Advertising And Promotion Campaigns Of Coca-Cola In The European Union Essay, Research Paper

Advertising & Promotion Campaigns of Coca-Cola in the European Union

Executive Summary 1

Coca-Cola, which was named Beverage Industry’s 1999 Company of the Year, has embraced a decentralized operating philosophy, recognizing that each market in which they operate has “different demands which must be met in unique ways”1. Coca-Cola Enterprises (The European bottler for Coke) CEO Henry Schimberg has stated that although they have well-defined general policies, much of the responsibility to succeed and make decisions has to come from each local market, not headquarters in Atlanta.2

While it may seem that firms have to choose between the extremes of a global vs. customized approach, in practice the method used is often a combination of both, “blending uniformity with individual area differences”.3 Coca-Cola, for instance, has previously had a successful international soccer-star campaign which featured the same common theme, but with a different celebrity athlete for each targeted country. Such pan-European advertising is becoming increasingly popular and common. 4 This strategy has built a strong global brand awareness not only in Europe but throughout the world. Based on this strong brand awareness, Coca-Cola tailors each ad to a specific country to achieve global sales success through local penetration.

EU Promotional Campaigns 2

Coca-Cola uses a multitude of promotional vehicles to attract new coke drinkers and retain current ones. One of the strongest promotional venues has been through television and sporting events (mainly soccer) but in the nineties the internet is strongly becoming a popular means to increase promotions.

Sports Promotion

Coke takes a global approach to its sports promotion. In 1997 they established managers for each of the different sports that Coke sponsors worldwide.5 This global coordination effort helps to oversee major marketing campaigns, however it also still allows unique advertising techniques and messages to be conveyed in each country.

Television

Recently, Coca-Cola has hired the services of TeleVest, a New York media agency specialized in purchasing television airtime, to select and locate TV series to purchase or sponsor in order to more effectively reach European television viewers. By purchasing programs, Coca-Cola will be able to license them to various markets with contracts stipulating that Coca-Cola receive a certain amount of free ad-time spread across other shows on the station. This strategy seems attractive especially as most international markets have national networks (such as TF1, A2, or FR3 in France) but no local stations. 6

Website Promotion

As expected, Coca-Cola has not just a European website, but several websites for certain countries in the EC; the countries offering such sites are France, Belgium, Denmark, Spain, Germany, and Norway. Upon examining these various sites, we concluded that they are another example of Coca-Cola’s decentralized marketing campaign. Each country’s management team has the freedom to market itself the way they want, as long as certain guidelines are followed. In France, the site (www.coca-cola.fr) is presented as a web-zine, offering the latest in music and sports-related news, obviously targeting a young public; In Spain, the site (www.siempre-on.com) offers coupons which you can print out at home, indicating that Coca-Cola reaches a price conscious audience. Denmark’s site (www.coca-cola.dk) is primarily a contest site currently featuring trips to Australia. Thus, Coca-Cola customizes its web campaign for each country in order to more effectively tap into people’s feelings, integrating any culturally relevant issues or preferences into the sites’ presentation.

Specific Promotional Activities

The following are specific promotional activities that are currently being done in the various countries in the European Union.

Spain

Telefonica Interactiva entered into a promotional arrangement with Coca-Cola Espana aimed at boosting Teleline’s user base. Telefonica Interactiva, Internet subsidiary of Telefonica, has entered into a promotional arrangement with Coca-Cola Espana aimed at boosting Teleline’s user base. Under the deal, people who buy 20 half-litre Coca-Cola bottles will receive a year’s Internet access for only Pta4k Vs Pta13k/y on average at present. 7

Coca-Cola launched “Dress-up with Coca-Cola Light” promotion in Spain in co-operation with clothing retailer Cortefiel. A consumer who buys the soft drink at a bar can have a special card marked by the waiter, building up points giving discounts of up to 20% at outlets of Cortefiel’s Springfield and Women’s Secret chains. The promotion was created by Think for Sale and is supported by an outdoor ad campaign and leaflets. 8

