Can’t beat the real thing

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In one of the biggest e-commerce ventures yet by a Fortune 500 company, The Coca-Cola Co. is building a private e-marketplace that will connect its headquarters, independent bottlers and retail outlets.

The as-yet-unnamed hub, slated to launch by the end of the year, should profoundly change the way Coke handles its b-to-b marketing.

"We are at work in creating a private system marketplace,” said Everett Darby, managing director Coca-Cola eBusiness & eVentures. "It literally is focused on integrating us, our bottlers and our customers so all information is seamless."

The hub will allow Coke, its independent U.S. bottlers and businesses ranging from supermarkets to fast food chains to share sales and promotion information online, in real-time. Today, nearly all such correspondence happens offline, a cumbersome ordeal that hinders the spontaneous marketing decisions Coke executives need to make.

In a subsequent interview, Darby modified his earlier comments and said that a private e-marketplace is but one of the b-to-b e-commerce strategies that Coke executives are considering. Others include participation in Transora, the consumer products industry consortia hub that Coke has a stake in.

Darby said it is likely that Coke will use several exchanges. "I would imagine it’s going to be a combination of a number of different methods," he said.

At least one of Coke’s competitors is also developing a private e-marketplace. Dr Pepper/Seven Up Inc. is working with Pilot Network Services Inc., a vendor, to build an Internet network for the beverage company and its national account customers. Calls to Coke’s archrival, Pepsi-Cola Co., were not returned by press time.

The need for speed

Coke is one of the few companies with enough power to pull off a private e-marketplace in an age when consortia exchanges reign. "This is a big deal," said Glenn Gow, president-CEO of Crimson Consulting Group Inc., a Los Altos, Calif.-based e-commerce marketing consultancy. "They are in a unique position with the exception of a few major companies that could do this."

Gow said the e-marketplace’s speed will be its greatest asset. "It will be especially useful if they can get real-time data that is valuable to them. They can’t get that today."

Indeed, Coke’s e-marketplace would be rare among Fortune 500 e-hub plays because it is to focus exclusively on marketing, not procurement. The idea is that Coke executives at the company’s Atlanta headquarters will be able to link up online with a regional bottler and a major retail account, at the same time and on short notice.

Up-to-the-minute sales, pricing and marketing data surrounding a new promotion could be analyzed online. And based on that data, decisions could be made on whether to kill the campaign or put more marketing dollars behind it and extend it to other markets. "We can find out what promotions are working and which are not working," Darby said. "If something’s working in Texas, will it in New York? Let’s see—we can find out that quickly through the Internet."

Such information and nimbleness are invaluable to Coke, which, like its competitors, often relies on dated data when developing its multimillion-dollar marketing programs. "Today, I’ve got to work on Nielsen numbers and someone’s got to make a phone call," Darby said.

Coke is currently working with technology providers to build its private marketplace, Darby said. "We are definitely working with outside tech partners," he said, though he declined to name any.

The hub venture underscores the emphasis that Coke’s management is placing on e-commerce as a way to cut costs and please investors. CEO Douglas N. Daft is under pressure from Wall Street to regain the golden marketing touch Coke had under late CEO Robert Goizueta. B-to-b e-commerce is widely viewed as one way the company can regain it.

Aside from Transora, other b-to-b initiatives recently undertaken by Coke include an investment in HispanB2B Inc., a portal that links Hispanic-owned suppliers with Fortune 500 companies.

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