The secret of Coca-Cola brand marketing!

In brand marketing , we not only need to promote products to users and make them buy them, but more importantly, we need to establish emotional drive and long-term connections to create long-term value and extend the life of the brand.

In the top ten world brand value rankings in 2019, Coca-Cola is still on the list, second only to the popular technology giants.

The brand that is so good at using "lyrics bottle", "nickname bottle", "reverse bottle" and "fat otaku happy water" is actually 134 years old? Other grandchildren's brands, such as Jianlibao, Wahaha, and Nestle Coffee, have long been disliked by the post-90s and post-00s. Why is Coca-Cola still so vibrant and full of energy?

In "Driven by Emotion", the former vice president of global marketing of Coca-Cola not only reveals the secret of the brand's youth, but also explores, based on the essence of marketing, how to sell more products to more people in a sustainable way to make more money.

These thoughts will be inspiring to corporate CEOs, marketing peers, fast-moving consumer goods industries, and software service companies. Next, let’s enter the brand world together.

01 The Essence of Marketing

In the 1960s, Paul MacLean proposed the "triune brain" hypothesis. According to the order of human development and evolution, humans actually have three brains: the "reflective" brain, the "emotional" brain and the "rational" brain .

Each brain is connected to the other two through nerve fibers, but each operates as a relatively independent system with its own functions. He believes that the operating mechanisms of these three brains are like "three interconnected biological computers", each with independent intelligence, subjectivity, sense of time and space, and memory.

Ramirez, author of Emotional Drive, draws his conclusion from this assumption. He believes that our actions are primarily driven by emotions.

For example, when buying a watch, from a rational point of view, an electronic watch that costs no more than 100 yuan can meet the need of "telling time". Many people are willing to pay a hundred or even a thousand times the price to buy a watch from a well-known brand because the emotional brain convinces the rational brain with various reasons such as "symbol of identity, reflection of personal charm, taste, inheritance, and value preservation".

For a product without brand support, we will buy it just for the sake of buying it, and the rational price in our mind = product cost + very little profit. (The profit can only be slightly higher than that of competitors with slightly worse price-performance ratio.)

We are willing to pay extra for the emotional resonance a product from a brand with a good reputation evokes. (For example, tenacity, maturity, innovation, optimism, joy, trustworthiness, etc., whatever the brand says)

So, marketing is the process of making people fall in love with products and services by creating a brand.

However, the role that marketing can play varies from person to person, and each person responds differently to marketing activities. Therefore, marketing cannot work for everyone.

For example: decision makers in the To B industry are very rational and pay more attention to product functions, technical capabilities, and cost-effectiveness. However, once well-known brands join the competition and the technological gap is not large, people will tend to favor those companies that have a stronger sense of mission, are more trustworthy, and have better user experience. After all, the ultimate decision makers in B2B are still people, and they are all driven by their emotional brains.

Our emotional connection with a brand and letting everyone know about the company/product is just the first step. For example, brainwash advertisements in elevators force people to remember brand names through constant repetition, but it is difficult to generate emotional preferences.

Summary: What you need to think about before investing in marketing is: "Will these investments make people fall in love with my brand? Will our marketing actions establish an emotional connection with future consumers? Can these effects drive consumers to buy?..."

02 Make the new generation fall in love with your brand

Brands need to have conversations with people that are both impactful and engaging to cultivate brand preference. Unfortunately, it is impossible for us to communicate with everyone at all times. We can only use the right media to communicate with the right people at the right time.

Coca-Cola once fell into a growth crisis. After market analysis, it was found that in the growth market, the highest per capita consumption has always been among young people around 20 years old; while in the recession market, the age of consumers with the highest per capita consumption is still increasing year by year.

If a brand wants to continue to grow, it must capture the group of people with the greatest purchasing power.

For example, the people who contribute the most to sales now are 20-year-olds. If the product does not change, they will still be 20-year-olds in 10 years, but they will not be the same group as they were 10 years ago .

