CASE
21
Coca-Cola: Integrated Marketing
Communications*
Synopsis: Coca-Cola displays an extensive understanding of integrated marketing communications.
In conjunction with traditional marketing, the company uses a number of newer promotional tools to
increase brand awareness, such as social media marketing. Perhaps the best example of
Coca-Cola’s use of integrated marketing occurs through its partnership with the Olympics. This
case examines Coca-Cola’s IMC strategies and looks at the benefits and costs of being a major
Olympic corporate sponsor.
Themes: Integrated marketing communications, promotion strategy, marketing program, branding,
positioning, sponsorships, sports marketing
Marketers have traditionally relied on television, radio, and print media to transmit
advertising content. However, in the past decade technological advances have led
to the creation of new platforms to reach consumers. For instance, over 50 percent
of American adults now own a smartphone and tablet computer. These devices allow
users to stay constantly connected to social media sites and create opportunities for
marketers to reach consumers with real-time targeted advertisements. These new
technologies have increased integrated marketing opportunities for major companies. Integrated marketing communications refer to the coordination of promotion
and other marketing efforts to ensure maximum informational and persuasive
impact on customers. This concept of an all-encompassing marketing strategy initially emerged at the American Association of Advertising Agencies conference in
1989. It allows an organization to coordinate and manage its promotional efforts to
transmit consistent messages. Integrated marketing communications also enable
synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets. Thus, this approach fosters not only long-term customer
relationships but also the efficient use of promotional resources. Since so many
factors are involved in a marketing strategy, the concept should incorporate all
aspects of marketing communications such as advertising, sales promotion, public
relations, and direct marketing to obtain promotional objectives.
For this reason, an effective integrated marketing strategy tends to combine different elements of the promotion mix—advertising, public relations, personal selling,
and sales promotion—that combine more traditional forms of marketing (e.g., print
advertisements) with newer forms of marketing (e.g., QR codes). Based on the
understanding that a unified and broad strategy is the most effective way to market
its brand, Coca-Cola approaches marketing strategically, using both newer and more
traditional marketing media to encourage growth. This organizational behavior has
become a key part of the company culture of Coca-Cola and has contributed to its
becoming one of the most admired companies in the world. Although Coca-Cola
leverages many of its resources to market its products and brand, traditional media
outlets provide a foundation to build upon.
Coca-Cola provides content through multiple communication channels, ranging
from traditional media (billboards, television, and sponsorship) to more modern
*
Timothy Aurand, Associate Professor of Marketing at Northern Illinois University, prepared this case.
Jennifer Sawayda, University of New Mexico, and Julian Mathias, University of New Mexico, provided
editorial assistance. This case is provided for classroom discussion rather than to illustrate effective or
ineffective handling of an administrative situation.
534
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Case 21 • Coca-Cola: Integrated Marketing Communications
channels (social media, digital coupons, and mobile advertisements). Over the past
couple of decades, technological advancements in the media landscape have driven
dramatic changes and alterations in organizational marketing strategies. Due to the
continuous evolution of media platforms and communication channels in recent
years, traditional marketing outlets such as print, radio, television, and partnerships/sponsorships have progressed to more modern technologically driven channels such as e-mail, Internet advertisements, e-catalogs, social media, and mobile
communications. These different types of promotion work together as a unified
force rather than individually, increasing the company’s promotional reach. For
instance, as part of its marketing strategy, Coca-Cola has utilized a content marketing technique with advertisements that cater to specific audiences when promoting
the brand. Coca-Cola is an excellent example of a company that effectively integrates traditional and modern channels as part of a broad marketing strategy.
COCA-COLA COMPANY OVERVIEW
Since its debut in 1886, The Coca-Cola Company (Coca-Cola) has grown into a $48
billion multinational corporation. The company is the largest worldwide manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups
in over 200 countries. Coca-Cola has thrived for over 125 years. Today its net income
of $8 billion and gross profit of $28.5 billion demonstrate its financial success.
