Capital Project Failures

CapitalProject Failures

CapitalProject Failure

Inthe year 1985, the Coca-Cola Company realized that its sales had beendipping for over 15 years. The company had been losing the marketshare to their fiercest competitors Pepsi. More and more peoplepreferred Pepsi to Coke. This prompted the company to act quickly soas not to lose its market share. The company decided to roll out anew product that would compete with Pepsi. The product would be knownas “new coke” (TheCoca-Cola Company, 2015). Before rolling out the new product, thecompany had done a series of tests of the new product to a group ofconsumers. In the initial tests, the consumers were in the opinionthat the new coke had a superior taste as compared to the classiccoke. The company moved quickly and replaced its coke formula for thefirst time in 99 years. However, the new coke would not do well inthe market. Most of their consumers preferred the classic coke to thenew coke. This led to a huge consumer outcry and finally the companydecided to bring back their original coke for fear of losing theirmarket share (TheCoca-Cola Company, 2015).

Whydid the new coke fail? The Coca-Cola Company had for a factunderestimated the power of its brand. New Coke was a marketingfailure. As a much as the product was sweeter than the classic coke,the consumers had already grown an emotional attachment to the oldbrand. As such, their consumers boycotted buying the new coke. Theirconsumers were outraged that the company had stopped producing itsoriginal brand in favor of the new brand. A few months after theintroduction of the new coke, the company had incurred massive lossesand decided to reintroduce the old coke much to the delight of theirconsumers.

Reference

TheCoca-Cola Company,. (2015).The Real Story of New Coke.Retrieved 19 February 2015, fromhttp://www.coca-colacompany.com/history/the-real-story-of-new-coke

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