Vol 2.9 "New Coke vs. Old Coke" September 17, 2003

It’s 7:30 A.M. on September 17th. Do you guys and gals remember in the
1980’s when Coca-Cola decided to change the flavor of Coke? Yes? No? Let me
refresh your memory. Here is an excerpt from Gary Smith’s 1997
book, ‘Introduction to Statistical Reasoning’ where he discusses New Coke vs.
Old Coke.

In 1985, after 99 years with essentially the same taste, Coca-Cola
decided to switch to a new, high-fructose corn syrup to make Coke taste
sweeter and smoother'”more like it’s arch rival, Pepsi. This historic decision
was preceded by a top-secret $4 million survey of 190,000 people, in which the
new formula beat the old by 55 percent to 45 percent. What Coca-Cola
apparently neglected to take into account was that many of the 45 percent who
preferred old Coke, did so passionately. The 55 percent who voted for new
Coke might have been able to live with the old formula, but many on the other
side swore that they could not stomach new Coke.

Coca-Cola’s announced change provoked outraged protests and panic
stockpiling by old Coke fans. Soon, Coca-Cola backed down and brought back
old Coke as ‘Coke Classic.’ A few cynics suggested that Coca-Cola had planned
the whole scenario as a clever way of getting some free publicity and causing,
in the words of a Coca-Cola senior vice-president for marketing, ‘a tremendous
bonding with our public.’ For 1985, new Coke captured 15.0 percent of the
entire soft drink market and Coke Classic 5.9 percent with Pepsi at 18.6
percent. In 1986, new Coke collapsed to 2.3 percent, Coke Classic surged to
18.9 percent, and Pepsi held firm at 18.5 percent.

In 1987, The Wall Street Journal commissioned an interesting survey of
100 randomly selected cola drinkers, of whom 52 declared themselves beforehand
to be Pepsi partisans, 46 Coke Classic loyalists, and 2 new Coke drinkers. In
The Journal’s blind taste test, new Coke was the winner with 41 votes,
followed by Pepsi with 39 and Coke Classic with 20. Seventy of 100 people who
participated mistakenly thought they had chosen their favorite brand; some
were very indignant. A Coke Classic drinker who chose Pepsi said, ‘I won’t
lower myself to drink Pepsi. It’s too preppy. Too yup. The New Generation
‘”it sounds like Nazi breeding. Coke is more laid back.’ A Pepsi enthusiast
who chose Coke said, ‘I relate Coke with people who just go along with the
status quo. I think Pepsi is a little more rebellious, and I have a little
bit of rebellion in me.’

In 1990, Coca-Cola re-launched new Coke with a new name'”Coke II'”and a new
can with some blue color, Pepsi’s traditional color. Coca-Cola executives and
many others in the soft drink industry remain convinced that cola drinkers
prefer the taste of new Coke, even while they remain fiercely loyal to old
Coke and Pepsi'”a loyalty due perhaps more to advertising campaigns than to
taste. Given the billions of dollars that cola companies spend persuading
consumers that the cola’s image is an important part of the taste experience,
blind taste tests may simply be irrelevant.

Interesting, huh? Mr. Smith’s research concluded that people were
perhaps more loyal to advertising campaigns than they were to taste! Now, at
this point, you’ve got to be asking yourself why the heck I’m talking about
new Coke vs. old Coke'”I’m not. I’m talking about synthetic diamonds vs.
natural diamonds. Which is better? Are they the same? Does it make a
difference? In next month’s article, ‘Apollo has Landed?’, I will update my
article, ‘Synthetics: The Final Frontier’ with the latest up-to-date info on
the new synthetics; who will be selling them (if anyone), what they will cost
(if available), and detection methods. What I won’t be talking about is the
public’s reaction to them. Because, at the end of the day, public opinion is
typically manipulated by big, slick advertising campaigns. Are the synthetics
as good as the old naturals? I guess we’ll have to see who does the best
advertising.

Talk to you soon,

Fred

The founder and president of Diamond Cutters International, is one of the world’s top diamond experts, as well as a three-time Guinness Book record holder in jewelry design.
Fred The Diamond Guy
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