TheStory… Prepared by A.REJI MBA (PART II) 4th SEMESTER, SESSION : 2007-2009 Internal guide Professor. SUMIT RAY (IISCO HOUSE, 7th FLOOR, 50 CHOWRINGHEE ROAD, KOLKATA 700 071) Executive summary Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. CocaCola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three legged brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Coca- Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduce its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company. The main objective of this study lies in understanding the organization. Acknowledgement I am very much obliged to Professor. SUMIT RAY (Faculty, EIM) my internal guide who have given me valuable suggestions by providing me feedback with which I was immensely benefited. I was also very much benefited by the help being provided by my institute, by providing me with the necessary information, reference books that I required. Certificate from internal guide This is to certify that the work embodied in the project report titled “strategic marketing analysis of Coca-Cola” done by A.REJI was conducted under my supervision. ________________________ (Professor. Sumit Ray) Student Declaration I declare that the project titled “The Coca Cola story” has been done by me and has not been submitted in part or full to any authority for award of any degree / diploma. ______________________ A.Reji Contents History of Coca-Cola Evolution of Coca-Cola Advertising history of Coca-Cola Brands of Coca-Cola Competition No.1 brand in the world The New Coke fiasco Core capabilities Challenges and risks Criticism relating to coca cola Conclusion History of Coca-Cola Coca-Cola was invented by Doctor John Pemberton a pharmacist from Atlanta Georgia in May of 1886. John Pemberton concocted the Coca Cola formula in a three legged brass kettle; all this was done in his backyard. The name Coca Cola was actually given to John Pemberton by his bookkeeper Frank Robinson Frank Robinson had excellent penmanship. He first scripted "Coca Cola" into the flowing letters which has become the famous logo we know and love today. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta on May 8, 1886. About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a loss. Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well as the caffeine-rich kola nut. In 1887, another Atlanta pharmacist and businessman, Asa Candler bought the formula for Coca Cola from inventor John Pemberton for $2,300. By the late 1890s, Coca Cola was one of America's most popular fountain drinks; Candler's aggressive marketing of the product takes credit for that. With Asa Candler, now at the helm, the Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900. Advertising was an important factor in John Pemberton and Asa Candler's success and by the turn of the century, the drink was sold across the United States and Canada. Coca Cola began selling syrup to independent bottling companies licensed to sell the drink. Still today, the US soft drink industry is organized on this principle Evolution of Coca-Cola Coca-Cola® originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. 1894 – A modest start for a Bold Idea In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling CocaCola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales. 1899 The first bottling agreement Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture. 1900-1909 … Rapid growth The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high. 1916 … Birth of the contour bottle Bottlers worried that the straight-sided bottle for CocaCola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world even in the dark! 1920s … Bottling overtakes fountain sales As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales. 1920s and 30s … International expansion Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries. 1940s … Post-war growth During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business. 1950s … Packaging innovations For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960. 1960s … New brands introduced Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined brand Coca-Cola in the 1960s. Mr. Pibb® and Mello Yello® were added in the 1970s. The 1980s brought diet Coke® and Cherry Coke®, followed by POWERADE® and DASANI® in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. 1970s and 80s … Consolidation to serve customers As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers. 1990s … New and growing markets Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between CocaCola bottlers, customers and communities are the foundation on which the entire business grows. 