Marketing Campaign Case Studies

Thursday, May 29, 2008


Despite being the top soft-drink company in the world, the Coca-Cola Company showed signs of struggle in the 1990s, when consumers worldwide started demonstrating a strong preference for healthier beverages. Coca-Cola’s subsequent marketing efforts, including the 2003 ‘‘Real’’ campaign, reflected this change.
The multimillion-dollar ‘‘Real’’ campaign, which used a combination of music and celebrity presence to promote Coke Classic, was reminiscent of Coca-Cola ads from the 1960s to the ‘90s. The ‘‘Real’’ campaign’s message itself, that Coke is the ‘‘Real’’ thing, was a reminder of the company’s long heritage. The campaign’s numerous television and radio spots, as well as print ads, were targeted toward a teen and young-adult market, just as Coke advertising had long been. It was with these consumers in mind that the company signed on such actors as Penelope Cruz and Courtney Cox Arquette, as well as musicians Common and Mya, to promote the product.
The campaign was attention grabbing, catching the eyes and ears of its target audience. Most consumers who were polled claimed to like the ads ‘‘a lot.’’ The press seemed equally entertained by the campaign, raving about its advertising success, especially compared with the past three botched advertising attempts that Coke had recently endured. In fact, many ad critics thought the ‘‘Real’’ campaign marked the first Coke advertising success in a decade. The success, however, was not a financial one. Despite the campaign’s popularity, sales of Coke products, especially Coke Classic, continued to dwindle. Coke Classic in 2003 experienced a disheartening 3 percent decrease in sales. ‘‘Real’’ ran until 2005, when it was replaced by ‘‘Make It Real,’’ an extension of the previous campaign.

In May 1886 Jacobs’ Pharmacy in Atlanta sold the first serving of Coca-Cola. Invented by John Pemberton (a Civil War veteran and pharmacist), the soft drink contained syrup, sugar, and carbonation, along with the caffeine-rich kola nut and the drug cocaine. The name Coca-Cola was invented by Pemberton’s bookkeeper, Frank Robinson, who also wrote the distinct script that has been sprawled on all Coca-Cola products to date. The beverage was not an instant success. In its first year at Jacobs’ Pharmacy, approximately nine servings were sold each day. Pemberton ended up with a $20 loss overall. But success, though not immediate, was right around the corner.
By the late 1890s Coca-Cola had become one of America’s most popular fountain drinks. And soon thereafter it was being sold all across the United States and Canada. Advertising played a key role in Coca-Cola’s early success, and for some time to come advertising would continue to contribute to its success. Its 1930s Santa advertising helped to create the modern image of Saint Nick, as well as an increased personal connection between consumers and Coke. In 1971 (while war persisted in Vietnam) a similar result was found with a television commercial showing young people gathered on a hilltop in Italy, singing, ‘‘I’d like to buy the world a Coke.’’ More than two decades later the ‘‘Always Coca-Cola’’ campaign, which introduced the very popular Coke-drinking polar bears, also ended with positive results. But advertising success would not come so easily in the future.
‘‘Always Coca-Cola’’ continued through 2000, when it was replaced by ‘‘Coca-Cola. Enjoy.’’ Neither campaign met with success. In 2001 Coca-Cola launched ‘‘Life Tastes Good,’’ but the campaign was pulled in the wake of the terrorist attacks of September 11, 2001. Largely because of consumers’ increasing preference for healthier beverages, sales of Coca-Cola were steadily declining. But perhaps consumers simply missed the polar bears and the entertaining campaign that featured them. With the thought that consumers might be won over by another successful advertising campaign, Coca-Cola threw millions into its 2003 ‘‘Real’’ advertising campaign.

