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New Coke – A Failure In Market Research

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Coca-Cola is a brand which became a household name all over the world.  It is not hard to find a Coca-Cola beverage in a remote location in different parts of the world.  This outreach was achieved over decades by brilliant marketing, brand positioning and word of mouth publicity.  However, the public relations (PR) disaster which Coke had to endure due to the release of New Coke will be a case study at many business schools about market research gone wrong.

Coca-Cola vs Pepsi

Pepsi was a new beverage manufacturer which came out with its own version of the cola and quickly ate into the market share which used to be controlled by Coca-Cola.  Pepsi was sweeter than Coca-Cola and they were positioning themselves as the next gen beverage for the youth in the ’70s and the ’80s. The management at Coca-Cola decided to reinvent Coke by making a sweeter cola concentrate and introducing it into the market.

Market Research

The research was done on focus groups and surveys were taken, where participants were subjected to a blind taste test and were asked to choose from Pepsi, the original Coca-Cola and the New Coke.  As many as 2,00,000 participants were asked to take the taste test. A majority of them chose the New Coke. This led to the conclusion Coca-Cola had its hands on a successful product which would finally let it take back its market share from Pepsi.  After the initial survey, it was found 10 % to 13 % of the participants were disgruntled and responded they might stop drinking Coke altogether. The remaining participants had not been clearly informed about the decision the New Coke would replace the original Coke and this affected the results of the research.  The research focussed only on the physical properties and failed to take into consideration the attachment and cultural acceptance of the original Coke by the American society. Many Americans favoured tradition over novelty. Once Coca-Cola officially announced they would stop the production of the original Coke and would begin selling only the New Coke, it turned their market base into angry consumers.

Return of the Classic Coke

People began to organize protests at the grassroot level, demanding the Classic Coke be brought back.  The Company hotline received over 1,500 calls a day with people complaining about the new product. The press got onto it as well, with articles ridiculing the new flavour being widely published.  The Company had to finally take note and made an official statement a little over three months after launching the New Coke. It said the New Coke would be discontinued and the Company would go back to the original formula.  The original Coke was then rebranded as Coca-Cola Classic. The American public took to this news positively and it reflected on their sales as well.

This goes on to show market research is not just about investing millions but also about taking into consideration the quantitative as well as qualitative feedback and coming up with a solid execution plan.

Bonus tidbit

Coca-Cola decided to do a little bit of marketing and made a limited batch of New Coke for a promotional campaign on the Netflix TV show Stranger Things Season 3, which is set in the year 1985.

Read more about : Best Coca-Cola Marketing Campaigns

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Andhra Pradesh Hotels Association Announces Boycott of Swiggy Over Unethical Practices and Payment Delays!

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The Andhra Pradesh Hotels Association (APHA) has declared a statewide boycott of Swiggy, effective October 14, 2024. This decision stems from ongoing grievances regarding the food delivery platform’s alleged unethical practices and its failure to make timely payments to restaurants.

Reasons for the Boycott

At a media conference on October 4, APHA President R.V. Swamy outlined several critical issues that prompted this drastic action. One of the primary concerns is the significant financial losses that restaurants are experiencing due to Swiggy’s high commission rates. Initially, both Swiggy and Zomato operated in Andhra Pradesh with zero commission fees. However, these rates have escalated over time, with Swiggy now charging between 20% to 30% on orders. According to Swamy, restaurants are losing between 40% to 60% of their menu prices because of these practices.

Another major issue raised by the APHA is the delay in payouts from Swiggy, which reportedly holds restaurant earnings for up to 12 days. This delay places immense financial strain on smaller establishments that rely heavily on timely revenue to sustain their operations.

Allegations of Unethical Practices

The APHA has accused Swiggy of implementing “uninformed discounts,” where price reductions are applied without consulting restaurant management. This practice not only affects the profits of the establishments but also leads to confusion among customers regarding pricing. Furthermore, members of the association expressed concerns about Swiggy altering restaurant menus without prior consent, often selling items at lower prices or offering promotions like “Buy One Get One Free.” Such actions undermine restaurants’ pricing strategies and can damage their brand integrity.

Additionally, the association criticized Swiggy’s refund policies, stating that neither customers nor restaurants receive refunds for canceled orders. This lack of accountability exacerbates the financial difficulties faced by restaurants already struggling with high operational costs.

Response from Zomato

In contrast to Swiggy, Zomato has reportedly engaged in constructive discussions with the APHA and has shown willingness to address many of their concerns. Zomato’s responsiveness has fostered a more favorable relationship with restaurant owners, highlighting a growing divide in how each platform is perceived within the industry.

Future Implications

The impending boycott against Swiggy signifies a critical moment in the ongoing tensions between food delivery platforms and local businesses. As APHA prepares to halt sales through Swiggy, it remains uncertain how this decision will affect both the delivery service and participating restaurants across Andhra Pradesh.

This boycott could serve as a wake-up call for food delivery companies to reassess their business practices and consider more equitable arrangements with restaurant partners. The outcome may influence similar actions in other regions as restaurant owners increasingly seek fair treatment in an evolving market landscape.