2001 … launched the new fridge pack in USA a thinner longer 12 pack design 2005 … innovative aluminum contour bottles introduced commonly called M5 as the magnificent five bottles., Coca Cola zero a zero calorie coca cola with real coca cola taste launched 2006 … coca cola turns 120. Launches the “every drop counts” campaign to make the consumers remind of the variety of products coca cola offers 2007 … launches the PET bottle which uses 5% less plastic than the other PET bottles. Opens up new world of coca cola in Atlanta Georgia on may 24th Advertising history of coca cola Coca-Cola's advertising has had a significant impact on American culture, nd is frequently credited with the "invention" of the modern image of Santa Claus as an old man in red-and-white garments; however, while the company did in fact start promoting this image in the 1930s in its winter advertising campaigns, it was already common before that. In fact, Coca-Cola was not even the first soft drink company to utilize the modern image Santa Claus in its advertising – White Rock Beverages used Santa in advertisements for its ginger ale in 1923 after first using him to sell mineral water in 1915 Before Santa Claus, however, Coca-Cola relied on images of smartly-dressed young women to sell its beverages. Coca-Cola's first such advertisement appeared in 1895 and featured a young Bostonian actress named Hilda Clark as its spokesperson. In the 1970s, a song from a Coca-Cola commercial called "I'd Like to Teach the World to Sing", produced by Billy Davis, became a popular hit single. Coca-Cola has a policy of avoiding using children younger than the age of 12 in any of its advertising. This decision was made as a result of a lawsuit from the beginning of the 20th century that alleged that Coke's caffeine content was dangerous to children. However, in recent times, this has not stopped the company from targeting young consumers. Coke's advertising is rather pervasive, as one of Woodruff's stated goals was to ensure that everyone on Earth drank CocaCola as their preferred beverage. This is especially true in southern areas of the United States, such as Atlanta, where Coke was born. Some of the memorable Coca-Cola television commercials between 1960 through 1986, were written and produced by former Atlanta radio veteran Don Naylor (WGST 1936-1950, WAGA 1951-1959) during his career as a producer for the McCann Erickson advertising agency. Many of these early television commercials for Coca-Cola featured movie stars, sports heroes, and popular singers of the day. During the 1980s, Pepsi-Cola ran a series of television advertisements showing people participating in taste tests essentially demonstrating that: "Fifty percent of the participants who said they preferred Coke actually chose the Pepsi". Statisticians were quick to point out the problematic nature of a 50/50 result; that most likely all this really showed was that in blind tests, most people simply cannot tell the difference between Pepsi and Coke. Coca-Cola ran ads to combat Pepsi's ads in an incident sometimes referred to as the cola wars; one of Coke's ads compared the so-called Pepsi challenge to two chimpanzees deciding which tennis ball was furrier. Thereafter, CocaCola regained its leadership in the market. Selena was a spokesperson for Coca-Cola from 1989 till the time of her death. She filmed three commercials for the company. In 1994 to commemorate her 5 years with the company, Coca-Cola issued special Selena coke bottles. In an attempt to broaden its portfolio, Coca-Cola purchased Columbia Pictures in 1982. Columbia provided subtle publicity through Coke product placements in many of its films while under Coke's ownership. However, after a few early successes, Columbia began to underperform, and was dropped by the company in 1989. Coca-Cola has gone through a number of different advertising slogans in its long history, including "The pause that refreshes", "I'd like to buy the world a Coke", and "Coke is it". In 2006, Coca-Cola introduced My Coke Rewards, a customer loyalty campaign where consumers earn virtual "points" by entering codes from special marked packages of Coca-Cola products into a website. These points can in turn be redeemed for various prizes or sweepstakes entries Brands of Coca-Cola Coca-Cola Zero® has been one of the most successful product launch hes in Coca Cola’s history. In 2007, Coca Cola’s sold nearly 450 million cases globally. Put into perspective, that's roughly the same size as Coca Cola’s total business in the Philippines, one of our top 15 markets. As of September 2008, Coca-Cola Zero is available in more than 100 countries. Energy Drinks For those with a high-intensity approach to life, Coca Cola’s brands of Energy Drinks contain ingredients such as ginseng extract, guarana extract, caffeine and B vitamins. Juices/Juice Drinks We bring innovation to the goodness of juice in Coca Cola’s more than 20 juice and juice drink brands, offering both adults and children nutritious, refreshing and flavorful beverages. Soft Drinks Coca Cola’s dozens of soft drink brands provide flavor and refreshment in a variety of choices. From the original Coca-Cola to most recent introductions, soft drinks from The Coca-Cola Company are both icons and innovators in the beverage industry. Sports Drinks Carbohydrates, fluids, and electrolytes team together in Coca Cola’s Sports Drinks, providing rapid hydration and terrific taste for fitness-seekers at any level Tea and Coffee Bottled and canned teas and coffees provide consumers' favorite drinks in convenient take-anywhere packaging, satisfying both