Audience: Could you elaborate a bit more on what you call the “consumer’s mind” and the “nature of the product”? …
Warren Buffett: You know, when you work in consumer products, you want to know or think about how many people around the world are thinking about your product now, and what’s going to be in their minds five, 10, 20 years from now.
Now, virtually every person on the planet, probably 75% of the people on the planet, has some sort of image in their head of Coca-Cola.
The word “Coca-Cola” means something to them. You see, RC Cola means nothing to virtually everyone in the world.
That’s true for RC owners, but it’s also true for bottlers.
But everyone has something to think about Coca-Cola. And it’s overwhelmingly advantageous. It is associated with a pleasurable experience.
Now, some of that is by design. In other words, that is your happy place. Located at Disneyland and Disney World. And it’s also at the ballpark. And I might add that there are smiles everywhere, including Berkshire Hathaway meetings. (laughs)
And in my mind that position is pretty firmly established. And it has become a staple among people in nearly 200 countries around the world.
After a year, it will be established in the hearts of more people. And the overall position is slightly, slightly, slightly different. Ten years from now, the position may change a bit.
It’s a share of the heart. It’s not market share. What is important is sharing the mind.
The same goes for Disney. Disney means something to billions of people. And if you’re a parent with several young children and you have 50 videos available for purchase in front of you, you’re not going to sit down and preview each video for an hour and a half before deciding which one to show your kids.
You must have some idea about Disney. And you don’t know anything about ABC video company. Or don’t know about anything else. I don’t even know about the 20th century. Nothing is known about Paramount.
So this name has meaning to billions of people, including many people outside this country. And the meaning is overwhelmingly positive. It is reinforced by other activities of the company.
And just think how much someone would pay if they could actually buy that heart of billions of people around the world. You can’t do that.
You can’t do that with a $1 billion advertising budget or a $3 billion advertising budget or 20,000 super salespeople.
