Coke to Increase Marketing in India, Brazil, China, Russia
By Kathleen Sampey
November 11, 2004

NEW YORK Coca-Cola worldwide CEO E. Neville Isdell today said the company will increase its global marketing expeditures by $350-400 million in 2005 and successive years.

Most of that money will be spent outside North America in high-growth markets such as Brazil, China, India and Russia, he said.

Isdell discussed the increase today in a presentation to Wall Street analysts. He laid out a plan he called "The Coca-Cola Manifesto for Change." He promised global volume growth over the long term, a clear point of view in the company's marketing, an increase in morale and cultivation of talent within the company's ranks.

"This is something I believe this company deserves," Isdell said in opening remarks to about 200 analysts, consultants and business reporters who attended. "A manifesto is a call to action," not a radical change in strategy but in execution, all centered around "the revival of an icon," he said.

The Atlanta-based company annually has spent an estimated $1 billion in global measured media. Through September, Coke spent $375 million on all products in the U.S., per Nielsen Monitor-Plus. About $230 million of that amount was spent on media for Coca-Cola trademarked products.

Three other executives also made presentations: CFO Gary Fayard, worldwide CMO Chuck Fruit, and worldwide vp, Coca-Cola Franchise Marc Mathieu.

Coke is in the midst of hearing ideas concerning its global "iconic" brief for the flagship brand, Fruit and Mathieu acknowledged. Two holiday-themed spots for Coke Classic reflecting that strategy were shown at the meeting.

One broke overseas in October to coincide with the Muslim holy days known as Ramadan. A Christmas-themed spot will break later this month in North America.

In the first spot, a female narrator speaks about the kindred spirit of human beings as scenes containing the cycles of life are played out, ending with an onscreen super that reads: "The power of one."

In the second ad , a grunge-rock version of "White Christmas" plays over traditional, contemporary Christmas scenes in which people are shown creating small acts of kindness. That spot's onscreen super reads: "Let's make this season a little better."

Fruit said both spots were produced by Interpublic Group's McCann Erickson. The agency's Kuala Lampur, Malaysia, office created the Ramadan-themed spot, while McCann's Madrid outpost crafted the Christmas spot.

"Our advertising has not been as consistently effective in recent years," Fruit said. The iconic brief asks for communications about simple, human insights around one big idea, he added.

McCann is still contributing ideas for "iconic" Coke marketing, as are WPP Group's WM/Red Cell in Buenos Aires, Argentina, and Berlin Cameron/Red Cell in New York; the Madrid and Johannesburg, South Africa, offices of IPG's McCann Erickson; Publicis in Paris; independent Mother in London; and undisclosed others, according to sources. Coke will choose a handful of ideas to test, with the goal of going into production at the end of the year.

Fruit declined to comment on the agencies involved in the process, but said that Berlin Cameron/Red Cell is in production on new spots for Coke Classic's "Real" campaign that will break in the first quarter.

While Isdell called brand Coke "a decent thing, honestly made," Mathieu said in his presentation that marketing would seek to reinforce that idea and what consumers associate with the trademarked products: uplifting refreshment, stubborn optimism, and universal connections. "Carrying that message of optimism in everything we do is essential," Mathieu declared.

But Isdell cautioned that it would be 18-24 months before shareholders saw significant results, saying that the marketing strategy "is not just about throwing money against ad campaigns because we've underspent." He said spending would go behind targeted consumers and media and be monitored closely for success in each country.

Fayard declined to provide guidance on projected share prices, but Isdell said he foresaw worldwide volume growth of up to 4 percent over the long-term, operating income increases of 6-8 percent, and earnings per share growth in the "high single digits."

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