traditional tea drinkers and today's growing coffee culture. Water Smooth and essential, our Waters and Water Beverages offer hydration in its purest form. Other Drinks So much more than soft drinks. Coca Cola’s brands also include milk products, soup, and more so you can choose a Coca Cola Company product anytime, anywhere for nutrition, refreshment or other needs. Competition PEPSI INTERNATIONAL History PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-toeat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.would entertain the listener with the latest musical selections rendered by violin or piano or both. The new name, “Pepsi Cola”, is derived from the two of the principle ingredients, Pepsin and Kola Nuts. It was first used on the August 28. At that time, Bradham’s advertising praises his drink as “Exhilarating, invigorating, aids digestion”. Pepsi and Coca-Cola had/have different brands of soda and other drinks competing with each other: Type Cola drink Diet / low calorie Low carb Lemon lime soda Orange soda Orange juice Water Sports drink Pepsi co Pepsi Diet Pepsi ,Pepsi light, Pepsi one , Pepsi max Pepsi edge 7 up ,sierra mist Mirinda , Tropicana twister, Sunkist ,kas Tropicana Aquafina Gatorade , Propel Coca cola company Coca cola Diet Coke / Coca-Cola Light Tab, Coca-Cola Zero Coca cola c2 Sprite Fanta , Minute maid Kinley ,dosani , Ciel,Eva PowerAde Other competitors • • • • • • • • • Cadbury Schweppes plc Nestle S.A. Unilever Procter & Gamble Cott Corporation Kraft Foods, Inc. National Grape Cooperative National Beverage Corp. Quilmes Industrial S.A. • • • • • • • • • Yeo Hiap Seng Limited Wimm-Bill-Dann Foods OJSC Co-Ro Food A/S Rynkeby Foods A/S Spadel SA Delta Holding S.A. Spendrups Bryggeri AB Pago Hermann Pfanner Getraenke The No.1 Brand in the world Year Brand value Rankings 2008 2007 2006 2005 2004 2003 2002 2001 66,667 65,324 67,000 67,525 67,394 70,453 69,637 68,945 1 1 1 1 1 1 1 1 Coca cola has maintained the no1 spot as the world’s best brand and the most recognizable word after ok for the past nine years .with a brand value of 66,667 million dollars an increase of 2% from its proceeding year The New Coke fiasco New Coke was introduced on April 23, 1985. Production of the original formulation ended that same week. The press conference at New York City's Lincoln Center to introduce the new formula did not go over very well. Reporters present had already been fed questions by Pepsi, which was extremely worried that New Coke would erase all its gains. The press did not give Goizueta easy questions as he changed a century of tradition. His stumbling description of the new taste, given his background as one of the company's flavor chemists, was widely ridiculed: “ It's smoother, uh, uh, yet, uh, rounder yet, uh, bolder ... it has a more harmonious flavor.[ ” Goizueta defended the change by pointing out that the drink's secret formula was not sacrosanct and inviolable. (As far back as 1935, Coca-Cola sought kosher certification from an Atlanta Rabbi, and made two changes to the formula so that the drink could be certified kosher (and, incidentally, Halal and vegetarian) and also Kosher For Passover. But Goizueta also refused to admit that taste tests had in any way led the company to make the change (which he called "one of the easiest decisions we have ever made” to avoid giving Pepsi any credit, yet gave no other real reason for the change, further alienating reporters who had already heard from Pepsi representatives in advance on this very issue A reporter asked whether Diet Coke would also be reformulated "if this is a success," Goizueta curtly replied, "This is a success" taking aback many reporters. The emphasis on the sweeter taste of the new flavor also ran contrary to previous Coke advertising, in which spokesman Bill Cosby had touted its less-sweet taste as a reason to prefer Coke over Pepsi. Nevertheless, the company's stock went up on the announcement, and market research showed that 80% of the American public was aware of the change within 48 hours. Early acceptance While it is widely believed today that the new drink failed almost instantly, this was not the case. The company, as it had planned, introduced the new formula with big marketing pushes in New York (workers renovating the Statue of Liberty were symbolically the first Americans given cans to take home[) and Washington, D.C. (where thousands of free cans were given away in Lafayette Park). Sales figures from those cities, and other regions where it had been introduced, showed a reaction that went as the market research had predicted. In fact, Coke's sales were up 8% over the same period the year before Most Coke drinkers resumed buying the new drink at much the same level as they had the old one. Surveys indicated, in fact, that a majority liked the new flavoring. Three-quarters of the respondents said they would buy New Coke again. The big test, however, remained in the Southeast, where Coke was first bottled and tasted and has always been such a market leader and cultural institution that "coke" is a colloquialism for all colas, or even, in some areas of the