In conclusion, the APHA’s decision to boycott Swiggy reflects deep-rooted frustrations within the restaurant industry regarding commission rates, payment practices, and overall treatment by food delivery platforms. As the deadline approaches, all eyes will be on how both parties respond and whether any resolutions can be reached before October 14.

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Mahindra Group Launches Dedicated AI Division to Drive Innovation and Efficiency Across Its Business Portfolio!

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The Mahindra Group has taken a significant step forward in its digital transformation journey by launching a dedicated Artificial Intelligence (AI) division. This initiative, spearheaded by Bhuwan Lodha, aims to harness the power of AI across the conglomerate’s diverse business sectors, streamlining operations and enhancing overall efficiency.

Centralizing AI Efforts

The newly established AI division is designed to centralize all AI-related activities within the Mahindra Group. By consolidating these efforts, the group seeks to implement a more coherent and effective strategy for utilizing AI technologies across its various enterprises. Lodha, who previously served as the digital chief for Mahindra’s automotive sector, emphasized that the growing importance of AI over the past two years necessitated this focused approach. He noted that many companies had been experimenting with AI on a smaller scale, but now there is a concerted effort to bring these initiatives into mainstream operations.

Tailored Solutions for Diverse Sectors

The AI division is committed to developing tailored solutions that cater specifically to the needs of Mahindra’s diverse business units, which include automotive, real estate, and hospitality. The division will not only create proprietary solutions but will also seek out innovative technologies from startups and academic institutions globally. This collaborative approach aims to ensure that each sector benefits from cutting-edge advancements in AI.

Collaboration with Tech Mahindra

While the new division will not have the same capacity to hire domain specialists as Tech Mahindra, the group’s IT services arm, it plans to closely collaborate with Tech M to leverage their expertise. This partnership will facilitate the development and deployment of advanced AI solutions tailored to enhance operational efficiency across Mahindra’s various businesses.

Building Talent and Career Opportunities

One of the key goals of the AI division is to consolidate talent within the Mahindra Group. By creating a dedicated career path for professionals specializing in AI, the division aims to attract and retain skilled workers who can contribute meaningfully across multiple sectors. Lodha highlighted that this initiative would not only provide exciting career opportunities but also foster a culture of innovation within the organization.

Generative AI Implementation

Mahindra & Mahindra (M&M), a prominent entity within the group, has already begun implementing generative AI technologies in its operations. The company has automated maintenance processes for robots and heavy machinery on factory floors, significantly reducing downtime and improving productivity. Additionally, generative AI is being utilized to enhance customer service through advanced chatbots, which streamline interactions and save time for customer service agents.

Strategic Partnership with Google Cloud

In a complementary move, Tech Mahindra recently announced a strategic partnership with Google Cloud aimed at accelerating generative AI adoption across Mahindra’s businesses. This collaboration will leverage Google Cloud’s advanced AI technologies to develop applications that enhance critical business functions such as engineering, supply chain management, and customer service. By integrating these technologies, Mahindra aims to optimize operations and improve customer experiences significantly.

Conclusion

The establishment of a dedicated AI division within the Mahindra Group underscores its commitment to embracing technological innovation as a driver of business success. By centralizing its AI initiatives and fostering collaboration with industry leaders like Tech Mahindra and Google Cloud, the group is well-positioned to unlock new growth opportunities across its diverse portfolio. As this division evolves, it will be interesting to observe how it transforms operations within Mahindra and sets new benchmarks in various industries.

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CCI Approves Merger Between Reliance and Disney

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CCI Approves Merger Between Reliance and Disney

Competition Commission of India (CCI) has granted approval for the merger between Reliance Industries Limited (RIL) and The Walt Disney Company’s Indian media assets, valued at approximately ₹70,000 crore (or $8.5 billion). This significant development was announced on August 28, 2024, and is set to create the largest entertainment
conglomerate in India, encompassing 120 television channels and two streaming services.

The merger involves RIL, Viacom18 Media Private Limited, Digital18 Media Limited, Star India Private Limited, and Star Television Productions Limited. Following the deal, Reliance will hold a 63.16% stake in the new joint venture, while Disney will retain 36.84%. The CCI’s approval comes after previous concerns regarding the merged
entity’s potential dominance in cricket broadcasting rights, which could adversely affect competition and advertisers in the market.

The CCI noted that the approval is contingent upon the compliance with certain “voluntary modifications,” although specific details of these modifications have not yet been disclosed. The merger is expected to be completed by the end of 2024 or early 2025, with Nita Ambani appointed as the Chairperson and Uday Shankar as Vice
Chairperson of the joint venture.

This merger positions the new entity to compete vigorously against major players such as Sony, Netflix, and Amazon, leveraging a vast content library and extensive distribution capabilities. The merger agreement also includes provisions for Disney’s films and productions to be distributed in India through the new joint venture, which is anticipated to significantly enhance its market presence and operational efficiency in the competitive entertainment landscape.

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