Coke looks to ads for a new high

Coca-Cola launched its new global advertising campaign in SA last week – the fifth market in the world to be hyped as part of Coke’s revitalised image.

Julian Bryant of Coke SA said: “We need to find that voice again – to take a stance, be it about war, or HIV/Aids, or other topics that matter.”

Some new ads already flighted overseas use humour, which has been missing from Coke’s advertising strategy of late. Others have a 1960s retro feel.

The campaign for the 120-year-old brand has been three years in the making. Instead of being directed from Atlanta in the US, the international headquarters of the Coca-Cola group, the process involved interactions with Coke brand managers around the world.

The aim was to gather input from various markets and perspectives to inform the process and gather insights.

At Coke’s advertising launch in the US at the beginning of the year, Mary Minnick, president of research for Coke’s global marketing, innovation and strategy, said in order to push the product and the brand, “traditional media is not enough”.

She said TV advertising has grown from 800 to 8000 ads daily in the US and the increasing clutter makes the medium a less effective tool to advertise the company’s core brands.

For the first time, the brand is moving into digital marketing. First prize for the group would be for the ads to inspire consumers to the extent that they start sending them around via mobile technology.

But Amanda Broughton, Coca-Cola’s marketing director in SA, said a viral campaign cannot be forced – it happens spontaneously. Bryant said the campaign will run until 2010.

Coke is pushing extra funds into marketing and more beverages. Part of the strategy is the creation of Coke Bl’k, a derivative of the famous brand containing coffee essence.

Coke Bl’k was launched first in France, then the US (both big coffee-drinking markets), and last week in Canada. It is likely to debut in SA next year.

Website Marketing Daily said Coke is hoping the new advertising campaign will restore lustre to its brand and boost sagging sales. Sales of Coca-Cola Classic in the US fell 2% by volume last year, contributing to a 10% decline for the brand over the past five years. CNNMoney said Coca-Cola is threatened with becoming second in market value to arch rival PepsiCo for the first time. ‘ Business Times

Coke’s current market share is $100-billion, not much higher than Pepsi’s $98.2-billion.

Last year, Coca-Cola increased its $2-billion global marketing budget by $400-million.

Advertising spending on Coca-Cola Classic in the US, the world’s largest soft-drink market, dropped to $124-million last year, down from $210-million in 2000, according to TNS Media Intelligence.

Both Coke and Pepsi see declining sales trends in their key domestic markets. Consumption patterns show a shift from non-carbonated drinks to juices, energy drinks and water.

Doing well outside the US is important for Coke because 80% of its operating income comes from international markets.

Only 6% of Pepsi’s beverage operating income is derived outside of the US.

CNN reports that Pepsi’s better-performing snack foods division provides the company with a buffer against a challenging beverages market.

‘ Business Times

September 2006
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