South, for all soft drinks, regardless of flavor. Backlash Despite New Coke's acceptance with a large number of Coca-Cola drinkers, a vocal minority of them resented the change in formula and were not shy about making that known — again just as had happened in the focus groups. Many of these drinkers were Southerners, some of whom considered the drink a fundamental part of regional identity. They viewed the company's decision to change the formula through the prism of the Civil War, as another surrender to the "Yankees"[(although Pepsi was invented in New Bern, North Carolina, PepsiCo has located its headquarters in New York State since its 1965 establishment). Company headquarters in Atlanta started receiving angry letters expressing deep disappointment and anger at executives. Over 400,000 calls and letters were received by the company. A psychiatrist Coke hired to listen in on phone calls to the company hotline, 1-800-GET-COKE, told executives some people sounded as if they were discussing the death of a family member. They were, nonetheless, joined by some voices from outside the region. Chicago Tribune columnist Bob Greene wrote some widely reprinted pieces ridiculing the new flavor and damning Coke's executives for having changed it. Talk show hosts and comedians made light of the switch. Ads for New Coke were booed heavily when they appeared on the scoreboard at the Houston Astrodome. Even Fidel Castro, a longtime Coke drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence. Goizueta's own father expressed similar misgivings towards his son; the only time the younger man recalled him ever agreeing with Castro, the man whose revolution had driven him and his son, nearly penniless, to America a quarter-century before. Pepsi took advantage of the situation, running ads in which a first-time Pepsi drinker exclaimed "Now I know why Coke did it! However, Pepsi actually gained very few converts over Coke's switch, despite claiming a 14% sales increase over the same month the previous year, the largest sales growth in the company's history. The most alienated customers simply refused to buy New Coke rather than switch to Pepsi. Coca-Cola's director of corporate communications, Carlton Curtis, realized over time that they were more upset about the withdrawal of the old formula than the taste of the new one.[ Gay Mullins, a Seattle retiree looking to start a public relations firm with $120,000 of borrowed money, formed the organization Old Cola Drinkers of America on May 28 to lobby Coca-Cola to either reintroduce the old formula or sell it to someone else. His organization eventually received over 60,000 phone calls. He also filed a class action lawsuit against the company (which was quickly dismissed by a judge who said he preferred the taste of Pepsi), while nevertheless expressing interest in landing Coca-Cola Company as a client of his new firm should it reintroduce the old formula. In two informal blind taste tests, Mullins either failed to distinguish New Coke from old or expressed a preference for New Coke. Still, despite ongoing resistance in the South, New Coke continued to do well in the rest of the country.[ But executives were uncertain of how international markets would react. Sergio Zyman, the company's chief marketing officer, heard doubts and skepticism from his relatives in Mexico, where New Coke was slated to be introduced later that summer, when he went there on vacation. Goizueta publicly voiced a complaint many company executives had been making in private as they shared letters the company had received thanking them for the change in formula, that bashing it had become "chic" and that, as had happened in the focus groups, peer pressure was keeping those who liked it from speaking up in its favor as vociferously as its critics were against it. Donald Keough, the company's president and chief operating officer, reported overhearing this exchange at his country club outside Atlanta Company dissatisfaction Some Coca-Cola executives had quietly been arguing for a reintroduction of the old formula as early as May.[ By June, when soft drink sales usually start to rise, the numbers showed the new formula was leveling among consumers. Executives feared social peer pressure was now affecting their bottom line. Some consumers began trying to obtain old Coke from overseas, where the new formula had not yet been introduced, as domestic stocks of the old drink were finally liquidated. Over the course of the month, Coca-Cola's chemists also quietly reduced the acidity level of the new drink, hoping to assuage complaints about the flavor and allow its sweetness to be better perceived (ads pointing to this change were prepared, but never used). In addition to the noisier public protests, boycotts and bottles being emptied into the streets of southern cities, the company had more serious reasons to be concerned. Its bottlers, and not just the ones still suing the company over syrup pricing policies, were expressing concern. While they had given Goizueta a standing ovation when he announced the change at an April 22 bottlers' meeting at Atlanta's Woodruff