Introducing to new coke BY connections Introducing new coke Problems: From year 1970 to 1984, the soft drink market share of Pepsi-co is growing from 17. 0 to 18. 8. At the same time, the share of Coke is dropping from 28. 4 to 21 . 7. It is hardly to call them the “number one” drink in the world. In this situation, Coke decided to replace the classic coke (C) with new coke (NC). Problem 1: After replacing the C, what will happen to the customers who are extremely loyal to C. For example, what will the veterans from WWW response?
Problem 2: For the new formula, the Coke may eave to face the lawsuit from the Pepsi-co because of the suspicion of infringement. Problem 3: For the NC, the cost would be high in the first 3-5 years. What if the revenue would not cover the cost and lost the C customers, the stock would go down and Pepsi-co might acquire the stock to be Coke’s dominant stockholder. Alternatives: Alternative 1: still keep the C product line, and establish a new product line for NC. Pros: when push the NC wouldn’t lose the C customers. The NC will be the new generation of the Coke, and be the next flagship product.
Cons: high cost because of the new product line, which meaner the company would take years to make profit from the NC. Alternative 2: warm the market for NC first. For example, get 6-pack C for 1 free sample NC. Pros: it gives die-hard customers enough time to accept and adapt the NC, meanwhile bring new customers in to the market. Cons: it may take too long time to see customers change, and wouldn’t make any profit during that time even lose money. What’s worse, if warming market was failed, that will be a huge lost to the company. Crucial Issues
Patriotism: since C went through the WWW (1940-1945) with the GIs, it became the symbol of the patriotism, the generations during that time are the largest group of die-hard C customers. The launch of NC will be strongly resisted by them. The threatens from Pepsi-co: if the NC project would be successful, Pepsi-co would not just stand there and watch what happened, they would react quickly for sure. Recommendations For introducing the NC, my suggestions are following: In the short run: 1, Taking 3-6 months to warm the market for the NC first.
Increasing the ads budget o introducing the NC, but never ever compare with Pepsi. In this way, NC can be introduced in a good circumstance. 2, Do more promotions. To change die-hard C customers is very hard and the NC can focus on the other customers, like the new generations, let them compare NC with Pepsi and choose their sides. In the long run: 1, setting a special lawyer group which focus on any possible infringement issues. This group costs but is necessary. The main threatens are from Pepsi-co and it is Just a start. When time goes by, the issues would Jump out as various new drinks. , as a second flagship product, NC, the company needs to establish a new product line. For preventing Pepsi-co to be Coke’s dominant stockholder, company has to prepare the possible failure, which meaner establish a new line is high risky. So taking years to Dull a new product Ellen Day stages Is necessary Ana low rills. 3, Emmanuel ten Like a growing up child. Creating a new symbol for the NC (Santa for the C), it can be cartoon or whatever teenagers like and it can “group up” with them. In this way, the company wouldn’t lose the original C market, and meanwhile building up a new market for the NC.