Caso Coca Cola

Case Study Coca-Cola: Crisis in Belgium

Case Study Coca-Cola: Crisis in Belgium

“Over the past several days in Belgium, we allowed two breakdowns to occur in fulfilling the promise of Coca-Cola. We have worked round the clock to identify the sources of these breakdowns, fix them and make absolutely sure that all of our products are up to the high standards you deserve and have alwaysexpected from us. I want to say that I am personally very sorry for any discomfort or inconvenience.” (Douglas Ivester, in a personal letter to Belgian consumers dated 22 June 1999) That was how Douglas Ivester, Coca-Cola’s CEO, reacted to one of the worst crises the world-famous soft drink manufacturer had ever known. There had been nothing like it in the company’s history, which had begun in Atlanta,Georgia 113 years ago. And it had all started just two weeks earlier when a group of school children from Bornem in the north of Belgium had developed symptoms of stomach upsets and headaches after having drunk Coca-Cola branded beverages. They had been given emergency treatment, but some of them had even had to be hospitalised.

Coca-Cola: more than a century of success In 1886, pharmacist JohnStith Pemberton of Atlanta, Georgia developed a recipe for a caramel-coloured syrup. Pemberton reported in his book of experiments that on 8 May 1886 he mixed water, sugar, fluid extract of kola nut,
Copyright © 2000 ESADE. Barcelona. This case was written for the ESADE Department of Marketing Management by Professor Josep Franch with the help of Assistant Professor Carlota Torrens Csonka. Theauthor would like to thank Steve Leroy, Director of Communications, Coca-Cola Belgium-Luxembourg for the information and assistance provided. This case is intended as a basis for discussion and not as an example of appropriate or inappropriate management of a particular situation. No part of this material may be reproduced without written authorisation from ESADE.

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Case Study Coca-Cola:Crisis in Belgium

coca leaf1 and other herbs in an attempt to produce a tonic that would cure “headaches, nervous afflictions, neuralgia, hysteria and melancholia”. The result was a “medicine” that proved effective as a stimulant and invigorating agent and was sold in and also from a cart on the streets around Pemberton’s pharmacy (See illustrations in Exhibit 1). The price was five cents a glassand at the beginning Pemberton sold an average of nine glasses a day. Frank M. Robinson, Pemberton’s accountant and partner, put together the names of two ingredients –coca leaf and kola nut– and came up with a name, Coca-Cola, he thought would look good in advertisements. In fact, the logotype with its two large C’s has never been changed and is said to be Robinson’s own handwriting. Five yearslater, in 1891, Atlanta entrepreneur Asa G. Candler bought Pemberton’s small business for $2,300 and in 1893 he registered the Coca-Cola brand name with the United States Patent and Trademark Office. Although company advertising continued using the original name, the public began shortening it to “Coke”. Candler insisted on using the whole name because he felt that abbreviations encouragedimitation: “Ask for Coca-Cola by its full name; nicknames encourage substitution”, Candler often said. It wasn’t until 1945 that widespread public usage led the company to register the Coke trademark. In the early years, Candler personally supervised preparation of the syrup. The secret formula, known as “7X”, was confided to only his most trusted associates. By 1894, and thanks to a creative advertisingcampaign that used billboards and point of sale materials such as calendars and fans, and revolutionised the marketing of the times, Candler had managed to distribute Coca-Cola to the majority of U.S. outlets that served soft drinks to the public directly from soda fountains, with the exception of outlets located in Alaska and Hawaii, which were not yet part of the union. Meanwhile, Joseph A....