Crossing Borders by Building Relationships
For a sneak peek at the cool drink your 10-year-old will clamor for next year, look at what Asian kids are drinking today. Coca-Cola has long looked to Japan for ideas, and now other Asian markets such as China are also hotbeds of innovation, particularly as Coke expands its portfolio with new water, juice, tea and coffee brands and even "gel" beverages.
As Coca-Cola's group marketing director-Pacific Group, Darren Marshall is exploring -- and exporting -- products across Asia, as well as Europe and North America. A rising star, Mr. Marshall himself is likely to be one of Coke's next Asian imports, taking an international marketing role at Atlanta headquarters after a decade in Asia.
Late last month, he shared sandwiches and Cokes with Ad Age Asia Editor Normandy Madden in his Hong Kong office to talk about the economy, the Olympics, Coke's Chinese-medicine research center -- and those weird gel drinks.
Ad Age: How is your business in Asia?
Mr. Marshall: Asia has 2 billion consumers [who] drink our products relatively infrequently compared to other parts of the world. It's a huge opportunity with big populations, low category development, high economic growth, increasing affordability.
Ad Age: Can big emerging markets help companies like Coke offset a slowdown in developed markets like the U.S.?
Mr. Marshall: It's not just the big BRIC [Brazil, Russia, India and China] countries. We've put a ton of focus on China, but the other focus is: What's next? There are 250 million people in Indonesia, 85 million in Vietnam. These are huge populations that are really starting to take off. We have to build infrastructure in such markets, not only from a system-capability standpoint but with the right brands at the right time with the right messages.
Ad Age: Will Coke's proposed takeover of China's juice giant Huiyuan be approved?
Mr. Marshall: I hope so. It's totally synergistic with our business. We have a strong juice business in China, but our focus there is in juice drinks.
Ad Age: Were the Olympics worth the investment?
Mr. Marshall: Our sponsorship wasn't about building brand awareness or convincing people Coke is a sponsor of the Olympics. We developed our Olympic program to inspire consumers to love our brand and teach them how to drink our brand. That's not something you can measure two days after the Olympics.
Ad Age: Do Asians still need education about Coke?
Mr. Marshall: Absolutely. It's a huge issue in all developing markets. We've had circumstances where people really loved the brand and knew what it stood for but never drank it and didn't understand it should be chilled.
Ad Age: Interactive media seem increasingly important for Coke in Asia.
Mr. Marshall: Without question, Asia is a three-screen world: TV, internet and mobile. TV will continue to be the pillar of what we do, because ours is a mass business, and [TV]continues to be the medium that reaches everyone quickly and efficiently.
Ad Age: What are the latest Coke products coming out of Japan?
Mr. Marshall: Georgia coffee, which has built critical mass and scale in Japan, was recently launched for the first time outside Japan, in South Korea and Singapore. We're turning it into a regional and perhaps global brand. Another example is [sugarless, blended tea brand] Sokenbicha. We just launched that in Korea as well, and are looking at other markets.
Ad Age: What is Coke creating in Asia that the Western world hasn't seen?
Mr. Marshall: There are two things that I'm really excited about. One is beverages with bits. Minute Maid Pulpy, juice with added pulp, was designed in China. It's affordable and accessible with something unique and different. It is hugely successfully in China, consistently growing double digits. This year we've expanded it to the Philippines and Indonesia. We've already launched it in Vietnam and Thailand and have plans for other places. Another is Nestea with Aloe Pulp in Hong Kong. Note the commonality. Both started with something added back to the product.
Ad Age: Would beverages with bits work in America?
Mr. Marshall: I'm North American, and I quite like it! I think it's pretty cool and different. The second thing I'm excited about is the gel-based drink Fanta Furu Furu in Japan. It looks like a normal sparkling beverage, but shake it a few times, it creates a gel texture. The orange and grape versions both topped the list of Japan's most successful product launches this year.
Ad Age: How do Coke brands cross borders?
Mr. Marshall: First, by understanding what drives people. Asians have different languages, cultures, religions. But in most cases, consumer motivations are very, very similar. If we're going to create efficiencies, we need to work together. This is Asia, so everything is built on relationships. Rather than have 30 countries create 30 platforms in 30 unique ways, we have one country build a platform for the broader group. It also creates a sense of interdependence. For example, the Philippines has a "Coke with food" platform. Thailand has the development center focused on refreshment. The benefit of this structure is we're getting better work, faster, with less development cost.
Ad Age: Give us an example.
Mr. Marshall: China's development center created Minute Maid Pulpy. It's a really important brand that has built not only a lot of critical mass in China but a lot of critical understanding about how to launch the product.
Coke Zero came out of Australia and has been a huge success for our business globally. It created very big news there and taught the world from that case study how we could create a very large business out of the zero-sugar platform.
Ad Age: What's behind the Chinese-medicine research center in Beijing?
Mr. Marshall: Driving insights and benefits. Traditional Chinese medicine is a fundamental belief many consumers have about the balance between heating and cooling properties. ... Coca-Cola is a cooling type of beverage, which doesn't go with cooling foods. It needs to be matched with "heaty" foods to achieve a perfect balance. It also involves the balance of fun and function. Consumers in Asia have to have that balance.
Ad Age: Is Coke concerned about packaging waste in Asia?
Mr. Marshall: We're committed to making sure everything that goes into making our bottles is recyclable and making sure we're reusing the plastic. In places like Brazil, for example, all of our sales guys wear uniforms recycled from bottles.
Ad Age: What's your biggest mistake?
Mr. Marshall: We launched a product in Southeast Asia called Alive, a lifestyle isotonic beverage for fashionable 20-somethings -- water plus juice plus vitamins, lightly carbonated in a beautiful package that gripped your hand. I loved it, but it sank like a rock. ... It was a small niche product that would never get enough scale to be successful within our system.
But pieces of it ended up in other places. The packaging used on Bonaqua water was inspired by Alive. So was the Coca-Cola grip bottle in China. The product was reintroduced with a couple of modifications in Spain under the Sprite brand. You can learn from success as well as failure. Don't throw the baby out with the bath water.