The Coca-Cola Company is the world's number one maker of soft drinks, selling 1.3 billion beverage servings every day. Coca-Cola's red and white trademark is probably the best-known brand symbol in the world. Headquartered since its founding in Atlanta, Coca-Cola makes four of the top five soft drinks in the world, Coca-Cola at number one and Diet Coke, Fanta, and Sprite at numbers three through five. The company also operates one of the world's most pervasive distribution systems, offering its nearly 400 beverage products in more than 200 countries worldwide. Nearly 70 percent of sales are generated outside North America, with revenues breaking down as follows: North America, 30 percent; Europe, Eurasia, and the Middle East, 31 percent; Asia, 24 percent; Latin America (including Mexico), 10 percent; and Africa, 4 percent. Among the company's products are a variety of carbonated beverages (including the aforementioned brands and many others, such as Fresca, Barq's, and Cherry and Vanilla Coke); sports drinks (POWERade and Aquarius); juices and juice drinks (Minute Maid, Fruitopia,, Five Alive, Qoo, Maaza, and Bibo); teas (Sokenbicha and Marocha); coffees (Georgia); and bottled waters (Ciel, Dasani, and Bonaqua). Moreover, the company holds the rights to the Schweppes,, Dr Pepper, and Crush brands outside of North America, Europe, and Australia. Coca-Cola's development into one of the most powerful and admired firms in the world has been credited to proficiency in four basic areas: consumer marketing, infrastructure (production and distribution), product packaging, and customer (or vendor) marketing.
Creation of a Brand Legend
The inventor of Coca-Cola, Dr. John Styth Pemberton, came to Atlanta from Columbus, Georgia, in 1869. In 1885 he set up a chemical laboratory in Atlanta and went into the patent medicine business. Pemberton invented such products as Indian Queen hair dye, Gingerine, and Triplex liver pills. In 1886 he concocted a mixture of sugar, water, and extracts of the coca leaf and the kola nut. He added caffeine to the resulting syrup so that it could be marketed as a headache remedy. Through his research Pemberton arrived at the conclusion that this medication was capable of relieving indigestion and exhaustion in addition to being refreshing and exhilarating.
The pharmacist and his business partners could not decide whether to market the mixture as a medicine or to extol its flavor for its own sake, so they did both. In Coca-Cola: An Illustrated History, Pat Watters cited a Coca-Cola label from 1887 which stated that the drink, "makes not only a delicious... and invigorating beverage... but a valuable Brain Tonic and a cure for all nervous affections." The first newspaper advertisement for Coca-Cola appeared exactly three weeks after the first batch of syrup was produced, and the famous red and white trademark made its debut at about the same time.
Coca-Cola was not, however, immediately successful. During the product's first year in existence, Pemberton and his partners spent around $74 in advertising their unique beverage and made only $50 in sales. The combined pressures of poor business and ill health led Pemberton to sell two-thirds of his business in early 1888. By 1891, a successful druggist named Asa G. Candler owned the entire enterprise. It had cost him $2,300. Dr. Pemberton, who died three years earlier, was never to know the enormous success his invention would have in the coming century.
Candler, a religious man with excellent business sense, infused the enterprise with his personality. Candler became a notable philanthropist, associating the name of Coca-Cola with social awareness in the process. He was also an integral part of Atlanta both as a citizen and as a leader. Candler endowed Emory University and its Wesley Memorial Hospital with more than $8 million. Indeed, the university could not have come into existence without his aid. During World War I, Candler helped to avert a cotton crisis by using his growing wealth to stabilize the market. After he stepped down as the president of Coca-Cola, he became the mayor of Atlanta and introduced such reforms as motorizing the fire department and augmenting the water system with his private funds.
1891-1919: Rapid Growth Under the Candlers
Under Candler's leadership, which spanned a 26-year period, the Coca-Cola Company grew quickly. Between 1888 and 1907, the factory and offices of the business were moved to eight different buildings in order to keep up with the company's growth and expansion. As head of the company, Candler was most concerned with the quality and promotion of his product. He was particularly concerned with production of the syrup, which was boiled in kettles over a furnace and stirred by hand with large wooden paddles. He improved Pemberton's formula with the help of a chemist and pharmacist. In 1901, responding to complaints about the presence of minute amounts of cocaine in the Coca-Cola syrup, Candler devised the means to remove all traces of the substance. By 1905, the syrup was completely free of cocaine.
