If you pocket 10 dong, you’ll spend up to 5 dong on advertising, last year just burned 4.3 billion USD

If you pocket 10 dong, you’ll spend up to 5 dong on advertising, last year just burned 4.3 billion USD

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2023-05-15 11:28:49

Coca-Cola in 2022

Coca Cola is the world’s leading beverage company, offering a wide range of products such as Coke, Diet Coke, Fanta, Sprite and Dasani,…

According to statistics in 2022, Coca-Cola brought in about 43 billion USD in revenue. Gross profit reached 25 billion USD, up 7.32% compared to 2021. In which, pre-tax profit reached 11.68 billion USD and net income reached about 9.5 billion USD.

However, Coca-Cola spent $4.3 billion on advertising last year. On average, over the past seven years, the brand has spent about $4 billion a year on marketing, excluding $2.77 billion in 2020, according to Statista data.

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Coca-Cola’s advertising expenses from 2014 to 2022 ($ billion)

Thanks to marketing advertising, what did Coca-Cola gain?

Coca-Cola currently holds more than 44% of the beverage market in the US. However, to get the “glorious” as today, they have gone through a long journey to create a brand name.

Coca-Cola started with a unique drink recipe with a logo in the same font. They standardized the logo in 1923 and is now over 100 years old.

In addition, some strategies to make Coca-Cola remembered by many people can be mentioned such as using exclusive bottle models, forcing retailers to ensure product quality, keeping retail prices unchanged throughout the year. 70 years (since sold) or apply the franchise model.

However, in it, marketing advertising is an indispensable thing to help this brand have its recognition spread around the world and sales increase rapidly.

An example can be taken with Coca-Cola’s “Share a Coke” marketing campaign. During the campaign, the company’s logo on coke bottles will be replaced with 250 of the most popular names of each country. Users will see familiar names and possibly their own names printed on them, for example “David”. Consumers are encouraged to share these soft drinks bottles with friends and family.

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After this campaign, Coca-Cola has obtained impressive results, represented in the US market. It can be said that 2015, 2016 is a difficult time for the carbonated beverage industry in this country. People care a lot about health, the explosion in demand for smoothies and juices has caused the company’s sales to decline.

Even, according to research, nearly half of American youth were not too “interested” in Coke for a year at that time. However, the Share A Coke advertising campaign changed everything:

– During the campaign in this country, the company recorded the highest number of Coke sales (Coca-Cola, Diet Coke and Coke Zero) here since 2019.

– In addition, an additional 1.25 million American teenagers drink this carbonated drink.

– Paid media advertising helped Coca-Cola’s sales increase by 10%.

Overall, revenue increased 11% from a year earlier. Coca-Cola-related shares also increased by 1.6%.

– Hashtag #ShareaCokewithCam became the #1 hot topic all over the world spontaneously at that time.

– 2.1 million views of promotional videos on Youtube.

Spending heavily on advertising – A strategy chosen by many big men

In the opinion of many people, a famous brand really doesn’t need to advertise “busy” anymore because everyone is familiar. But why do big brands like Coca-Cola, Red Bull, Pepsi continue to invest so much money in this kind of expense?

In fact, Coca-Cola is popular in many households, from generation to generation because of its constant appearance in advertisements. An example can be taken with Jianlibao – once known as China’s top drink.

Jianlibao was born in 1984, is the first electrolyte supplement drink in the country of billions of people. Jianlibao pioneered the concept of a sports drink for the Chinese and became famous after the 1984 Los Angeles Olympics.

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The advertising push has made it at the forefront of the Chinese beverage market. The company’s sales reached a staggering 5.5 billion yuan in 1997, equal to the combined sales of Pepsi and Coca-Cola in the Chinese market.

At that time, Jianlibao orange juice was a childhood memory. However, from the years after 1995, many people no longer remember what kind of drink Jianlibao is.

This “submergence” cannot be attributed to non-advertising. But in fact, the company did not push the marketing to get closer to the next generations. New generations are born in the context of foreign brands such as Coca-Cola, Pepsi appearing constantly on television and social networks, forgetting a name for a long time is inevitable.

According to studies, people’s impressions will gradually fade if not reinforced repeatedly. For any product, its advertising audience can be divided into high-frequency consumers, low-frequency consumers, and non-consumers.

The advertising mechanism for these three types of people is different. In theory, the logic of advertising comes from four aspects: inform, persuade, remind, and reinforce.

For non-consumers, advertising’s role is to raise awareness, that is, to “inform and remind” them of the brand’s presence.

“I didn’t drink Coke before 2014. As for Coca-Cola, I am not a consumer. But on a summer afternoon in 2014, when I was done swimming – thirsty and hungry, I happened to see coke cans next to the newsstand. They have funny lyrics printed on them – part of an advertising campaign and I picked up a bottle with the words: The original dream is bound to come true. At that time, after drinking, the feeling of coolness and thirst disappeared, making me a low-frequency Coca-Cola consumer since then,” one consumer shared.

– For low-frequency consumers, the role of advertising is to build reputation – the role of “persuasion”.

One of the characteristics of low frequency consumers is that they often dislike something in particular. They drink Pepsi as well as Coca-Cola; eat McDonald’s as well as KFC; wear Nike as well as Adidas.

However, they are very important. As an example, a boy chose to eat McDonald’s today perhaps because he liked the toy gift that came with it. A girl drank Pepsi recently just because its new promoter was her favorite singer. Therefore, companies have to devise different advertising strategies to attract these “unbiased” consumers.

– For high-frequency consumers, the role of advertising is to “cultivate loyalty”

For example, you are already a loyal customer of the Coca-Cola brand. Your refrigerator is filled with Coke of all different capacities. You have to drink Coke when meeting friends. If Coca-Cola sponsors the American basketball tournament or invites an idol friend to represent, you will think, “This is the brand that I love” and support even more. Making “loyal consumers” proud is also one of the important tasks of advertising.

Synthesis

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