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

In 1985, Coca-Cola, which had just celebrated its 100th anniversary, experienced an unprecedented dark moment for the brand: faced with the rapid growth in sales of Pepsi, Coca-Cola's first foreign CEO, Roberto Goizueta, decided to change the original formula of Coca-Cola in order to target more user groups. Not only did they reduce the bubbles and increase the sweetness to make the taste of Coke softer, but they also spent $4 million to conduct a blind taste test with 191,000 consumers in 13 cities - New Coke won an overwhelming victory with 61% to 39%.

Everything was ready. In April of the same year, Coca-Cola held a grand press conference that surpassed the Apollo moon landing in terms of communication effect, allowing 81% of Americans to know the news that Coca-Cola had changed its formula within 24 hours. However, this change brought Coca-Cola an unforeseen nightmare.

From initial protest calls to demonstrations, countless users have expressed their surprising anger over the better-tasting Coca-Cola. Not only that, old rival Pepsi also took the opportunity to add fuel to the fire, designating the day of the new cola launch as "Pepsi Day", and mocking that since Coca-Cola wanted its taste to be more like Pepsi, why don't people just buy Pepsi directly. Eventually, Coca-Cola had to change the formula back to appease public anger.

Is Coca-Cola wrong?

From a product perspective, large-scale blind testing has proven the popularity of the new formula. However, what Coca-Cola failed to take into account was that by 1985, Coca-Cola had evolved from a sweet, bubbly, and pleasurable beverage into a unique brand that brought joy to people on an emotional level. It is more like an important part of the most influential country in the world, both economically and culturally. It is worth noting that consumers have shifted from rationally purchasing products to irrationally consuming brands - and this is the core driving force behind Coca-Cola's century-long popularity. During this century of best-selling, famous cases in marketing history were created, such as the secret formula of Coca-Cola, Santa Claus, and the blue-red dispute.

Generally, the marketing process of a product can be divided into two stages.

The first stage is product marketing, because the innovative products themselves attract more users. In this process, more and more people use the product, the number of product exposures continues to increase, and brand awareness rises accordingly. Then, as the influence of the product expands, competitors will also emerge. They will try their best to create products that are very similar to the leading products, and seize the market share of the leaders by lowering prices, copying models, etc. At this time, the leading products must find the second curve that influences user favor, that is, the brand.

If the key to the first stage is to seize the window of product innovation, seize the market as quickly as possible and become the leader in this category. The key to the second stage is to tap into the emotional side of users, allowing them to have a deep impression of the brand and give priority to one brand among a bunch of similar products.

Coca-Cola has a long history, and its marketing process is much more complicated than other brands. We can roughly divide it into three stages:

Phase 1 Cold Start

Here we borrow an Internet term: cold start. Prohibition in the United States brought Coca-Cola an excellent opportunity and a huge market, allowing it to debut as an alcohol substitute and then rely on the addictive nature of the product itself and quickly gain popularity in Atlanta and most parts of the United States through large-scale marketing. It is these actions that have established the Coca-Cola brand's leading position in the carbonated beverage industry.

The second stage of brand competition

The emergence of its old rival Pepsi-Cola forced Coca-Cola to stop competing on product features and to start clearly choosing to establish a strong connection with the word that everyone desires (especially during the Great Depression in the United States), namely "happiness", so that the Coca-Cola brand was deeply rooted in the hearts of every American.

The third stage of globalization

As we all know, World War II established Coca-Cola's leading position in the world. This is because before World War II, Coca-Cola was already a part of America in the hearts of Americans. Taking advantage of the opportunity of World War II, Coca-Cola strongly bound the symbol of "America" ​​with Coca-Cola itself, so that when the world mentions America, they think of the Star-Spangled Banner and Uncle Sam, as well as Coca-Cola. Ultimately, Coca-Cola leveraged the United States' globalization strategy to flourish around the world. Interestingly, it was precisely because of this ties with the United States that Pepsi-Cola took the opportunity to become the leading carbonated beverage in the Soviet Union.

As consumer goods in our country are booming, more and more Internet celebrity products are emerging. They are like Coca-Cola, a popular street brand in the late 19th and early 20th centuries. "How to evolve from a rational consumer product to an irrational consumer brand" is the problem they are facing now. Therefore, we disassemble Coca-Cola’s marketing history over the past 100 years in the hope of providing inspiration to these brands.

Chapter 1 Coca-Cola Cold Start: Founded in Atlanta

Coca-Cola

According to official records of Coca-Cola, in May 1886, John Pemberton of Georgia, USA, accidentally mixed coca and cola nuts with sucrose when preparing a medicine for treating headaches, and obtained a caramel-colored liquid. He sent the liquid to a nearby pharmacy, added soda water, and produced the world-famous Coca-Cola.

However, in fact, the birth of Coca-Cola is much more complicated than this paragraph.

Mark Pendergrast mentioned in "The Coca-Cola Biography" that drug addict John Pemberton was originally a soldier in the American Civil War. After being injured in the Civil War, he used morphine to relieve pain, and continued to use morphine for pain relief after leaving the army. In the 19th century, various secret medicines and special-effect drugs were popular in the United States. Merchants colluded with pharmacists to add various alcohols and drugs to secret medicines, claiming that they could treat various diseases. As an inventor and pharmacist, Pemberton invented "Prescription No. 47-11" for treating rheumatism, triple liver pills, ginger oil water, lemon citrus panacea and other secret medicines and beverages whose names have long been forgotten. Some of the formulas contained not only morphine, but also cocaine and marijuana. Coca-Cola is one of them. Interestingly, around the same time that Coca-Cola was invented, Pemberton miraculously quit morphine, most likely because of Coca-Cola.

Coca-Cola was originally called CocaKola, but later it was changed to Coca-Cola for uniformity. Coca and Kola come from its two important ingredients: coca and cola nut.

Coca contains cocaine. More than 2,000 years ago, the Incas in South America discovered that chewing a small ball of coca leaves could refresh the mind, suppress appetite and increase sexual desire. Later, after it was introduced to Europe, coca was promoted as a panacea for all diseases. In the mid-18th century, a Bordeaux wine with coca leaves added, Mariani, was popular throughout Europe and the United States. The Pope, the Queen of England, the President of the United States, the great inventor Edison and other celebrities and government heads were loyal fans of this wine.

Pemberton added cola nuts to Mariani wine and developed a copycat version - French Coca Wine. The origin of kola nut is Ghana in West Africa. Its uses are similar to those of coca. It also has the effects of refreshing the mind, enhancing physical strength and strengthening sexual function. This is because it contains caffeine. Studies have shown that combining caffeine with cocaine can enhance the effects of cocaine. However, not long after, the city of Atlanta, where Coca-Cola was located, passed a prohibition law that would be implemented in seven months. Pemberton had to modify the formula of Coca-Cola and replace alcohol with sugar and soda water. This became the official and original version of Coca-Cola. In addition to soda water and sugar, this bottle of drink contains caffeine and cocaine. It would be more accurate to describe it as a bottle of "addictive drug" rather than a drink.

In fact, modern scientific research shows that sugar is also an addictive substance. The bubbly soda water brings a strong stimulation the moment it enters the mouth, providing a drinking experience very similar to that of alcohol, making Coca-Cola the best substitute for alcoholic beverages during the Prohibition era.

Coca-Cola lover and investment guru Warren Buffett has always had a special liking for the business of making addictive products. The companies he has invested in, such as Coca-Cola, See's Candies, and Heinz, whose products include Oreos and Chowhound, all contain a lot of addictive sugar. He also commented on the tobacco business: "Let me tell you why I like the tobacco industry? It only costs 1 cent to make and can be sold for 1 dollar. Smokers will become addicted and have very strong brand loyalty." In his view, whether it is Coca-Cola containing cocaine or Coca-Cola that later removed cocaine and reduced the amount of caffeine, it is an excellent business in itself, and you can even gain a group of frequent consumers by simply issuing free drinking coupons. However, Coca-Cola's early marketing was much more complicated than this.

"Street Popular Product" Coca-Cola

The 1880s and 1990s, when Coca-Cola was born, were also the golden age of advertisements for various secret medicines and health products. Since there were no relevant institutional restrictions, these companies could run all kinds of advertisements with impunity. At the same time as Coca-Cola was introduced, the annual advertising expenses of leading companies were over $100,000. Pemberton, who was a pharmacist, also recognized the model of using advertising to boost sales. He once said, "If I had $25,000, I would spend $24,000 on advertising for Coca-Cola, and use the remaining $1,000 on production."

