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10 Worst Business Decisions Ever Made


7
Coke Introduces 'New Coke'
This billboard advertises the short-lived New Coke. © Todd Gipstein/CORBIS
This billboard advertises the short-lived New Coke. © Todd Gipstein/CORBIS

For soda fans, the flavor of Coke is the unchanging standard by which all other sweet fizzy beverages are judged. But the original formula, whipped up Atlanta pharmacist John Pemberton in 1886, was almost ditched in the 1980s when Coke began losing market share to its archrival Pepsi [source: Coca-Cola].

Coke executives worried that "kids these days" were drawn to the syrupy-sweet kick of Pepsi, so they began tinkering with the recipe. For two years, Coke's flavor engineers mixed up experimental batches and tested them extensively on the soda-drinking public [source: Saffir]. The verdict was unanimous: New Coke tastes better than old Coke.

On April 23, 1985, American consumers popped open their first cans of New Coke. Within days, hundreds of letters and phone calls poured in to Coke's Atlanta headquarters demanding a return to the old formula. People began hording cases of old Coke and selling them on the black market. Apparently, throughout its meticulous product testing, Coke failed to ask the real question: do Coke drinkers even want a new Coke [source: Ross]? Author Malcolm Gladwell in his book "Blink" adds that the taste test was the problem – people might prefer a sip of a sweeter drink but not necessarily want to drink a whole can of it.

On July 11, less than three months after its debut, New Coke was pulled from the shelves and replaced with Coca-Cola Classic (now just called Coca-Cola)[source: Ross]. In retrospect, the failed launch of New Coke had the unintended consequence of strengthening the appeal of its original brand. Its bottom line certainly hasn't suffered. As of May 2014, Coca-Cola is worth more than $180 billion [source: Fortune].


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