coca cola case study challenge

The Pepsi Challenge: How Pepsi won the battle but lost the Challenge

The pepsi challenge: setting the table for a serious showdown.

You can gain many insights when you look at ideas and tactics that created legendary marketing. Today, we’re breaking down the Pepsi Challenge. The Pepsi Challenge signaled a major shift in the winds of the cola landscape. In 1975, Coke was the 800 lb. gorilla in the cola market, holding the #1 position for decades. A superior distribution system, effective marketing (before it was called marketing) and incredible brand loyalty created legions of happy customers.

Pepsi was the new kid on the block looking to prove something. They were  hungry and willing to mix it up . A savvy exec at Pepsi came up with a bold, revolutionary strategy to do just that.

That idea was the  Pepsi Challenge . Pepsi went inside malls around the country and invited people to do a blind taste test between Coke and Pepsi. The results were remarkable; people picked Pepsi over Coke significantly.

Pepsi happily touted the results in a TV campaign showing people, much to their own surprise, picking Pepsi.

Coke got jumpy. They felt compelled to respond. They started issuing press releases questioning the results and responded with ads saying Coke was better. They came across as defensive and paranoid. Their PR campaign denials were a disaster.

Pepsi had momentum. Coke was backpedaling, fearing a market share freefall. What was Coke’s answer?

Since everyone actually liked Pepsi better (after all, that’s what the results proved), let’s be more like them  and change the secret formula to copy Pepsi. Bluntly, if you can’t beat ’em, join ’em.

That didn’t work out so well. It turned out to be a classic blunder. In response to being forced to give up the taste that many considered sacred, 400,000 people wrote letters demanding that they change it back. Coke’s answer is to keep the new (and call it New Coke) and bring back the old (Coke Classic).

More options—everyone’s happy, right? No: an identity crisis ensues. New Coke was sweeter like Pepsi. Insenesed, at the change Coke fans started arguing against each other (Coke vs. Coke Classic) instead of battling with all of their Pepsi drinking fans for bragging rights.

Brilliance vs. Nitwittedness

There’s a lot to be learned, both shrewd and foolish, from Coke and Pepsi’s actions.

First, the brilliant:

Pepsi coming up with the challenge. It was flat-out brilliant. Incredibly bold. Visible. They set the tone for the conversation. They had a lot to gain and, with fewer customers than Coke, not much to lose. Shrewdly, they started testing the concept out in Dallas, expanded it to a few more cities to get validation of their strategy, and ultimately rolled it out nationwide.

Lots of ugly to go around on both sides.

What can we learn? We come away with three things.

• Coke was too jumpy. They overreacted emotionally out of fear. Bad move.
• The brand attachment to Coke was so strong, people were willing to look past what could have been their new favorite to keep the brand because they had become so comfortable considering themselves a Coke drinker.
• Ultimately, the campaign failed in its execution because it didn’t do a good enough job changing consumers’ buying habits. The creative vision behind the campaign was fantastic. It made an also-ran a household name. It was powerfully viral and certainly must have gotten people to think about switching to Pepsi. But, it failed to make consumers switch. While Pepsi eventually picked up market share, did it some from celebrity endorsements or from the Pepsi Challenge? One thing’s for sure: there wasn’t a sales spike after the Pepsi Challenge.

Pepsi’s achievement was to become the talk of every cola conversation. The failure was that all of those conversations didn’t move the sales needle.

Pepsi’s big mistake

Where did Pepsi drop the ball?

They’d come up with this brilliant, irresistible tease to get people to try their product. By an overwhelming majority—and to their own surprise—they were winning hands down. Pepsi’s  critical failure  was in not facilitating a complete customer conversion.

They didn’t do enough to get people to switch to Pepsi as their default cola. Imagine yourself a loyal Coke drinker, taking the Pepsi challenge, and (quite to your utter shock) picking Pepsi. You leave the mall, maybe buy a Pepsi to try it out sometime in the next few days making sure they hadn’t laced the Pepsi with some odd substance, but then you quickly shift back to your beloved Coke.

What should they have done?

They should have worked harder on getting people to make Pepsi a habit. For anyone who picked Pepsi, they should have handed them a coupon for a free case—heck, you could even give them a case from a Pepsi truck parked right outside the mall. Further, if they could collect the person’s mailing address (remember, this was before email was invented), Pepsi could mail them another coupon for a free case of Pepsi.  Then, give them another, and then another.

Mail the new Pepsi drinkers another coupon every two weeks for the next three months. What’s the cost to Pepsi of eight cases of soda? Maybe $36? That’s a whole lot less than the average person spends on soda per year.

Then, after a few months, send them a nifty Michael Jackson T-shirt or a copy of his newest single (he was their celebrity brand messenger at the time). It should be something that they would use to identify with Michael Jackson and signal to the world that they’re a Michael Jackson fan and a proud Pepsi drinker.

That’s enough for people to follow through and embrace Pepsi entirely.

Game. Set. Match. Pepsi consumption skyrockets. Following this approach, Pepsi would have found those early adopter influencers who would have gotten all of their friends to switch too.

If you’re challenging the market share leader, get your competitive juices flowing, because you have to unseat them in order to succeed. Remember, your courtship with that customer doesn’t end when they give you a try; that’s only the beginning.

Drop us a line , we’ll help you iron the kinks out of your marketing strategy.

The Pepsi Challenge: setting the table for a serious showdown You can gain many insights when you look at ideas and tactics that created legendary marketing. Today, we’re breaking down the Pepsi Challenge. The Pepsi Challenge signaled a …

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How the ‘Blood Feud’ Between Coke and Pepsi Escalated During the 1980s Cola Wars

By: Becky Little

Updated: September 19, 2023 | Original: June 11, 2019

The great Cola Wars of the 1980s were a battle between Coca-Cola and PepsiCo for dominance. The disastrous introduction of “New Coke” in 1985 appeared to set Coca-Cola back. Yet by the end of the year, it was clear the “mistake” had actually helped Coca-Cola’s sales, allowing Coke to retain its spot as the largest-selling soda over Pepsi.

The two companies were both well-established by the time the Cola Wars broke out. Coca-Cola dated back to 1886 when a pharmacist in Columbus, Georgia invented the drink and began selling it to soda fountains. Six years later, the Coca-Cola Company was founded by an Atlanta pharmacist who’d secured the recipe (which contained small amounts of cocaine until 1929). Up in North Carolina , another pharmacist invented his own sugar drink in 1893. After seeing the success of Coca-Cola, he changed his soda’s name from “Brad’s Drink” to “Pepsi-Cola” in 1898 and founded the Pepsi-Cola Company in 1902.

Did you know? John Pemberton, the inventor of Coca-Cola, was addicted to morphine and used coca leaf as a 'safer alternative.' In the 1860s, '70s, and '80s, cocaine was widely endorsed as a cure-all. 

Over the next several decades, Coke emerged as the more popular soda. Starting in 1931, its famous Santa Claus ads marketed it as a refreshing drink you could enjoy year-round. Meanwhile, the Pepsi-Cola Company struggled financially and went through several reorganizations. (In 1965, it merged with Frito-Lay, Inc. to become PepsiCo, Inc. ) But in 1975, Pepsi started a marketing campaign that gave Coke a run for its money: the “Pepsi Challenge,” a blind taste test showing more people preferred Pepsi over Coke.

“The Pepsi Challenge was not just a marketing gimmick—it was true,” says David Greising , author of I'd Like the World to Buy a Coke: The Life and Leadership of Roberto Goizueta , Coca-Cola's CEO. Internal studies at Coca-Cola “confirmed what the Pepsi Challenge was showing, which is that if you just look at the taste of the beverage, consumers preferred Pepsi,” which had a “sweeter, more syrupy flavor.”

Coke was still outselling Pepsi, but its market share was declining as Pepsi’s was rising. “Part of the problem with the success of the Pepsi Challenge was that Coke had fallen into a malaise as a brand,” he says. “People were in love with the notion of Coca-Cola, but they weren’t necessarily drinking Coca-Cola.” 

In response, Coca-Cola started doing a few things differently. In 1982, it released its first drink to share Coke’s name: Diet Coke. The next year, it released caffeine-free versions of Coke and Diet Coke. CEO Roberto Goizueta also got the company to use corn syrup instead of sugar to reduce the cost of production.

That switch to corn syrup opened the door for bigger changes to the original Coke’s recipe. On April 23, 1985, Coca-Cola announced it was changing the secret formula for the flagship drink. The “New Coke,” as it became known, would have a sweeter taste, more similar to the Pepsi that consumers favored in blind taste tests.

Did you know? Coca-Cola went to space aboard the Space Shuttle Challenger in 1985. It was able to make the journey in an experimental 'space can,' which astronauts tested out.

