Coca-Cola and its Evolution
The Coca-Cola company started out as an insignificant one man business and over the last one hundred and ten years it has grown into one of the largest companies in the world. The first operator of the company was Dr. John Pemberton and the current operator is Roberto Goizueta. Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886. He mixed a combination of lime, cinnamon, coca leaves, and the seeds of a Brazilian shrub to make the fabulous soda. Coca-Cola debuted in Atlanta’s largest pharmacy, Jacob’s Pharmacy. Later on, the carbonated water was added to the syrup to make the soda that we know today as Coca-Cola.
A medical elixir…
Coca-Cola was originally used as a medical elixir. Coca-Cola was named by Frank Robinson, one of Pemberton’s close friends, he also penned the famous Coca-Cola logo in unique script. Dr. John Pemberton sold a portion of the Coca-Cola company to Asa Candler, after Pemberton’s death the remainder was sold to Candler. Pemberton was forced to sell because he was in a state of poor health and was in debt.
Candler achieved a lot during his time as owner of the company. On January 31, 1893, the
famous Coca-Cola formula was patented. He also opened the first syrup manufacturing plant in 1884. His great achievement was great ehancements for the size of the bottles. Candler aggressively advertised Coca-Cola in newspapers and on billboards. In the newspapers, he would give away coupons for a free Coke at any fountain. Coca-Cola was sold after the Prohibition Era to Ernest Woodruff for 25 million dollars. He gave Coca-Cola to his son, Robert Woodruff.
Robert Woodruff was an influential man in Atlanta because of his connections to area colleges, universities, businesses and organizations. When he made a contribution, he would never leave his name, this is how he became to be known as “Mr. Anonymous.” Woodruff introduced the six-pack in 1923. He started advertising on the radio in the 1930s and on the television in 1950. Currently Coca-Cola is advertised on over five hundred TV channels around the world. In 1931, he introduced the Coke Santa as a Christmas promotion and it caught on. The Coca-Cola contour bottle was patented in 1977. The two liter bottle was introduced in 1978, the same year the company also introduced plastic bottles.
Woodruff did have one dubious distinction, he raised the syrup prices for distributors. But he improved efficiency at every step of the manufacturing process. Woodruff also increased productivity by improving the sales department, maded the quality control better, and beginning large-scale advertising and promotional campaigns. Woodruff made Coke available in every state of the Union through the soda fountain. For all of these achievements he earned the name, “The Boss”.
The biggest marketing blunder…
In 1985, the Coca-Cola Company made what has been known as one of the biggest marketing blunder. The Coca-Cola company stumbled onto the new formula in meaning to produce diet Coke. They put forth 4 million dollars of research to come up with the new formula. The decision to change their formula and pull the old Coke off the market came about because taste tests showed a distinct preference for the new formula. The new formula was a sweeter variation with less tang, it was also slightly smoother.
Robert Woodruff’s death was a large caus to the change because he stated that he would never change Coca-Cola’s formula. Another factor that influenced the change was that Coke’s market share fell 2.5 % in four years. Each percent was a lost of 200 million dollars.. This was the first flavor change since the existence of the Coca-Cola company.
The change was telled April 23, 1985 at the Lincoln Center. Some two hundred TV and newspaper reporters attended this very glitzy announcement. It included a question and answer session, a history of Coca-Cola, and many other elements.
81% of the population!
The change to the world’s best selling soft drink was heard by 81 % of the United States population within twenty-four hours of the announcement. Within a week of the change, one thousand calls a day were flooding the company’s eight hundred number (1-800-GET-COKE). Most of the callers were shocked and/or furious, many said that they were considering switching to Pepsi. Within six weeks, the eight hundred number was being jammed by six thousand calls a day. The company also recieved over 40 000 letters, which were all answered and each person got a coupon for the new Coke. A retired Air Force officer, explained in a letter to the Coca-Cola company that he wanted to be cremated and barried in a Coke can, but now that this change had come about he was reconsidering. Many American consumers of Coca-Cola asked if they would have the final say.
