Marketing Casestudy of Coca-Cola

Disclaimer

1. We, in no way, are trying to promote Coke.
2. Coke is nothing but sugared water and a lot of sugar is not good for your body, so do not consume Coke in excessive quantities.

Coke is nothing but sugared water and it’s bad for health, everybody knows about it. But have you ever wondered, in spite of this brand merely selling sugared water? How is it that they are able to generate billion-dollar profits every single year? And not just that.

Coca-Cola is a company that has survived for more than 111 years. Which includes 7 revolutions and 2 World Wars. The question is How is it possible that a company selling sugared water could make a billion dollars in spite of having competitors, which are much tastier than Coca-Cola, and much more healthier than Coca-Cola?

And a simple example of that is the lemonade business in India. The answer to that is that Coca-Cola deploys a genius marketing strategy because of which Coca-Cola is able to make a billion dollars in profits merely by selling sugared water.

So if you’re here to learn something incredible Let’s do a deep dive and try to understand one of the greatest marketing strategies ever known to mankind and that is Coca-Cola.

Coca-Cola experiment by Reed Montague

In 2005, there was a scientist called Reed Montague, who conducted a very simple experiment to try and understand what exactly is the difference between Coca-Cola and Pepsi. And which one was preferred by people? So he conducted this simple experiment with 3 iterations.

1^st iteration: In the first iteration, he placed two bottles one of Coke and the other of Pepsi. He took off the label so that people couldn’t identify on the outside which one is Coke and which one is Pepsi. So, when he called the subjects to come and taste both colas. He scanned their brains through an fMRI(Functional magnetic resonance imaging) scanner. And the first iteration was when people came and tasted both the colas from the bottles which were not labeled. They were not even able to identify the difference between both colas. And the fMRI scanner also did not show any difference in the reading.

2^nd Iteration: This time, he puts the labels back on so that people can identify which one is Coke and which one is Pepsi. This time when the subjects come and taste Pepsi nothing happens. But the moment they tasted Coca-Cola, the fMRI scanner showed a significant difference in the reading. That’s when Reed Montague thought, ‘Maybe there’s something to the recipe. So let’s send them back and call them in for a third iteration.’

3^rd Iteration: This time he swapped the logos, which meant that the bottle that contained Coca-Cola was now labeled as Pepsi and the bottle that contained Pepsi was now labeled as Coca-Cola. This time when the subjects came and tasted the cola from the Pepsi-labelled bottle nothing happened. But the moment they tasted the cola from the Coca-Cola labeled bottle the fMRI scanner showed the same significant difference in the reading.

That is when Reed Montague understood that it’s not the cola, it’s not the bottle, it’s not the subjects it is just the flash of the red color logo of Coca-Cola that made that significant difference in the reading. Now, to put those straight people in front of the scenes it’s just the 3-second logo flash that made a significant difference in the reading and altered the very perception of people. Whereas behind the scenes it clearly justifies the billion-dollar budget that Coca-Cola takes out every single year to establish itself as the brand icon of happiness.

The question is what do we exactly mean by the brand icon of happiness?

So for that let’s try to understand the fundamentals of marketing. So every product has two kinds of values.

1. Tangible Value (which is the real value of the product)
2. Perceived Value

For example, when you go to a restaurant the aroma, the room freshener, the ambiance, and the lighting are what are going to make up for the perceived value of the product. It is going to enhance your perception of the experience. And the tangible value of the product is how well the food is cooked.

So if I serve you rotten chicken in the best restaurant in the world you’re still not going to like it, right? Because the true value of the product is nothing but the product of the tangible value and the perceived value. So even if one of them is bad the value of the product goes down.

Similarly, if I were to serve you the best food in the world but I put dead cockroaches around the table you’re still going to feel disgusted, right?

Now, the question is you still have the best food on the table and the cockroaches are not even inside the food. Why do you still not like the experience?

The answer is even though the tangible value of the product is great the perception of the product has been degraded to such an extent that the experience is completely ruined. So every company needs to make sure that it is able to build great products hence bringing up the tangible value of the product and it has to make sure that the marketing strategies are so well designed that it is able to enhance the perception of the product in the minds of the people.

Now, when it comes to Coca-Cola, the tangible value of the product is sugar. And by default, scientifically speaking sugar is bound to give you pleasure. Whereas when it comes to the perception of the product, Coca-Cola does an extraordinary job by associating itself with the emotion of happiness.

Marketing Strategy of Coca-Cola in India

Now a classic example of the association with emotion can be seen when Coca-Cola penetrated the Indian population using its remarkable marketing strategy. So to put that straight, when Coca-Cola came to India they were facing a hard time because they did not know what type of commercial to bring in which is going to resonate with the entire country. Because we are such a beautifully complex country that when you go from one state to another the tradition changes, the culture changes, the language changes, and the lifestyle also changes. So, how does a brand come out with a commercial which is going to resonate with the entire country? And that is when after doing deep research they found this beautiful recipe for something called the game of cricket.

Because Coca-Cola, after doing deep market research, understood that in India, regardless of your religion, caste, race, or sex in the game of cricket everybody is an Indian and everybody is going to cheer, “Sachin! Sachin!”. And guess what they hired Sachin Tendulkar as their brand ambassador and came out with a beautiful campaign called “Coke ki Khushi, Cricket ki Khushi”. They came out with a bunch of commercials that portrayed the true essence of the game of cricket and this is what the commercial looks like.

If you look closely at that commercial, it is not even talking about the product until the last 3 seconds. you know what? While good brands sell you products, legendary brands sell you emotion. And that is the secret behind Coca-Cola’s genius marketing strategy.

Business Lessons from Coca-Cola

To put that straight, there are a few lessons that you need to learn as an entrepreneur if you want to do the same for your product.

1. Sell Emotions

While good brands sell you their product legendary brands will always try and sell you an emotion.

2. Use storytelling in your marketing

It is okay if you don’t talk about specifications. All you have to do is tell a great story. And if you do that you’re going to resonate with your customers more than anybody else.

Even if you’re selling sugared water, you could still make a billion dollars

That’s all from my side. If you learned something valuable write in the comment box.

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