Francisco Crespo, SVP and chief growth officer at The Coca-Cola Company, doesn’t just provide stewardship for one of the world’s most highly valued brands. He guides the portfolio of different consumer brands that require what can be dramatically different marketing strategies.
I recently asked Francisco to illuminate parts of Coca-Cola’s strategic process.
Paul Talbot: What process do you use to insure your marketing strategies are in lockstep with your business objectives?
Francisco Crespo: It starts with ensuring we successfully identify where we have headroom to grow. We shouldn’t discard opportunities because there are hurdles. Sometimes, the obstacle is the path, with challenges we can overcome to create a competitive advantage.
There are three dimensions in this process. It starts with understanding consumer needs. What problem are they trying to solve? What outcome are they expecting? What are their key occasions, contexts and rituals?
Then we must establish what we call our Brand Edge, which is finding the reasons our brand solves consumer needs better.
Next is determining how will we collect the value we create. We have to understand not only consumer interaction but the incentives for the different players in the ecosystem, including retailers and our bottlers.
Talbot: When you evaluate a marketing strategy, what do you want to see and what don’t you want to see?
Crespo: Firstly, we want to see strategy versus tactics. There has always been a temptation for tactics to drive strategy or, worse, tactics appearing as a strategy. Tactics are important, but in our evaluation, we want to prioritize strategy ahead of tactics.
A clear strategy leverages Brand Edge to achieve objectives. It should have a seamless connection to consumer experiences and rituals. I don’t like to see strategy that uses observations as insights, objectives that are framed as strategy without substance or converging toward industry standards as opposed to pushing for something new.
Talbot: CEO James Quincey said, “The brand Coca-Cola will always be the heart and soul of the Coca-Cola Company, but the company has outgrown its core brand. The company needs to be bigger than our core brand.” What issues need to be addressed in your marketing strategies to achieve this objective?
Crespo: We formerly applied the same playbook for every brand in our portfolio, treating all brands as Coca-Cola. We now use three different playbooks for a given brand, based on their place in the market: as a Leader, Explorer or Challenger.
Leaders, like Coke trademark, which includes all its variants, can collect value through premiumization if they continue to enhance their edge. That means if our market advantages are expanding, we earn the right to collect part of the value we are creating.
Explorers are smaller, disruptive brands that are experimenting in an evolving territory. They must be entrepreneurial, with clear edge compared to what consumers are currently using. So long as they grow faster than the category, they don’t have to answer the same questions as a leader brand.
When Explorers achieve a double-digit share of value in the market, they become Challengers. At this stage, they must sharpen areas their edge and consistently invest to surpass the current leaders.
Strong margins are associated with quality market leaders, and we need to build these in more spaces across the portfolio by mastering these three different playbooks.
Finally, we have to leverage our unique system to scale our proven recipes for success around the world faster.
Talbot: Any other insights on the role of marketing strategy you’d care to share?
Crespo: I have found that old-school marketers hide behind the idea that our industry is an art versus a science. They pretend art is vague, with no place for data-driven strategy.
I see in art perhaps the highest level of discipline. Artists are obsessed with practicing levels of discipline. They relentlessly repeat until an ultra-high standard is achieved. That is why their work lasts and is revered.
Our marketing has been event-driven. We have been hiring for reach and frequency while, in the future, we will need to hire for engagement and personalization.
Fortunately, Coca-Cola has built one of the most diverse systems in the world, including different types of retailers, digital players, content producers, media platforms, research companies, NGOs, local bottling partners and entertainment companies.
We have the means of leveraging this network in ways that will create new forms of value for consumers and partners well beyond our current imagination.