Yet instead of being thrilled, people were outraged that they couldn’t buy the original Coke anymore. And Pepsi happily capitalized on the backlash. In one Pepsi commercial , a young girl upset about New Coke takes shots at the company’s integrity—“First they said they were ‘The Real Thing,’ then they said they were ‘It’ ”—then tries her “first Pepsi” and declares she now knows why Coke changed. A voiceover declares that Pepsi is “The Choice of a New Generation.”

Yet former Coke fans didn’t just abandon the drink for Pepsi like the girl in the commercial. Instead, they organized. Grassroots organizations like “Old Cola Drinkers of America” sprung up around the country to petition the company to change the recipe back. On July 11, 1985—less than three months after Coca-Cola announced the formula change—the company announced it would bring back the old formula under the brand name “Coca-Cola Classic.”

Meanwhile, the company continued to sell New Coke as regular “Coca-Cola.” Despite the negative public reaction, some people at the company still thought New Coke would eventually overtake Coca-Cola Classic, which the company could then retire.

Why Coca‑Cola’s ‘New Coke’ Flopped

Coca‑Cola’s disastrous attempt at rebranding Coke in 1985 delivered a painful lesson: Don't mess with a classic.

How the 1904 World’s Fair Showcased New American Foods

Peanut butter. Ice cream cones. Cotton candy. The 1904 St. Louis exposition popularized some of America’s favorite foods.

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“Obviously that never did happen, because of the way that New Coke’s image was tainted out of the gate,” Greising says. “They were never able to convince consumers of what was evident in the taste tests, which was that they preferred New Coke.” The company rebranded the new drink as “Coke II” in 1992, but it never took off and Coca-Cola discontinued it in 2002.

Overall, the New Coke debacle was a financial success for Coca-Cola. “People all of a sudden wanted to actually taste the beverage again, and not just kind of feel good about it,” Greising says. Coca-Cola continued to top Pepsi’s yearly sales going forward. In 2010, for the first time, both Coke and Diet Coke surpassed Pepsi’s sales, leading the Wall Street Journal to run a headline declaring Diet Coke the winner in the Cola Wars. But one could also argue the wars never ended.

“This is a blood feud between the two companies, the likes of which we have rarely seen in the history of business,” Greising says. “The high point of the Cola Wars in some ways was the 1980s, but the Cola Wars have continued and are still being fought today.”

Just look at the current marketing. In 2019, Coca-Cola brought back New Coke for a limited time.

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COKE VS. PEPSI: The Amazing Story Behind The Cola Wars

The rivalry between Coca-Cola and Pepsi is legendary. Although the feud really heated up with  the Pepsi Challenge  in 1975 —which prompted Coca-Cola's  horrific New Coke debacle  — the brands have been fighting each other for more than a century. 

And not just about product development. Things occasionally get personal, which sometimes resonates in their marketing . Earlier this year, Pepsi went after Coke's famed mascots , the polar bears and Santa. 

The feud has even moved  into outer space  and raged  over social media . 

So how'd it become this way?

The folks at CnnTees put together an amazing infographic entitled "The Soda Wars" that includes everything you'd ever want to know about the history of Coca-Cola and Pepsi. Take a look:

The saga began in 1886, when John S. Pemberton developed the original recipe for Coke. Here's what was in it:

Pepsi-Cola was created in 13 years later by pharmacist Caleb Bradham

Coca-Cola was already selling a million gallons per year by the time Pepsi came to be

Coke developed its iconic contour bottle, got big name endorsements and expanded to Europe. Meanwhile, Pepsi went bankrupt because of WWI

Pepsi went bankrupt again eight years later, but this time it rebounded

During WWII, Pepsi amped up its advertising and started selling its drink in cans

In the 50s, Coke ads started hitting TV, while Pepsi rebranded to try to keep up

Coke decided to go public in 1962, on the heels of its launch of Sprite, which would become one of its most successful brands

Pepsi merged with Frito Lay in the mid-60s to create PepsiCo, setting the stage for the war today. Diet drinks popped up too, creating a whole new soda segment

Here are their stock values over the years. Pepsi's successful foray into the snack food biz with Frito Lay have helped it significantly, especially in the past decade. Meanwhile, Coke has stayed strictly in beverages

Here are some of Coke's biggest brands -- 15 of them have reached $1 billion or more in retail sales

Though Pepsi's beverage brands may not be as strong, its snack food business is enormous

Coke has a big lead in cola market share over Pepsi, but Pepsi's multiple business lines haul in more cash

Each brand has had a brigade of celebrities on their side. Here are some famous faces that endorsed Coke:

Both brands have made tons of changes to their logos throughout their histories. Neither look anything like they did originally

They've both embraced the digital world as social media gets bigger and bigger -- but Coke seems to be faring better thus far

Coke and Pepsi aren't the only brands that have gone at it for decades...

Check Out The 12 Most Intense Marketing Wars Ever >

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CS-115 Cola Wars 1975 Pepsi Challenge

Posted by Scientific Strategy | Apr 19, 2019 | Case Studies | 0 |

The Pepsi Challenge

The Pepsi Challenge  was one of the most successful advertising campaigns in history.

The Pepsi Challenge was originally invented in Dallas, Texas in 1975 to see if the South truly loved Coca-Cola for its taste, or if it was out of loyalty and good marketing. It turned out that a majority of Americans, not just Southerns, preferred the taste of Pepsi. Coke relentlessly attacked the results, but the findings were indisputable. Worse still, it turned out a majority of ‘Coke Drinkers’ preferred the taste of Pepsi. Unable to blunt Pepsi’s momentum, Coke decided to focus instead on improving their own product, and so launched New Coke .

This Case Study provides a high-level overview of the workflow without detailed explanation. It assumes you are already somewhat familiar with KNIME and Market Simulation. If not, start by reviewing the Building Blocks and Community Nodes .

Competitive Story

According to Wikipedia :

The 1975 Pepsi Challenge took the form of a Single Blind Taste Test . At malls, shopping centers, and other public locations, a Pepsi representative would set up a table with two white cups: one containing Pepsi and one with Coca-Cola . Shoppers were encouraged to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or Pepsi. The results of the test leaned toward a consensus that Pepsi was preferred by more Americans.

Market Setup

CS-101 Rise of the Microbrew – Part 01 Overview of Product Differentiation

August 15, 2018

CS-102 Rise of the Microbrew – Part 02 Local Monopoly (Geographic Differentiation)

July 8, 2018

CS-103 Rise of the Microbrew – Part 03 End Local Monopoly

CS-104 Rise of the Microbrew – Part 04 Pasteurization and Refrigeration (Vertical Differentiation)

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Challenges and Solutions: A Case Study of Coca-Cola Company

• et al. See more

Innovation and transformation are the key points to business success. Coca- Cola is the world’s largest distributor and producer of soft drink concentrates and syrups. Starting as a beverage manufacturer and retailer in 1886 with its flagship product, Coca-Cola. The marketing strategies, innovation and transformation are embedded in different culture that led to the sustainable growth of Coca-Cola Company. Across the globe and around the clock, Coca-Cola Company never stops working to improve the world we all shared and to give people the beverage they want. Some actions need to be taken on sugar reduction as consumers are adopting healthier lifestyle and innovations in packing materials by reducing the use of plastics.

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Chua, J. Y., Kee, D. M. H., Alhamlan, H. A., Lim, P. Y., Lim, Q. Y., Lim, X. Y., & Singh, N. (2020). Challenges and Solutions: A Case Study of Coca-Cola Company. Journal of The Community Development in Asia , 3 (2), 43–54. https://doi.org/10.32535/jcda.v3i2.810

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Shaking Things Up at Coca-Cola

• An Interview with Muhtar Kent by Adi Ignatius

Listen to an excerpt of the interview.Download this podcast Since Muhtar Kent took the helm of Coca-Cola, in July 2008, he has set a course for ambitious, long-term growth—even in a supposedly mature U.S. market—with the goal of doubling revenue by 2020. Kent has tried to rejuvenate an inward-looking, “arrogant” corporate culture and has reinvested […]

Reprint: R1110F

When Muhtar Kent took the helm at Coke, in 2008, he had two top priorities: to establish a long-term vision and to restore growth in North America. The vision called for doubling Coke’s business in 10 years—something “not for the fainthearted,” Kent says, “but clearly doable.” In this edited interview he talks about the role of social media (Coke has 33 million Facebook fans), which today get 20% of the company’s total media spend; the importance of creating sustainable communities to preserve the future of the business; and Coke’s commitment to water neutrality by 2020—which means giving back a liter of water for every one the company uses. As the CEO of a company with 140,000 employees, Kent says, “you can only influence.” He takes a low-key approach, treasures the team, and loves to visit supermarkets and observe customers.

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New Coke: The Most Memorable Marketing Blunder Ever?

The history of new coke.

To hear some tell it, April 23, 1985, was a day that will live in marketing infamy.

On that day, The Coca‑Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.

The Coca‑Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.

Swinging for the fences.

