Putting some fizz into drinks marketing

The FIFA World Cup trophy is touring 86 countries to promote next summer’s tournament in South Africa, but corporate partner Coca-Cola is hoping to make the impact of its sponsorship of the event travel even further.

Talking to Marketing Week at the launch of its plans in Zurich last week, Coca-Cola chief marketing officer Joseph Tripodi claims that the brand has plans to reach more than 200 countries through a new marketing strategy.

Tripodi says: “One of the things we’re talking about now is how we evolve as a marketing entity around the world. What we’re going for more and more will be content management.

“Some content will be consumer generated, some of it we’ll buy and some of it we’ll create ourselves. The idea, and this is where our business is really going, would be to flex that content out over different digital endpoints.”

Coca-Cola has already had some success with interactive marketing in the UK and US through its two online portals CokeZone and My Coke Rewards respectively. The relationship marketing websites encourage consumers to gather points attached to purchases that are then swapped for a range of content, experiences and prizes.

In the US, My Coke Rewards has given Tripodi access to 13 million names. A huge number of customers are interacting with the brand and offering the company their details voluntarily. “One million pin codes from under the cap of bottles are entered every day. When you have that kind of database, you can start building a very different relationship from the one you gain through a TV ad,” he explains.

As the relationship with consumers develops, says Tripodi, so the number of possibilities grows. “You start to evolve your thinking about how to engage them, beyond giving them a free T-shirt.”

The success of this digital strategy does not mean that Tripodi is setting aside more traditional marketing methods for Coke’s World Cup sponsorship. While some marketers suggest that digital content provision is now as important as the 30-second TV spot (see Google roundtable, page 26), Tripodi is less bold.

“It depends on which market you’re talking about, but I don’t see the death of the TV ad occurring in the near term. Television is still a great foundation for launching new products,” he claims.

“Having said that,” he continues, “what we’re finding in our developed markets is that the mix is definitely changing in terms of the money we spend on television, social media, digital platforms, out of home and so on.”

Tripodi says Coca-Cola will match its media to the needs of the market and consumer in its sights. “In some regions, it is still a 30-second television model, elsewhere it is more about social networking, consumer relationship and CRM systems used to engage customers with loyalty programmes.”

With the differently developed markets in mind, there are clearly regions where his marketing budget would be spent more effectively than others in leveraging the World Cup sponsorship. Is he crossing his fingers that some nations qualify for the tournament at the expense of others? “I’d be less than honest if I said it doesn’t matter to me whether France or North Korea qualifies. There’s not a lot of commercial value for us in North Korea and generally you would like your largest markets in the tournament.”

Even the thought of less developed markets has its positive side for Tripodi, however. He suggests: “The World Cup can also work for us in markets with little awareness of Coca-Cola, where the actual per capita consumption of Coke is quite low.”

Coca-Cola uses sponsorship properties such as the World Cup in these markets to put the business on what he calls a “different trajectory”. For example, Tripodi claims that the money Coca-Cola spent at last year’s Beijing Olympic Games transformed its business there. “I wish they were great at football in India,” he jokes.

Of course, the efficiency of Tripodi’s use of its FIFA sponsorship will be under immense scrutiny, especially in a recession. Tripodi admits that “the ultimate barometer is that you sell more stuff, right?”. But he says that softer results are also beneficial to the company: “It is also a great hospitality tool, a consumer engagement tool, you can use it to build a consumer database, you can use it for PR, for sustainability and so on. It can be a wonderful platform from which to tell your story.”

It isn’t just the Coke brand that will benefit from the World Cup, says Tripodi, since Coca-Cola owns another 399 brands globally. “You always want to try and use your property strategically to build your business in a different way,” he says. “In South Africa, where our business is so strong, we’re thinking about what kind of legacy we can leave.”

Coca-Cola dominates the South African carbonated soft drinks market, but Tripodi intends to use next year’s tournament to develop the still beverages business there – juices, teas and, in particular, its sports drink Powerade.

“The World Cup property can establish a bigger platform for those brands in targeted markets. I think we’ll probably put a reasonable amount on a global level behind Powerade next year which we haven’t done historically,” he reveals. “So aligning the system behind some key brands for us is really what we view as the way to leverage the property.”

While Coke’s non-carbonated portfolio is enormous, even Tripodi admits that the company’s flagship beverage has an advantage in marketing terms. He says: “It’s easier when your brand has the heritage of Coca-Cola Red. The brand stands for the same thing around the world, the notion of positivity, happiness and bringing people together.”

He has a point. The global campaign Coke launched earlier this year, “Open Happiness”, is now in 80% of its total markets worldwide. Coca-Cola’s consistent brand essence is the dominant reason it has been so successful for decades, according to Tripodi. “You saw last week that we’re still considered the number one most valued brand in the world by the Interbrand survey. Brands that get all schizophrenic and constantly chase the new cool have problems getting people rallied around them on a global level,” he claims.

Marketing the other brands as consistently as Coca-Cola is more of a challenge. “We have a lot of energy drink brands,” he says, “with very different local personalities.” He cites Relentless in the UK and Gladiator in Mexico among others.

Tripodi gives a clue to Coca-Cola’s future strategy, though, as he adds: “We’re trying to clean that up and bring some overall discipline to it.” The process of doing so will involve incorporating the views of management teams from specific markets.

“The last thing you want to do when you operate in a multicountry model is dictate everything out of headquarters, go to the mountain top and hand them the commandments,” he observes. “There needs to be a level of engagement, where people say ‘yeah, I had some input into that and it makes sense to me’.”

Retaining this level of local autonomy and involvement will remain important despite the drive for global consistency. As rival Pepsi works on a $7.8bn (£4.9bn) plan to buy and integrate its major bottlers, Tripodi is convinced Coca-Cola’s less hands-on model is the right one. “We believe very strongly that bottling is best left in the hands of a local distributor. The franchise model is the path of success for us.”

Coca-Cola only takes over a bottler if it underperforms but then will typically install new management, fix the problems and spin it back out. “We don’t want to be in the business of owning and managing bottlers outright. Local bottlers, connected to their communities with local distribution systems and all that infrastructure is a much better play for us.”

Tripodi appears to be echoing the words of his CEO Muhtar Kent when the pair discussed the company’s sponsorship plans on a stage in front of the world’s press. Kent had said: “We can only have a sustainable business if we help create sustainable communities in the markets we serve.”

In the same vein, Tripodi’s sights are set on creating global brands for local communities. Some trick. Is the Coca-Cola Company structured for such fundamentally new marketing business models? Tripodi sighs: “That’s a great question. We’re not yet structured for this way of working in every market. That is part of the journey.”