Monday, June 12, 2006

Why Coke Isn’t It Any More

What do you get if you mix Mentos mint candies and Diet Coke?
A. a science experiment
B. a liquid mess
C. a marketing coup
For Mentos, at least, the answer is a resounding C.

Thus begins an article in today’s Wall Street Journal describing what, for any ordinary consumer products company, would be a chance to jump on the hottest trend in American popular culture—a cult web video hit—and run with it.

As the article goes on to explain:

Hundreds of amateur videos have flooded the Internet in recent months showing an oddball experiment: people dropping the quarter-size Mentos candies into bottles of Diet Coke. The combination results in a geyser of soda that shoots as high as 20 feet into the air.

"It's a funny thing to do," says Sidney Shapiro, a 26-year-old student in Israel, who posted his film on Google Video last month.

Now, the folks at Mentos—a hard-shelled chewy mint candy enormously popular in Europe—are delighted. They figure the free publicity is worth “over $10 million” in the U.S. market, which amounts to more than half the company’s actual annual marketing spend here.

And Coke? Well, the folks at Coke demonstrate precisely why Coke is no longer—as its old commercials used to claim—“It.”

Despite the fact that the amateur scientists behind the 800-plus web videos of the gushing soft drink bottles have determined that for some reason Diet Coke works best, a “Coke spokesperson” told the Journal:

“We would hope people want to drink [Diet Coke] more than try experiments with it.”

Yes, that’s right: Coke has witnessed a web-based phenomenon among precisely the target demographic that consumer products companies spend billions to reach—which might, if harnessed with an imaginative marketing campaign, help turn around a flagship product that has flat-lined in recent years…not to mention a stock price that has flat-lined since 1996.

And Coke has dismissed it out of hand.

Jeff Matthews
I Am Not Making This Up

© 2006 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.


JFB said...

Wow. What a lost opportunity. I bet Pepsi jumps on it with their legion of gen X'ers. I'm sure the combo-reaction will work the same.

Harry DeMott said...

Funny Jeff. I had exactly the same reaction when reading the article this morning on my unusually packed train to the city. Here's a great opportunity for some quick hitting buzz, but Coke's reaction falls completely flat. Instead of spending some marketing dollars geting more imaginative content on, looks like Coke is going to teach the world to toe the corporate line. They seem to have forgotten that the first rule of getting people to buy your product is to give them a reason to try the product - and this Mentos thing has to appeal to a tough to reach demo that has sent Hansens through the roof.

Aaron Koral said...

Jeff - Your post brings to light a more interesting phenomenon: when will companies like KO and TWX realize that the "tipping point" of consumer-led marketing trends(i.e., the use of YouTube, for example, to display amateur music videos or product placements), as opposed to corporate-devised advertisements and product endorsements, is here to stay? Just wondering....

Harry said...

Great post, Jeff. It is polite to link to your source.

cargocultinvestor said...

Not a big fan of coke, either the product or the stock. But this is America. You can be sued for astronomical sums if a customer spills a hot beverage on themselves. Seen to be encouraging young aspirants to the Darwinian Awards to use your product in an explosive way would give any American legal department fits. Perhaps Mentos, being British, is the one that doesn't get it.

Aron said...

Yes. And for that reason superglue manufacturers could get sued if someone sticks their hands together. Or aerosol companies could get sued for people making 'blowtorches' using an aerosol and a lighter.

Don't be stupid. America may be litigious, but no-one would be dumb enough to sue for hurting themselves after their own stupididty. And if they did, they couldn't win.

Well done on thinking that through so well.

Creekree said...

Wait a second, aron, there WAS an actual case where some old woman sued mcdonalds because spe spilled her coffee on her legs and burnt herself. i dont remember the exact sum she got out of it, but it was a TREMENDOUS amount of money.
go figure.