Adage wrote about Coca-Cola’s desire to save $400-$500 million a year by the end of 2011 by cutting back on marketing.
According to the article, Coca-Cola CEO Muhtar Kent says that as the company undergoes an aggressive review of spending, the primary focus will be on marketing.
Kent says, “Our objective is to reinvest marketing efficiencies … that we realize into efficient brand-building activities to drive the long-term health of our business,” Mr. Kent said.
You can read the entire article here. But after I read the article I had a thought. Can a such a universal brand like Coke sustain themselves without huge marketing efforts. It’s certainly a brand that stands on its own merit. Is it the kind of brand that can scale back its marketing and still exist as the brand giant that it is?
Coca Cola isn’t suggesting that all spending will cease. Exec VP-Chief Financial Officer Gary Fayard says they into to take a more “disciplined” approach to marketing. Whish means an increase in total direct-marketing spending vs. planned spending. And, reallocation of funds against certain geographies to drive growth.
Fayard also says, “By continuing to invest in difficult economic times, our system is seeking to build a stronger bond with consumers and a stronger share position for the long term.”
They seem to recognize the important of staying relevant, but express the obvious need to save money in tough economic times. I think it’s wise to assume that it will always be a dominant brand. I’d argue that Coca Cola has become such an iconic brand that they could scrap advertising altogether and still reatain a very loyal base of consumers.