New Coke: now you see it, now you don't

Image from Time Magazine

A good example of ostensible demarketing was the decision by Coca-Cola in 1985 to replace their staple product line with something called New Coke: the mistake, according to Ringold (1988) and others was not the launching of New Coke (the company spent $4 million on market research), but the decision to take the long-established original product off the market.

As numerous other studies have reported (see for example Oliver 1986), Coca Cola's decision to withdraw Classic Coke, produced a very different outcome to the public relations disaster described in many entry-level marketing textbooks.  Prior to the “debacle” (Clifford 2009), when the company was forced to reintroduce Classic Coke in the US, Coca Cola had lost its market leadership and continued to suffer declining market share.  Within 6 months of the attempted demarketing these trends had reversed, Coca Cola regaining the lead from Pepsi and continuing to show growth in sales and market share into the late 1980s (Ringold 1988).   

Whether intended or not, the company's removal of a long-established brand appeared to trigger a collective bout of national grief at the passing of a loved-one, followed by a Proustian remembrance of its core qualities on the re-introduction.  The extent to which an initial demarketing decision led to a reversal of a long-standing decline led to speculation that the whole exercise was indeed (in Kotler and Levy's terms) creating the appearance of a strategic marketing withdrawal with the express intention of boosting a declining brand (Haig 2011:13).  This charge was disingenuously rejected by the company, which shrugged off a threatened consumer boycott as “a humbling experiment” (Clifford 2009).  It was an example, as Ringold (1988) observed,  demonstrating the classic features of psychological reactance.

There are many examples where demarketing a product, or having an advertisement banned, has benefited the brand, but hardly any where the marketing people have publicly admitted that this was their intention all along.  This is unsurprising, as owning up to any kind of manipulation of public and media alike could easily rebound.  More common is the reaction of Coca Cola to accusations that they had deceived the public in 1985: their claim “We are not smart enough for that” (Clifford 2009) neatly dodged the ethical questions and positioned the company as being the consumer's friend.  

References

Clifford, Stephanie (2009), “Coca-Cola Deleting ‘Classic’ From Coke Label”,

Haig, Matt (2011), Brand failures: the truth about the 100 biggest branding mistakes of all time, London: Kogan Page Publishers

Kotler, Philip and Sidney Levy (1971), “Demarketing, yes, demarketing”, Harvard Business Review, November-December, pp. 74-80

Oliver, Thomas (1986), The Real Coke, the Real Story, New York: Random House

Ringold, Debra Jones (1988), “Consumer response to product withdrawal: the reformulation of Coca-Cola”, Psychology and Marketing, 5(3), pp. 189-210