Coke And The Early Days Essay, Research Paper

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. 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(Things go better

with Coke 14). Coca-Cola debuted in Atlanta’s largest pharmacy, Jacob’s Pharmacy, as a five cent non-

carbonated beverage. Later on, the carbonated water was added to the syrup to make the beverage that we

know today as Coca-Cola.

Coca-Cola was originally used as a nerve and brain tonic and 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. He had paid $76.96 for advertising, but he only made $50.00 in

profits. Candler acquired the whole company for $2,300(Coca-Cola multiple pages).

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 large scale bottling of Coca-Cola in 1899. In 1915, The Root Glass Company

made the contour bottle for the Coca-Cola company. 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, 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. 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

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