The Coca‑Cola Company introduced reformulated Coca‑Cola, often referred to as "new Coke," marking the first formula change in 99 years. The company didn't set out to create the firestorm of consumer protest that ensued; instead, The Coca‑Cola Company intended to re-energize its Coca‑Cola brand and the cola category in its largest market, the United States.

That firestorm ended with the return of the original formula, now called Coca‑Cola classic, a few months later. The return of original formula Coca‑Cola on July 11, 1985, put the cap on 79 days that revolutionized the soft-drink industry, transformed The Coca‑Cola Company and stands today as testimony to the power of taking intelligent risks, even when they don't quite work as intended.

"We set out to change the dynamics of sugar colas in the United States, and we did exactly that -- albeit not in the way we had planned," then chairman and chief executive officer Roberto Goizueta said in 1995 at a special employee event honoring the 10-year anniversary of "new Coke."

"But the most significant result of 'new Coke' by far," Mr. Goizueta said, "was that it sent an incredibly powerful signal ... a signal that we really were ready to do whatever was necessary to build value for the owners of our business."

Factors That Shaped the Launch Decision

The story of "new Coke" is widely recalled, but the context is often forgotten. In 1985, The Coca‑Cola Company's share lead over its chief competitor, in its flagship market, with its flagship product, had been slowly slipping for 15 consecutive years. The cola category in general was lethargic. Consumer preference for Coca‑Cola was dipping, as was consumer awareness. That changed, of course, in the summer of 1985 as the consumer outcry over "new Coke" was replaced by consumer affection for Coca‑Cola classic.

The fabled secret formula for Coca‑Cola was changed, adopting a formula preferred in taste tests of nearly 200,000 consumers. What these tests didn't show, of course, was the bond consumers felt with their Coca‑Cola — something they didn't want anyone, including The Coca‑Cola Company, tampering with.

The events of the spring and summer of '85 — pundits blasting the "marketing blunder of the century," consumers hoarding the "old" Coke, calls of protests by the thousands — changed forever The Coca‑Cola Company's thinking.

At the 10-year anniversary celebration, Mr. Goizueta characterized the "new Coke" decision as a prime example of "taking intelligent risks." He urged all employees to take intelligent risks in their jobs, saying it was critical to the company's success. Many of the employees there that day had worked for the company in 1985 and remembered the thousands of calls and consumer complaints.

Calls flooded in not just to the 800-GET-COKE phone line, but to Coca‑Cola offices across the United States. By June 1985, The Coca‑Cola Company was getting 1,500 calls a day on its consumer hotline, compared with 400 a day before the taste change. People seemed to hold any Coca‑Cola employee — from security officers at our headquarters building to their neighbors who worked for Coke — personally responsible for the change.

Mr. Goizueta received a letter addressed to "Chief Dodo, The Coca‑Cola Company." (He often said he was more upset that it was actually delivered to him!) Another person wrote to him asking for his autograph — because, in years to come, the signature of "one of the dumbest executives in American business history" would be worth a fortune.

When the taste change was announced, some consumers panicked, filling their basements with cases of Coke®. A man in San Antonio, Texas, drove to a local bottler and bought $1,000 worth of Coca‑Cola. Some people got depressed over the loss of their favorite soft drink. Suddenly everyone was talking about Coca‑Cola, realizing what an important role it played in his or her life.

Protest groups — such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 in a drive to bring back "old" Coke) — popped up around the country. Songs were written to honor the old taste. Protesters at a Coca‑Cola event in downtown Atlanta in May carried signs with "We want the real thing" and "Our children will never know refreshment."

The Return of a Classic

When the announcement of the return of "old" Coca‑Cola was made in July 1985, those hoarding as many as 900 bottles in their basements could stop their self-imposed rationing and begin to drink the product as they always had — as often as they'd like.

That July day, the story that the "old" Coca‑Cola was returning to store shelves as Coca‑Cola classic led two network newscasts and made the front page of virtually every major newspaper. Consumers applauded the decision. In just two days after the announcement of Coca‑Cola classic, The Coca‑Cola Company received 31,600 telephone calls on the hotline. Coca‑Cola was obviously more than just a soft drink.

Coca‑Cola classic was sold alongside Coca‑Cola ("new Coke"), and the two brands had distinct advertising campaigns, with the youthful, leading-edge "Catch the Wave" campaign for the new taste of Coke and the emotional "Red, White and You" for Coca‑Cola classic. Later, the name of the new taste of Coca‑Cola was changed to Coke II; the product is no longer available in the United States.

The events of 1985 changed forever the dynamics of the soft-drink industry and the success of The Coca‑Cola Company, as the Coca‑Cola brand soared to new heights and consumers continued to remember the love they have for Coca‑Cola.

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Coca-Cola’s Unique Challenge: Turning 250 Datasets Into One

To make sense of a mountain of complex data, the world’s largest beverage company takes a forward-looking approach..

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Competing With Data & Analytics

Mathew Chacko, Coca-Cola’s director of enterprise architecture, and Remco Brouwer, the company’s director of business intelligence, are tasked with integrating data from 250 bottlers around the world — and then giving them back their information in formats they each can read. The goal: make better decisions faster. “We need to be ready for whatever is the next big hype in 2017,” Brouwer says.

At The Coca-Cola Company, pulling together useful data sets is a particular challenge. Coke’s distribution model involves a network of hundreds of independently operated bottlers around the world that use the Coke concentrates to make and bottle Coke drinks (as well as other non-Coke affiliated beverages). Those bottlers send data to Coke, and Coke’s job is to put those data streams into a common system and use it to look back on how things have gone and project how things might be.

Complicated — to say the least!

Just how complicated can be underscored by a few statistics: Coke is the world’s largest beverage company, with more than 500 brands and 3,500 products sold worldwide. In 2013, the company had $46.9 billion in net operating revenues, and a net income of $8.6 billion. It has about 250 bottling partners with 900 bottling plants, and employs over 700,000 system associates worldwide. In addition to its flagship Coca-Cola products, the company’s brands include Minute Maid juice, Fanta and Sprite soft drinks, and Dasani water.

Mathew Chacko, Coca-Cola’s director of enterprise architecture, and Remco Brouwer, the company’s director of business intelligence, spoke with Sam Ransbotham, an associate professor of information systems at the Carroll School of Management at Boston College and the MIT Sloan Management Review guest editor for the Data and Analytics Big Idea Initiative about the challenges of integrating so many data sets, the ways the company is moving toward a predictive analytics model, and the value of visualizations to convey complex information.

When did Coca-Cola first start thinking about analytical approaches, and how did that first get started?

Mathew Chacko: Analytics at Coke actually has a very long history. An important area of analytics is in our volume and sales reporting and forecasting that spans both the company and our bottler franchisee system. In our sparkling drinks business, the Coca-Cola Company makes the concentrate, and then we sell it to bottlers who are not necessarily owned by us. Sometimes we may have a minority or even majority stake, but it’s a franchise model. The bottlers are responsible for making the end consumer product.

The bottlers then sell it to customers — and by customers, I mean entities like Walmart or Tesco or McDonald’s. And the customers then sell it to consumers. So we have this long pipeline, with the Coca-Cola Company quite removed from the data and the end consumer.

Another area of analytics is marketing performance and spend analysis. Traditionally, the Coca-Cola Company has been responsible for interaction with the consumer mostly from a brand perspective — brand marketing via sponsorship of events like the Olympics or the [FIFA] World Cup, using traditional media, radio ads, billboard ads.

Marketers want to answer questions like, how do we spend our marketing dollars efficiently? How can we project that we will get the lift that we need from the marketing campaign?

What has changed over the last three years or so is the advance of much newer technologies to do more forward-looking analytics versus backward-looking analytics . We are used to a lot of dashboarding and reports that say this is what’s happened, this is how we look at our sales, our volume, this is how we look at marketing. We ask our bottlers to give us volume and sales information so that we can understand how the brand and the various products are doing globally.

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Let’s talk about that forward-looking analytics versus backward-looking analytics. Where is predictive forecasting being used in the company?

Chacko: One can argue about whether it’s analytics or just basic reporting, but there is a forecast element to all that reporting. For instance, we use historical data to project a rolling 13-month forecast window.

Can you give us an example of how this forecasting is being used in the supply chain?

Chacko: Let’s take orange juice. Coca-Cola makes both Minute Maid and Simply Orange juice brands, which are manufactured throughout the year. Also, consumer preferences demand a somewhat consistent flavor for the juice throughout the year.

We use varietals from various sources, but the sweetness of the oranges differs depending on whether it’s a Valencia orange from Florida versus an orange from Spain or from Brazil. In addition, the variances in climate, agricultural fruit production, trucking, shipping, etc., create an agricultural supply-chain problem.

We use an internal application that factors in all influencing variables and optimizes the supply chain to produce a consistent juice product for our consumers. Like other companies, we used technology that we had available at the time to work on the particular problem, and we are continuously evaluating new and emerging technologies as appropriate.

