Coca-Cola: The Behemoth of Sugar Water

A history of the Coca-Cola Company

“Ultimately, my belief is that the best marketing is creating a product that people are excited to talk about. Period.”

-Katrina Lake, Founder and CEO of Stitch Fix

Throughout the annals of marketing history, there are many stories about successful advertising campaigns that caught a large percentage of the consumers attention. Many included clever slogans, interesting storylines in the commercials and however fleeting, their time in the limelight of the market. Most of these products revolved around consumer trends and fads that faded away. Fluctuations in consumer desires and preferences are well known in the advertising world. Only a few select companies can claim global recognition simply by name or symbol. Through shrewd marketing and sustained branding strategies, these companies have positioned themselves into a place of stature and prominence within the global market that other corporations can only envy. A majority compose the technology sector such as Google, Apple and Facebook (Joel, 2019). Of the top 20 companies, only two represent the food industry. The first, McDonald’s, enjoys universal recognition for their golden arches, fast service and millions of adults who have memories of happy meal trips as a child. The other is the soft drink maker The Coca-Cola Company (Joel, 2019). This ubiquitous brand of caffeinated sugar water is known and available all over the world in over 200 countries excluding North Korea and Cuba, with 1.9 Billion servings a day (Feloni, 2016).

Invented in 1886 in Atlanta Georgia by a Pharmacist and Civil War Veteran Dr. John Stith Pemberton, it was an almost immediate success and was sold for five cents a serving (The Coca-Cola Company History, n. d.). As Coca-Cola became more popular, many imitations were marketed that tried to profit off Coca-Cola’s success. To ensure that customers knew they were buying authentic Coke, the ingenious idea to create a distinct bottle shape with original contours that could be recognized was invented (Feloni, 2016). This price per bottle would stay the same from 1886 to 1959, representing one of the longest price fix periods of a product (Feloni, 2016).

Mission and Vision of The Coca-Cola Company

The Coca-Cola Company conveys in their Mission Statement the goal of their product that the they want to “Refresh the World. Make a Difference (The Coca-Cola Company Purpose and Vision, n. d.).” The meaning of these words is expanded upon in their Vision Statement: “Our vision is to craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet (The Coca-Cola Company Purpose and Vision, n. d.).”

Branding Statement

“Open Happiness.” “Coke Side of Life.” These statements are not merely platitudes or hollow promises made to consumers. Since 1984, the Coca-Cola Foundation has granted over 1 Billion dollars to a variety of programs and causes that varied along the spectrum of pressing issues affecting the globe. These include economic empowerment for underserved women and minorities, water conservation and partnering up with local communities to sponsor education and youth development initiatives for over 2,400 organizations (The Coca-Cola Company Foundation, n. d.).

Sponsorships for Olympic Athletes and other sporting events keeps the brand visible worldwide. Philanthropy is another area that the company excels in. Coca-Cola also supports HIV/AIDS awareness and prevention programs in Africa and Latin America (The Coca-Cola Company Foundation, n. d.).

Positioning Statement and Target Customer

The Coca-Cola Company’s positioning statement is expressed through their advertisements and how they portray consumers of Coke enjoying everyday fun activities, holidays and major live events. The themes presented give the impression that Coca-Cola is a must to have in these settings between family, friends and associates (Perch, 2020).  A strong correlation between happiness and bonding can be seen in the these so that when a customer thinks of the product, they have an immediate connection. (Perch, 2020). While many contain young adults, Coca-Cola targets a broad spectrum of demographics ensuring that the product retains a mass appeal along all ages. With the formula and taste generally unchanged, this assists Coca-Cola in multiple markets across the globe by not having to adjust the product formula in any significant ways to appeal to these markets (Perch, 2020).

Environmental Forces

As a company the realization that customers not only buy the product, but also personally identify with the goods and services offered requires careful consideration. Actions taken by the company to increase sales or expand operations can have reverberations across political and cultural lines. This is a lesson learned by The Coca-Cola Company through direct experience. Businesses need to be cognizant of the perceptions their products create in the market, and what direction the political winds are moving. These factors affect decisions on how to execute strategy to expand and grow distribution.  Knowing the laws and customs when operating in foreign countries is important to the success of an organization.

