Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, April 13, 1995                   TAG: 9504130051
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: ATLANTA                                  LENGTH: Medium

A VERY BAD IDEA LIVES ON: NEW COKE HAS TURNED 10

New Coke is 10 years old this month. Raise a can in acknowledgment - if you can find one.

Renamed Coke II a couple of years ago, Coca-Cola Co. keeps it alive in a few scattered markets. But the drink that a decade ago impudently replaced beloved Coca-Cola endures mainly as a sort of liquid Edsel, a marketing-class example of how not to introduce a new product.

And it lives on as a convenient cultural touchstone: The word is that ``Forrest Gump'' author Winston Groom is at work on a sequel in which the history-roving hero is in on the New Coke decision.

In 1994 such soda pop nonentities as Frostie Root Beer and Squirt outsold the beverage Coca-Cola once touted as the best-tasting cola in the world. It was yet another reminder of a lesson Atlanta-based Coke learned all too painfully: Comparative taste is no excuse for messing with a phenomenon.

``Coca-Cola was so deeply ingrained in the American psyche. It represented a culture. When they deposed an icon, it shook Americans,'' said beverage industry consultant Tom Pirko.

``It's hard to underestimate. It was like taking away Mickey Mouse,'' said Pirko, president of New York-based BevMark Inc.

Coca-Cola Co., despite New Coke's poor performance, threw a party this week to celebrate the beverage's birthday. Top executives took the opportunity to remind employees of the value in taking risks.

``History and hindsight require no vision. ... You only stumble when you're moving,'' said Coke Chairman and Chief Executive Roberto Goizueta.

Indeed, the company's share of the highly competitive beverage market has grown steadily since 1985, when New Coke was introduced.

Sales of Coca-Cola's core sugar cola brands - which had been in decline prior to 1985 - have grown 29 percent in the past 10 years, said Coca-Cola spokesman Randy Donaldson.

Coke's flagship brand, Coca-Cola Classic, was the nation's No. 1 brand last year with a 19.8 percent market share, according to the Maxwell Consumer Report. Coke II's 1994 market share was 0.1 percent.

On April 23, 1985, Coke's top executives announced they had changed the formula of the world's most popular soft drink to a ``smoother, rounder, bolder'' mix. The 99-year-old soda would be taken off the shelves and the new product would bear the hallowed name Coca-Cola.

The new, sweeter taste was being introduced as rival Pepsi-Cola threatened Coke's long-held dominance of the beverage market. ``It was so clearly an imitation of our product,'' recalled Bill Cobb, Pepsi's vice president of marketing for colas.

The Coca-Cola brain trust thought it had produced a better drink, and figured that would win over consumers.

``In blind taste tests it still does very well. Unfortunately, you don't buy on blind taste tests. You buy an image,'' said Jesse Meyers, publisher of the soft drink industry publication Beverage Digest.

The public had not tired of the old Coke, a drink that generations of shrewd marketing had made synonymous with happy times.

While the media milked the story daily and Pepsi crowed that it had won the ``cola wars,'' consumers responded to New Coke with a torrent of pointed, sometimes downright nasty, telephone calls, letters and telegrams demanding their old favorite back.

Coke heard.

By summer 1985, the original Coke was brought back, labeled Coca-Cola Classic. It quickly regained its position as best-selling soft drink, and the company remains the undisputed industry leader.

If the New Coke introduction is regarded as marketing's greatest blunder, then the company's response likewise is considered one of the best examples of giving consumers what they want.

``They learned a lesson in the power of the consumer,'' said Frederick Allen, author of ``Secret Formula,'' a history of Coca-Cola.

``None of the advertising or marketing over the years had anything to do with what's in Coke. It was the mystique of the product and the familiarity of the name,'' he said.

Donaldson said there are no plans to drop Coke II.

Even with its tiny market share, it's unlikely New Coke ever will die, Meyers said. Each six-pack sold, he said, is one that might otherwise go to a competitor.

``As long as a consumer will walk across the street to buy it, they'll keep it,'' he said.