How Coke shot itself in the foot

Coca-Cola enjoys the distinction of being the most widely recognised brand name in the world, as the world’s best-selling soft drink. In the United States, the company also holds first position in the lucrative bottled water market with its Dasani brand.

In 2004 Coke decided to enter the highly competitive bottled water market in the UK in a big way. It invested £132 million in a brand new bottling plant in Sidcup, Kent, and set its UK marketing department to plan and execute an advertising and PR campaign that would enable it to compete with the many well-known brands already holding the UK market – Evian, Perrier, Volvic, Spa, Pelegrino.

However, although Dasani was like these brands in wanting to grace British dinner tables, it was radically different from them in the way it was produced. The other bottled waters are derived from natural springs. Dasani, is simply tap water that has been first filtered to remove impurities by a high-tech process claimed to have been developed by NASA, and which then has essential salts added before being bottled.

This process may sound a little strange to people used to drinking natural spa waters but it must have seemed a very logical progression to Coca-Cola executives because the company has been selling us flavoured bottled tap water for years. It simply exports a syrup or cordial to bottling plants around the world who add tap water, bottle it and distribute it to local retail outlets.

Naturally the company was concerned about how UK consumers would receive this new product, so it conducted one of the biggest consumer surveys of all time. Men and women of all ages were asked, “Do you care from what source your bottled water comes, as long as it’s pure?”

Not surprisingly, a massive majority of people interviews said that they didn’t care where the water came from as long as it was guaranteed to be pure. Based on these findings, the company went ahead and spent £4 million in the first few months of 2004 promoting Dasani.  The bottles with their blue label appeared in shops, supermarkets and other outlets all over Britain, selling for £1 a time.

But within months, Dasani had been ridiculed off the shelves of British supermarkets and was effectively finished for ever in the UK market.

Upmarket broadsheets like the Guardian as well as the red top tabloids took great pleasure in pointing out the similarities between Dasani Water, bottled from taps in Sidcup and “Peckham Water” bottled by Del Boy in TV sitcom “Only Fools and Horses”.

It quickly became obvious that the market research survey had asked the wrong question. It wasn’t the origin that mattered. The real question was; “What would you say if I told you that the bottle of water you have just paid a pound for is simply tap water?”

Coke removed its product from the supermarket shelves and later removed it from the UK market completely claiming that traces of a carcinogenic chemical has been found in it.

In my opinion this claim was even more stupid than the original market research campaign. I suspect it was an excuse, based on the withdrawal of Perrier water from the shelves a little earlier, for the same reason. There is no doubt a grain of truth in the story in that practically every substance is carcinogenic in enough quantity. But I believe this was an excuse cooked up by marketing to make it appear the company was acting responsibly in the interests of consumers. This may well have seemed preferable to admitting that it was withdrawing Dasani because of its own marketing incompetence, not to mention its arrogance in thinking it could sell us tap water at a £1 a bottle.

There are some very useful PR lessons to be learned from Coke’s handling of Dasani water.

If you are going to survey your potential market with a study to gauge demand for a new product, make sure the questions are framed and asked by outsiders who have no axe to grind.

By all means reinvent and update your existing products to extend market penetration, but don’t assume that what has always worked in the past must necessarily work in today’s market, or what works in your region will work abroad.

If you have a weakness in your product, don’t imagine you can compensate for it by PR methods — you can be sure that your competitors will shop you to the media. In Dasani’s case, the company overlooked some obvious and simple factors that became obstacles later on. Chief among these was the fact that the word ‘pure’ has a legal definition in Britain in relation to food and drink; it means with nothing added and nothing taken away.

Yet Dasani was filtering the tap water to remove what it described as ‘impurities’ and was adding what it claimed were ‘essential’ salts. These acts alone meant it could no longer use the word ‘pure’ on its product. That the world’s largest drinks manufacturer did not know this defies all comprehension.

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