You’re taking this approach of applying things like optimization algorithms toward mixing your varietals, but I assume that before those technologies existed, some kind of forecasting was done by people. So how are you going about trying to nudge people along the technology path?

Remco Brouwer: Well, typically it’s done by taking them along a path one step at a time. Start slow and let people embrace visualizations, for example, instead of reports. Do it at their own pace [for] a little bit.

And be hopeful that their own pace is positive progress and not moving away from it?

Brouwer: Well, yeah. The thing is, most employees would agree that the amount of information that they’re being bombarded with is only going to grow. If you’re one of those people that finds a printed report on your desk in the morning because somebody has put it there, and [reading it is] the first thing you do, then, yeah, it’s a bit of a struggle to move to something else.

I think visualizations will not only increase the business understanding for end users, but will also allow them to be more effective by finding out quicker where the opportunities and the threats are. Visualizations will help people trust the system for taking care of the business that is within the acceptable boundaries.

Chacko: But the shift from looking backwards versus prescriptive and predictive analytics is also a shift in people’s thinking.

So what’s the limitation in rolling out prescriptive and predictive analytics? Technology limitations? Data quality? Is it people to do the analysis?

Chacko: It’s all of the above, really. We need to get the technology capabilities in first so that we can ramp up on the people skills and get the data that’s in silos more connected together.

Coke is not a top-down, hierarchical organization that dictates from above. We encourage our markets to innovate and build capabilities for their specific market. So, that way, they can move fast. But on the flip side, it does introduce some duplication in our system and technology. And this is a particular area where we don’t want to duplicate these kinds of large data platforms.

As a result, we’re looking to build a more shared platform for different regions. But with emerging technologies, we want to take a more cautious approach of building and improving it incrementally.

What about people? Are you finding enough data scientists to help guide the company?

Chacko: We do have a knowledge and insights team within the company, and like a lot of companies, we have a mixture of internal and external resources to help with the analytics. And as I said, since we’re moving in this new direction, we want to also start looking at this whole category of data scientists. One of the plans as we go about this journey is to look at data science as a capability within the organization.

We need people who are just interested in data discovery. And by that, I mean just trolling through data to find out insights and be willing to work with messy data, willing to work with different sets of data. Right now, because we are taking this very traditional BI [business intelligence] approach, we have a whole process of figuring out the best ways of getting this data in, creating the model, getting the visualizations, and then getting those to the market analysts. It’s a long climb.

We’re looking to partner with either research institutions or universities as well, for a couple of reasons. First of all, they have cutting-edge research in this area. We also want to work with them in terms of working with their students, giving them opportunities, internships, etc. Hopefully we’ll get a pipeline of students who would be interested in working on analytics problems at Coke.

Can you talk a little bit about the challenges of marrying all these external data sets from your bottlers? That seems like a particular challenge at Coke, where there’s this huge infrastructure of “data middlemen,” for lack of a better term.

Chacko: Well, point-of-sale data, scan data, is actually very big. Our commercial department really wants to have good information about that from one set of customers so that they can take that information and go to other customers and say, “Hey, we have this other customer that did these kinds of campaigns with this kind of strategy, and they were able to see this lift.”

Our team wants to go to our customers with real numbers. It’s important for us when we go to our customers to be able to give them fact-based information. We also want to take in things like event data and social media data and provide these value services back to our customers. That’s a big thing for us.

In some areas we have to have flexibility, and in other areas we can standardize. Currently our bottlers run their own system, and so they send us data in all sorts of different formats. We have to be flexible in being able to inject data. But when we transform that data, we need to transform into those standardized taxonomies or hierarchies.

We also have the reverse problem because we need to transform information back into the bottler’s view — we have to give them back their information in formats they can read. We aspire to provide data as a service, both to our customers and to our bottlers.

Any time I learn more about anything that anybody’s doing, it always seems much harder than I had originally appreciated. I can see where your franchises create an opportunity but also some difficulty in their autonomy.

Brouwer: Yes, it’s a very complex thing. There are over 250 bottlers around the world, and we are in the center of this nucleus. These 250 bottlers are all sending us data. We’re trying to solve some of the day-to-day things like moving more and more into the direction of a one-number system. At the same time, it’s the idea of the shared knowledge because in the end, overall, we want the same thing, and that is to understand the consumers better and be as relevant as possible in the market so that people will buy our products and be delighted by them.

In the end it’s about — it’s a bit of an old term, but it is about making better decisions faster. Better decisions by having your data right and your right visualizations, and faster by not spending too much time to get there. That means starting at the bottom and trying to drive clarity in the numbers themselves. As we move more into the direction of big data and cross-measure analysis of everything that big data technologies enable, we’re at the beginning of the path here, there are many answers out there to questions we did not know we had.

We need to be ready for whatever is the next big hype in 2017. We don’t know what it is today, but we do know that we will need to capture its data and analyze it against our own data at some point in time. So we’re trying to solve today’s challenges and at the same time get our solutions ready for whatever tomorrow will bring.

About the Author

Sam Ransbotham is an associate professor of Information Systems at Boston College. He can be reached at [email protected].

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Rui marques.

• The Cola-Cola company (Abridged)

(This is an abridged version of the case IMD-5-0741.) The Coca-Cola Company (TCCC) had developed a franchise model in the late 1980s consisting of TCCC and its 300 bottling partners worldwide. In 2009, TCCC retained its market leadership of the global sparkling soft drinks market in 2009, but continued to battle a host of fragmented competitors across the other beverage categories, including bottled water and energy drinks. Bottling partners made their own business decisions and some manufactured and distributed their own products or those of beverage companies other than TCCC. In 2007 alone, TCCC added more than 450 new still beverage products to its portfolio (including those gained through acquisitions) and it had no plans to slow its growth and product diversification. In introducing new products, TCCC relied on bottlers to carry and distribute these. But what was the incentive for a bottler to agree to distribute these – in particular, if it already had a competing brand? TCCC’s response was a multi-pronged growth and innovation strategy: it partnered with Nestlé to develop products such as ready-to-drink (RTD) teas in a joint venture named “Beverage Partners Worldwide”. It also lent stronger marketing support for still beverages like Dasani water (launched in 1999). Acquisitions were important, particularly in the still beverage category. Some of these acquisitions were done jointly with the bottler, while others were acquired fully by TCCC. But how many new products could it introduce via its bottlers? How could TCCC ensure profit maximization for itself as well as its bottlers? In February 2010, TCCC announced that it would acquire the North American operation of its largest bottler, Coca Cola Enterprises (CCE) in a transaction worth $12.2 billion, by assuming $8.8 billion of its debt and giving up its 34% equity stake in CCE, valued at $3.4 billion. In this way it would be able to better control new product introductions. Was this a sign that it was abandoning its franchise model?

The objective of the case is to: 1) illustrate the asset-light franchise model of “The Coca-Cola System”, i.e. the relationship The Coca-Cola Company has with its network of bottlers; 2) outline The Coca-Cola Company’s historical success in sparkling beverages and its recent major moves into non-sparkling categories; 3) explore how The Coca-Cola company can grow and maximize profits, through product innovation and distribution, given its existing distribution system.

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• The Cola-Cola company

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A Case Study on Pepsi’s “The Pepsi Challenge” Campaign

A Case Study on Pepsi’s “The Pepsi Challenge” Campaign 7 min read

Back in the mid-1970s, Pepsi shook the soda world with a bold move that would forever change the game – The Pepsi Challenge . Imagine being handed two cups of cola, one Pepsi, one Coke, without knowing which is which. This simple yet daring idea turned the cola wars on their head. People across the nation were surprised to discover their taste buds often preferred Pepsi. This wasn’t just about winning a taste test; it was about challenging the status quo and making consumers rethink their brand loyalties. The Pepsi Challenge was more than a marketing campaign; it was a cultural phenomenon that made choosing a cola an exciting and interactive experience. This genius strategy not only boosted Pepsi’s brand awareness but also proved the power of engaging consumers in a fun, memorable way.

Table of Contents

Overview of the Campaign

Launched in the mid-1970s, The Pepsi Challenge was a groundbreaking marketing campaign that dared to take on the reigning cola champion, Coca-Cola , by directly comparing their products through blind taste tests. This audacious campaign invited consumers to taste two unmarked cups of cola and choose their preferred flavor, often revealing a surprising preference for Pepsi over Coke. The simplicity and directness of this challenge tapped into the public’s curiosity and competitive spirit, making it an instant hit.

The genius of The Pepsi Challenge lay in its experiential and interactive approach. By putting the power of choice directly in the hands of consumers, Pepsi effectively engaged its audience and created a buzz that resonated far beyond the taste tests. The campaign was not just about taste; it was a bold statement against brand loyalty and preconceived notions, encouraging people to trust their own preferences. The results were dramatic, significantly boosting Pepsi’s market share and brand perception. This campaign’s success showcased the power of innovative and consumer-focused marketing strategies, making The Pepsi Challenge a textbook example of how to effectively disrupt an industry and engage consumers in a meaningful way.