Arts Center, glad the company had finally taken some initiative in the face of Pepsi's advances,] they were less enthusiastic about the taste. Most of them saw great difficulty having to promote and sell a drink that had long been marketed as "The Real Thing", constant and unchanging; now that it had been changed. The twenty bottlers still suing Coca-Cola had even more sport with the change in their legal arguments. Coca-Cola had argued in its defense when the suit was originally filed that the formula's uniqueness and difference from Diet Coke justified different pricing policies from the latter - but if the new formula was simply an HFCS-sweetened Diet Coke, Coca-Cola could not argue the formula was unique. Bottlers, particularly in the South, were also tired of facing personal opprobrium over the change. Many reported that some acquaintances had stopped speaking to them, or had expressed displeasure in other emotionally hurtful ways. On June 23, several of the bottlers took these complaints to Coca-Cola executives in a private meeting. With the company now fearing boycotts not only from its consumers but its bottlers, talks about reintroducing the old formula moved from "if" to "when." Reversal Coca-Cola executives announced the return of the original formula on July 10, less than three months after New Coke's introduction. ABC News' Peter Jennings interrupted regular programming to share the news with viewers. On the floor of the U.S. Senate, David Pryor called the reintroduction "a meaningful moment in U.S. history". The new product continued to be sold and retained the name Coca-Cola (until 1992, when it was officially renamed Coca-Cola II), so the old product was named Coca-Cola Classic, more commonly Coke Classic and later just Coke. Many who tasted the reintroduced formula were not convinced that the first batches really were the same formula that had supposedly been retired that spring. This is partially true because Coca-Cola Classic differed from the original formula, as all bottlers who hadn't already done so were using high fructose corn syrup instead of cane sugar to sweeten the drink.” There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years," said Keough at a press conference. "The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people." The company gave Gay Mullins the first case of Coke Classic. Aftermath By the end of the year, Coke Classic was substantially outselling both New Coke and Pepsi, putting the company back into the number-one position it has enjoyed ever since. Six months after the rollout, Coke's sales had increased at more than twice the rate of Pepsi's New Coke's sales dwindled to a three percent share of the market, although it was doing quite well in Los Angeles and some other key markets. It sold better in its first year on the market than the entire Nantucket Nectars product line would in its first five years. Later research, however, suggested that it was not the reintroduction of Classic Coke, but instead the lessheralded rollout of Cherry Coke, that can be credited with the company's success that year. Coke spent a considerable amount of time trying to figure out where it had made a mistake, ultimately concluding that it had underestimated the public impact of the portion of the customer base that would be alienated by the switch. This would not emerge for several years afterward, however, and in the meantime the public simply concluded that the company had, as Keough suggested, failed to consider the public's attachment to the idea of what Coke's old formula represented. While that has become conventional wisdom in the ensuing years, some analyses have suggested otherwise. This populist version of the story served Coke's interests, however, as the whole episode did more to position and define Coca-Cola as a brand embodying values distinct from Pepsi than any deliberate effort to do so probably could have done. Allowing itself to be portrayed as a somewhat clueless large corporation forced to back off a big change by overwhelming public pressure flattered customers (as Keough put it, "We love any retreat which has us rushing toward our best customers with the product they love the most. "Bottles and cans continued to bear the "Coca-Cola Classic" title until 2009 when the company announced that it would discontinue the use of "Classic" to avoid confusion with the younger generation. While in the short term the fiasco led Cosby to end his advertising for Coke, saying his commercials that praised the superiority of the new formula had hurt his credibility, no one at Coca-Cola was fired or otherwise held responsible for what is still widely perceived as a misstep, for the simple reason that it ultimately wasn't (in contrast with Schlitz beer's disastrous change to a cheaper formula in the early 1970s, which was also based on market research into product taste yet unquestionably detrimental to the company in the long term). When Goizueta died in 1997, the company's share price was at a level well above what it was when he had taken over 16 years earlier and its position as market leader even more firmly