Due to limited funds, Coca-Cola's advertising expenses in the first year were only $150. Fortunately, the advertising cost at that time was very low: huge oilcloth slogans cost $1 each, tram slogans cost a little more than 1 penny, three posters cost only 1 cent, and it only cost $1 to print 1,000 tasting coupons.

The person who led the early marketing of Coca-Cola was Frank Robinson. If Pemberton is the product manager of Coca-Cola, then Frank Robinson is the CMO of Coca-Cola, the person in charge of marketing and branding. He took the name "Coca-Cola", wrote the Spencerian Coca-Cola logo, manufactured Coca-Cola products, planned Coca-Cola's advertising materials, and was responsible for the overall marketing of Coca-Cola.

The marketing strategy developed by Robinson was simple but effective: use various print advertisements to open the minds of as many people as possible to know the name Coca-Cola; cooperate with terminal sales channels such as drug stores and cold drink shops so that consumers can easily obtain Coca-Cola; lower the consumption threshold by giving away free drinks, and rely on the addictive nature of the product itself to form repeat purchases.

The first Coca-Cola advertisement was published in the Atlanta Journal on March 29, 1886. Like many new products, the advertisement emphasized the characteristics of Coca-Cola: "Coca-Cola, delicious! Refreshing! Invigorating! Coca-Cola combines the characteristics of the wonderful coca leaf and the famous kola nut! Available in every soda fountain."

The advertisement written by Robinson was not only concise and eye-catching, but also saved the cost of purchasing space for advertising. In order to get more exposure for Coca-Cola, Robinson also borrowed from secret recipes of medicine and health products and invested most of the advertising budget in posters, road signs, calendars, restaurant dishes, thermometers, alarm clocks, pencils, student bookmarks, glass plates in cold drink cabinets and other daily necessities, so that consumers would remember Coca-Cola while using it repeatedly.

Coca-Cola then began to post advertisements saying "Coca-Cola for sale, 5 cents a cup" in front of drug stores, cold drink stores, on the streets, and on cars. In order to better attract consumers, Robinson designed a unique handwritten logo. On June 16, 1887, this logo was first published in a newspaper advertisement and has been used to this day, which is the one we see on every bottle of Coca-Cola.

It turns out that free drink coupons are the most effective. Although Pemberton initially believed that giving away free drinks was a waste of money, Robinson soon showed him the market that free drinks brought: after using the free drink coupons, consumers would become repeat customers because of the addictive nature of Coca-Cola. As a result, Coca-Cola increased its efforts to distribute free drink coupons, and even used the Atlanta city directory to mail the coupons to potential consumers or entrust traveling salesmen to deliver them.

The implementation of Prohibition helped promote the rapid development of Coca-Cola and French Coca Wine. Before Prohibition, people stockpiled alcohol. After Prohibition, Coca-Cola, which was improved based on coca wine, became the best substitute for coca wine, and its sales continued to increase. Although the Prohibition movement was voted off within a few months, Coca-Cola had already established itself: by the summer of 1887, sales of Coca-Cola were reaching 25,000 cups per month. According to the current term "Internet celebrity products", Coca-Cola's brand elements have spread across Atlanta's streets, trams, buildings, and newspapers, becoming a "street celebrity product."

In 1888, Pemberton died of cancer, before which he had sold Coca-Cola to businessman Candler for an ultra-low price of $2,300. Candler resolved the Coca-Cola property rights issue, established the Coca-Cola Company, acquired a legal trademark, and removed cocaine from the formula.

During this process, the positioning of Coca-Cola was also changing. Because of consumers' aversion to the pharmaceutical positioning, under Robinson's leadership, Coca-Cola began to transition from a medicine to a beverage that was more accepted by the public and had a brighter future. Robinson adjusted the slogan to "Coca-Cola, delicious and refreshing!", but this process was gradual. For a long time, Coca-Cola emphasized the "delicious and refreshing" beverage characteristics on the one hand, and the "relieve mental and physical fatigue, treat headaches" properties of the medicine on the other.

It seems that it was destined from the beginning that the mixture of medicine and beverage would be the initial perception of Coca-Cola for most people. At first it tasted like medicine, but as the number of times it was drunk increased, it became more and more addictive. With this unique product attribute, Coca-Cola began to enter more cities in the United States in the late 19th century and early 20th century. They offered free drinks to attract people to try the product, while bombarding them with advertisements to boost sales.

