All About New Coke - from The Excellence Files [MUSIC PLAYING] WOMAN: Kids! NARRATOR: In 1985, one of America's most successful companies ran into serious trouble when it decided to change its product. But unlike other industry giants who actually disappeared, like US Steel or Eastern Airlines, this one has come roaring back as the owner of the world's most recognized brand. ROBERTO GOIZUETA (CHAIRMAN & CEO): Coca-Cola is a trademark and it is a trademark that is surrounded with sights and sounds that make it a brand. And Coca-Cola is attached to music. Coca-Cola is attached to sports. We like to say that if it does not move, we paint it red. And if it moves, we sponsor it. [TELEGRAPH SIGNAL] [Text on screen: Location: Atlanta, Georgia. Company: Coca-Cola. File Title: From Trouble: Marketing Opportunity] VINTAGE ADVERTISEMENT: Coca-Cola, Coca-Cola-- NARRATOR: =From its origins in 1886 right on through the '50s, Coca-Cola maintained a consistent record of growth. VINTAGE ADVERTISEMENT: Coca-Cola now! Wow! NARRATOR: It created what seemed a special bond with consumers, largely propelled by advertising in tune with the times. VINTAGE ADVERTISEMENT: Coca-Cola-- PHIL MOONEY (CHIEF ARCHIVIST): From the very beginning, we created colorful images that capture the consumer's attention. The proliferation of different types of imagery and different forms really made the advertising universal. VINTAGE ADVERTISEMENT: Quench the thirst of the fish-- NARRATOR: Year after year, things did seem to go better with Coke. VINTAGE ADVERTISEMENT: Things go better with Coke. NARRATOR: That is until the mid-1960s, when the company ran into a wall of change. GOIZUETA: Since 1964, the product Coca-Cola had been losing market share in the United States. At the same time, the sugar cola segment in which Coca-Cola competes was shrinking. So it doesn't take much of an imagination that if you're losing share in a market segment that is shrinking, eventually you will end up with nothing. NARRATOR: Through the '70s into the '80s, Coke's market share was being chipped away by diet sodas and drinks like 7-Up. VINTAGE ADVERTISEMENT: Once there was a time when a cola was a cola was a cola. Then came the Uncola. And as the world began to discover its fresh, clean taste-- NARRATOR: At the same time, Pepsi introduced its successful campaign, the Pepsi Challenge. Coke had to reassert itself, but how? GOIZUETA: We had tried everything. The only thing we did not try was changing the taste. In the process of developing Diet Coke, our flavor chemist came up with a flavoring compound that they felt was exceptional. And that in blind taste test, and I emphasize the word blind, was preferred. NARRATOR: The test results were all the company needed. People seemed to prefer the new formula. In 1985, after 20 years of struggling with changing market realities, Goizueta decided to alter the taste. Backed by millions in advertising and promotion funds, Coke believed it had finally figured out how to win over the next generation of consumers. VINTAGE ADVERTISEMENT: Introducing the new taste of Coca-Cola. That's right-- the new taste of Coke. Coca-Cola just went one better, a new taste that does more and goes further-- NARRATOR: But the launch of new Coke created a backlash that stopped the company in its tracks. VINTAGE ADVERTISEMENT: Please don't change the taste of Coke. Why do you want to fix it? It ain't broke. INTERVIEWER: You didn't like the new formula? WOMAN: I’ve never tried it. But I didn't want to. Did I? Oh, I did. That's right and I threw it out the window. MAN: Because we don't like it. WOMAN: Because we don't like it. MAN 2: Dear sirs, I'm glad the person who came up with this dumb idea wasn't around when the Mona Lisa was painted. He probably would have said that her smile wasn't big enough. NARRATOR: Rarely had an executive decision generated so much ridicule. For Goizueta, it was the supreme test. Most observers felt that his future, as well as the company's, would be determined by how he responded. GOIZUETA: It was a fascinating spring and summer in 1985. I received numerous letters, one of the letters was addressed to Chief Dodo, the Coca-Cola Company. What was fascinating was that it reached my desk. There was another one, a gentleman in Wisconsin, who wrote a letter, you know, kind of protesting about the formula change. And then he said, I would appreciate it very much if you signed this letter at the bottom and return it to me. Because in years to come, the signature of the dumbest executive in American history is going to be worth a fortune. So I did sign on the bottom and send it to him. So it was humbling in that sense. And it was exhilarating in the sense that we realized we had something in our hands, a treasure that we had never valued as it should have been valued. NARRATOR: Goizueta acted decisively and reintroduced the original formula. DONALD KEOUGH (PRESIDENT & COO): We're bringing back the classic original formula as Coca-Cola Classic-- NARRATOR: The return of Coca-Cola Classic showed the company had learned an important marketing lesson about the consumer's connection to the brand. SALLY COHEN (GROUP BRAND MANAGER): I think it's very difficult when people first come to Coke from other packaged goods companies. Because they're used to brands that have very straightforward, what we call functional benefits. It makes your clothes cleaner, whiter, brighter. And you come to Coke, and you work on a brand like Coca-Cola. And suddenly you have this brand that's-- yeah, there's something physical. It does refresh you and cool you down. But there's much more emotional and mental things happening. It's a lot more intangible the way people feel about Coke. It's almost more like a perfume than it is like a consumer product. VINTAGE ADVERTISEMENT: I'd like to teach the world to sing in perfect harmony, perfect harmony-- NARRATOR: Goizueta's marketing inspiration was to realize that the emotions behind the outcry represented a huge opportunity. VINTAGE ADVERTISEMENT: It's the real thing, Coke is. What the world wants today-- GOIZUETA: We realized that we had in our hands a most powerful tool for growing the business, which was and is all those images that surround Coca-Cola-- the red color, the contoured bottle. VINTAGE ADVERTISEMENT: A bottle that would capture a moment of pleasure the world had come to love. GOIZUETA: So since then, you have seen us emphasizing all those icons that surround the brand, the product, the taste of Coca-Cola. NARRATOR: The centerpiece of Goizueta's turnaround strategy was to focus on Coke's icons, particularly the contour bottle. Originally developed in 1960, [Text on screen: “Enterprise Media Inc. To view the complete program, please visit: www.enterprisemedia.com”]