Coca-Cola: A trip down the memory, its reign as Best Global Brand and what comes after.

Chup! Coca-Cola. A brand that is no stranger to people of all ages, a brand associated with the color Red (among other things such as Manchester United, Hell, Anger, etc. You get the picture), happiness, joy, sweet, gassy, refreshing among many other things. Just a quick trip down the memory lane, Coca-Cola’s journey begun as early as 1886 where an Atlanta pharmacist by the name of Dr. John S. Pemberton created a flavored syrup, mixed with a neighborhood pharmacy’s carbonated water before distributing it to a sample size where…well, the result boomed to a brand that lasted for 127 years. Yes, you read that right. One hundred and twenty seven years.

With that said, the Coca-Cola brand did not go through one hundred and twenty seven years without its set of challenges. After all, life is a bed of roses after all. A bed of thorny roses that is. No company that operates for more than a hundred years would operate without facing a fair set of challenges. In fact, companies that has been operating for a year would be able to testify that they too faced a set of tough, difficult challenges. However, it is challenges like these that builds the character of the organization and its identity, challenges were made to make or break a company.

Coca-Cola, as mentioned, did faced its fair share of challenges. One that is worth mentioning dates way back to the year 1985, 99 years after the birth of an international brand that was all known, talked about and consumed by the public till this very day. In 1985, Coca-Cola made an announcement that shook the entire industry: to introduce a reformulated Coca-Cola, or better known as the New Coke. A first in 99 years. Imagine sticking to a traditional “recipe” for the past 99 years only to change it. What happens after that was beyond Coca-Cola’s idea and vision of this New Coke which is to strengthen the Coca-Cola brand and its position in the cola industry in the United States of America; instead of that, Coca-Cola ignited protests from Coca-Cola consumers, protesting against the move of bringing New Coke. That move caused Coca-Cola employees to answer thousands of calls from consumers, filing their dissatisfaction over the move, complaints, expressing how they want the old Coca-Cola back, it made every Coca-Cola staff at that time feel like a public enemy for butchering their favorite carbonated drink.

How long did the protest lasts? 2 Months + . The power of the consumer was too powerful to ignore that Coca-Cola had to cave it, seize production of the New Coke by reintroducing good old Coca-Cola, branding it as Classic Coke; proving the saying that the customer is always right. If there’s one thing Coca-Cola deserves, despite the move of changing a 99 year old formula which has proven to be gold is the courage to take the leap of faith and doing things differently, well, the outcome of that leap is something to be talked about in the future. However, Coca-Cola does deserve some credit for that, try going out the streets, interview individuals, ask them if they would do the same and we bet none of the people would take the risk Coca-Cola did.

Was there a reason behind the New Coke move? Why yes, like everything in this world, everything happened for a reason, I mean, Coca-Cola came into existence simply because the curiosity and entrepreneur-spirited Atlanta pharmacist was curious about inventing a soda that could be sold a soda fountains. So what was the cause that led to New Coke? Turns out at that time, Coca-Cola’s been facing some strong competition in the market, where its share lead margin against its competitor’s been slipping slowly for more than a decade. Note that New Coke’s yet to come into existence at that time where Coca-Cola struggles to maintain its stand in the market where they dominated for years with its flagship product. Yikes. It seems like more and more people are jumping ship, brand loyalty barely exists if not non-existent, people no longer want or need Coca-Cola, the brand has no place for Coca-Cola.

What did Coca-Cola do? They spark interest by announcing a reformulated Coke and the rest is history. As of this moment, it amazes me greatly how one move, one surprising move from Coca-Cola could turn the tide around. One move from Coca-Cola, wanting to change a 99 year old formula, what would appear as a trolling move for some, or a innovative move, led thousands of people who no longer give two cents to the existence of Coca-Cola feeling empty, feeling lethargic with this New Coke, the desire, the longing to just have that 1 sip of good old Coca-Cola, a move that led people stocking up their basement with the original recipe bottled Coca-Cola. That move sparked a revival. It is no surprise that the New Coke chapter finds itself in many Marketing books, textbooks and articles; simply because that very move created a wave of free publicity and public awareness of the Coca-Cola brand.

Let us take a minute (or two) as we imagine this scenario: You have been a loyal Coca-Cola consumer since 1950. 35 years later, Coca-Cola announce to change that brand you’ve been so attached to (let us admit this, 1 consumer does not speak the voice of thousands). You get mad at the news, the Coca-Cola you’ve been drinking for the past 35 years is no longer around, suddenly Bruce Banner sounds so relatable that you felt like there is a Hulk in you waiting to be unleashed. 2 months later, Coca-Cola announce to withdraw all New Cokes and re-introducing your good old Coca-Cola, branding it as Classic Coke to avoid confusion with New Coke. How would you feel? Excited? To a point where you’re willing to say, “Shut up and take my money!”?

