Getting emotional about brands – the real New Coke story

I was recently asked a question by an astute member of the audience: “what about New Coke?”

The implication being, that if consumers rarely feel deep emotional bonds towards the brands they buy then why the rejection of New Coke?

It was a very good question.

On the spot I answered that one of the few times that people do get emotional about brands is when you take something away from them, particularly when you do it in a very public noticeable way. Psychologists talk about the endowment effect, how people tend to place a much higher value on something they already have than something they are offered. Also people are much more adverse to loss than they are attracted to gains.

I think this is a pretty reasonable answer but it turns out that there is more to the New Coke story…., read on…

The story of New Coke is now a marketing legend. Covered by many a textbook and still regularly referred to by marketing consultants. The story goes like this….. worried by ‘The Pepsi Challange’ taste test Coca-Cola executives decided to change Coke to make it sweeter and more likely to win in blind taste tests with consumers. So a new formula was devised and in a bold move Coca-Cola’s time-honoured taste was changed and launched with national advertising and publicity. Cans carried the message “New”. But the American public hated the idea of a classic like Coke being tampered with. They complained and refused to buy. Coca-Cola realised their mistake and brought back “Classic Coke” which quickly became the norm and “New Coke” was phased out of production. It was considered a huge marketing mistake, although some conspiracy theorists proposed that it was all part of a master plan by Coca-Cola corporation to get publicity.

So goes the legend but the real story doesn’t fit marketing theory quite so neat and tidily.

Coke’s share price actually went up when it introduced the flavour change. Earlier Coke bottlers gave the CEO of Coke a standing ovation when he announced their plans. Sales did not dive when the new formula was introduced, they rose. So the degree of consumer backlash has been exaggerated, and wasn’t immediate. Resistance came from the South, around Atlanta Coca-Cola Corporation’s home. Here were people who felt they owned part of Coke, who felt current management didn’t have the right to change things. And here consumer backlash was highly visible to Coke executives many of whom lived in the South.

The legend that developed later served Coke well. The idea that Americans loved Coke so dearly that they demanded its return and were reminded of their love.  If I worked for Coke it would be a myth I’d be happy with.