Magazine

How Coke Can Bring Back The Magic


My time at Coca-Cola Co. (KO

) began during Roberto Goizueta's last years, outlived M. Douglas Ivester's stint, and ended with Douglas Daft's slice-and-dice job ("Coca-Cola: The real problem," Cover Story, Dec. 20). I remember the early feeling of magic within the company, how wonderful it felt to produce and market a product loved and adored worldwide. Unfortunately, Coke, by putting long-timers out to pasture early, laying off thousands, and forcing others out, eliminated those who knew how to make that magic sparkle, reducing the company to just another soft drink manufacturer fighting for share.

Once, I mentioned to a marketing exec how my friends wished Coke would air the nostalgic Mountain Top and Sprite Christmas ads -- strong connections with my friends' childhood memories of warm and fuzzy holidays. "Can't do that," came the response. "It's off target." It was obvious to me even then that the company had lost sight of how special it was in consumers' minds, acting on marketing research numbers rather than on the desires of its consumers' hearts and souls.

John Huston

Marietta, Ga.

Your story on Coca-Cola made me perplexed. After reading and rereading it, I made up my mind that, too often, the financial community appraises companies based on "emotional" factors. Coke's business performance is measured by stock and growth figures, and the financial community blames Coke's sole emphasis on the carbonated drinks business.

In my opinion, the "real" business figures in your table "Coke vs. Pepsi" tell another story: Coke with its $4.3 billion in earnings on $21 billion in sales is still a better-performing company than PepsiCo Inc. (PEP

), making $3.6 billion on $27 billion in sales. And I bet Warren E. Buffett thinks so, too.

Ronald Appeltants

Hasselt, Belgium

In his otherwise excellent discussion of the strategic difficulties facing Coca-Cola, Dean Foust takes a cheap shot. He suggests that Coke's decision to spin off its U.S. bottling operations "in some ways" prefigures Enron with its whimsically named special-purpose entities such as Chewbacca. What exactly "in some ways" means is left unexplained.

Former Enronoids are looking at serious jail time for what went on at that company, and it cannot have escaped a writer as skilled as Foust that he was indulging in a pernicious form of guilt by association. Pernicious, and, by the way, wholly unproven.

John Endean

President

American Business Conference

Washington As for IBM's (IBM

) decision to sell its PC business to Lenovo Group Ltd., IBM is disposing of a money-losing business ("China goes shopping," News: Analysis & Commentary, Dec. 20). For Michael S. Dell to be critical of this sale when his company's products are sourced by overseas suppliers is a little disingenuous. At least IBM has retained a minority interest in the new company. I don't believe other companies like Dell Inc. (DELL

) or Hewlett-Packard Co. (HPQ

) can say that.

John Ngai

Rego Park, N.Y.

I find Chinese business efforts at branding rather ironic considering their government's blatant disregard for trademarks and intellectual-property rights. Perhaps the Chinese government will finally hear the cries for protection of these rights if they are from within.

Peter C. Plaia

Jefferson, La.

Thousands of companies are trying to achieve the public recognition and brand loyalty that IBM has enjoyed from its PC and laptop business. After adding the value of its strategic advertising impact on customer and prospect awareness to its aftertax, bottom-line performance, the purchase of IBM's business appears to be a brilliant strategic move by Chinese-owned Lenovo and a blunder by IBM.

William A. Pauwels Sr.

Franklin Lakes, N.J. In "Why consumers hate mergers" (The Corporation, Dec. 6), you note two seemingly contradictory survey results about BP PLC (BP

): Your finding is that customers feel they get 13% less value in terms of price and quality of service, whereas BP's study shows that customers are more satisfied with service than before. This discrepancy is attributable to two common factors: First, when companies lower their product or service quality, raise prices, curtail distribution, or cut advertising, customers tend to defect. The ones who remain generally have the most positive attitudes, so the new average ratings tend to rise.

Second, the meaning of service changes over time. Attendant service? Self-service? Repair and maintenance service? Car wash? Food shop? Ease of payment? Ambience? As fewer service stations have mechanics or technicians, as full-service and dealers have evolved toward obsolescence, as credit-card accepters are now nearly universal, as bank cards have replaced oil company credit cards, customers change their referents, with many finding the service concept irrelevant.

Joseph M. Kamen

Flossmoor, Ill.


Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus