Coca-Cola: Pushing a Global Program to the Ends of the Earth
Geoffrey Precourt reports from the Association of National Advertisers' annual Masters of Marketing Conference 2008. His other stories from the event include: Jim Stengel: Marketing Lessons from 25 years at P&G
For his full coverage, visit WARC Online's conference blog.
The Coca-Cola Co. made a strong statement about a powerful marketing mandate in July 2007, when it hired Joseph V. Tripodi--who was renowned in marketing circles as a change-maker--as svp/chief marketing and commercial officer. Whatever his attributes might have been, no one could have called him "just another beverage guy" who had worked his way up through the ranks.
He arrived from Allstate, where he'd been CMO and he'd held that same position at a disparate group of enterprises that includes The Bank of New York, Seagram Spirits & Wine Group and MasterCard International. Stints in Paris, Hong Kong and Guam during seven years with Mobil Oil brought him a global perspective entirely appropriate for the world's most beloved brand.
Bob Liodice, president ceo of the Association of National Advertisers (ANA) and Tripodi's host at the organization's 98th annual convention in Orlando, FL, simply stated that Coca -Cola was "in need of a wake-up call" when it summoned Tripodi. And, as the first speaker at the ANA's Saturday-morning session, Tripodi fired off a number of warning shots that brought his audience to full attention.
"You've probably heard that the winds of change are blowing," the Coca-Cola CMO told his ANA audience. "Some of you might have seen it as a soft breeze--not really all that serious. Well, you're wrong. And you better get prepared to change….
"This is my call to action: Don't jump. Don't let the urgent overwhelm the important. Continue to innovate, continue to push the envelope…. When you start to believe your own bullshit, that's the death knoll. Be nimble. Be flexible. Reinvent your business and your brand. Be prepared to fail at times. Be prepared to lead."
Some Tripodi snapshots of the current marketing environment: Investing is out, hiding your money under the mattress is in. Retirement is out; going back to work ("you want fries with that?") is in. Financing is out; cash is king. Risk is out; consistent and reliable is in.
That last observation--the one about trust--is a critical advantage for Coca-Cola, one that can help it ride out even the roughest times. The company has been around since 1866. Every day, it serves 1.5 billion drinks (with 450 different brands) from restaurants, bars, greasy spoons and 10,000 vending machines. Nine hundred thousand employees work in 200 countries. It is the no. 1 sparkling beverage and the world's leader in juice drinks as well as ready-to-drink coffee and tea. The enterprise generates $20 billion of positive cash flow a year.
And, each and every one of those factoids reinforces the perception of trust from a 142-year-old company.
But, as Tripodi advised, change is in the air. And Coca-Cola has radically revamped its advertising from a TV-centric model to a concept of a 360-degree program that extends beyond advertising, but still has to have what the CMO calls a Coke Core Creative Idea at its center.
"It didn't do us any good if someone saw a fabulous commercial one night and, the next morning, found that the local market was all out of Coke." The company had to balance its marketing with shipping and shelf realities. Even more fundamentally, Tripodi said, "we had to move from spray-and-pray to precision marketing." And that meant "alignment of the right message with the right media at the right time."
Tripodi called the Internet the "ultimate democratizer. It's forcing us to change. Siloed countries are out; global tribes are in."
This vision of tribes--of discrete, sharply defined pockets of customers--allows Coke to target youthful drinkers, high-net-worth consumers, urbanite, health enthusiasts, and sustainability activists, no matter where they are. And communicate to each one of them on a consistent basis.
With the global-tribe concept, Tripodi explained, "a young person in New York or Beijing or Shanghai has much more in common with each other than they do with a farmer in upstate New York. "It's not like they're leaving their culture," he continued, "it's just a means of tuning in with another culture in a secondary or tertiary way."
It's not that the global tribalization happens seamlessly: "People tell us the countries that we'll have the most difficulty with are France and Japan. They say, 'Nothing you do in the rest of the world will work for us.' But that's changing. The differences are narrowing. And the youth cultures give us a new window."
The result: a new set of rules for consumer engagement. "Consumers demand value for their time and attention. They want self-expression. Ease of use. And portability is important to them as well." Mobile devices, in particular, have much grater penetration in the rest of the world than they do in the United Stats. In markets such as China, where urbanization has become particularly pronounced, "the need for a better life and for more convenience is even more important…. In BRIC [Brazil, Russia, India, and China], the number of middle-class people is expected to grow by 700 million in the next seven years. Think of that: That's the size of two United States of Americas in less than a decade. And they're all going to want a better life."
For Coke, the global tribalization and the global growth in affluence, said Tripodi, means, "we have to grow sparkling-beverage leadership, accelerate our still-beverage businesses, speed up our innovation, straighten out system capability (we're only as good as our weakest bottler) and leverage our balanced global portfolio."
For Tripodi and the company's marketing operation, that challenge translates into four executional imperatives:
- Leadership: Control Your Own Destiny or Someone Else Will
- Innovate Everything
- Balance Inspirational and Operational Marketing
- Collaborate or Die
Leadership: Control your own destiny of someone else will
Tripodi became the first--and likely only--ANA speaker to reference the American entomologist E.O. Wilson with the observation that, were the rest of the world to take on the same standard of living as the U.S., we would need four planets to keep up with the need for raw materials.
