Coca-Cola's Marketing Legend Creator Shared Secret of Marketing

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Written by: Stella Chen, Angela Peng

Edited by: Anna Hu, Olivia Huang, Vicky Gan

What’s Chinese people’s favorite foreign food and beverage brand? According to the analysis of big data, the answer is Coca-Cola. Why is it so popular among Chinese? Javier Sanchez Lamelas brought us the secret during his work in marketing at Coca-Cola.

Javier is the founder and the CEO of Top Line Marketing. He worked for P&G for 20 years and was the former Vice President of Marketing for Europe, Coca-Cola. He has been working on marketing for more than 30 years.

1. The core concept of marketing—the value goes together with the price

Nowadays, everything is changing so fast. Those who work on marketing may have the impulse to have everything restart. However, some basic principles in marketing won’t change—the essence of marketing to create value for the incorporation, to sell more products to more customers at a higher price. The so-called value is, in other words, is the money that customers are willing to pay.

How to set the price? According to Javier, if the price is higher than the price line, yet lower than the value line, you lost the money that supposed to be yours. To be specific, if the customer perceived value for the product is very high, but you set a lower price, you may only earn $80 when you could have earned $100. On the contrary, if people are unwilling to spend much on your product, the customer perceived value is rather low, while the price is set too high, people certainly won’t buy then you earn less (taking the value curve for reference). The most fundamental principle in marketing is to raise the customer perceived value by goodmarketing, to make customers more willing to pay, then raise the price and sellmore, in order to get the maximized profit.

2. Love and creativity—the eternal themes for fantastic marketing

How to do marketing well? The answer is touse the brand as a tool. Javier mentioned that the brand itself is not the product. When you endow the product with strong emotions which can be sensed by customers, and make the customers in desire to buy, the product becomes abrand.

Javier said that human brains have three different modes of thinking. The concept of brand comes from the combination ofthe three modes. The first is instinctive brain, mainly people’s habitual behavior. The second is emotional brain, which to a large extent determine the effects of marketing. The third is rational brain, enables people to think logically. It can be put in this way, “Rational brain is what products aim for, while emotional brain is what brands work on.”

Emotional marketing is more effective than rational marketing. While ration can bring logical conclusions, emotion is what make people take action. For example, Tide emphasize ration, its focus is on products. But things like luxuries, luxury cars, Coca-Cola, they relate more to customers’ emotion. Rational brain can help the incorporation see immediate effect in its marketing, but the rate of profit is very low. But if you can reach out the customers through emotion, make them accustomed to buying your products, you break the game rules. Those customers will think about nothing but to buy your products. It’s a desire shaped by your brand.

In fact, the process of falling in lovewith a brand is the same as the mechanism of falling in love with a person, both determined by the brain. But how can a brand arouse emotions in customers? The answer is to make it a value-driven one. The first thing is to ensure that your emotion has one specific point about life. Take the Samsung ostrich commercial, Coca-Cola’s 3-meter-tall vending machine commercial as examples, they don’t concern products, only deliver the emotion, and build the value ofthe brand.

3. A Darwinian age— “Technocentrism” vs.transfer of “right of control”

The changes have taken place is not so-called digital marketing or Internet, but the transfer of the right of control. We could only watch what the channel chose to play in the past. But now, TV stations, advertising agencies and advertisers can not force you to absorb the commercials. Customers are taking the initiative. In the past, the society was collective, the quality of marketing didn’t matter. Now, it’s an age of Darwinism, only what people are willing to see can survive.

Previously, mass media companies needed to pay a huge amount of money to let the audience see their product, yet in the days to come, customers need to pay if they want to watch the content of our marketing. If you want to be a better marketer, you need to be sure that your marketing is good enough to persuade people to pay. When facing changes like this, innovation becomes the spine of the incorporation. All the staff should stick to innovation, until it becomes the spirit of the company. We need to plan for the future, not only focusing on where the bridges start, but its trend, in this way can hold on to it.

Q&A

Q1: In your introduction, you talked about the importance of brand, value and emotion, but products promoting was not mentioned. How do you manage the product positioning when you make decisions on marketing? Don’t you mention you products? Or you combine the two subtly?

Javier: Product and brand are two concepts.Products surely need to be great, great enough to attract people to buy. But it’s not enough. Products can be improved constantly. Products require certain qualities before they can be sold, for example, whether they’re safe or not, eco-friendly or not, etc. You can not trade with others without products, but products alone are not highly competitive. Products need to be good to enter the market, but what’s more important is to promote them by marketing.

Thus marketing is based on good products. Besides, the customer perceived price and value should be coherent. Then it’s distribution, no matter they are going to be sold inphysical stores or online ones. Finally it’s about the creative material, packing design, commercial design and so on. The products’ function is not important here, you should focus on what they can convey on the appearance,then the commercials, then the profits, undoubtedly.

Q2: You have experience in marketing almost allover the world. Do different cultures and groups identify with this selling of values similarly? Do westerners like the value you promote more? Or do Chinese customers focus more on the cost performance?

Javier: We have done the cross-culture comparison.The means of marketing differ according to different customers. For instance, Japanese, Chinese and Indians have their different values. But the easier way is to find the commonality among different groups, instead of the distinctions. Ultimately every one has the same intense emotions from the bottom of their hearts.

Take Disney as anexample, Disney movies have strong diversity in them. Within North America, there are African-Americans, white people and Latin Americans. But jokes are all the same. People of different age groups feel differently toward them as well. Thus it’s all about making decisions. Generally, instead of focusing on the difference of diverse groups, to find the commonality is the best solution.