In the late 19th century and early 20th century, Coca-Cola adopted about 30 forms of advertising and distributed more than 1 million advertising materials each year. In 1900, Coca-Cola's advertising expenditure was close to US$85,000. By 1912, that figure had climbed to over $1 million. In 1913 alone, Coca-Cola distributed more than 100 million pieces of advertising materials, including thermometers, cardboard cutouts, metal billboards (50,000 each), Japanese fans and calendars (1 million each), soda fountain trays (2 million), cardboard matchboxes (10 million boxes), notebooks (20 million), baseball cards (25 million), and countless cardboard and metal signage... Coca-Cola permeated every aspect of American life - and this year's advertising materials were enough to meet the needs of all men, women, and children living in the American continent since 1650.

In 1917, Coca-Cola changed its slogan to "Three million bottles of Coca-Cola sold every day", and began to use specific numbers to attract consumers' attention. Eight years later, it changed to "Six million bottles of Coca-Cola sold every day." The change in numbers also shows the influence of Coca-Cola in society at that time.

Throughout its long history of development, what has supported the continuous growth in Coca-Cola sales is not only the addictive formula and advertising, but also the bottling model that was not originally valued by Candler.

Bottled Coca-Cola

When we mentioned Coca-Cola in the previous article, we used the measure word "cup". This is because when Coca-Cola was first launched on the market, it only produced syrup, which was directly sent to various pharmacies and cold drink shops for sale. The merchants added soda water and ice cubes into the cup to make the finished Coca-Cola. When Coca-Cola enters a new city, they will first reach an agreement with local pharmacists and beverage store owners, and then transport Coca-Cola syrup and promotional materials such as banners and flyers with the Coca-Cola logo to the local area. Since Atlanta is an important transportation hub in the United States, this process runs smoothly for a period of time at the beginning.

However, as sales increase, the environments in different cities are very different, and the operating methods of each merchant are completely different. Adding too much or too little soda water will affect the taste, and the lack of ice or refrigerators will also affect the experience of the moment of drinking. The bottling authorization system can solve this problem well.

Coca-Cola only needs to build a factory to produce syrup and send the syrup to bottling plants in various places. The bottling plants can quickly make Coca-Cola with consistent taste by adding a certain amount of soda water according to the corresponding operating procedures. Later, Coca-Cola updated the syrup into powder, further reducing transportation costs.

Changing non-standardized cups into standardized bottles is a milestone in the development of Coca-Cola. Standardization means replicability. As long as there is a Coca-Cola bottling plant in every corner of the world, almost the same Coca-Cola can be produced. This has become the basis for Coca-Cola's global popularity.

On the one hand, Coca-Cola does not build its own bottling plants wherever it goes, but instead adopts the now very popular "ecological" model, cooperating with local manufacturers to benefit them (in fact, not only the bottles, but also the bottle caps, machines, and trucks are all purchased and operated locally, and the employees hired are naturally local). In other words, wherever Coca-Cola builds a factory, it can drive the economic development of the entire region, which will naturally be actively welcomed by the local government and local people.

On the other hand, for Coca-Cola, reducing the production links means throwing many unstable factors, including rising material prices, to its partners. Coca-Cola only needs to focus on the most important and most profitable syrup production. Therefore, Coca-Cola has maintained super high profit margins.

In addition, because of the unique design of the Coca-Cola curved bottle, the bottle itself has become part of the Coca-Cola brand. A 1949 survey showed that more than 99% of Americans could recognize Coca-Cola by the appearance of the packaging alone. The Coca-Cola Curved Bottle is synonymous with Coca-Cola.

At this point, Coca-Cola's business model was basically formed. Large-scale advertising brought Coca-Cola maximum exposure and attracted people to buy. The mysterious formula made everyone who tasted Coca-Cola unable to stop. The bottling authorization system gave Coca-Cola unlimited replication capabilities. With extremely low cost, Coca-Cola can take root anywhere in the world it wants.

This classic business model has continued to operate to this day.

This concludes the preface and the first chapter. Next issue preview: Coca-Cola creates a source of happiness? How did World War II “help” Coca-Cola?

If you are also a brand owner and are worried about how to make consumers remember you, you might as well try telling a brand story like Coca-Cola. If you also have marketing cases or brand stories, welcome to follow us and we can chat together when we have nothing to do.

Author: TopMarketing

Source: TopMarketing