Interesting marketing info from Coca-Cola

[disneysteve]

I was reading an interview with the head of Coke in Smart Money. When asked what the leading method of boosting sales is, he said "packaging." Not making a quality product. Not making a healthy product. Not making a product that tastes good. Their main focus is on designing new packages, new shapes, colors, logos, etc. That drives sales more than any other factor.

I thought that was a surprisingly honest answer and speaks volumes about the shopping habits of the average consumer.

[cicy33]

and people wonder why we as a society are so broke! maybe if we paid more attention to what we are buying versus buying the "pretty" package. that applies to everything. not just food! but on the food subject. people don't even notice much these days that packages are shrinking. but the prices aren't

[disneysteve]

Originally Posted by cicy33

. but the prices aren't

A while ago, I was at the supermarket and took notice of an end cap display of bottled spaghetti sauce. It isn't a product we use but I noticed something unusual. The item was on sale but the display had 2 different bottles of the same product. One was a rather plain, straight-sided bottle. The other was more shapely with a couple of curves and ridges. So I went over and looked more closely. Both bottles were being sold for the same price. Sure enough, the curvy bottle which I'm assuming was the new design, had a couple ounces less in it. Based on what the guy from Coke said, I'm sure they redesigned the bottle to attract more attention and boost sales. In the process, they raised the unit price by reducing the contents but keeping the same price.

[kork13]

My favorite of packaging getting smaller is when I see, for example, ice cream that says on the tub, "Still 1/2 gallon!". Sure enough, all around it are tubs that look about the same size, but then checking it, it's been shorted by a fair few ounces of the good stuff, though still the same price as the "true 1/2 gallon" one... lol gotta love competition, right?

[jIM_Ohio]

Originally Posted by disneysteve

I was reading an interview with the head of Coke in Smart Money. When asked what the leading method of boosting sales is, he said "packaging." Not making a quality product. Not making a healthy product. Not making a product that tastes good. Their main focus is on designing new packages, new shapes, colors, logos, etc. That drives sales more than any other factor.

I thought that was a surprisingly honest answer and speaks volumes about the shopping habits of the average consumer.

My company has a software which consumer companies use to manage all this. I have seen how P&G tracks this and the efforts they need to go through to package and display products.

For the most part companies like Coke and P&G know their price points... their profits are made on volume (sell more)- their margins are low (meaning they might be selling products for $.01-$.10 more than they cost). Volume is where profit is.

Some of packaging is controlling costs. Some of it is how the product is displayed.

[MoneyTrev]

I heard of this before too.

It applies for most businesses. I remember a business owner I knew that sold stationary was always worried about his packaging cause he knows his product is "good enough" to compete with other products.

[simpleyme]

I work for a small store, the cola companies change packaging all the time to push sales on us they will pull out a new line up remember the 5 new flavors of mountain dew last year that means we have to buy 5 more cases on top of our regular order which really only increases our back stock

[bjl584]

In Coca Cola's defense, their core product being Coca Cola Classic has been the same for decades. The can is the same shape and size, the contents look and taste the same as the always have. The only real way to keep and to generate new interest in their product is with the marketing of that product. That can take the form of celebrities and sports stars pitching it or with new forms of packaging to box it up in and display it on the store shelves. It does say a lot about human nature though.

[jIM_Ohio]

Please note that packaging can be "new" to display better.

It can also be a way to cut costs (because the price of a candy bar, can of soda or cake mix probably can't be increased much). Same with razors, shampoo and soap.

So can a new material be used (which is cheaper). Can less material be used? Can the big containers used to ship to stores in get recycled?

Packaging is:
1) the display on the can/bottle
2) the box the can/bottle comes in
3) the case the boxes were shipped in
4) how the cases get hooked together during shipment, stored in wearhouse (if applicable) and possibly returned to distributor.

There is more to packaging than the consumer sees. In Steve's post I saw nothing on "improve store displays", I saw "improve packaging".

Packaging will be influenced by transportation costs. It's possible that packaging could indirectly lower shipping costs (if there is volume issues with the packaging).

There is much more to this than the average consumer will ever see.

[cicy33]

Originally Posted by bjl584

In Coca Cola's defense, their core product being Coca Cola Classic has been the same for decades. The can is the same shape and size, the contents look and taste the same as the always have. .

this I disagree with! When they changed the formula about 20 years back to something and then tried to go back to what they called coke classic it was not the same. I don't care who says it is. I could taste the difference. It was better before they messed with it.

[disneysteve]

Jim, back when gas prices shot up, I saw a story on the news about themn redesigning plastic milk jugs to take up less space and allow a lot more to be shipped on a truck. I don't remember the numbers but it resulted in a substantial savings to the dairy by reducing the number of truck trips needed to deliver their orders. Of course, in turn, that allows them to keep the price down and not have to pass on higher costs to the consumer. I thought that was pretty interesting.

[kork13]

Originally Posted by cicy33

this I disagree with! When they changed the formula about 20 years back to something and then tried to go back to what they called coke classic it was not the same. I don't care who says it is. I could taste the difference. It was better before they messed with it.

Yea, they tried to launch "New Coke", but people literally revolted, and there were protests that you wouldn't believe. How very funny. In the end they had to go back to their 'original' recipe. However, I wouldn't put it past them to change the composition slightly in order to save a quarter of a cent per bottle. Maybe a different (cheaper) sweetener, coloring, flavor additive, or whatever. The recipe itself is a trade secret, seriously locked up in a vault somewhere, so no one can call them on a minor change like that. Since they produce millions (billions?) of bottles/cans/etc each year, the savings become significant. It's like what Jim mentioned earlier about volume... So although I don't drink it myself (soda is too sicky-sweet for me), I do know some people that make the same argument, that today's Coke is no longer the same as a Coke of yesteryear.

[disneysteve]

Originally Posted by cicy33

this I disagree with! When they changed the formula about 20 years back to something and then tried to go back to what they called coke classic it was not the same. I don't care who says it is. I could taste the difference. It was better before they messed with it.

Originally Posted by kork13

Yea, they tried to launch "New Coke", but people literally revolted, and there were protests that you wouldn't believe. How very funny. In the end they had to go back to their 'original' recipe. However, I wouldn't put it past them to change the composition slightly in order to save a quarter of a cent per bottle.

I do know some people that make the same argument, that today's Coke is no longer the same as a Coke of yesteryear.

I remember that well. The change they made wasn't a secret at all. The original Coke was sweetened with sugar. After the New Coke debacle, they went back to the "original" formula except it was now sweetened with high fructose corn syrup.

[kork13]

Originally Posted by disneysteve

I remember that well. The change they made wasn't a secret at all. The original Coke was sweetened with sugar. After the New Coke debacle, they went back to the "original" formula except it was now sweetened with high fructose corn syrup.

haha well, there it is.... as I said, I'm no Coke connoisseur. Do you know if the change was for cost reasons, or something else? Just curious...

[disneysteve]

I don't know for sure, but I'm sure it was about cost.

Coke and other products like to advertise that they've been selling the same product for umpteen years when in reality, some of the ingredients they use now, like HFCS, haven't been around nearly as long as their products have, so whether they admit it or not, they must have changed the recipes at some point.

[jIM_Ohio]

Originally Posted by disneysteve

I don't know for sure, but I'm sure it was about cost.

Coke and other products like to advertise that they've been selling the same product for umpteen years when in reality, some of the ingredients they use now, like HFCS, haven't been around nearly as long as their products have, so whether they admit it or not, they must have changed the recipes at some point.

Wife used to work in HR department of a flavor company. There are chemists, chefs and other professions which get a product off the store shelves, take it to the lab, then try to duplicate the flavor at any cost.

Cheese is a common one (when my wife's former employer tested cheese, I could tell by the smell of her coat or clothes), because potato chips were a common thing to flavor or common customers of her employer.

I am sure Coke could hire the same people, change their recipe, keep their same flavor and use cheaper ingredients. Food companies have r&d costs too.

[PrincessPerky]

Originally Posted by disneysteve

I don't know for sure, but I'm sure .....

Heh, Not sure but sure

I also agree, I do not know 100% but I bet it was cost, high fructose corn syrup is cheap, sugar is not.

[disneysteve]

Originally Posted by PrincessPerky

Heh, Not sure but sure

I guess that didn't make much sense, did it?

[jIM_Ohio]

Originally Posted by disneysteve

I don't know for sure, but I'm sure it was about cost.

Coke and other products like to advertise that they've been selling the same product for umpteen years when in reality, some of the ingredients they use now, like HFCS, haven't been around nearly as long as their products have, so whether they admit it or not, they must have changed the recipes at some point.

If you remember Coke changed their formula after the "Cola wars" where people were asked which flavor they liked better- Coke or Pepsi.

Pepsi won most and it was determined about 55% of the people preferred sweeter cola.

The problem was Coke grossly overestimated the 45% which prefer the more bland taste of coke. When they went to the sweeter formula, their loyal customer base was without a cola they liked. That was the big reason for the change back to coke classic.

I am sure there are other reasons (like cost) which went into the change. I also remember doing case studies on this in economics is both HS and college.

Sometimes consumer loyalty is more important than market share.

I am a pepsi drinker myself. Mountain Dew is even better.

[disneysteve]

Originally Posted by jIM_Ohio

If you remember Coke changed their formula after the "Cola wars" where people were asked which flavor they liked better- Coke or Pepsi.

Pepsi won most and it was determined about 55% of the people preferred sweeter cola.

The problem was Coke grossly overestimated the 45% which prefer the more bland taste of coke.

I remember the Pepsi Challenge. Took it a couple of times myself. The two products taste totally different so I always picked Coke just to mess them up. I heard a lot of reports of them serving the Pepsi fresh and cold and the Coke room temp and flat.

It's odd that you describe Coke as bland. I think Coke is definitely the more syrupy sweet one of the two. Pepsi is lighter and "cleaner" tasting IMO. Coke is heavier or fuller. I would definitely say Coke is the sweeter one.