When Pepsi heard that the Coca-Cola company was changing its secret formula they said that it was a decision that Pepsi tastes better. Roger Enrico, the president of Pepsi-Cola wrote a letter to every major newspaper in the U.S. to declare the victory, the letter read like something like: This is a proof that Pepsi is better then Coke…bla bla bla
Coca-Cola officials said, “The new formula will boost Coke’s share by one %. That is worth 200 million dollars a year.” Coca-Cola management had to decide: Do nothing or “buy the world a new Coke”. They decided to develop the new formula. Roberto Goizueta, the president of the Coca-Cola Company stated, “The old Coke formula, with its secret flavoring ingredient, called Merchandise 7X, will stay locked in the Trust Company of Georgia bank vault in Atlanta, never to be used again”. This is what many Coke officials said, “This is the most significant soft drink development in the company’s history”.
The change back to the old Coke was known as the Second Coming. Roberto Goizueta said, “Today, we have two messages to deliver to the American consumer, first, to those of you who are drinking Coca-Cola with its great new taste, our thanks…But there is a second group of consumers to whom we want to speak to today and our message to this group is simple: We have heard you”. On July 10, 1985, eighty-seven days after the new Coke was introduced, the old Coke was brought back in addition to the new one. This was greatly due to dropping market share and consumer protest.
The market share fell from a high of 15 % to a low of 1.4 %.
Roberto Goizueta and Donald Keough took full blame for this failed product launch. Don Keough, Coca-Cola president, said in response to the comeback, “The truth is we are not dumb and we are not that smart”. Roberto Goizueta’s response when the change about, “We have heard you”. This was said to be a classic marketing retreat. Coca-Cola executives admitted that they had goofed by taking the old Coke off the market. One old Coke loyalist said, “The company had spoiled the taste of its ninety nine year old soft drink and betrayed a national trust”. Ike Herbert, a Coke marketer said, “You would have thought we had invented a cure for cancer”. The Coca-Cola company’s eight hundred number received eighteen thousand calls. One caller said they felt like a lost friend had returned home. The comeback of old Coke drove stock prices to the highest level in twelve years. This was said to be the only way to regain the lead on the cola wars.
In 1979, fifteen hundred employees moved to the new corporate headquarters in Atlanta located on North Avenue. The new corporate headquarters came to be known as “The Tower.” During the time when the research for the new formula was taking place, it was known as “The Bunker”. The known ingredients in todays Coca-Cola are water. caffeine, phosphoric acid, vanilla, various oils and essences and extracts of the coca leaf and the kola nut. The one in four hundred part of cocaine was removed from Coca-Cola in 1903. Five years after the infamous Coke fiasco, the Coca-Cola company tried to bring back the reformulated Coke. The effort to phase in Coke II into the soda market was quite unsuccessful.
During the Woodruff era, Mr. Woodruff made a promise to the armed forces of the United States to supply Coca-Cola to every serviceperson. He said that costs and location did not matter, he supplied 5 billion bottles to the service. In the mid-1970’s, more than half Coca-Cola sold was outside of the U.S. One in every two colas and one in every three soft drinks is a Coca-Cola product. The best known trademark in the world is sold in about one hundred and forty countries to 5.8 billion people in eighty different languages. This is why Coca-Cola is the largest soft drink company in the world. Coca-Cola is worth more than 58 billion dollars on the stock market. For more than 65 years, Coca-Cola has been a sponsor of the Olympics. The 1996 Summer Olympics were held in Atlanta, Georgia, the home of Coca-Cola. They accomplish this through scholarships, hotlines, donations and contributions, etc. Another large accomplishment that the Coca-Cola has, is being the first company to make and use recycled plastic bottles. One way to see all of the achievements of the Coca-Cola company is to visit the World of Coke in Atlanta. Keep on consuming the world’s favorite soft drink, Coca-Cola !