CORPORATE HISTORY
The Coca-Cola formula was invented by pharmacist Dr. John Pemberton, who sold
the beverage at Jacobs’ Pharmacy in Atlanta, Georgia, for five cents a glass. In its
first year, Coca-Cola averaged sales of nine glasses a day. Today, more than 1.8
billion servings of Coca-Cola products are consumed each day in over 200 countries.
Coca-Cola has continually evolved since 1886, but its formula has stood the test of
time for over a century.
Coca-Cola began promoting its brand with coupons for complimentary samples
(a type of sales promotion) as well as the placement of clocks and calendars displaying the Coca-Cola logo in different pharmacies. In 1915, the signature contour bottle
was created to be easily recognizable and prevent imitators from copying the brand.
The company continued to grow over the years and launched many new products
including Diet Coke, Sprite, and Fanta Orange. Evolving from its original promotions, Coca-Cola spent millions of dollars on billboard advertising in rural areas,
along highways, and on the sides of buildings. Today, Coca-Cola’s beverage concentrates and syrups are used to produce more than 500 beverage brands.
PRODUCTS
For 70 years the only beverage created and sold by Coca-Cola was its traditional
Coca-Cola product. In 1955, Coca-Cola expanded its product offering when a bottler
in Italy began selling Fanta Orange. Since this time, the company has continued to
add a wider variety of beverages and portion sizes for every consumer that appeals
to different lifestyles, life stages, and life occasions.
Coca-Cola sells more than 3,500 beverages in numerous categories that include
regular carbonated soda, low- and no-calorie sparkling beverages, fruit juices and
fruit drinks, bottled water, sports and energy drinks, and ready-to-drink teas and
coffee. Prior to introducing a new product to the market, Coca-Cola performs nearly
450 different taste tests to ensure the ingredients and packaging quality meet the
company’s standards.
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Coca-Cola is always on the lookout for new product categories or technologies.
For instance, the company entered into an agreement with Keurig Green Mountain,
the creator of the popular Keurig one-cup coffee brewer, to develop and introduce
Coca-Cola products on Keurig Green Mountain’s newest machine. This collaboration
will result in carbonated and noncarbonated beverages such as soft drinks, teas, and
juices through their Keurig machines. Muhtar Kent, Coca-Cola’s Chief Executive
Officer, claims the deal will provide the company with access to new business opportunities. Consequently, Coca-Cola became the largest shareholder in Keurig Green
Mountain. The partnership and financial stake in Keurig Green Mountain offer
Coca-Cola an opportunity to enhance its bottling system and expand in the single
serve soda and coffee market.
CORPORATE STRATEGY
Coca-Cola’s mission and vision statements guide the strategy of the company by
describing its business emphasis and future goals. For instance, its three-tiered
mission statement involves (1) to refresh the world, (2) to inspire moments of
optimism, and (3) to create value and make a difference. Coca-Cola’s vision statement further supports its mission with its emphasis on the six Ps: people, portfolio,
partners, profit, planet, and productivity.
Using these statements as a foundation for its business, Coca-Cola created its
strategic integrated marketing plan known as 2020 Vision. While some of the main
objectives of this plan will directly benefit Coca-Cola’s bottom line, other objectives
focus on building a strategic business model that relies on developing and strengthening partnerships while being environmentally conscious.
One of the main goals of the 2020 Vision strategy is to increase Coca-Cola’s servings to consumers by 3 billion servings per day. In order to achieve another 2020
Vision goal of reaching everyone in the world, Coca-Cola will leverage an estimated
$4 billion advertising and marketing budget annually. The content of Coca-Cola’s
integrated marketing strategy relies on principles outlined in its Responsible Marketing Policy. This includes refraining from placing advertising in programs where
more than 35 percent of the audience are children less than 12 years of age. The company also does not buy advertising on the Internet that directly targets children and
refrains from advertising in schools.
INTEGRATED MARKETING THROUGH OLYMPIC PARTNERSHIP
From early in its history, Coca-Cola recognized the importance of partnering with the
Olympic Games as a public relations strategy. In 1928, Coca-Cola traveled with Team
USA for the first time to the Olympics in Amsterdam and has been a sponsor for
every Olympic team since. Coca-Cola’s continuous Olympic sponsorship makes it
the longest running corporate sponsor in Olympic history. Fans of the Olympics can
accurately predict that when the Olympic Games begin, Coca-Cola will inevitably be
there. Such a strong relationship has helped Coca-Cola become a household brand
name. Its brand is estimated to be worth more than $80.6 billion.
A major goal of integrated marketing strategy is to send consistent messages to
customers that will strongly impact them. Because various units both inside and outside most companies have traditionally planned and implemented promotional
efforts, customers have not always received consistent messages. To help create synergistic effects among Coca-Cola’s numerous marketing channels, Coca-Cola
employs a strategy known as content marketing. Content marketing is an approach
that centers on educating audiences with valuable and reliable information in an
effort to indirectly drive sales.
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Case 21 • Coca-Cola: Integrated Marketing Communications
In an effort to emphasize more modern marketing techniques, Coca-Cola
launched the Open Happiness campaign in 2009, which used various forms of
communication to bring happiness to the consumer. Additionally, to further
advance the idea of content marketing, Coca-Cola geared its 2012 Olympics campaign toward content rather than brand awareness. At the 2008 Beijing Olympics,
Coca-Cola’s promotions consisted of fewer than 10 unique posters and themed
ads. Only 4 years later for the next Olympics, Coca-Cola created and dispersed
over 120 pieces of advertising content, which included traditional media such as
TV shows and documentary film as well as newer media including mobile applications. The customized ads were a corporate effort to cater to more specific target
audiences, rather than just universally promoting the Coca-Cola brand. Coca-Cola
also implemented a no-waste strategy during the 2012 Olympics in which all bottles sold were recyclable and the company used biogas trucks and coolers without
harmful chemicals.
MARKETING IN PARTNERSHIP WITH THE OLYMPIC GAMES
In many locations where Coca-Cola is consumed, the availability of modern technology is limited, which restricts the ability to leverage social media. As a result, the
company’s marketing department continues to rely heavily on traditional forms of
marketing. While many companies are moving away from traditional marketing techniques in favor of social media, there is still a need to integrate new marketing platforms so that they synergistically enhance or improve upon the existing traditional
marketing foundation.
“To refresh the world,” as stated in Coca Cola’s mission statement, highlights the
company’s desire to have its products available everywhere in the world. What better
way to reach mass audiences than to advertise on the biggest global stage, the Olympic Games? As the longest continuously running corporate sponsor of the Olympic
Games, Coca-Cola has mastered the art of effectively employing promotion through
its Olympic sponsorship.
TELEVISION COMMERCIAL ADVERTISING
Although many companies are prioritizing social media and Internet-driven platforms to reach customers, multinational corporations, including Coca-Cola, continue
to see the value in television advertising. This is an incredibly important marketing
channel for the Olympics, as television advertising is one of its premier marketing
platforms because Olympic broadcasts are syndicated worldwide.
During the 2012 London Olympic Games, the company created the Coca-Cola
8-Pack of Olympic and Paralympic Athletes commercial series featuring eight
Olympic stars: David Boudia (Diving), Henry Cejudo (Wrestling), Marlen Esparza
(Boxing), John Isner (Tennis), Shawn Johnson (Gymnastics), Jessica Long (Paralympic Swimming), Alex Morgan (Soccer), and David Oliver (Track & Field). The
commercials highlighted their stories and accomplishments in reaching the Olympic Games, while simultaneously emphasizing Coca-Cola’s values. The goal was to
create product loyalty by having its audience empathize with each athlete’s story.
Henceforth, customers were urged to buy products featuring limited-edition packaging that supported individual athletes. This advertising campaign allowed customers to feel connected to the Games and Olympic athletes through Coca-Cola
products.
For the 2014 Winter Olympics in Sochi, Russia, Coca-Cola released a 60-second
television commercial called “It’s Beautiful” that featured the song “America the
Beautiful” sung in seven languages. The advertisement linked Coca-Cola to America
but also stressed the multicultural nature of the American population. Behindthe-scenes videos of the cast were also released on YouTube. The advertisement
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was meant to elicit good feelings among the audience and emphasize that Coca-Cola
is for everyone. Two other television commercials Coca-Cola featured for the Sochi
Olympics included its fourth iteration of its “Ceremony” commercial, which highlights Olympic medal moments throughout the Games’ history, as well as a more
humorous, fun-loving commercial called “Fountain Pour,” featuring a customer
stealing extra sips at a soda fountain.
PRODUCT DISPLAY ADVERTISING
Among its use of traditional media, Coca-Cola adopts special product packaging to
coincide with the Olympic Games. Its ultimate goal is to provide information to customers and other stakeholders to initiate and develop long-term relationships. Due to
its partnership, Coca-Cola receives sponsorship rights to brand products with the
Olympic name and symbols, such as the rings and torch of the games. This strategic
product placement strongly connects the company with the worldwide popularity of
the Games.
Each campaign also reflects the culture and values of the host country while
distinctly highlighting the Coca-Cola brand. As an example, Coca-Cola created
unique cans for both the London and Beijing Olympic Games. At the 2008 Olympics
in Beijing, Coca-Cola designed a can to celebrate the Chinese culture featuring
Olympic themes with accents of red. In China, red symbolizes joy, fortune, success,
and good luck. The specialized can not only had Olympic themes but also clouds and
kites to represent further aspects of Chinese culture. Clouds represent good luck,
and kites are an ancient Chinese invention that symbolizes the spirit of the Chinese
people and the teamwork necessary for the Beijing Olympics to be a success. In the
2012 Olympic Games in the United Kingdom, Coca-Cola partnered with famous
photographer Rankin to create a limited edition bottle for Great Britain featuring
one of his images.
The 2014 Winter Olympics in Sochi, Russia, proved problematic for Coca-Cola
with its product display advertising. For its “Share a Coke” promotional campaign,
Coca-Cola released an online interactive feature that would allow consumers to
place messages to cheer on Olympic athletes. While the campaign itself was not at
fault, the location of the Olympics caused a public relations nightmare. Although
Coca-Cola has been consistently sponsoring the Olympics for years, it was heavily
criticized by LGBT activists for supporting the Olympics because they were held in
Russia. Russia’s law banning homosexual “propaganda” caused outrage among
global consumers. Therefore, what might have been a good idea turned into a major
mistake when LGBT activists began encouraging global consumers to use the interactive feature to write messages about Russian brutality against homosexuals. It
became such a problem that Coca-Cola shut down the feature. Additionally, a video
of a Coca-Cola commercial from 1971 was edited to show Russian brutality against
homosexuals. The video went viral. Finally, Coca-Cola was eliminated from that
year’s shortlist at the awards ceremony of a popular gay magazine. This debacle
demonstrates the darker side of sponsorship, when one highly criticized brand influences the perception of the other brand. These are risks Coca-Cola must assume in
its continual sponsorship of the Olympics.
LARGE DISPLAY AND SIGNAGE ADVERTISING
Traditional marketing includes the use of large displays, such as billboards, signs,
and symbols. Coca-Cola became well known for its display and signage advertisements during the 2008 Olympics. In building anticipation for the Beijing Olympics,
Coca-Cola created a 50-foot tall, high-tech LED screen version of its classic glass
coke bottle. The LEDs were used to display positive messages consistent with
Coca-Cola’s “happiness” marketing campaign that used positive words to help
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Case 21 • Coca-Cola: Integrated Marketing Communications
promote the brand. Coca-Cola was attempting to draw upon the emotional elements
surrounding China’s hosting of the Olympics, hoping to win over the hearts of new
consumers. Coca-Cola featured the display all over China in hopes of bringing loyalty
and trust to their brand.
During the Olympics, advertising signage is not permitted inside the Olympic
stadiums. In accordance with the legal limits, Coca-Cola creatively executed several
advertising tactics to gain exposure. In addition to its billboard campaign, Coca-Cola
partnered with retail stores to display televisions featuring Coca-Cola products and
advertisements. Other displays included large inflatable Coca-Cola bottles featuring
Chinese Olympic athletes, which created photo opportunities for tourists. Another
clever way that Coca-Cola created awareness was by handing out Coca-Cola
branded foam fingers to fans as they were entering stadiums. This allowed CocaCola to advertise within the Olympic stadiums indirectly and legally.
