Coca Cola and Happiness

Among all the popular products that are now considered top brands I consider Coca Cola the most extraordinary. It is not essential product for human nutrition and it actually started as an alcohol beverage surrogate in times of prohibition in Georgia in 1886. Only 3.200 servings were sold in Atlanta drug stores the first year and it was all but success when Dr. John Pemberton died in 1888. My theme in this assessment will be the history of making a product associated with fun and enjoyment out of simple syrup mixed with soda water. Generations and generations have taken Coca Cola as their own drink and it is a choice drink for youth of all ages. What were marketing campaigns that have brought Coke so close to association with fun and enjoyment? How was its marketing arranged that no other cola comes close, with Pepsi being the closest second brand of colas? I am going to research the history of Coca Cola brand development through the eyes of different marketers. What was the Coca Cola Company doing right since its inception and where were its mistakes? How was the message of fun and association with fun delivered to western population?

They say that Coca Cola was incidentally discovered when DeLuise, American soda promoter accidentally hit the soda water spigot filling a glass with a syrup with soda water. It was a surrogate for wine cola because during Georgia prohibition of 1986/1987 the original beverage could not sell. Probably there would never have been Coca Cola if it were not for the prohibition in Georgia. As soon as prohibition has been repealed Dr. Pemberton returned to his original wine recipe and placed his son in charge of Coca Cola development. Dr Pemberton was skilled doctor and his chemistry work was of high quality. He developed chemical laboratories that were later state run analytical facilities. But he never realised the potential of Coca Cola. There were his successors that developed Coca Cola in the brand it is today. Until 1905 the soft drink marketed as tonic and contained traces of illegal drugs as well as caffeine-rich kola nut. By the late 1890 Asa Grieg Chandler directed the Coca-Cola Company and syrup sales rose for 4.000% between 1890 and 1900. The famous logo, which is highly recognizable everywhere, was an idea and work of Dr. Pemberton's accountant Frank Robinson. Asa Candler took over the Coca-Cola Company as owner soon after Dr. Pemberton's death. He partnered with Frank Robinson and redid the formula for Coca Cola syrup. Frank Robinson's creation was the logo, script and a push that the classic slogan "delicious and refreshing" be tied to all the future advertising. Coca-Cola Company also pioneered in distribution and coupon sales. Under long term tenure of chairman and CEO Woodruff between 1923 and 1981 Coca-Cola Company expanded in 44 countries and was global business before going global was "cool". In sixties soda fountain was something like water cooler is today - a meeting and chat place during breaks. As soon as bottled beverages and packed ice cream took over people forgot about soda fountains. Advertising, packaging, distribution, and trade secret protection has made possible that over one billion of servings of Coca-Cola are sold today daily. Coca cola has been aggressively advertised on billboards and in newspaper under chairman Candler who sold the company after prohibition to Ernest Woodruff for his son Robert Wudruff, Coca-Cola Company boss for six decades. In his first year of 1923 he introduced "sixpack", and in 1929 he made Coca Cola available through vending machines. In 1930's he started with radio advertising and in 1950's on television. In 1931 he introduced Coca Cola Santa Claus repeating its appearance and good wishes every Christmas since. In his sixty years at the wheel he was responsible for twelve ounce Coca Cola can in 1960's, the Coca Cola contour bottle in 1977, introduction of two litre bottles and plastic bottles. He raised prices of syrup for distributors but also improved efficiency and productivity, emphasized quality control, and improved sales department. "The Boss" also started big item advertising and promotional campaigns. (Source: Cola Marketing History) The publicly traded company has also built a strong trust of its investors (Waren Buffet Secrets, 2010)

