HaCKeRz KrOnIcKLeZ 3/HaCKeRz_KrOnIcKLeZ.iso/anarchy/essays/term/cocacola.txt

Text File | 1996-04-27 | 13KB | 161 lines

                                    Ramiro Lindado

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 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.  Without societies help,
Coca-Cola could not have become over a 50 billion dollar business.  Keep on consuming the world's
favorite soft drink, Coca-Cola.