Coca-Cola Company Essay, Research Paper

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. Without societies help, Coca-Cola could

not have become over a 50 billion dollar business. 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 beverage. Coca-Cola debuted in Atlanta’s largest pharmacy, Jacob’s

Pharmacy, as a five cent non-carbonated beverage, which was originally used as a

nerve and brain tonic and a medical elixir. Later on, the carbonated water was

added to the syrup to make the beverage that we know today as Coca-Cola. At the

time of his death, John Pemberton sold the Coca-Cola company to Asa Candler,

Pemberton was forced to sell because he was very ill 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 copyrighted. The first syrup manufacturing plant

was opened in 1884. However, Candler’s great achievement was large scale

bottling of Coca-Cola in 1899. In 1915, The Root Glass Company made the contour

bottle for the Coca-Cola company. Coca-Cola was sold after the Prohibition Era

to Ernest Woodruff for 25 million dollars. He gave Coca-Cola to his son, Robert

Woodruff, who would be president for six decades (Facts, Figures, and Features

Multiple pages). Robert Woodruff was an influential man in Atlanta because of

his contributions 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

bottle carton in 1923. He also made Coca-Cola available through vending machine

in 1929, that same year, the Coca-Cola bell glass was made available. 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.

Candler also introduced the twelve ounce Coke can in 1960. 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(Coca-Cola multiple pages).

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,

emphasizing quality control, 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"(Facts, Figures, and Features Multiple pages). 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 efforts 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(Demott 54). Robert Woodruff’s death was a large contributor 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

percent in four years. Each percentage point lost or gain meant 200 million

dollars. A financial analyst said, "Coke’s market share fell from 24.3

percent in 1980 to 21.8 percent in 1984"(Things go better with Coke 14).

This was the first flavor change since the existence of the Coca-Cola company.

The change was announced April 23, 1985 at the Vivian Beaumont Theater 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(Oliver 131). The debut was accompanied by an

advertising campaign that revived the Coca-Cola theme song of the early 1970s,

"I’d Like to Buy the World a Coke"(Say it ain’t so, Coke 24). The

Jingle read like this: I’d like to teach the world to sing In perfect harmony.

I’d like to buy the world a Coke And keep it company. The change to the world’s

best selling soft drink was heard by 81 percent 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 outraged, 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

fielded over forty thousand 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 interred in a Coke can,

but now that this change had come about he was reconsidering(Pendergrast

Multiple pages). Sharlotte Donneally, a thirty-six year old anthropologist said,

"I hate the new stuff"(Demott 60). Wendy Koskela, a thirty-five year

old vice president of an insurance company said, "It’s too sweet. It tastes

like Pepsi." She also stated, "Real Coke had punch. This taste almost

like it’s flat"(Demott 60). 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 and CEO of Pepsi-Cola wrote a letter to

every major newspaper in the U.S. to declare the victory, the letter read like

this(Oliver 128): It gives me great pleasure to offer each of you my heartiest

congratulations. After eighty-seven years of going at it eyeball to eyeball, the

other guy just blinked. Coca-Cola is withdrawing their product from the

marketplace, and is reformulating brand Coke to be more like Pepsi…There is no

question the long-term market success of Pepsi has forced this move…Maybe they

finally realized what most of us have known for years, Pepsi tastes better than

Coke. Well, people in trouble tend to do desperate things…and we’ll have to

keep our eye on them. But for now, I say, victory is sweet, and we have earned a

celebration. We’re going to declare a holiday on Friday. Enjoy! Best Regards,

Roger Enrico President, CEO Pepsi-Cola USA Coca-Cola officials said, "The

new formula will boost Coke’s share by 1 percent. That is worth 200 million

dollars a year." Coca-Cola management had to decide: Do nothing or

"buy the world a new Coke"(Things go better with Coke 14). 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"(Demott et. al 55).

This is what many Coke officials said, "This is the most significant soft

drink development in the company’s history"(Demott et. al 54). 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"(Oliver

178). 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 percent to a low of 1.4 percent(Miller 38). 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"(New bottle 18). Roberto Goizueta’s response when

the change about, "We have heard you"(Moore 8). 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"(Moore 8). Ike Herbert, a Coke marketer said,

"You would have thought we had invented a cure for cancer"(Pendergrast

366). The Coca-Cola company’s eight hundred number received eighteen thousand

calls of gratitude. One caller said they felt like a lost friend had returned

home. Be 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(Classic comeback of an old champ 12). 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"(Oliver 53). The known ingredients in present day

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(Demott 54). 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(Miller 38). 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. Coca-Cola products outsell closest competitor by more

than two to one. One in every two colas and one in every three soft drinks is a

Coca-Cola product(Facts, Figures, and Features 16). 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(Coca-Cola, The Coca-Cola Company 232). For more than 65 years,

Coca-Cola has been a sponsor of the Olympics. The 1996 Summer Olympics will be

held in Atlanta, Georgia, the home of Coca-Cola. One great earmark that the

Coca-Cola company has is helping the people of Atlanta. 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. It houses a

collection of memorabilia, samples of the products, exhibits, and many other

exciting items(Facts, Figures, and Features Multiple pages). All of what has

been said is the basis of what Coca-Cola was built on.

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