Case Analysis on Coca-Cola

When it comes to mass marketing, perhaps no one does it better than Coca-Cola. Coke is the
most popular and best-selling soft drink in history. With an annual marketing budget of nearly $3
billion and annual sales exceeding $30 billion, the brand tops the Inter brand ranking year after
year. Today, Coca-Cola holds a current brand value of $68 billion and reaches consumers in over
200 countries, making it the best-known product in the world. In fact, Coca-Cola is such a global
phenomenon that its name is the second-most understood word in the world (after okay). The
history of Coke’s success is astonishing. The drink was invented in 1886 by Dr. John S.
Pemberton, who mixed a syrup of his own invention with carbonated water to cure headaches.
The company’s first president later turned the product into a pop culture phenomenon by
introducing it to pharmacists and consumers around the world and handing out clocks, posters,
and other paraphernalia with the Coca-Cola logo. Coca-Cola believed early on that to gain
worldwide acceptance, the brand needed to connect emotionally and socially with the masses,
and the product needed to be “within arm’s-length of desire.” So the company focused on
gaining extensive distribution and worked hard at making the product loved by all. In World War
II, it declared that “every man in uniform gets a bottle of Coca-Cola for 5 cents, wherever he is,
and whatever it costs the company.” This strategy helped introduce the soft drink to people
around the world as well as connect with them positively in a time of turmoil. Why is Coca-Cola
so much bigger than any other competitor? What Coke does better than everyone else is create
highly current, uplifting global campaigns that translate well into different countries, languages,
and cultures. Coke’s advertising over the years has primarily focused on the product’s ability to
quench thirst and the brand’s magical ability to connect people no matter who they are or how
they live. Andy Warhol said it best, “A Coke is a Coke and no amount of money can get you a
better Coke than the one the bum on the corner is drinking.” One of Coca-Cola’s most
memorable and successful commercials was called “Hilltop” and featured the song, “I’d like to
buy the world a Coke.” Launched in 1971, the ad featured young adults from all over the world
sharing a happy, harmonious moment and common bond (drinking a Coke) on a hillside in Italy.
The commercial touched so many consumers emotionally and so effectively showed the
worldwide appeal of Coke that the song became a top ten hit single later that year. Coca-Cola’s
television commercials still touch upon the message of universal connection over a Coke, often
in a lighthearted tone to appeal to a young audience. In one spot, a group of young adults sit
around a campfire, playing the guitar, laughing, smiling, and passing around a bottle of Coke.
The bottle reaches a slimy, one-eyed alien who joins in on the fun, takes a sip from the bottle,
and passes it along. When the next drinker wipes off the slime in disgust, the music stops
suddenly and the group stares at him in disappointment. The man hesitantly hands the bottle back
to the alien to get re-slimed and then drinks from it, and the music and the party continue in
perfect harmony. Coca-Cola’s mass communications strategy has evolved over the years and
today mixes a wide range of media including television, radio, print, online, in-store, digital,
billboard, public relations, events, paraphernalia, and even its own museum. The company’s
target audience and reach are so massive that choosing the right media and marketing message is
critical. Coca-Cola uses big events to hit huge audiences; it has sponsored the Olympics since
1928 and advertises during the Super Bowl. Red Coke cups are placed front and center during
top-rated television shows like American Idol, and the company spends over $1 billion a year on
sports sponsorships such as NASCAR and the World Cup. CocaCola’s global campaigns must
also be relevant on a local scale. In China, for example, Coca-Cola has given its regional
managers control over its advertising so they can include appropriate cultural messages. The
delicate balance between Coca-Cola’s local and global marketing is crucial because, as one
Coca-Cola executive explained, “Creating effective marketing at a local level in the absence of
global scale can lead to huge inefficiencies.” In 2006, for example, Coca-Cola ran two
campaigns during the FIFA World Cup as well as several local campaigns. In 2010, the company
ran a single campaign during the same event in over 100 markets. Executives at Coca-Cola
estimated that the latter, more global strategy saved the company over $45 million in
efficiencies.

Despite its unprecedented success over the years, Coke is not perfect. In 1985, in perhaps the
worst product launch ever, Coca-Cola introduced New Coke—a sweeter concoction of the
original secret formula. Consumers instantly rejected it and sales plummeted. Three months later,
Coca-Cola retracted New Coke and re-launched the original formula under the name Coca-Cola
Classic, to the delight of customers everywhere. Then-CEO Roberto Goizueta stated, “The
simple fact is that all the time and money and skill poured into consumer research on the new
Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original
Coca-Cola felt by so many people.” Coca-Cola’s success at marketing a product on such a
global, massive scale is unique. No other product is so universally available, universally
accepted, and universally loved. As the company continues to grow, it seeks out new ways to
better connect with even more individuals. Referring to itself as a “Happiness Factory,” it is
optimistic that it will succeed.

Questions

1. What does Coca-Cola stand for? Is it the same for everyone? Explain.
2. Coca-Cola has successfully marketed to billions of people around the world. Why is it so
successful?
3. Can Pepsi or any other company ever surpass CocaCola? Why or why not? What are
Coca-Cola’s greatest risks?