Iv) Coca-Cola

Coca-Cola, which started in 1885, is also a fascinating example. On the face of it, it would appear to be the exception to the rule. For over 100 years the company has sold the same product.

The only time they changed the formula they were forced by customers to reverse this decision. Their secret lies in their motto: the world belongs to the discontented. The basis for this motto is to warn against complacency and advocate a perpetual curiosity. For example, Coca-Cola's Japanese company market tests a new soft drink variety or other product every month.

The company has continually re-vitalised itself by updating advertising and packaging, so that it is in line with the ever-changing youth culture

Over the decades Coca-Cola has had very successful advertising campaigns that have resulted in it being one of the most successful brands ever like

- linking Coca-Cola with Santa Claus (starting in the 1930s, this campaign linked Coca-Cola with one of the most iconic celebrations, ie Xmas, and western family values)

- during World War II (offering the military discounted Coke for the soldiers in wars zones. Along with cigarettes and candy, it was 1 of the 3 things that soldiers most wanted. This helped internationalise Coca-Cola with US soldiers fighting world-wide and allowed it to get around the wartime restrictions on sugar usage by making Coke an essential item).

- doing the right thing (linking Coke with the civil rights movement in USA - 1960s)

- movies (in the 1980s, Coca-Cola purchased Columbia pictures and began inserting Coke-product images into many films)

- sports sponsorship (including the Olympic Games since 1928, FIFA World Cup since 1978; others in the USA include the National Football League, National Basketball Association, Major League Baseball, National Hockey League, etc)

Other successful campaigns include using slogans like "the pause that refreshes", "I had like to buy the world a Coke", "Coke is it", "share a Coke", etc

One of the few times that Coke got its marketing wrong was when Pepsi (its main competitor) introduced blind taste testing and demonstrated that Pepsi was the preferred drink on initial taste. To counter this, Coke decided to change the formula, ie New Coke. The market reacted very adversely to this new product and Coke had to revert to the original.

Like many others firms in the food industry, Coke is looking at cannabis!!!!!

After 1990 its share price increased from $US 10 to over $US 88 in 1998; subsequently, the share price fell to around $US 40 in 2003; by mid 2004, the share price had recovered to around $US 50. These fluctuations in share price correlate with the S-curve phenomenon. The fall in share price is linked with the

- problems with management, especially with succession planning at the CEO level after the death of the legendary CEO Roberto Goizueta in 1997. Douglas Ivestor succeeded Goizueta. Next came Doug Draft but he was regularly over-ridden by the Board, such as in the abortive Quaker deal. Neville Isdell followed Draft as CEO.

- poor governance by the Board (sometimes referred to as "Coca-Cola keiretsu" as it resembles a web of interlocking relationships typical of Boards in Japan).

By mid 2004, the financial performance improved with a 35% increase in net income and a 13% increase in revenue to $US 5.1 billion

To handle increasing criticisms (2013) that it is adding to youth obesity (estimates claim that 17% of American children are obese and 36% of adults) and fear of government regulation on 'soda consumption', Coke has re-enforced its agreement of

- 2009 to put calorie labeling on the front of all packages;

- 2007 not to direct advertising to children under 12 years old;

Furthermore, it has expanded its physical activity programs in 200+ countries and promotes low-and no-calorie drinks like Diet Coke and Coke Zero.

Youth-culture focus with change from traditional promotions via radio, TV, print, etc. to social media (Facebook, Instagram, YouTube, etc) via teen influencers

. Used to be no. 1 world brand & associated with sociability, happiness & convenience. But allegations that its products are increasing obesity are eroding its brand value

. Coke is under pressure due to the increasing popularity of healthy drinks like bottled water, coconut water & juice, plus move away from sugar-based & artificially sweetened carbonates like Coke with its caffeine hit

. Coke is chasing the changing market with new "healthier" products.

Currently the 4 biggest challenges facing the Coca-Cola brand revolve around:

i)  obesity crisis - the high calorie content of Coca-Cola is claimed to be contributing to this crisis

ii) competition - from drinks that are regarded as "healthier"

iii) water usage - the amount of water the bottling factories use to make Coca-Cola is regarded as excessive

iv) waste - the disposal of the plastic Coca-Cola bottles is causing an environmental issue.

 Under its accelerated growth strategy, Coca-Cola has a commitment to reducing

"...sugar content of its beverages by 20% and replacing virgin PET with recycled plastic..."

Sue Mitchell 2019

Coca-Cola is also diversifying its drinks portfolio with healthier products like MOJO kombucha, Cocobella coconut water, Rokeby Farms high protein smoothies and Impressed - cold pressed juices, etc plus other drinks like alcohol and coffee like Grinders coffee, Coors beer, Canadian Club, Jim Bean, etc.

 

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