established. At the time Roger Enrico, then head of Pepsi's American operations, likened New Coke to the Edsel. Later, when he was himself PepsiCo's CEO, he modified his assessment of the situation, saying that had people been fired or demoted over New Coke, it would have sent a message that risk-taking was strongly discouraged at the company. In the late 1990s, Zyman summed up the New Coke experience thus: “ Yes, it infuriated the public, cost a ton of money and lasted only 77 days before we reintroduced Coca-Cola Classic. Still, New Coke was a success because it revitalized the brand and reattached the public to Coke ” New Coke continued to do what it had originally been designed to do: win taste tests. In 1987, The Wall Street Journal surveyed 100 randomly selected cola drinkers, the majority of whom indicated a preference for Pepsi, with Classic Coke accounting for all save two New Coke loyalists. Given a chance to try all three in a blind test, New Coke slightly edged out Pepsi yet many drinkers reacted angrily to finding they had chosen a brand other than their favorite. Goizueta never once regretted the decision, even throwing an anniversary party for New Coke in 1995, and continued to have it produced for his personal consumption until shortly before his own death Core Capabilities Consumer Marketing Marketing investments are designed to enhance consumer awareness and increase consumer preference for their brands. This produces long-term growth in unit case volume, per capita consumption and their share of worldwide nonalcoholic beverage sales. Through their relationships with bottling partners and those who sellout products in the marketplace, they create and implement integrated marketing programs, both globally and locally, that are designed to heighten consumer awareness of and product appeal for their brands. In developing strategy for a Company brand, they conduct product and packaging research, establish brand positioning, develop precise consumer communications and solicit consumer feedback. Their integrated marketing activities include, but are not limited to, advertising, point-of-sale merchandising and sales promotions. They have disciplined marketing strategies that focus on driving volume in emerging markets, increasing their brand value in developing markets and growing profit in their most developed markets. In emerging markets, they are investing in infrastructure programs that drive volume through increased access to consumers. In developing markets, where consumer access has largely been established, their focus is on differentiating their brands. In outmost developed markets, they continue to invest in brands and infrastructure programs, but at a slotheyr rate than revenue growth. They are focused on affordability and ensuring they are communicating the appropriate message based on the current economic environment. Commercial Leadership The Coca-Cola system has millions of customers around the world who sell or serve their products directly to consumers. They focus on enhancing value for their customers and providing solutions to grow their beverage businesses. Their approach includes understanding each customer’s business and needs, whether that customer is sophisticated retailer in a developed market or a kiosk owner in an emerging market. They focus on ensuring that their customers have the right product and package offerings and the right promotional tools to deliver enhanced value to themselves and the Company. They are constantly looking to build new beverage consumption occasions in their customers’ outlets through unique and innovative consumer experiences, product availability and delivery systems, and beverage merchandising and displays. They participate in joint brand-building initiatives with their customers in order to drive customer preference for their brands. Through their commercial leadership initiatives, they embed themselves further into their retail customers’ businesses while developing strategies for better execution at the point-of-sale. Franchise Leadership They continued to improve their franchise leadership capabilities to give their Company and their bottling Partners the ability to grow together through shared values, aligned incentives and a sense of urgency and Flexibility that supports consumers’ always changing needs and tastes. The financial health and success of their Bottling partners are critical components of the Company’s success. They work with their bottling partners to Identify system requirements that enable them to quickly achieve scale and efficiencies, and they share best practices throughout the bottling system. Their system leadership allows us to leverage recent acquisitions to expand their Volume base and enhance margins. With their bottling partners, they work to produce differentiated beverages and Packages that is appropriate for the right channels and consumers. They also design business models for Sparkling and still beverages in specific markets to ensure that they appropriately share the value created by these 35 Beverages with their bottling partners. They continue to build