Since the 1990s Coke Classic had experienced a decrease in market share and volume in the beverage industry, especially among its younger consumers. Largely as a result of a nationwide focus on obesity and other health issues, which resulted in healthier eating habits (especially among the young), tastes for beverages changed. According to Beverage Digest, during each year between 1996 and 2000, Coke Classic’s sales either fell flat or reflected a decline. In 2000 there was a 0.1 percent increase. Younger people simply drank less cola than had earlier generations, preferring instead such beverages as bottled water, juices, and flavored sodas.
Coke’s 2003 ‘‘Real’’ campaign targeted the younger generation the company felt it was losing. While many longtime consumers had remained loyal to Coke, most of these represented an aging population. Young adults, in contrast, had the potential to be targeted for years to come. Because of this Coke’s ‘‘Real’’ campaign had a celebrity-heavy focus. Such big names as Cruz and Cox Arquette starred in new Coke commercials. The campaign premiered its first advertisement (the television commercial ‘‘Real Compared to What’’) during the 2003 American Music Awards, an event that typically drew a young audience.

The Coca-Cola Company’s three main competitors were PepsiCo, Cadbury Schweppes, and Nestle´. Presenting the most challenging competition for Coca-Cola was PepsiCo, which had also long ago branched out beyond cola. Coke had extended its reach far into the ‘‘other beverages’’ market with Fanta, Sprite, Barq’s, Minute Maid, and Dasani water, among others, to a tune of some 400 drink brands in all, including coffees, juices, sports drinks, waters, and teas. PepsiCo had similarly expanded its ‘‘other beverages’’ market, having acquired, for example, Tropicana orange juice and Aquafina water (the top seller of bottled water in the United States). But PepsiCo also had gone beyond beverages by adding a number of nonbeverage food products, including Frito-Lay (the world’s number one distributor of corn chips and potato chips) and Rold Gold Pretzels. Although Cadbury Schweppes and Nestle´ might have seemed the less-obvious competitors of Coke products, they each succeeded in taking market share from the world’s leading soft-drink company. Largely associated with its chocolates, British-owned Cadbury, after merging with Schweppes in 1969, became a top competitor in the beverage business. With a long list of beverages offered (including 7 UP, A&W Root Beer, Canada Although Coca-Cola was the world’s leading softdrink distributor (with a 44 percent market share in 2003, a clear lead over second-place PepsiCo, at 31.8 percent), some of its competitors brought in significantly larger overall sales. In 2004, for instance, Nestle´’s total sales exceeded $76 billion and PepsiCo’s was in the neighborhood of $29 billion, while Coca-Cola’s was less than $22 billion. (Cadbury Schweppes trailed the pack at approximately $13 billion.)

Coca-Cola wanted to remind consumers of its past, its authenticity, its ‘‘realness’’ in its 2003 ‘‘Real’’ campaign. Created by ad agency Berlin Cameron/Red Cell in New York, the new slogan played off Coca-Cola slogans of the past: ‘‘It’s the real thing’’ and ‘‘Can’t beat the real thing.’’ (Initially the job of coming up with a new campaign was assigned to both Berlin and McCann-Erikson Worldwide Advertising in New York. With its ‘‘Real’’ idea Berlin took over the new campaign.)
Coca-Cola believed the ‘‘Real’’ campaign could return the company to a level of success that at least equaled what it had experienced during its ‘‘Always Coca-Cola’’ campaign years of 1996–98. (During that period the Coca-Cola Company had enjoyed an average 5 percent increase in volume change per year.) To achieve this goal Coke and Berlin relied heavily on a musical and celebrity presence. The campaign debuted with a 90-second ‘‘Real Compared to What’’ television commercial during the 2003 American Music Awards. In the commercial R&B singer Mya and hip-hop artist Common performed a remake of the 1960s jazz hit ‘‘Compared to What.’’ The commercial’s debut followed the duo’s presentation of the Coca-Cola New Music Award to the top unsigned artist or band.
In another television commercial, ‘‘Penelope,’’ Cruz walked into a restaurant, guzzled a Coke Classic, burped, and giggled. ‘‘The Arquettes’’ was filmed on a set that copied the real home of Cox Arquette and husband David Arquette. A motive of the commercials was to reveal celebrities during ‘‘real’’ moments in which they enjoyed a ‘‘real’’ soft drink. In all more than a dozen television spots were filmed for the campaign. They featured a variety of celebrities, including late-night talk-show host Craig Kilborn, cyclist Lance Armstrong, and members of Coke’s NASCAR racing team. The campaign also included a major tie-in with the 2003 NCAA basketball tournament and a summer promotion that awarded families trips to theme parks. And in addition to its television presence, ‘‘Real’’ advertising was found in print, online, and on the radio waves. As to the latter Coke went all out, introducing ‘‘Coke FM,’’ in which 60-second spots featured well-known musicians. In all mediums the advertising efforts represented an attempt by Coca-Cola to return to the values of past campaigns. Coke wished to reveal its ‘‘real’’ values. As one consulting firm adviser pointed out, the ‘‘Real’’ campaign was something that easily could have been done in any decade since the 1960s. The question was, would consumers go for it?