In 1892, the newly incorporated Coca-Cola Company allocated $11,400 for advertising its drink. Advertising materials included signs, free sample tickets, and premiums such as clocks and stained-glass lampshades, all with the words "Coca-Cola" engraved upon them. These early advertising strategies initiated the most extensive promotional campaign for one product in history. Salesmen traveled the entire country selling the company's syrup, and by 1895 Coca-Cola was being sold and consumed in every state in the nation. Soon it was available in some Canadian cities and in Honolulu, and plans were underway for its introduction into Mexico. By the time Asa Candler left the company in 1916, Coke had also been sold in Cuba, Jamaica, Germany, Bermuda, Puerto Rico, the Philippines, France, and England.
An event that had an enormous impact on the future and very nature of the company was the 1899 agreement made between Candler and two young lawyers that allowed them to bottle and sell Coca-Cola throughout the United States: the first bottling franchise had been established. Five years later, in 1904, the one-millionth gallon of Coca-Cola syrup had been sold. In 1916 the now universally recognized, uniquely contour-shaped Coke bottle was invented. The management of all company advertising was assigned to the D'Arcy Advertising Agency, and the advertising budget had ballooned to $1 million by 1911. During this time, all claims for the medicinal properties of Coca-Cola were quietly dropped from its advertisements.
World War I and the ensuing sugar rationing measures slowed the growth of the company, but the pressure of coal rations led Candler's son, Charles Howard, to invent a process whereby the sugar and water could be mixed without using heat. This process saved the cost of fuel, relieved the company of the need for a boiler, and saved a great amount of time since there was no need for the syrup to go through a cooling period. The company continued to use this method of mixing into the 1990s.
1919-55: The Woodruff Era
Robert Winship Woodruff became president of the company in 1923 at the age of 33. His father, Ernest Woodruff, along with an investor group, had purchased it from the Candler family in 1919 for $25 million, and the company went public in the same year at $40 a share. After leaving college before graduation, Woodruff held various jobs, eventually becoming the Atlanta branch manager and then the vice-president of an Atlanta motor company, before becoming the president of Coca-Cola.
Having entered the company at a time when its affairs were quite tumultuous, Woodruff worked rapidly to improve Coca-Cola's financial condition. In addition to low sales figures in 1922, he had to face the problem of animosity toward the company on the part of the bottlers as a result of an imprudent sugar purchase that management had made. This raised the price of the syrup and angered the bottlers. Woodruff was aided in particular by two men, Harrison Jones and Harold Hirsch, who were adept at maintaining good relations between the company and its bottling franchises.
Woodruff set to work improving the sales department; he emphasized quality control, and began advertising and promotional campaigns that were far more sophisticated than those of the past. He established a research department that became a pioneering market research agency. He also worked hard to provide his customers with the latest in technological developments that would facilitate their selling Coca-Cola to the public, and he labored to increase efficiency at every step of the production process so as to raise the percentage of profit from every sale of Coca-Cola syrup.
Through the 1920s and 1930s such developments as the six-pack carton of Coke, which encouraged shoppers to purchase the drink for home consumption, coin-operated vending machines in the workplace, and the cooler designed by John Stanton expanded the domestic market considerably.
Considered slightly eccentric, Woodruff was a fair employer and an admired philanthropist. In 1937, he donated $50,000 to Emory University for a cancer diagnosis and treatment center, and over the years gave more than $100 million to the clinic. He donated $8 million for the construction of the Atlanta Memorial Arts Center. Under his leadership the Coca-Cola Company pioneered such company benefits as group life insurance and group accident and health policies, and in 1948 introduced a retirement program.
Even during the Great Depression the company did not suffer thanks to Woodruff's cost-cutting measures. When Prohibition was repealed, Coca-Cola continued to experience rising sales. It was World War II, however, that catapulted Coca-Cola into the world market and made it one of the country's first multinational companies.
