Coca-Cola's Centennial Marketing History (Part 3)

Coca-Cola's 100-year marketing history (I)

Coca-Cola's Centennial Marketing History (Part 2)

Last time we talked about the initial conflict between Coca-Cola and Pepsi and Coca-Cola’s World War II legend. Today, let’s continue to talk about the resulting red-blue war and brand globalization. At the end of the story, we will analyze the pioneering significance of Coca-Cola's century-old marketing for new consumer brands in today's society. I hope it will be of some use to your brand.

Chapter 4: Red vs. Blue and the Global Bestseller

PR first, advertising second

After the end of World War II, the world entered a bipolar pattern of competition between the United States and the Soviet Union. Because of the close relationship between Coca-Cola and the United States itself, Coke became part of the game between the two hegemons: the red Coca-Cola came together with the blue-flag United States, and the blue Pepsi-Cola came together with the red-flag Soviet Union.

In fact, the Soviet Union was the first to come into contact with Coca-Cola, and this is still attributed to Eisenhower. After World War II, during the negotiations between the United States and the Soviet Union on the division of Germany, Zhukov of the Soviet Union tasted Coca-Cola at the recommendation of Eisenhower and fell in love with this drink. But Zhukov believed that Coca-Cola carried American symbols, and at his request, with the permission of President Truman, Coca-Cola produced a batch of colorless Coke with a white cap and a Soviet red star on the label.

In fact, Coca-Cola has always maintained a good relationship with American presidents, not just Eisenhower and Truman. Kennedy, Carter, and Clinton have all stated that they are Coca-Cola fans and often drink Coca-Cola in front of the camera.

Of course, this close relationship is the result of Coca-Cola's deliberate management. This management is not only reflected in Eisenhower mentioned above, but also includes Jimmy Carter, who once had a feud with Coca-Cola but eventually helped Coca-Cola to market around the world.

When Carter first ran for governor, Coca-Cola supported his rival, and Carter even publicly declared that he would severely punish Coca-Cola. However, as Carter's chances of winning the election grew, Coca-Cola began to turn its support toward Carter.

In the later stages of the campaign, Coca-Cola's media consultants helped Carter create a new campaign image and reverse his declining public support. So when Carter became president, he immediately expelled Pepsi from the White House and naturally replaced it with Coca-Cola. At the same time, he invited many people from Coca-Cola to hold important government positions. It was also with the help of President Carter that Coca-Cola obtained licenses for markets such as Portugal, Egypt, Yemen, Sudan and even Cuba.

Positioning author Al Ries once wrote a book titled "PR First, Advertising Second", which proposed that in the process of marketing, public relations should be conducted first to shape the brand, and then advertising exposure should be carried out to remind consumers.

The process of Coca-Cola's global marketing is actually in line with this theory. Public relations comes first, relying on the United States' strong power and opening up new markets through high-level contacts, and then relying on large-scale advertising exposure to occupy the minds of consumers.

Because of this strategy, Coca-Cola temporarily lost its main market in Soviet bloc countries. During this period, Pepsi took advantage of the situation and obtained franchise rights in Romania, the Soviet Union and other places. It was not until the collapse of the Soviet Union, the decline of the Soviet bloc, and the United States began to infiltrate its influence into these regions that local officials and civilians became aware of this drink. They began to feel that Coca-Cola was a symbol of new life that would bring job opportunities and a colorful life to the people.

The temporary loss of the Soviet bloc's national markets alone cannot be considered the end of the Red-Blue War. After all, post-World War II globalization is actually Americanization. Only by succeeding in the U.S. market can Coca-Cola become a truly global product. In other words, the US market is the main battlefield in the battle between red and blue.

Pepsi's Counterattack

With the end of World War II, production in the United States gradually recovered, and the younger generation began to form families and have children. According to statistics, from 1946 to 1964, the number of newborns in the United States exceeded 78 million, and they are also called the "baby boomers." Children and young people have always been the main consumer groups of carbonated beverages, so this group of people became the focus of the battle between Coca-Cola and Pepsi that year.

During this period, the leader Coca-Cola mainly adopted a defensive strategy, that is, working hard to define the category, making full use of the opportunities brought by the rise of television media, and striving to reach all user groups. The laggard Pepsi took an extremely radical approach and found its own living space under the shadow of Coca-Cola by defining the baby boomers. PepsiCo's strategy continues to this day.