MUSIC AND RADIO ADVERTISING
For its sponsorship of the 2012 U.K. Olympics, Coca-Cola introduced the “Move to
the Beat” music campaign. The campaign, which started airing in July 2012, focused
on blending the music and sounds of Olympic events. Coke targeted the campaign
toward teenagers, hoping to create enthusiasm for the Olympics by combining the
Games with popular music. In one advertisement, a drumbeat was replaced by the
sound of an arrow finding its target. The advertisement also combined the sounds
of gymnasts launching off vaults, runners on a track, table tennis players during a
match, and martial artists—all in combination with Coca-Cola’s famous jingle.
To launch the campaign, Coca-Cola unveiled the Beat Wall in East London featuring urban art consisting of work from world-renowned young artists to depict
the synthesis of music and the sounds of sports. A billboard and television commercials were used to highlight the “Move to the Beat” campaign during the London
games. Coca-Cola also created Coca-Cola Radio, which gave DJs and other music
enthusiasts an opportunity to participate in the Olympic festivities. Coca-Cola also
used digital media to enhance the impact of the “Move to the Beat” campaign, as
the next section demonstrates.
DIGITAL MARKETING CAMPAIGNS
The 2008 Olympics in China were the first Games in which digital media were used
extensively as a marketing tool. Coca-Cola seized upon this opportunity. Its campaign “Design the World a Coke” encouraged consumers to build their own packaging designs for virtual Coke bottles. Coca-Cola also launched its “Coca-Cola Virtual
Torch Relay” on the Chinese social network QQ, one of the most popular among Chinese consumers at the time. Participants could participate in these virtual relays
through instant messaging. Within 2 weeks, 17 million individuals had participated.
Coca-Cola also used social media heavily in its 2012 “Move to the Beat” campaign discussed earlier. It introduced a Facebook app called Track the Beat that
encouraged teens to download the app through Coca-Cola’s website and then collect
“beats” on Facebook to create their own versions of the song. Participants were
awarded prizes and had the ability to download wallpapers and screen savers,
preview the Move to the Beat commercial on Facebook before it was shown on
television, as well as other incentives. More than 3.5 million original versions of the
song were created as a result of the campaign.
Unfortunately for Coca-Cola, its digital campaign for the 2014 Winter Olympics
was a disaster due to the controversy over Russia’s treatment of homosexual propaganda. Another criticism levied against Coca-Cola was the allegation that the word
“gay” was not accepted by Coca-Cola’s online interactive feature when individuals
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were customizing their Coca-Cola cans. However, the word “straight” was accepted.
Coca-Cola admitted that its South African website did have this problem, although it
was an unintentional glitch. Coca-Cola apologized for the issue and pulled the website. This public relations mishap demonstrates the care that companies must take
when implementing digital media campaigns.
CONTINUED SPONSORSHIP WITH OTHER ORGANIZATIONS
Further supporting Coca-Cola’s inclusivity and diversity, the company has been a
sponsor of the Special Olympics since 1968, as well as the sole founding partner. As
a special tribute to the Special Olympics community, Coca-Cola donated copies of
Mark Shriver’s biography, A Good Man, in which Shriver details his personal journey
to understanding and accepting his father’s legacy. The legacy his father provided
was instilling within his five children the calling to serve the community. For its
2013 Special Olympics Games in Bath, England, the company released a billboard
marketing campaign that featured 12 of the athletes in the Special Olympics. CocaCola’s support helps rally the community to take pride in itself and the people close
to it. In return, Coca-Cola develops a positive image among community members. In
addition to its sponsorship of the Olympics and Special Olympics, Coca-Cola began
associating and partnering with FIFA, Rugby World Cup, the NBA, and NASCAR during the 1990s.