Coca-Cola started “Suma Oros” promotion in Spain with French publisher Hachette. Consumers can trade in coupons from Fanta bottles for subscriptions to Hachette magazines including Elle, Diaz Minutos, Regazza and Quo; the promotion is handled by McCoy and supported by TV and print from McCann-Erickson. 9

Turkey

Promotional activities also include bottling alternatives. For instance, Coca-Cola is introducing 500ml nonrefundable plastic bottles in Turkey. Coca-Cola Classic, Coca-Cola Light, Fanta and the Sprite brands are available in the new format. The new packaging launch is supported by a campaign involving sales promotion, point-of-sales promotion, plus outdoor and print advertising. The promotional effort is based on the “I go where you go” slogan, according Public Relations Manager Gurtay Kipcak. 10

France (World Cup)

Coca-Cola created a huge promotional campaign for the 1998 World Cup Soccer Tournament. For this, the world’s largest single-sporting event, Coca-Cola spent more than it did on the 1996 Summer Olympic Games, when it painted Atlanta red. Systemwide, the cost to Coca-Cola and its bottling partners was estimated at $250 million, though company officials won’t pin down an exact figure. The goal of that spending, as always, is to boost sales — and not just by selling an estimated 5 million servings of Coca-Cola products at the tournament itself. The company s plan is to drive global sales by tapping into the frenzied passion that fans have for the world’s No. 1 sport. The advertising, promotions and other marketing efforts played off of Coca-Cola’s “For the Fans” theme, popularized during the 1996 Summer Games. This time, the catch phrase was “Eat Football, Sleep Football, Drink Coca-Cola,” or “Vivez Football, Vibrez Football, Buvez Coca-Cola,” as the signs say in France. Coca-Cola CEO, Douglas Ivester said the sponsorship lets the company “refresh consumers” while “sharing the fans’ passion for football,” which is what soccer is called outside the United States. In France, where the company began “activating” its plan a year prior to the event by giving away 5,000 World Cup tickets, sales of Coca-Cola products have risen almost 30 percent year-to-date. Volume rose 26 percent in the first quarter of promotion and shot up 50 percent just prior to the World Cup. The marketing push was in more than half of the 200 countries where Coca-Cola does business. But rather than using a one-size-fits-all approach, Coca-Cola has tailored advertising, promotions and other marketing efforts for specific areas. 11

Finland

National regulations/cultures also restrict promotional activities. For instance, Coca-Cola Finland will be fined $47,000 if it repeats its Yo-yo promotion. The ruling upholds a complaint from Finland’s Competition Ombudsman about a quiz promotion called Coca-Cola Yo-yo Lottery run by Coca-Cola Finland last autumn. Consumers who bought Coke, Fanta and Sprite were offered a chance to win a “free” yo-yo. Court officials also determined that since the prize was a Coca-Cola yo-yo, the campaign targeted children. The court ruled that it was improper of Coca-Cola to expect children to waste time and incur costs by dialing a special number. The court described the whole exercise as being “in very poor taste”.12

Joint Marketing

Coca-Cola & Schweppes Beverages are to launch the “Peel to Reveal” soft drink can promotion featuring special labels. PRINTPACK Europe, of Bury, has produced 15 million labels for the world’s first Peel to Reveal soft drinks can promotion by Coca-Cola & Schweppes Beverages. A dotted line along the seal shows consumers where to peel off the label to check for instant win cinema ticket prizes. 13

Coke currently has deals with both McDonalds and Burger King in Belgium. These deals are such that local franchise holders coordinate the design of posters and point-of-sale materials with Coke s input. This local promotion allows tailoring of material to the needs of the specific franchise (i.e. Burger King as opposed to McDonalds) as well as customizing to local cultural aspects. 14

EU Advertising Campaigns 3

Coca-Cola’s approach in the European Union has been to advertise specifically to each country. It realizes that although the product is branded the same worldwide, cultural differences requires different techniques for advertising. To achieve this, Coke assigns advertising agencies to specific brands and specific countries. In 1997 McCann-Erickson, Madrid, won a contract for a line of ads for the Coke brand from rival Publicis Conseil, Paris, which had been handling Spain.15 The following are specific advertising campaigns that are currently being done in the various countries in the European Union.