Woodruff and Archie Lee of the D'Arcy Advertising Agency worked to equate Coca-Cola with the American way of life. Advertisements had, in Candler's era, been targeted at the wealthy population. In Woodruff's time the advertising was aimed at all Americans. By early 1950, African Americans were featured in advertisements, and by the mid-1950s there was an increase in advertising targeted at other minority groups. Advertising never reflected the problems of the world, only the good and happy life. Radio advertising began in 1927, and through the years Coca-Cola sponsored many musical programs. During World War II, Woodruff announced that every man in uniform would be able to get a bottle of Coke for five cents no matter what the cost to the company. This was an extremely successful marketing maneuver and provided Coke with good publicity. In 1943, at the request of General Eisenhower, Coca-Cola plants were set up near the fighting fronts in North Africa and eventually throughout Europe in order to help increase the morale of U.S. soldiers. Thus, Coca-Cola was introduced to the world.
Coke was available in Germany prior to the war, but its survival there during the war years was due to a man named Max Keith who kept the company going even when there was little Coca-Cola syrup available. Keith developed his own soft drink, using ingredients available to him, and called his beverage Fanta. By selling this beverage he kept the enterprise intact until after the war. When the war was over the company continued to market Fanta. By 1944, the Coca-Cola company had sold one billion gallons of syrup, by 1953 two billion gallons had been sold, and by 1969 the company had sold six billion gallons.
Continuing Struggles in the Early 2000s
Daft's first year was a hectic one. In January 2000 the company announced a drastic restructuring based on a plan drafted by a Daft-led team. Coca-Cola said it would lay off about 6,000 employees, representing a slashing of the workforce by 20 percent--the largest cutbacks in Coke history. The cuts were later scaled back to about 5,200, but the company still took about $1.6 billion in one-time charges for a plan that aimed to save $300 million in operating costs per year. The restructuring, which centered on marketing, sales, and customer support jobs, was envisioned as a slashing of bureaucracy in an attempt to create a more decentralized company, one in which ideas could more readily bubble up from managers in the field rather than those at the Atlanta headquarters. In November 2000 Daft engineered a tentative deal to take over the Quaker Oats Company for $15.75 billion. This would have added to the Coke portfolio the Gatorade brand, which dominated the sports drink sector, a perennial Coke weakness, and would also have complemented the company's strategy of strengthening its lineup of noncarbonated beverages. But at the last minute, Coca-Cola's board pulled the plug on the deal, mainly concerned that the price was too high. The company's arch-rival PepsiCo quickly swooped in to complete a $13.4 billion acquisition of Quaker Oats. Also in November, Coca-Cola reached an agreement to settle the race-discrimination class-action lawsuit that had been brought against it. The company agreed to a $192.5 million settlement and also to have certain of its employment practices overseen by an outside task force. About 2,000 current and former African American employees were eligible for settlement awards.
Another of Daft's main objectives was pumping up an arid new product pipeline, but he garnered only mixed results. The company found moderate success with the 2001-debuting Diet Coke with Lemon, before making a much bigger splash with Vanilla Coke one year later. The latter received the firm's largest new product launch since the New Coke debacle. To supplement these meager advances--and particularly to try to capture a greater share of the noncarbonated beverage sector, which was growing at a much faster clip than the stagnant carbonated sector--Daft turned to partnerships as a potential source of renewed growth. In January 2001 an agreement was reached with Nestlé S.A. to form a joint venture called Beverage Partners Worldwide. Within a couple of years, this venture was marketing ready-to-drink tea (Nestea, Belté, Yang Guang, and several other brands) and coffee (Nescafé, Taster's Choice, and Georgia Club) products in the United States and about 45 other countries. Coca-Cola and the Procter & Gamble Company (P&G) agreed in March 2001 to create a $4 billion joint venture that would have joined Coke's Minute Maid brand and distribution network with P&G's snack and juice brands. However, Coca-Cola pulled out of the deal just a few months later, having decided to try to build the Minute Maid brand on its own. Then in July 2002 Coca-Cola and Groupe Danone formed a joint venture to produce, market, and distribute Danone's Dannon and Sparkletts bottled-water brands in the United States. In a separate deal, Coke took over the U.S. marketing, sales, and distribution of Danone's Evian water brand, the French firm's biggest seller.
