Coca-Cola's Marketing Strategy: Brand Building and Online Retailers

This report examines Coca-Cola's strategic shift towards brand building and innovation in response to the growing influence of online retailers. The analysis focuses on insights from Javier Meza, Coca-Cola's CMO of sparkling, who emphasizes the critical need to create strong brands to maintain market presence. The report highlights Coca-Cola's move to diversify its portfolio, adopting a test-and-learn approach to launch new products and adapt to changing consumer demands. It discusses the company's restructuring into three brand categories (leaders, challengers, and explorers) and how marketing strategies are adjusted accordingly. The report also touches upon the importance of faster innovation, cultural shifts within the company, and the evolving role of marketers in building brands and fostering consumer loyalty in a competitive market landscape.

““
Coca-Cola: We must keep creating brands or onlineCoca-Cola: We must keep creating brands or online
retailers will winretailers will win
Coca-Cola has put a focus on scaling new brands to drive growth as it looksCoca-Cola has put a focus on scaling new brands to drive growth as it looks
to innovation and takes a test-and-learn approach to navigate a rapidly-to innovation and takes a test-and-learn approach to navigate a rapidly-
changing market.changing market.
ByBy Molly FlemingMolly Fleming27 Nov 201827 Nov 20187:00 am7:00 am
Creating brands and engendering loyalty among consumers is key to success amid the
rise of online retailers such as Amazon, according to one of Coca-Cola’s top
marketers.
Speaking exclusively to Marketing Week, Javier Meza, CMO of sparkling at Coca-Cola,
says: “The only way to remain in business is creating brands. The moment we stop
creating brands then the e-retailers are going to rule.”
He adds: “The moment people stop deciding they want a Coke then Amazon is going
to decide the brand they have.”
Meza was speaking on his first day in the CMO role at a press event in Atlanta, US,
organised by Coca-Cola earlier this month. He has spent more than 20 years at the
company, the last 18 months as vice-president of marketing for Asia Pacific.
He discussed how Coca-Cola is becoming more nimble when it comes to innovation.
For example, in Japan the company is launching two products per week, with each
launch monitored for six weeks before it decides whether to roll it out more widely or
shelve the idea.
The moment the pace of change outside the company is higher than inside, then you start to lose.The moment the pace of change outside the company is higher than inside, then you start to lose.
Javier Meza, Coca-Cola
Meza explains: “One of the things the Japan business has done is to understand very
quickly which products have the chance to be maintained and which have to be
removed.”
Faster innovation is one of CEO James Quincey’s key areas of focus as he looks to keep
the business on top of new trends and changing consumer demands. That has
involved changing the culture of the drinks giant to become more like a startup.
“The moment the pace of change outside the company is higher than inside, then you
start to lose,” says Meza.
READ MORE: Coca-Cola puts focus on scaling new brands to drive growth
He adds: “It’s a change of mindset and that’s what James is pushing us to do and I’ve
seen more and more of that in Coca-Cola. For example, with the Coca-Cola brand
we’ve done Coke with coffee, with ginger and we now have Coke with cinnamon
coming in Europe.
Coca-Cola puts focus on scaling
new brands to drive growth
Coca-Cola launches £5m
campaign as it redesigns
packaging to unify original and
zero sugar variants
How getting rid of the CMO
‘broadened’ Coca-Cola’s marketing
approach
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“The reason we’ve been able to do that is this notion of ‘it’s OK to try new things’ and
if it is not a big success that you don’t have to keep it for years. It’s OK to just learn
the marketplace.”
Coca-Cola has committed to diversifying its portfolio to become “a total beverage
company” in order to align with consumer trends and move away from its core fizzy
drinks business. In its most recent results, organic sales were up 6%, driven by sales
of low-sugar drinks such as Coke Zero Sugar and bottled water.
It now divides brands into three categories – leaders, challengers and explorers – with
the marketing strategy changing depending on the category.
Meza explains: “Coca-Cola has a leadership position so the marketing model for that
brand is not the same as what we want to do with a brand like Powerade because in
most markets it is a challenger. And in some categories we are not even a challenger
we are just exploring.
“That for me is the biggest change in this growth to becoming a total beverage
company, adjusting the marketing models.”
Despite the changes in the marketplace, Meza still believes the job of a marketer is the
same: “You need to build brands”.
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