Brilliant marketing key to Coke’s early success
by Bill Kinney and Joe Kirby
Around Town columnists
September 30, 2012 01:25 AM | 1364 views | 0 0 comments | 5 5 recommendations | email to a friend | print
Bill Kinney
Bill Kinney
The world’s favorite soft drink has a long history, and as you have probably guessed, it began here in Atlanta back in 1886.

That’s when a pharmacist named John Pemberton first introduced his new concoction, Coca-Cola. It wasn’t what you’d call an overnight success.

“He only sold nine drinks his first year,” Coca-Cola archivist Phil Mooney told members of the Marietta Rotary Club last week. “He made $50 his first year, but had expenses of $76.”

The drink was sold only at soda fountains for its first 13 years. And creator Pemberton died about a year after it was introduced.

At that point, one of his original investors, Asa Candler, stepped in and took over things. He was a brilliant marketeer, Mooney said.

“He created the kinds of things we think of today when we think about marketing, like calendars and posters and serving trays. He also introduced the concept of ‘sampling’ coupons and direct-mail campaigns.”

In the 1890s it’s estimated that one of every 10 Americans had received a free Coke via the marketing campaign.

“That’s really amazing when you consider the limited communications tools that were available at that time,” Mooney said.

Candler’s other key contribution to the company’s fortunes was helping create a bottling system.

When two men from Chattanooga proposed selling Coke in bottles, he sold them the national rights to bottle Coke for just $1.

“It was a brilliant strategy,” Mooney said. “All of the capitalization costs of building plants, hiring personnel and buying equipment would be on these two men. And they still had to buy their syrup from Candler. And that model is pretty much the way we’ve done business for 126 years.”

The company relies on a series of independent bottlers to distribute its product to consumers.

For most of its history, the biggest of those bottlers was Coca-Cola Enterprises, but that changed a year and a half ago when Coca-Cola purchased CCE.

So now Coca-Cola is a bottler as well, and also owns 80 percent of the bottling in this country.

Outside the United States, bottling continues to operate on a franchise model, Mooney said.

Those bottlers produce the finished product by mixing the syrup they buy from Coca-Cola with filtered water and sweeteners, and then carbonating it. It then is put into cans and bottles which are sold to customers.

But interestingly, Coke’s independent bottlers are allowed to sweeten the drink according to local tastes, which explains why Americans traveling in, say, the United Kingdom, will find the Cokes they drink there to be sweeter than those they are used to here.

Candler also played the key role in the creation of Coke’s distinctive green bottle.

“It’s a unique package,” he said. “When you have a successful product, other people try to imitate you. And that’s what was happening with Coke. All sorts of people were introducing drinks like ‘Dixie Cola,’ ‘Take-A-Cola’ and 18 other varieties that used a Coke-type script and bottles that looked like the bottles that Coke was then using, which were straight-sided, like the beer bottles of that era.”

In 1915, Candler decided the company needed something more unique. So he commissioned the Root Glass Works of Terre Haute to produce a bottle that was “so distinctive that even if you felt it in the dark, you’d know it was a Coca-Cola bottle.”

Coke’s contour bottle was introduced later that year and proved to be a game-changer.

“We patented it and no one else could use it for their product,” Mooney said. “It was absolutely distinct and unique.”

NEXT — Robert Woodruff puts his stamp on Coke.

Bill Kinney is associate editor of The Marietta Daily Journal.

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