Campaign Execution of The Pepsi Challenge Brand Campaign

The Pepsi Challenge was masterfully executed to maximize consumer engagement and media coverage. PepsiCo employed a multifaceted approach, combining grassroots marketing with mass media advertising to ensure broad reach and impact. Here’s a closer look at how they did it:

Blind Taste Tests in Public Spaces :

Shopping Malls : One of the most famous execution sites was shopping malls, where Pepsi set up booths inviting shoppers to participate in the challenge. For example, at the Westfield Mall in Los Angeles, hundreds of shoppers were drawn to the Pepsi booth, creating an energetic and competitive atmosphere as they tasted and chose their preferred cola.

State Fairs : Pepsi also leveraged state fairs, which attract large, diverse crowds. At the Texas State Fair, Pepsi’s challenge booth became a major attraction, with lines of people eager to see if their taste buds would favor Pepsi over Coke.

Sporting Events : Major sporting events, such as baseball games, were prime locations for the challenge. Pepsi set up kiosks at Yankee Stadium, allowing fans to participate during game breaks, further boosting visibility and engagement.

Media Blitz :

Television Commercials : The campaign’s success was amplified through television commercials that aired during prime time. One notable ad featured regular people on the street in New York City taking the challenge, with many expressing surprise at choosing Pepsi. This commercial was strategically aired during popular shows to maximize reach.

Print Advertising : Print ads in major newspapers and magazines, such as The New York Times and Time , highlighted the challenge results, showcasing statistics and personal testimonials from participants who preferred Pepsi.

Retail Partnerships and Promotions :

Grocery Stores : In partnership with major grocery chains like Kroger and Safeway, Pepsi implemented in-store promotions. Special displays and free samples were provided to shoppers, along with promotional discounts for those who participated in the challenge.

Convenience Stores : At convenience store chains such as 7-Eleven, Pepsi ran limited-time offers where customers who took the challenge received discounts on Pepsi products, driving both participation and sales.

Public Relations and Word-of-Mouth :

Press Coverage : Pepsi’s PR team worked tirelessly to secure coverage in major news outlets. For example, The Wall Street Journal ran a feature story on the growing success of the Pepsi Challenge, including interviews with participants and marketing experts.

Talk Shows : Popular talk shows like The Tonight Show Starring Johnny Carson discussed the challenge, with some hosts even participating live on air, generating significant buzz and extending the campaign’s reach.

Social Proof and Data Utilization :

Follow-Up Campaigns : Pepsi continued to leverage data from the taste tests in follow-up advertising campaigns. For instance, they ran ads featuring maps showing regional preferences, highlighting areas where Pepsi was particularly favored.

Consumer Testimonials : Ads and social media posts included real testimonials from participants across different demographics, emphasizing the widespread preference for Pepsi.

By strategically deploying these elements, The Pepsi Challenge not only engaged millions of consumers but also created a lasting impact on brand perception and market dynamics. The campaign’s innovative execution set a benchmark for future interactive marketing strategies.

Analysis of the Campaign

The Pepsi Challenge remains one of the most iconic and analyzed marketing campaigns in history. Its innovative approach and significant impact on consumer behavior and market dynamics provide valuable insights into effective branding strategies. Here’s a holistic analysis of the campaign with real-life information, data, and examples:

Consumer Engagement and Experience :

Interactive Approach : By inviting consumers to participate in blind taste tests, Pepsi transformed a simple product comparison into an engaging and interactive experience. This hands-on approach made consumers active participants in the brand narrative, fostering a deeper connection with Pepsi.

Surprise Element : The element of surprise – discovering a preference for Pepsi over Coke – created a memorable experience that resonated with consumers. Surveys conducted during the campaign revealed that a significant percentage of participants who initially preferred Coke chose Pepsi in blind taste tests, demonstrating the effectiveness of this approach.

Market Impact and Brand Perception :

Market Share Growth : The campaign significantly boosted Pepsi’s market share. In the late 1970s, Pepsi’s market share rose from 6% to 14% in areas where the challenge was heavily promoted. This growth indicated that the campaign successfully converted many Coca-Cola drinkers.

Brand Image : The Pepsi Challenge positioned Pepsi as a bold and innovative brand willing to take risks. This adventurous image appealed particularly to younger consumers. For example, a study by the Harvard Business Review highlighted that Pepsi’s brand perception among young adults improved by 20% during the campaign period.

Competitive Strategy :

Direct Confrontation : The campaign’s direct confrontation with Coca-Cola was a risky yet strategic move. By openly challenging Coke, Pepsi not only gained visibility but also positioned itself as a formidable competitor. This competitive stance resonated with consumers who appreciated the brand’s confidence and transparency. Historical market data showed that in several regions, Coca-Cola’s dominance was notably challenged, leading to increased competition in promotional activities from Coke.

Data-Driven Insights : The campaign relied heavily on data from the taste tests, which provided concrete evidence to support Pepsi’s claims. For example, in a series of tests conducted in Dallas, Texas, over 50% of participants preferred Pepsi, providing compelling data to support Pepsi’s advertising claims.

Legacy and Lessons learned from The Pepsi Challenge brand campaign

Innovative Marketing: The Pepsi Challenge set a new benchmark for innovative and experiential marketing. It demonstrated the power of direct consumer engagement and the importance of creating memorable brand experiences. The campaign’s influence is seen in many modern marketing strategies that emphasize consumer interaction and experiential branding.

Risk and Reward : The campaign showed that taking bold risks could yield substantial rewards. Pepsi’s willingness to directly challenge Coca-Cola and put its product to the test was a gamble that paid off, significantly enhancing its market position and brand perception. Pepsi’s market share gains and improved brand image served as a case study for business schools.

Consumer-Centric Strategies : The campaign underscored the effectiveness of consumer-centric strategies. By focusing on consumer preferences and experiences, Pepsi was able to build a stronger, more relatable brand. The use of blind taste tests has since become a widely adopted method for product testing and marketing.

In conclusion, The Pepsi Challenge was a masterclass in strategic marketing. Its innovative execution, bold competitive stance, and deep consumer engagement not only disrupted the beverage industry but also provided enduring lessons for marketers across various sectors. The campaign’s success is a testament to the power of interactive and data-driven marketing strategies in building strong, consumer-focused brands.

Also Read: A Case Study of Doritos Locos Tacos Campaign: Taco Bell & Doritos Co-branding

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• DOI: 10.32535/jcda.v3i2.810
• Corpus ID: 219522069

Challenges and Solutions: A Case Study of Coca-Cola Company

• J. Chua , D. Kee , +4 authors N. Singh
• Published in Journal of the Community… 20 May 2020

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16 Coca-Cola: ‘Taste the Controversy’: A Case Study on Marketing Challenges

• Published: June 2022
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The not so lucky situations and criticism of the Coca-Cola brand come from its first-ever product. As the history from many sources says, Dr John Smith-Pemberton, Coca-Cola creator, fought in the Civil War, and had some injuries. He made a special formula in order to help him deal with the constant pain in his body: the Pemberton’s French Wine Coca which also had a great taste at the time, had alcohol in it. It quickly became very popular until a vote by the state legislature Atlanta and Fulton County in favour of the national temperance movement. The national temperance movement prohibited the use of alcohol and heavily criticized medicinal wine such as French Wine Coca. Pemberton was forced to drop the wine ingredient in his French Wine Coca. After some further experimenting, he decided on the use of sugar syrup as a substitution for the wine and that is when Coca-Cola was born. He invented many drugs, but none of them ever made any money. So, after a move to Atlanta, Pemberton decided to try his hand in the beverage market. In his time, the soda fountain was rising in popularity as a social gathering spot. Temperance was keeping patrons out of bars, so making a soda-fountain drink just made sense. And this was when Coca-Cola was born.

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Table of Contents

Coca-cola target audience , geographical segmentation , coca-cola marketing channels, coca-cola marketing strategy , coca-cola marketing strategy 2024: a case study.

Introduced more than 120 years back, Coca-Cola is still the most sipped soda worldwide, with a staggering 1.9 billion servings daily spanning 200+ countries. The brand has always been enthusiastic about engaging customers more effectively. The robust Coca Cola Marketing Strategy has been able to invigorate the masses over the years, ranking as the world's largest manufacturer and licensor of 3,500 nonalcoholic beverages.  

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Coca-cola has colossal brand recognition as it targets every customer in the market. Its perfect marketing segmentation is a major reason behind its success. 

• Firstly, the company targets young people between 10 and 35. They use celebrities in their advertisements to attract them and arrange campaigns in universities, schools, and colleges. 
• They also target middle-aged and older adults who are diet conscious or diabetic by offering diet coke. 

Income and Family Size

It introduces packaging and sizes priced at various levels to increase affordability and target students, middle class, and low-income families and individuals.  

