Originally Posted by
ffsim
Excellent post, HangTen!
I just want to highlight this curious comment from Calin. I'm certainly no marketing guru, but to my knowledge New Coke failed because Coca-Cola changed their core product fundamentally and tried to pass it onto its customers who had a certain expectation of what a Coca-Cola product should be.
One could argue that AC hasn't actually learnt anything from New Coke at all. They're fundamentally changing a sizeable chunk of their offering, calling it Air Canada rouge and passing it along to customers who have a certain expectation of what an Air Canada product should be. What's more, their changing the "Old Coke," or Air Canada mainline, too.
They're not just fiddling with a recipe that only tastes good because of lower fuel prices, but introducing a whole new one that tastes much worse.
Let's see how much they actually learnt from Coke once all is said and done...
Hmm, I think that this is a bit of a stretch through from a marketing perspective.
Marketing 101: 4P's
Price
Product
Placement
Promotion
Let's keep things simple and just focus on the first two P's which are part of the marketing mix.
Customers want to pay less, so price goes down, so then AC has to then create a new product to deal with this decrease in price (what the market will bear), and that's Rouge.
From what I remember (and please correct me if i'm wrong), New Coke was a change in product, and I don't recall a change in price. If New Coke was cheaper than Coke, then perhaps the consumers would have adopted it, but as best as I can recall, it wasn't. And customers didn't like New Coke and they most likely said "well hey, I used to pay the same, why am I getting this garbage". If New Coke was priced at say 3/4 of coke, would it have sold? I dunno, as Coke is an addiction (at least to me)
Now, where AC did, IMHO screw up on was promotion. They did not differentiate their Rouge product and the ML product properly. So AC got in a lot of **** (beginning with the letter S) for that. AC has now figured out how to fix their promotion aspect (aka sending emails reminding people's it's Rouge, offering refunds, differentiating on site) etc.
Thoughts?