Like never before in its 125-years history, The Coca-Cola Company’s marketing machine is firing on all cylinders. A mere 25 years after the Cola Wars, Coke is clearly choice of this generation. Last year the company’s volume grew by 4%, even though the restaurant business, which Coca-Cola depends on for its huge fountain business, has been weak.
Diet Coke surpassed Pepsi to become the No.2 soda brand, and Minute Maid Milky Pulpy, launched in China, became the first $1 billion brand launched in a developing market. Globally, Coca-Cola is the leader with sodas, juice, ready-to-drink coffee, tea and enhanced waters. It is No. 2 in sports drinks and No. 3 in water.
Wall Street took notice too. While the PepsiCo stock price barely budged and grew by only 2% in the past 5 years, Coca-Cola grew by almost 50%. And, for the 12th year in a row Coca-Cola topped the list of Interbrand’s most valuable brands.
Joe Tripodi, Coca-Cola’s Executive Vice President and Chief Marketing and Commercial Officer was
in New York yesterday, to give the a speech at a global marketing conference, and sat down for an interview. Tripodi joined Coca-Cola 5 years ago from Allstate Insurance, where he was also a CMO. Earlier in his career Joe was a senior marketer with Seagram and MasterCard.
Coca-Cola stumbled 10 years ago, losing share and momentum. How did you regain your footing?
On the Coke side, I attribute it to getting people to believe in the brand, with [former CEO] Neville [Isdell] first, and then [current CEO] Muhtar [Kent] getting behind it and putting it back on track. We were under attack on our soda brands for a while by different people, and that contributed to the loss of momentum. And with the juice business, where we are the market leaders by far, it was a matter of getting better organized on our end and executing better.
Coke has been relevant for 125 years. How do you stay fresh and maintain consumer interest?
It revolves around innovation, whether it’s the packaging or the Freestyle dispensing machines that are able to dispense over 125 different beverages and lets you get the perfect pour, or from a consumer enrichment point of view. And the key is not to be afraid to fail or take a risk, as long as you are willing to learn. You also have to find the emotional connection, and now a cultural connection, to have a point of view and a voice on the cultural leadership aspects of your product. We are not going to solve all the world’s problems, but if we can contribute some optimism and happiness to the way people look at it, then that’s victory for us.
What is your philosophy on innovation?
We call it 70/20/10. We invest 70% of our resources in existing products, 20% in innovations related
to existing products, and 10% in pure innovations.
You operate in 206 countries, more than any other company. What kind of global model do you use?
It’s an 80/20 model. About 80% of the tool kit is created at the center, and the rest gets adapted or adjusted locally. We also have something we call a global charter process. We really didn’t need 30 Christmas commercials, as an example. So we did away with the duplication. Instead we’ll say, “Germany, you come up with the Christmas commercial”, and other countries can then use it or adapt it slightly. I don’t believe that an idea has to come from the U.S. or London. We encourage our agencies
to let the best idea win, no matter the geography.
Global organizations often become ineffective because of silos. How do you get around it?
The trick is to get people to understand that someone else may have faced the same problem that they are now facing, and to get people to share information. We have a sharing portal so people can access knowledge. The key to being competitive is to shorten the learning curve. We also try to move people from culture to culture because that also helps them become more collaborative.
Do you change your marketing approach depending on the size of the brand?
The fundamentals of management remain the same, but we’ve learned that the smaller brands can get lost in the big distribution machine. You have to let them customize their approach and also be patient and give them time to develop.
Postscript: Coca-Cola has its pedal to the metal. Muhtar Kent set the bar high in 2010 with his 2020Vision plan, which calls for doubling revenues to $200 billion by 2020, generating the same amount of sales in this decade as what took nearly 125 years.
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