Coke, in fact, does have projects all over the word. But in the pre-Tripodi days, there was no single uber-brand that would cause for the kind of resource-consolidation suggested by Professor Wilson.
"We had a thousand little footprints from activity all around the world," Tripodi said. Every place had its own footprint, and owned its brand." Flashing a Godzilla paw on the screen adjacent to the speaker's platform, the Coke CMO said that the dispersed branding efforts were about to be subsumed under one giant footprint.
"We need to deliver one powerful message to engage a number of different audiences all over the world," Tripodi told his ANA confreres. "It's a matter of living positively by coming up with a communications platform that would engage employees, plants, and consumers throughout the world."
Sustainability will be a core global message for Coke and it will extend beyond fundamental environmental concerns to include the way the company uses water, its packaging, and its workplace standards. An important agenda item will be to focus on the benefits of the beverages, on the benefits of an active lifestyle, and the ease of consumption. "We want our entire system to meet our societal commitments and engage a series of programs using our 90,000 employees."
The result, he said, would create the kind of shared value system that will drive leadership and lead to positive brand differentiation. Engagement will follow both internally as employees worldwide begin to take on the initiative and as the effort begins to engage consumers.
To date, under Tripodi's leadership, the "Live Positively" program already has traction in the company's major markets. And its Beijing Olympic branding efforts likewise tapped into the same global distribution system.
"Stop chasing the Holy Grail," the Coke CMO told the ANA audience. "Everybody in most businesses is looking for the panacea that will solve all their business challenges. This is nonsense. What makes better sense is to figure out how to leverage your core and to innovate at that core."
As an example of core-informed innovation, Tripodi cited the introduction of Coke Zero: "The category was losing relevance. And we went to our core audience, asked them what they wanted, and gave it to them. In a year, we went from nothing to 500 million cases, selling in 102 countries. And, for the brand, our 2008 volume will be up 29 percent."
Products are just one aspect of Coca-cola innovation. "We've not just looked at the product, but its packaging as well," Tripodi observed. In fact, in the summer of 2008, the company's redesign effort won the first Cannes Grand Prix Design Award at the Cannes International Advertising Festival. With bottles, trucks, and outdoor display sporting a new look, the company's line of 10,000 coolers are next in line for a new look--a climate-friendly dispenser that will not only suit the new product design but also reduce potential direct CO2-equivalent green house gas emissions by approximately 99 percent.
Balance Inspirational and Operational Marketing
"This is mission critical," Tripodi insisted. And, to demonstrate his point, he showed three inspirational spots--the first two created in support of the brand's Beijing effort, the third for American audiences.
The first piece illustrates the new marketing initiative for Godzilla-footprint branding with a commercial that ran in markets throughout the world:
For the half-billion Coca-Cola users in China, a celebratory spot featured basketball star Yao Ming--but only at the end of the commercial and only in the contest of the brand:
The third spot, a very American piece that finds its inspiration in the Macy's Thanksgiving Day parade New York City still is driven by brand's core values but addresses Tripodi's concern of what happens when the consumer has "system overload" from watching too many commercials:
Balancing the inspirational appeal of the broadcast work is some tactical, operational work that further embraces the brand's core audience. "Don't let your shopper get lost in the store," Tripodi advised. "Don't let your brand become a commodity." He specifically pointed to the My Coke rewards program that currently has 107 million enrollees, with 1 million PIN codes entered every day. "It's an on-going way to have a dialogue with our consumers, of bringing an interactive aspect to our retention efforts."
In China, he added, a loyalty-and-sales promotion initiative uses mobile phones for couponing for a joint program with McDonald's. The series already has paid off with 1 million unique visitors and a sales-volume increase of 29 percent.
In Australia, a new up-market beverage used targeted audience identification in six cities, with efforts concentrated in university and trendy areas. A "feet-on-the-street" model, it used celebrity endorsers speaking to a narrow audience slice.
"This kind of precision marketing shows the power of our core-influencer strategy," Tripodi explained. "For a brand like Coke, it's really a transformational opportunity. It's a new approach to markets--something very different than just stacking it high and selling it cheap."
The company's "advanced insights into--and segmentation of-- shoppers provides us with a different way to approach our consumer. We're doing everything we can at all points of sale in the store. We're aligning the right brand at the right price point at the right time in the right channels."
For the future of operational marketing, Tripodi said that he envisions both sound and smell sensory appeals in retail environments, extensive in-store digitization, customized cell-phone messages that will help you shop, customized flat-screen messages that will speak directly to you, and tailored products--offerings that will "show what happens when the medicine cabinet meets the refrigerator."
Collaborate or Die
"We need to create value by joining silos," the Coke marketing chief told the AMA. "If we have a bunch of structures that only hold product and do nothing else, they have no value for us. In fact, it's a waste of money if we don't share and scale."
A global design machine, he said, can enable collaboration and deliver global brand consistency. The other side of the equation: The work also has to have market-by-market local customer relevance and still be easy to manage.
"We need to get more precise with our marketing. It's absolutely critical to understand all dynamics and possibilities, to innovate with a purpose across the board at many different levels. Invest in your brand, especially in dry times. Invest in emerging platforms. Be comfortable with failure.
"Go ahead, get to the edge of abyss. Someone will pull you back."About the author: