ROKCin’ Coke, Again

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No worries about the spelling. I know from many years living abroad that most speak English as you do and not as Americans/Brits/Canadians/Australians do. Its OK.

I see you are getting close to understanding but you are not quite there yet. Let me see if I can help.

To use your Coke example, you are focusing on yet failing to see that the key component is the brand. Almost every aspect of the product you mention have to do with branding and not the beverage in the can. Do you see that? I hope it is clear now.

As I wrote previously, the key component changes over time. In Coke’s case, it was the cocaine/cola nuts used in the original formula, then it became mass manufacturing, and is more recently, in your example, the brand. Each change is the result of the old key component not providing a high enough return and a new one providing a better return.

Remember, the Coke formula was a trade secret the company guarded for years. Then they manufactured the syrup and sent to bottling plants all around the world. Now, they have the brand under which they have numerous other products.

Personally, in the Coke portfolio of products I like Dasani water the best. I do not think it is sold outside the US so you may not know it. Anyway, Coke has all these bottling plants filtering ordinary tap water, injecting carbon dioxide in to it, mixing in the syrup and then bottling/canning the product to be shipped to retailers. A few years ago, water became a big business in the US and consumption of Coke declined. To compete in the water market, Coke launched “Dasani” water. Basically, what they do is interrupt the coke production after the water filtration process, skip the other steps and bottle it for shipment to retailers. Even though it does not have the bubbles and syrup, less costs, they sell it a higher per unit price than coke! Now that makes a good return on the Coke brand because everyone knows it is a Coke product.

Hope you get some sleep.

Best,

Alessandro


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