortt, then associate group creative director at McCann-Erickson Worldwide, New York, who was there.

"This [meeting] just underlined the whole disaster that was about to unfold," Mr. Shortt said.

"New Coke is the Edsel of the beverage world," said Donald Stuart, a partner at Cannondale Associates, Wilton, Conn., a marketing consultancy.

Even though new Coke is dubbed as one of the biggest marketing blunders of all time, the experience was valuable for the soft-drink giant.

Through the public uprising over new Coke's introduction, the company stumbled onto a way to reawaken consumers to its brand and create a new appreciation for what's now called Coca-Cola Classic, said J. Walker Smith, managing partner at Yankelovich Partners, Atlanta.

New Coke's introduction and the subsequent return of the original serve as a valuable lesson to marketing executives and students all over the world. Even 10 years later, Advertising Age found few of those intimately involved in the launch would speak on the record.

Here's a look at what happened in 1985.

The Idea

Coca-Cola, which was losing market share to colas like Pepsi, sought to change its 99-year-old formula by replacing it with a sweeter taste, discovered while developing Diet Coke.

Those close to the company said the idea of a sweeter cola had been tossed around more than 20 years earlier as a strategy to attract younger people.

Coca-Cola spent $4 million researching the concept, including 180,000 to 200,000 blind taste tests in 21/2 years.

The marketer also hired two research companies to survey consumers about a new taste. One polling company determined consumers would like new Coke, but the other said that the new taste would tamper with Americana.

The problems seem obvious today. The taste tests didn't all use the same new formula. None of the participants involved in the actual taste tests were asked how they would feel about Coca-Cola abandoning its venerable taste for a new formula, due to concern about the idea getting out. In retrospect, that was the "major blunder," one insider said.

Still, Coca-Cola decided to go ahead and brought in McCann to develop a creative strategy.

The Bunker

McCann executives were surprised on Jan. 3, 1985, when they were told about plans to change Coke's taste. Massive security measures were taken; executives weren't allowed to discuss the meetings with their secretaries, employees or even their spouses.

The "bunker," a secret place where McCann executives met to discuss the new project openly, was established. The group gathered in parent Interpublic Group of Cos. space at 750 Third Ave., a building adjoining McCann's 485 Lexington Ave. headquarters. The room was protected by a security guard who checked passes of everyone who entered and made sure no one took out any written material.

By February, the group-McCann executives Bill Thompson, Ira Madras, Bruce Nelson, Barry Day, John Bergin and Marcio Moreira-had formed a solid marketing direction and decided to bring in more staff. The size of the group eventually swelled to nearly 500 people. Everyone brought in was required to sign a legal document stating they would never disclose what they were working on.

Many people who were involved in the filming of the commercials didn't know the significance of the project. Lifestyle filming was done in California, New York and Canada.

Product shots were done in London because the agency felt the film crews in England would be less apt to ask questions about the package change. Directors would carry around the new soft-drink cans in locked briefcases until they were to be used in the shot.

One day, Mr. Moreira left the cans in a box under his bed in a hotel and an efficient chambermaid threw them out. Luckily, he rescued them just before they entered the hotel's trash compactor.

The big day for bottlers was April 22, and the next day Coca-Cola revealed the new, sweeter taste to financial analysts and the media.

Pepsi, in response to the anticipated announcement, ran a page ad in The New York Times on April 23, signed by then-President Roger Enrico and offering "congratulations" to bottlers and personnel. The ad said: "After 87 years of going at it eyeball to eyeball, the other guy just blinked." He claimed Coke was being formulated to be more like Pepsi.

The Revolt

Consumer reaction was new Coke's downfall. During late May and early June, consumers began demanding that the company bring back the original taste. Hard-core fans rushed to stores to load up by the case on their beloved original formula.

Seattle promoter Frank Olson founded Public Response Corp., establishing a 900-number aimed at making the company bring back the old formula.

The recording on the 900-number told callers: "We think the old Coca-Cola is the best Coca-Cola. For the last 99 years, Coke had the taste, well, of Coke. There was nothing like an ice-cold Coca-Cola.....Now Coke's real thing doesn't seem well, real."

The message continued to encourage callers to express their displeasure with new Coke.

During this revolt, Pepsi took advantage of its competitor's position. It launched advertising addressing the reformulation. And during the month of May, the company's efforts seemed to pay off. Pepsi claimed sales of its bottled and canned soda rose 14% at retail.

The Switch

Finally, Coca-Cola admitted defeat. On July 10, it was announced the original taste would come back as Coca-Cola Classic. Today, the new formula accounts for less than 1% of the soft-drink market.

Coca-Cola put a good face on the whole mess, saying people who hadn't bought the soft drink in years tried it again during the uproar. The company would have paid millions for the media coverage, albeit coverage verging on mass hysteria, received. And in the long run, Coca-Cola seems to have profited mightily from what then-President Donald Keough called a "lesson in humility."

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