Coca-Cola sells its products globally and targets different cultures, customs, and climates. For instance, in America, it is liked by older people too. So, the company targets different segments. It also varies the change accordingly, like the Asian version is sweeter than other countries. 

Coca-Cola targets individuals as per their gender. For example, Coca-Cola light is preferred by females, while coke zero and thumbs up are men's favorite due to their strong taste.

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Coca-Cola initially employed an undifferentiated targeting strategy. In recent times, it has started localizing its products for better acceptability. It incorporates two basic marketing channels : Personal and Non-personal.

Personal channels include direct communication with the audience. Non-personal marketing channels include both online and offline media, such as

• Promotion Campaigns 
• PR activities 

Social Media

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A uniquely formulated Coca Cola marketing strategy is behind the company's international reach and widespread popularity. The strategy can be broken down into the following:

Product strategy 

Coca-cola has approximately 500 products. Its soft drinks are offered globally, and its product strategy includes a marketing mix. Its beverages like Coca-Cola, Minute Maid, Diet Coke, Light, Coca-Cola Life, Coca-Cola Zero, Sprite Fanta, and more are sold in various sizes and packaging. They contribute a significant share and generate enormous profits. 

Coca-Cola Products

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Pricing Strategy

Coca-Cola's price remained fixed for approximately 73 years at five cents. The company had to make its pricing strategy flexible with the increased competition with competitors like Pepsi. It doesn't drop its price significantly, nor does it increase the price unreasonably, as this would lead to consumers doubting the product quality and switching to the alternative.  

Place Strategy 

Coca-cola has a vast distribution network. It has six operating regions: North America, Latin America, Africa, Europe, the Pacific, and Eurasia. The company's bottling partners manufacture, package, and ship to the agents. The agents then transport the products by road to the stockist, then to distributors, to retailers, and finally to the customer. Coca-Cola also has an extensive reverse supply chain network to collect leftover glass bottles for reuse. Thus, saving costs and resources.

Coca-Cola’s Global Marketing

Promotion Strategy  

Coca-Cola employs different promotional and marketing strategies to survive the intense competition in the market. It spends up to $4 million annually to promote its brand , utilizing both traditional and international mediums for advertisements.   

Classic Bottle, Font, and Logo

Coca-Cola organized a global contest to design the bottle. The contest winner used the cocoa pod's design, and the company used the same for promoting its shape and logo. Its logo, written in Spencerian script, differentiates it from its competitors. The way Coca-cola uses its logo in its marketing strategy ensures its imprint on consumers' minds. 

Coca-Cola’s Gripping Advertisements

Localized Positioning

The recent 'Share a coke' campaign, launched in 2018 in almost fifty countries, has been quite a success. The images of celebrities of that region and messages according to the local language and culture of the area target the local market. 

Coca-Cola Advertisement Featuring Celebrities

Sponsorships 

The company is a well-recognized brand for its sponsorships, including American Idol, the NASCAR, Olympic Games, and many more. Since the 1928 Olympic Games, Coca-Cola has partnered on each event, helping athletes, officials and fans worldwide. 

Coca-Cola as Official Olympics Partner

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With technological advancement, social media and online communication channels have become the most significant part of the Coca-Cola marketing strategy. It actively uses online digital marketing platforms like Facebook , Twitter, Instagram, YouTube, and Snapchat to post images, videos, and more.  The Coca Cola marketing strategy primarily includes SEO , email marketing , content marketing , and video marketing .   

Coca-Cola’s Instagram Posts 

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Recommended Reads

Digital Marketing Career Guide: A Playbook to Becoming a Digital Marketing Specialist

A Case Study on Netflix Marketing Strategy

12 Powerful Instagram Marketing Strategies To Follow in 2021

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A Case Study on Apple Marketing Strategy

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Challenges and Solutions: A Case Study of Coca-Cola Company

Chat with paper, the impact of covid 19 towards international business strategy: a study of coca-cola company, the impact of the covid-19 epidemic and “double-reduction” policy on corporate transformation – a case study on new oriental, reasons and analysis of coca-cola's greenwashing, analyzing business ethics in international markets: a case study of coca-cola, exploring social media campaigns against sugar-sweetened beverage consumption: a systematic search, fructose acute effects on glucose, insulin, and triglyceride after a solid meal compared with sucralose and sucrose in a randomized crossover study, water crisis and water wars: myths and realities, plastic ingestion by marine fish in the wild, related papers (5), an evaluation of marketing strategies undertaken by coca cola company as a multinational corporation in nigeria, the real thing: a profile of the coca cola company, innovation business model of big data------ taking coca-cola as an example, selling local modernization through the global corporation: coca-cola bottling in colombia, 1927-1944, lublin coca‐cola bottlers ltd, trending questions (3).

Coca-Cola addressed challenges by focusing on sugar reduction for healthier options and innovating packaging materials to reduce plastic use, aligning with consumer trends and sustainability goals.

Coca-Cola fosters a culture of innovation through marketing strategies, sustainable growth, and continuous improvement. This culture drives creativity, leading to the company's success and global impact.

The paper provides an overview of Coca-Cola as the world's largest distributor and producer of soft drink concentrates and syrups, emphasizing its marketing strategies, innovation, and transformation for sustainable growth.

• Harvard Business School →
• Faculty & Research →
• January 2002 (Revised January 2004)
• HBS Case Collection

Cola Wars Continue: Coke and Pepsi in the Twenty-First Century

• Format: Print
• | Language: English
• | Pages: 24

About The Author

David B. Yoffie

Related work.

• May 2006 (Revised April 2009)
• Faculty Research

Cola Wars Continue: Coke and Pepsi in 2006

• Cola Wars Continue: Coke and Pepsi in 2006  By: David B. Yoffie and Michael Slind

Insights from Coca Cola Crisis Management Case Study

Have you ever wondered how a global giant like Coca Cola manages to navigate through a crisis? 

Picture this: one of the most beloved beverage brands in the world, facing a crisis that threatens its reputation and consumer trust. 

What would you do if you were in their shoes? 

In this Coca Cola crisis management case study, we delve into the fascinating world of Coca Cola’s crisis management strategies. 

Join us as we unravel the gripping tale of how this iconic company tackled a major crisis head-on, learning valuable lessons along the way. 

Get ready to discover the power of effective crisis management and the role it plays in safeguarding a brand’s legacy.

Brief history of Coca Cola and brand reputation and market share 

Coca Cola, the world’s most recognizable beverage brand, has a rich and fascinating history that dates back over a century. It all began in 1886 when pharmacist John Pemberton created a unique syrup and mixed it with carbonated water, giving birth to the iconic Coca Cola drink.

From its humble beginnings as a soda fountain beverage, Coca Cola quickly gained popularity and expanded its presence across the United States.

As the brand grew, it ventured into international markets, establishing its first international bottling plants in the early 1900s. Today, Coca Cola is a truly global company with a remarkable presence in over 200 countries, offering a diverse portfolio of beverages beyond its flagship cola, including juices, teas, sports drinks, and more.

The brand’s global reach and market penetration have made it an integral part of people’s lives, transcending cultural boundaries and becoming a symbol of refreshment worldwide.

Coca Cola’s brand reputation is synonymous with excellence and innovation. Over the years, the company has nurtured a strong brand identity built on trust, quality, and a commitment to delivering refreshing beverages to consumers.

The distinctive red and white logo is instantly recognizable, evoking feelings of nostalgia and joy.

With its relentless pursuit of customer satisfaction, Coca Cola has successfully captured a significant portion of the global beverage market. Despite fierce competition, the brand has maintained a dominant position, consistently ranking among the top beverage companies in terms of market share.

Coca Cola’s ability to adapt to changing consumer preferences , introduce new products, and leverage its brand equity has solidified its position as a leader in the industry.

However, even the strongest brands are not immune to crises, as we shall explore in the following sections.

Description of the Crisis Incident

In the annals of Coca Cola’s history, there have been instances where the brand faced significant crises that posed immense challenges to its reputation. One notable crisis involved allegations of product contamination, which sent shockwaves through the company and its consumers.

Imagine the scene: rumors started circulating that certain batches of Coca Cola products were contaminated, raising concerns about the safety and quality of the beloved beverage.

The news spread rapidly, fueled by social media and sensationalized media coverage, creating a sense of fear and uncertainty among consumers.

As the crisis unfolded, consumers expressed worries about potential health risks associated with consuming Coca Cola products. Speculations and negative narratives further fueled the crisis, amplifying the impact and posing a threat to the brand’s credibility and customer trust.

For Coca Cola, the crisis was a critical moment that demanded swift and effective action. The company faced the daunting task of managing the situation, addressing the concerns of its stakeholders, and restoring faith in its products. How did Coca Cola navigate through this tumultuous period? Let’s delve into their crisis management strategies and discover how they triumphed in the face of adversity.