In 1892, six years after Coca-Cola was first sold (for five cents a glass, in Atlanta’s Jacobs’ Pharmacy), the company had an advertising budget of $11,401 (accounting for inflation this would represent $234,006.49 in 2005). A budget of this size was highly unusual for the time. The advertising agenda included hiring salesmen to travel across the country to sell Coca-Cola to various businesses. To convince business owners to order the soda, the company often offered free merchandise (for instance, prescription scales and decorative clocks) that displayed the Coca-Cola logo. Another strategy involved the distribution of coupons, which allowed proprietors to try Coca-Cola for free.
Lastly Coca-Cola began placing its name everywhere:
on newspapers, outdoor posters, wall and barn signs, streetcar cards, and many other places. The combination of these efforts proved quite successful, and before long Coca-Cola had become a household name.
Dry, Dr Pepper, and Hawaiian Punch), Cadbury Schweppes managed to place itself third among the world’s top soft-drink providers. Nestle´, the top-selling food company in the world, became the world leader in coffee sales and one of the world’s largest makers of bottled water.

Consumers were positive in their ratings of the ‘‘Real’’ advertisements. For instance, shortly after the campaign debuted a Harris study revealed that 25 percent of respondents claimed to ‘‘like the ads a lot,’’ while only 8 percent claimed to ‘‘dislike the ads.’’ Of those who liked the ads ‘‘a lot,’’ the largest presence was among 25- to 29-year-olds, followed by 18- to 24-year-olds. Thus Coke’s target market had indeed been reached. Financially, though, the campaign did not measure so successfully. Coca-Cola finished 2003 with a small decline in volume, down 0.2 percent from 2002. The results for Coke Classic were far less desirable: a 3 percent decrease from 2002.
Regardless of the popularity of the ‘‘Real’’ campaign, which generated a multitude of positive press, there was not much hope to promote Coke Classic in a marketplace that was squeezing out sugary colas. Contrary to the campaign’s message, consumers, who had been seeking healthier, lighter drinks, might actually have preferred the ‘‘unreal’’ thing. This could later be demonstrated by the notable success of Diet Coke with Lime (2004) and the introduction of other varieties of Diet Coke by 2005, including calorie-free Coca-Cola Zero (designed to taste more like Coke Classic than like Diet Coke).
Even as the ‘‘Real’’ campaign did not send consumers in droves to purchase Coke Classic, Coca-Cola hoped the campaign’s popularity would have lasting effects, prompting consumers to purchase the Coca-Cola brand product that better suited their tastes. To launch the new, healthier version of the classic, the 2005 Coca-Cola Zero campaign (‘‘Everybody Chill’’) took an approach similar to that of the ‘‘Real’’ campaign by reviving the 1971 ‘‘I’d Like to Buy the World a Coke’’ television spot. Thus ‘‘Everybody Chill’’ repeated the trend of looking to the past in the quest to find future customers.

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