In March 2003 the company slashed another 1,000 jobs from the payroll, half of them at headquarters. Also that year, Coca-Cola was the recipient of more negative publicity when it was revealed that several midlevel employees had rigged a marketing test for Frozen Coke done three years earlier at Burger King restaurants in the Richmond, Virginia, area. The scandal led to the departure of the head of Coke's fountain division, and the company issued an apology to Burger King and its franchisees and offered to pay them $21 million. An early 2004 launch of the Dasani brand into the European market was aborted when bottles in Britain were found to contain elevated levels of bromate, a substance that can cause cancer after long-term exposure.
This latest product recall came as Coca-Cola was in the midst of yet another change at the top. In February 2004 Daft announced his intention to retire following a search for a new chief executive. After considering a number of outside candidates, the company hired a semi-outsider, E. Neville Isdell, in June 2004. An Irish citizen who had grown up in Africa, Isdell was a former senior executive at Coke who had led the company's push into a number of new markets around the globe in the 1980s and 1990s. He left the company in 1998 to become chairman of Coca-Cola Beverages, a major Coke bottler, and then retired in 2001. The new leader was faced with many of the same challenges that his predecessor struggled with little success to overcome: improving marketing, forging better relations with the company's bottlers, and satisfying consumer demand for more healthful beverage products, particularly of the noncarbonated variety.
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Vocabulary
innovation [ˌɪnəu'veɪʃ(ə)n] инновация, нововведение
dreadful ['dredf(ə)l], [-ful] страшный, ужасный
АТМ [ˌeɪtiː'em] (сокр. от Automatic Teller Machine) банкомат
retail payments розничные платежи
mortgage ['mɔːgɪʤ] ипотека, ипотечный кредит
backer['bækə] спонсор, сторонник, сделавший ставку на что-л.
social-impact bond облигации социального воздействия
equity ['ekwɪtɪ] акция без фиксированного дивиденда
charitу ['ʧærɪtɪ] благотворительность
reconviction повторное осуждение
database ['deɪtəbeɪs] база данных
ostensibly [ɔs'ten(t)sɪblɪ] якобы, по видимости
transfer переносить, перемещать
measurement ['meʒəmənt] измерение
payout выплат, выплаченная сумма
trademark ['treɪdmɑːk] торговая марка
headquarter [ˌhed'kwɔːtə] головной офис
revenue ['rev(ə)njuː] доход, выручка
concocter [kɔ̃kɔkte] приготовить
infuse[ɪn'fjuːz] привносить, вселять
enormous [ɪ'nɔːməs] огромный, гигантский, обширный
endow [ɪn'dau], [en-] снабжать, наделять
crisis ['kraɪsɪs] кризис, перелом
wealth [welθ] богатство, состояние
aid [eɪd] помогать, способствовать
growth [grəuθ] рост, развитие
leadership ['liːdəʃɪp] руководство, лидерство, руководящая роль
recognize ['rekəgnaɪz] узнавать, опознавать
establish [ɪs'tæblɪʃ], [es-] учреждать
concern [kən'sɜːn]проблема, вопрос
available [ə'veɪləbl] доступный, имеющийся в наличии
advertisе ['ædvətaɪz] рекламировать
franchise ['frænʧaɪz] право на производство, лицензия
accumulation [əˌkjuːmjə'leɪʃ(ə)n] накопление, сбор
department [dɪ'pɑːtmənt] отделение, управление, отдел
purchase ['pɜːʧəs] покупка, закупка
insurance [ɪn'ʃuər(ə)n(t)s] страхование
restructuring - реструктурирование, изменение структуры
splash [splæʃ] всплеск
hectic ['hektɪk] беспокойный
announce [ə'naun(t)s] объявить, сообщить
References
1. https://www.economist.com/node/21547999
2. https://www.referenceforbusiness.com/history2/32/The-Coca-Cola-Company.html