Let us do a quick recap on the New Coke era: Started as a move to put Coca-Cola back to the top in the market after shares declined for the past 15 years after 99 in business. Move led to protests and complaints from consumers. 2 months later, Coca-Cola recall all New Coke and re-introduced the old Coca-Cola formula, branding it as Classic Coke. They get free publicity, brand awareness, known to be a company that dares to take innovative risks in the objective of strengthening the company and also they developed brand loyalty from the consumers towards the Coca-Cola company.

In 1974, Interbrand came into existence. A company that creates and manages brands as valuable business assets, in other words, a brand consultancy. So why am I talking about another company when my focus was supposed to be on top carbonated beverage, Coca-Cola? In 2000, Interbrand marks its inaugural Best Global Brand report; ranking worldwide brands in the market based on its financial performance, role of brand and brand strength. Guess who topped the list? None other than Coca-Cola themselves, with a brand value of up to 72532 million dollars. Coca-Cola was the only brand under the beverage sector to make it to the top 10, with Nescafe taking the 22^nd spot under the beverage sector. What’s amazing is how it stands against its competitor in the soda market, Pepsico, with a brand value of 6636 million dollars, a huge margin.

Over the years, Coca-Cola’s brand value has been moving like a wave, with moments where bearish market and bullish market happened, notably in 2001, a year after launching the Best Global Brand report, Coca-Cola’s brand value dropped by 5% and yet still maintaining the top spot, the biggest drop over the period of 2000 till 2013, one possible explanation for this occurrence is due to the 2001 recession in the US. Coca-Cola’s brand value skyrocketed by 8% in 2012 from 2011, resulting a brand value of 77839 million dollars. What’s amazing about these numbers is that Coca-Cola wasn’t at all during the late 2007/2008 recession which lasted till 2009. Instead, Coca-Cola’s brand value rose in 2008 by 2% from 2007 and then increased by another 3% in the year 2009. What happened? Could it be due to brand loyalty, where even in times of crisis, where people do not have enough money to buy food or support themselves could still save up for 1 bottle of ice cold Coke? No doubt, Coca-Cola’s growth based on these reports are amazing, sure, their value may dropped by 5% back in 2001, but they regained that 5% in the next recession.

“All good thing must come to an end,” how true is that statement? Some beg to defer, saying things does not need to end but it should get better. Apparently Coca-Cola goes both ways. At least in results. After 13 years of reigning, of being at the very top, Coca-Cola got toppled over in 2013, but by 1 spot, but 2. It now sits as the 3^rd Best Global Brand, taken over by Apple with a brand value of 98 million dollars, ranking number 2 in the previous year and also by Google who sits on the 2^nd spot with a brand value of 93 million dollars, ranking 4^th back in 2012. Despite the drop in 2 spots, Coca-Cola’s brand value went up by 2%, with current brand value of 79 million dollars.

One does not help but to wonder how does Coca-Cola feel about this. No doubt, they dropped 2 places, beaten by Technology brand giants but their value grew and after 13 years remain to be the only brand to be in the top 10 under the beverage sector, that is an impressive record. Let us analyze the situation shall we?

In 1943, Abraham Maslow came up with a psychology theory on the needs of people through the psychology sense and this was represented in the form of a pyramid, now known as Maslow’s Hierarchy of Needs. The hierarchy states that men has a huge need for physiological needs which includes the basic necessities such as food, sleep, breathing, water, excretion, sex. Coca-Cola would probably fall under this category, which probably explains how they survived the 2008 recession and in 2013, grew by 2%. People need to drink. Above physiological needs is the need for safety, where men needs security in body, employment, morality, health, family. Coca-Cola probably does not fit best in this category given how social media spreads the healthy-level of Coca-Cola, associating it with an agent to help clean toilet bowls or cleaning dirty coins and so on. The hierarchy then states the least need of men happens to be in a category called “Self-actualization,” where items fall in this category includes creativity, problem solving among other things.

Perhaps both Apple and Google excelled in the self-actualization category, where mobile devices such as the iPad, iPhones, various Android products boosts to help solve problems and promotes creativity in developing apps and maximizing the capabilities of such devices. With the current standing, is Maslow’s Hierarchy of Needs still relevant to this new age, because results seem to show that creativity and problem solving is one of the top needs, unless an item known as “using branded technology toys” is missing from the physiological needs in the hierarchy.

With that said, the market is shifting, the focus of people are shifting. Where will Coca-Cola stand in the coming years? We have no idea, but what we do know is this: Coca-Cola is irreplaceable. A brand that has been established for more than a hundred years is one brand that is hard to be taken off the market. They may not be the Best Global Brand, but they are still good. What Coca-Cola can do is to keep relevance to its generation and its crowd, using what goes against them as a tool to gain publicity such as the recent hash tags printed on Malaysia’s Coca-Cola cans helps promote the brand while staying relevant in the market. Perhaps Coca-Cola needs to prepare itself to take serious move, reliving the title of a brand that takes “intelligent risks in their jobs,” as said by Roberto Goizueta, the CEO of Coca-Cola during the “New Coke” era,  as it was the key to the company’s success.