a supply chain network that leverages the size and scale of the Coca-Cola system to gain a competitive advantage. Challenges and Risks Being a global company provides unique opportunities for their Company. Challenges and risks accompany those opportunities. Their management has identified certain challenges and risks that demand the attention of the nonalcoholic Beverages segment of the commercial beverages industry and their Company. Of these, their key challenges and Risks are discussed below. Obesity and Inactive Lifestyles. Increasing concern among consumers, public health professionals and Government agencies of the potential health problems associated with obesity and inactive lifestyles represents significant challenge to their industry. They recognize that obesity is a complex public health problem. Their Commitment to consumers begins with their broad product line, which includes a wide selection of diet and light Beverages, juices and juice drinks, sports drinks and water products. Their commitment also includes adhering to Responsible policies in schools and in the marketplace; supporting programs to encourage physical activity and Promote nutrition education; and continuously meeting changing consumer needs through beverage innovation, Choice and variety. They are committed to playing an appropriate role in helping address this issue in cooperation with governments, educators and consumers through science-based solutions and programs. Water Quality and Quantity. Water quality and quantity is an issue that increasingly requires their Company’s attention and collaboration with the nonalcoholic beverages segment of the commercial beverages Industry, governments, nongovernmental organizations and communities where they operate. Water is the main Ingredient in substantially all of their products. It is also a limited natural resource facing unprecedented Challenges from overexploitation, increasing pollution and poor management. Their Company is in an excellent Position to share the water-related knowledge they have developed in the communities they serve—water-resource Management, water treatment, wastewater treatment systems, and models for working with communities and Partners in addressing water and sanitation needs. They are actively engaged in assessing the specific water-related Risks that they and many of their bottling partners face and have implemented a formal water risk management Program. They are working with their global partners to develop water sustainability projects. They are actively Encouraging improved water efficiency and conservation efforts throughout their system. As demand for water continues to increase around the world, they expect commitment and continued action on their part will be crucial in the successful long-term stewardship of this critical natural resource. Evolving Consumer Preferences. Consumers want more choices. They are impacted by shifting consumer Demographics and needs, on-the-go lifestyles, aging populations in developed markets and consumers who are empowered with more information than ever. They are committed to generating new avenues for growth through their core brands with a focus on diet and light products. They are also committed to continuing to expand the Variety of choices they provide to consumers to meet their needs, desires and lifestyle choices. Increased Competition and Capabilities in the Marketplace. Their Company is facing strong competition from some well-established global companies and many local participants. They must continue to selectively expand into other profitable segments of the nonalcoholic beverages segment of the commercial beverages industry and strengthen their capabilities in marketing and innovation in order to maintain their brand loyalty and market share. All these challenges and risks—obesity and inactive lifestyles, water quality and quantity, evolving Consumer preferences, and increased competition and capabilities in the marketplace— have the potential to Have a material adverse effect on the nonalcoholic beverages segment of the commercial beverages industry anon their Company; however, they believe their Company is well positioned to appropriately address these challenges And risks. Criticisms relating to Coca Cola The Coca-Cola Company and its products have been criticized by various sources for various reasons including negative health effects resulting from consumption of its products, exploitative labor practices, high levels of pesticides in its products, building plants in Nazi Germany which employed slave labor, environmental destruction, monopolistic business practices, hiring paramilitary units to murder union leaders, and marketing unhealthy products to children. Health effects Acidity and tooth decay Although numerous court cases have been filed against The Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous, according to corporate information no evidence corroborating this claim has been found. In some of these cases, evidence has been presented showing Coca-Cola is no more harmful than comparable soft drinks or acidic fruit juices. Under