Final answer:
Coca-Cola's new formula failed due to the company's underestimation of brand loyalty and the emotional connection consumers had with the original product. Strong consumer loyalty to the 'classic' taste and the challenging advertising conditions for new entrants contributed to the failure, despite positive research for the new formula.
Step-by-step explanation:
The failure of Coca-Cola's new formula despite positive research findings can be largely attributed to the strong emotional and brand connections that consumers had with the original formula. Although the new formula tested well, Coca-Cola underestimated the value of its brand loyalty and the connection customers felt to the 'classic' taste. The introduction of New Coke led to a public outcry. This situation is akin to an election with split votes: while there might be a larger number of candidates (or in this case, flavors) from Coca-Cola, the vote (or consumer preference) could swing to a single strong candidate (or the original, well-established brand preference) due to consumer loyalty. Additionally, massive advertising budgets and other competitive strategies ensure that established brands like Coca-Cola and Pepsi maintain market dominance, making it difficult for new products—even from the same company—to gain traction.