Victor Lai, signing off, Chup! Coca-Cola.

Reference List

The Real Story of New Coke: The Coca-Cola Company. 2013. The Real Story of New Coke: The Coca-Cola Company. [ONLINE] Available at:http://www.coca-colacompany.com/stories/coke-lore-new-coke. [Accessed 04 October 2013].

Coca-Cola History | World of Coca-Cola. 2013. Coca-Cola History | World of Coca-Cola. [ONLINE] Available at: http://www.worldofcoca-cola.com/coca-colahistory.htm. [Accessed 04 October 2013].

 About Interbrand . 2013. About Interbrand . [ONLINE] Available at:http://www.interbrand.com/en/about-us/Interbrand-about-us.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2013 . 2013. Interbrand - Best Global Brands 2013 . [ONLINE] Available at: http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands-2013.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2000 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2000.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2001 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2001.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2008 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2008.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2009 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2009.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2011 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2011.aspx. [Accessed 04 October 2013].

 Interbrand - Best Global Brands 2012 Ranking . 2013. Interbrand - Best Global Brands 2000 Ranking . [ONLINE] Available at:http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2012.aspx. [Accessed 04 October 2013].

Maslow's Hierarchy of Needs - Simply Psychology. 2013. Maslow's Hierarchy of Needs - Simply Psychology. [ONLINE] Available at:http://www.simplypsychology.org/maslow.html. [Accessed 04 October 2013].

HTC stock slumps. Will the tide turn or will there be a funeral?

Source: HTC Slumps After Forecasting Sales Drop: Taipei Mover - Bloomberg. 2013. HTC Slumps After Forecasting Sales Drop: Taipei Mover - Bloomberg. [ONLINE] Available at: http://www.bloomberg.com/news/2013-07-30/htc-forecasts-eighth-consecutive-quarter-of-declining-sales.html. [Accessed 13 September 2013].

The article of the link attached focuses on a bearish market, where HTC Corp’s stock dropped to its lowest point since November 2005. The stock is expected to drop, leaving HTC struggling to support its operations. Despite great efforts of keeping up with the competition such as Samsung and Sony in the mobile phone market, those efforts does not seem to work at all.

Besides of constantly releasing new phone models out to the ever-competitive market, the article states that the management will be plans to boost promotion for the HTC One and also to release more mid-range model instead of focusing on releasing on upper-range models such as the  flagship model, the HTC One.

Despite all that, the management of HTC foresees that those plans would turn the tide for the company, an analyst at PNB begs to differ, who does not see that happening. HTC however has another card up in its sleeve: The HTC One Mini. Everything (almost everything) the flagship model has, only smaller which is expected to be released in the fourth quarter this year.

Over the years, HTC’s been struggling and despite countless effort to change the situation, does not seem to work at all. This is a market of strong competition and every company needs to stand out from the crowd. HTC’s faced with companies that has been producing quality Android-based products, such as Samsung whose proved to be a force to be reckon with, standing as one of the top mobile phone brand, and then there is Sony which produces the Xperia series, releasing new models faster than a hen laying eggs from various range. Then there is Apple that produces the iPhone which is in a constant competition against Samsung.

With that said, HTC’s effort should not be watered down but should be given credit as they dare to take its chances. In the current market, Nokia has been releasing quality Windows 8 Phones; the Lumia series. HTC tried to bring in some competition after its rather successful HTC 7 by bringing in the HTC 8 and the 8X, but despite all that, failed in terms of sales against the Lumias. Prior to that, HTC brought yet a revival attempt to their brand by releasing the One series, bringing in the HTC One V, One S, One X and then later the HTC One X+. They tried to be innovative by packing the phones in Styrofoam-like packaging that was deemed eco-friendly.

Later, they introduced the flagship model, the HTC One. The design is amazing, classy, one-piece aluminum body, stereo speakers in front of the phone. HTC took a gamble for that model: instead of putting in a 8MP camera, they pumped in their resources to researching and developing a 4 Ultra Pixel camera into the phone, claiming to take better pictures under low light condition. Did they get the attention of the public? Oh yes they did, but then crisis happened. Short of supply of the camera, resulting a plunge in its sales as users, at that time, switched to the Samsung Galaxy S4.

The damage in HTC’s stock dropped has already been done. Efforts taken but results not seen, in fact, they are still struggling. One does not help but to wonder about the future of HTC Corp. Will we be seeing yet another “Microsoft acquires Nokia,” situation? From the looks of things, that might just be the best thing that could ever happen to HTC Corp at this point. Who knows? Maybe its upcoming promotion and marketing plans for the One brand, maybe even the HTC One Mini could bring a revival to its share, creating a bullish situation in the market. Only time will tell. 

Signing off,

Victor Lai