BENEFITS AND COSTS OF THE OLYMPIC PARTNERSHIP
Event sponsorship accounts for a significant portion of Coca-Cola’s marketing
expenditures. Coca-Cola spent $29.9 million to promote its products at the 1984
Olympic Games in Los Angeles. Furthermore, during the 1996 Olympics in Atlanta,
the company was the leading advertiser, spending $73.6 million. As a partner of all
2014 National Olympic Committees and their teams, Coca-Cola has developed a
strong tradition of creating programs and events to bring the spirit of the Games to
consumers around the world. As a result, the company spent an estimated $100 million for its sponsorship rights for the 2014 Olympic Games in Sochi. It is estimated
that for every dollar of sponsorship fees, a company will typically spend an additional $3 to $4 on new marketing campaigns and advertising.
In addition to monetary costs, Coca-Cola is also at risk for bad publicity like it
faced in the 2014 Sochi games. As with any sponsorship, bad press affecting the
sponsored brand is likely to affect the sponsoring organization as well. Coca-Cola’s
choice of a digital marketing campaign proved inappropriate for the Games due to
the Russian controversy regarding homosexuality. As a result of the bad publicity,
Coca-Cola was forced to take quick action before it snowballed into a major
scandal.
Despite the costs and risks of sponsorship, Coca-Cola views the benefits as
being much greater. Although an official return on investment (ROI) is hard to calculate, Coca-Cola’s sponsorship allows it to build global awareness of the company
over a longer period of time. Its stated reasoning for continuous sponsorship goes
hand-in-hand with this concept. In a statement on Coca-Cola’s U.K. website, the company cited deeper customer relationships as a major factor in perpetual Olympic
sponsorship. The Olympics provides one of the largest stages in the world with over
200 countries competing and billions of viewers. The brand awareness generated by
the Olympic Games sponsorship is what Coca-Cola refers to as “social value” and is
highly significant. Coca-Cola has been working with an outside company, Demos, to
try to place a monetary value on social value and better understand the impact it has
on the company’s profits.
Coca-Cola states that sponsorship is more about building brand awareness and
customer relationships than it is about ROI. However, one observational study
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Case 21 • Coca-Cola: Integrated Marketing Communications
considered all the publicly traded Olympic advertisers and partners’ stock prices for
the 4 weeks of the Olympic Games from 2000 to 2010. The study results indicated
that the companies that advertised during the Olympic broadcasts outperformed
the S&P 500. It also suggests that companies that partner with the Olympics, as well
as advertise during the broadcast, outperform the S&P 500 by an even greater margin. The results of the study support the notion that there are tangible benefits that
arise from sponsoring the Olympic Games. For these reasons, Coca-Cola signed an
agreement with the Internal Olympic Committee in 2005 to continue its partnership
and have Coca-Cola products be a part of the Olympics until 2020.
CONCLUSION
Coca-Cola integrates traditional and modern marketing strategies in the Olympics to
promote its vast brand assortment and create global awareness. Its many promotional campaigns during the Olympics have helped make it one of the most dominant
and recognizable companies in the world. The company effectively integrates a wide
range of promotional media, including television advertising, product display advertising, and digital marketing, to bring its brand to the attention of Olympic viewers.
Maintaining and continuing to build one of the most recognized brands in the
world requires constant adaptations and improvements. Multinational corporations
like Coca-Cola need to constantly evaluate how they can better integrate marketing
platforms to ensure that consistent messages are reaching customers. Coca-Cola
should continue to monitor the environment to understand what issues are important to Olympic viewers. By understanding the global market, Coca-Cola can develop
effective campaigns and avoid issues like the digital marketing failure in the Sochi
Olympics. As Coca-Cola continues to sponsor the Olympics, its brand will become
even more intertwined with the symbolic spirit behind the Games.
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QUESTIONS
1. Why is Olympic sponsorship such a crucial part of Coca-Cola’s marketing
strategy?
2. Describe how Coca-Cola uses various marketing tools to develop consistent and
impactful messages during the Olympics.
3. What do the marketing issues that Coca-Cola encountered during the 2014 Sochi
Olympics imply about careful planning of promotional campaigns?
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