After World War II, many changes occurred across the globe to the former colonies of the British Empire. India, a former colonized country of the empire, gained its independence in 1947 and established their own political system. The Coca-Cola Company seized this opportunity and by 1950 they were operating a bottling plant in New Delhi (Dyck, 2019). Coca-Cola enjoyed a near monopoly in India for decades as each successive government pushed India further towards socialism with their policies and edicts issued. As an American company, Coca-Cola became the de facto face of Capitalism and Western Civilization’s power. Politicians inflamed the population to incite animosity towards the company using statistics that revealed Coca-Cola’s effect on the country. One example is that only 10% of the villages had access to safe drinking water, but 90% had access to Coca-Cola (Dyck, 2019). The company was also accused of making false claims regarding the healthy benefits associated with drinking Coke. By 1977, the government declared that for the business to stay, they would have to hand over proprietary knowledge of Coca-Cola and give up over half their stake of ownership to the Indian government. This would effectively give the company to the government so Coca-Cola left India. They would not return until 1993 after the socialists lost their political power and were voted out (Dyck, 2019).

These and other incidents occurring that involved political sensibilities and environmental concerns led to the company’s realization that consumers not only buy the product, but also blend personal identity with the goods purchased. In the current socio-economic modern economy, all companies have to keep these factors in mind when appealing to the customer. Business practices that were acceptable in the past receive heavy scrutiny in today’s increasingly connected global market with the proliferation of social media and the concern for the world’s ecology (Perch, 2020). Customer Relation Management for Coca-Cola involves e-mail, phone and resources on-line to ensure customer satisfaction and real-time feedback loops for solutions to product issues (Perch, 2020).

Marketing and Budget

Coca-Cola’s marketing budget averages four billion per year between 2015-2019 (A look at Coca-Cola’s Advertising Expenses. 2020, May 18). As the leading soft drink company in the world with numerous competitors vying for consumer sales, Coca-Cola runs a constant promotion blitz to retain market shares regionally across the globe. They do this utilizing the 4P’s of marketing; Price, Product, Place and Promotion. Price cuts and discounts abound for Coca-Cola products sold in stores along with tactical partnership’s with fast food chains and stadiums to have omnipresent place in the markets. This method made the word “Coke” a part of the language lexicon that many use to describe a soft drink even when not referring specifically to a Coca-Cola product (Feloni, 2016).

Summary and Forecast

The Coca-Cola Company sets the standard for other organizations to emulate when planning market strategy. By endearing the consumer to their product, it is one of the few companies universally known and respected for consistent business practices and product quality. New product rollout is enhanced by familiarity of the consumer with the brand reputation of Coca-Cola, not counting the missteps of “New Coke” in 1985. With a market capitalization of 185.8 billion and a 9% stock value increase in 2019, Coca-Cola will continue to be the leader for the soft drink industry in the coming years (A look at Coca-Cola’s Advertising Expenses. 2020, May 18).

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References

A look at Coca-Cola’s Advertising Expenses. (2020, May 18). Retrieved from https://www.investopedia.com/articles/markets/081315/look-cocacolas-advertising-expenses.asp

Dyck, J. (2019, October 9). How Coca Cola Lost India (And How They Won Her Back). Retrieved from https://medium.com/bc-digest/coca-cola-history-a6c55eb5dfe6

Feloni, R. (2016, February 19). 7 Strategies Coca-Cola used to become one of the world’s most recognizable brands. Retrieved from https://www.businessinsider.com/strategies-coca-cola-used-to-become-an-iconic-brand-2016-2

Joel. (2019, November 20). Most Reputed Brands in the World. Retrieved from https://www.appypie.com/top-global-brands

Perch, D. (2020, February 12). Positioning strategies of Coca-Cola and Pepsi. Retrieved from https://thesocialgrabber.com/positioning-strategies-of-coca-cola-and-pepsi/

The Coca-Cola Company History. (n. d.). Retrieved from https://www.coca-colacompany.com/company/history