🎧 The $6Bn Coke Studio Project: How Coca-Cola is Leveraging Human Psychology

Never wondered how Coca Cola got into the music industry with Coke Studio? And how does music help a soda brand? ReadOn!

Alexa, Play Afreen Afreen. 

*Coke Studio Season 9 plays*

Alexa, Pause. 

We've all heard the Coke Studio jingle play before our favourite songs. 

But have you ever wondered why Coca-Cola started Coke Studio?

And how has it impacted the brand? 

Well, after we heard that Coke Studio was returning to India as Coke Studio Bharat, we started digging deep... 

ReadOn! 

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🍹The Origin Story of Coke Studio

Year 2004: Coca-Cola became the market leader of the soft drinks industry, and still wears the crown.

Only other brand that can come close to its sweet success? Pepsi. 

The reason for Coke's success: taste? Naah! 

And there's proof of this! 

Most people actually pick Pepsi over Coke in a blind taste test between the two. 

Um, how does Coca-Cola have a bigger market share then? 

Brand positioning. 

After all, it spends billions on marketing and advertising. 

But in some markets, these ads haven't worked. Result? Pepsi has emerged as the market leader. 

One such market: Pakistan. 

Pepsi sponsored the Pakistani Cricket Board in the cricket-crazy country. This helped it gain more market share and mindshare. 

Now, Coca-Cola obviously wanted to counter this. 

That's when it came up with the idea of Coke Studio to win over Pakistan. 

But why Coke Studio and why music? 

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🤔 Why Coke Studio? 

Music has the power to connect us all. 

It doesn't matter who is listening, a physics teacher or a CEO, Dilbaro gets us all to shed a tear. 

So, why not use this magic of music and create a brand campaign? 

That's exactly what Coca-Cola planned to capture the Pakistani market. 

The best part? This totally went with Coca-Cola's established brand values: unbottling happiness and refreshing the world! 

The problem? Pepsi had captured the music space with the Battle of the Bands. 

So, Coca-Cola had to come up with something different, something unique that would connect with everyone. 

It chose fusion music that would attract everyone, from the little boy learning the guitar to the older grandma knitting sweaters.. 

This worked like a charm! 

Coke Studio didn't just win the hearts of Pakistanis. It won over the entire subcontinent. 

India, Bangladesh, Nepal, everyone was a fan. 

This newfound love increased Coke's market share to 38.8%. It also brought down Pepsi's 80% market share down to 51%.

With Coke Studio songs getting more and more popular (they were featured in Disney's Ms. Marvel), Coke's market share could go even higher! 

While Coke Studio may be just beautiful music for you and I, it truly put Pakistan on the global map. It saved its music industry. 

But this comes at a cost. Is it worth it? 

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💵 The Costs of Coke Studio

Coca-Cola has famously never revealed how much it costs to run Coke Studio. 

Some research agencies estimated that in 2015, it spent about $6 bn (15% of its total revenue) on the Coke Studio project. 

And looks like this was a good investment. 

In most countries where Coke Studio was launched, Coca-Cola has won market share or even emerged as the market leader. 

In fact, Coke actually earns from Coke Studio. 

How? YouTube monetisation! 

Here are its approximate earnings:

Now, this may seem like a small number but the campaign does two things for Coca-Cola:

• Acquire more users and increase market share

• Earn ad revenue from YouTube!

And in a world where people now value experiences over tangible goods, selling a wow! experience makes more sense.  

This is also why it is relaunching Coke Studio in India. 

More and more people today are aware of the harms of excessively sugary drinks. 

A TV ad wouldn't be enough to convince such health-conscious customers to drink soda. 

This is where Coke is betting on human psychology. While your conscious mind will tell you not to drink soda, your subconscious mind will not think twice before sipping Coke while listening to Coke Studio music! 

Plus, competition is tightening up in India. With Reliance and the Tata Group (through its acquisition of Bisleri) both entering the soda market, Coke needs to fight bigger giants. 

But will music be enough to convince India to keep drinking Coke?

Or should Coke focus on healthier alternatives to keep up with the times? 

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