Let’s look at the impact of different marketing methods on brand growth:

Recuritment strategy: TV ads, event sponsorship, free trials…

Attracting new customers mainly targets the emotional brain, and the cost is generally higher, so it requires more insights and there is not much room for trial and error.

Frequency strategy: promotion (such as buy two get one free, discount, etc.) or change of packaging, etc.

These are all thought processes using the rational brain, but once a brand has been accepted for a long time, the reflexive brain will be used, which is what we call "blind buying", and people who engage in these behaviors are loyal consumers of the brand.

Retention strategy: membership system, "private domain traffic", etc.

Keeping consumers in the brand family for a long time is a manifestation of loyalty. At this time, the emotional brain and rational thinking will work at the same time.

To maximize the brand's value in the market, all three strategies must be used simultaneously, none of which can be ignored.

• If the rate of new user acquisition is decreasing, or the share of the youngest users is lower than that of other age groups, then invest a lot of money in acquiring new users;
• Once the effect of attracting new customers is seen, immediately consider balancing the investment between attracting new customers and increasing frequency.
• After the basic business and indicators have grown healthily, it is necessary to extend the product line or promote the membership system to improve retention.

Coca-Cola does not just talk to existing users as the only dialogue partner, but also focuses on updating the user base. By having in-depth conversations with the new generation, increasing topical content, more interesting activities, and cooler designs... the brand can continue to remain vibrant.

In fact, all companies face the problem of user growth. Well-known technology companies will constantly hold technology competitions on campus to recruit outstanding students; Google even has a search page for teenagers to cultivate children's user habits and preferences from an early age.

Summary: Brands need to weigh long-term development and short-term benefits, which is what we often call brand reconfiguration strategy. The cost of attracting new customers is the highest, and frequency-increasing activities are most effective for short-term sales, but they will lead to a decrease in the anchor price, which is not conducive to enhancing brand value.

03 Brand value and price

In almost all companies, marketing investment is recorded as "expense" in accounting items. In fact, the reason why a lot of resources and manpower are invested in brand communication, innovation, design, and user interaction is to enhance brand value awareness and generate positive returns.

Marketing investment increases the value of the brand. If it is greater than the price, the brand will make a profit. The economic demand theory is used in "Emotional Drive" to illustrate this:

(Note: The law of demand does not apply to all industries, such as luxury goods, high-tech companies, etc.)

Effective marketing activities will move the value curve in the direction of the arrow and increase the perceived value from A to B. Then, even if the price remains unchanged, net income and sales will increase. You can also raise the price to price B, and as net income increases, profits will also increase.

However, the prices in the above picture do not necessarily have to be horizontal and continuous. Marketers can participate in price setting based on different user groups, consumption scenarios, packaging methods, scarcity, etc., so that prices continue to approach value and maximize profits for the company.

Take Coca-Cola as an example, it achieves favorable differential pricing through packaging size and packaging material. For example, there are glass bottles, cans, and bottles... If you need personalized cans to highlight your mood, then you will have to pay extra for the packaging; when you are dining at a food stall, a glass bottle will be enough; when you are gathering with friends at home, a family pack may be a good choice... The price difference (and value difference) between Coca-Cola's high-end and low-end products can be as high as 10 times.

Marketers also need to respond quickly to the cause of "value loss" and take quick action. Is it that the product or service is no longer what consumers like? Do competitors have better products or promotions? Are the packaging and price unreasonable? Is the brand image outdated? …

Summary: Marketing itself is not an end, but a means. The purpose of our investment in marketing is to get better returns.

There is no doubt that marketing is a discipline that spans psychology, statistics, and economics. With the development of technology, marketing will become more complex and sophisticated. However, no matter how things change, establishing emotional connections with users and creating value are the eternal truths of a brand.

Author: Hanni

Source: Time Notebook