---
title: "Coca-Cola Sells So Well, Why Does It Still Advertise?"
description: "Many people wonder why well-known brands like Coca-Cola continue to advertise heavily. This article explains that advertising is crucial for maintaining brand awareness, reinforcing memory, and driving sales, using examples like Jianlibao and the Ebbinghaus forgetting curve."
author: "卫夕"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-05-12"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/coca-cola-sells-so-well-why-does-it-still-advertise-6bd2c761/"
markdown: "https://xinjignxiao.com/en/articles/coca-cola-sells-so-well-why-does-it-still-advertise-6bd2c761.md"
original_source: "https://mp.weixin.qq.com/s/BfeZvIeZilf3ycOl_Nnfcg"
translation: "https://xinjignxiao.com/zh/articles/%E5%8F%AF%E5%8F%A3%E5%8F%AF%E4%B9%90%E5%8D%96%E5%BE%97%E9%82%A3%E4%B9%88%E5%A5%BD-%E4%B8%BA%E4%BB%80%E4%B9%88%E8%BF%98%E8%A6%81%E7%BB%A7%E7%BB%AD%E6%89%93%E5%B9%BF%E5%91%8A-6bd2c761.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/coca-cola-sells-so-well-why-does-it-still-advertise-6bd2c761/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Coca-Cola Sells So Well, Why Does It Still Advertise?

> Many people wonder why well-known brands like Coca-Cola continue to advertise heavily. This article explains that advertising is crucial for maintaining brand awareness, reinforcing memory, and driving sales, using examples like Jianlibao and the Ebbinghaus forgetting curve.