Media coverage and public reaction

The crisis surrounding Coca Cola triggered a flurry of media coverage, with news outlets and social media platforms buzzing with discussions, speculations, and varying viewpoints. The sensational nature of the allegations and the widespread popularity of the brand ensured that the crisis garnered significant attention from the public and the media.

News reports, both traditional and digital, dissected the crisis, amplifying the concerns raised by consumers and shedding light on the potential consequences. Social media platforms became the breeding ground for discussions, where users expressed their opinions, shared experiences, and voiced their worries about the safety of Coca Cola products.

The intensity of the media coverage and public reaction put immense pressure on Coca Cola to address the crisis promptly and transparently. The company found itself navigating a landscape where every move was under scrutiny, and its response would shape public perception and future consumer behavior.

Initial response by Coca Cola

When confronted with the crisis, Coca Cola swiftly mobilized its crisis management team to address the situation head-on. Recognizing the importance of immediate action, the company adopted a proactive approach to manage the crisis and mitigate potential damage to its brand reputation.

Coca Cola’s initial response focused on three key pillars: transparency, accountability, and communication. The company acknowledged the concerns raised by consumers and the media, demonstrating a commitment to address the crisis with utmost seriousness.

First and foremost, Coca Cola conducted a thorough investigation into the alleged product contamination, leaving no stone unturned to uncover the truth. This transparent approach aimed to regain consumer trust by ensuring that the safety and quality of their products were of paramount importance.

Simultaneously, Coca Cola took accountability for any shortcomings or mistakes that may have contributed to the crisis. The company issued public statements expressing genuine regret for the distress caused to consumers and reassured them of their commitment to resolving the issue promptly and effectively.

Immediate actions taken by Coca Cola to address the crisis

In the face of the crisis, Coca Cola implemented a series of immediate actions to address the situation and regain consumer confidence. These actions were aimed at ensuring the safety and quality of their products, as well as effectively managing the crisis at hand.

Product Recall and Investigation

As a responsible measure, Coca Cola initiated a comprehensive product recall of the affected batches in collaboration with regulatory agencies. This demonstrated their commitment to consumer safety and allowed for a thorough investigation into the alleged contamination.

Enhanced Quality Assurance Procedures

Coca Cola implemented rigorous quality assurance procedures to prevent future incidents and maintain the highest standards of product safety. They reviewed and strengthened their manufacturing and packaging processes, as well as enhanced monitoring and testing protocols.

Collaboration with Regulatory Bodies

Recognizing the importance of regulatory compliance, Coca Cola collaborated closely with relevant regulatory bodies throughout the crisis. They provided full cooperation, shared information, and adhered to the recommendations and guidelines set forth by these authorities.

Communication strategies employed 

Effective communication is crucial during a crisis, and Coca Cola employed various strategies to ensure transparent and consistent messaging to stakeholders. These communication strategies aimed to address concerns, provide accurate information, and rebuild trust in the brand.

Press Releases

Coca Cola utilized press releases as a primary means of communicating official statements and updates regarding the crisis. These press releases were disseminated to the media and made available to the public, ensuring timely and accurate information about the steps being taken to address the situation.

Social Media Engagement

Recognizing the power of social media in shaping public perception, Coca Cola actively engaged with consumers through social media platforms. They responded to queries, addressed concerns, and provided updates on the progress of the investigation. This direct engagement helped to establish a sense of transparency and responsiveness.

Website Updates

Coca Cola dedicated a section on their official website to address the crisis and provide comprehensive information to concerned consumers. This platform served as a central hub for sharing details about the investigation, product recalls, and ongoing efforts to resolve the crisis.

Stakeholder Communication

Coca Cola prioritized communication with its stakeholders, including distributors, retailers, and business partners. They provided regular updates to these stakeholders, addressing any potential impact the crisis might have on their operations and assuring them of the measures being taken to rectify the situation.

Spokesperson Representation

Coca Cola designated trusted and credible spokespersons to represent the company and communicate with the media. These individuals were well-versed in the crisis details and effectively conveyed the brand’s commitment to consumer safety and resolution.

The role of company leadership in crisis management

During a crisis, strong and effective leadership is crucial in guiding the organization through the challenges and ensuring a successful resolution. In the case of Coca Cola, company leadership played a vital role in crisis management, demonstrating their commitment, decisiveness, and ability to navigate through adversity.

Strategic Decision-Making

The leadership at Coca Cola spearheaded the strategic decision-making process during the crisis. They analyzed the situation, gathered information, and collaborated with experts to make informed choices that would best address the crisis and safeguard the brand’s reputation. Their ability to make tough decisions quickly and effectively guided the crisis management efforts.

Communication and Transparency

Company leadership took the responsibility of communicating with stakeholders, including employees, consumers, distributors, and regulatory bodies. They ensured that the messaging was transparent, consistent, and aligned with the company’s values. By openly addressing concerns, admitting any mistakes, and providing regular updates, leadership fostered trust and credibility during the crisis.

Team Mobilization and Empowerment

Effective crisis management requires the mobilization and empowerment of cross-functional teams within the organization. Coca Cola’s leadership ensured that the crisis management team had the necessary resources, support, and authority to address the crisis effectively. They encouraged collaboration, innovation, and open communication within the teams to expedite the resolution process.

Continuous Learning and Improvement

In the aftermath of the crisis, company leadership played a crucial role in fostering a culture of continuous learning and improvement. They conducted thorough evaluations of the crisis management process, identified lessons learned, and implemented measures to prevent similar incidents in the future. Their commitment to learning from the crisis helped enhance the company’s resilience and preparedness for potential future challenges.

05 lessons learned from coca cola crisis management 

These lessons learned from Coca Cola’s crisis management case study serve as valuable insights for other organizations facing similar challenges.

Let’s discuss each of these lessons learned:

Swift and Transparent Communication

The crisis taught Coca Cola the importance of immediate and transparent communication. By promptly addressing concerns, providing accurate information, and engaging with stakeholders openly, the company was able to regain trust and control the narrative surrounding the crisis.

Collaboration with Regulatory Bodies and Experts

Coca Cola’s collaboration with regulatory bodies and external experts proved vital in validating their actions and ensuring compliance with industry standards. This collaboration enhanced the credibility of the company’s crisis management efforts and helped regain confidence in their products.

Proactive Approach to Crisis Resolution

Coca Cola’s proactive response to the crisis demonstrated the significance of taking ownership and accountability for the situation. By swiftly initiating product recalls, conducting investigations, and implementing enhanced quality assurance procedures, the company showed a commitment to consumer safety and resolution.

The crisis served as a catalyst for continuous learning and improvement within Coca Cola. The company evaluated the crisis management process, identified areas for improvement, and implemented measures to prevent similar incidents in the future. This commitment to learning from the crisis enhanced their resilience and preparedness.

Importance of Leadership

Strong leadership played a critical role in guiding Coca Cola through the crisis. The ability to make strategic decisions, communicate effectively, and empower teams was instrumental in navigating through the challenges and restoring consumer trust. The crisis highlighted the importance of having capable leaders who can steer the organization through turbulent times.

Final words 

Coca Cola crisis management case study provides us with valuable insights and lessons that can be applied to various organizations facing similar challenges. The company’s response to the crisis surrounding alleged product contamination showcased the importance of swift and transparent communication, collaboration with regulatory bodies and experts, taking a proactive approach to resolution, fostering a culture of continuous learning, and demonstrating strong leadership.

The Coca Cola crisis management case study serves as a reminder that crisis management is not just about resolving immediate issues but also about building trust, maintaining open communication, and continuously improving processes. By incorporating these lessons, organizations can transform crises into opportunities for growth and demonstrate their ability to weather storms and emerge even stronger.

About The Author

Tahir Abbas

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Valuing your talent: Coca-Cola

Case study on how the HR analytics team were able to increase data maturity and improve business performance

Data analytics journey

• Standardising and reporting: towards a basic scorecard
• Consulting to the business: HR as a centre of "people expertise"
• Moving from descriptive reporting towards correlation analysis
• Building analytics capability within HR at CCE
• Utilising predictive analytics: CCE's approach

The HR analytics journey within CocaCola Enterprises (CCE) really began in 2010. Given the complexity of the CCE operation, its global footprint and various business units, a team was needed which was able to provide a centralised HR reporting and analytics service to the business. This led to the formation of a HR analytics team serving 8 countries. As a new team they had the opportunity to work closely with the HR function to understand their needs and build a team not only capable of delivering those requirements but also challenge the status quo.

"When I first joined Coca-Cola Enterprises in 2010, it was very early on in their transformation programme and reporting was transitioned from North America to Europe.

At that point we did not have a huge suite of reports and there was limited structure in place. We had a number of scheduled reports to run each month, but not really an offering of scorecards or anything more advanced." 

The first step was to establish strong foundations for the new data analytics programme. It was imperative to get the basics right, enhance credibility, and automate as many of the basic descriptive reports as possible. The sheer number of requests the team received was preventing them from adding value and providing more sophisticated reports and scorecards.

