CPGmatters: Coca-Cola Aims to Connect With Recession-Weary Shoppers
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Coca-Cola is mounting a major marketing offensive as it tries to connect with shoppers keeping a tight grip on their purse strings in these challenging economic times.
"We believe these pressures are real and that they're not going to change quickly even if the economy does rebound," said Diana Wallace, the vice president of shopper marketing, speaking at a Shopper Insights in Action conference hosted by the Institute for International Research (IIR) in Chicago recently.
In her presentation, Ms. Wallace listed four components of Coca-Cola's shopper solutions:
Occasion-Based Approach
"This has been a significant shift for us over the last couple of years," said Ms. Wallace, "but it's a tried and true approach that has worked in other global markets for us in tough economic times. It's really getting very relevant about what you offer with what shoppers are looking for. "
She explained that Coca-Cola has placed a value on the occasions when people drink beverages. It is focusing on two occasions: Chilling Out at Home Watching TV and Eating Meals at Home.
"People are eating at home a lot more. It's a phenomenon which is occurring and we don't think it will change drastically. So that's one of the reasons why we're going at this approach," she said.
Shopper Segment and Merchandising
"This is something we put into the market last year and we're fine-tuning it this year," she said. "Each store has a different mix of shoppers, needs and occasions occurring. It's the store's shopper DNA."
Coca-Cola has created smaller segments and tailored solutions to each of them. Then it merchandises against the predominant shopper cluster within each outlet.
"This gives us the ability to connect with shoppers at outlet levels," she said. "We have to segment what we're doing. That's how we get really distinctive and tailored at a chain or outlet level by product."
Bundled Solutions
"This has been a very important strategy for us this year and it will be into next year in terms of how we create the most relevant and innovative bundles out there," she said.
She described bundled solutions as the best combination of product, food and beverage in stores for shoppers.
"Bundling enables you to group things together on price points, which also gives you a unique opportunity to begin to separate yourself out from the everyday deep discounting that sometimes can occur in some of our categories," she said.
Packaging Solutions
As an example, she pointed to the contour two-liter bottle of Coke, a package that lifted sales by double digits. Another new product is the 16-oz.-99-cent "entry" package offered cold in stores.
"One of the things that we've learned," she said, "is we've got to think very differently about how we talk to shoppers in store and create various sizes and shapes, improving our messaging. Putting the right package on those merchandising racks has been one of the most important elements of our plan and has reaped wonderful results for us in markets where we've been able to execute it."
Discussion questions: Which of Coca-Cola's shopper solutions - Occasion-Based Approach, Shopper Segment and Merchandising, Bundled Solutions, Packaging Solutions - will do most to boost sales in the current climate? Which will likely prove least effective or most challenging?