As described above the basic product of Coca-Cola Company is Coca Cola syrup and its preparation is one of the most guarded secrets. Coca Cola was not sold in India until 1991 because Indian government required disclosure of trade secrets and the company would not tell. Only in 1991 India changed its legislation so that trade secrets need not be disclosed like patents and copyrights. Only a handful of executives know the formula and they are not allowed to travel together just like the president and vice president of the United States. The syrup is catered to regional bottling factories from where bottled products and syrup for dispensers are distributed to retailers. In early 1900 the Coca-Cola Company lawyers had to battle regulatory action because it was believed that illegal drug is one of ingredients of the syrup. But nowadays Coca Cola complies with all FDA requirements. In 1985 Coca Cola wanted to change the formula but ran into protests and boycotts of their consumers so they returned to the original brand as Coca Cola Classic. Coca Cola developed light brand and zero calories brand, as well as vanilla and other tastes. In some markets they test special beverages like mixture of Coke with coffee or with spices but they are always perceived as limited editions or short lived brands. In 2008 the Coca-Cola Company alone issued 88 new brands soon to be forgotten just to protect its market share in beverage markets. In the case of Coca Cola. keeping the original formula safe and secret is more important than developing new tastes. The story is different with packaging and distribution but the product itself is still version 1.0 with no Beta version 1.1 in sight.

Coca Cola advertising targets youth of all generations who want to enjoy life and have fun. Because of its longevity, the youth targeted twenty, thirty or forty years ago is no longer young but it feels like when with Coke. Delicious and refreshing since 1886, always associated with popular music. To name just a few of Coca Cola's advertising campaigns: "Have a Coke and a Smile", "Coca-Cola. Enjoy", I'd Like to Buy the World a Coke", "The Real Thing". Every marketing campaign was strategically prepared and best advertising venues chosen. Coca Cola crews visit campuses and make practical jokes and film them. There is a YouTube Coca Cola Channel with over 23.000 members. On this channel you can watch short videos where real person is hidden in vending machine and starts giving bigger and better servings, two cokes for one and the like. In one of this shows they brought to the campus oversized vending machine where coin dispenser was as high as basketball rim and students had to climb to it but the machine would then gave also oversized cokes. Videos are funny and they travel through viral networks carrying the message very fast and far. Student population is the most receptive Cokes target. The Coca-Cola Company has a few official contact points in new social media (like Facebook, Twitter, Flickr, and YouTube) which they use to spread the message.
If we look back, a Coca Cola (advertisements' copies observed online at Beautiful Life) billboard advertisement from 1889 features a young lady standing by a stand where a glass of Coca Cola is for sale at 5 cents, the name Coca Cola in unique branded logo is repeated twice and the words delicious and refreshing stand on the stand above a bouquet of fresh roses.

A billboard advertisement from 1900 depicts a beautiful young lady on a horse drawn wagon served by a white uniformed waiter, the Coca Cola logo again repeated twice, once as a store name and once in text below where its price at 5 cents is also stated. The message was stated as "The ideal beverage for discriminating people".
An advertisement from 1907 also depicts angel like lady in white gloves as if selling Coca Cola at the stand. Besides the Coca Cola logo being repeated three times there is also price for a drink at 5 cents. In 1909 an a billboard advertisements shows something like all ladies party in the background with three young fashionably clothed women drink and the message written depicts "Relieves the fatigue that comes from over-play, over-work, and over-thinking. Delicious, Refreshing, Thirst-Quenching" with 5 cents price tag. The logo is repeated twice.
The fatigue relieving theme was also a theme of billboard advertisement from 1910. There are two pictures in the advertisement one with tired executive behind his desk and one with a waiter filling a glass from soda fountain. The logo is depicted centrally in large print. It also looks that Coca Cola has got some competition by 1910 as the words below the logo say: "It will relieve your fatigue, cool you comfortably, calm your jangled nerves and quench the thirst. But be sure to get the genuine, Cooling Refreshing Wholesome" The 5 cent price tag is also mentioned. As we have seen from ad description the Coca Cola was still sold like some kind of tonic that will relieve fatigue and stress. It also looks that Coca Cola target upper class of society at the beginning of the century. By 1918 the feature was omitted from advertising by 1918. A poster from 1918 features beautiful young lady in white drinking Coca Cola as the logo on the glass shows with a playground as a background and some greenery around to contrast whitish main motive. Text below the picture promotes Coca Cola as "The Drink of All the Year" and mentions words delicious and refreshing. The 5 cent price tag is also omitted. Another advertisement from the same time shows a young lady sitting on a bench with only blurry picture of colonial home in the background, holding a bottle with Coca Cola logo and drinking from it using a straw. The message: "Drink Coca Cola In Bottles Delicious and Refreshing".
An ad from 1920 looks like drawing in watercolour of New York harbour with Manhattan skyline where upfront a male hand holds a glass with logo and the words above state "Drink Coca Cola Delicious and Refreshing". In 1924 logo a container for six bottles is featured on which main text repeats: "Thirst knows no season. Drink Coca Cola Delicious and Refreshing." The other text being reserved for the merits of six bottle box, probably a very good marketing feature to increase sales.