△2018 China (Luohe) Food Marketing Innovation Summit and the 3rd Leisure Food Manufacturers and Distributors Precision Matchmaking Conference
Free registration is in full swing, scan the QR code for details.
Why do many household-name brands continue to invest in advertising?
In many people's view, brands like Coca-Cola that are already household names—could they stop advertising? If they stopped, would people really stop buying Coca-Cola? Why does it still spend so much money on advertising as always? Today, let's discuss this issue together:
The Story of Jianlibao: "Household Name" Is Never Reliable
We say Coca-Cola is a household name precisely because of its continuous advertising. However, "household name" has never been reliable—let's look at a typical example of a former "household name"—Jianlibao, once called "Oriental Magic Water," was a miracle in the domestic soft drink market.
Its outstanding advertising helped it reach the top spot in the domestic beverage market:
**In 1997, Jianlibao's sales reached an astonishing 5.5 billion yuan, equaling the combined sales of Pepsi and Coca-Cola in China.**
At that time, the orange canned Jianlibao was a collective memory for many born in the 1980s; describing it as "household name" is not an exaggeration. But now, for those born after 1995 and 2000, many don't even know what Jianlibao is.
The reasons for Jianlibao's decline are complex and cannot be attributed solely to stopping advertising, but it objectively provides a perfect case to answer this question—a once household-name brand, after years without advertising, consumers forget it.
In fact, Jianlibao hasn't gone bankrupt; it's still on sale. Now, when Coca-Cola, Pepsi, and Jianlibao are placed side by side on the shelf, how many consumers would choose Jianlibao?
For many young consumers, the name Jianlibao no longer evokes any associations.
Jianlibao is a typical phenomenon to explain brand advertising. So what is the essence of this phenomenon?
Let's continue:
The Forgetting Curve: People Are Always Forgetful
German psychologist Ebbinghaus's forgetting curve tells us:
**The speed at which people forget something is not linear; they forget quickly at first, and then the speed of forgetting slows down.**
The theoretical significance of this finding is that any memory must be reinforced repeatedly before it is forgotten. Advertisers deeply understand this principle—they repeatedly deepen impressions before people forget, to establish a solid image; otherwise, others will forget you.
Whether in the era of TV advertising or the current internet advertising era, brands care about one metric when placing ads: frequency of exposure.
Typically, an advertising campaign runs on TV for four weeks and then stops for two weeks. In internet advertising, the same audience is covered at least three times. The underlying logic is to use the memory curve to reinforce impressions before you forget.
According to Nielsen data: **An average American is exposed to more than 120 advertising brands.**
How to stand out among so much information? Advertising is a direct and effective means.
Even if impressions are repeatedly reinforced, if there is no reinforcement for a period, they will gradually disappear from consumers' minds.
Let's take another example: Li Ning, the former gymnastics prince, was an idol for all Chinese people in the 1980s; calling him a household name is not an exaggeration.
However, more than 20 years later, how many people still remember Li Ning as a living gold medal athlete?
Ask the younger generation; many only know Li Ning as a sports brand and don't know the former national idol and world champion.
If Li Ning were willing, how many sports brands would still want him as a spokesperson?
So Li Ning long recognized people's forgetting curve and early on turned his name into a sports brand.
Similarly, Yao Ming, without NBA game exposure, has inevitably seen his popularity decline in recent years; over 60% of NBA stars go bankrupt within five years of retirement, partly due to their lifestyle and financial management, but it also illustrates how much commercial value drops with reduced exposure.
The Mechanism of Advertising: Inform, Persuade, Remind, Reinforce
For any product, its advertising audience can be divided into heavy users, light users, and non-users. Advertising works differently on these three types. According to classic advertising theory, advertising works through four aspects: informing, persuading, reminding, and reinforcing.
**1. For Non-Users**
**For non-users, the role of advertising is to cultivate awareness.** That is, the "informing and reminding" function of advertising.
> "We have a new flavor!"
>
> "We have a new spokesperson!"
>
> "We have new packaging!"
>
> "We have a new marketing theme!"
>
> ......
These all need to be communicated to consumers through advertising.
Before 2014, I didn't have a habit of drinking cola; for Coca-Cola, I was a non-user. But one noon in the summer of 2014, I came out of the swimming pool in Haidian, thirsty and hungry. The newsstand nearby was promoting Coca-Cola's lyric bottles. I picked one with the lyrics "The original dream will surely be achieved," drank it, and felt extremely refreshed. After that, I became a light user of Coca-Cola.
Non-users like me, seemingly "accidentally" converted, are seen as inevitable by Coca-Cola's advertisers—every day, thousands of non-users convert to light or even heavy users, and this "accidental" conversion is actually the inevitable result of long-term advertising influence.
In the summer of 2013, Coca-Cola's nickname bottle campaign increased sales by 20% year-on-year. This conversion is very important. Even in the US, a major cola-consuming country, 45% of households do not consume Coca-Cola. If advertising can reduce that percentage by just one point, it would be extremely successful for Coca-Cola.
**2. For Light Users**
**For light users, the role of advertising is to cultivate favorability.** That is, the "persuasion" function of advertising.
One characteristic of light users is that they often don't have a stable preference for a specific brand; they might drink Pepsi or Coca-Cola; eat at McDonald's or KFC; wear Nike or Adidas.
However, they are very important. Because consumers have many choices, light users, although they are the long tail of brand consumption, actually account for a very high proportion of brand sales—just as no one eats McDonald's every day, but people occasionally eat there.
Yet, it is these numerous occasional consumers that support McDonald's popularity; the role of McDonald's advertising is to ensure that when you think of grabbing a quick bite, it's within your consideration set.
When I first graduated, I worked with a young editor born in the 1990s. Every time we had a meal, she would choose Pepsi. Even if the waiter gave her Coca-Cola, she would specifically ask to change it to Pepsi. I asked her why. She said: "**Because Pepsi hired Wu Mochou as spokesperson. I like her. I know many people don't like my Mochou, but Pepsi still hired her, so I've become a lifelong Pepsi fan!**"
Consumers are like this—they have many reasons to like a brand, so advertising agencies must devise different strategies to influence these diverse consumers.
**3. For Heavy Users**
For heavy users, the role of advertising is to cultivate loyalty. That is, the "reinforcement" function of advertising. At this point, advertising reinforces the pride of loyal consumers.
For example: You are already a loyal Pepsi consumer; your fridge is stocked with various sizes of Pepsi, and you always drink Pepsi at gatherings. If Pepsi sponsors the World Cup, or hires Leonardo DiCaprio as spokesperson, or releases a viral video with great reviews, you would think: Yes, this is the Pepsi I love!
My cousin bought a Xiaomi phone in 2015. That year, Xiaomi sponsored the Spring Festival Gala. On New Year's Eve, my cousin was very excited to see Xiaomi's ad. This excitement came from his belief that his choice was finally recognized by more people and moving toward the mainstream. This is the pride advertising brings to loyal customers.
Making loyal consumers proud is also one of the important missions of advertising.
Competition and Scale: If You Don't Advertise, Others Will
Coca-Cola operates in the FMCG market, which implies high purchase frequency. At the same time, unlike products like shampoo or cosmetics that emphasize functional aspects, Coca-Cola and Pepsi have little differentiation in product function or taste.
In 1970, Americans conducted an experiment; less than 10% of people could taste the difference between the two colas. That is, brand is an important bridge for purchase, and advertising is one of the most important ways to build brand.
**The reason I say "one of" is that there are exceptions, such as Lao Gan Ma, which builds its brand through its unique taste, and Haidilao, which builds its brand through superior service; neither advertises.**
The beverage market is extremely competitive, and maintaining scale through advertising is crucial for Coca-Cola. For a company of Coca-Cola's magnitude, a simple rule is: in the short term (with fixed costs unchanged), scale determines profit margins because marginal costs definitely decline in the short term.
Let's use a simplified model—suppose Coca-Cola's fixed costs are 100 yuan (including factory, R&D, etc., which don't vary with sales volume), producing 200 bottles a year, with variable cost per bottle at 1.5 yuan (the material cost of one bottle). Then total cost is 100+200*1.5=400, and average cost is 400/200=2 yuan.
If each bottle sells for 2.5 yuan, it can earn 0.5.
If advertising stops and sales drop from 200 to 100 bottles, fixed costs remain unchanged, total cost becomes 100+100*1.5=250, and average cost becomes 250/100=2.5.
If still selling at 2.5, then no profit; profit margin becomes 0.
This is the significance of scale in the short term.
Of course, reality is a thousand times more complex than this model, but in any case, for an industry, scale and share mean bargaining power.
When your scale and share are small, your bargaining power with upstream suppliers and downstream distributors is very weak; in such cases, making profit becomes very difficult.
If you don't advertise, others will, and their scale will crush you; unless you change your model to be profitable at small scale, maintaining scale through advertising is an inevitable choice.
Source: Everyone is a Product Manager (ID: woshipm)
-END-


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671