Geoffrey Precourt, WARC
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.
Innovate Everything
"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.
This is an excerpt from the WARC blog following the ANA Annual Conference. For more, click here.