Another Coca Cola advancement was reached in 1931 when an advertisement in The Saturday Evening Post shows Santa Claus in red colour of Coca Cola without his hat explaining: "My hat's off to the pause that refreshes". The classic red rectangle saying "Drink Coca Cola Delicious and Refreshing" blinks prominently above Santa's hand. In 1936 Coca Cola celebrated its 50th anniversary by showing two beautiful ladies in bathing suits, one from 1886 that covers mostly the whole body and the other in one-piece swimsuit from 1936 showing much more skin, both holding a glass with Coca Cola logo. The price: still 5 cents a bottle. The rectangle "Drink Coca Cola Delicious and refreshing" turned into circle.
The first advertisement that shows a change in targeting general audience instead of upper classes I found in 1937 "Stop for a pause... Go refreshed" shows two workers at a gas station taking Coca Cola bottles out of special Coca Cola refrigerator. There is no price on this advertisement. It was still advertised as "Drink Coca Cola Delicious and Refreshing" as another advertisement from the same year shows a young lady with a dog and signature bottle in gloved hands sitting on a bench in a park. In 1942 advertisement a hand holding unique patented Coca Cola bottle breaks through a paper that features red circle "Drink Coca Cola Delicious and Refreshing" and the price tag, still 5 cents. New six pack carrier has been introduced in 1948 and six bottles were sold for 25 cents (plus return deposit) and the name was shortened to Coke so the red circle does not carry the whole text just Coca Cola logo above bracketed new name "Coke". 5 cents Coca Cola vending machines were introduced in 1949 and a picture of red Coca Cola vending machine on the panoramic background calling: "Inviting workers everywhere to the pause that refreshes with ice-cold Coca-Cola 5 cents". In 1952 a panel window with each panel showing different seasons and weather conditions in parts of a whole picture with Coca Cola bottle, bottle opener, two lids and red circle calling "Drink Coca Cola". A line is added at the bottom repeating 1918 message in different words "Thirst knows no season". In 1954 an add shows global reach of Coca Cola. Few heads wearing symbols of different nationalities are featured on the globe and the red circle inviting "Drink Coca Cola" top right at the Coca Cola bottle. Words on the left side of the bottle explain "That extra something made Coke the most asked-for soft drink in the world". In 1959 vending machines invaded offices and an advertisement shows a secretary with a Coca Cola bottle on one side of red Coca Cola vending machine and her desk and typewriter on the other. The message "Coke on-the-job keeps workers refreshed.
A 1965 advertisement shows Coca Cola in a paper cup inside baseball glove. The cup features red circle with words "Enjoy Coca |Cola". Below the picture it says "things go better with Coke" followed by a red circle saying "Drink Coca Cola". In 1970 Coca Cola became the real thing Coke. During 1970 advertisements ask Coca Cola for the real times. After a blunder made in 1985, in 1986 advertisements called for Coca Cola Classic making association with red, white & blue American colours stating "Red, White & You". Coca Cola in the 1990's kept promoting Coca Cola Classic with a slogan "Can't Beat The Real Thing." Although very important part, advertising is just a part of overall promotion in marketing mix, the others being price, place and product. We have seen from the advertisements that more than seventy years Coca Cola sold for 5 cents a bottle. This was possible because of economy of scale as per capita consumption of Coca Cola has been steadily rising. Just in recent years from 1988 to 2008 annual worldwide consumption of Coca Cola has risen from 39 servings per capita to 85 servings per capita while consumption in the USA in the same time rose from 275 servings to 412 servings per capita. Americans are second in Coca Cola consumption surpassed by Mexico with 635 servings per capita in 2008. (Source: The Coca-Cola Company) Although Coca Cola commands highest price among colas its product sales are very price sensitive. Interestingly enough the Coca Cola hasn't changed its taste from the 1890'.

The change of formula in 1985 is considered one of the biggest marketing blunders of all times.
People boycotted new Coke so much that its market share fell from 25% to almost 2% at the lowest point so the company was forced to return the old Coca Cola from then on called Coca Cola Classic. Then CEO campaigned with "We have got your message" when reintroducing the old Coca Cola taste back to the market. The packaging of Coca Cola changes followed the development of different distribution channels. While Coca Cola started selling in drug stores and it slowly moved into soda fountains, the product that company sold to distributors was syrup that was mixed with soda water. New branded bottle was introduced so that Coca Cola could be sold in shops and supermarkets as well as gas stations. Six-bottle-packaging was invented to increase sales as it was convenient to carry, so people would buy six at a time instead of two or three. As Coca Cola is best ice cold the company introduced special refrigerators that later on developed into vending machines. Vending machines became Coca Cola's next big distribution channel bringing their product into companies' and schools' lunch rooms and other places where people gathered in numbers. Coca Cola contracted McDonalds and some other franchise chains and their contracts require exclusivity. You can not get Pepsi or any other brand "Behind the Arches" of McDonalds. The law forbids the same tactics in supermarkets and other retailer chains but Coca Cola is very good in choosing the right spots for their promotion because they do it extremely professional. The Coca Cola Company in Atlanta only makes syrup. Coke is bottled close to its distributors as transportation costs plays big role in the final product price. It is much cheaper to send overseas only syrup and then add 90% of its bulk closer to consumers than it would be making and transporting final products to worldwide destinations out of Georgia. Coca Cola introduced cans because they were safer for vending machines and cheaper to make than glass bottles. Both were partially replaced with plastic bottles for the same reason as they are cheaper to make and harder to brake or distort. The Coca Cola Company first sponsored Olympic Games of 1924 in Amsterdam. It looks like you can find Coca Cola logo everywhere although it is not exactly so. Coca Cola is strategically placing its logo to events and places that are associated with fun, enjoyment, refreshment, harmony, sportsmanship, and happiness like sports facilities, amusement parks, Olympic games, World Cup, Super Bowl and Christmas celebrations. Researchers in positive psychology are of opinion that "lasting happiness is the result of an engaged life, one with close social ties and one that that is motivated by values and goals larger than oneself" and lasting happiness is something that Coca Cola is trying to associate with (Nuys, 2010). Association with the need of the people to aspire to goals higher than oneself is clearly expressed in Coca Cola's "Open Happines" music video series (Open Happines, 2010) where everyone is invited to join happy and purposeful self improvement that will ultimately lead to happier society with rhymes "open up a little happiness today, so I can be someone new...open up a smile on another face, so I can feel something new." Here Coca Cola uses positive association and positive psychology to enter universal desire for deep, lasting happiness, even life essence (Kracauer, 168). And this is a logical extension of Delicious and Refreshing self centred fulfilment slogan that Coca Cola has been advertising for the first hundred and something years. From being a refreshment it now intends to move up the human needs leader and associate itself with lasting open happiness. Coca Cola has been adding popular music to their advertising since early times. For Coca Cola this move came naturally as "colas and popular music share a similar demographics" (Klein, 7). So water, sugar, some secret ingredients and a few bubbles made Coca Cola the biggest beverage company, operating in 206 countries round the globe, evaluated at 67 billion dollars and daily worldwide consumption of 100 million gallons (375 million litres). Right? No product that simple and unnecessary could succeed without brilliant marketing. The Coca Cola Company has built secret marketing research laboratory where they can test all the details of consumer behaviour and apply them in their marketing and they use it to its full capability. (Source : CNBC Video on YouTube) Coca cola makes beverages but it sells good times, warm feelings, and open happiness.

A recent survey of NSAC Boston University (2010) that targeted young population between 13-24 years on a small sample of 1200 people showed that target market is most attracted by taste (more than 50% and regardless of additional segmentation).
The same survey also concludes that:

"What are psychographic and behavioural characteristics of the target audience? The target audience invests much of its time in social activities. They feel most comfortable when around others and they use multiple forms of communication to keep in touch with others. The target audience values friends highly and prefers to do activities as a group rather than as individuals.

What is the target market's perception of Coca Cola Classic? Social, conservative and fun are a few words that the target uses to describe the Coca Cola Classic brand. They see Coca Cola as a solid brand that will always be around, though it may not always adapt well to current trends. The target audience says that Coca Cola does not put enough emphasize on what is interesting to them."

As a contrast, the Coca-Cola Company in May 2010 unveiled a study (Source: The Coca Cola Company, 2010) that measures human happiness and came to the conclusion that " The global study which covers 16 countries and four continents identifies what happiness means to different nationalities and reveals that, despite the rapid pace of growth in the virtual world, human contact wins hands down when it comes to happiness. People in all 16 countries agree real world contact with family and partners is a greater source of joy (77%) than virtual world alternatives." (p:1)

"Coca-Cola provides simple moments of pleasure throughout the day. Through this study we wanted to understand what else our consumers reach for in their quest for happiness," said Cristina Bondolowski, Senior Global Brand Director, Coca-Cola, The Coca-Cola Company. "We were especially pleased to see that it's the great taste of Coke that is still putting a smile on faces around the world, as it has done for nearly 125 years."" (p:2)
This study has also shown that taste is what means the most to majority of 54%.

The Coca Cola Company uses many different marketing methods in its quest to get their product in front of as many people as possible in every country of the world. The central marketing unit collaborates with local units to make sure that slogans sound good and are appropriate in that particular language and culture. Recently, Coca Cola is seeking association not only with good times and warm feelings but also with universal desire to be happy as their last "Open Happiness" music video series show. To relate to good times, warm feeling, pursuit of life and happiness, Coca Cola continuously markets at happy holidays, events, and places. The company has very strong marketing department with market research laboratory and keeps abreast of scientific developments in consumer psychology and behaviour research to "see that it's the great taste of Coke that is still putting a smile on faces around the world, as it has done for nearly 125 years" and will continue to do so for years to come. Until now, the company has responded to all messages from the market and I believe they will continue in the same fashion.

Reference:

Cola Marketing History. http://www.solarnavigator.net/sponsorship/coca_cola.htm (Accessed February 19th 2011)

WarenBuffetSecrets. Coca Cola Invest. http://www.buffettsecrets.com/coca-cola-invest.htm (Accessed February 19th 2011)

Beautiful Life. History of Coca Cola In Ads. http:beautifullife.info/advertisement/history-of-coca-cola-in-ads/ (Accessed February 19th 2011)

The Coca-Cola Company http://www.thecoca-colacompany.com/ourcompany/ar/pdf/perCapitaConsumption2008.pdf (Accessed February 19th 2011)

Van Nuys, David ."Did Coke Hijack Positive Psychology?. The happines Dispatch. Psychology Today, October 12th 2010 http://www.psychologytoday.com/blog/the-happiness-dispatch/201010/did-coke-hijack-positive-psychology (Accessed February 19th 2011)

Open Happiness Music Video http://www.youtube.com/results?search_query=open+happiness+music+video&aq=1 (Accessed February 19th 2011)

Klein, Bethany. "In Pefect Harmony: Popular Music and Cola advertising." Popular Music & Society. Ashgate, 2009: p 1-20

Kracauer Siegfried. Theory of Film: The Redemption of Physical Reality, 1997, p. 168

The Real Story Behind The Real Thing. CNBC Video http://www.youtube.com/watch?v=Jpi43qSXHas (Accessed February 19th 2011)

NSAC Boston University. Coca Cola Case Study 2008 http://www.slideshare.net/MShahab/coca-cola-case-study-nsac-boston-university (Accessed February 19th 2011) pp:7

The Coca Cola Company. Happiness Barometer. http://www.thecoca-colacompany.com/presscenter/happiness_barometer.pdf (Accessed February 19th 2011) pp: 1-2