Coca Cola Case Study

The History:

The birth of a refreshing idea best know today and always as Coca-Cola was born in Atlanta, Georgia, on May 8, 1886. Dr. John Stith Pemberton, a local pharmacist, produced the syrup for Coca-Cola, and carried a jug of the new product down the street to Jacobs' Pharmacy, where it was sampled, pronounced "excellent" and placed on sale for five cents a glass as a soda fountain drink. Carbonated water was teamed with the new syrup to produce a drink that was at once "Delicious and Refreshing," a theme that continues to echo today wherever Coca-Cola is enjoyed.

Thinking that "the two Cs would look well in advertising," Dr. Pemberton's partner and bookkeeper, Frank M. Robinson, suggested the name and penned the now famous trademark "Coca-Cola" in his unique script. The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try "the new and popular soda fountain drink." Hand-painted oilcloth signs reading "Coca-Cola" appeared on store awnings, with the suggestion "Drink" added to inform passersby that the new beverage was for soda fountain refreshment. During the first year, sales averaged a modest nine drinks per day.

Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler. An Atlantan with great business acumen, Mr. Candler proceeded to buy additional rights and acquire complete control. On May 1, 1889, Asa Candler published a full-page advertisement in The Atlanta Journal, proclaiming his wholesale and retail drug business as "sole proprietors of Coca-Cola ... Delicious. Refreshing. Exhilarating. Invigorating." Sole ownership, which Mr. Candler did not actually achieve until 1891, cost a total of $2,300.

By 1892, Mr. Candler's flair for merchandising had boosted sales of Coca-Cola syrup nearly tenfold. He soon liquidated his pharmaceutical business and focused his full attention on the soft drink. With his brother, John S. Candler, John Pemberton's former partner Frank Robinson and two other associates, Mr. Candler formed a Georgia corporation named The Coca-Cola Company. Initial capitalization was $100,000. The trademark "Coca-Cola," used in the marketplace since 1886, was registered in the United States Patent Office on January 31, 1893. (Registration has been renewed periodically.) That same year the first dividend was paid; at $20 per share, it amounted to 20 percent of the book value of a share of stock.

A firm believer in advertising, Mr. Candler expanded on Dr. Pemberton's marketing efforts, distributing thousands of coupons for a complimentary glass of Coca-Cola. He promoted the product incessantly, distributing souvenir fans, calendars, clocks, urns and countless novelties, all depicting the trademark.

Protecting a valuable name was not easy the bottlers of Coca-Cola in the early 1900s had their share of challenges. Probably the most persistent and serious was protecting the product and the package from imitation. Imitation may be the sincerest form of flattery, but in the business world it can mean the death of a good name.

The never-ending battle against substitution was the major force behind the evolution of the distinctive hobble-skirt bottle. A variety of straight-sided containers was used through 1915, but as soft-drink competition intensified, so did imitation. Coca-Cola deserved a distinctive package, and in 1916, the bottlers approved the unique contour bottle designed by the Root Glass Company of Terre Haute, Indiana. The now-familiar shape was granted registration as a trademark by the U.S. Patent Office in 1977, an honor accorded only a handful of other packages. The bottle thus joined the trademarks "Coca-Cola," registered in 1893, and "Coke®," registered in 1945.

The Coca-Cola Company has moved with the times from the late 1940s to the 1970s, the United States, like most of the world, changed at an unprecedented pace. The Coca-Cola Company also experienced its most dramatic changes in marketing and merchandising since the advent of bottling in the late 1890s. World War II had recast the world, and the Company faced a new, more complex global marketplace.

Until the mid-1950s, the world of Coca-Cola was defined by a 6 ½-ounce hobble-skirt bottle or bell-shaped fountain glass. But as consumers demanded a wider variety of choices, the Company responded with innovative packaging, new technology and new products.

In 1955, the Company introduced the 10-, 12- and 26-ounce king-size and family-size bottles, which were immediately successful. Metal cans, first developed for armed forces overseas, were available on U.S. market shelves by 1960. Then, following years of research into plastic soft-drink bottles, the Company introduced PET (Polyethylene Terephthalate)