The Cambridge’s dictionary defines ‘strategy’ as a detailed plan for achieving success in situations such as war, politics, business, industry, or sport. In this case, the definition needs to be applied to the business field and the Coca-Cola Company more specifically.
In this second blog post, the powerful and good example of Coca Cola Company will be presented and deeply analyzed in order to see how a good strategy can change a company. This will be based on the book written by David Butler: Design to Grow: How Coca-Cola Learned to Combine Scale and Agility (and How You Can Too)
The Coca-Cola Company began to take shape in Atlanta, on May 8th, 1886. It was John S. Pemberton the local pharmacist who developed a syrup against digestive problems which lately seemed to be the worldwide best known product’s formula.
The new product was placed on sale in the Jacobs pharmacy for five cents a glass, beginning to be famous thanks to the magic sentence…
It didn’t take much time until Pemberton realized that the product they had created could be totally succesful so, he and his partner and accountant Frank M.Robinson decided to give the brand a name and trademark. Established also by Asa and John Candler and Frank Robinson the Coca-Cola Company was officially born in 1891.
Some years after, from 1897 on, the beverage began to be produced out of the United States of America and therefore, the main basis of the business model of the company became fixed: Coca-Cola provide the bottling companies the extract and they covered the rest of the process (make the beverage and distribute and commercialize it). It was then by the XX century that the company had 400 different bottling factories working in Panama, USA, Canada and Cuba.
With the years, the Company has experienced a great success but as in any other company or brand that could not have been possible without the consumers. People enjoys the product and purchase after purchase the loyalty degree becomes each time stronger, getting a strong target market.
But besides, it is a well-known fact that selling a product that people like is not the only factor needed to be one of the most valuable companies of the world. So what could be the key factor that has make this company huge and successful?
In David Butler’s words, Coca-Cola’s VP Innovation and writer, Coca-Cola employed seven design and marketing key strategies in order to grow, which have turned the brand into a worldwide phenomenon.
- Everything began with a secret formula and the intention of creating coca wine. It was an in-fashion beverage that included alcohol and coca, considering that in 1886 Atlanta approved a legislation that oblige the manufacturers to produce non-alcoholic versions of their drinks. Pemberton gave the samples to his nephew and send him to the local pharmacy, where people tried the first versions of the drink. And it was by the end of the year and thanks to the information they got in the pharmacy, that Pemberton had already created his magic drink.
- Trademark. Pemberton’s bookkeeper decided that in order to be different from their competitors the logo should be included in the spreadsheets. The company set the standards of the logo in 1923 and as they did with the recipe, they decided that if the packaging could be adaptive and changeable with the time, the logo couldn’t; it would be fixed forever.
- The drink is distributed in their own bottle. Asa G. Candler put all his effort on making Coca-Cola one of the most famous cola drinks in the country through the marketing and the associations with regional bottling companies. In 1915, Candler launched a national competition with the objective of finding the new design of the bottle and make clear that Coca-Cola was a premium and unmistakable product. As a result, it was the Root Glass Company from Indiana the company that designed a bottle inspired by the cocoa seeds which lately became the winner of the contest.
- Ernest Woodruff bought Coca-cola to Candler in 1919 and shared with the retailers the responsibility of keeping high the standards of the company: the team decided that beverage should be served at 36 degree Fahrenheit.
- Same price for 70 years. It is common in a company to offer services for free and then, once the customer is loyal, increase the price of the product. The difference, is that the company did it 70 years after because from 1886 to 1959 a Coke bottle was sold for 5 cents.
- Pioneers on introducing the merchandising and different types of advertisement they increased the knowledge and brand recognition.
- Coca-Cola was now something else than a drink. It was a consumption brand with which the consumers could feel identified. And for that, the companied carried out different marketing campaigns.
- Between 1987 and 1920 Candler launched a massive promotional initiative in which the 10% of the products were given away in order to make people conscious of the brand. He also provided special posters, calendars, watched and other products that ended up decorating the locals and bars. In Butles words, Coca-Cola was pioneer on relating the brand with products that were not related to the brand, what nowadays is known as Merchandising and finally, he also started marketing campaigns in a national and then worldwide level.
After analyzing the key points of the company it is time to have a look at the new strategy that the company settled in 2015.
Since the origins, the brand has worked with three independent brands (Coca-Cola, Coca-Cola light and Coca-Cola Zero) in terms of the can design and advertisement. But from 2015 on, the company has unified the three brans in one common identity, unifying values and advertisement.
The only visible change of the strategy will be evident with the new little details that the cans will include so that the customer can identify his/her Cola beverage (plain, light or zero) without changing nor the product nor the taste of this particular drink. Some gold, black or silver stripes will now differentiate the drinks.
By way of conclusion it is clear that Coca-Cola is always searching for new and different ideas to stay strong in the market and maintain the competitiveness. That is why the company employs the distribution channels, motivates the sellers with awards and promotions and promotes the products with different activities.
The result? Loyal customers purchasing daily or weekly the products and a brand that is worldwide famous.
This all, could not have been possible with the amazing strategy that is ruled by a hard worker team thinking everyday in positive and success.
Cambridge University Press. (nd). Dictionary. Retrieved January 9, 2016, from http://dictionary.cambridge.org/dictionary/english/strategy
Coca-Cola. (2014, September 4). La historia de Coca-Cola. Retrieved January 9, 2016, from http://www.cocacola.es/historia/origen-coca-cola#.VpC2ZYRcgch
Coca-Cola. (2015, March 4). Coca-Cola estrena su nueva estrategia de “marca única” en España. Retrieved January 9, 2016, from http://www.cocacola.es/nosotros/marca-unica-Coca-Cola-Espana#.VpC4OIRcgch
The Coca-Cola Company. (2012, January 1). The Chronicle Of Coca-Cola: Birth of a Refreshing Idea. Retrieved January 9, 2016, from http://www.coca-colacompany.com/packages/history/the-chronicle-of-coca-cola-birth-of-a-refreshing-idea.