Coca-Cola aims for research revolution

25 March 2010

NEW YORK: Coca-Cola, the soft drinks giant, is revolutionising its approach to market research, as it seeks to gain a more in-depth understanding of its customers.

Speaking at the ARF's Re:think 2010 Conference – covered in more detail hereStan Sthanunathan, Coca-Cola's vp, marketing strategy and insights, said brands must change their models in this area.

"Our biggest challenge is to make sure that we keep pace with what is going on around us. And, in the past few years, we've all been moving at an incredible pace," he argued.

"The whole subject of transformation is front and center. We're not going to sit here and debate it. It's an imperative. It's not an option."

More specifically, Sthanunathan suggested that marketers need to make the shift towards anticipating the requirements of their customers in a manner that is both formalised and "predictable".

"It's all about how we delight costumers in a completely sustainable way," he argued. "The role of agencies should not be very different … to anticipate and meet the needs of consumers."

"It's not about following the change as quickly as possible – that's being reactive. It is about helping your company to shape change."

In order to achieve this goal, consumer insights specialists will need to radically rethink their traditional techniques, which typically emphasise understanding previous or present behaviour.

"We spend 80% of time on 'rear-view' research – brand-health tracking, validation, and risk-avoidance research," Sthanunathan stated.

"On top of that, we spend 80% of our remaining time debating report cards. And, whether it's good data or not, it's all about explaining the past."

"No company has become great by using the past to predict the future. Companies become great by dreaming of the future and then taking the company there."

This imperative has been driven by the growth of social media platforms such as Facebook and Twitter, which provide a huge amount of real-time data, and new ways to engage consumers.

"Inspiration. Insights. Activation. People want it right here and right now. And, as market researchers, we have to adapt to the needs of the people," said Sthanunathan.

"We have to do it collectively – the agencies and the clients who buy their services," he added. "Very often, when we talk to agencies, we find that the alignment is missing."

One example of how Coca-Cola has leveraged this new environment is its Vitamin Water brand, which relied on members of the public for its formulation and when it first hit store shelves.

"Vitamin Water took less than three months to develop and launch a new product by using a simple application on Facebook," Sthanunatha said.

"With the support of 1.74 million Facebook fans, the product actually was launched by its consumers. That's a new way of thinking about marketing and of taking research to a different level."

Devices such as Apple's iPhone also offer unique opportunities for gathering information about how people live and shop, particularly for an organisation with the reach of Coca-Cola.

"The Coca-Cola Company has hundreds of thousands of employees around the world and it would be great to promote them all to become ethnographic researchers," said Sthanunathan.

While the current climate may seem unique, an ability to let go of certainties, which has depicted so much corporate activities, harks back to the most important moment of Coca-Cola's history.

"One hundred and twenty-four years ago, if we'd used the kind of research and product testing we do today … a fuzzy brown-coloured liquid with a different kind of taste never would have been launched," Sthanunathan concluded.

Full coverage of the ARF's Re:think 2010 Conference – written by Geoffrey Precourt, Warc's US Editor – is available here.

Data sourced from Warc