New Coke

“New Coke” is the unofficial name of the reformulation introduced in 1985 by The Coca-Cola Company to replace the original formula of its flagship soft drink, Coca-Cola (a.k.a. Coke). Properly speaking, New Coke had no separate name of its own, but was simply known as “the new taste of Coca-Cola” until 1992 when it was renamed Coca-Cola II.

The American public’s reaction to the change was poor, and the new cola was a major marketing failure. The subsequent reintroduction of Coke’s original formula, re-branded as “Coca-Cola Classic”, resulted in a significant gain in sales, leading to speculation that the introduction of the New Coke formula was just a marketing ploy.

The Coca Cola Company claims it was “arguably the biggest risk in consumer goods history”. Read more about “Coke Lore” here.

The Paradox of Choice

Had seen this TED video last weekend. Was something that convinced me to not have too many choices. We are exposed to just too many choices and which probably makes us unhappy too. The video gave some striking examples. The basic fundamental behind the theory is that eliminating consumer choices can greatly reduce anxiety for shoppers.

Schwartz describes that a consumer’s strategy for most good decisions will involve these steps:

• Figure out your goal or goals
• Evaluate the importance of each goal
• Array the options
• Evaluate how likely each of the options is to meet your goals
• Pick the winning option
• Modify goals

Schwartz finds that when people are faced with having to choose one option out of many desirable choices, they will begin to consider hypothetical trade-offs. Their options are evaluated in terms of missed opportunities instead of the opportunity’s potential. Schwartz maintains that one of the downsides of making trade-offs is it alters how we feel about the decisions we face; afterwards, it affects the level of satisfaction we experience from our decision.