In his famous book, "For God, Country & Coca-Cola: The Definitive History of the World's Most popular soft drink," a Harvard graduate and investigative journalist, Mark Pendergrast, has come up with 30 business lessons based on the experience of the magical soft drink. We have tried to bring it down to 21 for the convenience of our readers.
1) Sell a good product.
2) Believe in your product.
3) Develop a mystique. An air of mystery, with a touch of sin, sells, they say. For Coke, the real formula for success is the product's "brand equity," developed over the last century.
4) Sell a cheaply produced item. Coca-Cola has always cost only a fraction of a cent per drink, the sweetener constituting most of the expense. Coca-Cola wasn't capital-intensive. Its manufacture, while highly secretive, was neither difficult nor laborious. From 1886 until the 1950s, Coca-Cola sold for a nickel a drink. The Company has tried its best to sell its products at affordable prices to the would-be consumers.
5) Everyone who touches your product before it reaches the consumer should make substantial amounts of money. It is important because you will have to pass through a long and often winding chain before your product reaches the prospective customers. Coca-Cola achieved a kind of Midas quality. For many years, every one who touched it became wealthy, including bottlers, stockholders, wholesaling jobbers, and those who provided the trucks, bottles, pallets, dispensers, etc.
6) Make your product widely available. This means to provide outlets virtually everywhere, from bus and train stations to schools, offices and work places.
7) Market your product wisely. How, when and where you market and advertise your product will determine its success. By 1911, Coca-Cola had spent over $ 1 million in creating public demand for its drink, making Coca-Cola the best-advertised single product in the world. In 1913, the company had issued over 100 million novelty items with the logo prominently displayed, all on items which required repeated visual use-thermometers, calendars, matchboxes, blotters, baseball cards, Japanese fans and signs.
8) Advertise an image, not a product. Perhaps, this is the key to the magical success of this soft drink. As one Coke advertiser once said, "We're selling smoke. They're drinking the image, not the product." It was portrayed that people who drank Coke were always happy, energetic, wholesome, and friendly. Appealing to universal desires is equally important. Since 1950, Coke has created "pattern advertising" which can appeal to any culture in the world.
9) Welcome an arch-rival. The Coca-Cola chairman, Roberto Goizueta, once said, "If Pepsi-Cola didn't exist, I would try to re-invent it. It keeps us, and them, on our toes and keeps us lean. We are magnificent competitors." In fact, the Cola Wars has become sort of fable of modern times and the publicity fostered by fierce competition is good for sales.
10) Use celebrity endorsements wisely-but sparingly. By the 1930s, movie stars from Clark Gable and Cary Grant to Jean Harlow and Joan Crawford were pushing Coke, and in the late 60s, singers ranging from Neil Diamond and Leslie Gore to Charles and Aretha Franklin crooned that things went better with the soft drink. There are dangers, however, in relying too heavily on celebrity endorsements. For Coke's rival Pepsi, both Madonna and Michael Jordan garnered a great deal of publicity, but not always the kind Pepsi wanted.
11) Get 'em young. If you can achieve loyalty among youthful consumers, you've possibly fostered lifelong consumption. In 1999, for example, under the Coke contract, each elementary school in the district received $3,000 a year, each middle school received $15,000 and the high schools received $25,000. Of course, there have been criticisms regarding the negative health attitudes that could develop among children due to aggressive marketing of the cola companies.
12) Develop cultural sensitivity. In the 1920s, when Robert Woodruff authorized the drink's global spread, he attempted to make the drink a German drink in Germany and a French drink in France. By importing only the Coca-Cola concentrate, the Company could proudly and accurately point out how much it contributed to local economies.
13) Become masters of influence. The Coke's strategy has been, "Hire aggressive lawyers but don't break the law." As anywhere, the world-leading company seems to have mastered in "Win Friends and Influence People," to quote Dale Carnegie, including politicians, media and celebrities.
14) Plan for the long haul. What is important is you should not be seduced into pursuing short-term gains at the expense of long-term vision. This means that you should be patient but implacable.
15) Adhere to simple commandments. According to his associates, Robert Woodruff -who led the company in the 1920s, never finished a book. His genius lay in looking at the big picture and in concentrating on a few elemental truths.
16) Be flexible enough to change. You must strike a balance between tradition and change.
17) Don't use defensive, negative advertising. It simply doesn't work.
18) Pay attention to the bottom-line. The bottom-line, for every company, is maximizing profit and continue to build on its goodwill. If you forget or compromise this bottom-line, you can never achieve success. Equally important is using cash wisely. It makes sense to borrow money if you could then re-invest it at a substantially higher Rate of Return. One simple method could be, "Repurchase your own stock, thereby driving the price further up."
19) All publicity is good publicity. This is a fantastic formula but companies need to be careful that unnecessary and unwanted publicity could do them more harm than good.
20) Think globally, but act locally: This catch-phrase probably originated with Goizueta, though other CEOs snapped it up in the trendy 1980s and used it as their own. In China and Indonesia, Coca Cola built a strong infrastructure. In Germany and Japan, they consolidated.
21) Pursue the halo effect. In early 1970s, Coke CEO Paul Austin tried to create what he termed "the halo effect." Coca Cola, the firm should appear to be in the vanguard of the environmental movement, progressive race relations, setting up model programs for migrant workers, creating nutritional soft drinks etc. It promotes good causes and it is very right for business too
22) And if none of the above works out, then introduce a new product having competitors product taste and withdraw the orignal product. that is hold public for ransom. (Not in the book, but in the mind).