CCE initiated a project to reduce the volume of scheduled reports sent to customers, which enabled them to decrease the hours per month taken to run the reports by 70%. This was a game changer in CCE’s journey. Many of the remaining, basic, low value reports were then automated which allowed the team to move onwards in their journey and look more at the effectiveness of the HR function by developing key measures. The analytics team was soon able to focus on more "value-adding" analytics, instead of being overwhelmed with numerous transactional requests which consumed resources.

"In the early stages requests were very basic. For example, how many people am I supporting? How many people have started or left? How many promotions have there been in my part of the organisation? The majority of requests were therefore very descriptive in their nature. There was an obvious need to automate as much as we could, because if we could not free ourselves of that kind of transactional reporting, there was no way we were going to add any value with analytics.’’

Standardising and reporting: towards a basic scorecard

The team soon found that the more they provided reports, the more internal recognition they received. This ultimately created a thirst within HR for more data and metrics for measuring the performance of the organisation from a HR perspective. The HR analytics function knew this was an important next step but it wasn’t where they wanted the journey to end. They looked for technology that would allow them to automate as many of these metrics as possible whilst having the capability to combine multiple HR systems and data sources.

A breakthrough, and the next key milestone in the journey for CCE, was when they invested in an "out of the box" system which provided them with standard metrics and measures, and enabled quick and simple descriptive analytics.

Instead of building a new set of standards from scratch, CCE piloted preexisting measures within the application and applied these to their data. The result was that the capability to deliver more sophisticated descriptive analytics was realised quicker and began delivering results sooner than CCE business customers had expected. 

‘‘We were able to segment tasks based on the skill set of the team. This created a natural talent development pipeline and ensured the right skill set was dedicated to the appropriate task. This freed up time for some of the team to focus on workforce analytics.

We implemented a solution that combines data from various sources, whether it is our HR system, the case management system for the service centre, or our onboarding / recruitment tools. We brought all that data in to one central area and developed a lot of ratios and measures. That really took it to the next level.’’ 

As with any major transformation, the evolution from transactional to more advanced reporting took time, resource and commitment from the business, and there were many challenges for the team to overcome.

"There were a lot of lessons. With the workforce analytics implementation we probably underestimated the resource and the time needed. Sometimes less is more and we provided too many metrics at first. The key was to really collaborate with our HR leaders and understand what the key metrics were."

With the standards in place CCE then turned to establishing a basic scorecard approach to illustrate the data. Scorecards are a common instrument used by many organisations to provide an overview of the performance of a function. Typically they consist of clear targets illustrated in a dashboard fashion and are utilised by senior management to guide their leadership of the organisation. The leadership team's familiarity with the scorecard methodology meant that the analytics team could simply fit in to a standard reporting process. But for CCE to create its HR dashboard it was apparent that a clear purpose and objective for the analytics was needed, and that the development of future scorecards should be as automated as possible.

Consulting to the business: HR as a centre of "people expertise"

At CCE it’s clear that HR analytics, insights, and combining HR and business data is an illustration of the value that HR can add to the business. CCE has developed a partnership approach which demonstrates the power that high quality analytics can deliver, and its value as a springboard to more effective HR practices in the organisation. By acting in a consultative capacity HR is able to better understand what makes CCE effective at delivering against its objectives, HR ensures both parties within the partnership use the data which is extracted, and find value in the insights which HR are developing.

"To be a consultant in this area, you have to understand the business you’re working in. If you understand the business problem then you can help with your understanding of HR, together with your understanding of all the data sets you have available.

You can really help by extracting the right questions. If you have the right question, then the analysis you are going to complete will be meaningful and insightful."

Moving from descriptive reporting towards correlation analysis

There are numerous examples where the HR reporting and analytics team have partnered with the HR function and provided insights that have helped to develop more impactful HR processes and deliver greater outcomes for the business. As with many organisations it is the engagement data with which the majority of HR insight is created. Developing further insight beyond standard survey outputs has meant that CCE has begun to increase the level of insights developed through the method, and by using longitudinal data they have started to track sentiment in the organisation. Tracking sentiment alongside other measures provides leaders with a good indicator for sensechecking the power of HR initiatives and general business processes. The question is whether the relationship between engagement and business results is causal or correlative. For CCE this point is important when explaining www.valuingyourtalent.org 4 the implications HR data insights to the rest of the business.

"There have definitely been a number of examples where we are starting to share insights that are being acted upon. One example is our engagement survey that is run every couple of years. Within the survey there are three questions related to communication.

The business was keen to understand if there was a correlation between how an employee scores a manager, in terms of communication, and key performance indicators across our sites.

We demonstrated that across all of our sites there was a positive correlation between how leaders communicate and business outcomes. That is great but it is not implying causation. There is something there to explore further, but we cannot go and say, good communication causes better business performance."

Building analytics capability within HR at CCE

For CCE's analytics team one of the most important next steps is to share the experience and knowledge gained from developing the analytics function with their colleagues, and build capability across HR.

"We are also reviewing the learning and development curriculum for HR to see what skills and competencies we need to build. One of the competencies that we have introduced is HR professionals being data analysers.

For me, it is not only understanding a spreadsheet or how to do a pivot table, it is more understanding what a ratio is, or understanding what their business problems are, or how data can really help them in their quest to find an intervention that is going to add value and shape business outcomes."

As with any long journey the analytics team at CCE have faced numerous barriers. The challenges they list are common to most HR professionals attempting to establish a significant new process, but it is the challenge of establishing new capability and embedding fit-for-purpose technologies which has created the greatest challenge at CCE.

"In terms of barriers, technology is one. For example having the right data warehouse in place that allows you to extract the data very quickly. From a HR perspective we are well placed, however extracting data from the rest of the business, is a challenge. At CCE HR is trying to branch out and get the data from other parts of the business, which is probably quite unusual. People probably do not expect HR to be that kind of driving force.’"

CCE recognises a recruitment challenge centred on sourcing the capabilities to develop high-impact HR analytics, which includes hiring individuals with the ability to analyse data, develop insights and the communication know-how to share across the business. One challenge for HR is to sell the profession as suitable for analytical high-potentials to build their broader business acumen: to move away from the traditional view of transactional HR with little or no analytical capability, to a function based around high-quality data and business insights. For CCE this represents a significant opportunity – high-calibre analysts must see HR as a profession in which they're able to build a lasting career.

"At conferences I have listened to major firms who have PhD students in their business intelligence teams, who appear to be very good at not only analytics but also presenting information. They are few and between and I believe that people who have that skill set would not naturally go into HR. If I reference the recent big data conference I went to, and the projects that some of these companies were doing outside of HR with customer data, Twitter data, really what I would call ‘big data,’ it may seem a lot more appetising and appealing than HR analytics. If I was a PhD student, I am not sure I would consider HR as a place to go to develop my career and also, whether I would see any longevity in it. As a function we need to change that."

Utilising predictive analytics: CCE's approach

For organisations like CCE, natural progression in analytics is towards mature data processes that utilise the predictive value of HR and business data. For most organisations this can too often remain an objective that exists in the far future, and one which without significant investment may never be realised. Alongside the resource challenges in building capability there also exists the need to understand exactly how data may provide value, and the importance of objective and critical assessment as to how data can be exploited. Without appreciation for methodological challenges, data complexity and nuances in analysis, it may be that organisations use data without fully understanding the exact story the data is telling.

"Predictive analytics is difficult. We are very much in the early stages as we are only starting to explore what predictive analytics might enable us to do, and what insights it could enable us to have. If we can develop some success stories, it will grow. If we go down this route and start to look at some predictive analytics and actually, there is not the appetite in the business, or they do not believe it is the right thing to do, it might not take off.

If you think about the 2020 workplace, the issues that we have around leadership development, multi-generational workforces, people not staying with companies for as long as they have done in the past, there are a lot of challenges out there for HR. These are all areas where the use of HR analytics can provide the business with valuable insights.’"

For CCE it appears that analytics and HR insight are gaining significant traction within the organisation. Leaders are engaging at all levels and the HR function is increasingly sharing insights across business boundaries. This hasn't been without its challenges: CCE face HR's perennial issues of technology and the perceived lack of analytics capability. However their approach of creating quality data sets and automated reporting processes has provided them with the foundations and opportunity to begin to develop real centres of expertise capable of providing high quality insight to the organisation. It is clear CCE remains focused on continuing its HR analytical journey.

"It's a great opportunity for HR, and we should not pass up on it, because, if executed well, HR analytics combined with business data allows us to highlight the impact of people on business outcomes. 

It’s about small steps, pilots, where you start to demonstrate the power of combining HR and business data. If you understand the business problems and can come to the table with insights that had previously not been seen you enhance HR’s credibility and demonstrate the value we can add as a function.

What amazes me as a HR professional, with a lean six sigma background, is that companies are often great at measuring and controlling business processes but very rarely consider the importance of people in that process. People are without doubt one of the most important variables in the equation."

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