Great Britain

Virgin Cola is to spend 15 million in a fresh attempt to take on soft drink giants Coca-Cola and Pepsi, including the launch of a national television advertising campaign later this year, writes David Lister. The investment, thought to be the largest in Virgin Cola since it was launched in November 1994, is a key part of Richard Branson’s attempt to rejuvenate the Virgin brand and win over young consumers to “the Virgin experience”.17

Coca-Cola has relaunched Lilt with a new 3-dimensional pack design. “The new design is a natural evolution for the brand,” says Vanessa Dennison, brand manger for Lilt at Coca-Cola Great Britain. “The aim is to bring the brand’s lively but laid back personality to life on shelf.” TV advertising featuring the Lilt ladies will continue to support the brand throughout 1999.17

Germany

Coca-Cola relaunches Cherry Coke in Germany; DMB&B Duesseldorf handles the estimated $5m TV ad campaign; Cherry Coke was launched in Germany in 1986 and taken off the market two years later.18

Spain

In the face of complaints from Spain’s fruit juice producers Coca-Cola has agreed to remove from its advertising for the Fruitopia range of drinks the phrase `more than a juice.’ The ASOZUMOS fruit juice association based its complaints on Fruitopia’s 25% fruit juice content, compared with the 100% of `true’ juices. Behind the move, however, are the politics of the increasingly competitive non-alcoholic drinks market in Spain. One of the leading members of ASOZUMOS is Pepsi subsidiary Kasfruit, market leader in 1994. There are rumors that Coca-Cola will enter the Spanish fruit juice market with its Minute Maid brand, currently being tested at the Port Aventura theme park.19

Major advertisers in Spain including Coca-Cola, brandy producer Osborne and dairy company Leche Pascual have bowed to pressure from restaurant, bar, cinema and theater owners and reduced soccer-related advertising on Spanish TV.

Coca-Cola has canceled its sponsorship of Catalonian station TV3’s recorded highlights of the best soccer action. Osborne has withdrawn sponsorship of all soccer games shown on regional TV channels in Andalucia and Galicia and canceled advertising during games in other regions. Pascual has pulled its advertising from commercial breaks during soccer games televised across Spain. Osborne is considered the major loss to the stations because it put in the most money. Coca-Cola says that it canceled its contract with TV3 in order to concentrate on a national program of soccer sponsorship. But it adds that the anti-TV soccer lobby influenced its decision.20

United Kingdom

Coca-Cola launched a second phase of brand advertising via Bartle Bogle Hegarty. The effort will also seek to battle competition from retailers that have created their own soft drink brands. The decision to run BBH’s poster campaign is sure to fuel speculation that HK McCann is losing its sway over Coca-Cola’s account in the UK. Five different BBH billboards for Coca-Cola have been erected across the UK on Superlites and 48-sheet and 96-sheet posters.

Conclusion 4

Coca-Cola has shifted its marketing strategy from advertising in those countries that consume more of their products to working to build market share in those countries that do not have a strong Coke following. In 1976, Coca-Cola spent six times more on advertising in Germany than in France; Germans, however drank four times more Coke (per person) than in France. Since, the early 80’s, however, Coca-Cola has spent ten times more on French advertising, attempting to build market share. However, this strategy has had little influence on this imbalance in consumption between the two countries. 22

Coke realizes that cultural differences exist in each country and that they have to overcome those differences in their advertising and promotional campaigns to be successful. Aside from the Germans, who are the primary soft drink consumers of the European Union and the French, who drink relatively large amounts of mineral water and wine, other EC countries have strong culturally tied beverage preferences as well. The Dutch consume a significant amount of soft drinks; the British: tea and beer; the Germans: beer; the Italians: wine…23 The Italian market was so unfavorable to Coca-Cola that the company decided to launch a campaign there, emphasizing the native element of the product: “Coca-Cola in Italy is Italian…produced in Italy by Italians, in factories built by Italians and is then distributed and consumed by Italians.” 24

Overall, however, the main market segment targeted in Europe is the same as in the rest of the world: 14-29 year olds, who are the primary consumers of soft drinks. In an effort to project a consistent image recognizable worldwide, advertising messages are “always the same, but adapted for local cultures and languages”.25 This consistent image is also due to the fact that our culture appeals to many foreign countries, and is often used as an appeal in Coke advertisements, an example of this being Burger King’s French slogan for the Whopper, “The hamburger most preferred by Americans”.26

Coca-Cola’s market strategy is supported by their organizational structure. A corporate group dedicated to overseeing all advertising/promotion in Europe directs the local marketing and promotional campaigns. This group selects advertising and public relations firms as well as ensures that the proper strategy is being implemented in each specific country.