normal conditions, scientific evidence indicates Coca-Cola's acidity causes no immediate harm. However, the frequency of exposure of teeth to acidic environments affects the likelihood of tooth decay through caries development. Environmental issues In India, there exists widespread concern over how Coca-Cola is produced. In particular, it is feared that the water used to produce Coke may contain unhealthy levels of pesticides and other harmful chemicals. It has also been alleged that due to the amount of water required to produce Coca-Cola, aquifers are drying up and forcing farmers to relocate. Pesticide use In 2003, the Centre for Science and Environment (CSE), a nongovernmental organisation in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants Pepsico and Coca-Cola, contained toxins including lindane, DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer and a breakdown of the immune system. Tested products included Coke, Pepsi, and several other soft drinks (7Up, Mirinda, Fanta, Thums Up, Limca, Sprite), many produced by The Coca-Cola Company. CSE found that the Indian produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found no such residues. Coca-Cola and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. David Cox, Coke's Hong Kong-based communications director for Asia, accused Sunita Narain, CSE's director, of "brand jacking" — using Coke's brand name to draw attention to her campaign against pesticides. Narain defended CSE's actions by describing them as a natural follow-up to a previous study it did on bottled water. In 2004, an Indian parliamentary committee backed up CSE's findings, and a government-appointed committee was tasked with developing the world's first pesticide standards for soft drinks. Coke and PepsiCo oppose the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks like soda. The Coca-Cola Company has responded that its plants filter water to remove potential contaminants and that its products are tested for pesticides and must meet minimum health standards before they are distributed. Coca-Cola had registered a 15 percent drop in sales after the pesticide allegations were made in 2003. As of 2005, Coke and Pepsi together hold 95% market share of soft-drink sales in India. In 2006, the Indian state of Kerala banned the sale and production of CocaCola, along with other soft drinks, due to concerns of high levels of pesticide residue On Friday, September 22, 2006, the High Court in Kerala overturned the Kerala ban ruling that only the federal government can ban food products. Water use Environmental degradation in the form of depletion of the local ground water table due to the utilization of natural water resources by the company poses a serious threat to many communities. In March 2004, local officials in Kerala shut down a $16 million Coke bottling plant blamed for a drastic decline in both quantity and quality of water available to local farmers and villagers. In April 2005, Kerala's highest court rejected water use claims, noting that wells there continued to dry up last summer, months after the local Coke plant stopped operating. Further, a scientific study requested by the court found that while the plant had "aggravated the water scarcity situation," the "most significant factor" was a lack of rainfall. Critics respond that Coke shouldn't be locating bottling plants in drought-stricken areas. The company has been trying to regain the plant's license, fighting a case that has gone all the way to India's Supreme Court Meanwhile, near the holy city of Varanasi in northeastern India, a local water official blames a Coke plant — which has been the scene of many protests by NGOs and local residents — for polluting groundwater by releasing wastewater into surrounding land. A Coke official confirms there had been a drainage problem with treated wastewater several years ago but says the company built a long pipeline to correct it. Indian environmental activists Vandana Shiva has stated that it takes nine liters of clean water to manufacture a litre of Coke though Coca-Cola says it is only an average of 3.12 litres. The case has been appealed and a decision is pending. Coca-Cola has set up a page to rebut these charges at this site. Packaging Packaging used in Coca-Cola's products has a significant environmental impact but the company strongly opposes attempts to introduce mechanisms such as container deposit legislation. Conclusion The Coca Cola Company has a very rich history and spread over the world, Coca Cola Company has a strong competitive position in the market with rapid growth. This includes focus on Water and Juices products, and catering to health consciousness of people through introduction of different coke flavor and maintaining basic coke flavor. Coca-Cola is worth more than 58 billion dollars on the stock market. For more than 65 years, Coca-Cola has been a sponsor of the Olympics. The 1996 Summer Olympics were held in Atlanta, Georgia, the home of Coca-Cola. One great thing that the CocaCola 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. 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