Defining Marketing for 21st Century

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CHAPTER 1

DEFINING MARKETING FOR 21ST CENTURY

1-1

MARKETING SPOTLIGHT

COCA-COLA

Coca-Cola is the most ubiquitous brand in history. Each day, people in 200 countries around the world drink some 1.2 billion 8-ounce servings of the cola. Marketing for the twenty-first century means leveraging the longtime marketing principles that work, while inventing new ways to stay relevant. CocaCola, which got its start in 1883, has successfully kept its brand relevant for over 100 years. Revenues in 2003 topped $21 billion. Coke’s first president, Asa Candler, instituted many of the marketing tactics that are entrenched principles now. To gain new customers, he printed coupons offering free first tastes of the Coca-Cola drink. To build brand recognition, he gave clocks, calendars, and weighing scales with the Coca-Cola logo to pharmacists who sold the drink. He hired the company’s first celebrity, music hall performer Hilda Clark, in the 1890s. During the heyday of mass-market TV advertising, Coke was the master of the 30-second TV spot. Its legendary “I’d like to buy the world a Coke” and “Mean Joe Greene” ads were rated as two of the best ads ever by Advertising Age. Coca-Cola also expanded overseas. During World War II, when the army shipped Cokes to soldiers in Europe and Asia, Coke cemented its image as the “All-American beverage.” But over time, Coke realized it would need a more local feel in each country. So, although it uses its signature red-and-white wave and lettering worldwide, the company uses different ad agencies in different countries in order to make the brand feel local. For example, the local versions of the “Mean Joe Greene” ad used sports figures famous in those regions, such as soccer stars. Similarly, ads for Coca-Cola in Spain show it as a mixer with wine, reflecting how consumers use the product in that country. Coke also sells a wide range of different-flavored sodas in different countries. Visitors to the company’s museum in Atlanta can try these beverages— everything from cool watermelon (China), to an intensely bitter herbal soda (Italy), to a zingy ginger soda (South Africa). In 2004, Coke launched a beerflavored carbonated beverage in Japan. Coca-Cola now gets two-thirds of its revenues from outside the United States. It’s easier to name the countries where Coke is not: Myanmar, Cuba, and Syria. Everywhere else—including such tricky markets as Pakistan, Cambodia, Liberia, Zimbabwe, and Colombia—Coke is a beloved consumer staple. In fact, the brand is so strong and so entrenched that even the anti-American sentiments of 9/11 and after have not hurt sales. Coca-Cola’s brand valuation actually increased from $68.95 billion in August 2001 to $70.45 billion in August 2003. (By comparison, rival Pepsi-Cola’s brand value is a mere $11.78 billion.) Coca-Cola remains the top

global brand, achieving the top ranking in BusinessWeek’s Global Brand Scorecard once again in 2003. Despite its powerhouse status, Coke must continue to evolve its marketing. For example, the effectiveness of TV ads is declining due to media fragmentation and use of devices like TiVO that let viewers zap commercials. Ads that reached 70 percent of Americans during prime time in the 1960s only reached 15 percent in 2004. So Coke is diverting money previously spent on TV toward more experiential activities. For example, it’s testing Coke Red Lounge gathering areas for teens in malls. The lounges offer exclusive music videos and video games and sell Coke drinks from a see-through Coke machine. In Britain, Coke’s mycokemusic.com Web site lets surfers legally download over 250,000 songs. Chris Lowe, a Coke marketing executive, explained how the company stays on top: “You can never betray the core values of the brand, but you can work to make those values fresh and relevant. If you can’t speak to people in these times, then you become an old icon.” Lowe described the iterative steps of generating a fresh ad campaign: “There’s the...
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