The significance of pan European branding became very apparent recently when people became ill after drinking Coke. Students in Belgium initially claimed they became nauseous after drinking Coke. The Belgian government eventually pulled all Coca-Cola products from its shelves. This led to France, Luxembourg and the Netherlands all also restricting Coke sales. Eventually it was discovered that the contamination was a result of defective carbon dioxide. Additionally, some cans had gotten a wood preservative on their exterior that resulted in a foul odor and taste. However, in less than a week the Coke brand had been tarnished. This scandal received worldwide attention and the repercussions even affected Coke s stock price. 27 Coke s global brand resulted in a global problem that had to be addressed. There was no way for Coke to conceal it as a local issue. Coke seemed to deal with the communications aspect of the scandal on a more nationally customized basis. Coca-Cola has hired a local Belgian and French public relations firm to mitigate the scandal in those countries. Additionally, Coke is running full-page apologies in Belgian newspapers. 28 If the scandal truly were Pan-European, Coca-Cola may have opted to run this communications effort on a European-wide basis with similar strategy to all EU nations.

References 5

1.) Holleran, Joan; “Strength Through Sense”; Beverage Industry; January 1999; pg. 18.

2.) Holleran, pg. 16.

3.) Vardar, Nukhet; Global Advertising: Rhyme or Reason; PCP; London; 1992; pg. 27.

4.) Vardar, pg. 28.

5.) Advertising Age – International Daily. August 15, 1997. Crain Communications, Inc.

6.) Ross, Chuck; “Coca-Cola Enlists TeleVest to Craft Global TV Plan”; Advertising Age; Nov 16, 1998; pg. 1.

7.) Source: Expansion (Spain):4, May 21, 1999.

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8.) Source: Euromarketing, IX(41):3, June 25, 1996. ISSN: 0952-3820

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9.) Source: Advertising Age International Supplement:i2, March 11, 1996. ISSN: 0001-8899

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10.) Source: Euromarketing via E-mail, I(44), July 24, 1998.

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11.) Source: Atlanta Journal & Constitution (GA), June 13, 1998. ISSN: 0093-1179

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12.) Source: Euromarketing, IX(45):2, July 23, 1996. ISSN: 0952-3820

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13.) Source: Packaging Week(5):1, June 15, 1995. ISSN: 0276-6117

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14.) Advertising Age – International Daily. August 7, 1996. Crain Communications, Inc.

15.) Advertising Age – November 17th, 1997. Crain Communications, Inc.

16.) Source: Evening Standard (London), May 14, 1999.

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17.) Source: Brand Strategy(121):27, February 1999. ISSN: 0951-3639 http://www1.xls.com/cgi-bin/bnisuite.exe (02410274)

18.) Source: Euromarketing, IX(23):5, February 20, 1996. ISSN: 0952-3820

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19.) Source: Euromarketing, VIII(43):2, July 11, 1995. ISSN: 0952-3820

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20.) Source: Euromarketing, VIII(23):3, February 21, 1995. ISSN: 0952-3820

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21.) Source: Campaign:5, July 22, 1994. ISSN: 0008-2309

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22.) Mattelart, Armand; Advertising International; Comedia; New York; 1991; pg. 56.

23.) Louis, J.C.; The Cola Wars; Everest House, Publishers; New York; 1980; pg. 154

24.) Louis, pg. 155

24.) Louis, pg. 166

26.) Louis, pg. 166

27.) World Wide Web: http://www.washingtonpost.com;80/wp-srv/Wplate/1999-06/21/0691-062199-idx.html

28.) World Wide Web:

http://cbs.marketwatch.com/archive/19990622/news/current/ko.htx?source=htx/http2_mw.