The transformation of Pepsi-Cola began in 1950 when Steele from Coca-Cola jumped to Pepsi-Cola and became its president.

Previously, because Pepsi has always adopted a cost-effective strategy of large quantity and low price, and its sweeter taste, it is often labeled as a product for the poor. In some areas of the United States, white people even call Pepsi "nigger cola." Therefore, in order to avoid the label of "poor", some Americans choose to pour Pepsi into cups and drink it as Coca-Cola.

The newly appointed Steele made many contributions to PepsiCo.

On the product side, the sugar content was reduced to make its taste closer to Coca-Cola. On the marketing side, PepsiCo tried to label its products as "diet drinks" by repeatedly broadcasting on live TV that "PepsiCo stands with modern people who are concerned about their weight." - conveying the feeling that as long as you drink PepsiCo, you will still be refreshed even if you don't eat anything else, and stating that this is a drink that can reduce calorie intake.

In addition, PepsiCo redesigned the bottle to have many swirls. They invited the new American queen of elegance, Faye Emerson, to host the 15-minute Pepsi Show, wearing a dress with a plunging neckline and leaning over an iced Pepsi bottle, which attracted many slender socialites to drink the beverage.

Pepsi even encroached on Coca-Cola's monopoly. Pepsi once spent $30,000 to install Pepsi vending machines at the exits of 600 Fox theaters on the West Coast.

It turned out that the proactive strategy was very effective: in less than five years, Coca-Cola's leading advantage worldwide dropped from 5:1 to 3:1, while Pepsi's domestic market share increased from 21% to 35%. Even in Atlanta, where everyone likes Coca-Cola, Pepsi's sales increased by 30% in one year.

Leaders' Strategies

By the 1960s, Pepsi had found the code for its brand to catch up. To understand this counterattack, let’s start with Coca-Cola’s continued dominance.

After World War II, Coca-Cola has firmly controlled its base like a grandmaster, with almost no flaws. This is because of the simple and clear business model. In the words of Coca-Cola's CEO in the 1980s, Guo Sida, Coca-Cola only needs to do three things well: make it available, affordable, and enjoyable to drink.

Being available refers to the construction of various sales channels. That is, the products are distributed in supermarkets, convenience stores, sports stadiums, factories, offices and various vending machines.

Affordable refers to the price. On this point, Coca-Cola has remained stable, and later launched packaging of various sizes and prices suitable for different occasions.

Liking to drink Coca-Cola not only refers to the taste of Coca-Cola, but also represents the emotional feeling that the Coca-Cola brand brings to people. Joy, happiness, excitement, good times and patriotism are enough to make users spend money.

It is precisely this simple business model that allows Coca-Cola to generate sufficient profits to support its various trial and error in advertising. Therefore , since its inception, Coca-Cola has seized the dividends brought by almost every media change, whether it is the previously mentioned movies, radio, or the rise of television, as well as the great wave of the Internet and mobile Internet that we are experiencing.

In the 1950s, under Steele's leadership, Pepsi-Cola recovered rapidly. Coca-Cola also seized the dividend of the rise of television media. Television changed the leisure habits of Americans. People moved from outdoors to indoors and gathered in groups in front of the TV instead of in public places. Although this caused a decline in sales in cold drink shops, it brought more opportunities for exposure on TV. Coca-Cola also began to sponsor various programs hosted by TV stations. They also carried out in-depth cooperation with Disney. In addition to various Disney programs, they also sponsored the establishment of the Mickey Mouse Club.

In order to cover as many Americans as possible, Coca-Cola also hired Eddie Fisher, the most popular male singer in the United States in the 1950s, as its spokesperson. If you don’t know him, you can think of him as the Michael Jackson of that era: between 1950 and 1956 alone, Fisher had a total of 19 personal singles that entered the top ten of the US pop music charts. With the sponsorship of Coca-Cola, Fisher released a personal album titled "The Age of Coca-Cola", praising Coca-Cola as the leader in the soft drink industry. During the same period, his photo was made into a life-size cardboard poster and pasted on Coca-Cola's one-step skirt-shaped bottles to induce consumers to buy Coca-Cola.

