7 brilliant strategies Coca-Cola used to become one of the world's most recognizable brands
Now people in more than 200 countries drink 1.9 billion servings every day, according to The Coca-Cola Company.
Having a product people enjoy is far from the only thing needed to become one of the world's most valuable companies. Coca-Cola used seven key design and marketing strategies, which made it as recognizable in the streets of Shanghai as in its hometown of Atlanta by the 1920s, says Coca-Cola VP of innovation and entrepreneurship David Butler.
In the book, "Design to Grow: How Coca-Cola Learned to Combine Scale and Agility (and How You Can Too)," Butler and co-author Linda Tischler explore these seven strategies, which we've explained below.
1. It started with a unique, market-tested formula.
After serving as a Confederate colonel in the Civil War, John Pemberton wanted to develop a version of the coca wines (basically cola with alcohol and cocaine) that were in vogue at the time. In 1886, Atlanta passed prohibition laws that forced beverage manufacturers to produce non-alcoholic versions of their drinks.
Pemberton sent his nephew Lewis Newman with samples of his formulas to a local pharmacy where people congregated to drink these early versions of sodas. Newman relayed feedback to his uncle about the various concoctions, and by the end of the year Pemberton had a recipe that was unique and tailored to customers' tastes. The original recipe is still locked in a vault in Atlanta.
Cocaine was removed from Coke in 1903. Other minor adjustments have been made in the past century or so, but beyond the "New Coke" disaster of 1985, the recipe has largely remained unchanged. This decision helped the company scale, Butler writes, since it did not spend time trying to tailor the taste to regional markets throughout the world.
2. Its logo uses a timeless font.
Pemberton's bookkeeper, Frank Mason Robinson, decided that Coca-Cola's logo should be written in the Spencerian script accountants used because it would differentiate it from its competitors. The company standardized the logo in 1923 and, like the recipe, decided that while packaging could adjust to the times, the core logo was to be untouched.
It's resulted in a logo that has had more than 100 years to become imprinted in the minds of people around the world.
The Coca-Cola Company
3. It was distributed in a proprietary bottle.
After the Georgia businessman Asa Griggs Candler became the majority shareholder of Coca-Cola in 1888, he set his sights on making Coke the nation's most popular cola through marketing and partnerships with regional bottlers.
By 1915, Candler was losing market share to hundreds of competitors. He launched a national contest for a new bottle design that would signal to consumers that Coke was a premium product that couldn't be confused with some other brown cola in an identical clear glass bottle.
The new bottle had to be able to be mass produced using existing equipment yet also be distinct.
The Root Glass Company in Indiana decided to enter the contest and base its design off the product's name. While combing through the dictionary for the word "coca" and words like it, Butler writes, mold shop supervisor Earl R. Dean came across an illustration for the cocoa plant that caught his attention. Coca-Cola had nothing to do with cocoa, but the cocoa pod had a strange but appealing shape. He and his team got to work and were declared the contest winners the next year.
Coca-Cola commissioned the bottle design as a piece of defensive marketing, but began promoting the shape as much as the logo and product. Even after plastic replaced glass as the standard means of drinking Coke in countries like the US, the company continued to promote the image of the Coke bottle as an icon.
Medicaster/Wikimedia Commons; The Coca-Cola Company
4. It held retailers responsible for maintaining its high standard.
Ernest Woodruff's Trust Company of Georgia bought Coca-Cola from Candler in 1919. Woodruff was focused on maintaining a standard of excellence as the company scaled.
The Coke team decided that its drink should be served at 36 degrees Fahrenheit, and would send salesmen to new retailers to tell them the product should never be served above 40 degrees.
The tactic may seem a bit silly today, but the 36-degree standard was just another example of establishing Coca-Cola as a premium product that was worthy of more attention than any of its competitors.
5. It kept its consumer price fixed for 70 years.
It's common today for tech startups to begin by offering a service for free and then charging a higher price to consumers and/or advertisers once they've become hooked. Before utilizing networking effects became a standard practice, Coca-Cola used a similar approach to scale across the US and then throughout the world.
From 1886 to 1959, a bottle of Coke cost just five cents.
6. It guided word-of-mouth advertising and developed a voice.
It became apparent after Candler took over early in the company's life that Coke was as much a drink as it was a consumable brand, an idea consumers could feel good about identifying with.
Candler started a mass coupon initiative that resulted in 10% of all products from 1887 to 1920 to be given away in order to build brand awareness. He also provided retailers with Coca-Cola swag like posters and festoons for decorations and calendars and clocks for customers. According to Butler, Coke was a pioneer in affixing a brand to items unrelated to the product.
And finally, all national, and then global, advertising contained variations of "Drink Coca-Cola/Delicious and refreshing" and fit into a standardized design style.
The Coca-Cola Company
7. It adopted a franchise model.
"Amid the soda wars that broke out in the 1880s, Candler's most significant business decision had nothing to do with branding," Butler writes.
In 1899, two Tennessee lawyers, Benjamin F. Thomas and Joseph B. Whitehead, approached Candler and asked if he would let them bottle Coke. The drink was sold as a syrup that retailers would mix with soda water, but it wasn't typical to drink cola on the go or bring it into the home. Candler decided to hand over the bottling rights for just a dollar, which he never collected, because he was content with maintaining the rights to the syrup.
This marked the beginning of what the company internally calls The Coca-Cola System, a franchise partnership with bottlers that allowed the brand to truly take off. Today, there are more than 250 independent bottlers around the world.
"The Coca-Cola Company isn't one giant company; it's a system of small companies," Butler writes. "And this pattern helps it scale new products, new communications, new equipment, etc. Designing for this pattern is critical; when it wants to scale fast, it can."
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