Coca Cola seeks Europe solution

If ever there was a company typifying the ‘think global, act local’ slogan it is Coca-Cola. It has defied the current orthodoxy favoured by other global brands (notably IBM and Colgate-Palmolive) and decentralised its advertising roster. More than 30 agencies, including the likes of Bartle Bogle Hegarty and Wieden & Kennedy, attempt to bring a creative local flavour to the global message.

The two people most closely associated with this ad strategy are Coke’s worldwide marketing director Sergio Zyman and head of worldwide advertising David Wheldon.

By almost any measure, the formula has been a success. Coke is steadily drawing away from its principal rival Pepsi and now, according to one source, accounts for 42 per cent of the US carbonated soft drinks market – a vast fiefdom.

So why is Wheldon dropping his advertising responsibilities to become Coke’s director of marketing in Greater Europe? The division between advertising might ordinarily seem no more than a semi-permeable membrane; but in the world of Coke a move at this level is highly unusual. Especially when we recall that Wheldon is very much an advertising man: in his last incarnation he was managing director of Lowe Howard-Spink in London. All of which has prompted some people to ask whether this is a promotion, or a poison chalice.

Certainly, Wheldon’s new role (which has been vacant for some months) won’t be a cake-walk. A clue to its importance is given by Coke’s third-quarter results, out last week. Europe is something of a blot on an otherwise rosy global landscape. The region experienced only one per cent volume growth over the same period the previous year, and in two major markets – the UK and Germany – volumes were dangerously down.

Whatever else may have been responsible for this dented performance, it was not the principal competition. Pepsi, despite the megabucks poured into Project Blue earlier this year, recorded a 13 per cent decline in its own volume figures in the UK, according to Nielsen. Both companies blame the temperamental weather. But this simply isn’t good enough.

Coke, for example, has massively increased its marketing spend in the UK to fend off the own-label threat. It should, in any case, have been annus mirabilis for Coke, what with its 15m sponsorship of Euro 96 and a somewhat bigger commitment to the Atlanta Olympics.

Coke’s very real PR coups in Russia, Venezuela and Brazil have given the company an impression of unstoppable momentum. Perversely, however, these will serve to highlight any bad news coming out of Europe. The task ahead for Wheldon is awesome: but so is the reward if he finds the right solution.

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