In the 1960s, McCann Advertising created the famous slogan for Coca-Cola: "With Coca-Cola, everything goes well for you", and adopted an integrated marketing approach to expose and reinforce this slogan on television, radio, offline advertising, print advertising, carpet marketing and various promotional activities. It also rewrote the lyrics of Ode to Joy as: "With Coca-Cola, food tastes better, fun is more enjoyable, dreams come true and everything goes as you wish", making the slogan "stylish enough to attract young adults and not alienating consumers of other age groups because of being 'outdated'."

These measures also put Coca-Cola in a leading position in sales throughout the 1960s.

However, PepsiCo found a way to strike back.

PepsiCo, positioning itself as a “new generation”

In the 1960s, US President Kennedy proposed the concept of "new generation" in his inaugural address, referring to the "baby boomers" born after World War II. Pepsi discovered that even if it reached all Americans with its influence at the time, it was not enough to get Coca-Cola followers to buy Pepsi instead, so it simply focused its limited resources on the "new generation." Using the pressure formula from junior high school physics to explain, the magnitude of pressure is not only related to pressure, but also reduces or increases the surface area. By the same token, if resources are limited, then focusing on the user group can often produce amazing results. That's exactly what happened with Pepsi.

Even though Coca-Cola’s advertisements are as close to the “new generation” as possible, due to its leading position, it still has to take more people into consideration. This is why there is the saying “With Coca-Cola, everything will go well for you”, which emphasizes the product itself. However, Pepsi is different. It can be more radically positioned as "young people's cola" and resonate with young people by showing their lifestyle:

On the new TV live site, brief, quiet intervals are broken by the loud noise of a motorcycle turning a corner or a roller coaster reaching its highest point. After the brass horn sounded, Joan Summers' voice gradually grew louder, calling on consumers to "Get moving! Get moving! You are the Pepsi generation." Using innovative technology—handheld cameras, using real California children instead of actors, and for the first time ever, Pepsi vending machines were flown by helicopter—the new ads finally made Pepsi effective enough to reach the kids of the 1950s and the "new generation" mentioned in Kennedy's inaugural address.

Since then, the two major cola brands have formed their marketing styles. Coca-Cola focuses on products and highlights the Coca-Cola products themselves, while Pepsi focuses on consumer groups, especially young users. The differentiated marketing approach allowed Pepsi to find its own living space, and was also the fundamental reason why Coca-Cola, which maintained its leading position in the following decades, could not ignore Pepsi.

"If you don't agree, run for a point" in the 1970s

This situation continued until the 1970s. By chance, Pepsi discovered a more effective way to seize Coca-Cola's market share.

I have always believed that the reason why Xiaomi phones quickly left an impression of high cost-effectiveness among the public was not only because the early pricing was really low enough, but more importantly, it invented the "run the score if you don't agree". Through running the score, it turned the complex, difficult to pronounce, difficult to spread, and extremely high cognitive threshold product performance into a set of numbers that are easy to understand. You only need to look at the numbers to judge which phone performs better. Later, Huawei phones used DxOMARK scores to demonstrate their excellent camera performance, which was also an excellent way to build awareness.

The same principle applies to the "grass planting" model in recent years. There are a thousand Hamlets in the hearts of a thousand people. It is not easy for ordinary people to judge whether a bottle of beverage is delicious or not. At this time, if a KOL can stand up and draw a clear conclusion through content display and relevant comments, recommending to buy or not, it will undoubtedly lower the threshold for consumers to make choices. This is also the reason why the "grass planting" and "review" models are booming on Bilibili and Xiaohongshu.

More than 40 years ago, Pepsi discovered the miraculous effect of this model. Pepsi accidentally discovered that it beat Coca-Cola in a cola taste test, so in 1975, a Dallas TV station began broadcasting "Take the Pepsi Challenge." In the program, consumers used anonymous testing to choose their preferred beverage, thereby proving which beverage tasted more popular. Many original Coca-Cola consumers chose Pepsi in the test. As the show aired, local consumers in Dallas began to accept Pepsi-Cola. In just two years, Pepsi-Cola's market share in Dallas increased from 4% to 14%.

Pepsi then began to broadcast provocative advertisements on a larger scale in the United States. By the late 1970s, Pepsi's market share had steadily increased. In the summer of 1978, Nielsen market research data showed that Pepsi's sales in supermarkets surpassed Coca-Cola.

The big players began to feel fear. They started to doubt that Coca-Cola's formula was really inferior to Pepsi's. This led to the $10 billion lesson that Coca-Cola made at the beginning - changing the formula in a big way.

Chapter 5: Brand is consensus

What exactly is a brand? Is it the name that you rack your brains to come up with, the logo that you design over and over again, the slogan that keeps changing, the product features, or the so-called brand culture and brand core... This is a problem that bothers all business owners and marketers.

Today, I would like to discuss this topic from another dimension: What do people need?

The most important thing, of course, is objective things. When you are hungry, you need to eat; when you are thirsty, you need to drink water; when you are cold, you need to wear clothes; and you also need a place to live. Not only humans, but all animals on earth need these things. The reason why humans are called advanced animals is that humans have an ability that ordinary animals do not have. The book "Sapiens: From Animals to God" attributes it to the ability to make up stories.

The human brain gives humans this ability. For the same lion, other animals can only use language to accurately express information: "Be careful! There is a lion", while human language can convey information about things that do not exist at all. For example, when it comes to lions, humans can say: "The lion is the guardian of our tribe."

This ability to make up stories allows humans to write all kinds of fictitious stories and pass them down from generation to generation, such as the Genesis in the Bible, Pangu creating the world, Nuwa creating humans, and the stories of Yan Emperor and Huang Emperor. Because of these stories, a large number of people who didn’t know each other established relationships, and then over time, these virtual stories replaced the things themselves and became the consensus of the entire organization.

Therefore, to explain it from the perspective of Sapiens: A Brief History of Humankind, it starts from the time when humans have the ability to tell fictional stories.

Homo sapiens has always lived in a dual reality. On the one hand, we have real, objective realities like rivers, trees, and lions; on the other hand, we have imaginary realities like gods, countries, and corporations. As time goes by, imagined realities grow stronger; today, rivers, trees, and lions sometimes have to rely on gods, states, and corporations to do them a favor and leave them alone if they want to survive.

It can be said that objective reality and fictional content constitute the DNA double helix structure of the evolution of human society. On the one hand, the development of objective reality enriches human imagination and promotes humans to create richer content. On the other hand, the content brings together people with similar interests to form a closely related organizational structure, which collides and rubs against each other and further improves objective reality.

From this perspective, brands are also composed of two parts: objective reality and fictional content. The product itself, brand name, brand logo, and brand main color are objective realities, while in the process of brand evolution, the various brand stories created by brand owners or consumers form the brand's fictional content. Over time, the objective reality of the brand and the fictional content merge and become inseparable.

Coca-Cola is the best example. Its name and logo were determined when it was first created in the late 19th century. Its formula was slightly adjusted in the early 20th century and has remained unchanged to this day. The fictional content related to Coca-Cola has been enriched, from the original refreshing drink (alcohol substitute) to the symbol of happiness during the Great Depression and then to the American symbol during World War II, interspersed with marketing events such as Santa Claus, rural life, and national idol endorsements, as well as various stories performed by consumers themselves in the process of buying and drinking Coca-Cola. These fictional contents are integrated with the objective reality of Coca-Cola. After the accumulation of time, they have become a consensus among Coca-Cola consumers about Coca-Cola: this is Coca-Cola, a magical drink that brings harmony, friendship, singing and laughter.

I have always had an assumption that if Coca-Cola did not make a big fuss, but instead quietly changed its formula and gradually gained recognition, perhaps this strategy of changing the formula would have been successful.

However, the high-profile change in the formula actually undermined this consensus in an extremely serious way.

The decision to change the formula was approved by Coca-Cola's greatest CEO, Woodruff. Later it was proved that Goizueta was also an outstanding leader. He made more people in more regions around the world become Coca-Cola consumers. But they still ignored the group consensus behind Coca-Cola products.

From an objective point of view, New Coke tastes better, and Pepsi's test also proves this. But from the perspective of group consensus, changing tastes means tearing up the consensus, causing the originally cohesive group to become divided. Re-establishing consensus will inevitably take a longer time and require the interpretation of virtual stories beyond the product. This is something that Coca-Cola, with a century-old history, cannot afford. Therefore, changing back to the original taste and restoring consensus is the only solution.

In fact, Coca-Cola did the same thing later. It restored the formula and continued to sell Coca-Cola which tasted worse than Pepsi. But later facts proved that Coca-Cola was still the leader in the carbonated beverage industry. No matter what strategies Pepsi adopted, it could only be second and had no chance of challenging Coca-Cola.

This is the power of the brand. It originates from the product, but transcends the product itself and becomes the common belief of the entire group.

The following story of Coca-Cola basically repeats what was said before: the product, brand and business model remain unchanged. What changes is that different marketing methods are used for different user groups and in different media forms to make the new generation of people accept Coca-Cola, identify with Coca-Cola and reach a consensus with Coca-Cola.

postscript

Looking back at the development history of Coca-Cola, I think the marketing success of Coca-Cola lies in

1. A clear and straightforward business model. For 130 years, Coca-Cola's business model has never changed. They produce concentrate at a very low cost, which later evolved into powder, was canned into Coca-Cola in various places, and then sold all over the world. In this process, Coca-Cola only needs to control the cost of concentrate, which is actually the cost of the main ingredient - sucrose. A simple, clear and profitable business model gives Coca-Cola enough funds to carry out marketing activities.
2. High-quality products have their own communication power. Water is a necessity for everyone, and sugar is also a necessity. The essence of Coca-Cola is sugar water. In theory, it is suitable for everyone. In the words of Buffett, Coca-Cola does not make you feel sick after drinking it, and you can drink one bottle after another. This determines that there is no ceiling for Coca-Cola's marketing. The ultimate goal of Coca-Cola's marketing is to make everyone accept it, everyone like it, and everyone addicted to it.
3. “Available for purchase” channel strategy. Under the first two conditions, Coca-Cola can be bought in shopping malls, supermarkets, restaurants, convenience stores, hotels, cinemas, stadiums, Tmall, JD.com, Amazon... and every corner of the world through the construction of various sales channels. I divide marketing into two processes: "influence" and "sales". The two are interdependent. Influence is to promote sales, and sales make influence create value. Then, Coca-Cola's sales channels all over the world can maximize every penny spent in the process of building the Coca-Cola brand. In fact, the advertisements of McDonald's and Unilever that we see have better conversions only on the basis of extremely perfect channel construction. If there are no sales channels, a large part of the marketing costs are bound to be wasted.
4. Insist on running public relations and advertising in parallel. When many people pay attention to Coca-Cola's large-scale advertising, they often overlook Coca-Cola's public relations strategy. After Woodruff took over, every large-scale marketing campaign of Coca-Cola was preceded by public relations. Coca-Cola first established good relationships with senior executives and the public, and then relied on the powerful symbol of "America" ​​to open up the global market.
5. Create a unique brand image. It turns out that product features can be caught up with or surpassed, but image cannot. Therefore, Coca-Cola created the brand image of "Refreshing Moment" and associated it with happiness, health, energy, and friendliness, establishing an emotional connection with consumers. This strategy has continued to this day, shaping the brand image, impressing users, and establishing deep links.
6. Shape the group's common beliefs. This is related to the fifth point, because long-term product sales and long-term brand image building have gradually formed a group consensus that goes beyond the product level. Coca-Cola lovers have formed a religious-like belief, which is the core force supporting the long-term popularity of Coca-Cola.

So, what inspiration can Coca-Cola’s century-old marketing case bring to our new consumer brands today?

First, the construction of sales channels is indispensable. Don’t limit yourself to online or offline, cover as many channels as possible, and the value of brand marketing will be further magnified.

Second, the value of public relations is greater than that of advertising. Creating a brand image that fits the market through good public relations is the prerequisite for achieving twice the result with half the effort.

Third, advertising should focus on communication rather than displaying products. Product features may be copied or even surpassed by other brands, but it is often the emotional connection that consumers pay for.

Fourth, form a unique fan culture through operations. I think everyone can understand it better by analogy with chasing stars. This is not that difficult in the age of social media.

Author: TopMarketing

Source: TopMarketing