:big_grin:
1) Sell a good product.
2) Believe in your product.
3) Develop a mystique. An air of mystery, with a touch of sin, sells, they say. For Coke, the real formula for success is the product's "brand equity," developed over the last century.
4) Sell a cheaply produced item. Coca-Cola has always cost only a fraction of a cent per drink, the sweetener constituting most of the expense. Coca-Cola wasn't capital-intensive. Its manufacture, while highly secretive, was neither difficult nor laborious. From 1886 until the 1950s, Coca-Cola sold for a nickel a drink. The Company has tried its best to sell its products at affordable prices to the would-be consumers.
5) Everyone who touches your product before it reaches the consumer should make substantial amounts of money. It is important because you will have to pass through a long and often winding chain before your product reaches the prospective customers. Coca-Cola achieved a kind of Midas quality. For many years, every one who touched it became wealthy, including bottlers, stockholders, wholesaling jobbers, and those who provided the trucks, bottles, pallets, dispensers, etc.
6) Make your product widely available. This means to provide outlets virtually everywhere, from bus and train stations to schools, offices and work places.
7) Market your product wisely. How, when and where you market and advertise your product will determine its success. By 1911, Coca-Cola had spent over $ 1 million in creating public demand for its drink, making Coca-Cola the best-advertised single product in the world. In 1913, the company had issued over 100 million novelty items with the logo prominently displayed, all on items which required repeated visual use-thermometers, calendars, matchboxes, blotters, baseball cards, Japanese fans and signs.
8) Advertise an image, not a product. Perhaps, this is the key to the magical success of this soft drink. As one Coke advertiser once said, "We're selling smoke. They're drinking the image, not the product." It was portrayed that people who drank Coke were always happy, energetic, wholesome, and friendly. Appealing to universal desires is equally important. Since 1950, Coke has created "pattern advertising" which can appeal to any culture in the world.
9) Welcome an arch-rival. The Coca-Cola chairman, Roberto Goizueta, once said, "If Pepsi-Cola didn't exist, I would try to re-invent it. It keeps us, and them, on our toes and keeps us lean. We are magnificent competitors." In fact, the Cola Wars has become sort of fable of modern times and the publicity fostered by fierce competition is good for sales.
10) Use celebrity endorsements wisely-but sparingly. By the 1930s, movie stars from Clark Gable and Cary Grant to Jean Harlow and Joan Crawford were pushing Coke, and in the late 60s, singers ranging from Neil Diamond and Leslie Gore to Charles and Aretha Franklin crooned that things went better with the soft drink. There are dangers, however, in relying too heavily on celebrity endorsements. For Coke's rival Pepsi, both Madonna and Michael Jordan garnered a great deal of publicity, but not always the kind Pepsi wanted.
11) Get 'em young. If you can achieve loyalty among youthful consumers, you've possibly fostered lifelong consumption. In 1999, for example, under the Coke contract, each elementary school in the district received $3,000 a year, each middle school received $15,000 and the high schools received $25,000. Of course, there have been criticisms regarding the negative health attitudes that could develop among children due to aggressive marketing of the cola companies.
12) Develop cultural sensitivity. In the 1920s, when Robert Woodruff authorized the drink's global spread, he attempted to make the drink a German drink in Germany and a French drink in France. By importing only the Coca-Cola concentrate, the Company could proudly and accurately point out how much it contributed to local economies.
13) Become masters of influence. The Coke's strategy has been, "Hire aggressive lawyers but don't break the law." As anywhere, the world-leading company seems to have mastered in "Win Friends and Influence People," to quote Dale Carnegie, including politicians, media and celebrities.
14) Plan for the long haul. What is important is you should not be seduced into pursuing short-term gains at the expense of long-term vision. This means that you should be patient but implacable.
15) Adhere to simple commandments. According to his associates, Robert Woodruff -who led the company in the 1920s, never finished a book. His genius lay in looking at the big picture and in concentrating on a few elemental truths.
16) Be flexible enough to change. You must strike a balance between tradition and change.
17) Don't use defensive, negative advertising. It simply doesn't work.
18) Pay attention to the bottom-line. The bottom-line, for every company, is maximizing profit and continue to build on its goodwill. If you forget or compromise this bottom-line, you can never achieve success. Equally important is using cash wisely. It makes sense to borrow money if you could then re-invest it at a substantially higher Rate of Return. One simple method could be, "Repurchase your own stock, thereby driving the price further up."
19) All publicity is good publicity. This is a fantastic formula but companies need to be careful that unnecessary and unwanted publicity could do them more harm than good.
20) Think globally, but act locally: This catch-phrase probably originated with Goizueta, though other CEOs snapped it up in the trendy 1980s and used it as their own. In China and Indonesia, Coca Cola built a strong infrastructure. In Germany and Japan, they consolidated.
21) Pursue the halo effect. In early 1970s, Coke CEO Paul Austin tried to create what he termed "the halo effect." Coca Cola, the firm should appear to be in the vanguard of the environmental movement, progressive race relations, setting up model programs for migrant workers, creating nutritional soft drinks etc. It promotes good causes and it is very right for business too
22) And if none of the above works out, then introduce a new product having competitors product taste and withdraw the orignal product. that is hold public for ransom. (Not in the book, but in the mind).
:big_grin:
