Coca-Cola went from a cocaine-infused elixir in 1886 to a ubiquitous sugary drink by 1929.
Now people in more than 200 countries drink 1.9 billion servings every day, according to The Coca-Cola Company.
Having a product people enjoy is far from the only thing needed to become one of the world’s most valuable companies. Coca-Cola used seven key design and marketing strategies, which made it as recognizable in the streets of Shanghai as in its hometown of Atlanta by the 1920s, says Coca-Cola VP of innovation and entrepreneurship David Butler.
In the book, “Design to Grow: How Coca-Cola Learned to Combine Scale and Agility (and How You Can Too),” Butler and co-author Linda Tischler explore these seven strategies, which we’ve explained below.
1. It started with a unique, market-tested formula.
After serving as a Confederate colonel in the Civil War, John Pemberton wanted to develop a version of the coca wines (basically cola with alcohol and cocaine) that were in vogue at the time. In 1886, Atlanta passed prohibition laws that forced beverage manufacturers to produce non-alcoholic versions of their drinks.
2. Its logo uses a timeless font.
Pemberton’s bookkeeper, Frank Mason Robinson, decided that Coca-Cola’s logo should be written in the Spencerian script accountants used because it would differentiate it from its competitors. The company standardized the logo in 1923 and, like the recipe, decided that while packaging could adjust to the times, the core logo was to be untouched.
3. It was distributed in a proprietary bottle.
After the Georgia businessman Asa Griggs Candler became the majority shareholder of Coca-Cola in 1888, he set his sights on making Coke the nation’s most popular cola through marketing and partnerships with regional bottlers.
4. It held retailers responsible for maintaining its high standard.
Ernest Woodruff‘s Trust Company of Georgia bought Coca-Cola from Candler in 1919. Woodruff was focused on maintaining a standard of excellence as the company scaled.
The Coke team decided that its drink should be served at 36 degrees Fahrenheit, and would send salesmen to new retailers to tell them the product should never be served above 40 degrees.
The tactic may seem a bit silly today, but the 36-degree standard was just another example of establishing Coca-Cola as a premium product that was worthy of more attention than any of its competitors.
5. It kept its consumer price fixed for 70 years.
It’s common today for tech startups to begin by offering a service for free and then charging a higher price to consumers and/or advertisers once they’ve become hooked. Before utilizing networking effects became a standard practice, Coca-Cola used a similar approach to scale across the US and then throughout the world.
6. It guided word-of-mouth advertising and developed a voice.
It became apparent after Candler took over early in the company’s life that Coke was as much a drink as it was a consumable brand, an idea consumers could feel good about identifying with.
Candler started a mass coupon initiative that resulted in 10% of all products from 1887 to 1920 to be given away in order to build brand awareness. He also provided retailers with Coca-Cola swag like posters and festoons for decorations and calendars and clocks for customers. According to Butler, Coke was a pioneer in affixing a brand to items unrelated to the product.
7. It adopted a franchise model.
In 1899, two Tennessee lawyers, Benjamin F. Thomas and Joseph B. Whitehead, approached Candler and asked if he would let them bottle Coke. The drink was sold as a syrup that retailers would mix with soda water, but it wasn’t typical to drink cola on the go or bring it into the home. Candler decided to hand over the bottling rights for just a dollar, which he never collected, because he was content with maintaining the rights to the syrup.
This marked the beginning of what the company internally calls The Coca-Cola System, a franchise partnership with bottlers that allowed the brand to truly take off. Today, there are more than 250 independent bottlers around the world. Read more…